MiMedx (MDXG) 10-Q 10 May 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	Apr. 15, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	MIMEDX GROUP, INC.
Entity Central Index Key	1,376,339
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		109,548,431
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 15,117	$ 28,486
Short term investments	2,500	3,000
Accounts receivable, net	53,882	53,755
Inventory, net	17,967	7,460
Prepaid expenses and other current assets	5,774	3,609
Total current assets	95,240	96,310
Property and equipment, net of accumulated depreciation	12,123	9,475
Goodwill	30,730	4,040
Intangible assets, net of accumulated amortization	33,710	10,763
Deferred tax asset, net	4,940	14,838
Deferred financing costs and other assets	477	487
Total assets	177,220	135,913
Current liabilities:
Accounts payable	13,059	6,633
Accrued compensation	9,394	15,034
Accrued expenses	5,137	4,644
Other current liabilities	1,252	466
Total current liabilities	28,842	26,777
Earn out liability	33,240	0
Other liabilities	895	1,148
Total liabilities	$ 62,977	$ 27,925
Commitments and contingencies
Stockholders' equity:
Preferred stock; $.001 par value; 5,000,000 shares authorized and 0 shares issued and outstanding	$ 0	$ 0
Common stock; $.001 par value; 150,000,000 shares authorized; 109,539,420 issued and 109,466,073 outstanding at March 31, 2016 and 109,467,416 issued and 107,361,471 outstanding at December 31, 2015	109	109
Additional paid-in capital	151,659	163,133
Treasury stock at cost: 73,347 shares at March 31, 2016 and 2,105,945 shares at December 31, 2015	(592)	(17,124)
Accumulated deficit	(36,933)	(38,130)
Total stockholders' equity	114,243	107,988
Total liabilities and stockholders' equity	$ 177,220	$ 135,913

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Stockholders' equity:
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	150,000,000	150,000,000
Common stock, shares issued (in shares)	109,539,420	109,467,416
Common stock, shares outstanding (in shares)	109,466,073	107,361,471
Treasury stock, shares (in shares)	73,347	2,105,945

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Statement [Abstract]
Net sales	$ 53,367	$ 40,767
Cost of sales	7,946	5,148
Gross margin	45,421	35,619
Operating expenses:
Research and development expenses	2,496	1,831
Selling, general and administrative expenses	40,648	29,308
Amortization of intangible assets	810	233
Operating income	1,467	4,247
Other income (expense), net
Interest (expense), net	(56)	(14)
Income before income tax provision	1,411	4,233
Income tax provision	(214)	(146)
Net income	$ 1,197	$ 4,087
Net income per common share - basic (in dollars per share)	$ 0.01	$ 0.04
Net income per common share - diluted (in dollars per share)	$ 0.01	$ 0.04
Weighted average shares outstanding - basic	105,538,271	105,820,335
Weighted average shares outstanding - diluted	112,039,860	113,638,551

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (unaudited) - 3 months ended Mar. 31, 2016 - USD ($) $ in Thousands	Total	Common Stock	Additional Paid - in Capital	Treasury Stock	Accumulated Deficit
Balance, beginning of period at Dec. 31, 2015	$ 107,988	$ 109	$ 163,133	$ (17,124)	$ (38,130)
Balance (in shares) at Dec. 31, 2015		109,467,416		2,105,945
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation expense	4,615		4,615
Exercise of stock options	$ 1,138		(3,259)	$ 4,397
Exercise of stock options (in shares)	608,717	72,004		(536,713)
Issuance of restricted stock			(12,750)	$ 12,750
Issuance of restricted stock (in shares)				(1,576,579)
Restricted stock shares cancelled/forfeited			378	$ (378)
Restricted stock shares cancelled/forfeited (in shares)				45,263
Shares issued for services performed	$ 173		4	$ 169
Shares issued for services performed (in shares)	20,406			(20,406)
Stock repurchase	$ (3,530)			$ (3,530)
Shares repurchased for tax withholding	(684)			$ (684)
Shares repurchased for tax withholding (in shares)				81,594
Shares issued in conjunction with acquisition	$ 3,346		(462)	$ 3,808
Shares issued in conjunction with acquisition (in shares)	441,009			(441,009)
Stock repurchase (in shares)	415,252			415,252
Net income	$ 1,197				1,197
Balance, end of period at Mar. 31, 2016	$ 114,243	$ 109	$ 151,659	$ (592)	$ (36,933)
Balance (in shares) at Mar. 31, 2016		109,539,420		73,347

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities:
Net income	$ 1,197	$ 4,087
Adjustments to reconcile net income to net cash from operating activities:
Depreciation	734	354
Amortization of intangible assets	810	233
Amortization of inventory fair value step - up	734	0
Amortization of deferred financing costs	49	0
Share-based compensation	4,615	3,933
Increase (decrease) in cash, net of effects of acquisition, resulting from changes in:
Accounts receivable	1,874	(4,329)
Inventory	(264)	885
Prepaid expenses and other current assets	(2,066)	(801)
Other assets	209	(26)
Accounts payable	(4,265)	1,789
Accrued compensation	(5,640)	(2,803)
Accrued expenses	493	1,111
Other liabilities	543	(223)
Net cash flows from operating activities	(977)	4,210
Cash flows from investing activities:
Purchases of equipment	(2,008)	(1,347)
Purchase of Stability Inc., net of cash acquired	(7,631)	0
Fixed maturity securities redemption	500	500
Patent application costs	(147)	(201)
Net cash flows from investing activities	(9,286)	(1,048)
Cash flows from financing activities:
Proceeds from exercise of stock options	1,138	1,276
Stock repurchase under repurchase plan	(3,530)	(12,295)
Stock repurchase for tax withholdings on vesting of restricted stock	(684)	0
Deferred financing costs	(20)	0
Payments under capital lease obligations	(10)	(29)
Net cash flows from financing activities	(3,106)	(11,048)
Net change in cash	(13,369)	(7,886)
Cash and cash equivalents, beginning of period	28,486	46,582
Cash and cash equivalents, end of period	$ 15,117	$ 38,696

Basis of Presentation

Basis of Presentation	3 Months Ended
	Mar. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) from interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASU’’) to the FASB’s Accounting Standards Codification (“ASC”). In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results of operations for the periods presented have been included. Operating results for the three months ended March 31, 2016 and 2015 , are not necessarily indicative of the results that may be expected for the fiscal year. The balance sheet at December 31, 2015 , has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. You should read these condensed consolidated financial statements together with the historical consolidated financial statements of the Company for the year ended December 31, 2015 , included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015 , filed with the SEC on February 29, 2016. The Company operates in one business segment, Regenerative Biomaterials, which includes the design, manufacture, and marketing of products and tissue processing services for the Wound Care, Surgical, Sports Medicine, Ophthalmic and Dental market categories. The Company's biomaterial platform technologies include tissue technologies, AmnioFix® and EpiFix®, amniotic fluid derived allograft, OrthoFlo, and anticipated device technology, CollaFix™, which the Company has yet to commercialize. Through the recent acquisition of Stability Inc., our newest proprietary platforms include Physio™, a unique bone grafting material comprised of 100% bone tissue with no added carrier, thus maximizing bone forming potential, a demineralized bone matrix (DBM) to complement our product portfolio offerings within the Orthopedic market and AlloBurn, a skin product for burns.

Significant Accounting Policies

Significant Accounting Policies	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Significant Accounting Policies	Significant Accounting Policies Please see Note 2 to the Company's Consolidated Financial Statements included in the Company’s Form 10-K for the fiscal year ended December 31, 2015 , for a description of all significant accounting policies. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Accounts Receivable Accounts receivable represent amounts due from customers for which revenue has been recognized. Generally, the Company does not require collateral or any other security to support its receivables. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing receivables. The Company determines the allowance based on factors such as historical collection experience, customers' current creditworthiness, customer concentrations, age of accounts receivable balance and general economic conditions that may affect the customers' ability to pay. Inventories Inventory is valued at the lower of cost or market value. The Company assesses the valuation of its inventory on a periodic basis and makes adjustments to the value for estimated excess and obsolete inventory based on estimates about future demand. The excess balance determined by this analysis becomes the basis for the Company's excess inventory charge. The Company's excess inventory review process includes analysis of sales forecasts, managing product rollovers and working with operations to maximize recovery of excess inventory. The value of inventory as of March 31, 2016 includes a fair value step - up connected with the January 2016 acquisition of Stability Inc. of approximately $1.6 million , which is comprised of approximately $2.3 million as of the date of the acquisition less amortization of approximately $734,000 during the quarter. Please see Note 4 contained herein. Revenue Recognition The Company sells its products through a combination of a direct sales force and independent stocking distributors and representatives in the U.S. and independent distributors in international markets. The Company recognizes revenue when title to the goods transfers to customers, provided there are no material remaining performance obligations required of the Company or any matters of customer acceptance. In cases where the Company utilizes distributors or ships product directly to the end user, it recognizes revenue upon shipment provided all other revenue recognition criteria have been met. A portion of the Company's revenue is generated from inventory maintained at hospitals, clinics and doctor's offices. For these products, revenue is recognized at the time the product has been used or implanted. The Company records estimated sales returns, discounts and allowances as a reduction of net sales in the same period revenue is recognized. Acquisitions Results of operations of acquired companies are included in the Company’s results of operations as of the respective acquisition dates. The purchase price of each acquisition is allocated to the net assets acquired based on estimates of their fair values at the date of the acquisition. Any purchase price in excess of these net assets is recorded as goodwill. The allocation of purchase price in certain cases may be subject to revision based on the final determination of fair values during the measurement period, which may be up to one year from the acquisition date. Contingent consideration is recognized at the estimated fair value on the acquisition date. Subsequent changes to the fair value of contingent payments are recognized in earnings. Contingent payments related to acquisitions consist of an earn out based on sales less direct production costs, and are valued using discounted cash flow techniques. The fair value of these payments is based upon probability-weighted future revenue estimates and increases or decreases as revenue estimates or expectation of timing of payments changes. Patent Costs The Company incurs certain legal and related costs in connection with patent applications for tissue-based products and processes. The Company capitalizes such costs to be amortized over the expected life of the patent to the extent that an economic benefit is anticipated from the resulting patent or alternative future use is available to the Company and are included in Intangible Assets in the Condensed Consolidated Balance Sheets. The Company capitalized approximately $147,000 of patent costs during the first three months of 2016 . The Company capitalized approximately $201,000 of patent costs during the first three months of 2015. Treasury Stock The Company accounts for the purchase of treasury stock under the cost method. Treasury stock which is reissued for the exercise of option grants and the issuance of restricted stock grants is accounted for on a first - in first - out (FIFO) basis. Recent Accounting Pronouncements The Company considers the applicability and impact of all Accounting Standards Updates ("ASUs") issued both effective and not yet effective. In May 2014, the FASB issued ASU 2014-09, “Revenue Recognition - Revenue from Contracts with Customers” (ASU 2014-09) that requires companies to recognize revenue when a customer obtains control rather than when companies have transferred substantially all risks and rewards of a good or service. This update is effective for annual reporting periods beginning on or after December 15, 2017 and interim periods therein and requires expanded disclosures. The Company is currently assessing the impact the adoption of ASU 2014-09 will have on our condensed consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. ASU 2015-17 simplifies the presentation of deferred taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. ASU 2015-17 is effective for public companies for annual reporting periods beginning after December 15, 2016, and interim periods within those fiscal years. The guidance may be adopted prospectively or retrospectively and early adoption is permitted. The Company adopted this standard, prospectively, at the beginning of the fourth quarter 2015 to simplify reporting with the release of the valuation allowance as disclosed in Note 12. Prior periods were not retrospectively adjusted. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. ASU 2016-02 is effective for public companies for annual reporting periods beginning after December 15, 2018, and interim periods within those fiscal years. The guidance may be adopted prospectively or retrospectively and early adoption is permitted. The Company is currently assessing the impact the adoption of ASU 2016-02 will have on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718). The standard is intended to simplify several areas of accounting for share - based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. This ASU is effective for fiscal years beginning after December 15, 2016. The Company is currently assessing the impact the adoption of ASU 2016-09 will have on its consolidated financial statements. All other ASUs issued and not yet effective for the three months ended March 31, 2016, and through the date of this report, were assessed and determined to be either not applicable or are expected to have minimal impact on the Company's financial position or results of operations.

