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As Filed with the Securities and Exchange Commission on June 26, 2020

Registration No. 333-           

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

ACell, Inc.
(Exact name of Registrant as specified in its charter)

6640 Eli Whitney Drive
Columbia, Maryland 21046
(800) 826-2926
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)

Patrick A. McBrayer
President and Chief Executive Officer
ACell, Inc.
6640 Eli Whitney Drive
Columbia, Maryland 21046
(800) 826-2926
(Name, address, including zip code, and telephone number, including
area code, of agent for service)

Approximate date of commencement of proposed sale to the public:
As soon as practicable after this registration statement is declared effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. o

CALCULATION OF REGISTRATION FEE

(1)

Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) of the Securities Act of 1933, as amended.

(2)

Includes the aggregate offering price of additional shares that the underwriters have the option to purchase, if any.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant will file a further amendment which specifically states that this Registration Statement will thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement will become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

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The information in this preliminary prospectus is not complete and may be changed. We and the selling stockholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

                 Shares

ACell, Inc.

Common Stock

$               per share

This is the initial public offering of shares of common stock of ACell, Inc. We are offering             shares of common stock.

Prior to this offering, there has been no public market for our common stock. It is currently estimated that the initial public offering price for our common stock will be between $             and $             per share. We have applied to list our common stock on the Nasdaq Global Market under the symbol "ACLL."

We are an "emerging growth company" as defined under the federal securities laws and, as such, we have elected to comply with certain reduced reporting requirements for this prospectus and may elect to do so in future filings.

Investing in our common stock involves a high degree of risk. Before buying any shares of our common stock, you should carefully read the discussion of material risks of investing in our common stock in "Risk factors" beginning on page 15 of this prospectus.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

The selling stockholders identified in this prospectus have granted the underwriters an option for a period of 30 days from the date of this prospectus to purchase up to                           shares of common stock from them at the initial public offering price, less the underwriting discounts and commissions. We will not receive any of the proceeds from the sale of any common stock by the selling stockholders upon any such exercise.

The underwriters expect to deliver the shares of common stock to purchasers on or about                           , 2020.

Prospectus dated                                        , 2020.

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None of us, the selling stockholders or any of the underwriters have authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. None of us, the selling stockholders or any of the underwriters take responsibility for, or can provide any assurance as to the reliability of, any other information that others may give you. We, the selling stockholders and the underwriters are offering to sell, and seeking offers to buy, shares of our common stock only under circumstances and in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common stock.

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About this prospectus

For investors outside the United States: None of us, the selling stockholders or any of the underwriters have done anything that would permit this offering or the possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside of the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, this offering and the possession and distribution of this prospectus outside of the United States.

Any discrepancies included in this prospectus between totals and the sums of the percentages and dollar amounts presented are due to rounding.

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Risk factors

An investment in our common stock involves a high degree of risk. You should consider carefully the following risks and other information contained in this prospectus before you decide whether to buy our common stock. If any of the events contemplated by the following discussion of risks should occur, our business, results of operations, financial condition and growth prospects could suffer significantly. As a result, the market price of our common stock could decline, and you may lose all or part of the money you paid to buy our common stock. The risks below are not the only ones we face. Additional risks that we currently do not know about or that we currently believe to be immaterial may also impair our business. Certain statements below are forward-looking statements. See "Special note regarding forward-looking statements" in this prospectus.

RISKS RELATED TO OUR BUSINESS AND GROWTH STRATEGY

We may not be profitable in the near term or maintain profitability in the future.

We reported a net loss of $2.7 million for the three months ended March 31, 2020 and there can be no assurance that we will achieve or maintain profitability in the future. As of March 31, 2020, we had an accumulated deficit of $26.1 million. Our future profitability depends on, among other things, our ability to generate revenue in excess of our costs. We expect to incur significant operating costs in the near term as we conduct or fund research, including clinical trials and post-market studies, seek to expand our product portfolio and the applications for which our products may be used, grow our commercial organization and incur additional expenses related to operating as a public company. In addition, we have significant and continuing fixed costs relating to the maintenance of our assets and business. We may incur significant losses in the future for a number of reasons, including the other risks described in this prospectus and specifically those related to the COVID-19 pandemic, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown events.

We may be unable to successfully execute on our growth strategy.

We intend to grow our business and market opportunity by further penetrating our current acute care customer accounts, growing our acute care customer base, selectively expanding the sale of our products into non-acute care settings, expanding our international sales opportunity and enhancing and expanding our product portfolio. Each of these growth strategies will require considerable time and resources, and we may not be successful in executing on any or all of these strategies. Furthermore, the continued impact of the COVID-19 pandemic may delay our ability to execute on our strategy.

A primary component of our growth strategy is to increase awareness of our products in the markets in which we compete. We may be unable to increase awareness cost-efficiently, on a timely basis or at all among hospitals, wound care centers, long-term acute care hospitals, or LTACHs, government facilities, ambulatory surgical centers, physician offices and patient advocates, as well as other key clinical and economic decision-makers. A significant part of our strategy to increase awareness is to continue the development of data supporting the clinical benefits of porcine urinary bladder matrix, or UBM. In order to do so, we will be required to invest significant time, resources and money in conducting or sponsoring research, including clinical trials and post-market studies, which could divert our resources from other parts of our business and growth strategy. Even if we are able to develop additional data on UBM and our products, there is no guarantee that the data will support the efficacy, cost-effectiveness and other benefits of our products at all or to the extent we expect. If the outcomes of such studies and trials are not positive or do not show statistically significant benefits of UBM, our technology platform or our products, we may suffer setbacks in increasing awareness and adoption of our products despite making these significant investments.

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Another component of our growth strategy is to expand and enhance our product portfolio, including expanding treatment applications for our current products. We intend to submit additional 510(k) premarket notifications in the coming years to pursue a number of initiatives, which include adding features and designs to our existing products as well as expanding treatment applications for these products. We may not be successful in obtaining the regulatory clearances that we seek, which could limit our market opportunities for our products. In addition, we are actively considering other product opportunities for which the U.S. Food and Drug Administration, or the FDA, may require a premarket approval application, or PMA, or biologics license application, or BLA, to commercialize. We have no experience applying for or receiving approval of a PMA or BLA and may not be successful in these efforts.

Our growth strategy also involves expanding our international operations. In addition to risks associated with international operations in general, we will also need to navigate complex foreign regulatory requirements with which we may not be familiar or have experience. To obtain regulatory approval in other countries, we must comply with numerous and varying regulatory requirements of such countries regarding safety, efficacy, manufacturing, clinical trials, commercial sales, pricing and distribution of our products. Although we have received regulatory clearance for our products in the United States and some other countries, we cannot ensure that we will obtain regulatory clearance or approval in other countries. If we fail to obtain regulatory clearance approval in any jurisdiction, the geographic market for our products could be limited.

There are several aspects of our growth strategy and opportunities to grow our sales and product portfolio. However, we have limited financial and managerial resources, and we may forego or delay pursuit of growth opportunities that later prove to have greater value to our business. Our resource allocation decisions may cause us to fail to capitalize on viable opportunities, and we could spend resources on strategies that are not ultimately successful.

Our future success will largely depend on our ability to maintain and further grow clinical acceptance and adoption of our products, and we may be unable to adequately educate healthcare practitioners on the use and benefits of our products.

Healthcare practitioners play a significant role in determining the course of a patient's treatment and, ultimately, the type of product that will be used to treat the patient. As a result, our commercial success is heavily dependent on our ability to educate these practitioners on the use of our products in surgical soft tissue repair procedures and complex wound management. Acceptance and adoption of our products in our markets depends on educating healthcare practitioners as to the distinctive characteristics, benefits, safety, clinical efficacy and cost-effectiveness of our products, including potential comparisons to our competitors' products, and on training healthcare practitioners in the proper application of our products. If we are not successful in convincing healthcare practitioners of the merits and advantages of our products compared to our competitors' products, they may not use our products and we will be unable to increase our sales and sustain growth or profitability.

Convincing healthcare practitioners to dedicate the time and energy necessary to properly train to use new products and techniques is challenging, and we may not be successful in these efforts. In particular, as healthcare resources are strained due to the ongoing COVID-19 pandemic, it may be more difficult to convince healthcare practitioners to commit their time and resources to learning to use a new product. If healthcare practitioners are not properly trained, they may use our products ineffectively, resulting in unsatisfactory patient outcomes, patient injury, negative publicity or lawsuits against us. Accordingly, even if our products show superior benefits, safety or efficacy, based on head-to-head clinical trials, in comparison to alternative treatments, our success will depend on our ability to gain and maintain market acceptance for our products. If we fail to do so, our sales will not

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grow and our business, financial condition and results of operations will be adversely affected. We may not have adequate resources to effectively educate the medical community and our efforts may not be successful due to physician resistance or negative perceptions regarding our products.

Healthcare practitioners may be hesitant to change their medical treatment practices for the following reasons, among others:

➤

lack of experience with extracellular matrix and UBM technologies or other biologically-derived regenerative products;

➤

lack or perceived lack of evidence supporting additional patient benefits;

➤

perceived liability risks generally associated with the use of new products and procedures;

➤

limited or lack of availability of coverage and reimbursement within healthcare payment systems;

➤

existing sole-source supply contracts with purchasing entities, such as hospital systems and group purchasing organizations, or GPOs, that do not use our products;

➤

limited or lack of available published clinical data;

➤

pressure to contain costs and use lower cost alternatives to our products;

➤

costs associated with the purchase of new products; and

➤

the time commitment that may be required for training to use new products or technologies.

In addition, we believe recommendations and support of our products by key opinion leaders are essential for market acceptance and adoption. If we do not receive support from such key opinion leaders or if long-term clinical data does not show the benefits of using our products, we may not achieve adequate commercial acceptance of our products.

We could be subject to increased monetary penalties and other sanctions, including exclusion from federal healthcare programs, if we fail to comply with the terms of our Federal Settlement Agreement, State Settlement Agreements or Corporate Integrity Agreement.

On May 14, 2019, we entered into a civil False Claims Act settlement with the United States, acting through the United States Department of Justice and on behalf of the Office of Inspector General of the Department of Health and Human Services, or OIG-HHS, the Defense Health Agency, acting on behalf of the TRICARE Program and the United States Department of Veteran Affairs, which is referred to herein as the Federal Settlement Agreement. As contemplated by the Federal Settlement Agreement, the United States Attorney's Office for the District of Maryland, or USAO, filed an Information against us on June 6, 2019, in a case captioned United States of America v. ACell, Inc., Action No. ELH-19-0282 in the United States District Court for the District of Maryland, and, on June 11, 2019, we entered into a plea agreement with the USAO on behalf of the Department of Justice and pled guilty to one misdemeanor count of failure to report a medical device removal. In connection with the plea agreement, we also agreed to pay a criminal fine of $3.0 million and establish and maintain a compliance and ethics program. On May 14, 2019, we also entered into civil False Claims Act settlement agreements with the states of Maryland, Wisconsin, and Florida, which are referred to collectively herein as the State Settlement Agreements, on the basis of the same conduct that was the subject of the Federal Settlement Agreement.

Under the terms of the Federal Settlement Agreement and the State Settlement Agreements, we have agreed to pay to the Department of Justice and the states of Maryland, Wisconsin, and Florida a total

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of $12.8 million, plus interest at a rate of 2.875%, referred to herein as the Settlement Amount, over the course of five years, and a total amount of $222,500 in attorneys' fees and costs for plaintiffs' counsel in the two qui tam complaints. Subject to our payment of the Settlement Amount, the United States has released us from any civil or administrative monetary claim the United States has under the False Claims Act and certain other statutes and common law theories of liability arising from the conduct that was the subject of the Federal Settlement Agreement, and the states of Maryland, Wisconsin and Florida have released us from any civil or administrative monetary cause of action that the state had for any claims submitted or caused to be submitted to the state's Medicaid Programs as a result of the conduct covered by the State Settlement Agreements. Likewise, in consideration of the obligations in the Federal Settlement Agreement and the Corporate Integrity Agreement, as described below, OIG-HHS agreed to release and refrain from instituting, directing or maintaining any administrative action seeking to exclude us from Medicare, Medicaid and other Federal health care programs.

If we violate the terms of the Federal Settlement Agreement or State Settlement Agreements, consequences could include accelerated settlement payments, rescission of the agreements and/or exclusion or disbarment from participation in all federal health care programs. A breach of the terms of our plea agreement could result in the rescission of the plea agreement and monetary penalties.

On May 13, 2019, we entered into a Corporate Integrity Agreement with the OIG-HHS. The Corporate Integrity Agreement has a term of five years and contains various compliance obligations designed to help ensure our ongoing compliance with federal health care program requirements. The terms of the Corporate Integrity Agreement include internal monitoring requirements, compliance training, certification obligations by our Board of Directors and certain employees, reporting requirements to OIG-HHS, and the engagement of an independent review organization to review and prepare written reports regarding reviews of certain of our systems and transactions.

If we fail to comply with the terms of the Corporate Integrity Agreement, we may be required to pay certain monetary penalties. Furthermore, material, uncorrected violations of the Corporate Integrity Agreement could lead to our exclusion or disbarment from participation in Medicare, Medicaid and other federal and state healthcare programs and subject us to repayment obligations. Any such exclusion or disbarment would result in the revocation or termination of certain government contracts and potentially have a material adverse effect on our results of operations. In addition, the Corporate Integrity Agreement increases the amount of information we must provide to the federal government regarding our compliance with federal regulations. The reports we provide in connection with the Corporate Integrity Agreement could result in greater scrutiny by other regulatory agencies.

