(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted pursuant~~ to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐

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 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

APPLICABLE ONLY TO ~~ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:~~

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐

As of ~~October 17, 2017~~April 30, 2024, there were ~~14,661,769~~14,828,456 outstanding shares of Common Stock, par value $0.01 per share.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

(amounts in thousands, except share and per share amounts or as otherwise noted)

The accompanying unaudited condensed consolidated financial statements and related notes have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and in accordance with accounting principles generally accepted in the United States (“USU.S. GAAP”). The financial statements include the accounts of Anika Therapeutics, Inc. and its subsidiaries. Inter-company transactions and balances have been eliminated. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with USU.S. GAAP have been ~~condensed~~ or omitted pursuant to SEC rules and regulations relating to interim financial statements. The December 31, ~~2016~~2023 balances reported herein ~~are~~were derived from the audited consolidated financial statements. In the opinion of management, these unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to fairly state the condensed consolidated financial position of the Company as of September 30, 2017, the results of its operations for the three- and nine-month periods ended September 30, 2017 and 2016, and cash flows for the nine-month periods ended September 30, 2017 and 2016.statements.

The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Company’s annual financial statements filed with its Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2023. The results of operations for the ~~nine-month~~three-month period ended ~~September 30, 2017~~March 31, 2024 are not ~~necessarily~~ indicative of the results to be expected for the year ending December 31, ~~2017. Certain prior period amounts have been reclassified~~2024.

Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to ~~conform to the current period presentation. This change~~allocate resources and in ~~classification does not materially affect previously reported cash flows from operations or from financing activities in the Condensed Consolidated Statement~~assessing performance. The Company’s chief operating decision maker as of ~~Cash Flows,~~March 31, 2024 was its President and ~~had no effect~~Chief Executive Officer. Based on the ~~previously reported Condensed Consolidated Statement of Operations~~criteria established by Accounting Standards Codification 280, Segment Reporting, the Company has one operating and ~~Comprehensive Income.~~

~~Recent Accounting Pronouncements~~

In~~May 2014,~~ November 2023, the Financial Accounting Standards Board ~~(“FASB”~~("FASB") issued Accounting Standards Update (“ASU”) No. ~~2014-09,~~2023-07, ~~Revenue from Contracts with Customers~~Segment Reporting (Topic 280)~~. ASU 2014-09 supersedes the revenue recognition~~: Improvements to Reportable Segment Disclosures, are intended to improve reportable segment disclosure requirements, ~~in Topic 605, Revenue Recognition, and requires entities to recognize revenue in a way that depicts~~primarily through enhanced disclosures about significant segment expenses. In addition, the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB issued a one-year deferral of ASU 2014-09 making it effective for annual reporting periods beginning on or after December 15, 2017, while also providing for early adoption not to occur before the original effective date. The Company currently anticipates it will adopt the new standard on a modified retrospective basis with the cumulative effect of the change reflected in retained earnings as of January 1, 2018 and to not restate prior periods. The Company has commenced work to assess the impact of the new revenue standard on its principal revenue streams. The Company has not made a determination on the impact to its consolidated financial statements.

~~In February 2016, the FASB issued ASU No. 2016-02,~~ ~~Leases~~ (Topic 842). ASU 2016-02 amends existing lease accounting requirements. The most significant change will result in the recognition of lease assets and lease liabilities by lessees for virtually all leases. The new guidance will ~~also require significant additional disclosures about~~enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The purpose of the ~~amount, timing,~~amendments is to enable investors to better understand an entity’s overall performance and ~~uncertainty of~~assess potential future cash flows ~~from leases.~~for the entity. ASU ~~2016-02~~2023-07 is effective for fiscal years and interim periods beginning after December 15, ~~2018. Upon adoption, entities are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. Early adoption~~2024. The Company is ~~permitted, and a number of optional practical expedients may be elected to simplify~~evaluating the impact of ~~adoption. The Company is assessing~~ ASU ~~2016-02 and the impact that adopting this new accounting standard will have~~2023-07 on its consolidated financial statements and ~~footnote disclosures.~~

~~In June 2016, the FASB issued ASU No. 2016-13,~~ ~~Financial Instruments~~ (Topic 326) Credit Losses. ASU 2016-13 changes the impairment model for most financial assets and certain other instruments. Under the new standard, entities holding financial assets and net investment in leases that are not accounted for at fair value through net income are to be presented at the net amount expected to be collected. An allowance for credit losses will be a valuation account that will be deducted from the amortized cost basis of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. ASU 2016-13 is effective as of January 1, 2020. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements or footnoterelated disclosures.

In ~~January 2017,~~December 2023, the ~~FASB~~Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. Under the new guidance, entities must consistently categorize and provide greater disaggregation of information in the rate reconciliation and must also disaggregate income taxes paid. ASU ~~No. 2017-04,~~ ~~Intangibles-Goodwill and Other~~ ~~(Topic 350): Simplifying the Test for Goodwill Impairment~~. ASU 2017-04 will simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Current guidance requires that companies compute the implied fair value of goodwill under Step 2 by performing procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. This standard will require companies to perform annual or interim goodwill impairment tests by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This standard will be2023-09 is effective for ~~annual~~fiscal years and interim periods beginning after December 15, ~~2019, including interim periods occurring after that date, and will be applied prospectively. Early adoption~~2024. The Company is evaluating the impact of ~~this standard is permitted. The adoption of this standard is not expected to have a material impact~~ASU 2023-09 on ~~the Company’s~~its consolidated financial statements ~~or footnote~~and related disclosures.

The Company estimates an allowance for credit losses with its accounts receivable resulting from the inability of its customers to make required payments, which is included in selling, general and administrative expenses in the accompanying consolidated statements of operations. In determining the adequacy of the allowance, management specifically analyzes individual accounts receivable, historical bad debts, customer concentrations, customer creditworthiness, current and reasonable and supportable forecasts of future economic conditions, accounts receivable aging trends, and changes in the Company’s customer payment terms.

~~In March 2016, the FASB issued ASU No. 2016-09,~~~~Compensation~~(Topic 718) Stock Compensation. ASU 2016-09 identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. ASU 2016-09 is effective as of January 1, 2017. Since January 1, 2017, the Company has recognized excess tax benefits and tax deficiencies related to share-based payments in the Condensed Consolidated Statements of Operations and Comprehensive Income as a component of the provision for income taxes on a prospective basis. Such excess tax benefits and tax deficiencies were previously recorded in equity. The Company also began presenting tax-related cash flows resulting from share-based payments as operating activities in the Condensed Consolidated Statements of Cash Flows, and retrospectively revised prior periods to reflect this provision. Accordingly, the Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2016 was revised by increasing net cash provided by operating activities by $0.4 million and by decreasing net cash used in financing activities by $0.4 million. Lastly, as of January 1, 2017, the Company elected to recognize forfeitures as they occur rather than estimate forfeitures each period on a modified retrospective basis. See Notes 6 and 14 for additional information regarding the impacts on the condensed consolidated financial statements.

~~13.~~

10.

~~Leases~~

Revenue and Geographic Information

~~On October 9, 2015, our Italian subsidiary,~~Revenue by product family is as follows:

	Three Months Ended March 31,
	2024		2023
OA Pain Management	$	24,318	$	22,633
Joint Preservation and Restoration		13,841		13,453
Non-Orthopedic		2,364		1,838
Total	$	40,523	$	37,924

Revenue from the Company’s sole significant customer, DePuy Synthes Mitek Sports Medicine, part of the Johnson & Johnson Medical Companies, as a percentage of the Company’s total revenue was 42% and 43% for the three months ended March 31, 2024 and 2023, respectively.

