Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2023 | May 01, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Document Transition Report | false | |
Entity Registrant Name | ORGANOGENESIS HOLDINGS INC. | |
Entity Central Index Key | 0001661181 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Trading Symbol | ORGO | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Address, State or Province | MA | |
Title of 12(b) Security | Class A Common Stock, $0.0001 par value | |
Security Exchange Name | NASDAQ | |
Document Quarterly Report | true | |
Entity Common Stock, Shares Outstanding | 131,261,833 | |
Entity File Number | 001-37906 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 85 Dan Road | |
Entity Address, City or Town | Canton | |
Entity Address, Postal Zip Code | 02021 | |
Entity Tax Identification Number | 98-1329150 | |
City Area Code | 781 | |
Local Phone Number | 575-0775 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 88,694 | $ 102,478 |
Restricted cash | 721 | 812 |
Accounts receivable, net | 92,021 | 89,450 |
Inventory, net | 25,539 | 24,783 |
Prepaid expenses and other current assets | 9,847 | 5,086 |
Total current assets | 216,822 | 222,609 |
Property and equipment, net | 106,637 | 102,463 |
Intangible assets, net | 19,560 | 20,789 |
Goodwill | 28,772 | 28,772 |
Operating lease right-of-use assets, net | 42,839 | 43,192 |
Deferred tax asset, net | 30,014 | 30,014 |
Other assets | 1,463 | 1,520 |
Total assets | 446,107 | 449,359 |
Current liabilities: | ||
Current portion of term loan | 5,009 | 4,538 |
Current portion of operating lease obligations | 12,160 | 11,708 |
Accounts payable | 30,310 | 32,330 |
Accrued expenses and other current liabilities | 28,597 | 26,447 |
Total current liabilities | 76,076 | 75,023 |
Term loan, net of current portion | 64,860 | 66,231 |
Operating lease obligations, net of current portion | 40,325 | 41,314 |
Other liabilities | 1,145 | 1,122 |
Total liabilities | 182,406 | 183,690 |
Commitments and contingencies (Note 18) | ||
Stockholders' equity: | ||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued | ||
Common stock, $0.0001 par value; 400,000,000 shares authorized; 131,954,935 and 131,647,677 shares issued; 131,226,387 and 130,919,129 shares outstanding at March 31, 2023 and December 31, 2022, respectively. | 13 | 13 |
Additional paid-in capital | 312,573 | 310,957 |
Accumulated deficit | (48,885) | (45,301) |
Total stockholders' equity | 263,701 | 265,669 |
Total liabilities and stockholders' equity | $ 446,107 | $ 449,359 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 131,954,935 | 131,647,677 |
Common stock, shares outstanding | 131,226,387 | 130,919,129 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Net revenue | $ 107,642 | $ 97,117 |
Cost of goods sold | 26,607 | 25,080 |
Gross profit | 81,035 | 72,037 |
Operating expenses: | ||
Selling, general and administrative | 73,834 | 63,578 |
Research and development | 11,202 | 8,587 |
Total operating expenses | 85,036 | 72,165 |
Loss from operations | (4,001) | (128) |
Other expense, net: | ||
Interest expense | (649) | (737) |
Other income (expense), net | 23 | (3) |
Total other expense, net | (626) | (740) |
Net loss before income taxes | (4,627) | (868) |
Income tax benefit (expense) | 1,658 | (45) |
Net loss | $ (2,969) | $ (913) |
Net loss, per share: | ||
Basic | $ (0.02) | $ (0.01) |
Diluted | $ (0.02) | $ (0.01) |
Weighted-average common shares outstanding | ||
Basic | 131,083,841 | 128,788,721 |
Diluted | 131,083,841 | 128,788,721 |
CONSOLIDATED STATEMENTS STOCKHO
CONSOLIDATED STATEMENTS STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Cumulative Effect of Adoption | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Deficit Cumulative Effect of Adoption |
Balance at Dec. 31, 2021 | $ 241,335 | $ 13 | $ 302,155 | $ (60,833) | ||
Balance (in shares) at Dec. 31, 2021 | 128,680,192 | |||||
Exercise of stock options | 291 | 291 | ||||
Exercise of stock options (in shares) | 86,121 | |||||
Vesting of RSUs, net of shares surrendered to pay taxes | (488) | (488) | ||||
Vesting of RSUs, net of shares surrendered to pay taxes (in shares) | 120,871 | |||||
Stock-based compensation expense | 1,303 | 1,303 | ||||
Net income (loss) | (913) | (913) | ||||
Balance at Mar. 31, 2022 | 241,528 | $ 13 | 303,261 | (61,746) | ||
Balance (in shares) at Mar. 31, 2022 | 128,887,184 | |||||
Balance at Dec. 31, 2022 | $ 265,669 | $ (615) | $ 13 | 310,957 | (45,301) | $ (615) |
Balance (in shares) at Dec. 31, 2022 | 130,919,129 | 130,919,129 | ||||
Accounting Standards Update [Extensible Enumeration] | ASC 2016-13 | |||||
Vesting of RSUs, net of shares surrendered to pay taxes | $ (298) | (298) | ||||
Vesting of RSUs, net of shares surrendered to pay taxes (in shares) | 307,258 | |||||
Stock-based compensation expense | 1,914 | 1,914 | ||||