In addition, we could be subject to future investigations. Many healthcare companies have announced government investigations of their sales and marketing practices and other activities. Even with compliance training and a company culture of compliance, our current or future practices may nonetheless become the subject of an investigation. A number of laws, often referred to as "whistleblower" statutes, provide for financial rewards to employees and others for bringing to the attention of the government practices that the government views as illegal or fraudulent. The costs of investigating any claims, responding to subpoenas of investigators and any resulting fines can be significant and could divert the attention of our management from operating our business.

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The global COVID-19 pandemic and related impacts are having an adverse effect on our operations, financial performance and cash flows. We are unable to predict the extent to which the pandemic and related impacts will continue to adversely impact our business operations, financial performance, results of operations, financial position and the achievement of our strategic objectives.

Our operations, financial performance and cash flows have been negatively impacted by the COVID-19 pandemic that has caused, and is expected to continue to cause, the global slowdown of economic activity, including the decrease in demand for a broad variety of goods and services, disruptions in global supply chains and significant volatility and disruption of financial markets. Because the severity, magnitude and duration of the COVID-19 pandemic and its economic consequences are uncertain, rapidly changing, and difficult to predict, the pandemic's impact on our operations and financial performance, as well as its impact on our ability to successfully execute our business strategies and initiatives, remains uncertain and difficult to predict. In addition, the ultimate impact of the COVID-19 pandemic on our operations and financial performance depends on many factors that are not within our control.

The COVID-19 pandemic has subjected, and is expected to continue to subject, our operations, financial performance and financial condition to a number of risks including, but not limited to, the following:

➤

Product sales risks:    Beginning in mid-March 2020, we began experiencing decreased demand for our products, resulting in a material decrease in our product sales. As a result of impacts associated with preventive and precautionary measures that we, other businesses and governments are taking to quell the spread of COVID-19 and protect our customers, employees, and the patients receiving our products, we may experience significant and unpredictable reductions in demand for certain of our products as health care customers re-prioritize the treatment of patients. This decrease in demand, and potential decreased demand in the future, may be attributable to:

•

Lower rates of traumatic acute wounds. We believe that state stay-at-home orders, closures of businesses, restrictions on travel and social distancing measures have all contributed to fewer acute injuries as people stay and work in their homes.

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Slowdown of elective surgeries. In the United States in mid-March 2020, governmental authorities began recommending, and in certain cases required, that elective procedures be suspended or canceled to avoid non-essential patient exposure to medical environments and potential infection with COVID-19 and to focus limited resources and personnel capacity toward the treatment of COVID-19. Although some healthcare facilities are in the early stages of resuming elective procedures, these policies vary from facility to facility.

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Temporary hospital limitations and restrictions on visitors. A key element of our strategy and success has been the relationships our sales representatives have forged with hospitals and physicians, and their presence in the operating room when the decision to use our products is made. As hospitals seek to limit the spread of COVID-19, many have instituted temporary restrictions which have included requiring some of our sales force personnel to present documentation of a negative COVID-19 test result in order to be present in the hospital.

➤

Operations-related risks:    We are facing increased operational challenges from the need to protect employee health and safety. While many of our employees are able to work remotely, we also must continue our manufacturing and distribution operations. We have implemented new safety measures designed to minimize risk for our employees and, ultimately, our customers, such as enacting a new screening protocol to identify employees who may have been exposed to COVID-19 and having

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these employees work in two-week rotating shifts. However, because the severity, magnitude, and duration of the COVID-19 pandemic and its economic consequences are uncertain, rapidly changing, and difficult to predict, we may, in the future, have to consider taking additional actions including further reductions to salary and work hours, furloughs, restructuring, layoffs or extensions of remote work arrangements, which may negatively impact our workforce and our business. These negative impacts could include inhibiting our ability to quickly respond to increased customer demand and to take advantage of more favorable economic and market conditions after the pandemic subsides as well as lower productivity and higher employee attrition.

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Liquidity- and funding-related risks:    Although we had cash and cash equivalents of $4.6 million as of March 31, 2020 and have subsequently drawn approximately $5.5 million on our line of credit and received approximately $9.0 million as part of the federal Paycheck Protection Program, a prolonged period of generating lower cash flows from operations could adversely affect our financial condition and the achievement of our strategic objectives. Additionally, as a result of weaker than previously anticipated operating and financial performance of our business, our cost of funds and related margins, liquidity, competitive position and access to capital markets may be adversely affected, negatively impacting our business. Any future credit downgrades could further adversely affect our cost of funds and related margins, liquidity, competitive position and access to capital markets, and a significant downgrade could have an adverse commercial impact on our business. Conditions in the financial and credit markets may also limit the availability of funding or increase the cost of funding, which could adversely affect our business, financial position and results of operations. Although the U.S. federal and other governments have announced a number of funding programs to support businesses, our ability or willingness to access funding under such programs may be limited by regulations or other guidance, by further change or uncertainty related to the terms of these programs or by being a public company.

As the COVID-19 pandemic continues to adversely affect our operating and financial results, it may also have the effect of heightening many of the other risks described in this prospectus. Further, the COVID-19 pandemic may also affect our operating and financial results in a manner that is not presently known to us or that we currently do not expect to present significant risks to our operations or financial results, particularly if the COVID-19 pandemic and its associated impacts reoccur in successive waves in the coming months.

Our results of operations could suffer if we are unable to manage our planned international expansion effectively.

Further expansion into international markets is an element of our business strategy and involves risk. The sale and shipment of our products across international borders, as well as the purchase of materials and products from international sources, subject us to extensive U.S. and foreign governmental trade, import, and export and customs regulations and laws. Compliance with these regulations and laws is costly and exposes us to penalties for non-compliance. Other laws and regulations that can significantly affect us include various anti-bribery laws, including the U.S. Foreign Corrupt Practices Act, or FCPA, anti-boycott laws, anti-money laundering laws and regulations relating to economic sanctions imposed by the United States, including the Office of Foreign Assets Control or the U.S. Treasury. Any failure to comply with applicable legal and regulatory obligations in the United States or abroad could adversely affect us in a variety of ways that include, but are not limited to significant criminal, civil and administrative penalties, including imprisonment of individuals, fines and penalties, denial of export privileges, seizure of shipments and restrictions on certain business activities. The occurrence of any of these events could have a negative effect on our financial returns and impact our planned foreign expansion.

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We may be unable to maintain current, and obtain future, contracts with major GPOs and integrated delivery networks, or IDNs, for our products, and even if we are able to do so, such contracts may not generate sufficient sales of our products.

Many existing and potential customers for our products within the United States are members of GPOs and IDNs, including accountable care organizations or public-based purchasing organizations, and our business strategy includes entering into major contracts with these organizations. Our products can be contracted under national tenders or with larger hospital GPOs. These organizations typically award contracts on a category-by-category basis through a competitive bidding process. We are currently responding to bids and negotiating a number of GPO and IDN agreements. Due to the highly competitive nature of the bidding process and the GPO and IDN contracting processes in the United States, we may not be able to obtain contracts with major GPOs and IDNs for our products. In addition, while having a contract with a major purchaser for a given product category can facilitate sales, sales volumes of those products may not be maintained. For example, GPOs and IDNs are increasingly awarding contracts to multiple suppliers for the same product category. Even if we are the sole contracted supplier for our product category, members of the GPO or IDN generally are free to purchase from other suppliers. Furthermore, such contracts typically are terminable without cause upon 60 to 90 days' notice.

We may be unable to compete successfully against our existing or future competitors.

We operate in a highly competitive market characterized by rapid technological change. We compete with both alternative biologically-derived products and synthetic products based on efficacy, price, ease of use, reimbursement, customer support services and healthcare provider education. We face competition from various industry participants, including medical device companies, pharmaceutical companies, biotechnology companies, academic institutions and government agencies, as well as private and public research institutions.

Our success depends, in part, on our ability to maintain a competitive position in the development of technologies and products for use by our customers. Many of the companies developing or marketing competing or alternative products have competitive advantages when compared to us, including:

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greater financial and human resources for product development, sales and marketing;

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greater domestic and international name recognition and more product familiarity among physicians;

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broader and more established relationships with physicians, hospitals and third-party payors;

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broader product lines and the ability to offer lower prices or rebates or bundle products to offer greater discounts or incentives;

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a greater body of clinical data supporting the efficacy and safety of their products, and the ability and resources to continue to develop supportive clinical data;

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broader intellectual property protection for their technology and products;

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broader and more established domestic and international sales and marketing and distribution networks; and

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more experience in conducting research and development, manufacturing, preparing regulatory submissions and obtaining regulatory clearance or approval for products, both in the United States and in foreign jurisdictions.

In the market for wound management, which includes burn care, we primarily compete against products marketed by Avita Medical Ltd., Integra LifeSciences Holdings Corporation, MiMedx

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Group, Inc., Organogenesis Holdings Inc., Osiris Therapeutics, Inc., a subsidiary of Smith & Nephew plc, and Vericel Corporation.

In the market for hernia repair, we primarily compete against products marketed by C.R. Bard, Inc., a subsidiary of Becton, Dickinson and Company, Cook Biotech Inc., Ethicon LLC, a subsidiary of Johnson & Johnson, Integra LifeSciences Holdings Corporation, LifeCell Corporation, a subsidiary of Allergan plc, Medtronic plc, TELA Bio, Inc. and W. L. Gore & Associates, Inc.

In addition to already marketed products, we also face competition from products that are or could be under development and that target the same applications as our products or applications that we may address in the future. Such product candidates may be developed by the above-mentioned entities and others, including pharmaceutical companies, biotechnology companies, academic institutions, government agencies and private and public research institutions. Our competitors may develop and patent processes or products earlier than we can, obtain regulatory clearance or approvals for competing products more rapidly than we can and develop more effective or less expensive products or technologies that render our technology or products obsolete or non-competitive. Despite the steps we have taken to maintain and protect our intellectual property, competitors may nevertheless attempt to or succeed in developing similar porcine or other UBM technology. We also compete with other organizations in recruiting and retaining qualified scientific, sales and management personnel. If our competitors are more successful than us in these matters, we may be unable to compete successfully against our existing or future competitors.

RISKS RELATED TO THE SUPPLY AND MANUFACTURING OF OUR PRODUCTS

We rely on third-party suppliers and providers, some of which are currently the only source for the respective materials or services they provide to us.

Any delay, interruption or cessation of production by our third-party suppliers of important materials, or any delay in qualifying new materials, if necessary, could prevent or delay our ability to manufacture our products. Although the porcine urinary bladders used in the manufacture of our products are available from multiple suppliers, we currently rely on two abattoirs to harvest the porcine urinary bladders that we use in our manufacturing process. In addition, we currently rely on one company to sterilize our porcine urinary bladders. While we have developed business continuity plans for various scenarios affecting the supply and sterilization of our raw materials and will continue to update these plans as necessary, including to mitigate supply risks that could occur as the result of the COVID-19 pandemic, we cannot give assurance that these plans will be effective in eliminating the negative effects of any such supply failures on our ability to manufacture and market our products.

In addition, an uncorrected impurity, a supplier's variation in a raw material, either unknown to us or incompatible with our manufacturing process, or any other problem with our materials, would prevent or delay our ability to manufacture products. These delays may limit our ability to meet demand for our products, which would have a material adverse impact on our business, results of operations and financial condition. In addition, any undetected defect or impurity could lead us to sell products that are defective and could cause harm to patients or lead to product liability lawsuits or other actions against us.

The production of our products involves a highly complex manufacturing process that is subject to a number of risks.

We manufacture our products in our own facilities through a complex, multi-step process involving procurement and preparation of porcine urinary bladders for initial processing, tissue delamination, disinfection, final processing to size and shape our products and sterilization. Manufacturing any

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animal-derived medical device is highly complex and is subject to a number of risks, and failure can occur at any stage in the production process. If we fail to achieve and maintain high quality controls, processing and manufacturing standards, including avoidance of manufacturing errors, defects or product failures, we could experience recalls or withdrawals of our products, delays in delivery, cost overruns or other problems that would adversely affect our business. If we are unable to manufacture our products on a timely basis, at acceptable quality and costs, and in sufficient quantities, or if we experience unanticipated technological problems or delays in production, our business would be adversely affected.

If we are unable to manage product inventory in an effective and efficient manner, our profitability could be impaired.

Many factors affect the efficient use and planning of product inventory, such as effectiveness of predicting demand, effectiveness of preparing manufacturing to meet demand, efficiently meeting product mix and product demand requirements and product expiration. Our products have an expected shelf life of two years. If we are unable to manage our product inventory efficiently or within expected budget goals, or keep sufficient finished and in-process product on hand to meet demand, our operating margins and long term growth prospects could be impaired.

We place orders with our suppliers based on forecasts of demand and, in some instances, may acquire additional inventory to accommodate anticipated demand. Our forecasts are based on management's judgment and assumptions, each of which may introduce error into our estimates. If we overestimate customer demand, our excess or obsolete inventory may increase significantly, which would reduce our gross margin and adversely affect our financial results. Conversely, if we underestimate customer demand or if insufficient manufacturing capacity is available, we would miss revenue opportunities and potentially lose market share and damage our customer relationships.

An outbreak of infectious disease carried by pigs could negatively affect the supply of our porcine urinary bladders and the sales of our products.

Sales of our UBM products could be materially adversely affected by the outbreak of disease carried by pigs, which could lead to the widespread death or precautionary destruction of animals that we rely upon for the manufacturing of our products. For example, recent outbreaks of African Swine Fever have seriously impacted swine herds primarily in China and certain Southeast Asian countries. The further spread of African Swine Fever within China, and its continued expansion to other countries, could further impact the size of swine herds globally and therefore the demand for our UBM products, and if widespread, could have a material impact on our financial results. Also, the outbreak of any highly contagious disease at or near our abattoirs could require us to immediately halt supply of the porcine bladders for our products at such sites and force us to incur substantial expenses in procuring raw materials or products elsewhere.