Total revenue by geographic location based on the location of the customer in total and as a percentage of total revenue were as follows:

	Three Months Ended March 31,
	2024					2023
			Percentage of					Percentage of
	Revenue		Revenue			Revenue		Revenue
Geographic Location:
United States	$	29,236		72	%	$	27,288		72	%
Europe		5,969		15	%		5,662		15	%
Other		5,318		13	%		4,974		13	%
Total	$	40,523		100	%	$	37,924		100	%

11.	Equity Incentive Plan

Equity Incentive Plan

The Anika Therapeutics, ~~S.r.l.~~Inc. 2017 Omnibus Incentive Plan (the “2017 Plan”) was approved by the Company’s stockholders on June 13, 2017 and subsequently amended on June 18, 2019, June 16, 2020, June 16, 2021, June 8, 2022 and June 14, 2023. On June 14, 2023, the Company’s stockholders approved an amendment to the 2017 Plan increasing the number of shares by 435,000 shares from 4,850,000 shares to 5,285,000 shares. The 2017 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights (“~~Anika S.r.l.”) entered into a build-to-suit lease agreement with Consorzio Zona Industriale E Porto Fluviale di Padova (“ZIP”~~SARs”), ~~as landlord,~~restricted stock awards, performance restricted stock units (“PSUs”), restricted stock units (“RSUs”), total shareholder return options (“TSRs”) and performance options that may be settled in cash, stock, or other property. In accordance with the 2017 Plan approved by the Company’s stockholders, including the amendments thereto, each share award other than stock options or SARs will reduce the number of total shares available for grant by two shares. Subject to adjustment for specified types of changes in the Company’s capitalization, no more than 4.6 million shares of common stock may be issued under the 2017 Plan. There were 0.7 million shares available for future grant at March 31, 2024 under the 2017 Plan.

Anika Therapeutics, Inc. 2021 Inducement Plan (the “Inducement Plan”) was adopted by the Company’s board of directors on November 4, 2021 and subsequently amended on December 22, 2023. On December 22, 2023, the Company’s board of directors approved an amendment to the Inducement Plan increasing the number of shares by 125,000 shares from 125,000 to 250,000 shares. The Inducement Plan reserves 250,000 shares of common stock for issuance pursuant to ~~which Anika S.r.l. leases~~equity-based awards granted under the Inducement Plan. Such awards may be granted only to an individual who was not previously the Company’s employee or director with the Company. The Inducement Plan provides for the grant of awards under terms substantially similar to the 2017 Plan (as amended). There were 0.1 million shares available for future grant at March 31, 2024 under the Inducement Plan.

The Company may satisfy the awards upon exercise, or upon fulfillment of the vesting requirements for other equity-based awards, with either newly issued shares or shares reacquired by the Company. Stock-based awards are granted with an exercise price equal to or greater than the market price of the Company’s stock on the date of grant. Awards contain service conditions or service and performance conditions, and they generally become exercisable ratably over three years with a new European headquarters facility, consisting of approximately 33,000 square feet of general office, research and development, training, and warehousing space located in Padova, Italy. The lease has an initialmaximum contractual term of ~~fifteen~~ten years.

The Company presents the expenses related to stock-based compensation awards in the same expense line items as cash compensation paid to each of its employees as follows (in thousands):

	Three Months Ended March 31,
	2024		2023

Cost of revenue	$	127	$	184
Research and development		531		517
Selling, general and administrative		2,932		3,016
Total stock-based compensation expense	$	3,590	$	3,717

Stock Options

Stock options are granted to purchase common shares at prices that are equal to the fair market value of the shares on the date the options are granted or, in the case of premium options, are granted with an exercise price at 110% of the market price of the Company’s common stock on the date of grant. Options generally vest in equal annual installments over a period of three years and expire 10 years after the date of grant. The grant-date fair value of options is recognized as expense on a straight-line basis over the requisite service period, which ~~commenced~~is generally the vesting period.

The following summarizes the activity under the Company’s stock option plans:

						Weighted
						Average
				Weighted		Remaining		Aggregate
				Average		Contractual		Intrinsic
	Number of			Exercise		Term		Value
	Options			Price		(in years)		(in thousands)
Outstanding as of December 31, 2023		1,812,729		$	33.42			$	127
Granted		426,925		$	27.93
Exercised		(1,089	)	$	21.77			$	4
Forfeited and canceled		(26,128	)	$	29.99			$	22
Outstanding as of March 31, 2024		2,212,437		$	32.41		7.8	$	316
Vested, March 31, 2024		1,305,902		$	35.24		6.8	$	38
Vested or expected to vest, March 31, 2024		2,212,437		$	32.41		7.8	$	316

The aggregate intrinsic value of options exercised for the three-month period ended March 31, 2024 was immaterial. The Company granted 426,925 stock options during the three-month ended March 31, 2024.

The Company uses the Black-Scholes pricing model to determine the fair value of options granted. The calculation of the fair value of stock options is affected by the stock price on the grant date, the expected volatility of the Company’s common stock over the expected term of the award, the expected life of the award, the risk-free interest rate and the dividend yield.

The assumptions used in the Black-Scholes pricing model for options granted during the three months ended March ~~1, 2017.~~31, 2024 and 2023, along with the weighted-average grant-date fair values, were as follows:

	Three Months Ended
	March 31,
	2024								2023
Risk free interest rate		3.9	%		-		4.3	%		3.5	%		-	4.3	%
Expected volatility		46.8	%		-		48.2	%		48.7	%		-	49.4	%
Expected life (years)					4.5								4.5
Expected dividend yield					0.0	%				0.0	%
Fair value per option				$	10.48							$	11.71

As of March 31, 2024, there was $9.0 million of unrecognized compensation cost related to unvested stock options. This expense is expected to be recognized over a weighted average period of 2.2 years.

Restricted Stock Units

RSUs generally vest in equal annual installments over a three-year period. The ~~lease will automatically renew~~grant-date fair value of RSUs is recognized as expense on a straight-line basis over the requisite service period, which is generally the vesting period. The Company determines the fair value of RSUs based on the closing price of its common stock on the date of grant.

RSU activity for upthe three-month period ended March 31, 2024 was as follows:

				Weighted
	Number of			Average
	Shares			Fair Value
Outstanding as of December 31, 2023		771,358		$	27.19
Granted		405,917		$	25.44
Vested		(249,716	)	$	27.82
Forfeited and cancelled		(28,611	)	$	27.00
Outstanding as of March 31, 2024		898,948		$	26.89

The weighted-average grant-date fair value per share of RSUs granted was $25.44 and $26.91 for the three-month periods ended March 31, 2024 and 2023, respectively. The total fair value of RSUs vested was $7.7 million and $5.7 million for the three-month periods ended March 31, 2024 and 2023, respectively. As of March 31, 2024, there was $8.9 million of unrecognized compensation cost related to ~~three additional six-year terms, subject~~time-based RSUs, which was expected to ~~certain terms and conditions.~~be recognized over a weighted-average period of 1.6 years.

The Company’s annual grant of RSU awards in March 2024 can be settled at vesting in cash or shares at the Company’s election. The Company has recorded these RSUs as a liability due to the ~~ability~~expectation that the Company will settle the vesting of the March 2024 RSU awards in cash due to ~~withdraw from this lease~~a potential shortage of shares in the 2017 Plan at the time of vesting. As a result, these RSUs will be subject to ~~certain financial penalties after six years~~change in value at the time of each reporting period. As of March 31, 2024, the Company had 405,917 shares outstanding in which a liability of $0.2 million was recorded in Accrued Expenses and ~~with no penalties after the ninth year. Beginning on the commencement date, the lease provides for an initial yearly rent of approximately $0.3 million.~~Other Liabilities.

Construction of the new facility commenced during the first quarter of 2016. During the period of construction, the Company was the deemed owner of the facility. Accordingly, the landlord's costs of constructing the facility were capitalized, as a non-cash transaction, offset by a corresponding facility lease obligation in the Company’s consolidated balance sheet. When the construction concluded on March 1, 2017, the Company removed the construction-in-process asset of $3.1 million and related liability from its condensed consolidated balance sheet. The Company commissioned ZIP for additional tenant improvements of $0.8 million, which are recorded within Other long-term assets on the condensed consolidated balance sheet and which will be amortized over the life of the lease. The lease is accounted for as an operating lease based on the Company’s assessment of the applicable accounting principles.

