MiMedx: Ouster of top brass was for cause

September 21, 2018 By Brad Perriello Leave a Comment

MiMedx (NSDQ:MDXG) said yesterday that the ouster this summer of four top executives was “for cause” after a probe into its accounting practices turned up “conduct detrimental to the business or reputation of the company.”

Marietta, Ga.-based MiMedx makes regenerative and therapeutic biologics using human placental tissue allografts. Last July CEO Parker Petit and president & COO William Taylor were ousted 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.

Today MiMedx said that all four of the departures of its top brass were for cause, triggering the forfeit of all equity and incentive awards for the executives and Petit’s resignation from the board today.

“In addition, the board and the compensation committee have determined that action shall be taken to recover compensation previously paid to the separated employees … based upon the final results of the company’s restatement of its previously issued consolidated financial statements and financial information,” MiMedx said.

“The board is taking the necessary steps to prepare MiMedx for its next chapter and a stronger future,” chairman Charles Evans said in prepared remarks. “The board is committed to taking the decisive actions necessary to develop enhanced systems and controls. Meanwhile, the board and management team remain focused on executing the company’s strategy to deliver operational and clinical successes to improve the lives of patients around the world and drive long-term business success and value creation.”

In a separate release, the company said the NASDAQ exchange granted an extension of its listing there through Feb. 25, 2019, contingent on it regaining compliance with SEC rules and the exchange’s own listing rules by Feb. 25.

MDXG shares were down -6.9% to $5.77 apiece today in pre-market trading.

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