Liquidity and Management's Plan

Liquidity and Management's Plans	3 Months Ended
	Mar. 31, 2016
Liquidity and management's plans [Abstract]
Liquidity and Management's Plans	Liquidity and Management’s Plans As of March 31, 2016 , the Company had approximately $15,117,000 of cash and cash equivalents. The Company reported total current assets of approximately $95,240,000 and current liabilities of approximately $28,842,000 as of March 31, 2016 . The Company believes that its anticipated cash from operating and financing activities, existing cash and cash equivalents, short term investments and availability under its line of credit will enable the Company to meet its operational liquidity needs and fund its planned investing activities for the next twelve months.

Acquisition of Stability Inc.

Acquisition of Stability Inc.	3 Months Ended
	Mar. 31, 2016
Business Combinations [Abstract]
Acquisition of Stability Inc.	Acquisition of Stability Inc. On January 13, 2016, the Company completed the acquisition of Stability Inc., d/b/a Stability Biologics, a provider of human tissue products to surgeons, facilities, and distributors serving the surgical, spine, and orthopedic sectors of the healthcare industry. As a result of this transaction, the Company acquired all of the outstanding shares of Stability in exchange for $6,000,000 cash, $3,346,000 in stock, represented by 441,009 shares of our common stock, and assumed debt of $1,771,000 . Additional one time costs incurred in connection with the transaction totaled $713,000 . Contingent consideration may be payable in a formula determined by sales less certain expenses for the years 2016 and 2017. As of March 31, 2016, the contingent consideration was valued at $33,240,000 and is shown in the schedule below as fair value of earn-out. The Company used a third party specialist to assist us with the valuation. The contingent consideration was classified as a liability. The Company has evaluated the contingent consideration for accounting purposes under GAAP and has determined that the contingent consideration is within the scope of ASC 480 Distinguishing Liabilities from Equity whereby a financial instrument other than an outstanding share, that embodies a conditional obligation that the issuer may settle by issuing a variable number of its equity shares, shall be classified as a liability if, at inception, the monetary value of the obligation is based solely or predominantly on variations in something other than the fair value of the issuer’s equity shares. The actual purchase price was based on cash paid, the fair value of our stock on the date of the acquisition, and direct costs associated with the combination. The actual purchase price has been preliminarily allocated as of March 31, 2016 (in thousands) and is subject to change: Cash paid at closing $ 6,000 Common stock issued (441,009 shares valued at $9.07 per share) 3,346 Assumed debt 1,771 Fair value of earn - out 33,240 Total fair value of purchase price $ 44,357 Net assets acquired: Debt-free working capital $ 2,382 Other assets, net 199 Property, plant and equipment 1,375 Deferred tax liability (9,899 ) Subtotal (5,943 ) Intangible assets: Customer relationships 8,920 Patents and know-how 10,230 Trade names and trademarks 1,000 Non compete agreements 2,700 Licenses and permits 760 Subtotal 23,610 Goodwill 26,690 Total Assets Purchased $ 44,357 Working capital and other assets were composed of the following (in thousands): Working capital: Cash $ 140 Prepaid Expenses and other current assets 100 Accounts Receivable 2,001 Federal and state taxes receivable 28 Inventory 10,977 Accounts payable and accrued expenses (10,864 ) Debt-free working capital $ 2,382 Current portion of long term debt $ (194 ) Long-term debt (560 ) Line of credit (932 ) Shareholder loan (85 ) Net working capital $ 611 Other assets: Other long term assets $ 199 The acquisition was accounted for as a purchase business combination as defined by FASB Topic 805 - Business Combinations. The fair value of the contingent consideration is measured as a Level 3 instrument. The contingent consideration liability is recorded at fair value on the acquisition date and will be remeasured quarterly based on the assessed fair value and adjusted if necessary. The increases or decreases in the fair value of contingent consideration can result from changes in anticipated revenue levels and changes in assumed discount periods and rates. As the fair value measured is based on significant inputs that are not observable in the market, they are categorized as Level 3. The income valuation approach was applied in determining the fair value of the contingent consideration using a discounted cash flow valuation technique with significant unobservable inputs comprised of projected sales and certain expenses. The values assigned to intangible assets are subject to amortization. The intangible assets were assigned the following lives for amortization purposes: Estimated useful life (in years) Intangible asset: Customer relationships 12 Patents and know-how 20 Trade names and trademarks indefinite Non compete agreements 4 Licenses and permits 2 Goodwill consists of the excess of the purchase price paid over the identifiable net assets and liabilities acquired at fair value. Goodwill was determined using the residual method based on an independent appraisal of the assets and liabilities acquired in the transaction and is preliminary as of March 31, 2016 and is subject to change. Goodwill is tested for impairment as defined by FASB Topic 350 - Intangibles - Goodwill and Other. The following unaudited pro forma summary financial information presents the consolidated results of operations as if the acquisition had occurred on January 1, 2015. The pro forma results are shown for illustrative purposes only and do not purport to be indicative of the results that would have been reported if the acquisition had occurred on the date indicated or indicative of the results that may occur in the future. Unaudited pro forma information for the three months ended March 31, 2016 and 2015 (in thousands) is as follows: Three months ended March 31, 2016 2015 Revenues $ 53,915 $ 45,921 Net income $ 1,611 $ 2,879 Income per share, fully diluted $ 0.01 $ 0.03 The 2016 supplemental pro forma earnings were adjusted to exclude $713,000 of acquisition-related legal, audit and other costs, net of tax. The 2015 supplemental pro forma earnings were adjusted to include $577,000 of amortization costs related to recorded intangible assets with defined useful lives, and $1,038,000 of inventory step up charges as a result of the acquisition for comparability to 2016. The shares outstanding used in calculating the income per share for 2015 was adjusted to include 441,009 shares issued as part of the purchase price and assumed to be issued on January 1, 2015.

Short Term Investments

Short Term Investments	3 Months Ended
	Mar. 31, 2016
Cash and Cash Equivalents [Abstract]
Short Term Investments	Short Term Investments Short term investments consist of approximately $2,500,000 of FDIC insured certificates of deposit held with various financial institutions as of March 31, 2016 . Short term investments consisted of approximately $3,000,000 of FDIC insured certificates of deposit at December 31, 2015. The cost of these instruments approximates their fair market value at March 31, 2016 and December 31, 2015.

Inventories

Inventories	3 Months Ended
	Mar. 31, 2016
Inventory Disclosure [Abstract]
Inventories	Inventories Inventories consisted of the following items as of March 31, 2016 , and December 31, 2015 (in thousands): March 31, 2016 December 31, 2015 Raw materials $ 1,127 $ 602 Work in process 4,786 3,850 Finished goods 12,658 3,405 Inventory, gross 18,571 7,857 Reserve for obsolescence (604 ) (397 ) Inventory, net $ 17,967 $ 7,460

Property and Equipment

Property and Equipment	3 Months Ended
	Mar. 31, 2016
Property, Plant and Equipment [Abstract]
Property and Equipment	Property and Equipment Property and equipment consist of the following as of March 31, 2016 , and December 31, 2015 (in thousands): March 31, December 31, Leasehold improvements $ 3,233 $ 2,684 Lab and clean room equipment 7,528 4,564 Furniture and office equipment 5,730 4,577 Construction in progress 1,539 2,629 Property and equipment, gross 18,030 14,454 Less accumulated depreciation (5,907 ) (4,979 ) Property and equipment, net $ 12,123 $ 9,475 Included in net property and equipment is approximately $427,000 of equipment covered under capital leases. The corresponding liability of approximately $103,000 is included in other liabilities in the accompanying Condensed Consolidated Balance Sheets. Interest rates for these leases range from approximately 3% to 12% with maturity dates from September 2016 to January 2018. Also included is approximately $1.0 million in leasehold improvements paid for by the landlord of the Company's main facility with a corresponding liability included in other liabilities which is amortized over the term of the lease. Depreciation expense for the three months ended March 31, 2016 and 2015, was approximately $734,000 and $354,000 , respectively.

Intangible Assets and Royalty A

Intangible Assets and Royalty Agreement	3 Months Ended
	Mar. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets and Royalty Agreement	Intangible Assets and Royalty Agreement Intangible assets are summarized as follows (in thousands): Weighted March 31, 2016 December 31, 2015 Cost Cost Licenses (a) (b) (d) 7 years $ 1,769 $ 1,009 Patents & Know How (b) (d) 19 years 18,233 8,001 Customer & Supplier Relationships (b) (d) 13 years 12,681 3,761 Tradenames & Trademarks (b) (d) indefinite 2,008 1,008 Non - compete agreements (d) 4 years 2,700 — In Process Research & Development (b) n/a 25 25 Patents in Process (c) n/a 1,969 1,823 Total 39,385 15,627 Less Accumulated amortization (5,675 ) (4,864 ) Net $ 33,710 $ 10,763 (a) On January 29, 2007, the Company acquired a license from Shriners Hospitals for Children and University of South Florida Research Foundation, Inc. in the amount of $996,000 . Within 30 days after the receipt by the Company of approval by the FDA allowing the sale of the first licensed product, the Company is required to pay an additional $200,000 to the licensor. Due to its contingent nature, this amount is not recorded as a liability. The Company will also be required to pay a royalty of 3% on all commercial sales revenue from the licensed products. The Company is also obligated to pay a $50,000 minimum annual royalty payment over the life of the license. (b) On January 5, 2011, the Company acquired Surgical Biologics, LLC. As a result, the Company recorded intangible assets for Customer & Supplier Relationships of $3,761,000 , Patents & Know-How of $7,690,000 , Licenses of $13,000 , Tradenames & Trademarks of $1,008,000 and In-Process Research & Development of $25,000 . For the three months ended March 31, 2016, approximately $1,000 of costs associated with patents granted during the period were capitalized and included in Patents & Know-How subject to amortization. (c) Patents in Process consist of capitalized external legal and other registration costs in connection with internally developed tissue-based patents that are pending. Once issued, the costs associated with a given patent will be included in Patents & Know-How under intangible assets subject to amortization. (d) On January 13, 2016, the Company acquired Stability Inc. As a result, the Company recorded intangible assets for Patents & Know - How of $10,230,000 , Customer Relationships of $8,920,000 , Non - compete agreements of $2,700,000 , Tradenames & Trademarksy of $1,000,000 and Licenses of $760,000 . Amortization expense for the three months ended March 31, 2016 and 2015, was approximately $810,000 and $233,000 , respectively. Expected future amortization of intangible assets as of March 31, 2016 , is as follows (in thousands): Year ending December 31, Estimated Amortization Expense 2016 (a) $ 2,434 2017 3,156 2018 2,766 2019 2,766 2020 2,091 Thereafter 18,489 $ 31,702 (a) Estimated amortization expense for the year ending December 31, 2016, includes only amortization to be recorded after March 31, 2016 .