RISKS RELATED TO OUR PRODUCTS SALES

Substantially all of our revenue has been, and we expect that it will continue to be, generated from sales of our UBM products, and we therefore are highly dependent on their success.

Sales of our UBM products accounted for substantially all of our revenue for the years ended December 31, 2018 and 2019 and the three months ended March 31, 2019 and 2020, and we expect that sales of our UBM products will continue to account for substantially all of our revenue for the foreseeable future. Our failure to successfully increase sales of these products or any other event

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impeding our ability to sell these products would result in a material adverse effect on our business, financial condition and results of operations.

We rely heavily on our sales professionals to market and sell our products. If we are unable to hire, effectively train, manage, improve the productivity of, and retain our sales professionals, our business will be harmed, which would impair our future revenue and profitability.

Our success largely depends on our ability to hire, train, manage and improve the productivity levels of our sales professionals. We train our existing and recently recruited sales professionals to better understand our existing and new product technologies and how they can be positioned against our competitors' products and increase the revenue of our customers. It may take time for the sales professionals to become productive and there can be no assurance that recently recruited sales professionals will be adequately trained in a timely manner, or that our direct sales productivity will improve, or that we will not experience significant levels of attrition in the future. Furthermore, there is a risk that our sales professionals may make inaccurate claims regarding the efficacy and benefits of our products, including in indications for which the products are not cleared by the FDA, which could subject us to claims and liabilities.

Even if we receive the necessary regulatory clearances or approvals for new products or the use of our existing products for the additional indications currently in our development pipeline, we may not be able to successfully launch and market our new products, or our existing products for each intended treatment indication.

We may not market new products or our existing products for the various new treatments contemplated by our development efforts until we have received the requisite regulatory approvals or clearances for each product or treatment indication. Our product development program may be curtailed, redirected, eliminated or delayed at any time for many reasons, and we cannot predict whether we will successfully develop and commercialize our new products or additional indications for our existing products. The commercial success of our new products, and existing products for the treatment of each future proposed indication, whether 510(k)-cleared or with an approved PMA or BLA, will depend on a number of factors, including the following:

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the availability, relative cost and relative effectiveness of alternative and competing treatments;

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acceptance by patients and healthcare practitioners of our products as safe and effective treatment; and

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our ability to obtain sufficient third-party payor coverage or reimbursement for our products for the treatment of each indication.

We anticipate submitting additional 510(k) premarket notifications in 2020 for our products for new surgical soft tissue repair indications. However, even if we obtain a 510(k) clearance, the FDA may issue a clearance for more narrow indications than we seek, or restrict the claims we may make regarding our products. Even if we receive clearance or approval to market our products to treat each new indication we seek, any problems associated with the successful marketing and commercialization of our products for such indications could harm sales of our products for current treatment indications. If we are not successful in launching and marketing our products for the treatment of new indications, or if we are significantly delayed in doing so, our future prospects may be diminished.

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In the future our products may become obsolete, which would negatively affect operations and financial condition.

The field of regenerative medicine is characterized by rapid and significant advancement and change. There can be no assurance that other companies will not succeed in developing or marketing devices and products that are more clinically or cost effective than our UBM products or that would render our products obsolete or noncompetitive. Additionally, new surgical procedures, medications and other therapies could be developed that replace or reduce the importance of our products.

Accordingly, our success will depend in part on our ability to respond quickly to medical and other changes through the development and introduction of new products. Product development involves a high degree of risk, and there can be no assurance that our new product development efforts will result in any commercially successful products.

Product liability lawsuits against us could cause us to incur substantial liabilities and could limit commercialization of any products we may develop.

We face an inherent risk of product liability exposure relating to the use of our products, which may result from previously unknown problems with a product, manufacturer or facility. This risk exists even if a product is 510(k)-cleared, PMA-approved or BLA-approved for commercial sale by the FDA and manufactured in facilities that are required to be in compliance with the FDA's quality system regulation, or QSR, or has received marketing authorization from an applicable foreign regulatory authority. Any side effects, manufacturing defects, misuse or abuse associated with our products could result in injury to a patient. In addition, a liability claim may be brought against us even if our products merely appear to have caused an injury or were used in a procedure in which an injury occurred. Product liability claims may be brought against us by consumers, healthcare providers, medical device companies or others selling or otherwise coming into contact with our products, among others. If we cannot successfully defend ourselves against product liability claims, we will incur substantial liabilities. While we carry product liability insurance coverage for our products that we believe is consistent with industry norms, our insurance coverage may not be sufficient to cover all of our product liability related expenses or losses and may not cover us for any expenses or losses we may suffer.

Moreover, insurance coverage is becoming increasingly expensive, and, in the future, we may not be able to maintain insurance coverage at a reasonable cost, in sufficient amounts or upon adequate terms to protect us against losses due to product liability. Even if we determine that it is prudent to increase our product liability coverage, we may be unable to obtain this increased product liability insurance on commercially reasonable terms or at all. Large judgments have been awarded in class action or individual lawsuits based on device or drug products that had unanticipated side effects. A successful product liability claim or series of claims brought against us could cause our stock price to decline and, if judgments exceed our insurance coverage, could decrease our cash and have a material adverse effect on our business, results of operations, financial condition and growth prospects.

RISKS RELATED TO OUR REGULATORY ENVIRONMENT

If our products are found to be defective or otherwise pose certain safety risks, we may decide, or the FDA could require us, to initiate a recall, and we will be subject to medical device reporting requirements and could be subject to agency enforcement actions.

The FDA has the authority to require the recall of commercialized products if there is a reasonable probability that the product would cause serious, adverse health consequences or death, for example in

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the case of material deficiencies or defects in the design or manufacture of the product. Manufacturers may, under their own initiative, recall a product if any material deficiency in a device is found. A government-mandated or voluntary recall could occur as a result of an unacceptable risk to health, component failures, manufacturing errors, design or labeling defects or other deficiencies and issues.

In addition, under the FDA regulations, we are required to report to the FDA any incident in which our product may have caused or contributed to a death or serious injury or in which our product malfunctioned and, if the malfunction were to recur, would likely cause or contribute to death or serious injury. If we fail to report these events or a product recall to the FDA within the required timeframes, or at all, the FDA and/or the United States Department of Justice could take regulatory or enforcement action against us. In response to a recall initiated by us or the FDA, and depending on the circumstances, the FDA could pursue additional remedies including an injunction, product seizure, imposition of monetary penalties or criminal charges. For example, we recently entered into a plea agreement with the United States Attorney's Office for the District of Maryland and the United States Department of Justice Consumer Protection Branch, in which we pled guilty to one count of failure and refusal to report a medical device removal, agreed to pay a criminal fine and agreed to establish and maintain a compliance and ethics program. We are obligated under the plea agreement to report to the Department of Justice, among other things, (i) the initiation of a recall of a medical device; (ii) the failure to report to the FDA a medical device correction or removal under 21 USC § 360i(g); or (iii) the failure to submit a medical device report to the FDA as required by 21 USC § 360i(a). Failure to do so could result in the rescission of the plea agreement and monetary penalties. We are also obligated under the Corporate Integrity Agreement to report to OIG-HHS the initiation of a recall by us or the FDA. Failure to do so could result in monetary penalties and exclusion from participation in all federal health care programs. We would expect scrutiny by the FDA, Department of Justice and OIG-HHS if we initiate or are ordered to initiate a recall. Repeated product malfunctions may also result in a voluntary or mandatory product recall. Depending on the corrective action we take to redress a product's deficiencies or defects, the FDA may require, or we may decide, that we will need to obtain new clearances or approvals for the device before we may market or distribute the corrected device. Seeking such approvals or clearances may delay our ability to replace the recalled devices in a timely manner. Moreover, if we do not adequately address problems associated with our devices, we may face additional regulatory enforcement action, including FDA warning letters, product seizure, injunctions, administrative penalties, or civil or criminal fines. We may also be required to bear other costs or take other actions that may have a negative impact on our sales as well as face significant adverse publicity or regulatory consequences, which could harm our business, including our ability to market our products in the future. Additional recalls of any of our products would divert managerial and financial resources and have an adverse effect on our business, results of operations and financial condition. A recall could harm our reputation with customers and negatively affect our sales. We may initiate withdrawals of our products in the future that we determine do not require notification of the FDA. If the FDA were to disagree with our determinations, it could request that we report those actions as recalls, and again take regulatory or enforcement action against us or our products.

Our manufacturing operations require us to comply with the FDA's and other governmental authorities' laws and regulations regarding the manufacture and production of medical devices, which is costly and could subject us to enforcement action.

We are required to comply with the FDA's QSR, which covers the methods used in, and the facilities and controls used for, the design, testing, manufacture, quality assurance, labeling, packaging, sterilization, storage and shipping of our products. The FDA enforces the QSR through periodic announced and unannounced inspections of manufacturing facilities. The failure by us or one of our

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suppliers to comply with applicable statutes and regulations administered by the FDA and other regulatory authorities, or the failure to timely and adequately respond to any adverse inspectional observations, could result in, among other things, any of the following enforcement actions:

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untitled letters, warning letters, injunctions, civil penalties and criminal fines;

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customer notifications or repair, replacement, refunds, recall, detention or seizure of our products;

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operating restrictions or partial suspension or total shutdown of production;

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refusing or delaying our requests for approval of a PMA or BLA, or 510(k) clearance of new products, modified products or new indications of cleared products;

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withdrawing PMA approvals, revoking BLA approvals or reclassifying devices that have 510(k) clearances;

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refusal to grant export certificates for our products; or

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criminal prosecution.

Any of these actions could impair our ability to produce our products in a cost-effective and timely manner to meet our customers' demands. Furthermore, our key suppliers may not currently be or may not continue to be in compliance with all applicable regulatory requirements, which could result in our failure to produce our products on a timely basis and in the required quantities, if at all.

In addition to the FDA requirements in the United States, we are required to comply with requirements for the commercialization and distribution of medical devices in foreign countries to sell our products. While those requirements vary by country, they generally require compliance with ISO 13485 (Quality Management Systems). Some countries where we may commercialize our products also have special requirements related to medical devices that contain ingredients of an animal origin and require Transmissible Spongiform Encephalopathy or Bovine Spongiform Encephalopathy certification. If we are unable to comply with these international requirements related to the commercialization of our products, our ability to expand internationally may be limited, or if we fail to maintain compliance we may be subject to sanctions, including a total shutdown of our commercialization of the products internationally.

A reclassification of our products by the FDA could significantly increase our regulatory costs, including the time and expense associated with required clinical trials, or may require us to suspend or discontinue sales of our products.

Under the Federal Food, Drug, and Cosmetic Act, medical devices are classified into one of three classes—Class I, Class II or Class III—depending on the degree of risk associated with each medical device and the extent of control needed to provide reasonable assurance of safety and effectiveness.

Class I devices are those for which safety and effectiveness can be reasonably assured by adherence to FDA's "general controls" for medical devices, which include compliance with the applicable portions of the QSR facility registration and product listing, reporting of adverse medical events, and appropriate, truthful and non-misleading labeling, advertising, and promotional materials. Some Class I devices also require premarket clearance by the FDA through the 510(k) premarket notification process described below.

Class II devices are subject to FDA's general controls, and any other "special controls" deemed necessary by FDA to ensure the safety and effectiveness of the device. Premarket review and clearance by the FDA for Class II devices is accomplished through the 510(k) premarket notification procedure, though certain Class II devices are exempt from this premarket review process. When a 510(k) is

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required, the manufacturer must submit to the FDA a premarket notification submission demonstrating that the device is "substantially equivalent" to a legally marketed device, which in some cases may require submission of clinical data. A legally marketed device is defined by statute to mean a device that was legally marketed prior to May 28, 1976, the date upon which the Medical Device Amendments of 1976 were enacted, or another commercially available, similar device that was cleared through the 510(k) process. Unless a specific exemption applies, 510(k) premarket notification submissions are subject to user fees. If the FDA determines that the device, or its intended use, is not substantially equivalent to a legally marketed device, the FDA will place the device, or the particular use of the device, into Class III, and the device sponsor must then fulfill much more rigorous premarketing requirements in the form of a PMA.

A Class III device includes devices deemed by the FDA to pose the greatest risk such as life-supporting or life-sustaining devices, or implantable devices, in addition to a device that has a new intended use or utilizes advanced technology that is not substantially equivalent to that of a legally marketed device. The safety and effectiveness of Class III devices cannot be reasonably assured solely by general and special controls. These devices almost always require formal clinical studies to demonstrate safety and effectiveness. Submission and FDA approval of a PMA or BLA is required before marketing of a Class III device can proceed.

Our products are currently Class II medical devices; however, from time to time, the FDA may disagree with the classification and require us to apply for approval as a Class III medical device. In the event that the FDA determines that our products should be classified as Class III, we could be precluded from marketing the products for clinical use within the United States for months, years or longer, depending on the specific change in the classification. Reclassification of our technology as Class III could significantly increase our regulatory costs, including the timing and expense associated with required clinical trials and other costs. In addition, the FDA could determine that our products, or claims related to them, are biologics. For example, certain tissue-engineered products do not meet the criteria to be classified as medical devices and may be regulated as biologic products under Section 351 of the Public Health Service Act and also, in some respects, as drugs under the FDCA. Before a biological product can be marketed in interstate commerce, it must receive approval of a BLA by the FDA. Although we do not currently market any biological products, we may consider pursuing potential product opportunities that may require BLA approval. Should we choose to manufacture any potential product opportunities that require BLA approval in the future, the process must comply with the FDA's current good manufacturing, or cGMP, regulations, which are designed to ensure that finished products are not adulterated or misbranded or otherwise in violation of the requirements of the FDCA. Furthermore, we may determine to suspend or discontinue sales of products that are reclassified if we are unable to meet the new FDA requirements, if ever.

