☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
2021
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Class A Common Stock, $0.0001 par value | ORGO | Nasdaq Capital Market |
Act.
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of RegulationS-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form10-K or any amendment to this Form10-K. ☒
Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
Emerging growth company | ☐ |
128,765,237.
None.
EXPLANATORY NOTE
This Amendment No. 1
Except as described above, this Amendment does not amend, update or change any other items or disclosures in the Original Filing, and accordingly, should be read in conjunction with the Original Filing. As required byRule 12b-15 under the Securities and Exchange ActCommission on or before April 30, 2022.
Auditor Firm Id: | 49 | Auditor Name: | RSM US LLP | Auditor Location: | Boston, Massachusetts |
2021
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ITEM 1. | BUSINESS |
operational infrastructure and building out our direct sales force to supplement our independent sales agencies. We also plan to continue to take advantage of significant opportunities to cross-sell within our established customer bases in both the Advanced Wound Care and Surgical & Sports Medicine markets. We believe that the Surgical & Sports Medicine market presents a strong near-term opportunity with respect to our current product portfolio as well as a significant long-term opportunity with respect to chronic inflammatory and degenerative conditions. Given our experience in the Advanced Wound Care market and regenerative medicine in general, we believe we are well positioned to capture this opportunity. |
* | Based on a September 2013 JAMA Dermatology published retrospective cohort study. |
Product (Launch Year) |
Description | Regulatory Pathway | Clinical Application | |||
Affinity (2014)† ![]() | Fresh amniotic membrane wound covering in which viable cells, growth factors/cytokines, and ECM proteins in the native tissue are preserved. | 361 HCT/P | Chronic and acute wounds | |||
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Novachor (2021) ![]() | Fresh chorion membrane wound covering in which viable cells, growth factors/cytokines, and ECM proteins in the native tissue are preserved. | 361 HCT/P | Chronic and acute wounds | |||
Apligraf (1998) ![]() | Bioengineered living cell therapy that contains two living cell types, keratinocytes and fibroblasts, that produce a broad spectrum of cytokines and growth factors | PMA | VLUs; DFUs | |||
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Dermagraft (2001)* ![]() | Bioengineered product with living human fibroblasts seeded on a bioabsorbable scaffold, that produces human collagen, ECM, proteins, cytokines, and growth factors | PMA | DFUs | |||
NuShield (2010)† ![]() | Dehydrated placental tissue wound covering preserved to retain all layers of the native tissue including both the amnion and chorion membranes, with the epithelial layer and the spongy/intermediate layer intact | 361 HCT/P | Chronic and acute wounds | |||
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PuraPly AM (2016) ![]() | Antimicrobial barrier comprised of purified native collagen matrix with broad-spectrum polyhexamethylene biguanide, or PHMB, antimicrobial agent. Line extensions include PuraPly XT, which contains additional layers of collagen matrix and a higher level of PHMB. Extra-fenestrated (EF) versions of the products allow for added conformability and fluid drainage. | 510(k) | Chronic and acute wounds (except 3 rd degree burns) |
† | Launched by NuTech Medical; acquired by Organogenesis in 2017. |
* | Launched by Smith & Nephew; acquired by Organogenesis in 2014. |
Product (Launch Year) | Description | Regulatory Pathway | Clinical Application | |||
NuShield (2010) ![]() | Dehydrated placental tissue barrier membrane preserved to retain all layers of the native tissue including both the amnion and chorion membranes, with the epithelial layer and the spongy/intermediate layer intact | 361 HCT/P | Barrier membrane to support repair of tendon, ligament and other soft tissue injuries | |||
Affinity (2014) ![]() | Fresh amniotic membrane wound covering in which viable cells, growth factors/cytokines, and ECM proteins in the native tissue are preserved | 361 HCT/P | Wound covering for acute surgical wounds | |||
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Novachor (2021) ![]() | Fresh chorion membrane wound covering in which viable cells, growth factors/cytokines, and ECM proteins in the native tissue are preserved. | 361 HCT/P | Wound covering for acute surgical wounds | |||
PuraPly AM (2016) ![]() | Purified native collagen matrix with broad-spectrum PHMB antimicrobial agent. Line extensions include PuraPly XT, which contains additional layers of collagen matrix and a higher level of PHMB. Extra-fenestrated (EF) versions of the products allow for added conformability and fluid drainage. | 510(k) | Antimicrobial barrier for management of open wounds in the surgical setting | |||
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PuraForce (2019) ![]() |
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| Indicated for the reinforcement of soft tissues repaired by sutures or suture anchors during tendon repair surgery |
Incidence of 100% Wound Closure |
Median Time to 100% Wound Closure | |||||
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Executive Officers
Gary S. Gillheeney, Sr.
availability or lack of alternative treatments. As a condition of approval, FDA may require that a sponsor of a drug or biologic product candidate receiving accelerated approval perform adequate and well-controlled post-marketing clinical trials to verify the predicted clinical benefit. In addition, for accelerated approval products FDA typically requires pre- dissemination submission of promotional materials to FDA for the agency’s consideration. A drug approved under the accelerated approval pathway may have its approval revoked on several grounds including if a required post-approval trial fails to verify clinical benefit or does not demonstrate sufficient clinical benefit to justify the risks associated with the drug. |
on our diverse workforce, which we believe has been and will continue to be a major contributor to our growth and innovation, and intend to continue to make diversity and inclusion a focus of our efforts regarding our workforce. |
ITEM 1A. | RISK FACTORS |
Timothy M. Cunninghamdetermined that there is no limitation on our federal net operating losses. Current or future changes in our stock ownership may trigger an “ownership change,” some of which may be outside our control. Accordingly, our ability to utilize our net operating loss carryforwards to offset federal taxable income, if any, could be limited by Section 382, which could potentially result in increased future tax liability to us.
Patrick Bilbo has served as our Chief Operating Officer since 2017. Previously, he served as our Senior Vice President, Regulatory, Government Affairs and Administrationaffiliated hospitals and other executivemembers. GPOs and IDNs typically award contracts on a
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Lori Freedman has servedlicense. Such licenses or other settlements may involve, for example, upfront payments, yearly maintenance fees and royalties. At any given time, we may be involved as our Vice President and General Counsel since 2018 and as our General Counsel since 2017. Previously, she served as Vice President, Corporate Affairs & General Counsel of pSivida Corp. (n/k/either a EyePoint Pharmaceuticals),plaintiff or a specialty biopharmaceutical company, from 2001 to 2016 and as Vice President, General Counsel for Allaire Corporation, a computer software company, from 1998 to 2001. Mrs. Freedman holds a J.D. from the Boston University School of Law and a B.A. in economics and psychology from Brandeis University.
Brian Grow has served as our Chief Commercial Officer since 2017. Since 2004, he has serveddefendant in a number of rolesintellectual property actions, the outcomes of which may not be known for prolonged periods of time. A successful claim of patent or other intellectual property infringement or misappropriation against us could materially adversely affect our business, results of operations and financial condition.
Antonio S. Montecalvo has served as our Vice President, Health Policy and Contracting since 2017. Since 2003, he has served in various roles at Organogenesis, including as Director of Customer Support Services from 2003 to 2006. Prior to joining Organogenesis, Mr. Montecalvo served as Director of Accounting for Innovative Clinical Solutions, LTD from 2000 to 2003, as Senior Contracts Specialist for UnitedHealth Group from 1996 to 2000 and as a Senior Accountant for Piccerelli, Gilstein & Company, LLP from 1994 to 1996. Mr. Montecalvo holds a B.S. in Accounting from the University of Rhode Island.
Howard Walthall has served as our Executive Vice President, Strategy and Market Development since 2017. Previously, he served as President and CEO of NuTech Medical from 2013 to 2017, as President and CEO of NuTech Spine from 2011 to 2017 and as Vice President and General Counsel of NuTech Medical from 2011 to 2012. Prior to joining NuTech, he was a partner at Burr & Forman LLP from 2006 to 2011 and served as an Adjunct Professor at the University of Alabama School of Law from 2005 to 2011. Mr. Walthall has a B.S.E. in Biomedical and Mechanical Engineering from Duke University and a J.D. from the Cumberland School of Law at Samford University.
Directors
Below we have identified our directors (other than Mr. Gillheeney, our President and Chief Executive Officer, who is an executive officer identified above) and provided a description of their business experience.
Alan A. Ades has served as a memberrespect of our board of directors since 2003. Mr. Ades is aCo-founderindebtedness and Principal Owner of A & E Stores, Inc.,could have other important consequences to our debt holders and has served as its President and Chief Executive Officer since 1966. Mr. Ades founded Rugby Realty Co., Inc. in 1980 and has served as its Principal since 1980. Mr. Ades has served as a director of A & E Stores, Inc. since 1967. Mr. Ades has a B.A. in Business Administration from the University of Michigan and an L.L.B. from New York University Law School. We believe Mr. Ades is qualified to servesignificant effects on our boardbusiness. For example, it could:
Maurice Ades has been a membersuch debt could proceed against the collateral securing that indebtedness. In addition, any event of default or declaration of acceleration under one debt instrument could also result in an event of default under one or more of our boardother debt instruments. As a result, any default by us on our indebtedness could have a material adverse effect on our business, results of directors since 2018. Mr. Ades has beenoperations and financial condition.
Albert Erani has served as a member ofpast, we have not been in compliance with certain financial covenants in our board of directors since 2003. Mr. Eranico-founded A & E Stores, Inc.debt agreements, which may occur again in the future. We cannot guarantee that we will be able to maintain compliance with these covenants in the future and, has served as its Vice President, Principal and Secretary since 1971. Mr. Erani is Principal of Rugby Realty Co., Inc., an entityif we fail to do so, that owns real estate partnerships. We believe Mr. Erani is qualifiedwe will be able to serve on our board of directors dueobtain waivers from the lenders and/or amend the covenants.
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Glenn H. Nussdorf has servedMerger, dated as of August 17, 2018 (as amended, the “Avista Merger Agreement”), by and among AHPAC, Avista Healthcare Merger Sub, Inc., a direct wholly-owned subsidiary of AHPAC (“Avista Merger Sub”) and Organogenesis Inc. As a result of the Avista Merger and the other transactions contemplated by the Avista Merger Agreement, Avista Merger Sub merged with and into Organogenesis Inc., with Organogenesis Inc. surviving the Avista Merger, and becoming a wholly-owned subsidiary of AHPAC. AHPAC changed its name to “Organogenesis Holdings Inc.” (ORGO). Trading of AHPAC’s Class A common stock and public warrants was suspended as a memberresult of the redemption on October 31, 2018 of all of AHPAC’s public shares. On November 2, 2018, as a result of the redemption of the public shares, Nasdaq issued a delisting notice in respect of the AHPAC units, AHPAC Class A ordinary shares and AHPAC warrants to purchase Class A ordinary shares. On November 9, 2018, AHPAC submitted a request for an oral hearing before the Hearings Panel to appeal the delisting determination pursuant to the procedures set forth in the Nasdaq rules. That hearing occurred on December 13, 2018 and on January 4, 2019, Nasdaq notified us that the Hearings Panel granted our request for the continued listing of our boardClass A common stock and lifted the trading suspension at the open of directors since 2003. Mr. Nussdorf has servedthe market on January 8, 2019. Pursuant to the Hearing Panel’s decision, on or before March 31, 2019, we were required to demonstrate to the satisfaction of Staff and the Hearings Panel that we had a minimum of 300 round lot stockholders and that we otherwise meet all applicable requirements for listing on Nasdaq. The Hearings Panel determined to delist our public warrants due to our
Arthur S. Leibowitz has been a member of our board of directors since 2018. Mr. Leibowitz is a clinical professor at the Robert B. Willumstad School of Business at Adelphi University, where he teaches courses in accounting and auditing to both graduate and undergraduate students. Mr. Leibowitz began as an adjunct professor at Adelphi University in 2008, became a full-time lecturer in 2010 and was promoted to clinical professor in 2013. Mr. Leibowitz previously served as a member of the board of directors and the audit committee of Arotech Corporation from 2009 to 2014. Before joining Adelphi University, Mr. Leibowitz was an audit and business assurance partner at PricewaterhouseCoopers. During his twenty-seven years at PwC, Mr. Leibowitz served in a national leadership role for PwC’s retail industry group and was the portfolio audit partner for one of PwC’s leading private equity firm clients. Mr. Leibowitz is a certified public accountant in New York State and received a B.S. in accounting from Brooklyn College and a Masters of Accountancy from Stetson University. We believe that Mr. Leibowitz is qualified to serve on our board of directors due to his experience working with public and private companies on corporate finance and accounting matters.