Net income (loss) | (2,969) | (2,969) | ||||
Balance at Mar. 31, 2023 | $ 263,701 | $ 13 | $ 312,573 | $ (48,885) | ||
Balance (in shares) at Mar. 31, 2023 | 131,226,387 | 131,226,387 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (2,969) | $ (913) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation | 2,694 | 1,347 |
Amortization of intangible assets | 1,230 | 1,221 |
Reduction in the carrying value of right-of-use assets | 1,939 | 1,847 |
Non-cash interest expense | 107 | 108 |
Deferred interest expense | 122 | 151 |
Provision recorded for credit losses | 243 | 40 |
Loss on disposal of property and equipment | 63 | |
Adjustment for excess and obsolete inventories | 1,407 | 2,205 |
Stock-based compensation | 1,914 | 1,303 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (3,429) | 2,942 |
Inventory | (2,163) | 80 |
Prepaid expenses and other current assets | (4,774) | (2,165) |
Operating leases | (2,122) | (1,751) |
Accounts payable | (1,390) | (1,186) |
Accrued expenses and other current liabilities | 2,029 | (3,828) |
Other liabilities | 22 | 10 |
Net cash provided by (used in) operating activities | (5,077) | 1,411 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (7,562) | (6,672) |
Net cash used in investing activities | (7,562) | (6,672) |
Cash flows from financing activities: | ||
Payments of term loan under the 2021 Credit Agreement | (938) | (469) |
Payments of withholding taxes in connection with RSUs vesting | (298) | (488) |
Proceeds from the exercise of stock options | 291 | |
Principal repayments of finance lease obligations | (99) | |
Net cash used in financing activities | (1,236) | (765) |
Change in cash, cash equivalents, and restricted cash | (13,875) | (6,026) |
Cash, cash equivalents, and restricted cash, beginning of period | 103,290 | 114,528 |
Cash, cash equivalents, and restricted cash, end of period | 89,415 | 108,502 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 1,271 | 627 |
Cash paid for income taxes | 128 | 4 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Purchases of property and equipment included in accounts payable and accrued expenses | 1,986 | 1,869 |
Right-of-use assets obtained through operating lease obligations | $ 1,586 | $ 171 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Basis of Presentation | 1. Nature of Business and Basis of Presentation Organogenesis Holdings Inc. (“ORGO” or the “Company”) is a leading regenerative medicine company focused on the development, manufacture, and commercialization of solutions for the Advanced Wound Care and Surgical & Sports Medicine markets. Several of the existing and pipeline products in the Company’s portfolio have Premarket Application (“PMA”) approval, or Premarket Notification 510(k) clearance from the United States Food and Drug Administration (“FDA”). The Company’s customers include hospitals, wound care centers, government facilities, ambulatory service centers (“ASCs”) and physician offices. The Company has one operating and reportable segment. COVID-19 pandemic On April 10, 2023, President Biden signed a joint congressional resolution ending the national emergency related to COVID-19 and the Biden Administration previously announced it will end the public health emergency declaration related to COVID-19 on May 11, 2023. While the COVID-19 pandemic has not materially adversely affected the Company’s financial results and business operations through March 31, 2023 , the COVID-19 pandemic continues to present risks to the Company, and the Company is unable to predict the impact that COVID-19 (including the emergence of new variants) will have on its financial position and operating results in the future. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies The Company’s significant accounting policies are described in Note “2. Significant Accounting Policies” to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “Annual Report”). There have been no material changes to the significant accounting policies previously disclosed in the Annual Report. Unaudited Interim Financial Information The accompanying unaudited consolidated financial statements have been prepared by management in accordance with generally accepted accounting principles in the United States (“GAAP”), and the rules and regulations of the SEC regarding interim financial reporting. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. While we believe that the disclosures presented are adequate in order to make the information not misleading, these unaudited quarterly financial statements should be read in conjunction with the financial statements and notes thereto included in the Annual Report. The unaudited consolidated financial statements include the accounts and results of operations of Organogenesis Holdings Inc. and its wholly-owned subsidiaries, Organogenesis Inc., Organogenesis GmbH (a Switzerland corporation) and Prime Merger Sub, LLC. All intercompany balances and transactions have been eliminated in consolidation. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. In the opinion of management, the unaudited consolidated financial statements reflect all adjustments of a normal recurring nature necessary for a fair presentation of the Company’s financial position, results of operations and cash flows at the dates and for the periods indicated. The results for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 , any other interim periods, or any future years or periods. 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, disclosure of contingent assets and liabilities at the date of the financial statements and the reported results of operations during the reporting periods. In preparing the consolidated financial statements, the estimates and assumptions that management consider to be significant and that present the greatest amount of uncertainty include: revenue recognition; sales returns and credit losses; inventory reserve; recognition and measurement of current and deferred income tax assets and liabilities; the assessment of recoverability of long-lived and indefinite lived assets (including intangible assets); assessing impairment of goodwill; valuation of assets and liabilities that use unobservable inputs; and the valuation and recognition of stock-based compensation. Actual results and outcomes may differ significantly from those estimates and assumptions. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents. The Company invests its cash equivalents in highly rated money market funds. Deposits may exceed federally insured limits, and the Company is exposed to credit risk on deposits in the event of default by the financial institutions to the extent account balances exceed the amount insured by the Federal Deposit Insurance Corporation (“FDIC”). However, the Company mitigates the risk by sweeping cash daily overnight and diversifies among financial institutions to reduce such exposure. Recently Issued Accounting Pronouncements Adopted Credit Loss In June 2016, the FASB issued ASU 2016-13 , Financial Instruments—Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments . The FASB subsequently issued a few amendments to ASU 2016-13. ASU 2016-13 and all the related updates replace the incurred loss impairment methodology previously required under generally accepted accounting principles, with an expected loss methodology that requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company adopted the standard as of January 1, 2023 using the modified retrospective method. Under this method, the Company applied the new credit loss measurement guidance to trade accounts receivable, the only financial asset of the Company that is impacted by the ASU and the related updates. The Company recorded a net reduction of $ 615 to the opening balance of retained earnings as the cumulative effect of initially applying the standard. Results for reporting periods beginning after January 1, 2023 are presented in accordance with Topic 326 . Prior period amounts have not been restated and are reported in accordance with legacy GAAP requirements. |
Acquisition
Acquisition | 3 Months Ended |
Mar. 31, 2023 | |
Business Combinations [Abstract] | |
Acquisition | 3. Acquisition On September 17, 2020 (the “Acquisition Date”), the Company acquired certain assets and assumed certain liabilities of CPN Biosciences, LLC (“CPN”) pursuant to an asset purchase agreement dated July 24, 2020. CPN offered a physician office management solution and advanced wound care products. The aggregate consideration amounted to $ 19,024 as of the Acquisition Date, consisting of $ 6,427 in cash, 2,151,438 shares of the Company’s Class A common stock with a fair value of $ 8,815 , and contingent consideration (the “Earnout”) with a fair value of $ 3,782 . On the Acquisition Date, the Company paid $ 5,820 in cash and issued 1,947,953 shares of the Company’s Class A common stock. The remaining consideration of $ 1,436 was held back and was released in April 2022 by the Company paying $ 608 in cash and issuing 203,485 shares of the Company’s Class A common stock to the former equity holders of CPN. The Company was obligated to pay the Earnout to CPN’s former equity holders if CPN’s legacy product revenue in the Earnout Period (July 1, 2021 to June 30, 2022), exceeded CPN’s 2019 revenue. The amount of the Earnout, if any, would be equal to 70 % of the excess and would be payable 60 days after the expiration of the Earnout Period. As of the conclusion of the Earnout Period on June 30, 2022, the Company calculated the Earnout liability to be $ 0 . During the Earnout Period, the Company assessed the fair value of the Earnout liability at each reporting period. Subsequent