We are subject to substantial post-market government regulation that could have a material adverse effect on our business.

The manufacture, labeling, advertising, promotion, record-keeping, post-market surveillance, and marketing of our products are subject to extensive regulation and review by the FDA and numerous other governmental authorities in the United States as well as foreign countries where we may sell our products. Even after we have obtained 510(k) clearance or PMA approval to market a product, we have ongoing responsibilities under FDA and other regulations. The FDA and other national governmental authorities have broad enforcement powers. The regulations to which we are subject are complex and have become more stringent over time. Regulatory changes could result in restrictions on our ability to continue or expand our operations, higher than anticipated costs or lower than

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anticipated sales. Our failure to comply with applicable regulatory requirements could result in enforcement actions such as:

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civil penalties;

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delays on or denials of pending requests for 510(k) clearance or PMA approval;

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recalls or seizures;

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withdrawals or suspensions of current PMA approvals or reclassification of 510(k) cleared devices, resulting in prohibitions on sales of our products;

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warning letters or untitled letters;

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operating restrictions, including a partial or total shutdown of production on our products for any indication;

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refusal to issue export approvals or certifications;

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obtaining injunctions preventing us from manufacturing or distributing our products;

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commencing criminal prosecutions; and

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total prohibitions on our international sales.

The incurrence or commencement of any such action would harm our reputation and cause sales of our products to suffer and may prevent us from generating revenue.

If we modify or change one or more of our products without 510(k) clearance, the FDA could retroactively determine that the modifications were improper and require us to stop marketing and recall our modified products.

Even after 510(k) clearance is obtained from the FDA for one or more of our products, any change or modification to such product that could significantly affect its safety or effectiveness, such as a significant change or modification in design, material, chemical composition, energy source or manufacturing process, or a major change or modification in the device's intended use, would require a new 510(k) clearance or possibly even a PMA approval. The FDA requires every manufacturer to make this determination in the first instance, but the FDA may review any manufacturer's decision. The FDA may not agree with our decisions regarding whether new clearances or approvals are necessary. We have modified some of our 510(k) cleared products, and have determined, based on our review of the applicable FDA guidance, that in certain instances new 510(k) clearances are not required. If the FDA disagrees with our determination and requires us to submit new premarket 510(k) notifications or PMAs for modifications to our previously cleared products for which we have concluded that new clearances or approvals are unnecessary, we may be required to cease marketing or to recall the modified product until we obtain clearance or approval, and we may be subject to significant regulatory fines or penalties.

If the FDA disagrees with our decision not to seek a new 510(k) for modifications to existing products, we may be required to submit extensive preclinical and clinical data, depending on the nature of the changes, in support of an application for marketing clearance or approval. We may not be able to obtain additional 510(k) clearances or premarket approvals for modifications to, or additional indications for, our existing products in a timely fashion, or at all. Delays in obtaining future clearances or approvals would adversely affect our ability to introduce our products for additional indications in a timely manner, which in turn would harm our revenue and operating results.

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Furthermore, the FDA's ongoing review of the 510(k) program may make it more difficult for us to make modifications to our previously cleared products, either by imposing more stringent requirements on when a manufacturer must submit a new 510(k) for a modification to a previously cleared product, or by applying more onerous review criteria to such submissions. Even though recent FDA guidance related to the Abbreviated 510(k) Program issued September 13, 2019 updates earlier guidance from 1998, the practical impact of any changes to the FDA's 510(k) program remains unclear.

The misuse or off-label use of our products may harm our reputation or the image of our products in the marketplace, or result in injuries that lead to product liability suits, which could be costly to our business. Moreover, we could be subject to FDA sanctions if we are deemed to have engaged in off-label promotion.

We have received 510(k) clearances from the FDA for the management of wounds, including for products indicated for pressure ulcers, venous ulcers, diabetic ulcers, second-degree burns, surgical wounds and trauma wounds, and the reinforcement of soft tissue where weakness exists in urological, gynecological and gastroenterological anatomy. Our promotional materials and training methods must comply with FDA and other applicable laws and regulations, including the prohibition on the promotion of a medical device for an indication that has not been approved or cleared by the FDA, referred to as an off-label use. We have been accused of, and recently entered into a settlement agreement regarding, the promotion of products in a manner that has not been approved by the FDA. While we have entered into a settlement agreement with the United States, acting through the United States Department of Justice on behalf of the Office of the Inspector General of the Department of Health and Human Services, the Defense Health Agency, acting on behalf of the TRICARE Program, and the United States Department of Veteran Affairs, regarding such claims, such accusation along with the terms of the Settlement Agreement may cause or impose increased scrutiny of our operations. The FDA does not restrict or regulate a physician's use of a medical device within the practice of medicine, and we cannot prevent a physician from using our products for an off-label use. If the FDA determines that our current or future promotional or training materials constitute the unlawful promotion of an off-label use, it could subject us to regulatory or enforcement actions, including additional civil money penalties, criminal fines and penalties, and exclusion from participation in federal health programs, among others. Other federal, state or foreign governmental authorities might also take action if they consider our promotion or training materials to constitute promotion of an off-label use, which could result in significant fines or penalties under other statutory authorities. In that event, our reputation could be damaged and the use of our products in the marketplace could be impaired.

In addition, there may be increased risk of injury if physicians or others attempt to use our products for off-label indications. Furthermore, the use of our products for indications other than those that have been cleared by the FDA may not effectively treat such conditions, which could harm our reputation in the marketplace among physicians and patients. Physicians may also misuse our products or use improper techniques if they are not adequately trained in the particular use, potentially leading to injury and an increased risk of product liability. Product liability claims are expensive to defend and could divert our management's attention from our primary business and result in substantial damage awards against us. Any of these events could harm our business, results of operations and financial condition.

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Our business and sale of our products are subject to extensive regulatory requirements, including compliance with labelling, manufacturing and reporting controls. If we fail or are unable to timely obtain the necessary 510(k) clearances or PMA approvals for new products or for the use of our products for additional indications, our ability to generate revenue could be materially harmed.

Our products are classified as medical devices and are subject to extensive regulation in the United States by the FDA and other federal, state and local authorities and by similar regulatory authorities in overseas jurisdictions. Government regulation of medical devices is meant to assure their safety and effectiveness, and includes regulation of, among other things:

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design, development and manufacturing;

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testing, labeling, including directions for use, processes, controls, quality assurance, packaging, storage, distribution, installation and servicing;

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preclinical studies and clinical trials;

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establishment registration and listing;

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product safety and effectiveness;

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marketing, sales and distribution;

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premarket approval and 510(k) clearance;

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recordkeeping procedures;

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advertising and promotion;

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corrections and removals and recalls; post-market surveillance, including reporting of deaths or serious injuries, and malfunctions that, if they were to recur, would be likely to cause or contribute to a death or serious injury; and

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product import and export.

In the United States, before we can market a new medical device, or a new use of, or claim for, an existing product, we must first receive either 510(k) clearance or PMA approval from the FDA, unless an exemption applies.

In the 510(k) clearance process, the FDA must determine that a proposed device is "substantially equivalent" to a device legally on the market, known as a "predicate" device. Substantial equivalence means that with respect to the proposed device being compared to the predicate device, the proposed device has the same intended use as the predicate device and the proposed device has the same technological characteristics as the predicate device, or has different technological characteristics but that the proposed device is as safe and effective as the predicate device and does not raise different questions of safety and effectiveness. Clinical data are sometimes required to support substantial equivalence. The PMA pathway requires an applicant to demonstrate the safety and effectiveness of the device based, in part, on extensive data, including, but not limited to, technical, preclinical, clinical trial, manufacturing and labeling data. The PMA process is typically required for devices that are deemed to pose the greatest risk, such as life-sustaining, life-supporting or implantable devices and also novel devices that remain in Class III. Products that are approved from a PMA application generally need FDA approval of a PMA supplement before they can be modified. Similarly, some modifications made to products cleared through a 510(k) may require a new 510(k). Both of these processes can be expensive and lengthy, and with respect to a PMA, can entail significant user fees, unless exempt. The FDA's 510(k) clearance process usually takes from three to six months, but may take significantly

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longer. The process of obtaining a PMA is much more costly and uncertain than the 510(k) clearance process and generally takes from one to three years, or longer, from the time the application is submitted to the FDA until an approval is obtained. The process of obtaining 510(k) clearances or PMA approvals to market a medical device can be costly and time consuming, and we may not be able to obtain these clearances or approvals on a timely basis, if at all.

In the United States, our currently commercialized products have received multiple 510(k) clearances. If the FDA requires us to go through a lengthier, more rigorous process for future products or modifications to existing products than expected, our product introductions or modifications could be delayed or cancelled, which could cause our sales to decline. In addition, the FDA may determine that future products will require the more costly, lengthy and uncertain PMA process. Although we do not currently market any devices under a PMA, the FDA may demand that we obtain a PMA prior to marketing certain of our future products. Further, even with respect to those future products where a PMA is not required, we cannot assure you that we will be able to obtain the 510(k) clearances with respect to those products. The FDA can delay, limit or deny 510(k) clearance or PMA approval of a device for many reasons, including:

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we may not be able to demonstrate to the FDA's satisfaction that our products are safe and effective for their intended uses;

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the data from our preclinical studies and clinical trials may be insufficient to support clearance or approval, where required; and

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the manufacturing process or facilities we use may not meet applicable requirements.

While we have previously received FDA clearance for the indication of our products, the FDA may not approve or clear additional indications that are necessary or desirable for future successful commercialization of our products. Indeed, the FDA may refuse our requests for 510(k) clearance or premarket approval of new products, new intended uses or modifications to existing products.

From time to time, legislation is drafted and introduced in the United States that could significantly change the statutory provisions governing any regulatory approval or clearance that we receive in the United States. In addition, the FDA may change its clearance and approval policies, adopt additional regulations or revise existing regulations, or take other actions which may prevent or delay approval or clearance of our products under development or impact our ability to modify our currently approved or cleared products on a timely basis.

In addition, it is possible that changes in the FDA's review processes or policies regarding tissue-engineered or animal-derived products may result in an FDA decision to review future potential indications of our products under FDA's authority to regulate biological products. Such a determination would require us to submit a BLA rather than a 510(k) or PMA to obtain marketing authorization, comply with applicable good manufacturing practice requirements for biological products, and may subject us to additional data requirements and conditions of approval prior to marketing our products for such indications.

Healthcare policy changes may have a material adverse effect on our business.

The United States and many foreign jurisdictions have enacted or proposed legislative and regulatory changes affecting the healthcare system that could affect our ability to profitably sell our products. Changes in regulations, statutes or the interpretation of existing statutes or regulations could impact our business in the future by requiring, for example: (i) changes to our manufacturing arrangements; (ii) additions or modifications to product labeling; (iii) the recall or discontinuation of our products; or

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(iv) additional record-keeping requirements. If any such changes were to be imposed, they could adversely affect the operation of our business.

In the United States, there have been and continue to be laws enacted and policies implemented by the federal government, state governments, regulators and third party payors to control healthcare costs, and generally, to reform the healthcare system in the United States. For example, the Patient Protection and Affordable Care Act, amended by the Health Care and Education Reconciliation Act or, collectively, ACA, substantially changed the way healthcare is delivered and financed by both governmental and private insurers. Among other things, the ACA:

➤

established a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in and conduct comparative clinical effectiveness research; and

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implemented payment system reforms, including a national pilot program to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain health care services through bundled payment models.

These changes included the creation of demonstration programs and other value-based purchasing initiatives that provide financial incentives for physicians and hospitals to reduce costs, including incentives for furnishing low cost therapies for chronic wounds even if those therapies are less effective than our products.

Under the Trump Administration, there are ongoing efforts to modify or repeal all or part of the ACA or to take executive action that affects its implementation. The Tax Cuts and Jobs Act of 2017, or the Tax Act, includes a provision that repealed effective January 1, 2019 the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the "individual mandate." On December 14, 2018, a U.S. District Court Judge in the Northern District of Texas, or the Texas District Court Judge, ruled that the individual mandate is unconstitutional and a critical and inseverable feature of the ACA, and therefore, the remaining provisions of the ACA are invalid as well. On December 18, 2019, the Fifth Circuit U.S. Court of Appeals held the individual mandate is unconstitutional, but remanded the case to the lower court to reconsider its earlier invalidation of the full ACA. On March 2, 2020, the United States Supreme Court granted the petitions for writs of certiorari to review this case, and has allotted one hour for oral arguments, which are expected to occur in the fall. Pending review, the ACA remains in effect, but it is unclear at this time what effect such litigation will have on the status of the ACA.

General legislative action may also affect our business. For example, the Budget Control Act of 2011 included provisions to reduce the federal deficit and resulted in the imposition of reductions of up to 2% in Medicare payments to providers, which began in April 2013. The CARES Act suspended the 2% Medicare sequester from May 1, 2020, through December 31, 2020, and extended the sequester through 2030. The American Taxpayer Relief Act of 2012 further reduced Medicare payments to several types of providers, including hospitals and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. These or other similar reductions in government healthcare spending could result in reduced demand for our products or additional pricing pressure.

