3. Asset Acquisition

On October 9, 2024, the Company entered into an asset purchase agreement with Sequence LifeScience, Inc. (“Sequence”) to acquire Sequence’s Rebound™ full thickness placental-derived allograft matrix product and certain related intangible assets. Rebound adds to the Company’s portfolio of placental-derived advanced biomaterial products. The Company will pay aggregate consideration for the assets of up to $5,500, which consists of (i) an upfront cash payment of $1,000 (ii) an aggregate of up to $4,000 in monthly milestone payments, and (iii) a credit of $500 for the previous payment made by the Company to Sequence pursuant to a letter of intent between the Company and Sequence dated August 16, 2024. Transaction costs incurred with in connection with the Rebound asset acquisition were de minimis. As of December 31, 2025, the Company has accrued a cumulative total of $3,127 for milestone payments due Sequence, of which $2,477 accrued during the year ended December 31, 2025, $650 of which was applied against the acquisition related contingent consideration. The Company has also accrued an additional $873 in accrued expenses and other current liabilities due to ongoing settlement discussions with Sequence.

Concurrently with the execution of the asset purchase agreement, the Company entered into an exclusive supply agreement with Sequence for the manufacture and supply of Rebound. The Company retains the right to manufacture Rebound internally.

The Company determined that this transaction represented an asset acquisition in accordance with ASC 805, Business Combinations, because the acquired assets did not meet the definition of a business. As noted above, the purchase price consists of $4,000 of contingent consideration that is based on future collections of net sales of Rebound. The Company’s policy is to record contingent consideration when the contingency is resolved and, therefore, it is generally excluded from the cost of the acquisition. Further, the contingent consideration comprising monthly milestone payments does not meet the definition of a derivative and, therefore, is not required to be recorded at fair value. The fair value of the net assets acquired exceeded the initial cash payments for the purchase, resulting in the full write-down of the intangible assets acquired and the recognition of a contingent consideration liability for the excess of the fair value of the inventory acquired over the initial cash consideration. Future monthly milestone payments will reduce the contingent consideration liability until it has been satisfied in full, and then will be recognized as a period cost The contingent consideration liability is recorded within accrued expenses and other current liabilities.

The purchase price was allocated to the acquired assets as follows:

 Schedule of Purchase Price Allocated to Acquired Assets