MiMedx (MDXG:NASDAQ) Part 2 – The same old story; Mimedx’s response is typical of companies trying to cover their tracks and is unacceptable.

MiMedx cherry-picked a handful of bulls for the September 21 call last week, restricting access for their own investors and others with an interest in the events that transpired on the week ending September 22, 2017. During the call, analysts asked pertinent questions that remain substantially unanswered. To assist investors, we’ve compiled a list of items that were conveniently ignored, avoided or even blatantly misrepresented.

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Over the last week, MiMedx has:

  • Dismissed “Deceptive Short Seller Reports”, including Viceroy’s, which presented evidence in the form of a withheld FOIA request suggesting that MiMedx was the subject of an undisclosed SEC enforcement investigation.
  • Announced that MiMedx are complying with an SEC subpoena, thus subject to an SEC investigation.
  • Failed to formally announce to the market that they are a subject of an SEC investigation. Viceroy requested management confirm whether it will fulfill their regulatory requirements by filing an 8-K in relation to an ongoing SEC investigation within the four days of becoming aware of it. If they have not filed an 8-K within 4 days of becoming aware of an SEC investigation, they are in breach of withholding material information from the investing public.
  • Been announced as the subject of an investigation by two securities litigation firms: Block & Leviton and Bragar Eagel & Squire, P.C. Both firms announced it had commenced investigations into a class action on behalf of MiMedx shareholders on September 22 and 25, 2017 respectively for not disclosing they were under SEC investigation, amongst other things.
  • Backdated government FAR & DFARS certification records as far as 2013 which were previously filled out by an employee, Don Ayers – who no longer worked at MiMedx at the time of certification – with Kimberley Durgan – who only commenced employment with MiMedx in 2014.
  • Backdated FAR & DFARs certifications remained signed with the authority of VP Brent Miller, whose LinkedIn status as of May 2017 is ‘Officially Retired’, and thus had no authority within MiMedx at the time of the amendments.
  • Announced it had come to a settlement of a confidential lawsuit with terminated employee Hal Purdy, a move we believe serves only to distract from the issues raised in our report which as yet go unacknowledged and undiscussed by the company. With ‘sealed’ documentation.

MiMedx’s (NASDAQ:MDXG) employment of kickback & bribery scheme inducers makes it uninvestable.

Viceroy Research uncovered substantial previously-unreported data evidencing an incestuous hiring policy from a kickback & bribery scheme, a possible SEC enforcement investigation, and indications of channel stuffing.

  • Sean McCormack – MiMedx’s “New Market Initiatives Director” – was an instrumental figure in Advanced BioHealing’s kickback and bribery inducement scheme, which resulted in the largest settlement of a False Claims Act breach to date: $350m settlement, and a $600m+ write-down by Shire. At least 54 Advanced BioHealing alumnus have been identified by Viceroy within MiMedx’s sales force including at least 15 in senior employment positions.
  • A FOIA request was withheld by the Securities and Exchange Commission (SEC) suggesting MiMedx is the target of an undisclosed SEC enforcement investigation.
  • Former employees-turned whistleblowers accused MiMedx of aggressive channel-stuffing practices and improper revenue recognition policies. Their statement named many ex-Advanced BioHealing employees. Despite the fact these allegations having been withdrawn, Viceroy’s analysis found evidence supporting these claims in MiMedx’s financial accounts – there’s no smoke without fire.
  • MiMedx’s SAM compliance certification was filled out by Don Ayers, who was no longer employed by MiMedx at the time the forms were signed.

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