On January 20, 2017, President Trump signed an Executive Order directing federal agencies with authorities and responsibilities under the ACA to waive, defer, grant exemptions from, or delay the implementation of any provision of the ACA that would impose a fiscal burden on states or a cost, fee, tax, penalty or regulatory burden on individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices. On October 13, 2017, President Trump signed

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an Executive Order terminating the cost-sharing subsidies that reimburse insurers under the ACA. The Trump administration has concluded that cost-sharing reduction, or CSR, payments to insurance companies required under the ACA have not received necessary appropriations from Congress and discontinued these payments. The loss of the CSR payments was expected to increase premiums on certain policies issued by qualified health plan issuers under the ACA. Several state Attorneys General filed suit to stop the administration from terminating the subsidies, but their request for a restraining order was denied by a federal judge in California on October 25, 2017. The Bipartisan Health Care Stabilization Act of 2017, as well as the follow-on Bipartisan Health Care Stabilization Act of 2018 were introduced to appropriate funds to stabilize CSR payments; however, the future of this effort is unclear. The effects of the loss of CSR payments on third-party payors, the viability of the ACA marketplace, providers, and potentially our business, are not yet fully known.

Moreover, on January 22, 2018, President Trump signed a continuing resolution on appropriations for fiscal year 2018 that delayed the implementation of certain ACA-mandated fees, including the so called "Cadillac" tax on certain high cost employer-sponsored insurance plans, the annual fee imposed on certain health insurance providers based on market share, and the medical device excise tax on non-exempt medical devices (these three provisions have been repealed, as discussed below). The Bipartisan Budget Act of 2018, also amended the ACA, effective January 1, 2019, by increasing the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D and closing the coverage gap in most Medicare drug plans, commonly referred to as the "donut hole." In addition, CMS published a final rule that would give states greater flexibility, starting in 2020, in setting benchmarks for insurers in the individual and small group marketplaces, which may have the effect of relaxing the essential health benefits required under the ACA for certain plans sold through such marketplaces.

We expect that the ACA, as well as other healthcare reform measures that may be adopted in the future, may result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria, lower reimbursement, and new payment methodologies. This could lower the price that we receive for our products. Any denial in coverage or reduction in reimbursement from Medicare or other government-funded programs may result in a similar denial or reduction in payments from private payors, which may prevent us from being able to generate sufficient revenue, attain profitability or commercialize our products. Litigation and legislative efforts to change or repeal the ACA are likely to continue, with unpredictable and uncertain results. We cannot predict the results of subsequent cases or appeals, any action by the Trump Administration, or whether additional legislative reform proposals will be adopted, when they will be adopted, or what impact they may have on us, but any such proposals could have a negative impact on our business and provide incentives for hospitals and physicians to not use our products.

We may be subject to or otherwise affected by federal and state healthcare laws, including anti-kickback, fraud and abuse and health information privacy and security laws, and could face substantial penalties if we are unable to fully comply with such laws.

Although we do not provide healthcare services, submit claims for third-party reimbursement, or receive payments directly from Medicare, Medicaid or other third-party payors for our products, we are subject to broadly applicable healthcare fraud and abuse regulation and enforcement by federal and state governments, which could significantly impact our business. Manufacturing, sales, promotion and other activities following product approval are also subject to regulation by numerous regulatory authorities in the United States in addition to the FDA, including the Centers for Medicare and Medicaid Services, or CMS, the Office of Inspector General and Office for Civil Rights, other divisions

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of the Department of Health and Human Services, or HHS, the Department of Justice, the Drug Enforcement Administration, the Consumer Product Safety Commission, the Federal Trade Commission, the Occupational Safety & Health Administration, the Environmental Protection Agency and state and local governments.

Additionally, healthcare providers and third-party payors play a primary role in the recommendation of medical devices and other medical items and services. Arrangements with providers, consultants, third-party payors and customers are subject to broadly applicable fraud and abuse, anti-kickback, false claims laws, reporting of payments to physicians and teaching hospitals and patient privacy laws and regulations and other healthcare laws and regulations that may constrain our business and/or financial arrangements. Healthcare fraud and abuse and health information privacy and security laws potentially applicable to our operations include:

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the federal Anti-Kickback Statute, which makes it illegal for any person to knowingly and willfully solicit, receive, offer or pay any remuneration (including any kickback, bribe or certain rebate), directly or indirectly, overtly or covertly, in cash or in kind, or in return for, that is intended to induce or reward referrals, including the purchase, recommendation, order or prescription of a particular drug, for which payment may be made under a federal healthcare program, such as Medicare or Medicaid. A person or entity need not have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it in order to have committed a violation. Violations are subject to civil and criminal fines and penalties for each violation, plus imprisonment and exclusion from government healthcare programs. In addition, the government may assert that a claim that includes items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act, or FCA. There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution. This law applies to our marketing practices, educational programs, pricing policies and relationships with healthcare providers, by prohibiting, among other things, soliciting, receiving, offering or providing remuneration intended to induce the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare or Medicaid programs;

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federal civil and criminal false claims laws, including the FCA, which prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment or approval that are false, fictitious or fraudulent; knowingly making, using or causing to be made or used, a false statement or record material to a false or fraudulent claim or obligation to pay or transmit money or property to the federal government; or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay money to the federal government. Manufacturers can be held liable under the FCA even when they do not submit claims directly to government payors if they are deemed to "cause" the submission of false or fraudulent claims. Companies that submit claims directly to payors may also be liable under the FCA for the direct submission of such claims. The FCA also permits a private individual acting as a "whistleblower" to bring actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery. When an entity is determined to have violated the FCA, the government may impose civil fines and penalties for each false claim, plus treble damages, and exclude the entity from participation in Medicare, Medicaid and other federal healthcare programs;

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the federal civil monetary penalties laws, which impose civil fines for, among other things, the offering or transfer or remuneration to a Medicare or state healthcare program beneficiary if the person knows or should know it is likely to influence the beneficiary's selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or a state health care program, unless an exception applies;

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the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, and its implementing regulations, which created additional federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity can be found guilty of violating HIPAA without actual knowledge of the statute or specific intent to violate it;

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federal "sunshine" reporting requirements imposed by the ACA on drug, device, biological and medical supply manufacturers when payment is available under Medicare, Medicaid or the Children's Health Insurance Program (with certain exceptions) to report annually to the U.S. Department of Health and Human Services, or HHS, under the Open Payments Program, information regarding any payment or other "transfers of value" made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members. Failure to submit required information may result in civil monetary penalties of up to an aggregate of $150,000 per year (or up to an aggregate of $1 million per year for "knowing failures"), for all payments, transfers of value or ownership or investment interests that are not timely, accurately, and completely reported in an annual submission. Beginning in 2022, these reporting obligations will extend to include transfers of value made to certain non-physician providers such as physician assistants and nurse practitioners; and

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analogous state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers or patients; state laws that require device companies to comply with the industry's voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state and local laws that require the licensure of sales representatives; state laws that require device manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and pricing information; data privacy and security laws and regulations in foreign jurisdictions that may be more stringent than those in the United States (such as the European Union, which adopted the General Data Protection Regulation, which became effective in May 2018); state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts; and state laws related to insurance fraud in the case of claims involving private insurers.

In addition, certain states mandate implementation of corporate compliance programs to ensure compliance with these laws, impose additional restrictions on our financial relationships with physicians and other healthcare providers, and/or require the tracking and reporting of compensation and other remuneration to physicians.

Another development affecting fraud and abuse risks is the continued use of the whistleblower or qui tam provisions of the FCA. The FCA imposes liability on any person or entity who, among other things, knowingly presents, or causes to be presented, a false or fraudulent claim for payment by a federal healthcare program. The qui tam provisions of the FCA allow a private individual to bring civil actions on behalf of the federal government alleging that the defendant has submitted a false claim to

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the federal government, and to share in any monetary recovery. Over the past several years, the number of suits brought by private individuals has increased dramatically. In addition, various states have enacted false claim laws analogous to the FCA. A number of these state laws apply where a claim is submitted to any third-party payor and not merely a federal healthcare program.

Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available under the federal Anti-Kickback Statute, it is possible that some of our business activities, including our relationships with physicians, hospitals, IDNs, and group purchasing organizations, or GPOs, could be subject to challenge under one or more of such laws. We could be adversely affected if regulatory agencies interpret our financial relationships with our physician consultants who order our products to be in violation of applicable laws. This could subject us to civil and criminal penalties for non-compliance, the cost of which could be substantial.

If our past or present operations are found to be in violation of any of such laws or any other governmental regulations that may apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines, exclusion from government healthcare programs and the curtailment or restructuring of our operations. Similarly, if the healthcare providers or entities with whom we do business are found to be non-compliant with applicable laws, they may be subject to sanctions, which could also have an adverse impact on us. Any penalties, damages, fines, curtailment or restructuring of our operations could adversely affect our ability to operate our business and our financial results. Any action against us for violation of these laws, even if we successfully defend against them, could cause us to incur significant legal expenses and divert our management's attention from the operation of our business. Moreover, we expect there will continue to be federal and state laws and regulations, proposed and implemented, that could impact our operations and business. The extent to which future legislation or regulations, if any, relating to healthcare fraud abuse laws or enforcement, may be enacted or what effect such legislation or regulation would have on our business remains uncertain. In addition, the commercialization of any of our products outside the United States will also likely subject us to foreign equivalents of the healthcare laws mentioned above, among other foreign laws.

Failure to obtain and maintain regulatory authorization in foreign jurisdictions will prevent us from marketing our products internationally.

We have been audited and are ISO 13485 certified by our Notified Body, BSI Group, which we expect will enable us, in combination with the appropriate marking authorizations, to initiate commercialization of our products in Latin America, Asia and the Middle East. Outside the United States, we can market a product only if we receive marketing authorization and, in some cases, pricing approval, from the appropriate regulatory authorities. The approval procedure varies among countries and can involve compliance with manufacturing and design controls and additional testing. The time required to obtain approval may differ from that required to obtain FDA approval or clearance and may include all of the risks associated with obtaining FDA clearance or approval in addition to other risks. We may not obtain foreign regulatory approvals or certifications on a timely basis, if at all. Approval or clearance by the FDA does not ensure approval or certification by regulatory authorities in other countries, and approval or certification by one foreign regulatory authority does not ensure approval by regulatory authorities in other foreign countries or by the FDA. However, the failure to obtain marketing authorization in one jurisdiction may adversely impact our ability to obtain marketing authorization in another jurisdiction. We may be required to perform additional preclinical or clinical studies even if we have obtained FDA clearance or approval. If we fail to receive necessary approvals to commercialize our products in foreign jurisdictions on a timely basis, or at all, or are deemed to be in violation of marketing restrictions in such countries, we may be subject to fines or other penalties and our business, results of operations and financial condition could be adversely affected.

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Changes in existing third-party coverage and reimbursement may impact our ability to sell our products.

In the United States and markets in other countries, patients who are prescribed medical products for their conditions and providers performing the prescribed services generally rely on third-party payors to reimburse all or part of the associated healthcare costs. Maintaining and growing sales of our products depends in large part on the availability of adequate coverage and reimbursement from third-party payors, including government programs such as Medicare and Medicaid, private insurance plans and managed care programs. Hospitals and other healthcare provider customers that purchase our products typically bill various third-party payors to cover all or a portion of the costs and fees associated with the procedures in which our products are used, including the cost of the purchase of our products. Medicare reimbursement for procedures using our products during an inpatient stay is generally made under a prospective payment system that is determined by a classification system known as the Medicare severity diagnosis-related groups, or MS-DRGs. The Centers for Medicare & Medicaid Services, or CMS, the agency responsible for administering the Medicare program, also includes payment for our products in Medicare payments for outpatient surgical procedures in ambulatory surgery centers or hospital outpatient departments. Our customers' access to adequate coverage and reimbursement for the procedures performed with our products by government and private insurance plans is central to the acceptance of our current and future products. Changes in the amount third-party payors are willing to reimburse our customers for procedures using our products or our products themselves could create pricing pressures for us. We may be unable to sell our products on a profitable basis if third-party payors deny coverage or reduce their current levels of payment, or if our costs of production increase faster than increases in reimbursement levels.

Coverage decisions and payment amounts are established at the discretion of individual third-party payors. Many private payors, however, use coverage decisions and payment amounts determined by CMS as guidelines in setting their coverage and reimbursement policies. As the portion of the U.S. population over the age of 65 and eligible for Medicare continues to grow, we may be more vulnerable to coverage and reimbursement limitations imposed by CMS. While certain procedures using our products are currently covered by Medicare and other third-party payors, future action by CMS or other government agencies may diminish payments to physicians, outpatient centers and/or hospitals for covered services. For instance, our products generally are classified as "skin substitutes" for Medicare reimbursement purposes, and therefore are typically reimbursed in the outpatient setting by CMS through bundled payments. Under these Medicare bundled payments, reimbursement for skin substitute products, including ours, are made as a single payment to the health care provider that includes both the application of the product and the product itself. These bundled payments are subject to a two-tier system—one bundled payment for procedures that involve products whose cost exceeds a threshold amount (i.e., high cost products) and another bundled payment for procedures that involve low cost products below that designated threshold (i.e., low cost payments). Bundled payment rates are modified annually based on modifications to the threshold amounts and geographic adjustments. Currently, our skin substitute products are classified as low cost; however it is not possible to predict whether their designation will change, or whether the bundled payment reimbursement rates will change.

In any case, these bundled payments are limited by dollar amount and may not cover the cost of our products used in a given surgical procedure. Moreover, coverage decisions are at the discretion of the Medicare contractors. As a result, we cannot be certain that the procedures performed with our products will be reimbursed at a cost-effective level or reimbursed at all.