Credit Facility

Credit Facility	3 Months Ended
	Mar. 31, 2016
Debt Disclosure [Abstract]
Credit Facility	Credit Facility On October 12, 2015, the Company and its subsidiaries entered into a Credit Agreement (the "Credit Agreement") with certain lenders and Bank of America, N.A., as administrative agent. The Credit Agreement establishes a senior secured revolving credit facility in favor of the Company with a maturity date of October 12, 2018 and an aggregate lender commitment of up to $50 million . The Credit Agreement also provides for an uncommitted incremental facility of up to $35 million , which can be exercised as one or more revolving commitment increases or new term loans, all subject to certain customary terms and conditions set forth in the Credit Agreement. Borrowings under the facility will bear interest at LIBOR plus 1.5% to 2.25% . Fees paid in connection with the initiation of the credit facility totaled approximately $500,000 . These deferred financing costs are being amortized to interest expense over the three -year life of the facility. The Credit Agreement contains customary representations, warranties, covenants, and events of default. As of March 31, 2016, there were no outstanding revolving loans under the credit facility.

Net Income Per Share

Net Income Per Share	3 Months Ended
	Mar. 31, 2016
Earnings Per Share [Abstract]
Net Income Per Share	Net Income Per Share Basic net income per common share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income per common share is computed using the weighted-average number of common and dilutive common equivalent shares from stock options, restricted stock, and warrants using the treasury stock method. The following table sets forth the computation of basic and diluted net income per share (in thousands except share data): Three Months Ended March 31, 2016 2015 Net income $ 1,197 $ 4,087 Denominator for basic earnings per share - weighted average shares 105,538,271 105,820,335 Effect of dilutive securities: Stock options, restricted stock, and warrants outstanding(a) 6,501,589 7,818,216 Denominator for diluted earnings per share - weighted average shares adjusted for dilutive securities 112,039,860 113,638,551 Income per common share - basic $ 0.01 $ 0.04 Income per common share - diluted $ 0.01 $ 0.04 (a) Securities outstanding that are included in the computation above, utilizing the treasury stock method are as follows: Three Months Ended March 31, 2016 2015 Outstanding Stock Options 5,981,250 7,392,355 Outstanding Warrants — 42,400 Restricted Stock Awards 520,339 383,461 6,501,589 7,818,216

Equity

Equity	3 Months Ended
	Mar. 31, 2016
Equity [Abstract]
Equity	Equity Stock Incentive Plans The Company has three share-based compensation plans: the MiMedx Group, Inc. Assumed 2006 Stock Incentive Plan (the “Assumed 2006 Plan”), the MiMedx Inc. 2007 Assumed Stock Plan (the “Assumed 2007 Plan”) and the MiMedx Group Inc. Amended and Restated Assumed 2005 Stock Plan (the “Assumed 2005 Plan”) which provide for the granting of qualified incentive and non-qualified stock options, stock appreciation awards and restricted stock awards to employees, directors, consultants and advisors. The awards are subject to a vesting schedule as set forth in each individual agreement. The Company intends to use only the Assumed 2006 Plan to make future grants. The number of assumed options under the Assumed 2005 Plan and Assumed 2007 Plan outstanding at March 31, 2016 totaled 70,000 . The maximum number of shares of common stock that can be issued under the Assumed 2006 Plan was 26,500,000 at March 31, 2016 . During the three months ended March 31 2016, 20,406 shares of common stock valued at approximately $173,000 were issued under the Assumed 2006 Plan to a consultant in return for services performed. Activity with respect to the stock options is summarized as follows: Number of Shares Weighted- Average Exercise Price Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding at January 1, 2016 14,019,629 $ 3.62 Granted — $ — Exercised (608,717 ) $ 1.87 Unvested options forfeited (120,563 ) $ 6.05 Vested options expired (12,497 ) $ 6.34 Outstanding at March 31, 2016 13,277,852 $ 3.69 6.3 $ 67,341,642 Vested at March 31, 2016 11,714,483 $ 3.24 6.1 $ 64,456,036 Vested or expected to vest at March 31, 2016 (a) 13,210,155 $ 3.67 6.3 $ 67,231,821 (a) Includes forfeiture adjusted unvested shares. The intrinsic value of the options exercised during the three months ended March 31, 2016 , was approximately $4,440,694 . Following is a summary of stock options outstanding and exercisable at March 31, 2016 : Options Outstanding Options Exercisable Range of Exercise Prices Number outstanding Weighted-Average Remaining Contractual Term (in years) Weighted- Average Exercise Price Number Exercisable Weighted- Average Exercise Price $0.50 - $0.76 441,429 3.2 $ 0.72 441,429 $ 0.72 $0.87 - $1.35 4,431,970 5.4 1.19 4,431,970 1.19 $1.40 - $2.45 1,460,924 4.7 1.92 1,460,924 1.92 $2.66 - $3.99 894,120 6.6 3.06 894,120 3.06 $4.19 - $6.38 3,426,178 7.2 5.35 2,897,570 5.26 $6.45 - $9.78 2,512,065 7.9 7.29 1,556,144 7.24 $9.90- $10.99 111,166 8.6 10.44 32,326 10.51 13,277,852 6.3 $ 3.69 11,714,483 $ 3.24 Total unrecognized compensation expense related to granted stock options at March 31, 2016 , was approximately $4,501,863 and will be charged to expense ratably over a weighted average period through April 2017. The fair value of options granted by the Company is estimated on the date of grant using the Black-Scholes-Merton option-pricing model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. Expected volatilities are based on historical volatility of peer companies and other factors estimated over the expected term of the options. The term of employee options granted is derived using the “simplified method,” which computes expected term as the mid point between the weighted average time to vesting and the contractual maturity. The simplified method was used due to the Company's lack of sufficient historical data to provide a reasonable basis upon which to estimate the expected term due to the limited period of time its equity shares have been publicly traded. The term for non-employee options is generally based upon the contractual term of the option. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term or contractual term as described. The assumptions used in calculating the fair value of options using the Black-Scholes-Merton option-pricing model are set forth in the following table: Three Months Ended March 31, 2016 2015 Expected volatility n/a 56.8 - 58.1% Expected life (in years) n/a 6.0 Expected dividend yield n/a — Risk-free interest rate n/a 1.57% - 1.66% Their were no options granted during the three months ended March 31, 2016 . Restricted Stock Awards Activity with respect to restricted stock awards is summarized as follows: Number of Weighted-Average Grant Date Unvested at January 1, 2016 2,613,267 $9.14 Granted 1,576,579 8.18 Vested (644,903 ) 8.42 Forfeited (45,263 ) 8.87 Unvested at March 31, 2016 3,499,680 $8.84 As of March 31, 2016 , there was approximately $24,965,395 of total unrecognized stock-based compensation related to time-based, nonvested restricted stock. That expense is expected to be recognized on a straight-line basis over a weighted-average period of 2.3 years, which approximates the remaining vesting period of these grants. All shares noted above as unvested are considered issued and outstanding at March 31, 2016 . For the three months ended March 31, 2016 and 2015 , the Company recognized stock-based compensation as follows (in thousands): Three Months Ended March 31, 2016 2015 Cost of sales $ 96 $ 95 Research and development 205 186 Selling, general and administrative 4,314 3,652 $ 4,615 $ 3,933 Treasury Stock On May 12, 2014, our Board of Directors authorized the repurchase of up to $10 million of our common stock from time to time, through December 31, 2014. The Board subsequently extended the program until December 31, 2016. In December 2014, the Board increased the authorization to $20 million and further increased the authorization in 2015 to $60 million . The timing and amount of repurchases will depend upon the Company's stock price, economic and market conditions, regulatory requirements, and other corporate considerations. The Company may initiate, suspend or discontinue purchases under the stock repurchase program at any time. For the three months ended March 31, 2016 , the Company purchased 415,252 shares of its common stock for a purchase price of approximately $3,518,000 , before brokerage commissions of approximately $12,000 bringing the total amount spent under the program to approximately $49,244,000 since inception. As of March 31, 2016, the Company had approximately $10,756,000 remaining under the repurchase program. In addition, the Company purchased during the quarter 81,594 shares surrendered by employees to satisfy tax withholding obligations upon vesting of restricted stock. Additionally, for the three months ended March 31, 2016 , the Company reissued 2,529,444 shares from the Treasury for common and restricted stock grants and stock option exercises, net of forfeitures, and the acquisition of Stability Inc. with an aggregate carrying value of approximately $20,746,000 .

Income taxes

Income taxes	3 Months Ended
	Mar. 31, 2016
Income Tax Disclosure [Abstract]
Income taxes	Income taxes The effective tax rates for continuing operations of 15.2% and 3.40% for the three months ended March 31, 2016 and March 31, 2015 , respectively, were determined using an estimated annual effective tax rate and includes in 2016 the impact of a discrete item of approximately $350,000 . The effective tax rate increased 11.8% when compared to the same period of 2015, primarily due to the $15.4 million valauation allowance release recorded in 2015 and discussed in our annual report on Form 10-K for the year ended December 31, 2015. Due to the valuation allowance previously recorded against the Company's U.S. deferred tax assets, the effective tax rate for the three months ended March 31, 2015, did not include the expense of the current period U.S. taxable income. As of the end of March 2016, the projected annual effective tax rate for 2016 is 40.4% .