15

Results of Operations

~~Three- and Nine-Months~~Three Months Ended ~~September 30, 2017~~March 31, 2024 Compared to ~~Three- and Nine-Months~~Three Months Ended ~~September 30, 2016~~
March 31, 2023

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 $ Inc/(Dec) % Inc/(Dec) 2017 2016 $ Inc/(Dec) % Inc/(Dec)
(in thousands, except percentages) (in thousands, except percentages)
Product revenue $ 27,178 $ 25,783 $ 1,395 5 % $ 78,899 $ 74,636 $ 4,263 6 %
Licensing, milestone and contract revenue 6 6 - 0 % 5,133 17 5,116 *
Total revenue 27,184 25,789 1,395 5 % 84,032 74,653 9,379 13 %

Operating expenses:
Cost of product revenue 6,250 4,998 1,252 25 % 18,648 16,488 2,160 13 %
Research and development 5,842 2,822 3,020 107 % 14,521 7,773 6,748 87 %
Selling, general and administrative 4,823 4,280 543 13 % 14,862 12,525 2,337 19 %
Total operating expenses 16,915 12,100 4,815 40 % 48,031 36,786 11,245 31 %
Income from operations 10,269 13,689 (3,420 ) (25 %) 36,001 37,867 (1,866 ) (5 %)
Interest income, net 261 93 168 181 % 335 214 121 57 %
Income before income taxes 10,530 13,782 (3,252 ) (24 %) 36,336 38,081 (1,745 ) (5 %)
Provision for income taxes 3,643 4,830 (1,187 ) (25 %) 12,587 13,619 (1,032 ) (8 %)
Net income $ 6,887 $ 8,952 $ (2,065 ) (23 %) $ 23,749 $ 24,462 $ (713 ) (3 %)
Product gross profit $ 20,928 $ 20,785 $ 143 1 % $ 60,251 $ 58,148 $ 2,103 4 %
Product gross margin 77 % 81 % 76 % 78 %

Three Months Ended March 31,

2024

2023

$ Change

% Change

(in thousands, except percentages)

Revenue
$ 40,523 $ 37,924 $ 2,599 7 %
Cost of revenue
15,895 15,081 814 5 %
Gross profit
24,628 22,843 1,785 8 %
Gross margin
61 % 60 %
Operating expenses:

Research and development
8,164 8,400 (236 ) (3 %)
Selling, general and administrative
21,527 26,996 (5,469 ) (20 %)
Total operating expenses
29,691 35,396 (5,705 ) (16 %)
Loss from operations
(5,063 ) (12,553 ) 7,490 (60 %)
Interest and other income (expense), net
592 539 53 10 %
Loss before income taxes
(4,471 ) (12,014 ) 7,543 (63 %)
Provision for (benefit from) for income taxes
43 (1,664 ) 1,707 (103 %)
Net loss
$ (4,514 ) $ (10,350 ) $ 5,836 (56 %)

* Percentage increase has been omitted due to magnitude.
~~Product~~ Revenue

~~Product~~The following table presents revenue by product family for the three-month period ended ~~September 30, 2017 was $27.2 million, an increase of 5%~~March 31, 2024 and 2023 as ~~compared to $25.8 million~~follows:

Three Months Ended March 31,

2024

2023

$ Change

% Change

(in thousands, except percentages)

OA Pain Management
$ 24,318 $ 22,633 $ 1,685 7 %
Joint Preservation and Restoration
13,841 13,453 388 3 %
Non-Orthopedic
2,364 1,838 526 29 %
$ 40,523 $ 37,924 $ 2,599 7 %
Revenue from our OA Pain Management product family increased 7% for the three-month period ended ~~September 30, 2016.Product revenue for the nine-month period ended September 30, 2017 was $78.9 million, an increase of 6% as compared to $74.6 million for the nine-month period ended September 30, 2016.~~ For the three-month period ended September 30, 2017, the increase in product revenue was mainly driven by the growth of our orthobiologics and surgical franchises. For the nine-month period ended September 30, 2017, the increase in product revenue was mainly driven by the growth of our orthobiologics and surgical franchises and the growth of our veterinary product in the other franchise category, with such increase being partially offset by a decrease in revenue from our dermal franchise.
~~The following tables present product revenue by product group for the three- and nine-month periods ended September 30, 2017 and 2016:~~
Three Months Ended September 30,
2017 2016 $ Inc/(Dec) % Inc/(Dec)
(in thousands, except percentages)
Orthobiologics $ 23,990 $ 22,428 $ 1,562 7 %
Surgical 1,765 1,173 592 50 %
Dermal 358 594 (236 ) (40 %)
Other 1,065 1,588 (523 ) (33 %)
Total $ 27,178 $ 25,783 $ 1,395 5 %
Nine Months Ended September 30,
2017 2016 $ Inc/(Dec) % Inc/(Dec)
(in thousands, except percentages)
Orthobiologics $ 68,686 $ 65,319 $ 3,367 5 %
Surgical 4,395 3,924 471 12 %
Dermal 1,235 1,558 (323 ) (21 %)
Other 4,583 3,835 748 20 %
Total $ 78,899 $ 74,636 $ 4,263 6 %

~~Orthobiologics~~
~~Our orthobiologics franchise consists of our joint health and orthopedic products. Overall, sales increased 7% and 5% for the three- and nine-month periods ended September 30, 2017, respectively,~~March 31, 2024, as compared to the same ~~periods~~period in ~~2016. The~~2023, due primarily to favorable strategic partner ordering patterns and sales growth ~~in the three-~~on increasing customer demand as strategic partner and ~~nine-month periods ended September 30, 2017 was primarily due to an increase in worldwide MONOVISC revenue. MONOVISC worldwide revenue~~distributor ordering patterns can vary significantly on a quarterly basis.
Revenue from our Joint Preservation and Restoration product family increased ~~during the three- and nine-month periods ended September 30, 2017 as a result of robust and growing end-user demand~~3% for the product. MONOVISC’s strong growth is further augmented as end-user demand in the market for viscosupplementation products more generally continues to shift from multi-injection products, including ORTHOVISC, to single-injection products, such as MONOVISC, both domestically and internationally. CINGAL and ORTHOVISC-T, both of which launched internationally during the second half of 2016, also contributed to the growth of orthobiologics revenue during the period. We expect orthobiologics revenue to continue to grow for the remainder of 2017, led by increased MONOVISC revenue in domestic and international markets, including in India, Australia, New Zealand, and Taiwan, where regulatory approvals were achieved in the second quarter and third quarters of 2017, the commercial availability of CINGAL in Canada and Europe, as well as overall revenue growth from our viscosupplementation products both domestically and internationally.
~~Surgical~~
Our surgical franchise consists of products used to prevent surgical adhesions and to treat ear, nose, and throat (“ENT”) disorders. Sales of our surgical products increased 50% and 12% for the three- and nine-month periodsthree-month period ended ~~September 30, 2017 to $1.8 million and $4.4 million, respectively,~~March 31, 2024, as compared to the same ~~periods~~period in ~~2016. The increase in surgical product revenue for the three- and nine-month periods was~~2023, primarily due to an ~~increase in sales to~~growing commercial adoption of our ~~worldwide ENT commercial partner. We~~ ~~expect surgical product revenue to increase modestly in 2017, as compared to 2016, primarily~~ ~~due to increased worldwide~~newest products, which offset lower sales of ~~our ENT products~~.
~~Dermal~~certain legacy products.

~~Our dermal franchiseconsists of advanced wound care products, which are based on~~Revenue from our ~~HYAFF technology, and aesthetic dermal fillers. Our advanced wound care products treat complex skin wounds ranging from burns to diabetic ulcers, with HYALOMATRIX and HYALOFILL as~~Non-Orthopedic product family increased 29% for the ~~lead products. For the three- and nine-month periods~~three-month ended ~~September 30, 2017, dermal product sales decreased 40% and 21%, respectively,~~March 31, 2024, as compared to the same ~~periods~~period in ~~2016. This year-to-date decrease reflects order~~2023, primarily due to favorable timing byof distributor ordering patterns with our ~~distribution partners. We expect dermal revenue~~Hyvisc veterinary product.