Some third-party payors in the United States, including certain Medicare contractors and private health insurance companies, have developed policies that deny coverage for our products when used as

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wound care treatment for certain clinical indications such as lower extremity ulcers in a hospital outpatient facility, ambulatory surgery center or physician office. To support changes in these policies and expanded coverage, we may need to conduct prospective, randomized controlled clinical trials and present data from such trials to payors to demonstrate the medical necessity or cost effectiveness of our products for these indications. While we are devoting considerable resources to such post-market clinical trials to support such additional coverage and reimbursement, there can be no assurance that coverage for our products will be expanded. In addition, those private payors that do not follow the Medicare guidelines may adopt different coverage and reimbursement policies for procedures performed with our products, though we cannot predict whether coverage will be sufficient or if there will be coverage at all. Failure to obtain favorable payor policies could have a material adverse effect on our business and operations.

Furthermore, the healthcare industry in the United States has experienced a trend toward cost containment as government and private insurers seek to control healthcare costs by imposing lower payment rates and negotiating reduced contract rates with service providers. Therefore, we cannot be certain that the procedures performed with our products will be reimbursed at cost-effective levels. Nor can we be certain that third-party payors using a methodology that sets amounts based on the type of procedure performed, such as those utilized by Medicare and in many privately managed care systems, will view the cost of our products to be justified so as to incorporate such costs into the overall cost of the procedure. Moreover, we are unable to predict what changes will be made to the reimbursement methodologies used by third-party payors in the future.

To the extent we sell our products internationally, market acceptance may depend, in part, upon the availability of coverage and reimbursement within prevailing healthcare payment systems. Reimbursement and healthcare payment systems in international markets vary significantly by country, and include both government-sponsored healthcare and private insurance. We may not obtain international coverage and reimbursement approvals in a timely manner, if at all. Our failure to receive such approvals would negatively impact market acceptance of our products in the international markets in which those approvals are sought.

Consolidation in the healthcare industry could lead to demands for price concessions or to the exclusion of some suppliers from certain of our markets, which could have an adverse effect on our business, results of operations and financial condition.

Because healthcare costs have risen significantly over the past decade, numerous initiatives and reforms initiated by legislators, regulators and third-party payors to curb these costs have resulted in a consolidation trend in the healthcare industry to create new companies with greater market power. As the healthcare industry consolidates, competition to provide products and services to industry participants has become and will continue to become more intense. This in turn has resulted and will likely continue to result in greater pricing pressures and the exclusion of certain suppliers from important market segments as GPOs, independent delivery networks and large single accounts continue to use their market power to consolidate purchasing decisions for some of our customers. We expect that market demand, government regulation, third-party coverage and reimbursement policies and societal pressures will continue to change the worldwide healthcare industry, resulting in further business consolidations and alliances among our customers, which may reduce competition, exert further downward pressure on the prices of our products and could adversely impact our business, results of operations and financial condition.

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RISKS RELATED TO OUR FINANCIAL POSITION AND CAPITAL REQUIREMENTS

We may need additional funding beyond the proceeds of this offering and may be unable to raise capital when needed, which would force us to delay, reduce, eliminate or abandon our commercialization efforts or product development programs.

We cannot be certain that our anticipated cash flow from operations will be sufficient to meet all of our cash requirements of our growth plan. We intend to continue to make investments to support our business growth and may require additional funds to:

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expand the commercialization of our products and execute on our growth strategy;

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fund our operations and product development;

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finance the expansion into new international markets;

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defend, in litigation or otherwise, any claims that we infringe third-party patents or other intellectual property rights;

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commercialize our new products, if any such products receive regulatory clearance or approval for commercial sale; and

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acquire companies and in-license products or intellectual property.

We believe that the net proceeds from this offering, together with our existing cash balances and cash receipts generated from sales of our products, will be sufficient to meet our anticipated cash requirements for at least the next 12 months. However, we may need additional funding sooner than expected and our business and future funding requirements can change unpredictably due to a variety of factors, which could affect our funding needs or cash flows from operations. We may be unable to raise additional funds in a timely manner or on terms that are acceptable to us. If we do not have, or are not able to obtain, sufficient funds, we may have to delay the further development or commercialization of our products for one or more indications. We also may have to reduce marketing, customer support or other resources devoted to our products.

Our results of operations and liquidity needs could be materially and adversely affected by market fluctuations and economic downturn.

Our results of operations and liquidity could be materially and adversely affected by economic conditions generally, both in the United States and elsewhere around the world. Domestic and international equity and debt markets have experienced and may continue to experience heightened volatility and turmoil based on domestic and international economic policies, conditions and concerns. In the event the markets continue to remain volatile, including as a result of the current COVID-19 pandemic, our results of operations and liquidity could be adversely affected by those factors in many ways, including making it more difficult for us to raise funds if necessary, and our stock price may decline. In addition, we maintain significant amounts of cash and cash equivalents at one or more financial institutions, some of which may not be federally insured. If economic instability were to occur, we cannot be certain that we will not experience losses on these cash and cash equivalents.

Our quarterly operating results may fluctuate significantly, which may cause the price of our stock to fluctuate.

Due in part to the unpredictability of the occurrence of traumatic wounds, which in turn causes some unpredictability in our acute wound management business, our operating results have varied from

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quarter to quarter and may vary significantly from quarter to quarter in the future. Quarterly fluctuations may also result from factors such as:

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changes in the complex wound management and soft tissue surgical repair markets that we currently serve or our rate of penetration within such markets;

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our ability to achieve our growth strategies, including increased penetration of existing acute care customer accounts and the establishment of new customer accounts;

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the continued impact of the COVID-19 pandemic on our business operations;

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our ability to develop and commercialize our products for additional applications and the timing and costs thereof, including with respect to obtaining coverage by third-party payors, and our ability to develop new products;

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changes in the reimbursement rates for our products by government and private insurers;

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changes in our operating, manufacturing or selling costs;

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changes in the pricing of our products or those of our competitors;

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our ability to retain and attract additional management, sales and other key revenue-generating personnel;

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our ability to enter into and maintain profitable international distribution arrangements;

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disruptions in the supply or manufacture of our products;

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product defects or a recall of one of more of our products by us or the FDA due to noncompliance with FDA requirements;

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our ability to protect and enforce our intellectual property rights;

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our ability to accurately report our financial results in a timely manner;

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changes or enactment of new laws or regulations promulgated by federal, state, local or foreign governments;

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our ability to obtain additional capital that may be necessary to maintain and expand our business;

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imposition of sanctions by any governmental body due to non-compliance with laws and regulations; and

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general economic conditions in the United States and abroad, as well as economic conditions specific to the health care industry.

As a result of these factors, we may not be able to accurately forecast our revenues or operating results, and our quarterly operating results may vary significantly in the future. This quarterly variation means that period-to-period comparisons of results of operations may not necessarily be meaningful and, as a result, such comparisons should not be relied upon as indications of future performance. Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our stock to fluctuate substantially.

Changes in tax law could adversely affect our business and could differ materially from the financial statements provided herein.

The rules dealing with U.S. federal, state and local income taxation are constantly under review by persons involved in the legislative process and by the Internal Revenue Service and the U.S. Treasury

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Department. Changes to tax laws (which changes may have retroactive application) could adversely affect us or holders of our common stock. In recent years, many such changes have been made and changes are likely to continue to occur in the future. Future changes in tax laws could have a material adverse effect on our business, cash flow, financial condition or results of operations. We urge investors to consult with their legal and tax advisers regarding the implication of potential changes in tax laws on an investment in our common stock.

Our ability to use net operating loss carryforwards and certain other tax attributes to reduce future tax payments may be subject to limitations.

Our U.S. federal net operating loss carryforwards generated in taxable years beginning before January 1, 2018 may be carried forward to offset future taxable income, if any, until such net operating loss carryforwards expire. Under the Tax Act, as modified by the CARES Act, U.S. federal net operating losses incurred in taxable years beginning after December 31, 2017 may be carried forward indefinitely, but the deductibility of such U.S. federal net operating losses in taxable years beginning after December 31, 2020, is limited to 80% of taxable income. It is uncertain if and to what extent various states will conform to the Tax Act or the CARES Act.

In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an "ownership change" (generally defined as a greater than 50 percentage point change (by value) in its equity ownership over a three-year period), the corporation's ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes (such as research tax credits) to offset its post-change income may be limited. It is possible that we have experienced one or more ownership changes in the past, and we may experience ownership changes in the future as a result of subsequent shifts in our stock ownership. We may therefore be limited in the portion of net operating loss carryforwards and other applicable tax attributes that we can use in the future to offset taxable income for U.S. federal income tax purposes. In addition, at the state level, there may be periods during which the use of net operating losses is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed.

RISKS RELATED TO OUR OPERATIONS

Significant disruptions of information technology systems or breaches of information security could adversely affect our business, results of operations and financial condition.

We rely to a large extent upon sophisticated information technology systems to operate our business. In the ordinary course of business, we collect, store and transmit large amounts of confidential information (including but not limited to, personal information and intellectual property). We also have outsourced significant elements of our operations to third parties, including significant elements of our information technology infrastructure and, as a result, we are managing many independent vendor relationships with third parties who may or could have access to our confidential information. The size and complexity of our information security systems, and those of our third-party vendors with whom we contract (and the large amounts of confidential information that is present on them), make such systems potentially vulnerable to service interruptions or to security breaches from inadvertent or intentional actions by our employees or vendors, or from malicious attacks by third parties. Such attacks are of ever-increasing levels of sophistication and are made by groups and individuals with a wide range of motives (including, but not limited to, industrial espionage and market manipulation) and expertise. While we have invested significantly in the protection of data and information technology, there can be no assurance that our efforts will prevent service interruptions or security breaches. Although we have cyber-insurance coverage that may cover certain events described

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above, this insurance is subject to deductibles and coverage limitations and we may not be able to maintain this insurance. Also, it is possible that claims could exceed the limits of our coverage. Any interruption or breach in our systems could adversely affect our business operations and/or result in the loss of critical or sensitive confidential information or intellectual property, and could result in financial, legal, business and reputational harm to us or allow third parties to gain material, inside information that they use to trade in our securities.

Our future success depends on our ability to retain key employees and our ability to attract, retain and motivate qualified personnel.

Our success depends, in part, upon key managerial, manufacturing, scientific, sales and technical personnel, as well as our ability to continue to attract and retain additional highly qualified personnel. We compete for such personnel with other companies, academic institutions, governmental entities and other organizations, some of which have greater financial resources than we do to recruit and retain personnel. We cannot be certain that we will be successful in retaining our current personnel or in hiring or retaining qualified personnel in the future. Recruiting and retaining qualified employees, including sales and scientific personnel, will be critical to our success. Our failure to retain key employees or to attract, retain or motivate qualified personnel may impede the progress of our commercialization, research and development objectives. Further, any inability on our part to enforce non-compete arrangements related to key personnel who have left our company or may leave our company in the future could have a material adverse effect on our business.

Our business could be adversely affected if there are disputes among members of our board and stockholders.

In 2015, one of our stockholders—and now a current director—acted to remove the then board of directors by means of a written stockholder consent. The action led to a lawsuit that ultimately confirmed the effectiveness of the consent, resulting in the replacement of the incumbent directors with the director slate elected by the stockholders. All legal proceedings related to this matter were resolved in 2016 and, in 2019, two of the removed directors were reappointed to our board. Although we believe the current relationships among our directors are good, we cannot guarantee that there will not be future disputes among stockholders or members of our board. If such a dispute were to occur, it could adversely affect the functioning of our board of directors, lead to management distraction and interfere with our operations, any of which could materially harm our business.

Our officers, employees, independent contractors, principal investigators, consultants and commercial partners may engage in misconduct or activities that are improper under other laws and regulations, which would create liability for us.

We are exposed to the risk that our officers, employees, independent contractors (including contract research organizations, or CROs), consultants, suppliers and third party distributors may engage in fraudulent conduct or other illegal activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct or disclosure of unauthorized activities to us that violate FDA regulations, including those laws requiring the reporting of true, complete and accurate information to the FDA, manufacturing standards, federal and state healthcare laws and regulations, and laws that require the true, complete and accurate reporting of financial information or data. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Misconduct by these parties could also involve the improper use of individually identifiable information, which could result in regulatory sanctions and serious harm to our reputation. While we have programs in place to

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address this conduct, it is not always possible to identify and deter misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal, and administrative penalties, including without limitation, damages, fines, imprisonment, exclusion from participation in government healthcare programs, and the curtailment or restructuring of our operations.

Our efforts to acquire and integrate other companies or technologies could adversely affect our operations and financial results.

As part of our growth strategy, we may, among other things, selectively in-license or acquire complementary products and technologies. A successful acquisition depends on our ability to identify, negotiate, complete and integrate such acquisition and to obtain any necessary financing. The process of proposing, negotiating and implementing a license or acquisition of a product candidate or approved product is lengthy and complex. Other companies, including some with substantially greater financial, marketing, sales and other resources, may compete with us for the license or acquisition of product candidates and approved products. With respect to any such future acquisitions, we may experience:

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difficulties in integrating any acquired companies, personnel and products into our existing business;

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exposure to unknown liabilities;

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delays in realizing the benefits of the acquired company or products;

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diversion of our management's time and attention as well as our capital resources from other business concerns;

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challenges due to limited or no direct prior experience in new markets or countries we may enter;

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impairment of relationships with key suppliers or customers of any acquired businesses due to changes in management and ownership;

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higher costs of integration than we anticipated; or

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difficulties in retaining key employees of the acquired business.

In addition, any future acquisitions could materially impair our operating results by causing us to make significant expenditures or incur debt in an effort to fund such acquisitions.

The estimates of market opportunity and forecasts of market growth included in this prospectus may prove to be inaccurate, and even if the markets in which we compete are as large as we estimate or achieve their forecasted growth, our business could fail to grow at similar rates, if at all.