Supplemental disclosure of cash

Supplemental disclosure of cash flow and non-cash investing and financing activities	3 Months Ended
	Mar. 31, 2016
Supplemental Cash Flow Elements [Abstract]
Supplemental disclosure of cash flow and non-cash investing and financing activities	Supplemental disclosure of cash flow and non-cash investing and financing activities: Selected cash payments, receipts, and noncash activities are as follows (in thousands): Three Months Ended March 31, 2016 2015 Cash paid for interest, net $ 56 $ 14 Income taxes paid 139 363 Stock issuance of 441,009 shares in connection with acquisition 3,346 — Stock issuance of 20,406 and 11,321 shares in exchange for services performed, respectively 173 108

Contractual Commitments and Con

Contractual Commitments and Contingencies	3 Months Ended
	Mar. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
Contractual Commitments and Contingencies	Contractual Commitments and Contingencies Contractual Commitments In addition to the capital leases noted above in Note 7, the Company has entered into operating lease agreements for facility space and equipment. These leases expire over the next six years and generally contain renewal options. The Company anticipates that most of these leases will be renewed or replaced upon expiration. The Company also has commitments for meeting space and to various charitable organizations. The estimated annual lease payments, meeting space and charitable organization commitments are as follows (in thousands): 12-month period ended March 31 2017 $ 2,998 2018 2,246 2019 2,199 2020 1,742 Thereafter 765 $ 9,950 Rent expense for the three months ended March 31, 2016 and 2015, was approximately $423,000 and $284,000 , respectively, and is allocated among cost of sales, research and development, and selling, general and administrative expenses. Letters of Credit As a condition of the lease for the Company's main facility, the Company is obligated under standby letters of credit in the amount of approximately $235,000 . These obligations are reduced at various times over the life of the lease. FDA Untitled Letter, Draft Guidance and Related Litigation FDA Untitled Letter and Draft Guidance On August 28, 2013, the FDA issued an Untitled Letter alleging that the Company's micronized allografts do not meet the criteria for regulation solely under Section 361 of the Public Health Service Act and that, as a result, MiMedx would need a biologics license to lawfully market those micronized products. Since the issuance of the Untitled Letter, the Company has been in discussions with the FDA to communicate its disagreement with the FDA's assertion that the Company's allografts are more than minimally manipulated. To date, the FDA has not changed its position that the Company's micronized products are not eligible for marketing solely under Section 361 of the Public Health Service Act, but discussions are continuing. The Company continues to market its micronized products but is also pursuing the Biologics License Application (“BLA”) process for certain of its micronized products. On December 22, 2014, the FDA issued for comment “Draft Guidance for Industry and FDA Staff: Minimal Manipulation of Human Cells, Tissues, and Cellular and Tissue-Based Products.” Essentially the Minimal Manipulation draft guidance takes the same position with respect to micronized amniotic tissue that it took in the Untitled Letter to MiMedx 16 months earlier. The Company submitted comments asserting that the Minimal Manipulation draft guidance represents agency action that goes far beyond the FDA’s statutory authority, is inconsistent with existing HCT/P regulations and the FDA’s prior positions, and is internally inconsistent and scientifically unsound. On October 28, 2015, the FDA issued for comment, "Draft Guidance for Industry and FDA Staff: Homologous Use of Human Cells, Tissues, and Cellular and Tissue-Based Products." The Company submitted comments on this Homologous Use draft guidance. The FDA has indicated that it will hold a public hearing on September 12 and 13, 2016 to obtain input on the Homologous Use draft guidance and the previously released Minimal Manipulation draft guidance, as well as other recently issued guidance documents on HCT/Ps. The hearing was originally scheduled for April 13, 2016, but was rescheduled to allow stakeholders additional time to provide comments due to the considerable interest in the hearing. The Company has requested an opportunity to speak at the rescheduled hearing. If the FDA does allow the Company to continue to market a micronized form of its sheet allografts without a biologics license either prior to or after finalization of the draft guidance documents, it may impose conditions, such as labeling restrictions and compliance with cGMP. Although the Company is preparing for these requirements in connection with its pursuit of a BLA for certain of its micronized products, earlier compliance with these conditions would require significant additional time and cost investments by the Company. It is also possible that the FDA will not allow the Company to market any form of a micronized product without a biologics license even prior to finalization of the draft guidance documents and could even require the Company to recall its micronized products. Revenues from micronized products comprised approximately 12% of the Company's revenues for fiscal-year 2015. Related Litigation Patent Litigation MiMedx continues to diligently enforce its intellectual property against several entities. Currently, there are four actions pending, as described below: The Liventa Action First, there is an action pending against several entities in the in the United States District Court for the Northern District of Georgia, i.e., “the Liventa Action”. On April 22, 2014, the Company filed a patent infringement lawsuit against Liventa Bioscience, Inc. ("Liventa"), Medline Industries, Inc. ("Medline") and Musculoskeletal Transplant Foundation, Inc. ("MTF") for permanent injunctive relief and unspecified damages. In addition to the allegations of infringement of MiMedx's patents, the lawsuit asserts that Liventa and Medline knowingly and willfully made false and misleading representations about their respective products to providers, patients, and in some cases, prospective investors. The Liventa Action was filed in the United States District Court for the Northern District of Georgia. MiMedx asserts that Liventa (formerly known as AFCell Medical, Inc.), Medline and MTF infringed and continue to infringe certain of the Company's patents relating to the MiMedx dehydrated human amnion/chorion membrane ("dHACM") allografts. MTF is the tissue processor while Liventa and Medline are the distributors of the allegedly infringing products. On May 30, 2014, defendants filed answers to the Complaint, denying the allegations in the Complaint. They also raised affirmative defenses of non-infringement, invalidity, laches and estoppel. MTF and Medline also filed counterclaims seeking declaratory judgments of non-infringement and invalidity. On June 30, 2014, fact discovery began and the parties have engaged in extensive fact discovery. MiMedx served Infringement Contentions on August 29, 2014, and Defendants served Invalidity Contentions and Responses to Infringement Contentions on September 29, 2014. After a protracted series of meet and confers, MiMedx required Defendants to supplement their invalidity contentions in view of parallel Inter Partes Review ("IPR")(see further discussion, infra) proceedings. MTF complied on June 26, 2015. In September 2015, the Defendants filed a renewed Motion to Stay in light of the Patent Trial and Appeal Board's ("PTAB") decisions to institute IPRs on the ’437 and ’687 Patents, seeking a partial stay of the litigation as to the ’437, ’687, and ’494 Patents (i.e., the ’437 Patent family). MiMedx opposed the Motion to Stay with respect to the ’494 Patent and once again successfully defeated Defendants’ motion to stay. Claim Construction proceedings began in October 2014. The parties submitted proposed constructions for key terms for the ’701, ’092, ’437, ’687, ’207, and ’494 Patents. Briefing was completed in March 2015. On December 22, 2015, a Markman Hearing was held before Special Master Sumner C. Rosenberg. Over thirty disputed claim terms were at issue. One week later, on December 30, 2015, the Special Master issued its Report and Recommendation. Except for one term, the Special Master’s Report essentially adopted MiMedx’s proposed constructions. The parties are awaiting a final Court decision pending their respective objections. On March 9, 2016, the Court adopted the Special Master’s Report. Since then the Court has entered a scheduling order in this action. Notably, fact discovery is set to close on May 25, 2016. Expert discovery begins in June 2016 and is expected to close in early September 2016. The Bone Bank Action On May 16, 2014, the Company also filed a patent infringement lawsuit against Transplant Technology, Inc. d/b/a Bone Bank Allografts ("Bone Bank") and Texas Human Biologics, Ltd. ("Biologics") for permanent injunctive relief and unspecified damages (the "Bone Bank Action"). The Bone Bank Action was filed in the United States District Court for the Western District of Texas. This lawsuit similarly asserts that Bone Bank and Biologics infringed certain of the Company's patents through the manufacturing and sale of their placental-derived tissue graft products. On July 10, 2014, defendants filed an answer to the Complaint, denying the allegations in the Complaint. They also raised affirmative defenses of non-infringement and invalidity and filed counterclaims seeking declaratory judgments of non-infringement and invalidity. The Bone Bank Action is in an advanced stage. The parties have (i) substantially completed document production; (ii) taken several fact depositions (both party and non-party); and (iii) completed claim construction briefing. The Markman hearing in this case was held on October 2, 2015. Except for one term, the Court adopted MiMedx’s proposed construction of the disputed terms. The parties have submitted a proposed scheduling order to the Court and are awaiting the Court’s order in this regard. Meanwhile, the parties continue with fact discovery in view of recent depositions. The NuTech Action On March 2, 2015, the Company filed a patent infringement lawsuit against NuTech Medical, Inc. ("NuTech") and DCI Donor Services, Inc. ("DCI") for permanent injunctive relief and unspecified damages. This lawsuit was filed in the United States District Court for the Northern District of Alabama. The lawsuit alleges that NuTech and DCI have infringed and continue to infringe the Company's patents through the manufacture, use, sale, and/or offering of their tissue graft product. The lawsuit also asserts that NuTech knowingly and willfully made false and misleading representations about its products to customers and/or prospective customers. On April 17, 2015, NuTech filed a motion to dismiss the case purportedly for lack of patentable subject matter, which the Company opposed. NuTech also filed a motion to stay the case pending disposition of the motion to dismiss, which MiMedx also opposed, and on which the Court declined to rule. Hearing on the motion to dismiss occurred on August 20, 2015. On November 24, 2015, the court ruled on NuTech’s Motion to Dismiss, granting in part, and denying in part. MiMedx still has claims against NuTech for infringement of the ‘494 and ‘687 patents, as well as violations of the Lanham Act; these claims shall proceed. On December 30, 2015, the parties submitted a Joint Rule 26(f) Report of Parties’ Planning Meeting and Proposed Case Management Order to the Court. In the Report, the parties requested that the Court stay the proceedings with respect to the ’687 patent pending the completion of the inter partes review on that patent. On January 8, 2016, MiMedx served its infringement contentions. Judge Hopkins entered the parties’ Case Management Order and granted the parties’ request to stay proceedings with respect to the ’687 patent pending the completion of the inter partes review. On January 8, 2016, the parties submitted their Initial Disclosures, and MiMedx submitted its preliminary infringement contentions. On March 14, 2016, Defendants submitted their preliminary invalidity contentions. On April 15, 2016, the parties exchanged proposed terms for construction and over the next several months the parties will engage in claim construction briefing. Discovery is ongoing. The Vivex Action On April 1, 2016, the Company also filed a patent infringement lawsuit against Vivex BioMedical (“Vivex”) for permanent injunctive relief and unspecified damages (the "Vivex Action"). The lawsuit was filed in the United States District Court for the Northern District of Georgia. The patent at issue is the ’494 patent. Pending IPRs In addition to defending the claims in the pending district court litigations, defendants in the Liventa and Bone Bank cases have challenged certain of the Company's patents in several IPR proceedings to avoid the high burden of proof of proving invalidity by "clear and convincing evidence" in the district court litigations. An inter partes review (or "IPR") is a request for a specialized group within the United States Patent and Trademark Office to review the validity of a plaintiff's patent claims. The defendants in the Bone Bank Action have challenged the validity of the Company's 8,597,687 and 8,709,494 patents (the "'687" and "'494" patents, respectively); while the defendants in the Liventa Action have challenged the validity of the Company's 8,372,437 and 8,323,701 patents (the "'437" and "'701" patents, respectively). On June 29, 2015, the Patent Trial and Appeals Board ("PTAB") denied defendants' request for institution of an IPR with respect to the '494 patent on all seven challenged grounds. On August 18, 2015, the PTAB also denied defendants' request for institution of an IPR with respect to the '701 patent on all six challenged grounds. That is, the PTAB decided in each case that the defendants failed to establish a reasonable likelihood that defendants would prevail in showing any of the challenged claims of the '494 or the '701 patent were unpatentable. On July 10, 2015 the PTAB issued an opinion allowing a review of the '687 patent to proceed, although on only two of the five challenged grounds. The PTAB also adopted MiMedx's construction of the claims which will govern the Board's review of the '687 patent. The parties decided to forego oral arguments. A decision is expected no later than July 10, 2016. On August 18, 2015, the PTAB issued an opinion allowing a review of the '437 patent to proceed, although only on one of the seven challenged grounds. Briefing and expert discovery is ongoing. Oral argument is scheduled for April 26, 2016. A decision is expected no later than August of 2016.

