MiMedx accounting firm quits

December 10, 2018 By Brad Perriello Leave a Comment

The troubles at MiMedx (NSDQ:MDXG) continued last week with the resignation of the accounting firm tapped to audit its books in the wake of a financial scandal.

Marietta, Ga.-based MiMedx last July ousted ex-CEO Parker Petit and president & COO William Taylor amid a board-directed independent investigation that had already prompted the departure of CFO Michael Senken and treasurer John Cranston in June.

At the time, MiMedx said it would restate all of its earnings reports going back to 2012 and was cooperating with U.S. Securities & Exchange Commission and Justice Dept. investigations into the matter.

The company later said that all four executives’ departures were for cause, triggering the forfeit of all equity and incentive awards for the executives and Petit’s resignation from the board. Petit and Taylor denied the allegations in a statement from their lawyer.

Last week MiMedx, which makes regenerative and therapeutic biologics using human placental tissue allografts, said the company hired by its board’s audit committee resigned Dec. 4 after determining that it can’t rely on the company’s internal financial controls or the representations from the former executives and their interim replacements.

“EY advised the company that the internal controls necessary for the company to develop reliable financial statements do not exist,” MiMedx said in a Dec. 7 regulatory filing. “Although EY could accept representations from the current interim CEO and interim CFO based on their knowledge, EY advised the company that EY is unable to rely on representations from them because, as of the date of the resignation, the current interim CEO and interim CFO, in turn, would have needed to rely on representations from certain legacy management personnel still in positions that could affect what is reflected in the company’s books and records.”

The accounting firm said it would need to “significantly expand” the scope of its audit, “due to material allegations of inappropriate financial reporting, material allegations of noncompliance with laws and regulations, the findings to date from the independent investigation conducted by the Audit Committee into these allegations, and the lack of internal controls necessary for the company to develop reliable financial statements,” MiMedx said in the filing.

“EY advised the company that information has come to EY’s attention that EY has concluded materially impacts the reliability of previously issued financial statements, and the issues raised by this information have not been resolved to EY’s satisfaction prior to its resignation,” MiMedx said.

MDXG shares closed down -4.2% at $1.15 apiece Dec. 7.

Last week the company said it’s planning to lay off 24% of its workforce in a restructuring effort.

Solition touts scar treatment study results
Soliton (NSDQ:SOLY) today announced positive results from treatment of fibrotic scars using its rapid acoustic pulse (RAP) device. The proof-of-concept study, conducted 12 weeks after a single treatment with the device, showed that 10 patients’ keloid and hypertrophic scars were with smaller. Soliton licensed the technology from the University of Texas on behalf of the… […]
January 2020 Issue: The Leadership in Medical Technology Issue
The next Roaring ’20s The medtech industry received one of the best holiday gifts it could have hoped for just before Congress adjourned for its year-end break: the repeal of the 2.3% medical device excise tax. The tax was part of the Affordable Care Act of 2010 and was one of a number of funding… […]
Integer adds IPG manufacturing and testing tech to Mexico plant
Integer Holdings (NYSE:ITGR) announced it has added implantable pulse generator (IPG) cleanroom assembly and testing capabilities at its Tijuana-North facility The plant is the first Class III active-implantable medtech manufacturing site in Mexico to receive FDA approval, according to the Plano, Texas-based company. Integer has added Class 7 and 8 cleanrooms, and manufacturing and capital… […]
FDA issues draft guidance on multi-use arthroscopy tubing sets
The FDA has issued draft guidance on arthroscopy pump tubing sets intended for multiple-patient use. Clinicians often use a single source of irrigation fluid for multiple patients without replacing the source of irrigation fluid or replacing/reprocessing the irrigation tubing system between patients. These devices are designed to deliver irrigation to the surgical site, these devices… […]
How LED light can break down ingestible medical devices
Researchers at the Massachusetts Institute of Technology have developed an approach to break down ingestible medical devices in the gastrointestinal tract. Medical devices can be inserted in the gastrointestinal tract to treat, diagnose or monitor a number of GI disorders. However, the devices have to removed through endoscopic surgery once completed. The MIT researchers developed… […]
New 510(k) boosts iRhythm, Verily efforts for AFib screening
The latest 510(k) clearance for the Verily Study Watch will further the efforts of the Google sister company and iRhythm Technologies (NSDQ:IRTC) to improve atrial fibrillation treatment. Verily — a life science company under Alphabet (NSDQ:GOOGL) — recently received an FDA 510(k) clearance to include an irregular pulse monitor in its Study Watch wearable. “We’ve worked carefully to meet the FDA’s stringent… […]
Argon Medical debuts IVC filter retrieval kits
Argon Medical Devices (Frisco, Texas) said this week that it has launched single-loop and triple-loop retrieval kits for percutaneous removal of inferior vena cava (IVC) filters that are no longer medically required. The kits are indicated for use via a jugular approach and offer the following features: A coil-reinforced outer sheath with the strength needed… […]
NANS 2020: Neuromodulation news you need to know
Neuromodulation devices from companies including Medtronic (NYSE:MDT), Abbott (NYSE:ABT) and SPR Therapeutics are showing promise treating pain. That’s one of the initial takeaways from study results that medical device companies in the neuromodulation space are touting this weekend at NANS 2020 in Las Vegas. NANS is a joint conference of Congress of Neurological Surgeons and the North American Neuromodulation… […]
Injection Molding Principles
Optimizing custom part designs for injection molding requires a thorough understanding of the process and outcomes. In this e-book, you’ll learn about common molding resins, special molding terms you should know, and most importantly, how to optimize your part with undercuts, even walls, drafts, and more. Download this e-book from Xometry to learn more… The […]
GW Plastics expands Vermont manufacturing and tech center
GW Plastics announced that it has completed a $10 million expansion of its Royalton, Vt., manufacturing and technology center. The company said it has added a 30,000 ft2 to the building to accommodate the growth of its thermoplastic injection molding and medical device contract assembly business. The expansion includes a new 13,000 ft2, Class 8… […]
Certain GE Healthcare patient-monitoring devices vulnerable to cyberattack
The federal government and GE Healthcare (NYSE:GE) announced today that the certain of the company’s patient monitoring devices are vulnerable to cyberattack. If attacked, some versions of the Carescape and ApexPro telemetry servers, the Carescape Central Station version 1 and Central Information Center systems could stop monitoring patients, silence alarms or produce unnecessary alarms during… […]