Market opportunity estimates and growth forecasts included in this prospectus, including those we have generated ourselves, are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. The variables that go into the calculation of our market opportunity are subject to change over time, and there is no guarantee that any particular number or percentage of customers covered by our market opportunity estimates will purchase our products at all or generate any particular level of revenue for us. Any expansion in our market depends on a number

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of factors, including the cost and perceived value associated with our products and those of our competitors. Even if the markets in which we compete meet the size estimates and growth forecast in this prospectus, our business could fail to grow at similar rates, if at all. Our growth is subject to many factors, including our success in implementing our business strategy, which is subject to many risks and uncertainties. Accordingly, the forecasts of market size and growth included in this prospectus should not be taken as indicative of our future growth.

We rely on third parties to conduct our research studies and they may not perform as contractually required or expected.

We rely on third parties, such as medical institutions, clinical investigators and contract laboratories to conduct our clinical research and studies. We and our third party collaborators are required to comply with all applicable regulations governing clinical research, including good clinical practice, or GCP, regulations. The FDA and similar foreign authorities enforce these regulations through periodic inspections of trial sponsors, principal investigators, and trial sites. If we or our third party collaborators fail to comply with GCP regulations, our studies may be delayed or the data generated in our studies may be deemed unreliable and the FDA may require us to perform additional studies before granting us authorization to market, if at all. We cannot be certain that, upon inspection, the FDA and similar foreign regulatory authorities will determine that any of our studies comply or complied with applicable regulations, including GCPs. In addition, our studies must be conducted with product manufactured in accordance with the QSR, and the FDA may also require a large number of test subjects. Our failure or the failure of our third party contractors, to comply with the applicable regulations may require us to repeat studies, which could delay or prevent us from obtaining clearance. Furthermore, our third-party collaborators may be delayed in conducting our studies for reasons outside of their control. For example, as a result of the current COVID-19 pandemic, many studies and clinical trials, including those involving our products, have been temporarily suspended.

If these third parties do not successfully carry out their contractual duties or regulatory obligations or meet expected deadlines, if these third parties need to be replaced, or if the quality or accuracy of the data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our non-clinical development activities or clinical studies may be extended, delayed, suspended or terminated, and we may not be able to obtain regulatory clearance for, or successfully commercialize, our products for additional indications on a timely basis, if at all, and our business, results of operations, financial condition and growth prospects may be adversely affected.

RISKS RELATED TO OUR INTELLECTUAL PROPERTY

Our core patents with claims directed to our currently marketed products will soon expire and our remaining patents and other intellectual property rights may not adequately protect our products.

Our ability to compete effectively will depend, in part, on our ability to maintain the proprietary nature of our technology and manufacturing processes. We attempt to protect our intellectual property rights in our technology platform and products through a combination of patent, trademark, copyright and trade secret laws. These legal means, however, afford only limited protection and may not adequately protect our rights. In addition, the laws of some of the countries in which our products are or may be sold may not protect our intellectual property to the same extent as U.S. laws or at all. In particular, the laws of certain countries in which we intend to expand, may provide means to permit the disclosure of our technology to companies of government agencies of such countries. We also may be unable to protect our rights in trade secrets and unpatented proprietary technology in these

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countries. Our failure to obtain or maintain adequate protection of our intellectual property rights for any reason could have a material adverse effect on our business, results of operations and financial condition. We rely on trade secrets, including proprietary know-how and other unpatented technology, which are difficult to protect. Although we seek such protection in part by entering into confidentiality agreements with our vendors, employees, consultants and others who may have access to proprietary information, we cannot be certain that these agreements will not be breached, that adequate remedies for any breach would be available, or that our trade secrets will not otherwise become known to or be independently developed by our competitors.

In addition to trade secret protection, we also rely on patents to protect our products. However, the core U.S. and foreign patents with claims directed to our currently marketed products will expire between October 2020 and January 2021. After these patents expire, we will be unable to prevent competitors from designing, marketing or commercializing products similar to ours, which could have an adverse effect on our revenues, sales, pricing and profitability. The patents we own may not be of sufficient scope or strength to provide us with any meaningful protection or commercial advantage, and competitors may be able to design around our patents to develop products that provide outcomes that are similar to ours. In addition, a third party may bring a proceeding before the U.S. Patent and Trademark Office, or USPTO, or equivalent foreign agency attempting to significantly narrow the claims in our issued patents, or even to invalidate any of our patents in their entirety. These proceedings could result in adverse decisions as to the ownership or priority of our inventions and the narrowing or invalidation of any or all of the claims in our issued patents.

Further, while we generally apply for patents in those countries where we expect to have material sales of our patented products, we may not accurately predict all of the countries where patent protection will ultimately be desirable. If we fail to timely file a patent application in any such country, we may be precluded from doing so at a later date. Furthermore, we cannot assure you that any of our patent applications will be approved.

We rely on our trademarks, trade names, and brand names to distinguish our products from the products of our competitors, and have registered or applied to register many of these trademarks. We cannot assure you that our trademark applications will be approved. Third parties may also oppose our trademark applications, or otherwise challenge our use of the trademarks. In the event that our trademarks are successfully challenged, we could be forced to rebrand our products, which could result in loss of brand recognition, and could require us to devote resources to the advertising and marketing of new brands.

If we are unsuccessful in protecting our intellectual property rights, sales of our products may suffer and our ability to generate revenue could be severely impacted.

Legal proceedings to assert our intellectual property rights could be costly and could impair our operations.

In the event that a third party infringes upon or challenges our patents or other intellectual property rights, enforcing these rights may be costly, difficult and time-consuming. If we are unsuccessful in enforcing and protecting our intellectual property rights and protecting our products, it could harm our business, results of operations and financial condition. Even if successful, litigation to enforce our intellectual property rights or to defend our intellectual property rights against challenge could be expensive and time-consuming and could divert our management's attention from our primary business. We may not have sufficient resources to enforce our intellectual property rights or to defend our patents or other intellectual property rights against a challenge. The patents covering our UBM technology platform have in the past been the subject of reexamination and interference proceedings

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before the USPTO, as well as patent infringement litigation. While we are pleased with the outcome of these prior proceedings, we cannot assure you that we will be successful enforcing and protecting our intellectual property rights in the future.

We may be sued by third parties for alleged infringement of their proprietary rights, which could be costly, time-consuming and limit our ability to use certain technologies in the future.

We may be subject to claims that our technologies infringe upon the intellectual property or other proprietary rights of third parties. Any claims, even those without merit, could be time-consuming and expensive, and could divert our management's attention away from the execution of our business plan. Moreover, any settlement or adverse judgment resulting from the claim could require us to pay substantial amounts or obtain a license to continue to use the technology that is the subject of the claim, or otherwise restrict or prohibit our use of the technology. There can be no assurance that we would be able to obtain a license from the third party asserting the claim on commercially reasonable terms, if at all, that we would be able to develop alternative technology on a timely basis, if at all, or that we would be able to obtain a license to use a suitable alternative technology to permit us to continue offering, and our customers to continue using, our affected product.

We generally indemnify our retail and distribution partners with respect to third party intellectual property infringement claims relating to our products. These claims may require us to initiate or defend protracted and costly litigation on behalf of our retail and distribution partners regardless of the merits. An adverse determination could force us to pay damages on behalf of our retail and distribution partners or obtain licenses on their behalf. If we cannot obtain such licenses on commercially reasonable terms, our retail and distribution partners may be forced to stop selling and distributing our products. Thus, infringement claims asserted against us or our vendors may have a material adverse effect on our business, results of operations or financial condition.

Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our products.

Success in the healthcare industry is often dependent on intellectual property, for example, patents. Obtaining and enforcing patents in the healthcare industry involve both technological and legal complexity, and therefore obtaining and enforcing healthcare patents is costly, time-consuming and inherently uncertain.

Moreover, U.S. Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. In addition to increasing uncertainty regarding our ability to obtain patents in the future, this combination of events has created uncertainty regarding the value of any patents we do obtain. Depending on decisions by the U.S. Congress, the federal courts, and the U.S. Patent and Trademark Office, the laws and regulations governing patents could change in unpredictable ways that could weaken our ability to obtain new patents or to enforce any current or future patents that we may own or license.

RISKS RELATED TO THIS OFFERING AND OUR COMMON STOCK

There has been no public market for our common stock prior to this offering, and an active market in the shares may not develop or be liquid enough for investors to resell our common stock quickly or at the market price.

Prior to this offering, there has been no public market for our common stock. We cannot predict the extent to which an active market for our common stock will develop or be sustained after this

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offering, or how the development of such a market might affect the market price for our common stock. The initial public offering price of our common stock in this offering will be agreed upon between us and the underwriters based on a number of factors, including market conditions in effect at the time of the offering, which may not be indicative of the price at which our shares will trade following completion of the offering. If an active market for our common stock does not develop or is not sustained, it may be difficult for you to sell shares you purchased in this offering at an attractive price or at all.

The price of our common stock is likely to be volatile and may fluctuate due to factors beyond our control.

The market price of our common stock may be highly volatile and may fluctuate or decline substantially as a result of a variety of factors, some of which are beyond our control, including:

➤

actual or anticipated fluctuations in our financial condition or results of operations;

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variance in our financial performance from expectations of securities analysts;

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changes in our projected operating and financial results;

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announcements by us or our competitors of significant business developments, acquisitions, or new offerings;

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announcements or concerns regarding real or perceived safety or efficacy issues with our products or similar products of our competitors;

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adoption of new regulations applicable to our industry or the expectations concerning future regulatory developments;

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volatility and changes in the healthcare industry, particularly in response to the ongoing COVID-19 pandemic;

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our involvement in litigation;

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future sales of our common stock by us or our stockholders, as well as the anticipation of lock-up releases;

➤

changes in senior management or key personnel;

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the trading volume of our common stock;

➤

changes in the anticipated future size and growth rate of our market; and

➤

general economic and market conditions.

Broad market and industry fluctuations, as well as general economic, political, regulatory, and market conditions, may also negatively impact the market price of our common stock.

If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, the price of our common stock and our trading volume could decline.

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. We do not currently have and may never obtain research coverage by equity research analysts. If no or too few securities or industry analysts commence coverage of us, the trading price for our common stock would likely be negatively affected. In the event securities or industry analysts initiate coverage, if one or more of the analysts

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who cover us downgrade our common stock or publish inaccurate or unfavorable research about our business, the price of our common stock would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease, which might cause the price of our common stock and trading volume to decline.

We will incur increased costs as a result of operating as a public company, and our management and board of directors will be required to devote substantial time to new compliance initiatives and corporate governance practices.

As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of the stock exchange on which our common stock is listed, and other applicable securities rules and regulations impose various requirements on public companies, including the establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our management, board of directors and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance, which in turn could make it more difficult for us to attract and retain qualified members of our management and board of directors. However, these rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

Future sales of our common stock in the public market could cause our share price to fall.

Sales of a substantial number of shares of our common stock in the public market after this offering, or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. Upon the closing of this offering, we will have              shares of common stock outstanding.

All of the shares of common stock sold in this offering will be freely tradable without restrictions or further registration under the Securities Act except for any shares held by our affiliates as defined in Rule 144 under the Securities Act. A total of shares             of common stock outstanding immediately after this offering, or         %, will be restricted as a result of securities laws, lock-up agreements or other contractual restrictions that restrict transfers for 180 days after the date of this prospectus.

UBS Securities LLC may, in its sole discretion, release all or some portion of the shares subject to lock-up agreements with the underwriters prior to expiration of the lock-up period. See "Shares eligible for future sale."

The holders of             shares of common stock outstanding after this offering, or         % of outstanding shares immediately after giving effect to this offering, will be entitled to rights with respect to registration of such shares under the Securities Act pursuant to an investor rights agreement between such holders and us. See "Description of capital stock—Registration rights." If such holders, by exercising their registration rights, sell a large number of shares, the market price for our common stock could be harmed. If we file a registration statement for the purpose of selling additional shares to raise capital and are required to include shares held by these holders pursuant to the exercise of

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their registration rights, our ability to raise capital may be impaired. We intend to file a registration statement on Form S-8 under the Securities Act to register shares for issuance under our equity incentive plans, including our 2002 Plan, 2011 Plan, 2020 Plan and ESPP, and shares issuable upon exercise of options granted outside of our equity incentive plans. Each of the 2020 Plan and ESPP provides for automatic increases in the shares reserved for issuance under the plan which could result in additional dilution to our stockholders. Once we register these shares, they can be freely sold in the public market upon issuance and vesting, subject to any lock-up restrictions of the holder.

Because we do not expect to pay dividends on our common stock in the foreseeable future, capital appreciation, if any, would be your sole source of gain.

We have never declared or paid any dividends on our common stock. We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. The decision to pay future dividends to stockholders will be at the discretion of our board of directors after taking into account various factors including our business prospects, cash requirements, financial performance and new product development. Accordingly, investors cannot rely on dividend income from our common stock and any returns on an investment in our common stock will likely depend entirely upon any future appreciation in the price of our common stock.

If you purchase common stock in this offering, you will suffer immediate dilution of your investment.

The assumed initial public offering price of our common stock is substantially higher than the pro forma as adjusted net tangible book value per share. Therefore, if you purchase common stock in this offering, you will pay a price per share that substantially exceeds the book value of our tangible assets, after subtracting our liabilities, after this offering. Based on the assumed initial public offering price of $             per share, which is the midpoint of the range set forth on the cover page of this prospectus, you will experience immediate dilution of $             per share, representing the difference between our pro forma as adjusted net tangible book value per share after giving effect to this offering and the assumed initial public offering price. In addition, purchasers of common stock in this offering will have contributed approximately             % of the aggregate price paid by all purchasers of our common stock but will own only approximately             % of our common stock outstanding after this offering. To the extent options are exercised, you will incur further dilution. See "Dilution."