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2016
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events None

Schedule II - Valuation and Qua

Schedule II - Valuation and Qualifying Accounts	3 Months Ended
	Mar. 31, 2016
Valuation and Qualifying Accounts [Abstract]
Schedule II - Valuation and Qualifying Accounts	Schedule II Valuation and Qualifying Accounts MIMEDX GROUP, INC. AND SUBSIDIARIES SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS Three Months Ended March 31, 2016 and 2015 (in thousands) Balance at Additions charged to Expense or Revenue Deductions Balance at For the three months ended March 31, 2016 Allowance for doubtful accounts $ 3,270 $ 602 $ — $ 3,872 Allowance for product returns 1,262 1,300 (911 ) 1,651 Allowance for obsolescence 397 235 (28 ) 604 For the three months ended March 31, 2015 Allowance for doubtful accounts $ 1,750 260 $ — $ 2,010 Allowance for product returns 841 709 (606 ) 944 Allowance for obsolescence 527 130 (105 ) 552

Significant Accounting Polici23

Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Basis of Presentation	The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) from interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASU’’) to the FASB’s Accounting Standards Codification (“ASC”). In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results of operations for the periods presented have been included. Operating results for the three months ended March 31, 2016 and 2015 , are not necessarily indicative of the results that may be expected for the fiscal year. The balance sheet at December 31, 2015 , has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. You should read these condensed consolidated financial statements together with the historical consolidated financial statements of the Company for the year ended December 31, 2015 , included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015 , filed with the SEC on February 29, 2016.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Accounts Receivable	Accounts Receivable Accounts receivable represent amounts due from customers for which revenue has been recognized. Generally, the Company does not require collateral or any other security to support its receivables. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing receivables. The Company determines the allowance based on factors such as historical collection experience, customers' current creditworthiness, customer concentrations, age of accounts receivable balance and general economic conditions that may affect the customers' ability to pay.
Inventories	Inventories Inventory is valued at the lower of cost or market value. The Company assesses the valuation of its inventory on a periodic basis and makes adjustments to the value for estimated excess and obsolete inventory based on estimates about future demand. The excess balance determined by this analysis becomes the basis for the Company's excess inventory charge. The Company's excess inventory review process includes analysis of sales forecasts, managing product rollovers and working with operations to maximize recovery of excess inventory.
Revenue Recognition	Revenue Recognition The Company sells its products through a combination of a direct sales force and independent stocking distributors and representatives in the U.S. and independent distributors in international markets. The Company recognizes revenue when title to the goods transfers to customers, provided there are no material remaining performance obligations required of the Company or any matters of customer acceptance. In cases where the Company utilizes distributors or ships product directly to the end user, it recognizes revenue upon shipment provided all other revenue recognition criteria have been met. A portion of the Company's revenue is generated from inventory maintained at hospitals, clinics and doctor's offices. For these products, revenue is recognized at the time the product has been used or implanted. The Company records estimated sales returns, discounts and allowances as a reduction of net sales in the same period revenue is recognized.
Acquisitions	Acquisitions Results of operations of acquired companies are included in the Company’s results of operations as of the respective acquisition dates. The purchase price of each acquisition is allocated to the net assets acquired based on estimates of their fair values at the date of the acquisition. Any purchase price in excess of these net assets is recorded as goodwill. The allocation of purchase price in certain cases may be subject to revision based on the final determination of fair values during the measurement period, which may be up to one year from the acquisition date. Contingent consideration is recognized at the estimated fair value on the acquisition date. Subsequent changes to the fair value of contingent payments are recognized in earnings. Contingent payments related to acquisitions consist of an earn out based on sales less direct production costs, and are valued using discounted cash flow techniques. The fair value of these payments is based upon probability-weighted future revenue estimates and increases or decreases as revenue estimates or expectation of timing of payments changes.
Patent Costs	Patent Costs The Company incurs certain legal and related costs in connection with patent applications for tissue-based products and processes. The Company capitalizes such costs to be amortized over the expected life of the patent to the extent that an economic benefit is anticipated from the resulting patent or alternative future use is available to the Company and are included in Intangible Assets in the Condensed Consolidated Balance Sheets.
Treasury Stock	Treasury Stock The Company accounts for the purchase of treasury stock under the cost method. Treasury stock which is reissued for the exercise of option grants and the issuance of restricted stock grants is accounted for on a first - in first - out (FIFO) basis.
Recent Accounting Pronouncements	Recent Accounting Pronouncements The Company considers the applicability and impact of all Accounting Standards Updates ("ASUs") issued both effective and not yet effective. In May 2014, the FASB issued ASU 2014-09, “Revenue Recognition - Revenue from Contracts with Customers” (ASU 2014-09) that requires companies to recognize revenue when a customer obtains control rather than when companies have transferred substantially all risks and rewards of a good or service. This update is effective for annual reporting periods beginning on or after December 15, 2017 and interim periods therein and requires expanded disclosures. The Company is currently assessing the impact the adoption of ASU 2014-09 will have on our condensed consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. ASU 2015-17 simplifies the presentation of deferred taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. ASU 2015-17 is effective for public companies for annual reporting periods beginning after December 15, 2016, and interim periods within those fiscal years. The guidance may be adopted prospectively or retrospectively and early adoption is permitted. The Company adopted this standard, prospectively, at the beginning of the fourth quarter 2015 to simplify reporting with the release of the valuation allowance as disclosed in Note 12. Prior periods were not retrospectively adjusted. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. ASU 2016-02 is effective for public companies for annual reporting periods beginning after December 15, 2018, and interim periods within those fiscal years. The guidance may be adopted prospectively or retrospectively and early adoption is permitted. The Company is currently assessing the impact the adoption of ASU 2016-02 will have on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718). The standard is intended to simplify several areas of accounting for share - based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. This ASU is effective for fiscal years beginning after December 15, 2016. The Company is currently assessing the impact the adoption of ASU 2016-09 will have on its consolidated financial statements. All other ASUs issued and not yet effective for the three months ended March 31, 2016, and through the date of this report, were assessed and determined to be either not applicable or are expected to have minimal impact on the Company's financial position or results of operations.

Acquisition of Stability Inc. (

Acquisition of Stability Inc. (Tables)	3 Months Ended
	Mar. 31, 2016
Business Combinations [Abstract]
Schedule of Acquisition of Stability Inc.	The actual purchase price has been preliminarily allocated as of March 31, 2016 (in thousands) and is subject to change: Cash paid at closing $ 6,000 Common stock issued (441,009 shares valued at $9.07 per share) 3,346 Assumed debt 1,771 Fair value of earn - out 33,240 Total fair value of purchase price $ 44,357 Net assets acquired: Debt-free working capital $ 2,382 Other assets, net 199 Property, plant and equipment 1,375 Deferred tax liability (9,899 ) Subtotal (5,943 ) Intangible assets: Customer relationships 8,920 Patents and know-how 10,230 Trade names and trademarks 1,000 Non compete agreements 2,700 Licenses and permits 760 Subtotal 23,610 Goodwill 26,690 Total Assets Purchased $ 44,357 Working capital and other assets were composed of the following (in thousands): Working capital: Cash $ 140 Prepaid Expenses and other current assets 100 Accounts Receivable 2,001 Federal and state taxes receivable 28 Inventory 10,977 Accounts payable and accrued expenses (10,864 ) Debt-free working capital $ 2,382 Current portion of long term debt $ (194 ) Long-term debt (560 ) Line of credit (932 ) Shareholder loan (85 ) Net working capital $ 611 Other assets: Other long term assets $ 199
Finite-Lived and Indefinite-Lived Intangible Assets Acquired	The intangible assets were assigned the following lives for amortization purposes: Estimated useful life (in years) Intangible asset: Customer relationships 12 Patents and know-how 20 Trade names and trademarks indefinite Non compete agreements 4 Licenses and permits 2
Business Acquisition Pro Forma Information	Unaudited pro forma information for the three months ended March 31, 2016 and 2015 (in thousands) is as follows: Three months ended March 31, 2016 2015 Revenues $ 53,915 $ 45,921 Net income $ 1,611 $ 2,879 Income per share, fully diluted $ 0.01 $ 0.03

Inventories (Tables)

Inventories (Tables)	3 Months Ended
	Mar. 31, 2016
Inventory Disclosure [Abstract]
Inventory	Inventories consisted of the following items as of March 31, 2016 , and December 31, 2015 (in thousands): March 31, 2016 December 31, 2015 Raw materials $ 1,127 $ 602 Work in process 4,786 3,850 Finished goods 12,658 3,405 Inventory, gross 18,571 7,857 Reserve for obsolescence (604 ) (397 ) Inventory, net $ 17,967 $ 7,460

Property and Equipment (Tables)

Property and Equipment (Tables)	3 Months Ended
	Mar. 31, 2016
Property, Plant and Equipment [Abstract]
Property and Equipment	Property and equipment consist of the following as of March 31, 2016 , and December 31, 2015 (in thousands): March 31, December 31, Leasehold improvements $ 3,233 $ 2,684 Lab and clean room equipment 7,528 4,564 Furniture and office equipment 5,730 4,577 Construction in progress 1,539 2,629 Property and equipment, gross 18,030 14,454 Less accumulated depreciation (5,907 ) (4,979 ) Property and equipment, net $ 12,123 $ 9,475

Intangible Assets and Royalty27

Intangible Assets and Royalty Agreement (Tables)	3 Months Ended
	Mar. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets Activity Summary	Intangible assets are summarized as follows (in thousands): Weighted March 31, 2016 December 31, 2015 Cost Cost Licenses (a) (b) (d) 7 years $ 1,769 $ 1,009 Patents & Know How (b) (d) 19 years 18,233 8,001 Customer & Supplier Relationships (b) (d) 13 years 12,681 3,761 Tradenames & Trademarks (b) (d) indefinite 2,008 1,008 Non - compete agreements (d) 4 years 2,700 — In Process Research & Development (b) n/a 25 25 Patents in Process (c) n/a 1,969 1,823 Total 39,385 15,627 Less Accumulated amortization (5,675 ) (4,864 ) Net $ 33,710 $ 10,763 (a) On January 29, 2007, the Company acquired a license from Shriners Hospitals for Children and University of South Florida Research Foundation, Inc. in the amount of $996,000 . Within 30 days after the receipt by the Company of approval by the FDA allowing the sale of the first licensed product, the Company is required to pay an additional $200,000 to the licensor. Due to its contingent nature, this amount is not recorded as a liability. The Company will also be required to pay a royalty of 3% on all commercial sales revenue from the licensed products. The Company is also obligated to pay a $50,000 minimum annual royalty payment over the life of the license. (b) On January 5, 2011, the Company acquired Surgical Biologics, LLC. As a result, the Company recorded intangible assets for Customer & Supplier Relationships of $3,761,000 , Patents & Know-How of $7,690,000 , Licenses of $13,000 , Tradenames & Trademarks of $1,008,000 and In-Process Research & Development of $25,000 . For the three months ended March 31, 2016, approximately $1,000 of costs associated with patents granted during the period were capitalized and included in Patents & Know-How subject to amortization. (c) Patents in Process consist of capitalized external legal and other registration costs in connection with internally developed tissue-based patents that are pending. Once issued, the costs associated with a given patent will be included in Patents & Know-How under intangible assets subject to amortization. (d) On January 13, 2016, the Company acquired Stability Inc. As a result, the Company recorded intangible assets for Patents & Know - How of $10,230,000 , Customer Relationships of $8,920,000 , Non - compete agreements of $2,700,000 , Tradenames & Trademarksy of $1,000,000 and Licenses of $760,000 .
Estimated Future Amortization Expense for Intangible Assets	Expected future amortization of intangible assets as of March 31, 2016 , is as follows (in thousands): Year ending December 31, Estimated Amortization Expense 2016 (a) $ 2,434 2017 3,156 2018 2,766 2019 2,766 2020 2,091 Thereafter 18,489 $ 31,702 (a) Estimated amortization expense for the year ending December 31, 2016, includes only amortization to be recorded after March 31, 2016 .

Net Income Per Share (Tables)

Net Income Per Share (Tables)	3 Months Ended
	Mar. 31, 2016
Earnings Per Share [Abstract]
Computation of Basic and Diluted Net Income per Share	The following table sets forth the computation of basic and diluted net income per share (in thousands except share data): Three Months Ended March 31, 2016 2015 Net income $ 1,197 $ 4,087 Denominator for basic earnings per share - weighted average shares 105,538,271 105,820,335 Effect of dilutive securities: Stock options, restricted stock, and warrants outstanding(a) 6,501,589 7,818,216 Denominator for diluted earnings per share - weighted average shares adjusted for dilutive securities 112,039,860 113,638,551 Income per common share - basic $ 0.01 $ 0.04 Income per common share - diluted $ 0.01 $ 0.04 (a) Securities outstanding that are included in the computation above, utilizing the treasury stock method are as follows: Three Months Ended March 31, 2016 2015 Outstanding Stock Options 5,981,250 7,392,355 Outstanding Warrants — 42,400 Restricted Stock Awards 520,339 383,461 6,501,589 7,818,216

Equity (Tables)

Equity (Tables)	3 Months Ended
	Mar. 31, 2016
Equity [Abstract]
Activity with respect to the stock options	Activity with respect to the stock options is summarized as follows: Number of Shares Weighted- Average Exercise Price Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding at January 1, 2016 14,019,629 $ 3.62 Granted — $ — Exercised (608,717 ) $ 1.87 Unvested options forfeited (120,563 ) $ 6.05 Vested options expired (12,497 ) $ 6.34 Outstanding at March 31, 2016 13,277,852 $ 3.69 6.3 $ 67,341,642 Vested at March 31, 2016 11,714,483 $ 3.24 6.1 $ 64,456,036 Vested or expected to vest at March 31, 2016 (a) 13,210,155 $ 3.67 6.3 $ 67,231,821
Following is a summary of stock options outstanding and exercisable	Following is a summary of stock options outstanding and exercisable at March 31, 2016 : Options Outstanding Options Exercisable Range of Exercise Prices Number outstanding Weighted-Average Remaining Contractual Term (in years) Weighted- Average Exercise Price Number Exercisable Weighted- Average Exercise Price $0.50 - $0.76 441,429 3.2 $ 0.72 441,429 $ 0.72 $0.87 - $1.35 4,431,970 5.4 1.19 4,431,970 1.19 $1.40 - $2.45 1,460,924 4.7 1.92 1,460,924 1.92 $2.66 - $3.99 894,120 6.6 3.06 894,120 3.06 $4.19 - $6.38 3,426,178 7.2 5.35 2,897,570 5.26 $6.45 - $9.78 2,512,065 7.9 7.29 1,556,144 7.24 $9.90- $10.99 111,166 8.6 10.44 32,326 10.51 13,277,852 6.3 $ 3.69 11,714,483 $ 3.24
Assumptions used in calculating the fair value of options using the Black-Scholes-Merton option-pricing model	The assumptions used in calculating the fair value of options using the Black-Scholes-Merton option-pricing model are set forth in the following table: Three Months Ended March 31, 2016 2015 Expected volatility n/a 56.8 - 58.1% Expected life (in years) n/a 6.0 Expected dividend yield n/a — Risk-free interest rate n/a 1.57% - 1.66%
Activity with respect to restricted stock awards	Activity with respect to restricted stock awards is summarized as follows: Number of Weighted-Average Grant Date Unvested at January 1, 2016 2,613,267 $9.14 Granted 1,576,579 8.18 Vested (644,903 ) 8.42 Forfeited (45,263 ) 8.87 Unvested at March 31, 2016 3,499,680 $8.84
Allocation of share-based compensation	For the three months ended March 31, 2016 and 2015 , the Company recognized stock-based compensation as follows (in thousands): Three Months Ended March 31, 2016 2015 Cost of sales $ 96 $ 95 Research and development 205 186 Selling, general and administrative 4,314 3,652 $ 4,615 $ 3,933

Supplemental disclosure of ca30

Supplemental disclosure of cash flow and non-cash investing and financing activities (Tables)	3 Months Ended
	Mar. 31, 2016
Supplemental Cash Flow Elements [Abstract]
Supplemental Disclosure of Cash Flow and Non-cash Investing and Financing Activities	Selected cash payments, receipts, and noncash activities are as follows (in thousands): Three Months Ended March 31, 2016 2015 Cash paid for interest, net $ 56 $ 14 Income taxes paid 139 363 Stock issuance of 441,009 shares in connection with acquisition 3,346 — Stock issuance of 20,406 and 11,321 shares in exchange for services performed, respectively 173 108

Contractual Commitments and C31

Contractual Commitments and Contingencies (Tables)	3 Months Ended
	Mar. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
Estimated Annual Lease, Royalty and Employment Agreement Expenses	The estimated annual lease payments, meeting space and charitable organization commitments are as follows (in thousands): 12-month period ended March 31 2017 $ 2,998 2018 2,246 2019 2,199 2020 1,742 Thereafter 765 $ 9,950

Basis of Presentation (Details)

Basis of Presentation (Details)	3 Months Ended
	Mar. 31, 2016segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of business segments	1

Significant Accounting Polici33

Significant Accounting Policies (Details) - USD ($) $ in Thousands	Jan. 13, 2016	Mar. 31, 2016	Mar. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Increase (decrease) in inventories		$ 264	$ (885)
Amortization of inventory fair value step - up		734	0
Patents and know-how
Finite-Lived Intangible Assets [Line Items]
Intangible assets, net of accumulated amortization		147	$ 201
Fair Value Adjustment to Inventory
Finite-Lived Intangible Assets [Line Items]
Increase (decrease) in inventories	$ 2,300	$ 1,600

Liquidity and Management's Pl34

Liquidity and Management's Plans (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015	Dec. 31, 2014
Liquidity and management's plans [Abstract]
Cash and cash equivalents	$ 15,117	$ 28,486	$ 38,696	$ 46,582
Total current assets	95,240	96,310
Total current liabilities	$ 28,842	$ 26,777

Acquisition of Stability Inc. -

Acquisition of Stability Inc. - Narrative (Details) - USD ($) $ in Thousands	Jan. 13, 2016	Mar. 31, 2016	Mar. 31, 2015
Business Acquisition [Line Items]
Amortization of intangible assets		$ 810	$ 233
Net income		1,611	2,879
Stability Biologics, LLC
Business Acquisition [Line Items]
Cash paid at closing	$ 6,000
Common stock issued	$ 3,346
Common stock issued (in shares)	441,009
Assumed debt	$ 1,771
Acquisition related costs	713
Fair value of earn - out	$ 33,240	$ 33,240
Fair Value Adjustment to Inventory
Business Acquisition [Line Items]
Net income			(1,038)
Pro Forma
Business Acquisition [Line Items]
Amortization of intangible assets			$ 577

Acquisition of Stability Inc.36

Acquisition of Stability Inc. - Preliminarily Allocation of Purchase Price (Details) - USD ($) $ / shares in Units, $ in Thousands	Jan. 13, 2016	Mar. 31, 2016	Dec. 31, 2015
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Goodwill		$ 30,730	$ 4,040
Stability Biologics, LLC
Business Combination, Consideration Transferred [Abstract]
Cash paid at closing	$ 6,000
Common stock issued (441,009 shares valued at $9.07 per share)	$ 3,346
Common stock issued (in shares)	441,009
Common stock issued, price per share (in dollars per share)	$ 9.07
Assumed debt	$ 1,771
Fair value of earn - out	33,240	$ 33,240
Total fair value of purchase price	44,357
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Debt-free working capital	2,382
Other assets, net	199
Property, plant and equipment	1,375
Deferred tax liability	(9,899)
Subtotal	(5,943)
Subtotal	23,610
Goodwill	26,690
Total Assets Purchased	44,357
Cash	140
Prepaid Expenses and other current assets	100
Accounts Receivable	2,001
Federal and state taxes receivable	28
Inventory	10,977
Accounts payable and accrued expenses	(10,864)
Debt-free working capital	2,382
Current portion of long term debt	(194)
Net working capital	611
Customer relationships | Stability Biologics, LLC
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Finite-lived intangible assets	8,920
Patents and know-how | Stability Biologics, LLC
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Finite-lived intangible assets	10,230
Non compete agreements | Stability Biologics, LLC
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Finite-lived intangible assets	2,700
Licenses and permits | Stability Biologics, LLC
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Finite-lived intangible assets	760
Trade names and trademarks | Stability Biologics, LLC
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Indefinite-lived intangible assets	1,000
Long-term debt | Stability Biologics, LLC
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Long-term debt	(560)
Line of credit | Stability Biologics, LLC
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Long-term debt	(932)
Shareholder loan | Stability Biologics, LLC
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Long-term debt	$ (85)