Gross Profit and Margin
Gross profit for the three-month period ended March 31, 2024 increased $1.8 million to ~~increase in 2017~~$24.6 million, representing a 61% gross margin for the period as compared to ~~2016 primarily due to increased end-user demand and geographic expansion related to our advanced would care products~~60% in the ~~U.S. and European markets.~~
~~Other~~
~~Other product revenue includes revenues from our ophthalmic and veterinary franchises. Product revenue from these franchises decreased~~prior year. The increase in gross profit for the three-month ~~and increased for the nine-month periods~~period ended ~~September 30, 2017~~March 31, 2024, as compared to the same ~~periods~~period in ~~2016. We expect other revenue to increase in 2017 as compared to 2016, driven~~2023, primarily ~~by our veterinary product.~~
~~Licensing, milestone and contract revenue~~
Licensing, milestone and contract revenue for the three- and nine-month periods ended September 30, 2017 was $6 thousand and $5.1 million, as compared to $6 thousand and $17 thousand for the same periods in 2016. Revenue for the nine-month period ended September 30, 2017 included a $5.0 million milestone payment associated with our U.S. license agreement with Mitek for MONOVISC that was received and fully recognized as a result of U.S. MONOVISC 12-month end-user sales exceeding $100.0 million.
~~Product gross profit and margin~~
~~Product gross profit for the three- and nine-month periods ended September 30, 2017~~resulted from increased ~~$143 thousand and $2.1 million to $20.9 and $60.3 million, respectively, representing 77% and 76% of product~~ revenue. ~~Product gross profit for the three- and nine- months ended September 30, 2016 was $20.8 million and $58.1 million~~,~~representing 81% and 78% of product revenue. The decrease in product gross~~Gross margin for the ~~three and nine-month periods~~three-month period ended ~~September 30, 2017, as~~March 31, 2024 increased compared to the same ~~periods in 2016, was primarily attributable to higher production volume in the~~period of prior year ~~periods and~~due primarily to lower acquisition related amortization expenses on intangible assets, offset by higher inventory ~~write-offs in 2017. This current product gross margin may not be indicative of the rest of the year due to dynamics such as future revenue mix and production volume variability.~~reserves.
17
Research and ~~development~~Development

Research and development expenses for the ~~three- and nine-month periods~~three-month period ended ~~September 30, 2017~~March 31, 2024 were ~~$5.8~~$8.2 million, ~~and $14.5~~a decrease of $0.2 million ~~representing 21.5% and 17.3% of total revenue for the respective periods, an increase of $3.0 million and $6.7 million, respectively,~~ as compared to the same ~~periods~~period in ~~2016.~~2023. The ~~increase in research and development expenses~~decrease was primarily ~~due~~related to ~~a higher level of clinical~~lower product development and regulatory ~~activities, including our HYALOFAST and CINGAL phase III clinical studies. Furthermore, we also increased our pre-clinical product development activities with respect to certain product candidates in our research and development pipeline.~~ Research and development spending is expected to increase in 2017 and thereafter, as compared to 2016, as we further develop new products and line extensions and initiate new clinical trials based on our existing technology assets, including CINGAL and HYALOFAST, as well as increase development activities for other products and line extensions in the pipeline.costs.
Selling, ~~general~~General and ~~administrative~~Administrative

Selling, general and administrative ~~(“SG&A”)~~ expenses for the ~~three- and nine-month periods~~three-month period ended ~~September 30, 2017~~March 31, 2024 were ~~$4.8~~$21.5 million, ~~and $14.9~~a decrease of $5.5 million, ~~or 17.7% of total revenue for both periods, an increase of $0.5 million and $2.3 million, respectively,~~ as compared to the same ~~periods~~period in ~~2016. SG&A expenses increased~~2023. This decrease for the ~~three-~~three-month period ended March 31, 2024 was primarily due to $5.0 million of costs incurred during the same quarter last year related to the Parcus Medical unitholder arbitration settlement and ~~nine-month periods ended September 30, 2017 primarily~~ ~~as a~~ result of increases in personnel related costs, external professional fees, and marketing initiatives to support the CINGAL and ORTHOVISC-T international launches. We expect SG&A expenses for 2017 will increase to reflect the support, including the implementation of improved operational and financial technology platforms, required to grow our business both domestically and internationally.other non-recurring corporate costs.
Income ~~taxes~~Taxes

~~Provisions for~~The income ~~taxes were $3.6 million and $12.6 million~~tax expense was immaterial for the ~~three- and nine-month periods~~three-month period ended ~~September 30, 2017, based on~~March 31, 2024, resulting in an effective tax rate of ~~34.6% for both periods. Provisions for~~(1.0%). The benefit from income taxes ~~were $4.8 million and $13.6~~was $1.7 million for the ~~three- and nine-month periods~~three-month period ended ~~September 30, 2016, based on effective tax rates of 35.0% and 35.8%, respectively. The decrease~~March 31, 2023, resulting in ~~income taxes for the three- and nine-month periods ended September 30, 2017 resulted from decreased income before income taxes and a net decrease in the~~an effective tax rate ~~as compared to the same periods in the prior year.~~of 13.9%. The net ~~decrease~~change in ~~the effective tax ratefor the three- and nine-month periods ended September 30, 2017, as compared to the same periods in 2016,was primarily due to the increase in the expected research and development and state investment tax credits.~~
In addition, we realized windfall tax benefits related to share-based payments in connection with the adoption of ASU 2016-09 as of January 1, 2017. The amount of excess tax benefits recognized as a discrete period income tax benefit was $0.0 and $0.3 million for the three- and nine-month periods ended September 30, 2017, respectively, which decreased the effective tax rate for the ~~interim periods by 0.0% and 0.9%, respectively. Prior~~three-month period ended March 31, 2024, as compared to the ~~adoption~~same period in 2023, was primarily due to a full valuation allowance being recorded against domestic deferred tax assets at March 31, 2024.
Net Loss
For the three-month period ended March 31, 2024, net loss was $4.5 million, or $0.31 per diluted share, compared to net loss of ~~ASU 2016-09 excess tax benefits and deficiencies were recorded in equity. The amount of excess tax benefits recognized through additional paid-in-capital was $0.0~~$10.4 million, ~~and $0.4 million~~or $0.71 per diluted share, for the ~~three-~~same period in prior year. The decrease in net loss and ~~nine-month periods ended September 30, 2016, respectively.~~diluted net loss per share was primarily due to higher revenues in 2024 and the non-recurring expenses related to the Parcus Medical arbitration settlement and other non-recurring corporate costs that occurred in the prior year.

Non-GAAP Financial Measures
We present certain information with respect to adjusted gross profit and adjusted gross margin, adjusted Earnings Before Interest, Tax, Depreciation and Amortization, or EBITDA, adjusted net income, adjusted diluted earnings per share or adjusted EPS, which are financial measures not based on any standardized methodology prescribed by accounting principles generally accepted in the United States, or GAAP, and is not necessarily comparable to similarly titled measures presented by other companies.

