anik20250331

anik20250331_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-14027

Anika Therapeutics, Inc.

(Exact Name of Registrant as Specified in Its Charter)

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

32 Wiggins Avenue, Bedford, Massachusetts 01730

(Address of Principal Executive Offices) (Zip Code)

(781) 457-9000

(Registrant’s Telephone Number, Including Area Code)

N/A

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

Securities registered pursuant to Section 12(b) of the Act:

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

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 every Interactive Data File required to be submitted 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 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.

Large accelerated filer ☐

Accelerated filer ☒

Non-accelerated filer ☐

Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition 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 CORPORATE ISSUERS:

As of April 30, 2025, there were 14,341,423 outstanding shares of Common Stock, par value $0.01 per share.

ANIKA THERAPEUTICS, INC.

TABLE OF CONTENTS

		Page
Part I	Financial Information	3
Item 1.	Condensed Consolidated Financial Statements (unaudited):	3
	Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024	3
	Condensed Consolidated Statement of Operations and Comprehensive Loss for the three months ended March 31, 2025 and 2024	4
	Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2025 and 2024	5
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27
Part II	Other Information	27
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	29
Signatures		30

References in this Quarterly Report on Form 10-Q to “we,” “us,” “our,” “our company,” and other similar references refer to Anika Therapeutics, Inc. and its subsidiaries unless the context otherwise indicates.

ANIKA, ANIKA THERAPEUTICS, CINGAL, HYAFF, HYALOFAST, INTEGRITY, MONOVISC, ORTHOVISC, and TACTOSET are our registered trademarks that appear in this Quarterly Report on Form 10-Q. For convenience, these trademarks appear in this Quarterly Report on Form 10-Q without ® and ™ symbols, but that practice does not mean that we will not assert, to the fullest extent under applicable law, our rights to the trademarks. This Quarterly Report on Form 10-Q also contains trademarks and trade names that are the property of other companies and licensed to us.

PART I:	FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS

Anika Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except per share data)

(unaudited)

	March 31,			December 31,
ASSETS	2025			2024
Current assets:
Cash and cash equivalents	$	53,371		$	55,629
Accounts receivable, net		21,987			23,594
Inventories, net		21,336			23,809
Prepaid expenses and other current assets		5,815			5,494
Current assets held for sale		-			5,126
Total current assets		102,509			113,652
Property and equipment, net		40,461			38,994
Right-of-use assets		25,180			25,685
Other long-term assets		5,725			5,656
Notes receivable		5,838			5,935
Deferred tax assets		1,188			1,177
Intangible assets, net		2,281			2,490
Goodwill		7,423			7,125
Non-current assets held for sale		-			2,026
Total assets	$	190,605		$	202,740

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable	$	5,277		$	5,617
Accrued expenses and other current liabilities		12,624			13,567
Current liabilities held for sale		-			4,122
Total current liabilities		17,901			23,306
Other long-term liabilities		744			772
Lease liabilities		23,563			24,014
Non-current liabilities held for sale		-			659
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, $0.01 par value; 1,250 shares authorized, no shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively		-			-
Common stock, $0.01 par value; 90,000 shares authorized, 15,270 issued and 14,336outstanding and 15,010 issued and 14,416 outstanding at March 31, 2025 and December 31, 2024, respectively		143			144
Additional paid-in-capital		87,563			88,961
Accumulated other comprehensive loss		(6,103	)		(6,783	)
Retained earnings		66,794			71,667
Total stockholders’ equity		148,397			153,989
Total liabilities and stockholders’ equity	$	190,605		$	202,740

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

Anika Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except per share data)

(unaudited)

	Three Months Ended March 31,
	2025			2024
Revenue	$	26,168		$	29,022
Cost of revenue		11,487			10,047
Gross Profit		14,681			18,975

Operating expenses:
Research and development		6,059			6,409
Selling, general and administrative		12,906			15,071
Total operating expenses		18,965			21,480
Loss from operations		(4,284	)		(2,505	)
Interest and other income (expense), net		415			592
Loss before income taxes		(3,869	)		(1,913	)
Provision for income taxes		89			43
Loss from continuing operations		(3,958	)		(1,956	)
Loss from discontinued operations, net of tax		(915	)		(2,558	)
Net loss	$	(4,873	)	$	(4,514	)

Loss per share:
Basic
Continuing operations		(0.28	)	$	(0.13	)
Discontinued operations		(0.06	)		(0.18	)
	$	(0.34	)	$	(0.31	)

Diluted
Continuing operations		(0.28	)	$	(0.13	)
Discontinued operations		(0.06	)		(0.18	)
	$	(0.34	)	$	(0.31	)

Weighted average common shares outstanding:
Basic		14,297			14,698
Diluted		14,297			14,698

Net loss	$	(4,873	)	$	(4,514	)
Foreign currency translation adjustment		680			(372	)
Comprehensive loss	$	(4,193	)	$	(4,886	)

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

Anika Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders' Equity

(in thousands, except per share data)

(unaudited)

	Three Months Ended March 31, 2025
	Common Stock												Accumulated
							Additional						Other			Total
	Number of			$.01 Par			Paid			Retained			Comprehensive			Stockholders'
	Shares			Value			in Capital			Earnings			Loss			Equity
Balance, January 1, 2025		14,416		$	144		$	88,961		$	71,667		$	(6,783	)	$	153,989
Vesting of restricted stock units		250			2			1,693			-			-			1,695
Stock-based compensation expense		-			-			2,344			-			-			2,344
Retirement of common stock for minimum tax withholdings		(90	)		(1	)		(1,466	)		-			-			(1,467	)
Repurchase of common stock		(241	)		(2	)		(3,969	)		-			-			(3,971	)
Net loss		-			-			-			(4,873	)		-			(4,873	)
Other comprehensive loss		-			-			-			-			680			680
Balance, March 31, 2025		14,335		$	143		$	87,563		$	66,794		$	(6,103	)	$	148,397

	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 income		-			-			-			-			(372	)		(372	)
Balance, March 31, 2024		14,821		$	148		$	91,165		$	123,538		$	(6,315	)	$	208,536

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

Anika Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Three Months Ended March 31,
	2025			2024
	(a)			(a)
Cash flows from operating activities:
Net loss	$	(4,873	)	$	(4,514	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		1,383			1,734
Amortization of acquisition related intangible assets		209			329
Non-cash operating lease cost		577			565
Stock-based compensation expense		2,863			3,590
Deferred income taxes		18			193
Provision for credit losses		(346	)		93
Provision for inventory		832			2,063
Interest income on notes receivable		(224	)		-
Gain on sale of Parcus Medical		(300	)		-
Changes in operating assets and liabilities:
Accounts receivable		3,034			3,624
Inventories		523			(4,090	)
Prepaid expenses, other current and long-term assets		(203	)		(548	)
Accounts payable		47			401
Operating lease liabilities		(569	)		(546	)
Accrued expenses, other current and long-term liabilities		(3,088	)		(3,110	)
Income taxes		(13	)		90
Net cash used in operating activities		(130	)		(126	)

Cash flows from investing activities:
Proceeds from sale of Parcus Medical, net of cash		4,496			-
Purchases of property and equipment		(2,824	)		(1,808	)
Net cash provided by (used in) investing activities		1,672			(1,808	)

Cash flows from financing activities:
Repurchases of common stock		(3,971	)		-
Cash paid for tax withheld on vested restricted stock awards		(1,467	)		(2,296	)
Proceeds from exercises of equity awards		-			23
Net cash used in financing activities		(5,438	)		(2,273	)

Exchange rate impact on cash		108			(31	)

Decrease in cash and cash equivalents		(3,788	)		(4,238	)
Cash and cash equivalents at beginning of period		57,159			72,867
Cash and cash equivalents at end of period	$	53,371		$	68,629
Supplemental disclosure of cash flow information:
Non-cash investing activities:
Purchases of property and equipment included in accounts payable and accrued expenses	$	502		$	622

(a)

The cash flows related to discontinued operations and held-for-use assets and liabilities have not been segregated and remain included in the major classes of assets and liabilities. Accordingly, the Consolidated Statements of Cash Flows include the results of continuing and discontinued operations. See Note 3 for selected financial information related to significant operating and investing cash flow items from discontinued operations.

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

Anika Therapeutics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

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

(unaudited)

1.	Nature of Business

Anika Therapeutics, Inc. (the “Company”) is a global joint preservation company in osteoarthritis (“OA”) pain management and regenerative solutions, focusing on early intervention orthopedics. The Company offers hyaluronic acid-based advancements in its OA Pain Management and Regenerative Solutions businesses, all designed to restore active living, empower surgeon choice, and enhance patient outcomes worldwide.

In early 2020, the Company expanded its overall technology platform through its strategic acquisitions of Parcus Medical, LLC (“Parcus Medical”), a sports medicine implant and instrumentation company, and Arthrosurface Incorporated (“Arthrosurface”), a company specializing in less invasive, bone preserving partial and total joint replacement solutions. These acquisitions broadened the Company's product portfolio, developed over its 30 years of expertise in hyaluronic acid technology, into joint preservation and restoration, increased its commercial capabilities, diversified its revenue base, and expanded its product pipeline and research and development expertise.

In October 2024, the Company announced a strategic shift to focus on its OA Pain Management and Regenerative Solutions businesses. This strategic decision resulted in the sale of Arthrosurface on October 31, 2024 and the sale of Parcus Medical on March 7, 2025.

The Company is subject to risks common to companies in the life sciences industry including, but not limited to, development by the Company or its competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, commercialization of existing and new products, and compliance with U.S. Food and Drug Administration (“FDA”) and foreign regulations and approval requirements, as well as the ability to grow the Company’s business through appropriate commercial strategies.

2.	Basis of Presentation

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 (“U.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 U.S. GAAP have been omitted pursuant to SEC rules and regulations relating to interim financial statements. The December 31, 2024 balances reported herein 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 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, 2024. The results of operations for the three-month period ended March 31, 2025 are not indicative of the results to be expected for the year ending December 31, 2025.

As noted above, the Company made a strategic decision in October 2024 that resulted in the sales of Arthrosurface and Parcus Medical. See Note 3, Discontinued Operations, for further information. The condensed consolidated financial statements reflect Arthrosurface and Parcus Medical’s results of operations as discontinued operations for all periods presented, and the related assets and liabilities as held-for-sale as of December 31, 2024.

Recent Issued Accounting Pronouncements

In December 2023, the 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 2023-09 is effective for fiscal years and interim periods beginning after December 15, 2024. The Company is evaluating the impact of ASU 2023-09 on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, and in January 2025, the FASB issued ASU No. 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for public companies for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact of ASU 2024-03 on its disclosures in future years as a result of the adoption of ASU 2024-03.

3.	Discontinued Operations

Arthrosurface

On October 31, 2024 (the “Closing Date”), the Company completed the sale of all of the outstanding equity interests of Arthrosurface, a Delaware corporation and former wholly-owned subsidiary of the Company, which held the Company’s Arthrosurface business, to Phoenix Brio, Incorporated, a Delaware corporation (the “Buyer”), pursuant to the terms and conditions of a Share Purchase Agreement, dated as of the Closing Date (the “Purchase Agreement”), by and among the Company, Arthrosurface and Buyer (the “Arthrosurface Transaction”).

As consideration for the Arthrosurface Transaction, at the closing, the Buyer delivered to the Company a ten-year non-interest-bearing promissory note in the principal amount of $7.0 million. Under the terms of the Purchase Agreement, the Company is also eligible to receive: (i) for each calendar quarter, an amount equal to a percentage of the net sales (the “Revenue Payments”) for the sale of certain commercial and pipeline products during the period commencing on the Closing Date and ending on the earlier of the fifth (5th) anniversary of the Closing Date or the date on which the Buy-Out Payment (as defined below) is paid to the Company; and (ii) a percentage of the gross proceeds with respect to the sale of certain commercial and pipeline products in a bona-fide arm’s length transaction with a third party that is not an affiliate of Buyer or the Company occurring within the first twenty four (24) months following the Closing Date. The Buyer can also elect to make a payment in an amount equal to the greater of (A) $14.0 million or (B) ten (10) times the Revenue Payments ((A) and (B) together, the “Buy-Out Payment”) paid to the Company during the last full calendar year prior to the consummation of a change of control transaction or Buyer’s written notice to the Company that it is electing to make the Buy-Out Payment. Pursuant to the Purchase Agreement, the aggregate consideration is subject to customary post-closing adjustments. The Company determined the fair value of the consideration with the sale of the Arthrosurface asset group to be $5.9 million and recorded as Notes Receivable on its balance sheet at the time of divestiture. The carrying value of the Notes Receivable was $5.8 and $5.9 million, as of March 31, 2025 and December 31, 2024, respectively.

Parcus Medical

On March 7, 2025, the Company completed the sale of all outstanding equity interests of Parcus Medical, to Medacta Americas Manufacturing, Inc. (“Medacta”), pursuant to the terms and conditions of a Membership Interest Purchase Agreement (the “Parcus Transaction”). As consideration for the Parcus Transaction, at closing, Medacta paid $4.5 million in cash. Pursuant to the terms of the agreement, the aggregate consideration is subject to customary post-closing adjustments.

The components of loss from discontinued operations for the three months ended March 31, 2025 and 2024, consist of the following (in thousands):

	Three Months Ended March 31,
	2025			2024
Revenue	$	2,710		$	11,501
Costs and expenses		3,625			14,059
Loss from discontinued operations	$	(915	)	$	(2,558	)

For the three months ended March 31, 2025 and 2024, there was no income tax expense associated with discontinued operations.

The assets and liabilities reported as held-for-sale consist of the following (in thousands):

	As of December 31,
	2024
Assets
Cash and cash equivalents	$	1,531
Accounts receivable, net		3,285
Inventories		221
Prepaid expenses and other current assets		89
Property and equipment, net		1,134
Right-of-use assets		892
Total assets held-for-sale	$	7,152
Liabilities
Accounts payable	$	797
Accrued expenses and other current liabilities		3,324
Lease liabilities		660
Total liabilities held-for-sale	$	4,781

There are no assets and liabilities reported as held-for-sale as of March 31, 2025, as the Company completed the divestitures of the Arthrosurface and Parcus Medical asset groups prior to March 31, 2025.

Selected financial information related to significant operating and investing cash flow items from discontinued operations (excluding working capital impacts) are as follows (in thousands):

	Three Months Ended March 31,
	2025		2024
Depreciation	$	149	$	492
Amortization of acquisition related intangible assets	$	55	$	197
Non-cash operating lease cost	$	59	$	102
Stock-based compensation expense	$	132	$	336
Provision for inventory	$	-	$	1,185
Purchases of property and equipment	$	19	$	248

4.	Accounts Receivable

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.

The components of the Company’s accounts receivable are as follows:

	As of		As of
	March 31,		December 31,
	2025		2024
Accounts Receivable	$	22,703	$	24,324
Less: Allowance for credit losses		716		730
Net balance, end of period	$	21,987	$	23,594

A summary of activity in the allowance for credit losses is as follows:

	As of March 31,
	2025		2024
Balance, beginning of the period	$	730	$	834
Amounts provided		46		42
Amounts recovered

SEC Form 10-Q filed by Anika Therapeutics Inc.