Acquisition of Stability Inc.37

Acquisition of Stability Inc. - Intangible Assets Acquired as Part of Acquisition (Details) - Stability Biologics, LLC	Jan. 13, 2016
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Estimated useful life	12 years
Patents and know-how
Finite-Lived Intangible Assets [Line Items]
Estimated useful life	20 years
Non compete agreements
Finite-Lived Intangible Assets [Line Items]
Estimated useful life	4 years
Licenses and permits
Finite-Lived Intangible Assets [Line Items]
Estimated useful life	2 years

Acquisition of Stability Inc.38

Acquisition of Stability Inc. - Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Business Combinations [Abstract]
Revenues	$ 53,915	$ 45,921
Net income	$ 1,611	$ 2,879
Income per share, fully diluted (in dollars per share)	$ 0.01	$ 0.03

Short Term Investments (Details

Short Term Investments (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Investment [Line Items]
Short term investments	$ 2,500	$ 3,000
Certificates of Deposit
Investment [Line Items]
Short term investments	$ 2,500	$ 3,000

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Inventory Disclosure [Abstract]
Raw materials	$ 1,127	$ 602
Work in process	4,786	3,850
Finished goods	12,658	3,405
Inventory, gross	18,571	7,857
Reserve for obsolescence	(604)	(397)
Inventory, net	$ 17,967	$ 7,460

Property and Equipment (Details

Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Property and equipment [Line Items]
Property and equipment, gross	$ 18,030		$ 14,454
Less accumulated depreciation	(5,907)		(4,979)
Property and equipment, net	12,123		9,475
Other liabilities	$ 895		1,148
Interest rate for leases, minimum (percent)	3.00%
Interest rate for leases, maximum (percent)	12.00%
Depreciation	$ 734	$ 354
Leasehold improvements
Property and equipment [Line Items]
Property and equipment, gross	3,233		2,684
Lab and clean room equipment
Property and equipment [Line Items]
Property and equipment, gross	7,528		4,564
Furniture and office equipment
Property and equipment [Line Items]
Property and equipment, gross	5,730		4,577
Construction in progress
Property and equipment [Line Items]
Property and equipment, gross	1,539		$ 2,629
Assets Held under Capital Leases
Property and equipment [Line Items]
Property and equipment, net	427
Other liabilities	103
Leasehold Improvements Paid by Others
Property and equipment [Line Items]
Property and equipment, net	$ 1,000

Intangible Assets and Royalty42

Intangible Assets and Royalty Agreement (Details) - USD ($)		Jan. 29, 2007	Mar. 31, 2016	Mar. 31, 2015	Jan. 13, 2016	Dec. 31, 2015	Jan. 05, 2011
Finite-Lived Intangible Assets [Line Items]
Total			$ 39,385,000			$ 15,627,000
Less Accumulated amortization			(5,675,000)			(4,864,000)
Net			33,710,000			10,763,000
Amortization of intangible assets			810,000	$ 233,000
Estimated future amortization expense [Abstract]
2,016	[1]		2,434,000
2,017			3,156,000
2,018			2,766,000
2,019			2,766,000
2,020			2,091,000
Thereafter			18,489,000
Net book value			$ 31,702,000
Licenses and permits
Finite-Lived Intangible Assets [Line Items]
Weighted average amortization lives			7 years
Gross carrying value	[2],[3]		$ 1,769,000			1,009,000
Licenses and permits | Shriners Hospitals for Children and University of South Florida Research Foundation, Inc.
Finite-Lived Intangible Assets [Line Items]
Acquisition price		$ 996,000
Maximum time of approval		30 days
Fair value of earn - out			$ 200,000
Contingent royalty to be paid to licensor (percent)			3.00%
Annual royalty payment		$ 50,000
Licenses and permits | Surgical Biologics, LLC
Finite-Lived Intangible Assets [Line Items]
Gross carrying value							$ 13,000
Patents & Know How
Finite-Lived Intangible Assets [Line Items]
Weighted average amortization lives			19 years
Gross carrying value	[3]		$ 18,233,000			8,001,000
Patents & Know How | Surgical Biologics, LLC
Finite-Lived Intangible Assets [Line Items]
Gross carrying value							7,690,000
Finite-Lived intangible assets, costs			$ 1,000
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Weighted average amortization lives			13 years
Gross carrying value	[3]		$ 12,681,000			3,761,000
Customer relationships | Surgical Biologics, LLC
Finite-Lived Intangible Assets [Line Items]
Gross carrying value							3,761,000
Tradenames & Trademarks
Finite-Lived Intangible Assets [Line Items]
Gross carrying value, indefinite lived	[3]		$ 2,008,000			1,008,000
Tradenames & Trademarks | Surgical Biologics, LLC
Finite-Lived Intangible Assets [Line Items]
Gross carrying value, indefinite lived							1,008,000
Non compete agreements
Finite-Lived Intangible Assets [Line Items]
Weighted average amortization lives			4 years
Gross carrying value			$ 2,700,000			0
In Process Research & Development
Finite-Lived Intangible Assets [Line Items]
Gross carrying value, indefinite lived	[3]		25,000			25,000
In Process Research & Development | Surgical Biologics, LLC
Finite-Lived Intangible Assets [Line Items]
Gross carrying value, indefinite lived							$ 25,000
Patents in Process
Finite-Lived Intangible Assets [Line Items]
Gross carrying value, indefinite lived	[4]		1,969,000			$ 1,823,000
Stability Biologics, LLC
Finite-Lived Intangible Assets [Line Items]
Fair value of earn - out			$ 33,240,000		$ 33,240,000
Stability Biologics, LLC | Licenses and permits
Finite-Lived Intangible Assets [Line Items]
Gross carrying value					760,000
Stability Biologics, LLC | Patents & Know How
Finite-Lived Intangible Assets [Line Items]
Gross carrying value					10,230,000
Stability Biologics, LLC | Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross carrying value					8,920,000
Stability Biologics, LLC | Tradenames & Trademarks
Finite-Lived Intangible Assets [Line Items]
Gross carrying value, indefinite lived					1,000,000
Stability Biologics, LLC | Non compete agreements
Finite-Lived Intangible Assets [Line Items]
Gross carrying value					$ 2,700,000
[1]	Estimated amortization expense for the year ending December 31, 2016, includes only amortization to be recorded after March 31, 2016.
[2]	On January 29, 2007, the Company acquired a license from Shriners Hospitals for Children and University of South Florida Research Foundation, Inc. in the amount of $996,000. Within 30 days after the receipt by the Company of approval by the FDA allowing the sale of the first licensed product, the Company is required to pay an additional $200,000 to the licensor. Due to its contingent nature, this amount is not recorded as a liability. The Company will also be required to pay a royalty of 3% on all commercial sales revenue from the licensed products. The Company is also obligated to pay a $50,000 minimum annual royalty payment over the life of the license.
[3]	On January 5, 2011, the Company acquired Surgical Biologics, LLC. As a result, the Company recorded intangible assets for Customer & Supplier Relationships of $3,761,000, Patents & Know-How of $7,690,000, Licenses of $13,000, Tradenames & Trademarks of $1,008,000 and In-Process Research & Development of $25,000. For the three months ended March 31, 2016, approximately $1,000 of costs associated with patents granted during the period were capitalized and included in Patents & Know-How subject to amortization.
[4]	Patents in Process consist of capitalized external legal and other registration costs in connection with internally developed tissue-based patents that are pending. Once issued, the costs associated with a given patent will be included in Patents & Know-How under intangible assets subject to amortization.

Credit Facility (Details)

Credit Facility (Details) - Revolving Credit Facility - Credit Agreement - USD ($)	Oct. 12, 2015	Mar. 31, 2016
Debt Instrument [Line Items]
Maximum borrowing capacity (up to)	$ 50,000,000
Uncommitted incremental facility (up to)	35,000,000
Debt issuance cost	$ 500,000
Debt term	3 years
Outstanding line of credit		$ 0
Minimum | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Basis spread on variable rate	1.50%
Maximum | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Basis spread on variable rate	2.25%

Net Income Per Share (Details)

Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015
Computation of basic and diluted net loss per share [Abstract]
Net income		$ 1,197	$ 4,087
Denominator for basic earnings per share - weighted average shares		105,538,271	105,820,335
Effect of dilutive securities: Stock options, restricted stock, and warrants outstanding (in shares)	[1]	6,501,589	7,818,216
Denominator for diluted earnings per share - weighted average shares adjusted for dilutive securities		112,039,860	113,638,551
Income per common share - basic (in dollars per share)		$ 0.01	$ 0.04
Income per common share - diluted (in dollars per share)		$ 0.01	$ 0.04
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)		6,501,589	7,818,216
Outstanding Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)		5,981,250	7,392,355
Outstanding Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)		0	42,400
Restricted Stock Awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)		520,339	383,461
[1]	Securities outstanding that are included in the computation above, utilizing the treasury stock method are as follows: Three Months Ended March 31, 2016 2015Outstanding Stock Options5,981,250 7,392,355Outstanding Warrants— 42,400Restricted Stock Awards520,339 383,461 6,501,589 7,818,216

Equity (Details)