We have presented adjusted gross profit and adjusted gross margin, adjusted EBITDA, adjusted net income, adjusted EPS, because they are key measures used by our management and board of directors to understand and evaluate our operating performance and to develop operational goals for managing our business. We believe these financial measures help identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude. In particular, we believe that the exclusion of these items in calculating these measures can provide a useful tool for period-to-period comparisons of our core operating performance. Accordingly, we believe that these measures provide useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects and allowing for greater transparency with respect to key financial metrics used by our management in their financial and operational decision-making.
Adjusted Gross Profit and Adjusted Gross Margin
We define adjusted gross profit as our gross profit excluding amortization of certain acquired intangible assets, the impact of inventory fair-value step up associated with our recent acquisitions and certain product rationalization charges. The amortized assets contribute to revenue generation, and the amortization of such assets will likely continue in future periods until such assets are fully amortized. These assets include the fair value of certain identified assets acquired in acquisitions, including developed technology and acquired tradenames. We define adjusted gross margin as adjusted gross profit divided by total revenue.
The following is a reconciliation of adjusted gross profit and gross margin, both non-GAAP metrics, to gross profit, the most directly comparable GAAP financial measure for the three-month periods ended March 31, 2024 and 2023, respectively:

Three-Month Periods Ended March 31,

2024

2023

Gross profit
$ 24,628 $ 22,843
Product rationalization charges
472 -
Acquisition related intangible asset amortization
157 1,562
Adjusted gross profit
$ 25,257 $ 24,405
Adjusted gross margin
62 % 64 %
Adjusted gross profit for the three-month period ended March 31, 2024 increased $0.9 million to $25.3 million representing adjusted gross margin of 62%. Adjusted gross profit for the three-month period ended March 31, 2023 was $24.4 million, or adjusted gross margin of 64%. There was a decrease in adjusted gross margin for the three-month period ended March 31, 2024 as compared to 2023, due to the impact of production inefficiencies and higher inventory reserves in 2024.
Adjusted EBITDA
We present information below with respect to adjusted EBITDA, which we define as our net income (loss) excluding interest and other expense, net, income tax benefit, depreciation and amortization, stock-based compensation, and acquisition-related expenses.
Adjusted EBITDA is not prepared in accordance with GAAP, and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are a number of limitations related to the use of adjusted EBITDA rather than net (loss) income, which is the nearest GAAP equivalent. Some of these limitations are:
●
adjusted EBITDA excludes depreciation and amortization, and, although these are non-cash expenses, the assets being depreciated or amortized may have to be replaced in the future, the cash requirements for which are not reflected in adjusted EBITDA;
●
we exclude share-based compensation expense from adjusted EBITDA although (a) it has been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy and (b) if we did not pay out a portion of our compensation in the form of stock-based compensation, the cash salary expense included in operating expenses would be higher, which would affect our cash position;

●
we exclude acquisition related expenses, including, amortization and depreciation of acquired assets in recent acquisitions, and the impact of inventory fair-value step up on cost of revenue;
●
the expenses and other items that we exclude in our calculation of adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from adjusted EBITDA when they report their operating results;
The following is a reconciliation of adjusted EBITDA, a non-GAAP metric, to net loss, the most directly comparable GAAP financial measure, for the three-month periods ended March 31, 2024 and 2023, respectively:

Three Months Ended March 31,

2024

2023

(in thousands)

Net loss
$ (4,514 ) $ (10,350 )
Interest and other (income) expense, net
(592 ) (539 )
Provision for (benefit from) income taxes
43 (1,664 )
Depreciation and amortization
1,866 1,764
Share-based compensation
3,590 3,717
Arbitration settlement
- 3,250
Product rationalization charges
472 -
Acquisition related intangible asset amortization
197 1,787
Severance costs
839 -
Costs of shareholder activism
601 831
Adjusted EBITDA
$ 2,502 $ (1,204 )
Adjusted EBITDA in the three-month period ended March 31, 2024 increased $3.7 million as compared with the same period in 2023. The increase in adjusted EBITDA for the period was primarily due to an increase in revenues as well as lower spending following the successful launch of key products and addressing new regulatory requirements in the European Union in 2023.
Adjusted Net Income (Loss) and Adjusted EPS
We present information below with respect to adjusted net (loss) income and adjusted EPS. We define adjusted net (loss) income as our net (loss) income excluding amortization and depreciation of acquired assets, share-based compensation, and other non-recurring items, such as product rationalization charges, severance costs and costs of shareholder activism. We define adjusted EPS as GAAP diluted earnings per share excluding the above adjustments to net (loss) income used in calculating adjusted net (loss) income, each on a per share and tax effected basis.
The following is a reconciliation of adjusted net loss, a non-GAAP metric, to net income (loss), the most directly comparable GAAP financial measure, for the three-month periods ended March 31, 2024 and 2023, respectively:

Three Months Ended March 31,

2024

2023

(in thousands)

Net loss
$ (4,514 ) $ (10,350 )
Product rationalization charges, tax effected
477 -
Arbitration settlement, tax effected
- 2,776
Share-based compensation, tax effected
3,624 3,175
Acquisition related intangible asset amortization, tax effected
199 1,526
Severance costs, tax effected
847 -
Costs of shareholder activism, tax effected
607 710
Adjusted net income (loss)
$ 1,240 $ (2,163 )

The following is a reconciliation of adjusted diluted EPS, a non-GAAP metric, to diluted EPS, the most directly comparable GAAP financial measure, for the three-month periods ended March 31, 2024 and 2023, respectively:

Three Months Ended March 31,

2024

2023

Diluted loss per share
$ (0.31 ) $ (0.71 )
Product rationalization charges, tax effected
0.03 -
Arbitration settlement, tax effected
- 0.19
Share-based compensation, tax effected
0.25 0.22
Acquisition related intangible asset amortization, tax effected
0.02 0.11
Severance costs, tax effected
0.06 -
Costs of shareholder activism, tax effected
0.04 0.05
Adjusted diluted earnings (loss) per share
$ 0.09 $ (0.14 )
Adjusted net income and adjusted diluted earnings per share in the three-month period ended March 31, 2024 increased $3.4 million and $0.23, respectively, as compared with the same period in 2023. The increase for the period was primarily due to higher revenues and lower spending following the successful launch of key products and addressing new regulatory requirements in the European Union in 2023.
Liquidity and Capital Resources

~~On October 24, 2017, we entered into a five-year agreement for a $50.0 million senior revolving line of credit,~~We require cash to fund our operating activities and ~~as of October 24, 2017, $50.0 million was available for borrowing under~~to make capital expenditures and other investments in the ~~line of credit. See Note 17 to the condensed consolidated financial statements for additional information regarding the line of credit.~~
business. We expect that our requirements for cash to fund ~~operations and capital expenditures~~these uses will increase as ~~the scope of~~ our operations ~~expands. Historically, we have generated positive~~expand. We continue to generate cash ~~flow~~ from ~~operations, which together with~~operating activities and believe that our ~~available~~operating cash flows, cash currently on our condensed consolidated balance sheet and ~~investments have met~~availability under our credit facility will be sufficient to allow us to continue to invest in our existing business, to manage our capital structure on a short and long-term basis, and to meet our anticipated operating cash ~~requirements.~~needs. Cash and cash equivalents ~~and investments totaled approximately $152.7~~aggregated $68.6 million and ~~$124.8~~$72.9 million, and working capital totaled $130.5 million and $132.2 million, at ~~September 30, 2017~~March 31, 2024 and December 31, ~~2016,~~2023, respectively. ~~Working capital totaled approximately $187.3 million at September 30, 2017 and $161.6 million at December 31, 2016. We believe that~~
On November 12, 2021, we ~~have adequate financial resources, including amounts available under the~~entered into a Third Amendment to Credit Agreement with Bank of America N.A. as administrative agent, which amended our existing revolving line of credit agreement dated October 24, 2017 which provides up to ~~support our business~~$75.0 million in the form of a senior revolving line of credit. Subject to certain conditions, we may request up to an additional $75.0 million for ~~at least~~a maximum aggregate commitment of $150.0 million. As of March 31, 2024, and December 31, 2023, there were no outstanding borrowings, and we are in compliance with the ~~next twelve months beyond the release~~terms of the ~~financial statements.~~credit facility.
Summary of Cash Flows (in thousands):

Three Months Ended March 31,

2024

2023

Cash provided by (used in)

Operating activities
$ (126 ) $ (3,618 )
Investing activities
(1,808 ) (1,389 )
Financing activities
(2,273 ) (1,613 )
Effect of exchange rate changes on cash
(31 ) 30
Net decrease in cash and cash equivalents
$ (4,238 ) $ (6,590 )
The following changes contributed to the net change in cash and cash equivalents in the three-month period ended March 31, 2024 as compared to the same period in 2023.
Operating Activities

Cash ~~provided by~~used in operating activities was ~~$33.8~~$0.1 million for the ~~nine-month~~three-month period ended ~~September 30, 2017,~~March 31, 2024, as compared to cash ~~provided by~~used in operating activities of~~$18.4~~ $3.6 millionfor the sameperiod in ~~2016. This increase~~2023. The decrease in cash used in operating activities in 2024 was primarily ~~related~~due to a ~~decrease in accounts receivable, an increase in accounts payable, and an increase in income taxes payable, due to~~lower net loss during the ~~timing of payments, offset, in part, by an increase in inventories.~~ period.

Investing Activities

Cash used in investing activities was ~~$11.8~~$1.8 million for the ~~nine-month~~three-month period ended ~~September 30, 2017,~~March 31, 2024, as compared to cash used in investing activities of ~~$7.1~~$1.4 million for the same period in ~~2016.~~2023. The change was primarily due to an increase in ~~cash used in investing activitieswas primarily the result of the purchase of investments offset by maturities of investments during the first half of 2017. Furthermore, expenditures for the buildout of~~capital expenditures to support manufacturing operations at our Bedford ~~Massachusetts facility are declining and we expect to complete validation by the end of 2017.~~facility.
Financing Activities

Cash ~~provided by~~used in financing activities was ~~$0.3~~$2.3 million for the ~~nine-month~~three-month period ended ~~September 30, 2017,~~March 31, 2024, as compared to cash used byin financing activities ~~totaling$24.0~~of $1.6 millionfor the same period in ~~2016. The decrease in~~2023. In both periods, the cash used in financing activities ~~for the nine-month period ended September 30, 2017~~ was primarily attributable to ~~the Fixed Dollar Accelerated Share Repurchase Transaction to repurchase $25.0 million~~utilization of cash for employee tax withholding in exchange for shares ~~of our common stock in February 2016.~~surrendered by equity award holders.
18
Critical Accounting Policies and Estimates

The preparation of our condensed consolidated financial statements in conformity with GAAP requires management to use judgment in making estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. We believe that our accounting policies for revenue recognition, accounts receivable and allowance for credit losses, goodwill, acquired in-process research and development, inventory and contingencies are based on, among other things, judgments and assumptions made by management that include inherent risks and uncertainties. There ~~were~~have been no ~~other~~ significant changes to the above critical accounting policies or in the underlying accounting assumptions and estimates used in such policies from those disclosed in our ~~critical accounting estimates during the nine months ended September 30, 2017 to augment the critical accounting estimates disclosed in Management’s Discussion~~annual consolidated financial statements and ~~Analysis of Financial Condition and Results of Operations~~accompanying notes included in our ~~Annual Report on~~2023 Form 10-K for the ~~fiscal~~ year ended December 31, ~~2016.~~2023. We monitor our estimates on an ongoing basis for changes in facts and circumstances, and material changes in these estimates could occur in the future. Changes in estimates are recorded in the period in which they become known. We base our estimates on historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from our estimates if past experience or other assumptions do not turn out to be substantially accurate.
Recent Accounting Pronouncements

A discussion of Recent Accounting Pronouncements is included in our ~~Annual Report on~~2023 Form 10-K for the fiscal year ended December 31, ~~2016~~2023 and is updated in ~~Note 3~~the Notes to the condensed consolidated financial statements included in this ~~Quarterly Report on Form 10-Q.~~report.
Contractual Obligations and Other Commercial Commitments

Our contractual obligations and other commercial commitments are summarized in the section captioned “Part II, Item 7,7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Contractual Obligations and Other Commercial Commitments” in our ~~Annual Report on~~2023 Form 10-K for the year ended December 31, ~~2016. We had~~2023. There were no material changes ~~outside the ordinary course of business~~ to our contractual obligations reported in our ~~2016 Annual Report on~~2023 Form 10-K during the ~~first nine~~three months ~~of 2017.~~ended March 31, 2024. For additional discussion, see Note 9 to the condensed consolidated financial statements included in this report.

To the extent that funds generated from our operations, together with our existing capital resources, are insufficient to meet future requirements, we will be required to obtain additional funds through equity or debt financings, ~~including through the previously discussed $50.0 million senior revolving line of credit,~~ strategic alliances with corporate partners and others, or through other sources. No assurance can be given that any additional financing will be made available to us or will be available on acceptable terms should such a need arise.

~~Off-balance Sheet Arrangements~~
We do not use special purpose entities or other off-balance sheet financing techniques, except for operating leases, that we believe have, or are reasonably likely to have, a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, or capital resources.

ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our market risks and the ways we manage them are summarized in the section captioned “Part II, Item ~~7A,~~7A. Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2023. There have been no material changes in the first ~~nine~~three months of ~~2017~~2024 to our market risks or to our management of such risks.

ITEM 4.
CONTROLS AND PROCEDURES

~~(a)~~

~~Evaluation of disclosure controls and procedures.~~

~~As required by Rule 13a-15 under the Securities Exchange Act~~(a) Evaluation of ~~1934, as amended (the “Exchange Act”), we carried out an evaluation under~~disclosure controls and procedures.

Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, ofwe have evaluated the effectiveness of the design and operation of our disclosure controls and procedures as defined by Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this report. Based upon that evaluation, the chief executive officer and chief financial officer have concluded as of March 31, 2024 that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in SEC rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports ~~it files~~we file or ~~submits~~submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. On an on-going basis, we review and document our disclosure controls and procedures, and our internal control over financial reporting, and may from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our business.

~~(b)~~

~~Changes in internal controls over financial reporting.~~

(b) Changes in internal controls over financial reporting.

There were no material changes in our internal control over financial reporting during the ~~three-month period~~quarter ended ~~September 30, 2017~~March 31, 2024, that have materially affected, or ~~that are~~were reasonably likely to materially affect, our internal ~~controls~~control over financial reporting.

~~PART II: OTHER INFORMATION~~

~~ITEM 1.~~PART II:	OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS

We are involved from time-to-time in various legal proceedings arising in the ~~ordinary~~normal course of business. Although the outcomes of these legal proceedings are inherently difficult to predict, we do not expect the resolution of these occasional legal proceedings to have a material adverse effect on our financial position, results of operations, or cash flow. There have been no material changes to the information provided in the section captioned “Part I, Item 3,3. Legal Proceedings” in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2023.

ITEM 1A.

RISK FACTORS

~~There~~Except as set forth below, there have been no material changes to the risk factors described in the section captioned “Part I, Item ~~1A,~~1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2023. In addition to the other information set forth in this report, you should carefully consider the factors discussed in the section captioned “Part I, Item ~~1A,~~1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2023, which could materially affect our business, financial condition, or future results. The risks described in our Annual Report on Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may have a material adverse effect on our business, financial condition, and/or operating results.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

In April 2023, we agreed to establish a share repurchase program for an aggregate purchase price of $20.0 million. The first $5.0 million was to be effected through an accelerated stock repurchase program, the second $5.0 million is to be purchased in the open market and the remaining $10.0 million is to be purchased in the open market subject to positive cash flow. On May 12, 2023, we entered into an accelerated share repurchase agreement with Bank of America, N.A. (“Bank of America”) pursuant to a Fixed Dollar Accelerated Share Repurchase Transaction (“ASR Agreement”) to purchase $5.0 million of shares of its common stock. During 2023, we repurchased 188,029 shares at an average purchase price of $26.59 per share.

Recent Sales of Unregistered Securities

None.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5.

OTHER INFORMATION.

Rule 10b5-1 Trading Plans

During the fiscal quarter ended March 31, 2024, none of the Company’s directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.

ITEM 6.