Wayne Mackie has been a member of our board of directors since 2018. Mr. Mackie served as a member of the board of directors, the nominating and corporate governance committee (if applicable) and as chairmancompensation committee on the following
Joshua Tamaroff has beenhave director nominees recommended by a majority of our independent directors meeting in executive session. On August 3, 2021, the board of directors voted to establish a nominating committee of the board of directors, consisting of independent directors only. In addition, one member of our board of directors since 2018. Mr. Tamaroff joined Avista in 2009 and serves ascompensation committee was independent on May 6, 2021, a Principal. Prior to joining Avista, Mr. Tamaroff worked as an Analyst in the leveraged finance group at Lehman Brothers and Barclays Capital. Mr. Tamaroff currently serves as a director of ACP Nimble Holdings, Inc., OptiNose, Inc. (NASDAQ: OPTN), United BioSource Corporation and WideOpenWest, Inc. (NYSE: WOW), and previously served as a director of InvestorPlace Media and IWCO Direct. Mr. Tamaroff received a Bachelor of Science from Cornell University and a Master of Business Administration from the Wharton School at the University of Pennsylvania, where he was a Palmer Scholar. Mr. Tamaroff was selected to serve on our Board of Directors because of his private equity investment and company oversight experience and background with respect to acquisitions, debt financings and equity financings.
CORPORATE GOVERNANCE
Code of Ethics and Conduct; Corporate Governance Guidelines
We have adopted a written code of ethics and conduct that applies to our directors, executive officers and employees, as well as corporate governance guidelines. Copiesmajority of the code of ethics and conduct and our corporate governance guidelines are posted on the Investor Relations (Investors > Corporate Governance > Documents & Charters) sectionmembers of our website, which is located at www.organogenesis.com. If we make any substantive amendments to the code of ethicscompensation committee were independent by August 4, 2021 and conduct or grant any waivers from the code of ethics and conduct for any executive officer or director, we will disclose the nature of such amendment or waiver on our website or on a Form8-K.
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Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a)all of the Exchange Act requires our directors and executive officers, and persons who beneficially own more than ten percent of a registered class of our equity securities, to file reports of ownership of, and transactions in, our securities with the Securities and Exchange Commission. These directors, executive officers andten-percent stockholders are also required to furnish us with copies of all Section 16(a) forms they file.
Based solely on a reviewmembers of the copiescompensation committee were independent by February 15, 2022. A majority of such forms received by us, and on written representations from certain reporting persons, we believe that during fiscal year 2018 our directors, executive officers andten-percent stockholders complied with all applicable Section 16(a) filing requirements.
Controlled Company Exemption
The Company is a “controlled company” under the Nasdaq Stock Market (“Nasdaq”) listing rules because Alan A. Ades, Albert Erani and Glenn H. Nussdorf, members of our board of directors togethermust be independent by May 6, 2022.
Audit Committee
The Company has a standing audit committee consisting of Mr. Leibowitz and Mr. Mackie, itsco-chairpersons, and Mr. Tamaroff. The audit committee is responsible for, among other matters: (i) reviewing and discussing with management and the independent auditor the annual audited financial statements, and recommendinglimited to, the board whether the audited financial statements should be included in the Company’sForm 10-K; (ii) discussing with managementelection and the independent auditor significant financial reporting issues and judgments made in connection with the preparationremoval of the Company’s financial statements; (iii) discussing with management major risk assessment and risk management policies; (iv) monitoringdirectors (including the independenceright to designate four of the independent auditor; (v) verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law; (vi) reviewing and approving related-party transactions (as requiredour directors pursuant to the Company’s related party transactions policy); (vii) inquiringterms of an agreement between the Company and discussing withthe Significant
Our board of directors has determined that each memberstockholders;
Director Nominations
Each year, the board of directors proposes a slate of director nominees to stockholderspromulgated thereunder, for election at the annual meeting of stockholders. Stockholders may also recommend candidates for election to the board of directors, as described below. The board of directors screens potential director candidates and considers criteria including experience, qualifications, attributes, skills and other characteristics in the context of the currentmake-up of the board of directors and the needs of the board of directors given the circumstances of the Company.
The board of directors values the input of stockholders in identifying director candidates. Accordingly, the board of directors considers recommendations for director candidates submitted by stockholders using substantially the same criteria it applies to recommendations from directors and members of management. Any such nominations should be submitted to the board of directors by mail in carewhich federal courts have exclusive jurisdiction.
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ITEM 11. EXECUTIVE COMPENSATION
Executive Summary
healthcare industry continues to lead the demand for price concessions or to the exclusion of some suppliers from certain of our markets, which could have an adverse effect on our business, results of operations or financial condition. The compensationpresence of this competition in our market may lead to pricing pressure, which would make it more difficult to sell our products at a price that will make us profitable or prevent us from selling our products at all. As a result, we will be required to devote continued efforts and financial resources to bring our products under development to market, deliver cost-effective clinical outcomes, expand our geographic reach, enhance our existing products and develop new products for the advanced wound care and soft tissue repair markets. Even if we develop cost effective and/or new products, they may not be covered or reimbursed due to cost-containment and other financial pressures from payers.
As previously disclosed, we are a controlled company within the meaning of the rules of Nasdaq and are not required to have a compensation committee. However, membersachievement of our board of directors have substantial managerial experience and wide contacts in the biotechnology, medical technology and biopharmaceutical industries and in the broader healthcare industry, upon which they rely in making their determinations. The board of directors also takes into account publicly available information concerning the compensation practices of other, similarly situated companies in the biotechnology, medical technology and biopharmaceutical industries. This information is used by the board of directors informally and primarily for purposes of comparison to ascertain whether our compensation practices for our executive officers are broadly competitive. Our Chief Executive Officer makes recommendations with regard to the compensation of our executive officers, which are reviewed by the board of directors. Executive officers (including Mr. Gillheeney) do not participate in the board’s determination of their own annual compensation.
The board of directors does not have a formal benchmarking policy or a practice of establishing the amount of any element of our executive officers’ compensation by reference to a fixed range of percentages or percentiles of the compensation of any peer or comparison group. As a result, the determinations made by the members of our board of directors are guided to a significant degree by their collective judgment and experience. During fiscal year 2018, the board of directors did not retain a compensation consultant to assist the board of directors in assessing the form and amount of compensation paid to our executives.
Our board of directors has reviewed our compensation programs and believes that our compensation programs have not encouraged or rewarded excessive or inappropriate risk taking.
Summary Compensation Table for Fiscal Year 2018
The following table sets forth information regarding compensation earned byobjectives. In particular, we depend on Gary Gillheeney, our President and Chief Executive Officer. Recruiting and retaining other qualified employees, consultants and advisors for our business, including scientific and technical personnel, will also be critical to our success. There is currently a shortage of skilled executives and scientific personnel in our industry, which is likely to continue. As a result, competition for skilled personnel is intense and the turnover rate can be high. We may not be able to attract and retain personnel on acceptable terms given the competition among numerous medical device companies for individuals with similar skill sets. The inability to recruit or loss of the services of any executive, key employee, consultant or advisor may impede the progress of our research, development and sales growth objectives.
ITEM 1B. | UNRESOLVED STAFF COMMENTS |
ITEM 2. | PROPERTIES |
ITEM 3. | LEGAL PROCEEDINGS |
Name | Year | Salary ($) | Option Awards ($)(1) | Bonus ($)(2) | All Other Compensation($)(3) | Total ($) | ||||||||||||||||||
Gary S. Gillheeney, Sr. | 2018 | 798,473 | — | 254,919 | 2,104,921 | 3,158,313 | ||||||||||||||||||
President and Chief Executive Officer | 2017 | 779,778 | — | 579,361 | 69,753 | 1,428,892 | ||||||||||||||||||
Lori Freedman(4) | 2018 | 346,484 | 98,293 | 131,285 | 18,484 | 594,546 | ||||||||||||||||||
Vice President and General Counsel | ||||||||||||||||||||||||
Howard Walthall | 2018 | 409,260 | — | 132,000 | 30,274 | 571,534 | ||||||||||||||||||
Executive Vice President, Strategy and Market Development | 2017 | 309,230 | 453,670 | 90,000 | 36,941 | 889,841 | ||||||||||||||||||
David Burgstahler(5) | 2018 | — | — | — | — | — | ||||||||||||||||||
President and Chief Executive Officer | 2017 | — | — | — | — | — |
ITEM 4. |
MINE SAFETY DISCLOSURES |
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ITEM 5. |
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
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(i) for Mr. Gillheeney, (a) $29,635 representing the costs related to a leased automobile, (b) a taxgross-up
(ii) for Ms. Freedman, (a) $4,614 representing the costs related to a leased automobile, (b) a taxgross-up on the amount specified in (a) above of $4,568, (c) $1,734 representing the cost of group term life insurance, (d) $1,243 representing the cost of long-term disability insurance premiums, (e) a taxgross-up on the amount specified in (d) above of $331 and (f) $5,995 representing employer matching contributions under our 401(k) plan; and
(iii) for Mr. Walthall, (a) $15,716 representing the costs related to a leased automobile, (b) a taxgross-up on the amount specified in (a) above of $7,872, (c) $1,298 representing the cost of group term life insurance, (d) $1,412 representing the cost of long-term disability insurance premiums, (e) a taxgross-up on the amount specified in (d) above of $173 and (f) $3,803 representing employer matching contributions under our 401(k) plan.
“All Other Compensation” for fiscal 2017 includes:
(i) for Mr. Gillheeney, (a) $31,833 representing the costs related to a leased automobile, (b) a taxgross-up on the amount specified in (a) above of $25,003, (c) $4,265 representing the cost of group term life insurance, (d) $1,835 representing the cost of long-term disability insurance premiums, (e) a taxgross-up on the amount specified in (d) above of $1,986 and (f) $4,831 representing employer matching contributions under our 401(k) plan; and
(ii) for Mr. Walthall, (a) $14,582 representing the costs related to a leased automobile, (b) a taxgross-up on the amount specified in (a) above of $9,228, (c) $1,038 representing the cost of group term life insurance, (d) $1,129 representing the cost of long-term disability insurance premiums and (e) $10,964 representing employer matching contributionsNasdaq Capital Market under the legacy NuTech Medical IRA plan.
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Narrative Disclosure to Summary Compensation Table
Employment Agreements, Severance and Change in Control Arrangements
We have entered into employment agreements or employment letter agreements with our named executive officers. The agreements generally provide forat-will employment and set forth the NEO’s initial base salary, and eligibility for employee benefits. In addition, each of our NEOs is subject to confidentiality obligations and has agreed to assign to us any inventions developed during the term of their employment.
Agreement with Mr. Gillheeney
We entered into an employment agreement with Mr. Gillheeney, dated February 1, 2007. The agreement provides for“at-will” employment and sets forth certain agreed upon terms and conditions of employment.symbol “ORGO”. As of April 1, 2019, Mr. Gillheeney’s annual base salary was increased from $772,481 to $795,655, and he is currently eligible to receiveFebruary 15, 2022, a target annual performance bonustotal of 75% of his base salary. If Mr. Gillheeney is terminated involuntarily without cause or he resigns with good reason, these terms as defined in the employment agreement, he is entitled to the following (subject to his execution of a release in form and substance reasonably satisfactory to us):(i) one-half of his then current annual base salary payable in six (6) equal monthly installments, (ii) a continuation of benefit coverage for six (6) months and (iii) executive outplacement services with a mutually agreeable outplacement provider for up to one (1) year.
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Agreement with Ms. Freedman
We entered into an employment letter agreement with Ms. Freedman, dated January 19, 2018. The letter agreement provides for“at-will” employment and sets forth certain agreed upon terms and conditions of employment. As of April 1, 2019, Ms. Freedman’s annual base salary was increased from $341,000 to $351,230 and she is currently eligible to receive a target annual performance bonus of 35% of her base salary.
