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Segment Information
 9 Months Ended
Sep. 30, 2022
Segment Reporting [Abstract]  
Segment Information Segment InformationThe Company has two reportable segments: Wound & Surgical and Regenerative Medicine.
Wound & Surgical focuses on the Advanced Wound Care and Surgical Recovery markets, the Company’s existing product portfolio, and near-term product development. Its platform technologies include tissue allografts derived from human placental membrane (EPIFIX®, AMNIOFIX®, and AMNIOEFFECT™), tissue allografts derived from human umbilical cord (EPICORD® and AMNIOCORD®), and a particulate extracellular matrix derived from human placental disc (AXIOFILL™). This segment is also responsible for the international sales of the Company’s Section 351 products.
The Regenerative Medicine business focuses solely on Regenerative Medicine technologies, specifically progressing the Company’s placental biologics platform towards registration as a FDA-approved biological drug. Micronized dehydrated human amnion chorion membrane is the lead product candidate in its late-stage pipeline targeted at achieving FDA approval for specific clinical indications, including degenerative musculoskeletal conditions, beginning with KOA.
The Company’s corporate function includes expenses incurred by executive, finance, human resource, information systems, legal, other functions which are generally shared and whose activities are not specifically identifiable solely to either of the other segments. It also includes amortization of intangible assets. The Company has another operating segment related to an expiring dental sales contract. All net sales and cost of sales presented in the Corporate & Other columns below relate to this operating segment.
Wound & Surgical net sales reflects sales of the Company’s Advanced Wound Care products (as discussed in Note 14, Revenue), except for sales of the Company’s dental product. Sales of the Company’s dental product are included in the Corporate & Other columns in the tables below. In addition, Wound & Surgical reflects international sales of the Company’s Section 351 products, which represent all Section 351 sales not reflected in Regenerative Medicine.
The accounting policies of the segments are the same as the Company’s accounting policies. See Note 2, Significant Accounting Policies, included in the 2021 Form 10-K for significant accounting policies.
The Company evaluates the performance of its segments and allocates resources based on segment contribution, defined as net sales less (i) cost of sales, (ii) selling, general and administrative expense, (iii) research and development expense, and (iv) amortization of intangible assets. Prior period results were recast on the basis of new operating segments. The only components which comprise loss before income tax provision that are not included in operating loss are interest expense, net and other expense, net.
Net sales and segment contribution for each reportable segment for the three months ended September 30, 2022 were as follows (in thousands):
 Wound & SurgicalRegenerative MedicineCorporate & OtherConsolidated
Net sales$66,873 $— $816 $67,689 
Cost of sales11,159 — 1,029 12,188 
Selling, general and administrative expense35,531 — 17,944 53,475 
Research and development expense1,680 4,273 — 5,953 
Amortization of intangible assets— — 175 175 
Segment contribution$18,503 $(4,273)
Investigation, restatement and related expense3,001 
Operating loss$(7,103)
Supplemental information
Depreciation expense$451 $36 $344 $831 
Share-based compensation$1,945 $347 $80 $2,372 

Net sales and segment contribution by each reportable segment for the three months ended September 30, 2021 were as follows (in thousands):
 Wound & SurgicalRegenerative MedicineCorporate & OtherConsolidated
Net sales$62,138 $76 $860 $63,074 
Cost of sales8,924 16 1,189 10,129 
Selling, general and administrative expense32,104 1,285 12,900 46,289 
Research and development expense1,423 2,945 — 4,368 
Amortization of intangible assets— — 193 193 
Segment contribution$19,687 $(4,170)
Investigation, restatement and related expense3,170 
Operating loss$(1,075)
Supplemental information
Depreciation expense$511 $34 $378 $923 
Share-based compensation$1,435 $322 $2,054 $3,811 

Net sales and segment contribution by each reportable segment for the nine months ended September 30, 2022 were as follows (in thousands):

 Wound & SurgicalRegenerative MedicineCorporate & OtherConsolidated
Net sales$191,297 $— $2,169 $193,466 
Cost of sales31,126 — 2,821 33,947 
Selling, general and administrative expense108,256 — 50,582 158,838 
Research and development expense6,068 11,361 — 17,429 
Amortization of intangible assets— — 519 519 
Segment contribution$45,847 $(11,361)
Investigation, restatement and related expense8,771 
Operating loss$(26,038)
Supplemental information
Depreciation expense$1,364 $120 $1,065 $2,549 
Share-based compensation$5,609 $910 $4,279 $10,798 

Net sales and segment contribution by each reportable segment for the nine months ended September 30, 2021 were as follows (in thousands):
 Wound & SurgicalRegenerative MedicineCorporate & OtherConsolidated
Net sales$172,401 $16,584 $2,221 $191,206 
Cost of sales25,646 3,652 3,232 32,530 
Selling, general and administrative expense87,392 11,127 46,772 145,291 
Research and development expense4,080 8,690 — 12,770 
Amortization of intangible assets— — 647 647 
Segment contribution$55,283 $(6,885)
Investigation, restatement and related expense8,304 
Operating loss$(8,336)
Supplemental information
Depreciation expense$1,172 $213 $2,005 $3,390 
Share-based compensation$3,827 $1,147 $6,141 $11,115 

The Company does not allocate any assets to the reportable segments. No asset information is reported or disclosed to the chief operating decision maker in the financial information for each segment.