EXHIBITS

Exhibit No.		~~Description~~

~~(10)~~		Description

*10.13.1		~~Credit Agreement, dated as~~Certificate of ~~October 24, 2017, among Anika Therapeutics, Inc., certain subsidiaries~~Incorporation of Anika Therapeutics, Inc. ~~as are or may from time~~(incorporated by reference to ~~time become parties~~Exhibit 3.1 to the ~~Credit Agreement, Bank of America, N.A., as administrative agent, swingline lender and issuer of letters of credit, and~~Current Report on Form 8-K (File No. 001-14027) filed by the ~~lenders party thereto.~~Registrant on June 6, 2018)

*10.23.2		~~Security and Pledge Agreement, dated as~~Bylaws of ~~October 24, 2017, among~~ Anika Therapeutics, Inc., ~~certain subsidiaries~~effective as of ~~Anika Therapeutics, Inc. listed~~June 6, 2018 (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K (File No. 001-14027) filed by the ~~signature pages thereto, and Bank of America, N.A., as administrative agent.~~Registrant on June 6, 2018)

~~10.3~~ (31)		Negotiated Settlement Agreement and General Release, dated July 13, 2017, by and between Stephen Mascioli, M.D., MPH and Anika Therapeutics, Inc., incorporated herein by reference to Exhibit 10.1 to Form 8-K, filed with the SEC on July 14, 2017. Rule 13a-14(a)/15d-14(a) Certifications

~~10.4~~		Employment Agreement, dated July 27, 2017, by and between Anika Therapeutics, Inc. and Joseph Darling, incorporated herein by reference to Exhibit 10.1 to Form 8-K, filed with the SEC on July 27, 2017.

~~(31)~~		~~Rule 13a-14(a)/15d-14(a) Certifications.~~

*31.1		Certification of ~~Charles H. Sherwood, Ph.D.,~~Dr. Cheryl R. Blanchard, pursuant to Rules 13a-15(e) and 15d-15(e), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

*31.2		Certification of ~~Sylvia Cheung~~Michael Levitz, pursuant to Rules 13a-15(e) and 15d-15(e), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

(32)		Section 1350 ~~Certifications.~~Certifications

**32.1		Certification of ~~Charles H. Sherwood, Ph.D.,~~Dr. Cheryl R. Blanchard, and ~~Sylvia Cheung,~~Michael Levitz, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(101)		XBRL

*101		The following materials from Anika Therapeutics, Inc.’s Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2017,~~March 31, 2024 as filed with the SEC on ~~October 27, 2017,~~May 8, 2024, formatted in Inline XBRL (eXtensible Business Reporting Language), as follows:

i.		Condensed Consolidated Balance Sheets as of ~~September 30, 2017~~March 31, 2024 (unaudited) and December 31, ~~2016~~2023 (unaudited)
~~ii.~~
ii.	Condensed Consolidated Statements of Operations and Comprehensive Income for the Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2024 and ~~September 30, 2016~~March 31, 2023 (unaudited)

iii.	Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2024 and March 31, 2023 (unaudited)

iv.	Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30, 2017~~March 31, 2024 and ~~September 30, 2016~~March 31, 2023 (unaudited)
~~iv.~~
v.	Notes to Condensed Consolidated Financial Statements (unaudited)

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*	Filed herewith.
**	Furnished herewith.

*	~~Filed herewith.~~
**	~~Furnished herewith.~~

SIGNATURES~~SIGNATURES~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		ANIKA THERAPEUTICS, INC.

~~Date: October 27, 2017~~	~~By:~~	~~/s/ SYLVIA CHEUNG~~
		~~Sylvia Cheung~~ (Registrant)
		~~Chief Financial Officer~~
Date: May 8, 2024	By:	/s/ MICHAEL LEVITZ
		Michael Levitz
		Executive Vice President, Chief Financial Officer and Treasurer
		(Authorized Officer and Principal Financial Officer)

~~Massachusetts~~ Delaware	04-3145961
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
~~Incorporation or Organization)~~

~~32 Wiggins Avenue, Bedford, Massachusetts~~	~~01730~~
~~(Address of Principal Executive Offices)~~	~~(Zip Code)~~

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share	ANIK	NASDAQ Global Select Market

		Page
Part I	Financial Information	3
Item 1.	Condensed Consolidated Financial Statements (unaudited):	3
	Condensed Consolidated Balance Sheets as of ~~September 30, 2017~~March 31, 2024 and December 31, ~~2016~~2023	3
	Condensed Consolidated ~~Statements~~Statement of Operations and Comprehensive Income for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2024 and ~~2016~~2023	4
	Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2024 and 2023	5
	Condensed Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2024 and ~~2016~~2023	56
	Notes to Condensed Consolidated Financial Statements	67
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1416
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25
Part II	Other Information	25
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	1926
Item 4.	Mine Safety Disclosures	~~Controls and Procedures~~	1926
~~Part II~~Item 5.	Other Information	~~Other Information~~
~~Item 1.~~	~~Legal Proceedings~~	2026
Item ~~1A.~~6.	~~Risk Factors~~Exhibits	2027
~~Item 6.~~Signatures	~~Exhibits~~	2128
~~Signatures~~		22

PART I:	FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS

							March 31,			December 31,
ASSETS	September 30, 2017			December 31, 2016			2024			2023
Current assets:
Cash and cash equivalents	$	126,960		$	104,261		$	68,629		$	72,867
Investments		25,750			20,500
Accounts receivable, net of reserves of $217 and $194 at September 30, 2017 and December 31, 2016, respectively		23,804			27,598
Accounts receivable, net								32,077			35,961
Inventories, net		20,252			15,983			49,408			46,386
Prepaid expenses and other current assets		2,268			2,098			8,848			8,095
Total current assets		199,034			170,440			158,962			163,309
Property and equipment, net		53,973			52,296			46,057			46,198
Right-of-use assets								28,181			28,767
Other long-term assets		1,283			69			17,571			18,672
Deferred tax assets								1,273			1,489
Intangible assets, net		10,738			10,227			4,297			4,626
Goodwill		8,104			7,214			7,403			7,571
Total assets	$	273,132		$	240,246		$	263,744		$	270,632

LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable	$	5,189		$	2,303		$	10,022		$	9,860
Accrued expenses and other current liabilities		6,516			6,496			18,438			21,199
Total current liabilities		11,705			8,799			28,460			31,059
Other long-term liabilities		545			2,126			404			404
Deferred tax liability		7,593			6,548
Commitments and contingencies (Note 12)
Lease liabilities								26,344			26,904
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, $0.01 par value; 1,250 shares authorized, no shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively		-			-
Common stock, $0.01 par value; 60,000 shares authorized, 14,662 and 14,627 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively		146			146
Preferred stock, $0.01 par value; 1,250 shares authorized, no shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively								-			-
Common stock, $0.01 par value; 90,000 shares authorized, 15,009 issued and 14,821 outstanding and 14,848 issued and 14,660 outstanding at March 31, 2024 and December 31, 2023, respectively								148			147
Additional paid-in-capital		66,746			61,735			91,165			90,009
Accumulated other comprehensive loss		(5,047	)		(7,317	)		(6,315	)		(5,943	)
Retained earnings		191,444			168,209			123,538			128,052
Total stockholders’ equity		253,289			222,773			208,536			212,265
Total liabilities and stockholders’ equity	$	273,132		$	240,246		$	263,744		$	270,632

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Product revenue	$	27,178	$	25,783	$	78,899	$	74,636
Licensing, milestone and contract revenue		6		6		5,133		17
Total revenue		27,184		25,789		84,032		74,653

Operating expenses:
Cost of product revenue		6,250		4,998		18,648		16,488
Research and development		5,842		2,822		14,521		7,773
Selling, general and administrative		4,823		4,280		14,862		12,525
Total operating expenses		16,915		12,100		48,031		36,786
Income from operations		10,269		13,689		36,001		37,867
Interest income, net		261		93		335		214
Income before income taxes		10,530		13,782		36,336		38,081
Provision for income taxes		3,643		4,830		12,587		13,619
Net income	$	6,887	$	8,952	$	23,749	$	24,462

Basic net income per share:
Net income	$	0.47	$	0.61	$	1.63	$	1.66
Basic weighted average common shares outstanding		14,579		14,625		14,572		14,726
Diluted net income per share:
Net income	$	0.46	$	0.59	$	1.58	$	1.61
Diluted weighted average common shares outstanding		15,115		15,077		15,065		15,163