Agreement with Mr. Walthall
We entered into an employment agreement with Mr. Walthall, dated March 18, 2017. The agreement provides for“at-will” employment and sets forth certain agreed upon terms and conditions of employment. As of April 1, 2019, Mr. Walthall’s annual base salary was increased from $400,000 to $412,000 and he is currently eligible to receive a target annual performance bonus of 30% of his base salary. If Mr. Walthall is terminated involuntarily without cause or he resigns with good reason, these terms as defined in the employment agreement, he is entitled to the following:(i) one-half of his then current annual base salary payable in six equal monthly installments, (ii) a continuation of benefit coverage for six (6) months and (iii) executive outplacement services with a mutually agreeable outplacement provider for up to one (1) year.
Outstanding Equity Awards at Year End
The following table sets forth information regarding outstanding stock options held by our named executive officers as of December 31, 2018. Mr. Burgstahler, the Chief Executive Officer of AHPAC from October 2016 until the closing of the business combination on December 10, 2018 held no outstanding equity-based awards as of December 31, 2018.
Name | Number of Securities Underlying Unexercised Options (#) exercisable | Number of Securities Underlying Unexercised Options (#) unexercisable | Option Price ($) | Option Date | Option Grant Date | |||||||||||||||||||
Gary S. Gillheeney, Sr. | 397,900 | — | 1.70 | 2/22/2020 | 2/22/2010 | |||||||||||||||||||
563,528 | (1 | ) | 140,882 | 0.99 | 7/24/2023 | 7/24/2013 | ||||||||||||||||||
664,804 | — | 0.99 | 8/21/2024 | 8/21/2014 | ||||||||||||||||||||
502,425 | (2 | ) | 101,500 | 0.99 | 12/8/2024 | 12/8/2014 | ||||||||||||||||||
904,105 | (2 | ) | 226,026 | 0.99 | 12/8/2024 | 12/8/2014 | ||||||||||||||||||
Lori Freedman | 8,120 | (3 | ) | 32,480 | 5.40 | 2/21/2028 | 2/21/2018 | |||||||||||||||||
Howard Walthall | 85,710 | — | 3.46 | 5/4/2027 | 5/4/2017 | |||||||||||||||||||
81,200 | (4 | ) | 121,800 | 3.46 | 5/4/2027 | 5/4/2017 |
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Director Compensation
Our board of directors approved a compensation program under which our independent directors are entitled to receive the following annual retainer and committee fees for their service as directors:
for service as a director, an annual retainer of $45,000;
for service as a chair of the audit committee, $20,000 (increased to $95,000 effective January 1, 2019); and
for service as a member of the audit committee other than as a chair, $10,000.
Retainer and committee fees are paid in arrears. In addition, Mr. Leibowitz, Mr. Mackie and Mr. Tamaroff each received an option award with respect to 30,000128,765,237 shares of our Class A common stock in connection with their election to our boardwere outstanding and we had 399 holders of directors and, for each year of service thereafter, will be entitled to an option award with respect to 20,000 sharesrecord of our Class A common stock, vesting annually over three years, subject to continued service. Allnon-employee directorsstock. This number does not include shareholders for whom shares are reimbursed for customary business expenses incurredheld in connection with attending board and committee meetings.
The following table sets forth information regarding compensation awarded to, earned by“nominee” or “street” name.
Name | Fees earned or paid in cash ($)(1) | Option awards ($)(2) | Total ($) | |||||||||
Alan A. Ades | $ | — | $ | — | $ | — | ||||||
Maurice Ades | $ | — | $ | — | $ | — | ||||||
Albert Erani | $ | — | $ | — | $ | — | ||||||
Arthur S. Leibowitz | $ | 3,792 | $ | 80,770 | $ | 84,562 | ||||||
Wayne Mackie | $ | 3,208 | $ | 80,770 | $ | 83,978 | ||||||
Glenn H. Nussdorf | $ | — | $ | — | $ | — | ||||||
Joshua Tamaroff | $ | 3,208 | $ | 80,770 | $ | 83,798 |
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The table below showsforeseeable future. In addition, the aggregate number of option awards held as of December 31, 2018 by eachterms of our currentnon-employee directors who was serving as of that date.
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Compensation Committee Interlocks and Insider Participation
As a controlled company, we are not required2021 Credit Agreement restrict our ability to have a compensation committee. As disclosed above, decisions aboutpay cash dividends on our capital stock without the compensation of our executive officers are made by our board of directors. None of our executive officers serves, or in the past has served, as a member of the board of directors or compensation committee, or other committee serving an equivalent function, of any entity that has one or more executive officers who serve as members of our board of directors. None of the members of our board of directors is an officer or employee of our company nor has any of them ever been an officer or employee of our company, in each case, other than Mr. Gillheeney.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth certain information with respect to beneficial ownership of our common stock, as of April 19, 2019, by:
each person or entity, or group of affiliated persons or entities, known by us to beneficially own more than 5% of our common stock;
each of our directors;
each of our named executive officers; and
all of our executive officers and directors as a group.
Beneficial ownership is determined in accordance with the rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options or warrants held by that person that are currently exercisable or exercisable within 60 days of April 19, 2019 are deemed outstanding, but are not deemed outstanding for computing the percentage ownership of any other person. To our knowledge, except as set forth in the footnotes to this table and subject to applicable community property laws, each person named in the table has sole voting and investment power with respect to the shares set forth opposite such person’s name.
Each stockholder’s percentage ownership is determined in accordance with Rule13d-3 under the Exchange Act and is based on 91,316,039 shares of our common stock outstanding as of April 19, 2019. The number of outstanding shares beneficially owned by each stockholder below was obtained from the most recent publicly filed information, as applicable.
Name and Address of Beneficial Owner(1) | Number of Shares | Right to Acquire | Total | Percentage of Shares Outstanding | ||||||||||||
Organo PFG LLC and affiliated entities(2) | 34,986,622 | — | 34,986,622 | 38.3 | % | |||||||||||
Avista Capital Partners IV, L.P. and affiliated entities(3) | 15,561,473 | 2,050,000 | 17,611,473 | 18.9 | % | |||||||||||
Controlling Entities(4) | 67,846,723 | — | 67,846,723 | 74.3 | % | |||||||||||
Gary S. Gillheeney, Sr.(5) | — | 3,077,219 | 3,077,219 | 3.3 | % | |||||||||||
Alan A. Ades(6) | 44,466,394 | — | 44,466,394 | 48.7 | % | |||||||||||
Maurice Ades | — | — | — | — | ||||||||||||
Albert Erani(7) | 38,654,337 | — | 38,654,337 | 42.3 | % | |||||||||||
Arthur S. Leibowitz | — | — | — | — | ||||||||||||
Wayne Mackie | — | — | — | — | ||||||||||||
Glenn H. Nussdorf(8) | 14,838,663 | — | 14,838,663 | 16.2 | % | |||||||||||
Joshua Tamaroff | — | — | — | — | ||||||||||||
Lori Freedman(9) | — | 16,240 | 16,240 | * | ||||||||||||
Howard Walthall(10) | — | 166,910 | 166,910 | * | ||||||||||||
All directors and executive officers as a group (14 individuals)(11) | 63,104,516 | 3,926,824 | 67,031,340 | 70.4 | % |
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EQUITY COMPENSATION PLAN INFORMATION
We have one equity compensation plan under which awards are currentlySecurities authorized for issuance the Organogenesis Holdings Inc. 2018 Equity Incentive Plan, or 2018 Plan. In connection with the consummation of the business combination in December 2018, our board of directors discontinued any new issuances under the Organogenesis Inc. 2003 Stock Incentive Plan, or 2003 Plan. If options outstanding under the 2003 Plan expire unexercised, they will not become available for future issuance. Both the 2018 Plan and the 2003 Plan were approved by our stockholders. The following table providesequity compensation plans
Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||
(a) | (b) | (c) | ||||||||||
Equity compensation plans approved by security holders | 7,266,715 | (1) | $ | 1.91 | 9,108,996 | (2) | ||||||
Equity compensation plans not approved by security holders | — | $ | — | — | ||||||||
Total | 7,266,715 | $ | 1.91 | 9,108,996 |
ITEM 6. |
RESERVED |
ITEM 7. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTORS INDEPENDENCE
Policies
analysis of financial condition and results of operations together with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form
Agreements with Our Stockholders
Leases with2020, respectively, and net loss of $38.7 million for the Controlling Entities
The buildingsyear ended December 31, 2019. While we occupyreported net income for the most recent two years, we have incurred significant losses since inception and we may incur operating losses in Canton, Massachusetts are owned by entities that are controlled by Alan Ades, Albert Erani, Dennis Erani and Glenn Nussdorf. These entities are: 65 Dan Road SPE, LLC; 65 Dan Road Associates; 85 Dan Road Associates; Dan Road Associates; and 275 Dan Road SPE, LLC. Mr. Ades, Mr. Albert Erani and Mr. Nussdorf are membersthe future as we expend resources as part of our board of directors. Mr. Ades and Mr. Albert Erani are first cousins. Together, Mr. Ades, Mr. Albert Erani, Mr. Dennis Erani and Mr. Nussdorf and certain of their respective affiliates, control a majority ofefforts to grow our organization to support the voting powerplanned expansion of our outstandingbusiness. As of December 31, 2021, we had an accumulated deficit of $60.1 million. Our primary sources of capital to date have been from sales of our products, borrowings from related parties and institutional lenders and proceeds from the sale of our Class A common stock. We referoperate in one segment of regenerative medicine.
On January 1, 2013, we entered into a capital lease with 65 Dan Road SPE, LLC related to the facility at 65 Dan Road, Canton, Massachusetts. Organogenesis made aggregate payments under the lease of $703,667 and $538,982 in 2017 and 2018, respectively. As of December 31, 2018, we had accrued, unpaid rent of $1,040,056 due under the lease. Under the lease, we were required to make monthly rent payments of approximately $62,000business operations through December 31, 2018. The monthly rent payments increased by 10% on January 1, 2019 to approximately $69,000 per month and will increase by 10% on January 1, 2022 to approximately $75,000 per month. In addition to the monthly rent payments,2021, we are responsible for reimbursingunable to predict the landlord for taxesimpact
On January 1, 2013, we entered into a capital lease with 85 Dan Road Associates related to the facility at 85 Dan Road, Canton, Massachusetts. We made aggregate payments under the lease of $727,939 and $666,890 in 2017 and 2018, respectively. As of December 31, 2018, we had accrued, unpaid rent of $2,211,556 due under the lease. Under the lease, we were required to make monthly rent payments of $77,000 through December 31, 2018. The monthly rent payments increased by 10% on January 1, 2019 to approximately $85,000 per month and will increase by 10% on January 1, 2022 to approximately $93,000 per month. In addition to the monthly rent payments, we are responsible for reimbursing the landlord for taxes and insurance on the property. The lease term expires on December 31, 2022.
On January 1, 2013, we entered into a capital lease with Dan Road Equity I, LLC related to the facility at 150 Dan Road, Canton, Massachusetts. We made aggregate payments under the lease of $1,083,497 and $786,696 in 2017 and 2018, respectively. As of December 31, 2018, we had accrued, unpaid rent of $1,981,794 due under the lease. Under the lease, we were required to make monthly rent payments of approximately $95,000 through December 31, 2018. The monthly rent payments increased by 10% on January 1, 2019 to approximately $105,000 per month and will increase by 10% on January 1, 2022 to approximately $115,000 per month. In addition to the monthly rent payments, we are responsible for reimbursing the landlord for taxes and insurance on the property. The lease term expires on December 31, 2022.
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On January 1, 2013, we entered into capital lease arrangements with 275 Dan Road SPE, LLC for the property located on 275 Dan Road, Canton, Massachusetts. We made aggregate payments under the lease of $578,600 and $463,100 in 2017 and 2018, respectively. As of December 31, 2018, we had accrued, unpaid rent of $5,059,434 due under the lease. Under the lease, we were required to make monthly rent payments of approximately $92,000 through December 31, 2018. The monthly rent payments increased by 10% on January 1, 2019 to approximately $101,000 per month and will increase by 10% on January 1, 2022 to approximately $111,000 per month. In addition to the monthly rent payments, we are responsible for reimbursing the landlord for taxes and insurance on the property. The lease term expires on December 31, 2022.
Loans from the Controlling Entities
Prior to the closingoperating results because of the numerous uncertainties created by the unprecedented nature of the pandemic. We are closely monitoring the evolving impact of the pandemic on all aspects of our business. We have implemented a number of measures designed to protect the health and safety of our employees, support our customers and promote business continuity. We continue to evaluate the Company’s liquidity position, communicate with and monitor the actions of our customers and suppliers, and review our near-term financial performance as we manage the Company through this period of uncertainty.
2010 Loans
We entered into a Second Amended and Restated Term Loan Agreement, herein referred to as the Term Loan Agreement, an Amended and Restated Working Capital Loan Agreement, herein referred to as the Working Capital Loan Agreement and an Amended and Restated Subordinated Loan Agreement, referred to herein as the Subordinated Loan Agreement, each dated as of October 15, 2010 with Alan Ades, Albert Erani, Dennis Erani and Glenn Nussdorf in the case of the Term Loan Agreement; and with Organo PFG LLC, Organo Investors LLC, Glenn Nussdorf, Alan Ades, Albert Erani and Dennis Erani in the case of the Working Capital Agreement and the Subordinated Loan Agreement. Alan Ades acts as Administrative Agent under the Term Loan Agreement. Organo PFG LLC acts as Administrative Agent under the Working Capital Loan Agreement and the Subordinated Loan Agreement. We refer to the Term Loan Agreement, the Working Capital Agreement and the Subordinated Loan Agreement collectively as the 2010 Loan Agreement.
Pursuant to the 2010 Loan Agreement, we had borrowed an aggregate principal of $19,850,089, herein referred to as 2010 Loans. Interest on the 2010 Loans accrued at 1.6% per annum. The 2010 Loans were secured by substantially all of the personal property and assets of the Company pursuant to security agreements by and among it and the lenders each dated as of October 15, 2010.
A breakdown of the principal amounts that were owed to each lender under the 2010 Loans is set forth below:
Lender | Term Loan Agreement Principal Amount | Working Capital Loan Agreement Principal Amount | Subordinated Loan Agreement Principal Amount | |||||||||
Alan Ades | $ | 849,246 | $ | 375,000 | $ | 1,885,824 | ||||||
Albert Erani | $ | 583,857 | — | $ | 406,496 | |||||||
Dennis Erani | $ | 265,389 | $ | 375,000 | $ | 1,639,328 | ||||||
Glenn Nussdorf | $ | 424,623 | $ | 600,000 | $ | 2,861,218 | ||||||
Organo PFG LLC | — | $ | 1,515,000 | $ | 7,284,821 | |||||||
Organo Investors LLC | — | $ | 135,000 | $ | 649,287 | |||||||
TOTAL | $ | 2,123,115 | $ | 3,000,000 | $ | 14,726,974 |
As noted above, the 2010 Loans (including all accrued and unpaid interest) were satisfied in full, including the payment of $19.9 million in principal and $4.3 million in interest, at the closing of the business combination.
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2015 Loans
We entered into a Loan and Security Agreement dated as of July 1, 2015 and amended as of November 20, 2015 with Alan Ades, Albert Erani, Dennis Erani, Glenn Nussdorf and Organo PFG LLC, referred to herein as the 2015 Loan Agreement, pursuant to which the Company borrowed an aggregate of $11,396,258 evidenced by secured promissory notes referred to herein as the 2015 Loans, as follows:
Lender | Date of Loan | Principal Amount | ||||||
Alan Ades | 7/1/15 | $ | 4,000,000 | |||||
Dennis Erani | 7/1/15 | $ | 2,000,000 | |||||
Glenn Nussdorf | 7/1/15 | $ | 4,000,000 | |||||
65 Dan Road Associates | 11/20/15 | $ | 97,436 | |||||
Organo PFG LLC | 11/20/15 | $ | 909,447 | |||||
Albert Erani | 12/23/15 | $ | 97,344 | |||||
Glenn Nussdorf | 12/23/15 | $ | 97,344 | |||||
Alan Ades | 12/31/15 | $ | 194,687 | |||||
TOTAL | $ | 11,396,258 |
The 2015 Loans accrued interest at a rate of 1.6% per annum, and were secured by substantially all of the personal property and assets of the Company. As disclosed above, the 2015 Loans (including all accrued and unpaid interest) were satisfied in full, including the payment of $11.4 million in principal and $0.6 million in interest, at the closing of the business combination.
2016 Loans
On April 12, 2016, Mr. Ades, Mr. Dennis Erani and Mr. Nussdorf entered into a Securities Purchase Agreement with us pursuant to which we issued $17,000,000 in aggregate principal amount of subordinated notes, referred to herein as the 2016 Loans, and warrants to purchase an aggregate of 905,775 shares of our Class A common stock as set forth below:
Lender | Principal Amount of Notes | Shares Underlying Warrants | ||||||
Alan Ades | $ | 6,000,000 | 319,685 | |||||
Dennis Erani | $ | 4,000,000 | 213,124 | |||||
Glenn Nussdorf | $ | 7,000,000 | 372,966 | |||||
TOTAL | $ | 17,000,000 | 905,775 |
The 2016 Loans accrued interest at the rate of 15% per annum and were secured by substantially all of the personal property and assets of the Company. The warrants had an exercise price of $3.59 per share and were net exercised prior to the closing of the business combination, resulting in the issuance of an aggregate of 444,0411,947,953 shares of our Class A common stock. We were also obligated to pay a $680,000 fee in connection with the 2016 Loans. The 2016 Loans (including all accruedremaining consideration was held back and unpaid interest and fees) were satisfied in full, including the payment of $17.0 million in principal and $7.7 million in interest and fees, atwill be paid or issued, as applicable, eighteen months after the closing date, subject to any offsetting indemnification claims against CPN. The results of operations of CPN have been included in our consolidated financial statements beginning on the business combination.
Real Estate Loans
On June 19, 2013, Organogenesis entered into a secured financing arrangement with 65 Dan Road SPE, LLC, 85 Dan Road Associates and 275 Dan Road SPE, LLC under which loans were made to the Company, referred to hereinacquisition date.
Lender | Principal Amount | |||
65 Dan Road SPE, LLC | $ | 200,000 | ||
85 Dan Road Associates | $ | 3,900,000 | ||
275 Dan Road SPE, LLC | $ | 400,000 | ||
TOTAL | $ | 4,500,000 |
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The Real Estate Loans (including all accrued and unpaid interest) were satisfied in full, including the payment of $4.5 million in principal and $0.4 million in interest, at the closing of the business combination.
2018 Loan Agreements
On March 1, 2018, we entered into a loan agreement with Alan Ades, Albert Erani and Glenn Nussdorf, each of whom is a memberpart of our boardlong-term plan to consolidate manufacturing operations in Massachusetts, manufacturing of directorsDermagraft was suspended in the fourth quarter of 2021 and sales of Dermagraft will be suspended in the second quarter of 2022. We currently plan to transition our Dermagraft manufacturing to our Massachusetts-based manufacturing facilities, which we expect will result in substantial long-term cost savings. In the period when Dermagraft is not available (possibly for a greater than 5% stockholder, pursuantfew years), we expect that customers will be willing to which Mr. Ades, Mr. Eranisubstitute Apligraf for Dermagraft and Mr. Nussdorf collectively agreedthat the suspension of Dermagraft sales will
On May 23, 2018, we entered into a loan agreement with Alan Ades, Albert Erani and Glenn Nussdorf, each of whom is a memberoverall understanding of our board of directorspast performance and afuture prospects, and allowing for greater than 5% stockholder, pursuant to which Mr. Ades, Mr. Erani and Mr. Nussdorf collectively agreed to lend us an aggregate of $10,000,000 (the “May Loan Agreement”). Advances were evidenced by promissory notes that accrued interest at a rate of 8% per annum, and were payable upon demand. Mr. Ades and Mr. Erani each agreed to provide 40% of any amounts advanced and Mr. Nussdorf agreed to provide 20% of any amounts advanced. Advances totaling $5,000,000 were made under the May Loan Agreement.
The loans made under the March Loan Agreement and the May Loan Agreement (including all accrued and unpaid interest) were satisfied in full, including the payment of $15.0 million in principal and $0.7 million in interest, at the closing of the business combination.
Unconditional Guaranty
On April 5 2018, Mr. Ades, Mr. Albert Erani and Mr. Nussdorf entered into an Unconditional Guaranty with Silicon Valley Bank, or SVB, herein referred to as the Unconditional Guaranty, in connection with the funding of the $5.0 million term loan under our prior SVB credit agreement. Pursuant to the Unconditional Guaranty, each of Messrs. Ades, Albert Erani and Nussdorf jointly and severally guaranteed the payment of Organogenesis’ obligationstransparency with respect to key financial metrics used by our management in its financial and operational decision-making.
Loans to Related Persons
From 2010 through 2012, we lent money to Gary S. Gillheeney, Sr., our current President and Chief Executive Officer, who at the timedebt issuance costs, net of the loans was our Chief Operating Officer and Chief Financial Officer. The loans to Mr. Gillheeney totaled $1,507,490 in principal amount, were interest bearing, maturedincome recognized.
Amended and Restated Registration Rights Agreement
extinguishment of the loan.
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entitled to certain registration rights described in the Amended and Restated Registration Rights Agreement, including, among other things, customary registration rights, including demand and piggy-back rights, subject tocut-back provisions. We will bear the expenses incurred in connection with the filing of any such registration statements, other than certain underwriting discounts, selling commissions and expenses related to the sale of shares.
Executive Officer Compensation
See “Executive Compensation” for additional information regarding compensation of our NEOs.
Gary Gillheeney, Jr., our Senior Manager, Customer Service, is a child of Gary S. Gillheeney, Sr., our President and Chief Executive Officer, and he received total compensation of $121,268 in fiscal 2018. James Gillheeney, one of our Tissue Regeneration Specialists, is also a child of Gary S. Gillheeney, Sr. and he received total compensation of $164,346 in fiscal 2018.
Employment Agreements
We have entered into employment agreements with certain of our NEOs. For more information regarding these agreements, see “Executive Compensation.”
Indemnification Agreements and Directors’ and Officers’ Liability Insurance
We have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us to indemnify each director and executive officer to the fullest extent permitted by Delaware law, including indemnification of expenses such as attorneys’ fees, judgments, penalties fines and settlement amounts incurred by the director or executive officer in any action or proceeding, including any action or proceeding by or in right of us, arising out of the person’s services as a director or executive officer.
AHPAC’s Related Party Transactions
Related Party Loans
AHPAC issued to Avista Acquisition Corp. (the “Sponsor”) on August 11, 2017, as amended and restated on August 30, 2018 and further amended on November 8, 2018, anon-interest bearing, unsecured promissory note pursuant to which AHPAC was permitted to borrow up to $850,000 in aggregate principal amount. As of the closing of the business combination on December 10, 2018, AHPAC had borrowed $850,000 under such note, which amount was repaid at the closing of the business combination.
Administrative Services Agreement
AHPAC previously occupied office space provided by an affiliate of the Sponsor. Until the closing of the business combination on December 10, 2018, the affiliate made such office space, as well as certain support services, available to AHPAC. AHPAC was required to pay the affiliate an aggregate of $10,000 per month for such office space and support services. As of April 30, 2017, the affiliate agreed to defer payment of the monthly administrative fee under the Administrative Services Agreement until the closing of the business combination. As of the closing of the business combination on December 10, 2018, $193,226 was accrued and included in accrued expenses related to the Administrative Services Agreement and was paid in full at the closing of the business combination.
Private Placement Warrants
The initial shareholders of AHPAC purchased 16,000,000 private placement warrants at $0.50 per warrant (for an aggregate purchase price of $8,000,000) in a private placement on the close date. A portion of the proceeds from the sale of the private placement warrants were placed into AHPAC’s trust account. The initial shareholders also purchased an additional 400,000 private placement warrants at $0.50 per warrant (for an aggregate purchase price of $200,000) simultaneously with the underwriters’ exercise of the over-allotment option granted to the underwriters in connection with the AHPAC initial public offering. Each private placement warrant was exercisable forone-half of one AHPAC Class A ordinary share. In connection with the closing of the business combination and the transactions contemplated thereby on December 10, 2018, all 16,400,000 of the private placement warrants were surrendered to the Company for no consideration and were cancelled.
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Founder Shares
In connection with the organization of AHPAC, on December 14, 2015, an aggregate of 8,625,000 AHPAC Class B ordinary shares (the “founder shares”) were sold to the Sponsor at a price of approximately $0.003 per share, for an aggregate price of $25,000. In October 2016, the Sponsor transferred 50,000 founder shares to each of AHPAC’s independent directors at a price per share of approximately $0.003 per share. In addition, at such time, each of AHPAC’s independent directors purchased an additional 421,250 founder shares from the Sponsor at a price per share of approximately $0.003 per share. The 8,625,000 founder shares included an aggregate of up to 1,125,000 shares that were subject to forfeiture if the over-allotment option was not exercised in full by the underwriters of the AHPAC initial public offering in order to maintain the initial shareholders’ ownership at 20% of the issued and outstanding ordinary shares upon completion of the AHPAC initial public offering. Following the partial exercise of the over-allotment option, 875,000 founder shares were forfeited in order to maintain the initial shareholders’ ownership at 20% of the issued and outstanding AHPAC ordinary shares. On August 17, 2018 the Sponsor and the other holders of founder shares agreed to surrender to the Company for no consideration an aggregate of 1,937,500 founder shares in connection with the execution of the merger agreement, which founder shares were cancelled. In connection with the closing of the business combination and the transactions contemplated thereby on December 10, 2018, an additional 4,421,507 of the founder shares were surrendered to the Company and cancelled. The remaining 1,390,993 outstanding founder shares became shares of the Company’s Class A common stock upon the closing of the business combination and are subject to the transfer restrictions described below. The outstanding founder shares may not be transferred, assigned or sold until December 10, 2019. Notwithstanding the foregoing, if the last sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within any30-trading day period commencing at least 150 days after the business combination, the outstanding founder shares will be released from thelock-up.
Concurrently with the signing of the merger agreement, AHPAC entered into a subscription agreement with Avista Capital Partners IV, L.P. and Avista Capital Partners IV (Offshore), L.P. (together,on December 10, 2018 (the “Private Warrants”). We classified the “PIPE Investors”)warrants as a liability on our consolidated balance sheets as the settlement provisions of the Private Warrants failed the
Year Ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Net revenue | $ | 468,059 | $ | 338,298 | $ | 260,981 | ||||||
Cost of goods sold | 114,199 | 87,319 | 75,948 | |||||||||
Gross profit | 353,860 | 250,979 | 185,033 | |||||||||
Operating expenses: | ||||||||||||
Selling, general and administrative | 250,200 | 204,193 | 200,088 | |||||||||
Research and development | 30,742 | 20,086 | 14,799 | |||||||||
Total operating expenses | 280,942 | 224,279 | 214,887 | |||||||||
Income (loss) from operations | 72,918 | 26,700 | (29,854 | ) | ||||||||
Other expense, net: | ||||||||||||
Interest expense | (7,236 | ) | (11,279 | ) | (8,996 | ) | ||||||
Gain on settlement of deferred acquisition consideration | — | 2,246 | — | |||||||||
Change in fair value of warrant liability | — | — | 2,140 | |||||||||
Loss on the extinguishment of debt | (1,883 | ) | — | (1,862 | ) | |||||||
Other income (loss), net | (13 | ) | 97 | 13 | ||||||||
Total other expense, net | (9,132 | ) | (8,936 | ) | (8,705 | ) | ||||||
Net income (loss) before income taxes | 63,786 | 17,764 | (38,559 | ) | ||||||||
Income tax (expense) benefit | 31,116 | (530 | ) | (150 | ) | |||||||
Net income (loss) | $ | 94,902 | $ | 17,234 | $ | (38,709 | ) |
Year Ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
(in thousands) | ||||||||||||
Net income (loss) | $ | 94,902 | $ | 17,234 | $ | (38,709 | ) | |||||
Interest expense | 7,236 | 11,279 | 8,996 | |||||||||
Income tax expense (benefit) | (31,116 | ) | 530 | 150 | ||||||||
Depreciation | 5,781 | 4,438 | 3,783 | |||||||||
Amortization | 4,949 | 3,745 | 6,043 | |||||||||
EBITDA | 81,752 | 37,226 | (19,737 | ) | ||||||||
Stock-based compensation expense | 3,864 | 1,661 | 936 | |||||||||
Restructuring charge (1) | 4,704 | 618 | — | |||||||||
Gain on settlement of deferred acquisition consideration (2) | — | (2,246 | ) | — | ||||||||
Recovery of certain notes receivable from related parties (3) | (179 | ) | (1,516 | ) | — | |||||||
Cancellation fee (4) | — | 1,950 | — | |||||||||
Write-off of a fixed asset (5) | 1,104 | — | — | |||||||||
Change in fair value of Earnout (6) | (3,985 | ) | 203 | — | ||||||||
Change in fair value of warrant liability (7) | — | — | (2,140 | ) | ||||||||
Loss on extinguishment of debt (8) | 1,883 | — | 1,862 | |||||||||
Exchange offer transaction costs (9) | — | — | 916 | |||||||||
CPN transaction costs (10) | — | 929 | — | |||||||||
Adjusted EBITDA | $ | 89,143 | $ | 38,825 | $ | (18,163 | ) | |||||
(1) | Amounts reflect employee retention and benefits as well as the facility-related cost associated with the Company’s restructuring activities. See Note “11. Restructuring”. |
(2) | Amount reflects the gain recognized related to the settlement of the deferred acquisition consideration dispute with the sellers of NuTech Medical in February 2020 as well as the settlement of the assumed legacy lawsuit from the sellers of NuTech Medical in October 2020. See Note “18. Commitments and Contingencies”. |
(3) | Amounts reflect the collection of certain notes receivable from related parties previously reserved. See Note “19. Related Party Transactions”. |
(4) | Amount reflects the cancellation fee for terminating certain product development and consulting agreements the Company inherited from NuTech Medical. |
(5) | Amount reflects the write-off of certain design and consulting fees previously capitalized related to the unfinished construction work on the 275 Dan Road Building. |
(6) | Amounts reflect the change in the fair value of the Earnout liability in connection with the CPN acquisition. See Note “3. Acquisition”. |
(7) | In connection with the Avista Merger, we issued 4.1 million Private Warrants which were classified as a liability. The Private Warrants were settled in the warrant exchange transactions in the third quarter of 2019. Amount reflects the change in the fair value of the warrant liability. |
(8) | Amounts reflect the loss recognized on the extinguishment of the 2019 Credit Agreement upon repayment in 2021 and the loss recognized on the extinguishment of the Master Lease Agreement upon repayment in 2019. See Note “12. Long-Term Debt Obligations”. |
(9) | Amount reflects legal, advisory and other professional fees incurred in the quarter ended September 30, 2019, related directly to the warrant exchange transactions. See Note “13. Stockholders’ Equity”. |
(10) | Amount reflects legal, advisory and other professional fees incurred in the nine months ended September 30, 2020, related directly to the CPN acquisition. See Note “3. Acquisition”. |
Years Ended December 31, | Change | |||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2021 to 2020 | 2020 to 2019 | ||||||||||||||||||||||||
(in thousands, except for percentages) | ||||||||||||||||||||||||||||
Advanced Wound Care | $ | 430,839 | $ | 294,624 | $ | 220,744 | $ | 136,215 | 46 | % | $ | 73,880 | 33 | % | ||||||||||||||
Surgical & Sports Medicine | 37,220 | 43,674 | 40,237 | (6,454 | ) | (15 | %) | 3,437 | 9 | % | ||||||||||||||||||
Net revenue | $ | 468,059 | $ | 338,298 | $ | 260,981 | $ | 129,761 | 38 | % | $ | 77,317 | 30 | % | ||||||||||||||
Years Ended December 31, | Change | |||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2021 to 2020 | 2020 to 2019 | ||||||||||||||||||||||||
(in thousands, except for percentages) | ||||||||||||||||||||||||||||
Cost of goods sold | $ | 114,199 | $ | 87,319 | $ | 75,948 | $ | 26,880 | 31 | % | $ | 11,371 | 15 | % | ||||||||||||||
Gross profit | $ | 353,860 | $ | 250,979 | $ | 185,033 | $ | 102,881 | 41 | % | $ | 65,946 | 36 | % | ||||||||||||||
Years Ended December 31, | Change | |||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2021 to 2020 | 2020 to 2019 | ||||||||||||||||||||||||
(in thousands, except for percentages) | ||||||||||||||||||||||||||||
Selling, general and administrative | $ | 250,200 | $ | 204,193 | $ | 200,088 | $ | 46,007 | 23 | % | $ | 4,105 | 2 | % | ||||||||||||||
Years Ended December 31, | Change | |||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2021 to 2020 | 2020 to 2019 | ||||||||||||||||||||||||
(in thousands, except for percentages) | ||||||||||||||||||||||||||||
Research and development | $ | 30,742 | $ | 20,086 | $ | 14,799 | $ | 10,656 | 53 | % | $ | 5,287 | 36 | % | ||||||||||||||
Years Ended December 31, | Change | |||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2021 to 2020 | 2020 to 2019 | ||||||||||||||||||||||||
(in thousands, except for percentages) | ||||||||||||||||||||||||||||
Interest expense | $ | (7,236 | ) | $ | (11,279 | ) | $ | (8,996 | ) | $ | 4,043 | (36 | %) | $ | (2,283 | ) | 25 | % | ||||||||||
Gain on settlement of deferred acquisition consideration | — | 2,246 | — | (2,246 | ) | (100 | %) | 2,246 | ** | |||||||||||||||||||
Change in fair value of warrant liability | — | — | 2,140 | — | ** | (2,140 | ) | (100 | %) | |||||||||||||||||||
Loss on the extinguishment of debt | (1,883 | ) | — | (1,862 | ) | (1,883 | ) | ** | 1,862 | (100 | %) | |||||||||||||||||
Other income (expense), net | (13 | ) | 97 | 13 | (110 | ) | (113 | %) | 84 | ** | ||||||||||||||||||
Total other expense, net | $ | (9,132 | ) | $ | (8,936 | ) | $ | (8,705 | ) | $ | (196 | ) | 2 | % | $ | (231 | ) | 3 | % | |||||||||
** | not meaningful |
Years Ended December 31, | Change | |||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2021 to 2020 | 2020 to 2019 | ||||||||||||||||||||||||
(in thousands, except for percentages) | ||||||||||||||||||||||||||||
Income tax (expense) benefit | $ | 31,116 | $ | (530 | ) | $ | (150 | ) | $ | 31,646 | ** | $ | (380 | ) | ** | |||||||||||||
** | not meaningful |
December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
(in thousands) | ||||||||||||
Cash and cash equivalents | $ | 113,929 | $ | 84,394 | $ | 60,174 | ||||||
Line of credit | $ | — | $ | 10,000 | $ | 33,484 | ||||||
Term loan | 73,425 | 59,710 | 49,634 | |||||||||
Finance lease obligations | 200 | 15,061 | 17,488 | |||||||||
Total debt | $ | 73,625 | $ | 84,771 | $ | 100,606 | ||||||
Year Ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
(in thousands) | ||||||||||||
Net cash provided by (used in) operating activities | $ | 61,978 | $ | 5,466 | $ | (33,528 | ) | |||||
Net cash used in investing activities | (31,220 | ) | (23,498 | ) | (6,234 | ) | ||||||
Net cash provided by (used in) financing activities | (1,036 | ) | 42,468 | 78,727 | ||||||||
Net increase in cash and restricted cash | $ | 29,722 | $ | 24,436 | $ | 38,965 | ||||||
ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
18
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Our Audit Committee engaged RSM US LLP to serve as our independent registered public accounting firm, appear on pages
ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
ITEM 9A. | CONTROLS AND PROCEDURES |
(1) | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets; |
(2) | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors; and |
(3) | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer’s assets that could have a material effect on the issuer’s consolidated financial statements. |
ITEM 9B. | OTHER INFORMATION |
ITEM 9C. | DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS |
ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
Audit and Other Fees
The following is a summary of the fees for professional services rendered by RSM US LLP, our independent registered public accounting firm, for fiscal year 2018. Prior to December 10, 2018, Marcum LLP was engaged as our independent registered public accounting firm and accordingly the fees reflected in the table below for fiscal year 2017 are the fees for professional services rendered by Marcum LLP:
Fee Category | Fiscal 2018 | Fiscal 2017(1) | ||||||
Audit fees | $ | 720,777 | $ | 53,560 | ||||
Audit-related fees | — | 31,380 | ||||||
Tax fees | — | — | ||||||
All other fees | — | — | ||||||
|
|
|
| |||||
Total fees | $ | 720,777 | $ | 84,940 | ||||
|
|
|
|
ITEM 11. |
EXECUTIVE COMPENSATION |
Audit fees. Audit fees consist
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES |
ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
Form
required, or because the information is included in the Consolidated Financial Statements and notes thereto.
20
21
22
23
24
25
|
| |
101* | The following materials from the Annual Report of Organogenesis Holdings Inc. onForm 10-K for the year ended December 31, | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* | Filed herewith. |
|
† |
|
Confidential treatment granted as to portions of this Exhibit. The confidential portions of this Exhibit have been omitted and are marked by asterisks. |
‡ | Management contract or compensatory plan or arrangement. |
26
ITEM 16. | FORM 10-K SUMMARY |
ORGANOGENESIS HOLDINGS INC. | ||
By: | /s/ Gary S. Gillheeney, Sr. | |
Gary S. Gillheeney, Sr. | ||
President and Chief Executive Officer | ||
Date: | March 1, 2022 |
Signature | Title | Date | ||
/s/ Gary S. Gillheeney, Sr. Gary S. Gillheeney, Sr. | Chief Executive Officer, President and Director (Principal Executive Officer) | March 1, 2022 | ||
/s/ David Francisco David Francisco | Chief Financial Officer (Principal Financial and Accounting Officer) | March 1, 2022 | ||
/s/ Alan A. Ades Alan A. Ades | Director | March 1, 2022 | ||
/s/ Robert Ades Robert Ades | Director | March 1, 2022 | ||
/s/ Prathyusha Duraibabu Prathyusha Duraibabu | Director | March 1, 2022 | ||
/s/ David Erani David Erani | Director | March 1, 2022 | ||
/s/ Jon Giacomin Jon Giacomin | Director | March 1, 2022 | ||
/s/ Arthur S. Leibowitz Arthur S. Leibowitz | Director | March 1, 2022 | ||
/s/ Glenn H. Nussdorf Glenn H. Nussdorf | Director | March 1, 2022 | ||
/s/ Michael J. Driscoll Michael J. Driscoll | Director | March 1, 2022 |
27
Page | ||||
F-2 | ||||
F-5 | ||||
F-6 | ||||
F-7 | ||||
F-8 | ||||
F-9 |
December 31, | ||||||||
2021 | 2020 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 113,929 | $ | 84,394 | ||||
Restricted cash | 599 | 412 | ||||||
Accounts receivable, net | 82,460 | 56,804 | ||||||
Inventory | 25,022 | 27,799 | ||||||
Prepaid expenses and other current assets | 4,969 | 4,935 | ||||||
Total current assets | 226,979 | 174,344 | ||||||
Property and equipment, net | 79,160 | 55,792 | ||||||
Intangible assets, net | 25,673 | 30,622 | ||||||
Goodwill | 28,772 | 28,772 | ||||||
Operating lease right-of-use | 49,144 | 0 | ||||||
Deferred tax asset, net | 31,994 | 18 | ||||||
Other assets | 1,537 | 670 | ||||||
Total assets | $ | 443,259 | $ | 290,218 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Current portion of deferred acquisition consideration | $ | 1,436 | $ | 483 | ||||
Current portion of term loan | 2,656 | 16,666 | ||||||
Current portion of finance lease obligations | 200 | 3,619 | ||||||
Current portion of operating lease obligations | 11,785 | 0 | ||||||
Current portion of deferred rent and lease incentive obligation | 0 | 95 | ||||||
Accounts payable | 29,339 | 23,381 | ||||||
Accrued expenses and other current liabilities | 36,589 | 23,973 | ||||||
Total current liabilities | 82,005 | 68,217 | ||||||
Line of credit | 0 | 10,000 | ||||||
Term loan, net of current portion | 70,769 | 43,044 | ||||||
Deferred acquisition consideration, net of current portion | 0 | 1,436 | ||||||
Earnout liability | 0 | 3,985 | ||||||
Deferred rent and lease incentive obligation, net of current portion | 0 | 2,315 | ||||||
Finance lease obligations, net of current portion | 0 | 11,442 | ||||||
Operating lease obligations, net of current portion | 46,893 | 0 | ||||||
Other liabilities | 1,557 | 7,971 | ||||||
Total liabilities | 201,224 | 148,410 | ||||||
Commitments and contingencies (Note 18) | 0 | 0 | ||||||
Stockholders’ equity: | ||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 0ne issued | 0— | — | ||||||
Common stock, $0.0001 par value; 400,000,000 shares authorized; 129,408,740 and 128,460,381 shares issued; 128,680,192 and 127,731,833 shares outstanding at December 31, 2021 and 2020, respectively | 13 | 13 | ||||||
Additional paid-in capital | 302,155 | 296,830 | ||||||
Accumulated deficit | (60,133 | ) | (155,035 | ) | ||||
Total stockholders’ equity | 242,035 | 141,808 | ||||||
Total liabilities and stockholders’ equity | $ | 443,259 | $ | 290,218 | ||||
Year Ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Net revenue | $ | 468,059 | $ | 338,298 | $ | 260,981 | ||||||
Cost of goods sold | 114,199 | 87,319 | 75,948 | |||||||||
Gross profit | 353,860 | 250,979 | 185,033 | |||||||||
Operating expenses: | ||||||||||||
Selling, general and administrative | 250,200 | 204,193 | 200,088 | |||||||||
Research and development | 30,742 | 20,086 | 14,799 | |||||||||
Total operating expenses | 280,942 | 224,279 | 214,887 | |||||||||
Income (loss) from operations | 72,918 | 26,700 | (29,854 | ) | ||||||||
Other expense, net: | ||||||||||||
Interest expense | (7,236 | ) | (11,279 | ) | (8,996 | ) | ||||||
Gain on settlement of deferred acquisition consideration | 0 | 2,246 | — | |||||||||
Change in fair value of warrant liability | — | — | 2,140 | |||||||||
Loss on the extinguishment of debt | (1,883 | ) | — | (1,862 | ) | |||||||
Other income (loss), net | (13 | ) | 97 | 13 | ||||||||
Total other expense, net | (9,132 | ) | (8,936 | ) | (8,705 | ) | ||||||
Net income (loss) before income taxes | 63,786 | 17,764 | (38,559 | ) | ||||||||
Income tax (expense) benefit | 31,116 | (530 | ) | (150 | ) | |||||||
Net income (loss) | 94,902 | 17,234 | (38,709 | ) | ||||||||
Non-cash deemed dividend to warrant holders | — | — | (568 | ) | ||||||||
Net income (loss) attributed to common shareholders | $ | 94,902 | $ | 17,234 | $ | (39,277 | ) | |||||
Net income (loss) attributed to common shareholders, per share: | ||||||||||||
Basic | $ | 0.74 | $ | 0.16 | $ | (0.42 | ) | |||||
Diluted | $ | 0.71 | $ | 0.15 | $ | (0.42 | ) | |||||
Weighted-average common shares outstanding | ||||||||||||
Basic | 128,331,022 | 107,737,936 | 92,840,401 | |||||||||
Diluted | 133,662,659 | 111,360,831 | 92,840,401 | |||||||||
Redeemable Common Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance as of December 31, 2018 (as reported) | 728,548 | $ | — | 91,261,413 | $ | 9 | $ | 177,272 | $ | (130,240 | ) | $ | 47,041 | |||||||||||||||
Adjustment due to Private Warrant reclassification | — | — | — | — | (4,018 | ) | 82 | (3,936 | ) | |||||||||||||||||||
Adjustment due to right of use asset amortization | — | — | — | — | — | (3,166 | ) | (3,166 | ) | |||||||||||||||||||
Balance as of December 31, 2018 (as adjusted) | 728,548 | — | 91,261,413 | 9 | 173,254 | (133,324 | ) | 39,939 | ||||||||||||||||||||
Adoption of ASC 606 | — | — | — | — | — | 332 | 332 | |||||||||||||||||||||
Exercise of common stock warrants | — | — | 74,052 | — | 628 | — | 628 | |||||||||||||||||||||
Exercise of stock options | — | — | 152,133 | — | 269 | — | 269 | |||||||||||||||||||||
Common stock issued in warrant exchange | — | — | 3,315,232 | — | 2,364 | (568 | ) | 1,796 | ||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | 936 | — | 936 | |||||||||||||||||||||
Redemption of redeemable common stock placed into treasury | (728,548 | ) | — | — | — | — | — | — | ||||||||||||||||||||
Stock issued in the 2019 Underwritten Public Offering, net of issuance costs of $3,510 | — | — | 10,068,056 | 1 | 46,830 | — | 46,831 | |||||||||||||||||||||
Net loss | — | — | — | — | — | (38,709 | ) | (38,709 | ) | |||||||||||||||||||
Balance as of December 31, 2019 (as adjusted) | — | — | 104,870,886 | 10 | 224,281 | (172,269 | ) | 52,022 | ||||||||||||||||||||
Exercise of stock options | — | — | 996,286 | 1 | 2,822 | — | 2,823 | |||||||||||||||||||||
Issuance of common stock associated with business acquisition | — | — | 1,947,953 | — | 7,986 | — | 7,986 | |||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | 1,661 | — | 1,661 | |||||||||||||||||||||
Stock issued in the 2020 Underwritten Public Offering, net of issuance costs of $4,647 | — | — | 19,916,708 | 2 | 60,080 | — | 60,082 | |||||||||||||||||||||
Net income | — | — | — | — | — | 17,234 | 17,234 | |||||||||||||||||||||
Balance as of December 31, 2020 (as adjusted) | — | — | 127,731,833 | 13 | 296,830 | (155,035 | ) | 141,808 | ||||||||||||||||||||
Exercise of stock options | — | — | 760,458 | — | 2,198 | — | 2,198 | |||||||||||||||||||||
Vesting of RSUs, net of shares surrendered to pay taxes | — | — | 187,901 | — | (737 | ) | — | (737 | ) | |||||||||||||||||||
Stock-based compensation expense | — | — | — | — | 3,864 | — | 3,864 | |||||||||||||||||||||
Net income | — | — | — | — | — | 94,902 | 94,902 | |||||||||||||||||||||
Balance as of December 31, 2021 | — | $ | — | $ | 128,680,192 | 13 | $ | 302,155 | $ | (60,133 | ) | $ | 242,035 | |||||||||||||||
Year Ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income (loss) | $ | 94,902 | $ | 17,234 | $ | (38,709 | ) | |||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||
Depreciation | 5,781 | 4,438 | 3,783 | |||||||||
Amortization of intangible assets | 4,949 | 3,745 | 6,043 | |||||||||
Amortization of operating lease right-of-use | 5,946 | — | — | |||||||||
Non-cash interest expense | 346 | 236 | 243 | |||||||||
Deferred interest expense | 1,493 | 2,133 | 1,446 | |||||||||
Deferred rent expense | 0— | 1,273 | 882 | |||||||||
Gain on settlement of deferred acquisition consideration | — | (2,246 | ) | — | ||||||||
Deferred tax expense (benefit) | (31,976 | ) | 112 | 111 | ||||||||
Loss on disposal of property and equipment | 1,407 | 201 | 146 | |||||||||
Provision recorded for doubtful accounts | 2,999 | 1,183 | 239 | |||||||||
Adjustment for excess and obsolete inventories | 12,079 | 3,050 | 1,297 | |||||||||
Stock-based compensation | 3,864 | 1,661 | 936 | |||||||||
Loss on extinguishment of debt | 1,883 | — | 1,862 | |||||||||
Change in fair value of Earnout liability | (3,985 | ) | 203 | — | ||||||||
Change in fair value of warrant liability | — | — | (2,140 | ) | ||||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts receivable | (28,654 | ) | (17,567 | ) | (4,691 | ) | ||||||
Inventory | (9,302 | ) | (6,700 | ) | (11,063 | ) | ||||||
Prepaid expenses and other current assets | (34 | ) | (355 | ) | (625 | ) | ||||||
Operating leases | (6,156 | ) | — | — | ||||||||
Accounts payable | 3,847 | (4,102 | ) | 4,700 | ||||||||
Accrued expenses and other current liabilities | 8,654 | 1,443 | 2,942 | |||||||||
Other liabilities | (6,065 | ) | (476 | ) | (930 | ) | ||||||
Net cash provided by (used in) operating activities | 61,978 | 5,466 | (33,528 | ) | ||||||||
Cash flows from investing activities: | ||||||||||||
Purchases of property and equipment | (31,220 | ) | (17,678 | ) | (5,984 | ) | ||||||
Cash paid for business acquisition | — | (5,820 | ) | — | ||||||||
Acquisition of intangible asset | — | — | (250 | ) | ||||||||
Net cash used in investing activities | (31,220 | ) | (23,498 | ) | (6,234 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Line of credit borrowings (repayments) under the 2019 Credit Agreement | (10,000 | ) | (23,484 | ) | 7,000 | |||||||
Term loan borrowings (repayments) under the 2019 Credit Agreement, net of debt discount and issuance cost | (60,000 | ) | 10,000 | 49,076 | ||||||||
Proceeds from term loan under the 2021 Credit Agreement, net of debt discount and issuance cost | 73,174 | — | — | |||||||||
Term loan repayments under the 2021 Credit Agreement | (938 | ) | — | — | ||||||||
Proceeds from equity financing | — | 64,729 | 50,340 | |||||||||
Payment of equity issuance costs | 0— | (5,656 | ) | (2,973 | ) | |||||||
Repayment of notes payable | — | — | (17,585 | ) | ||||||||
Principal repayments of finance lease obligations | (2,630 | ) | (2,427 | ) | (1,266 | ) | ||||||
Redemption of redeemable common stock placed into treasury | — | — | (6,762 | ) | ||||||||
Proceeds from the exercise of stock options | 2,198 | 2,823 | 269 | |||||||||
Proceeds from the exercise of common stock warrants | — | — | 628 | |||||||||
Payments of withholding taxes in connection with RSUs vesting | (737 | ) | — | — | ||||||||
Payments of deferred acquisition consideration | (483 | ) | (3,517 | ) | — | |||||||
Payment to extinguish debt | (1,620 | ) | — | — | ||||||||
Net cash provided by (used in) financing activities | (1,036 | ) | 42,468 | 78,727 | ||||||||
Change in cash and restricted cash | 29,722 | 24,436 | 38,965 | |||||||||
Cash and restricted cash, beginning of year | 84,806 | 60,370 | 21,405 | |||||||||
Cash and restricted cash, end of year | $ | 114,528 | $ | 84,806 | $ | 60,370 | ||||||
Supplemental disclosure of cash flow information: | ||||||||||||
Cash paid for interest | $ | 5,787 | $ | 9,609 | $ | 8,148 | ||||||
Cash paid for income taxes | $ | 607 | $ | 61 | $ | 49 | ||||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||||||
Reimbursement of offering expenses included in prepaid expenses and other current assets | $ | — | $ | 1,009 | $ | — | ||||||
Fair value of shares issued for business acquisition | $ | — | $ | 7,986 | $ | — | ||||||
Deferred acquisition consideration and earnout liability recorded for business acquisition | $ | — | $ | 5,218 | $ | — | ||||||
Non-cash deemed dividend related to warrant exchange | $ | — | $ | — | $ | 568 | ||||||
Equity issuance costs included in accounts payable | $ | — | $ | — | $ | 537 | ||||||
Purchases of property and equipment in accounts payable and accrued expenses | $ | 3,750 | $ | 2,391 | $ | 4,014 | ||||||
Acquisition of intangible assets included in accrued expenses and other liabilities | $ | — | $ | — | $ | 500 | ||||||
Right-of-use | $ | 53,793 | $ | — | $ | 1,099 |
As of December 31, 2020 | ||||||||||||
CONSOLIDATED BALANCE SHEETS | As Previously Reported | Adjustments | As Revised | |||||||||
Property and equipment, net | $ | 60,068 | $ | (4,276 | ) | $ | 55,792 | |||||
Total assets | $ | 294,494 | $ | (4,276 | ) | $ | 290,218 | |||||
Additional paid-in capital | $ | 299,129 | $ | (2,299 | ) | $ | 296,830 | |||||
Accumulated deficit | $ | (153,058 | ) | $ | (1,977 | ) | $ | (155,035 | ) | |||
Total stockholders’ equity | $ | 146,084 | $ | (4,276 | ) | $ | 141,808 | |||||
Total liabilities and stockholders’ equity | $ | 294,494 | $ | (4,276 | ) | $ | 290,218 |
For the Year Ended December 31, 2020 | For the Year Ended December 31, 2019 | |||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | As Previously Reported | Adjustments | As Revised | As Previously Reported | Adjustments | As Revised | ||||||||||||||||||
Selling, general and administrative | $ | 203,478 | $ | 715 | $ | 204,193 | $ | 199,693 | $ | 395 | $ | 200,088 | ||||||||||||
Total operating expenses | $ | 223,564 | $ | 715 | $ | 224,279 | $ | 214,492 | $ | 395 | $ | 214,887 | ||||||||||||
Income from operations | $ | 27,415 | $ | (715 | ) | $ | 26,700 | $ | (29,459 | ) | $ | (395 | ) | $ | (29,854 | ) | ||||||||
Change in fair value of warrant liability | $ | — | $ | 2,140 | $ | 2,140 | ||||||||||||||||||
Total other expense, net | $ | (10,845 | ) | $ | 2,140 | $ | (8,705 | ) | ||||||||||||||||
Net income (loss) before income taxes | $ | 18,479 | $ | (715 | ) | $ | 17,764 | $ | (40,304 | ) | $ | 1,745 | $ | (38,559 | ) | |||||||||
Net income (loss) | $ | (40,454 | ) | $ | 1,745 | $ | (38,709 | ) | ||||||||||||||||
Non-cash deemed dividend to warrant holders | $ | (645 | ) | $ | 77 | $ | (568 | ) | ||||||||||||||||
Net income (loss) attributed to common shareholders | $ | 17,949 | $ | (715 | ) | $ | 17,234 | $ | (41,099 | ) | $ | 1,822 | $ | (39,277 | ) | |||||||||
Net income (loss), per share: | ||||||||||||||||||||||||
Basic | $ | 0.17 | $ | 0.16 | $ | (0.44 | ) | $ | (0.42 | ) | ||||||||||||||
Diluted | $ | 0.16 | $ | 0.15 | $ | (0.44 | ) | $ | (0.42 | ) |
For the Year Ended December 31, 2020 | ||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | As Previously Reported | Adjustments | As Revised | |||||||||
Net loss | $ | 17,949 | $ | (715 | ) | $ | 17,234 | |||||
Depreciation | $ | 3,723 | $ | 715 | $ | 4,438 | ||||||
Recovery of certain notes receivable from related parties | $ | (1,516 | ) | $ | 1,516 | $ | 0 | |||||
Prepaid expenses and other current assets | $ | (971 | ) | $ | 616 | $ | (355 | ) | ||||
Accounts payable | $ | (635 | ) | $ | (3,467 | ) | $ | (4,102 | ) | |||
Net cash provided by (used in) operating activities | $ | 6,801 | $ | (1,335 | ) | $ | 5,466 | |||||
Purchases of property and equipment | $ | (21,145 | ) | $ | 3,467 | $ | (17,678 | ) | ||||
Proceeds from the repayment of notes receivable from related parties | $ | 2,132 | $ | (2,132 | ) | $ | 0 | |||||
Net cash used in investing activities | $ | (24,833 | ) | $ | 1,335 | $ | (23,498 | ) |
For the Year Ended December 31, 2019 | ||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | As Previously Reported | Adjustments | As Revised | |||||||||
Net loss | $ | (40,454 | ) | $ | 1,745 | $ | (38,709 | ) | ||||
Depreciation | $ | 3,388 | $ | 395 | $ | 3,783 | ||||||
Change in fair value of warrant liability | $ | — | $ | (2,140 | ) | $ | (2,140 | ) |
Leasehold improvements | Lesser of the life of the lease or the economic life of the asset | |
Building | 30 years | |
Furniture and computers | 3-5 years | |
Equipment | 5-10 years |
Trade names and trademarks | 1-12 years | |
Developed technology | 6-12 years | |
Customer relationships | 10 years | |
Non-compete agreements | 5 years |
Year Ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Advanced Wound Care revenue | $ | 430,839 | $ | 294,624 | $ | 220,744 | ||||||
Surgical and Sports Medicine revenue | 37,220 | 43,674 | 40,237 | |||||||||
Total revenue | $ | 468,059 | $ | 338,298 | $ | 260,981 | ||||||
Fair Value Measurements | ||||||||||||||||
as of December 31, 2021 Using: | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Liabilities: | ||||||||||||||||
Earnout liability | $ | — | $ | — | $ | — | $ | — | ||||||||
$ | — | $ | — | $ | — | $ | — | |||||||||
Fair Value Measurements | ||||||||||||||||
as of December 31, 2020 Using: | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Liabilities: | ||||||||||||||||
Earnout liability | $ | — | $ | — | $ | 3,985 | $ | 3,985 | ||||||||
$ | — | $ | — | $ | 3,985 | $ | 3,985 | |||||||||
Earnout liability | ||||
Balance as of December 31, 2019 | $ | 0 — | ||
Acquisition Date fair value | 3,782 | |||
Change in fair value | 203 | |||
Balance as of December 31, 2020 | 3,985 | |||
Change in fair value | (3,985 | ) | ||
Balance as of December 31, 2021 | $ | 0 — | ||
Warrant liability | ||||
Balance as of December 31, 2019 | $ | 3,936 | ||
Change in fair value | (2,140 | ) | ||
Settled in warrant exchange transaction | (1,796 | ) | ||
Balance as of December 31, 2020 | $ | 0 — | ||
December 31, | ||||||||
2021 | 2020 | |||||||
Accounts receivable | $ | 87,613 | $ | 59,473 | ||||
Less—allowance for doubtful accounts | (5,153 | ) | (2,669 | ) | ||||
$ | 82,460 | $ | 56,804 | |||||
Balance as of December 31, 2019 | $ | 1,988 | ||
Additions | 1,183 | |||
Write-offs | (502 | ) | ||
Balance as of December 31, 2020 | $ | 2,669 | ||
Additions | 2,999 | |||
Write-offs | (515 | ) | ||
Balance as of December 31, 2021 | $ | 5,153 | ||
December 31, | ||||||||
2021 | 2020 | |||||||
Raw materials | $ | 9,023 | $ | 10,075 | ||||
Work in process | 991 | 1,305 | ||||||
Finished goods | 15,008 | 16,419 | ||||||
$ | 25,022 | $ | 27,799 | |||||
December 31, | ||||||||
2021 | 2020 | |||||||
Subscriptions | $ | 2,745 | $ | 2,013 | ||||
Conferences and marketing expenses | 538 | 63 | ||||||
Deposits | 1,216 | 1,438 | ||||||
Reimbursement of offering expenses | 0 | 1,009 | ||||||
Insurance | 358 | 240 | ||||||
Other | 112 | 172 | ||||||
$ | 4,969 | $ | 4,935 | |||||
December 31, | ||||||||
2021 | 2020 | |||||||
Leasehold improvements | $ | 30,531 | $ | 39,574 | ||||
Building | 4,943 | — | ||||||