We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

Our management will have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that do not improve our results of operations or increase the value of our common stock. We intend to use the net proceeds from this offering to increase awareness of our technology and products, fund research, including clinical trials and post-market studies, grow our sales force, upgrade our Lafayette, Indiana facility, expand our international sales opportunity, expand and enhance our product portfolio and for working capital and general corporate purposes. The failure by our management to apply these funds effectively could result in financial losses that could have an adverse effect on our business, cause the price of our common stock to decline and delay the development of our product candidates. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.

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We are an "emerging growth company," and we cannot be certain if the reduced reporting requirements applicable to "emerging growth companies" will make our common stock less attractive to investors.

We are an "emerging growth company," as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies," including the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, or Section 404, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Pursuant to Section 107 of the JOBS Act, as an emerging growth company, we have elected to use the extended transition period for complying with new or revised accounting standards until those standards would otherwise apply to private companies. As a result, our financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make our common stock less attractive to investors. In addition, if we cease to be an emerging growth company, we will no longer be able to use the extended transition period for complying with new or revised accounting standards.

We will remain an emerging growth company until the earliest of: (1) the last day of the fiscal year following the fifth anniversary of this offering; (2) the last day of the first fiscal year in which our annual gross revenue is $1.07 billion or more; (3) the date on which we have, during the previous rolling three-year period, issued more than $1 billion in non-convertible debt securities; and (4) the last day of the fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million as of June 30 of such fiscal year.

We cannot predict if investors will find our common stock less attractive if we choose to rely on these exemptions. For example, if we do not adopt a new or revised accounting standard, our future results of operations may not be as comparable to the results of operations of certain other companies in our industry that adopted such standards. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile.

If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, stockholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our common stock.

Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations. In addition, any testing by us conducted in connection with Section 404, or any subsequent testing by our independent registered public accounting firm, may reveal deficiencies in our internal control over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement. Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common stock.

We will be required to disclose changes made in our internal controls and procedures on a quarterly basis and our management will be required to assess the effectiveness of these controls annually.

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However, for as long as we are an "emerging growth company" under the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404. We could be an "emerging growth company" for up to five years. An independent assessment of the effectiveness of our internal controls could detect problems that our management's assessment might not. Undetected material weaknesses in our internal controls could lead to financial statement restatements and require us to incur the expense of remediation.

Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock.

Provisions in our amended and restated certificate of incorporation and amended and restated bylaws, as they will be in effect upon the completion of this offering, and provisions of Delaware law, may have the effect of delaying or preventing a change of control or changes in our management. Our amended and restated certificate of incorporation and amended and restated bylaws will include provisions that:

➤

authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights, and preferences determined by our board of directors that may be senior to our common stock;

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require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent;

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specify that special meetings of our stockholders can be called only by our board of directors, the chairperson of our board of directors, or our chief executive officer;

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establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors;

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establish that our board of directors is divided into three classes, with each class serving three-year staggered terms;

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prohibit cumulative voting in the election of directors;

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provide that our directors may be removed for cause only upon the vote of at least 66²/3% of our outstanding shares of voting stock; and

➤

provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum.

These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally, subject to certain exceptions, prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any "interested" stockholder for a period of three years following the date on which the stockholder became an "interested" stockholder.

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Our amended and restated certificate of incorporation will designate the Court of Chancery of the State of Delaware and, to the extent enforceable, the federal district courts of the United States of America as the exclusive forums for substantially all disputes between us and our stockholders, which will restrict our stockholders' ability to choose the judicial forum for disputes with us or our directors, officers, or employees.

Our amended and restated certificate of incorporation, as will be in effect upon the completion of this offering, will provide that the Court of Chancery of the State of Delaware (or, if and only if the Court of Chancery of the State of Delaware lacks subject matter jurisdiction, any state court located within the State of Delaware or, if and only if all such state courts lack subject matter jurisdiction, the federal district court for the District of Delaware) is the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: any derivative action or proceeding brought on our behalf; any action asserting a breach of a fiduciary duty; any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our amended and restated certificate of incorporation, or our amended and restated bylaws; or any action asserting a claim against us that is governed by the internal affairs doctrine. The provisions would not apply to suits brought to enforce a duty or liability created by the Securities Act or the Exchange Act. In addition, our amended and restated certificate of incorporation will provide that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, subject to and contingent upon a final adjudication in the State of Delaware of the enforceability of such exclusive forum provision.

These choice of forum provisions may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees. If a court were to find either choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions. While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions. In such instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of our amended and restated certificate of incorporation. This may require significant additional costs associated with resolving such action in other jurisdictions and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions.

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Special note regarding forward-looking statements

This prospectus contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this prospectus, including statements regarding our future results of operations or financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "will" or "would" or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:

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our expected use of the net proceeds from this offering;

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our estimates regarding expenses, revenues and capital requirements, including our estimates regarding revenue for the three months ended June 30, 2020;

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our ability to obtain and maintain regulatory clearance or approval of our current or future products for any indication, and the labeling under any clearance or approval we may obtain;

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regulatory developments in the United States and foreign countries;

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our expectations regarding future impacts of the COVID-19 pandemic on our business operations and financial condition;

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our plans to further develop and commercialize our products for additional applications;

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our plans to conduct and fund research, including clinical trials and post-market studies, to provide additional data with respect to our products and UBM technology;

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the availability of adequate third-party reimbursement for our products;

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our ability to expand and enhance the effectiveness of our U.S. commercial organization to achieve greater market adoption of our products, including through further penetrating existing acute care customer accounts, growing our acute care customer base and selectively expanding the sale of our products into non-acute care facilities;

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our ability to expand our international sales opportunity;

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our ability to expand and enhance our product portfolio;

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our ability to maintain adequate supply of raw materials for our products and our manufacturing and distribution capabilities;

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the size and growth of the potential markets for our products and our ability to serve those markets;

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our ability to increase awareness of our products in the markets in which we compete and establish and grow market acceptance of our products for any indication;

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the success of competing products that are or become available;

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our ability to obtain additional financing if needed; and

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our ability to obtain and maintain intellectual property protection for our proprietary assets.

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this prospectus primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition

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and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled "Risk factors" and elsewhere in this prospectus. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this prospectus. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this prospectus. And while we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

The forward-looking statements made in this prospectus relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this prospectus to reflect events or circumstances after the date of this prospectus or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments.

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Market, industry and other data

This prospectus contains estimates, projections and other information concerning our industry, our business and the markets for our products. Some market data and statistical information contained in this prospectus are also based on management's estimates and calculations, which are derived from our review and interpretation of independent sources, our internal research and our knowledge of our markets. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to these estimates. In addition, projections, assumptions and estimates of the future performance of the industry in which we operate and our future performance are necessarily subject to uncertainty and risk due to a variety of factors, including those described in the sections titled "Risk factors" and "Special note regarding forward-looking statements." These and other factors could cause results to differ materially from those expressed in the projections and estimates made by independent third parties and us.

Unless otherwise expressly stated, we obtained industry, business, market and other data from our own internal estimates and research as well as from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources. Some of the estimates, projections and other industry information in this prospectus was obtained from BioMedGPS, provider of SmartTRAK Business Intelligence Solutions.

In some cases, we do not expressly refer to the sources from which this data is derived. In that regard, when we refer to one or more sources of this type of data in any paragraph, you should assume that other data of this type appearing in the same paragraph is derived from the same sources, unless otherwise expressly stated or the context otherwise requires.

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Use of proceeds

We estimate that we will receive net proceeds from this offering of approximately $              million based on an assumed initial public offering price of $             per share of common stock, the midpoint of the estimated price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We will not receive any of the proceeds from the sale of common stock in this offering by the selling stockholders in the event that the underwriters exercise their option to purchase additional shares.

A $1.00 increase (decrease) in the assumed initial public offering price of $             per share of common stock, the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase (decrease) the net proceeds to us from this offering by approximately $              million, assuming the number of shares of common stock offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. An increase (decrease) of 1,000,000 shares in the number of shares of common stock offered by us would increase (decrease) the net proceeds to us from this offering by approximately $              million, assuming the assumed initial public offering price of $             per share of common stock remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The principal purposes of this offering are to increase our capitalization and financial flexibility, to create a public market for our common stock and to facilitate our future access to the capital markets. As of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net proceeds we receive from this offering. However, we currently intend to use the net proceeds we receive from this offering as follows:

➤

approximately $           million to increase awareness of our differentiated technology, products and brand in the markets in which we compete;

➤

approximately $           million to fund research, including clinical trials and post-market studies, for our products;

➤

approximately $           million to grow our sales force and continue to invest in training to further enhance the experience and skills of our sales and marketing personnel;

➤

approximately $           million to invest in upgrades to our Lafayette, Indiana facility;

➤

approximately $           million to expand our international sales opportunity;

➤

approximately $           million to expand and enhance our product portfolio; and

➤

the remainder for working capital and general corporate purposes.

We may also use a portion of the net proceeds we receive from this offering to acquire complementary businesses, products, services or technologies. However, we do not have agreements or commitments to enter into any acquisitions at this time.

We will have broad discretion over how to use the net proceeds we receive from this offering. We intend to invest the net proceeds we receive from this offering that are not used as described above in investment-grade, interest-bearing instruments.

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Dividend policy

We have never declared or paid any dividends on our common stock. We currently intend to retain all available funds and future earnings, if any, to fund the development and expansion of our business, and we do not anticipate declaring or paying any cash dividends in the foreseeable future. In addition, our loan and security agreement with Silicon Valley Bank contains restrictive covenants that prohibit us, subject to certain exceptions, from paying dividends on our common stock, and future debt securities or other financing arrangements could contain similar or more restrictive negative covenants. Any future determination regarding the declaration and payment of dividends, if any, will be at the discretion of our board of directors and will depend on then-existing conditions, including our financial condition, operating results, contractual restrictions (including in our then-existing debt arrangements), capital requirements, business prospects and other factors our board of directors may deem relevant.

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Capitalization

The following table sets forth our cash and cash equivalents and capitalization as of March 31, 2020:

➤

on an actual basis;

➤

on a pro forma basis, giving effect to the automatic conversion of all outstanding shares of convertible preferred stock into an aggregate of 36,458,156 shares of common stock, which will occur immediately prior to the completion of this offering; and

➤

on a pro forma as adjusted basis, giving effect to (1) the pro forma adjustments described above and (2) our receipt of estimated net proceeds of $           million from the sale of shares of common stock that we are offering at an assumed initial public offering price of $             per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The information below is illustrative only and our capitalization following this offering will be based on the actual initial public offering price and other terms of this offering determined at pricing. Cash and cash equivalents are not components of our total capitalization. You should read this table together with the section titled "Management's discussion and analysis of financial condition and results of operations" and our financial statements and related notes included elsewhere in this prospectus.

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Capitalization

A $1.00 increase (decrease) in the assumed initial public offering price of $             per share of common stock, the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase (decrease) each of our pro forma as adjusted cash and cash equivalents, additional paid-in capital, total stockholders' equity and total capitalization by approximately $              million, assuming the number of shares of common stock offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase (decrease) of 1,000,000 shares in the number of shares of common stock offered by us would increase (decrease)

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Capitalization

each of our pro forma as adjusted cash and cash equivalents, additional paid-in capital, total stockholders' equity and total capitalization by approximately $              million, assuming the assumed initial public offering price of $             per share of common stock remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expense payable by us.

The information in the table above excludes:

➤

7,389,684 shares of common stock issuable on the exercise of outstanding stock options as of March 31, 2020 under our 2002 Stock Option and Incentive Plan, or 2002 Plan, our 2011 Stock Option and Grant Plan, or 2011 Plan, and granted outside of our equity incentive plans, with a weighted average exercise price of $1.81 per share;

➤

6,250 shares of common stock issuable on the exercise of a common stock warrant at an exercise price of $0.40 per share, which will expire upon the earlier of August 24, 2020 or the completion of this offering;

➤

           shares of common stock reserved for future issuance under our 2020 Plan, which will become effective immediately prior to the execution of the underwriting agreement related to this offering, as well as any future increases, including annual automatic evergreen increases, in the number of shares of common stock reserved for issuance thereunder, and any shares underlying outstanding stock awards granted under our 2002 Plan and 2011 Plan that expire or are repurchased, forfeited, cancelled or withheld, as more fully described in the section titled "Executive compensation—Equity Incentive Plans"; and

➤

           shares of common stock reserved for issuance under our ESPP, which will become effective immediately prior to the execution of the underwriting agreement related to this offering, as well as any future increases, including annual automatic evergreen increases, in the number of shares of common stock reserved for future issuance thereunder.

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Dilution

If you invest in our common stock in this offering, your interest will be diluted to the extent of the difference between the initial public offering price per share of common stock and the pro forma as adjusted net tangible book value per share immediately after this offering.

Our pro forma net tangible book value as of March 31, 2020 was $16.7 million, or $0.33 per share of common stock. Our pro forma net tangible book value per share represents the amount of our total tangible assets less our total liabilities, divided by the number of our shares of common stock outstanding as of March 31, 2020, after giving effect to the automatic conversion of all outstanding shares of convertible preferred stock into an aggregate of 36,458,156 shares of common stock, which will occur immediately prior to the completion of this offering.

After giving effect to the sale by us of                      shares of common stock in this offering at an assumed initial public offering price of $             per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of March 31, 2020 would have been $              million, or $             per share. This amount represents an immediate increase in pro forma as adjusted net tangible book value of $             per share to our existing stockholders and an immediate dilution of $             per share to new investors purchasing common stock in this offering. We determine dilution by subtracting the pro forma as adjusted net tangible book value per share after this offering from the initial public offering price per share paid by investors purchasing common stock in this offering. The following table illustrates this dilution on a per share basis: