Dive Brief:
- Augmedics, a developer of surgical navigation technologies, will acquire the digital health assets of Surgalign Holdings for $900,000 in cash and assume unspecified liabilities after making a successful bid in a bankruptcy court auction.
- Surgalign, which is selling its assets under court supervision after filing for Chapter 11 bankruptcy protection, said in a statement on Friday that Xtant Medical Holdings also was selected in a bidding process to acquire its hardware and biologics assets for a cash purchase price of $5 million, along with the assumption of certain liabilities.
- Augmedics, in a separate statement, said the purchase of Surgalign’s digital health assets and intellectual property will strengthen its augmented reality and AI portfolio.
Dive Insight:
Deerfield, Illinois-based Surgalign filed for bankruptcy in June, a year after the Securities and Exchange Commission charged the company with accounting fraud.
The SEC accused Surgalign, formerly RTI Surgical Holdings, of shipping future orders ahead of schedule to pull forward revenues, in violation of generally accepted accounting principles.
Surgalign paid $2 million to settle the charges, and former CFO Robert Jordheim agreed to pay a $75,000 civil penalty and return more than $206,000 to the company. Three other former RTI executives returned over $361,000 of incentive-based compensation to Surgalign.
In 2020, RTI restated its public financial statements from 2014 through 2019 to correct errors caused by the practice, according to the SEC.
Surgalign disclosed its plan to sell its hardware and biomaterials assets to Xtant at the time it announced its bankruptcy filing.
The company said it has now completed its auction of assets. “We are pleased to have concluded the sale process and believe with Xtant and Augmedics, our technology and its potential will live on,” Surgalign CEO Terry Rich said in a statement.
The asset sales are expected to be approved at a hearing next week in the U.S. Bankruptcy Court for the Southern District of Texas, which supervised the auction.