Equity (Details)		3 Months Ended		23 Months Ended
		Mar. 31, 2016USD ($)plan$ / sharesshares	Mar. 31, 2015USD ($)shares	Mar. 31, 2016USD ($)$ / sharesshares	Dec. 31, 2015USD ($)	Dec. 31, 2014USD ($)	May. 12, 2014USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of share-based compensation plans | plan		3
Outstanding assumed options (in shares) | shares		70,000		70,000
Shares authorized (in shares) | shares		26,500,000		26,500,000
Common stock shares issued (in shares) | shares		20,406	11,321
Shares issued for services performed | $		$ 173,000	$ 108,000
Total unrecognized compensation expense | $		$ 4,501,863		$ 4,501,863
Number of shares [Roll forward]
Outstanding, beginning of period (in shares) | shares		14,019,629
Granted (in shares) | shares		0
Exercised (in shares) | shares		(608,717)
Unvested options forfeited (in shares) | shares		(120,563)
Vested options expired (in shares) | shares		(12,497)
Outstanding, end of period (in shares) | shares		13,277,852		13,277,852
Vested at end of period (in shares) | shares		11,714,483		11,714,483
Exercisable options, vested and expected to vest (in shares) | shares	[1]	13,210,155		13,210,155
Weighted-Average Exercise Price [Roll forward]
Outstanding, weighted average exercise price, beginning of period (in dollars per share)		$ 3.62
Granted, weighted average exercise price (in dollars per share)		0
Exercised, weighted average exercise price (in dollars per share)		1.87
Unvested options forfeited weighted-average exercise price (in dollars per share)		6.05
Vested options expired weighted-average exercise price (in dollars per share)		6.34
Outstanding, weighted average exercise price, end of period (in dollars per share)		3.69		$ 3.69
Vested at end of period weighted average exercise price (in dollars per share)		3.24		3.24
Vested and expected to vest, weighted average exercise price (in dollars per share)	[1]	$ 3.67		$ 3.67
Stock options, additional disclosures [Abstract]
Vested at end of period weighted average remaining contractual term		6 years 1 month 6 days
Vested and expected to vest, weighted average remaining contractual term	[1]	6 years 3 months 18 days
Outstanding intrinsic value | $		$ 67,341,642		$ 67,341,642
Vested at end of period aggregate intrinsic value | $		64,456,036		64,456,036
Vested and expected to vest, aggregate intrinsic value | $	[1]	67,231,821		$ 67,231,821
Exercised options, intrinsic value | $		$ 4,440,694
Number of outstanding options (in shares) | shares		13,277,852		13,277,852
Outstanding Options, weighted average remaining contractual term		6 years 3 months 18 days
Outstanding Options, weighted average exercise price (in dollars per share)		$ 3.69		$ 3.69
Number of exercisable options (in shares) | shares		11,714,483		11,714,483
Exercisable Options, weighted average exercise price (in dollars per share)		$ 3.24		$ 3.24
Fair value options valuation assumptions [Abstract]
Expected volatility Minimum			56.80%
Expected volatility Maximum			58.10%
Expected life (in years)			6 years
Expected dividend yield			0.00%
Risk-free interest rate Minimum			1.57%
Risk-free interest rate Maximum			1.66%
Share-based Compensation [Abstract]
Share-based compensation expense | $		$ 4,615,000	$ 3,933,000
Authorized share amount for repurchase | $					$ 60,000,000	$ 20,000,000	$ 10,000,000
Stock repurchase (in shares) | shares		415,252
Payments for repurchase of common stock, net | $		$ 3,518,000
Brokerage commissions | $		12,000
Shares repurchased, value | $		3,530,000	12,295,000	$ 49,244,000
Remaining authorizations under the repurchase program | $		$ 10,756,000		10,756,000
Shares reissued from the treasury | shares		2,529,444
Shares reissued from the treasury, value | $		$ 20,746,000
Cost of Products Sold
Share-based Compensation [Abstract]
Share-based compensation expense | $		96,000	95,000
Research and Development
Share-based Compensation [Abstract]
Share-based compensation expense | $		205,000	186,000
Selling, General and Administrative
Share-based Compensation [Abstract]
Share-based compensation expense | $		4,314,000	$ 3,652,000
Restricted Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized stock-based compensation related to time-based, nonvested restricted stock | $		$ 24,965,395		$ 24,965,395
Expenses expected to be recognized over a weighted-average period (in years)		2 years 3 months 18 days
Number of Shares
Beginning Balance | shares		2,613,267
Granted | shares		1,576,579
Vested | shares		(644,903)
Forfeited | shares		(45,263)
Ending Balance | shares		3,499,680		3,499,680
Weighted- Average Grant Date Fair Value
Beginning Balance (in dollars per share)		$ 9.14
Granted (in dollars per share)		8.18
Vested (in dollars per share)		8.42
Forfeited (in dollars per share)		8.87
Beginning Balance (in dollars per share)		$ 8.84		$ 8.84
Share-based Compensation [Abstract]
Shares paid for tax withholding | shares		81,594
$0.50 - $0.76
Stock options, additional disclosures [Abstract]
Exercise Price Range, lower range limit (in dollars per share)		$ 0.50
Exercise Price Range, upper range limit (in dollars per share)		$ 0.76
Number of outstanding options (in shares) | shares		441,429		441,429
Outstanding Options, weighted average remaining contractual term		3 years 2 months 12 days
Outstanding Options, weighted average exercise price (in dollars per share)		$ 0.72		$ 0.72
Number of exercisable options (in shares) | shares		441,429		441,429
Exercisable Options, weighted average exercise price (in dollars per share)		$ 0.72		$ 0.72
$0.87 - $1.35
Stock options, additional disclosures [Abstract]
Exercise Price Range, lower range limit (in dollars per share)		0.87
Exercise Price Range, upper range limit (in dollars per share)		$ 1.35
Number of outstanding options (in shares) | shares		4,431,970		4,431,970
Outstanding Options, weighted average remaining contractual term		5 years 4 months 24 days
Outstanding Options, weighted average exercise price (in dollars per share)		$ 1.19		$ 1.19
Number of exercisable options (in shares) | shares		4,431,970		4,431,970
Exercisable Options, weighted average exercise price (in dollars per share)		$ 1.19		$ 1.19
$1.40 - $2.45
Stock options, additional disclosures [Abstract]
Exercise Price Range, lower range limit (in dollars per share)		1.40
Exercise Price Range, upper range limit (in dollars per share)		$ 2.45
Number of outstanding options (in shares) | shares		1,460,924		1,460,924
Outstanding Options, weighted average remaining contractual term		4 years 8 months 12 days
Outstanding Options, weighted average exercise price (in dollars per share)		$ 1.92		$ 1.92
Number of exercisable options (in shares) | shares		1,460,924		1,460,924
Exercisable Options, weighted average exercise price (in dollars per share)		$ 1.92		$ 1.92
$2.66 - $3.99
Stock options, additional disclosures [Abstract]
Exercise Price Range, lower range limit (in dollars per share)		2.66
Exercise Price Range, upper range limit (in dollars per share)		$ 3.99
Number of outstanding options (in shares) | shares		894,120		894,120
Outstanding Options, weighted average remaining contractual term		6 years 7 months 6 days
Outstanding Options, weighted average exercise price (in dollars per share)		$ 3.06		$ 3.06
Number of exercisable options (in shares) | shares		894,120		894,120
Exercisable Options, weighted average exercise price (in dollars per share)		$ 3.06		$ 3.06
$4.19 - $6.38
Stock options, additional disclosures [Abstract]
Exercise Price Range, lower range limit (in dollars per share)		4.19
Exercise Price Range, upper range limit (in dollars per share)		$ 6.38
Number of outstanding options (in shares) | shares		3,426,178		3,426,178
Outstanding Options, weighted average remaining contractual term		7 years 2 months 12 days
Outstanding Options, weighted average exercise price (in dollars per share)		$ 5.35		$ 5.35
Number of exercisable options (in shares) | shares		2,897,570		2,897,570
Exercisable Options, weighted average exercise price (in dollars per share)		$ 5.26		$ 5.26
$6.45 - $9.78
Stock options, additional disclosures [Abstract]
Exercise Price Range, lower range limit (in dollars per share)		6.45
Exercise Price Range, upper range limit (in dollars per share)		$ 9.78
Number of outstanding options (in shares) | shares		2,512,065		2,512,065
Outstanding Options, weighted average remaining contractual term		7 years 10 months 24 days
Outstanding Options, weighted average exercise price (in dollars per share)		$ 7.29		$ 7.29
Number of exercisable options (in shares) | shares		1,556,144		1,556,144
Exercisable Options, weighted average exercise price (in dollars per share)		$ 7.24		$ 7.24
$9.90- $10.99
Stock options, additional disclosures [Abstract]
Exercise Price Range, lower range limit (in dollars per share)		9.90
Exercise Price Range, upper range limit (in dollars per share)		$ 10.99
Number of outstanding options (in shares) | shares		111,166		111,166
Outstanding Options, weighted average remaining contractual term		8 years 7 months 6 days
Outstanding Options, weighted average exercise price (in dollars per share)		$ 10.44		$ 10.44
Number of exercisable options (in shares) | shares		32,326		32,326
Exercisable Options, weighted average exercise price (in dollars per share)		$ 10.51		$ 10.51
Assumed 2006 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock shares issued (in shares) | shares		20,406
Shares issued for services performed | $		$ 173,000
[1]	Includes forfeiture adjusted unvested shares.

Income taxes (Details)

Income taxes (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Income Tax Contingency [Line Items]
Effective tax rate	15.20%	3.40%
Effective income tax rate increase (decrease), amount	$ 350
Effective income tax rate increase (decrease), percent	11.80%
Change in valuation allowance				$ (15,400)
Forecast
Income Tax Contingency [Line Items]
Effective tax rate			40.40%

Supplemental disclosure of ca47

Supplemental disclosure of cash flow and non-cash investing and financing activities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Supplemental Cash Flow Elements [Abstract]
Cash paid for interest, net	$ 56	$ 14
Income taxes paid	139	363
Stock issuance of 441,009 shares in connection with acquisition	$ 3,346	0
Shares issued in conjunction with acquisition (in shares)	441,009
Stock issuance of 20,406 and 11,321 shares in exchange for services performed, respectively	$ 173	$ 108
Shares issued for services performed (in shares)	20,406	11,321

Contractual Commitments and C48

Contractual Commitments and Contingencies (Details) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2016USD ($)claim	Mar. 31, 2015USD ($)	Dec. 31, 2015	Dec. 30, 2015term	Dec. 22, 2015term	Oct. 02, 2015term	Aug. 18, 2015claim	Jul. 10, 2015claim	Jun. 29, 2015claim
Estimated annual lease, royalty, and employment agreement expenses [Abstract]
2,017	$ 2,998
2,018	2,246
2,019	2,199
2,020	1,742
Thereafter	765
Total Contractual commitments	$ 9,950
Loss Contingencies [Line Items]
Lessee expiration period (years)	6 years
Rent expense	$ 423	$ 284
Sales Revenue, Net | Product Concentration Risk
Loss Contingencies [Line Items]
Percentage of revenue			12.00%
Standby Letters of Credit
Loss Contingencies [Line Items]
Standby letters of credit	$ 235
Pending Litigation
Loss Contingencies [Line Items]
Number of patent challenged grounds | claim	4
Pending Litigation | Bone Bank Action
Loss Contingencies [Line Items]
Number of patent challenged grounds | claim								5	7
Number of pending disputed claim terms | term						1
Opinion allowing a review of patent | claim								2
Pending Litigation | Liventa Action
Loss Contingencies [Line Items]
Number of pending disputed claim terms | term				1	30
Pending Litigation | Liventa Action, 701 Patent
Loss Contingencies [Line Items]
Number of patent challenged grounds | claim							6
Pending Litigation | Liventa Action, 437 Patent
Loss Contingencies [Line Items]
Number of patent challenged grounds | claim							7
Opinion allowing a review of patent | claim							1

Schedule II - Valuation and Q49

Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Allowance for doubtful accounts
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at Beginning of Period	$ 3,270	$ 1,750
Additions charged to Expense or Revenue	602	260
Deductions and write-offs	0	0
Balance at End of Period	3,872	2,010
Allowance for product returns
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at Beginning of Period	1,262	841
Additions charged to Expense or Revenue	1,300	709
Deductions and write-offs	(911)	(606)
Balance at End of Period	1,651	944
Allowance for obsolescence
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at Beginning of Period	397	527
Additions charged to Expense or Revenue	235	130
Deductions and write-offs	(28)	(105)
Balance at End of Period	$ 604	$ 552