Net income	$	6,887	$	8,952	$	23,749	$	24,462
Other comprehensive income:
Foreign currency translation adjustment		690		310		2,270		548
Comprehensive income	$	7,577	$	9,262	$	26,019	$	25,010

	Three Months Ended March 31, 2024
	Common Stock												Accumulated
							Additional						Other			Total
	Number of			$.01 Par			Paid			Retained			Comprehensive			Stockholders'
	Shares			Value			in Capital			Earnings			Loss			Equity
Balance, January 1, 2024		14,660		$	147		$	90,009		$	128,052		$	(5,943	)	$	212,265
Issuance of common stock for equity awards		1			-			23			-			-			23
Vesting of restricted stock units		250			2			(2	)		-			-			-
Stock-based compensation expense		-			-			3,430			-			-			3,430
Retirement of common stock for minimum tax withholdings		(90	)		(1	)		(2,295	)		-			-			(2,296	)
Net loss		-			-			-			(4,514	)		-			(4,514	)
Other comprehensive loss		-			-			-			-			(372	)		(372	)
Balance, March 31, 2024		14,821		$	148		$	91,165		$	123,538		$	(6,315	)	$	208,536

	Three Months Ended March 31, 2023
	Common Stock												Accumulated
							Additional						Other			Total
	Number of			$.01 Par			Paid			Retained			Comprehensive			Stockholders'
	Shares			Value			in Capital			Earnings			Loss			Equity
Balance, January 1, 2023		14,625		$	146		$	81,141		$	210,719		$	(6,443	)	$	285,563
Issuance of common stock for equity awards		1			-			7			-			-			7
Vesting of restricted stock units		177			2			(2	)		-			-			-
Stock-based compensation expense		-			-			3,717			-			-			3,717
Retirement of common stock for minimum tax withholdings		(62	)		(1	)		(1,620	)		-			-			(1,621	)
Net loss		-			-			-			(10,350	)		-			(10,350	)
Other comprehensive income		-			-			-			-			272			272
Balance, March 31, 2023		14,741		$	147		$	83,243		$	200,369		$	(6,171	)	$	277,588

	As of		As of
	March 31,		December 31,
	2024		2023
Accounts Receivable	$	33,735	$	37,580
Less: Allowance for credit losses		1,658		1,619
Net balance, end of period	$	32,077	$	35,961

	As of March 31,
	2024			2023
Balance, beginning of the period	$	1,619		$	1,608
Amounts provided		185			102
Amounts recovered		(92	)		(78	)
Amounts written off		(45	)		(106	)
Translation adjustments		(9	)		11
Balance, end of period	$	1,658		$	1,537

	March 31,		Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Amortized
	2024		(Level 1)		(Level 2)		(Level 3)		Cost
Cash equivalents:
Money Market Funds	$	52,177	$	52,177	$	-	$	-	$	52,177

			Fair Value Measurements at Reporting Date Using
	September 30, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents:
Money market funds	$	5,324	$	-	$	5,324	$	-

Investments:
Bank certificates of deposit	$	25,750	$	-	$	25,750	$	-

			Fair Value Measurements at Reporting Date Using
	December 31, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents:
Money market funds	$	68,352	$	-	$	68,352	$	-
Bank certificates of deposit		750		-		750		-
Total cash equivalents	$	69,102	$	-	$	69,102	$	-

Investments:
Bank certificates of deposit	$	20,500	$	-	$	20,500	$	-

	September 30, 2017		December 31, 2016
Raw materials	$	7,867	$	5,884
Work-in-process		6,564		5,559
Finished goods		5,821		4,540
Total	$	20,252	$	15,983

					September 30, 2017								December 31, 2016
	Gross Value		Useful Life		Accumulated Currency Translation Adjustment			Accumulated Amortization			Net Book Value		Net Book Value
Developed technology	$	17,100		15	$	(2,644	)	$	(7,487	)	$	6,969	$	6,842
In-process research & development		4,406		Indefinite		(1,061	)		-			3,345		2,973
Distributor relationships		4,700		5		(415	)		(4,285	)		-		-
Patents		1,000		16		(158	)		(418	)		424		412
Elevess trade name		1,000		9		-			(1,000	)		-		-
Total	$	28,206			$	(4,278	)	$	(13,190	)	$	10,738	$	10,227

											December 31,
			Three Months Ended March 31 , 2024								2023
			Less:
			Accumulated										Weighted
			Currency			Less:			Net				Average
	Gross		Translation			Accumulated			Book		Net Book		Useful
	Value		Adjustment			Amortization			Value		Value		Life
Developed technology	$	33,061	$	(1,608	)	$	(29,653	)	$	1,800	$	1,973		15
IPR&D		2,656		(1,006	)		-			1,650		1,650	Indefinite
Customer relationships		3,887		-			(3,542	)		345		360		10
Distributor relationships		4,700		(415	)		(4,285	)		-		-		5
Patents		1,000		(189	)		(740	)		71		83		16
Tradenames		4,641		-			(4,210	)		431		560		5
Total	$	49,945	$	(3,218	)	$	(42,430	)	$	4,297	$	4,626		13

Remainder of 2024	$	1,008
2025		274
2026		160
2027		160
2028		160
Thereafter		886
Total	$	2,648

	Nine Months Ended September 30, 2017		Twelve Months Ended December 31, 2016
Balance, beginning	$	7,214	$	7,482
Effect of foreign currency adjustments		890		(268	)
Balance, ending	$	8,104	$	7,214

	Three Months Ended March 31,
	2024
Balance, beginning of period	$	7,571
Effect of foreign currency adjustments		(168	)
Balance, ending of period	$	7,403

	September 30, 2017		December 31, 2016
Compensation and related expenses	$	2,985	$	3,089
Facility construction costs		-		804
Research grants		413		463
Professional fees		897		802
Clinical trial costs		2,136		227
Deferred rent		-		231
Other		85		880
Total	$	6,516	$	6,496

	●	Over 30 years of experience in HA-based regenerative solutions and early intervention orthopedics combined with seasoned leadership with a strong financial foundation for future investment in meaningful solutions for our customers and their patients;

	●	Utilizing HA-based technology and manufacturing expertise to provide new and differentiated solutions in next generation OA Pain Management and regenerative solutions markets;

	●	Introducing key HA-based products into the US market upon FDA approval/clearance, such as Cingal, Hyalofast and Integrity, our arthroscopic patch system for rotator cuff repair;

	●	Robust network of stakeholders in our target markets to identify evolving unmet patient treatment needs;

	●	Global commercial expertise, which we will leverage to drive growth across our product portfolio, including continued international expansion;

	●	Opportunity to pursue strategic inorganic growth opportunities, including potential partnerships and smaller acquisitions and technology licensing, and leveraging our strong financial foundation and operational capabilities; and

	●	Energized and experienced team focused on strong values, talent, and culture.

	Three-Month Periods Ended March 31,
	2024			2023
Gross profit	$	24,628		$	22,843
Product rationalization charges		472			-
Acquisition related intangible asset amortization		157			1,562
Adjusted gross profit	$	25,257		$	24,405
Adjusted gross margin		62	%		64	%

	●	adjusted EBITDA excludes depreciation and amortization, and, although these are non-cash expenses, the assets being depreciated or amortized may have to be replaced in the future, the cash requirements for which are not reflected in adjusted EBITDA;

	●	we exclude share-based compensation expense from adjusted EBITDA although (a) it has been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy and (b) if we did not pay out a portion of our compensation in the form of stock-based compensation, the cash salary expense included in operating expenses would be higher, which would affect our cash position;

	●	we exclude acquisition related expenses, including, amortization and depreciation of acquired assets in recent acquisitions, and the impact of inventory fair-value step up on cost of revenue;

	●	the expenses and other items that we exclude in our calculation of adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from adjusted EBITDA when they report their operating results;