Furniture, computers and equipment | 53,959 | 48,236 | ||||||
89,433 | 87,810 | |||||||
Accumulated depreciation and amortization | (57,729 | ) | (73,797 | ) | ||||
Construction in progress | 47,456 | 41,779 | ||||||
$ | 79,160 | $ | 55,792 | |||||
Original Cost | Accumulated Amortization | Net Book Value | ||||||||||
Developed technology | $ | 32,620 | $ | (17,709 | ) | $ | 14,911 | |||||
Trade names and trademarks | 2,080 | (1,183 | ) | 897 | ||||||||
Customer relationship | 10,690 | (1,381 | ) | 9,309 | ||||||||
Independent sales agency network | 4,500 | (4,500 | ) | — | ||||||||
Patent | 7,623 | (7,623 | ) | — | ||||||||
Non-compete agreements | 1,010 | (454 | ) | 556 | ||||||||
Total | $ | 58,523 | $ | (32,850 | ) | $ | 25,673 | |||||
Original Cost | Accumulated Amortization | Net Book Value | ||||||||||
Developed technology | $ | 32,620 | $ | (14,330 | ) | $ | 18,290 | |||||
Trade names and trademarks | 2,080 | (906 | ) | 1,174 | ||||||||
Customer relationship | 10,690 | (312 | ) | 10,378 | ||||||||
Independent sales agency network | 4,500 | (4,500 | ) | — | ||||||||
Patent | 7,623 | (7,623 | ) | — | ||||||||
Non-compete agreements | 1,010 | (230 | ) | 780 | ||||||||
Total | $ | 58,523 | $ | (27,901 | ) | $ | 30,622 | |||||
2022 | $ | 4,883 | ||
2023 | 4,918 | |||
2024 | 3,403 | |||
2025 | 3,323 | |||
2026 | 3,043 | |||
Thereafter | 6,103 | |||
Total | $ | 25,673 | ||
December 31, | ||||||||
2021 | 2020 | |||||||
Personnel costs | $ | 26,865 | $ | 18,943 | ||||
Royalties | 3,458 | 2,971 | ||||||
Accrued but unpaid lease obligations and interest | 3,963 | — | ||||||
Other | 2,303 | 2,059 | ||||||
$ | 36,589 | $ | 23,973 | |||||
Employee | Facility | |||||||
Liability balance as of December 31, 2019 | $ | 0 | $ | 0 | ||||
Expenses | 618 | 0 | ||||||
Cash distributions | 0 | 0 | ||||||
Liability balance as of December 31, 2020 | 618 | 0 | ||||||
Expenses | 3,513 | 1,191 | ||||||
Cash distributions | (1,614 | ) | (540 | ) | ||||
Liability balance as of December 31, 2021 | $ | 2,517 | $ | 651 | ||||
December 31, | ||||||||
2021 | 2020 | |||||||
Line of credit | $ | 0 | $ | 10,000 | ||||
Term loan | 74,062 | 60,000 | ||||||
Less debt discount and debt issuance cost | (637 | ) | (290 | ) | ||||
Term loan, net of debt discount and debt issuance cost | $ | 73,425 | $ | 59,710 | ||||
2022 | $ | 2,812 | ||
2023 | 4,687 | |||
2024 | 5,625 | |||
2025 | 6,563 | |||
2026 and beyond | 54,375 | |||
Total | $ | 74,062 | ||
December 31, | ||||||||
2021 | 2020 | |||||||
Shares reserved for issuance for outstanding options | 6,596,969 | 6,425,040 | ||||||
Shares reserved for issuance for outstanding restricted stock units | 764,871 | 806,048 | ||||||
Shares reserved for issuance for future grants | 5,644,691 | 6,832,649 | ||||||
Total shares of authorized common stock reserved for future issuance | 13,006,531 | 14,063,737 | ||||||
Number of Shares | Weighted Average Grant Date Fair Value | |||||||
Unvested at December 31, 2020 | 787,923 | $ | 3.81 | |||||
Granted | 310,692 | 14.29 | ||||||
Vested | (248,305 | ) | 4.20 | |||||
Canceled/Forfeited | (85,439 | ) | 7.64 | |||||
Unvested at December 31, 2021 | 764,871 | $ | 7.52 | |||||
Year Ended December 31, | ||||||||
2021 | 2020 | |||||||
Risk-free interest rate | 0.83 | % | 0.46 | % | ||||
Expected term (in years) | 6.22 | 6.22 | ||||||
Expected volatility | 39.31 | % | 37.42 | % | ||||
Expected dividend yield | 0.0 | % | 0.0 | % | ||||
Exercise price | $ | 13.57 | $ | 4.04 | ||||
Underlying stock price | $ | 13.57 | $ | 3.37 |
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||||||||||
(in years) | ||||||||||||||||
Outstanding as of December 31, 2020 | 6,615,223 | $ | 2.32 | 5.22 | 34,438 | |||||||||||
Granted | 1,069,658 | 13.57 | ||||||||||||||
Exercised | (955,736 | ) | 2.29 | 10,121 | ||||||||||||
Canceled / forfeited | (132,176 | ) | 4.67 | |||||||||||||
Outstanding as of December 31, 2021 | 6,596,969 | 4.10 | 5.20 | 38,524 | ||||||||||||
Options exercisable as of December 31, 2021 | 4,342,519 | 1.80 | 3.47 | 32,292 | ||||||||||||
Options vested or expected to vest as of December 31, 2021 | 6,216,308 | $ | 3.79 | 4.98 | 37,618 | |||||||||||
Year Ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Income tax expense (benefit): | ||||||||||||
Current tax expense (benefit) | ||||||||||||
Federal | $ | — | $ | (106 | ) | $ | (105 | ) | ||||
State | 899 | 505 | 116 | |||||||||
Foreign | (39 | ) | 19 | 28 | ||||||||
Total current tax expense | 860 | 418 | 39 | |||||||||
Deferred tax expense (benefit) | ||||||||||||
Federal | (30,506 | ) | 109 | 105 | ||||||||
State | (1,470 | ) | — | — | ||||||||
Foreign | — | 3 | 6 | |||||||||
Total deferred tax expense | (31,976 | ) | 112 | 111 | ||||||||
Total income tax expense (benefit) | $ | (31,116 | ) | $ | 530 | $ | 150 | |||||
December 31, | ||||||||
2021 | 2020 | |||||||
Net operating loss carryforwards | ||||||||
Federal | $ | 21,760 | $ | 31,783 | ||||
State | 1,612 | 3,342 | ||||||
Foreign | 16 | 18 | ||||||
Other | 7,556 | 5,829 | ||||||
163j interest | — | 4,979 | ||||||
Stock-based compensation | 676 | 357 | ||||||
Finance leases | 632 | 2,991 | ||||||
Operating leases | 12,918 | — | ||||||
Fixed assets | 2,748 | 2,589 | ||||||
Net deferred tax assets before valuation allowance | 47,918 | 51,888 | ||||||
Valuation allowance | — | (48,252 | ) | |||||
ROU assets | (12,273 | ) | — | |||||
Intangibles | (3,651 | ) | (3,618 | ) | ||||
Net deferred tax assets | $ | 31,994 | $ | 18 | ||||
December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
U.S. federal statutory income tax rate | 21.0 | % | 21.0 | % | 21.0 | % | ||||||
Federal valuation allowance | (70.6 | )% | (28.9 | )% | (17.6 | )% | ||||||
State valuation allowance | (9.1 | )% | (4.8 | )% | (3.9 | )% | ||||||
State and local income taxes | 6.8 | % | 6.2 | % | 3.5 | % | ||||||
Nondeductible expenses | 0.8 | % | 6.0 | % | (1.4 | )% | ||||||
Uncertain tax position reserves | 0.9 | % | 0.4 | % | (0.1 | )% | ||||||
Research and development credits | 0.9 | % | 3.0 | % | (1.9 | )% | ||||||
Effective income tax rate | (49.3 | )% | 2.9 | % | (0.4 | )% | ||||||
Year Ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Gross balance at beginning of year | $ | 2,123 | $ | 2,618 | $ | 3,286 | ||||||
Additions based on tax positions related to the current period | 153 | 111 | 133 | |||||||||
Reductions for tax positions of prior years | (664 | ) | (606 | ) | (801 | ) | ||||||
Gross balance at end of year | $ | 1,612 | $ | 2,123 | $ | 2,618 | ||||||
Year Ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Numerator: | ||||||||||||
Net Income (loss) | $ | 94,902 | $ | 17,234 | $ | (38,709 | ) | |||||
Less: Non-cash dividend to warrant holders | — | — | 568 | |||||||||
Net Income (loss) attributable to common shareholders | $ | 94,902 | $ | 17,234 | $ | (39,277 | ) | |||||
Denominator: | ||||||||||||
Weighted average common shares outstanding—basic | 128,331,022 | 107,737,936 | 92,840,401 | |||||||||
Dilutive effect of restricted stock units | 469,123 | 135,932 | — | |||||||||
Dilutive effect of options | 4,862,514 | 3,486,963 | — | |||||||||
Weighted-average common shares outstanding—diluted | 133,662,659 | 111,360,831 | 92,840,401 | |||||||||
Earnings (loss) per share—basic | $ | 0.74 | $ | 0.16 | $ | (0.42 | ) | |||||
Earnings (loss) per share—diluted | $ | 0.71 | $ | 0.15 | $ | (0.42 | ) | |||||
December 31, | ||||||||
2021 | 2020 | |||||||
Principal portion of rent in arrears | $ | 7,246 | $ | 6,946 | ||||
Interest portion of rent in arrears | — | 2,865 | ||||||
Unpaid operating and common area maintenance costs | 558 | 525 | ||||||
Total accrued but unpaid lease obligations | $ | 7,804 | $ | 10,336 | ||||
Accrued interest on accrued but unpaid lease obligations | $ | 1,938 | $ | 1,673 |
Classification | Year Ended December 31, 2021 | |||||||
Finance lease | ||||||||
Amortization of right-of-use | COGS and SG&A | $ | 1,707 | |||||
Interest on lease liabilities | Interest Expense | 980 | ||||||
Total Finance lease cost | 2,687 | |||||||
Operating lease cost | COGS, R&D, SG&A | 7,066 | ||||||
Short-term lease cost | COGS, R&D, SG&A | 2,869 | ||||||
Variable lease cost | COGS, R&D, SG&A | 4,808 | ||||||
Total lease cost | $ | 17,430 | ||||||
December 31, 2021 | January 1 2021 | |||||||
Property and equipment, gross | $ | 1,174 | $ | 22,989 | ||||
Accumulated depreciation | (961 | ) | (19,250 | ) | ||||
Property and equipment, net | $ | 213 | $ | 3,739 | ||||
Current portion of finance lease obligations | $ | 200 | $ | 3,619 | ||||
Finance lease long-term obligations | 0 | 11,442 | ||||||
Total finance lease liabilities | $ | 200 | $ | 15,061 | ||||
Year Ended December 31, 2021 | ||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows for operating leases | $ | 7,276 | ||
Operating cash flows for finance leases | $ | 1,427 | ||
Financing cash flows for finance leases | $ | 2,630 | ||
Right-of-use assets obtained in exchange for lease obligations—upon adoption: | ||||
Operating leases | $ | 13,525 | ||
Finance leases | — | |||
Right-of-use assets obtained in exchange for lease obligations—post adoption: | ||||
Operating leases | $ | 40,268 | ||
Finance leases | — |
December 31, 2021 | ||||
Weighted-average remaining lease term | ||||
Finance leases | 0.45 | |||
Operating leases | 8.22 |
December 31, 2021 | ||||
Weighted-average discount rate | ||||
Finance leases | 11.30 | % | ||
Operating leases | 4.51 | % |
Operating leases | Finance leases | |||||||
2022 | $ | 14,032 | $ | 207 | ||||
2023 | 8,100 | 0 | ||||||
2024 | 7,315 | 0 | ||||||
2025 | 7,526 | 0 | ||||||
2026 | 7,435 | 0 | ||||||
Thereafter | 25,936 | 0 | ||||||
Total lease payments | 70,344 | 207 | ||||||
Less: interest | (11,666 | ) | (7 | ) | ||||
Total lease liabilities | $ | 58,678 | $ | 200 | ||||