changes in the estimated fair value of the liability were reflected in earnings until the liability was settled. See Note “5. Fair Value Measurement of Financial Assets and Liabilities.” |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 4. Revenue The Company generates revenue through the sale of Advanced Wound Care and Surgical & Sports Medicine products. There is a single performance obligation in all of the Company’s contracts, which is the Company’s promise to transfer the Company’s products to customers based on specific payment and shipping terms in the arrangement. Product revenue is recognized when a customer obtains control of the Company’s products which occurs at a point in time and may be upon shipment, procedure date, or delivery, based on the terms of the contract. Revenue is recorded net of a reserve for returns, discounts and Group Purchasing Organization (“GPO”) rebates, which represent a direct reduction to the revenue recognized. These reductions are accrued at the time revenue is recognized, based upon historical experience and specific circumstances. For the three months ended March 31, 2023 and 2022, the Company recorded GPO fees of $ 1,424 and $ 1,619 , respectively, as a direct reduction of revenue. The following tables set forth revenue by product category: Three Months Ended 2023 2022 Advanced Wound Care $ 100,917 $ 90,090 Surgical & Sports Medicine 6,725 7,027 Total net revenue $ 107,642 $ 97,117 For all periods presented, net revenue generated outside the United States represented less than 1 % of total net revenue. |
Fair Value Measurement of Finan
Fair Value Measurement of Financial Assets and Liabilities | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement of Financial Assets and Liabilities | 5. Fair Value Measurement of Financial Assets and Liabilities Earnout Liability In connection with accounting for the CPN acquisition on September 17, 2020, the Company recorded an Earnout liability of $ 3,782 on the Acquisition Date, representing the fair value of contingent consideration payable upon the achievement of a certain revenue target. The Earnout liability was classified as a Level 3 measurement within the fair value hierarchy for which fair value was derived from inputs that were unobservable and significant to the overall fair value measurement. The fair value of such Earnout liability was estimated using a Monte Carlo simulation model that utilized key assumptions including forecasted revenues and volatilities of the underlying financial metrics during the Earnout Period that ended on June 30, 2022. Before its settlement, the Company assessed the fair value of the Earnout liability at each reporting period. Any subsequent changes in the estimated fair value of the liability were reflected in selling, general and administrative expenses until the liability was settled. Since September 30, 2021, the Earnout liability remained at $ 0 through its settlement. For more information about the Earnout liability, refer to Note “3. Acquisition.” The Company did not have any financial assets and liabilities measured at fair value on a non-recurring basis as of March 31, 2023 and December 31, 2022 . |
Accounts Receivable, Net
Accounts Receivable, Net | 3 Months Ended |
Mar. 31, 2023 | |
Receivables [Abstract] | |
Accounts Receivable, Net | 6. Accounts Receivable, Net Accounts receiva ble consisted of the following: March 31, December 31, 2023 2022 Accounts receivable $ 98,942 $ 95,812 Less — allowance for credit losses ( 6,921 ) ( 6,362 ) $ 92,021 $ 89,450 The Company ’s allowance for credit losses was comprised of the following: Three Months Ended 2023 2022 Balance at beginning of period $ 6,362 $ 5,153 Cumulative effect of adopting ASU 2016-13 615 - Additions 243 40 Write-offs ( 299 ) ( 66 ) Balance at end of period $ 6,921 $ 5,127 |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | 7. Inventories Inventories, net of related reserves for excess and obsolescence, consisted of the following: March 31, December 31, 2023 2022 Raw materials $ 13,126 $ 12,282 Work in process 1,158 1,022 Finished goods 11,255 11,479 $ 25,539 $ 24,783 Raw materials include various components used in the Company’s manufacturing process. The Company’s excess and obsolete inventory review process includes analysis of sales forecasts and historical sales as compared to inventory level, and working with operations to maximize recovery of excess inventory. During the three months ended March 31, 2023 and 2022, the Company charged $ 1,407 and $ 2,205 , respectively, for inventory excess and obsolescence to cost of goods sold within the consolidated statements of operations. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Prepaid Expenses and Other Current Assets | 8. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist ed of the following: March 31, December 31, Subscriptions $ 5,334 $ 4,211 Conferences and marketing expenses 1,277 106 Deposits 652 635 Insurance 2,519 54 Other 65 80 $ 9,847 $ 5,086 Deposits are funds held by vendors which are expected to be released within twelve months and therefore they are recorded as current assets. |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 9. Property and Equipment, Net Property and equipme nt consisted of the following: March 31, December 31, 2023 2022 Leasehold improvements $ 52,369 $ 37,607 Buildings 4,943 4,943 Furniture, computers and equipment 58,282 57,147 115,594 99,697 Accumulated depreciation ( 65,490 ) ( 62,798 ) Construction in progress 56,533 65,564 $ 106,637 $ 102,463 Depreciation expense was $ 2,694 and $ 1,347 for the three months ended March 31, 2023 and 2022, respectively. Construction in progress primarily represents unfinished construction work on a purchased building located on the Company’s Canton, Massachusetts campus and improvements at the Company’s leased facilities in Canton and Norwood, Massachusetts. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 10. Goodwill and Intangible Assets Goodwill was $ 28,772 as of March 31, 2023 and December 31, 2022. Identifiable intangible assets consisted of the following as of March 31, 2023: Original Accumulated Net Book Cost Amortization Value Developed technology $ 32,620 $ ( 22,040 ) $ 10,580 Trade names and trademarks 2,080 ( 1,442 ) 638 Customer relationships 10,690 ( 2,717 ) 7,973 Independent sales agency network 4,500 ( 4,500 ) - Patent 7,623 ( 7,623 ) - Non-compete agreements 1,010 ( 641 ) 369 Total $ 58,523 $ ( 38,963 ) $ 19,560 Identifiable intangible assets consisted of the following as of December 31, 2022: Original Accumulated Net Book Cost Amortization Value Developed technology $ 32,620 $ ( 21,164 ) $ 11,456 Trade names and trademarks 2,080 ( 1,393 ) 687 Customer relationship 10,690 ( 2,450 ) 8,240 Independent sales agency network 4,500 ( 4,500 ) - Patent 7,623 ( 7,623 ) - Non-compete agreements 1,010 ( 604 ) 406 Total $ 58,523 $ ( 37,734 ) $ 20,789 Amortization of intangible assets, calculated on a straight-line basis or using a n accelerated method, was $ 1,230 and $ 1,221 for the three months ended March 31, 2023 and 2022 , respectively. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | 11. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: March 31, December 31, 2023 2022 Personnel costs $ 22,049 $ 17,113 Royalties 3,041 3,320 Accrued but unpaid lease obligations and interest 1,960 2,463 Accrued taxes 771 2,625 Other 776 926 $ 28,597 $ 26,447 The accrued but unpaid lease obligations and the interest accrual on these obligations are related to the buildings in Canton, Massachusetts. See Note “17. Leases.” |
Restructuring
Restructuring | 3 Months Ended |
Mar. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | 12. Restructuring In order to reduce the Company’s cost structure and improve operating efficiency, the Company consolidates its manufacturing operations in various locations into Massachusetts facilities. On October 21, 2020, the Company committed to a plan to restructure its workforce and operations in its La Jolla, California facilities. The restructuring involved 65 em ployees and was substantially completed as of December 31, 2021, with certain facility and storage activities continuing through 2024. On March 9, 2022, the Company committed to a plan to restructure its workforce and operations in its Birmingham, Alabama facilities. The restructuring involved 24 employees and was substantially completed as of December 31, 2022 , with minimal expenses to be incurred in 2023. On February 3, 2023, the Company committed to a plan to restructure its workforce to increase productivity and enhance profitability. The reduction in force reduced the Company’s headc ount by 71 employees, o r approximately 7 % of all employees. The Company incurred a total charge of $ 1,817 in th e first quarter of 2023 in connection with the restructuring, primarily consisting of severance payments. As a result of the restructuring activiti es, the Company incurred a pre-tax charge of $ 1,908 and $ 264 during the three months ended March 31, 2023 and 2022, respectively. These charges were included in selling, general and administrative expenses in the consolidated statements of operations. The liability related to the restructuring activitie s was $ 1,087 and $ 1,192 a s of March 31, 2023 and December 31, 2022, respectively, and w as included in accrued expenses and other current liabilities in the consolidated balance sheets. The following table provides a roll-forward of the restructuring liabilities. Employee Other Total Liability balance as of December 31, 2022 $ 1,010 $ 182 $ 1,192 Expenses 1,817 91 1,908 Payments ( 1,740 ) ( 273 ) ( 2,013 ) Liability balance as of March 31, 2023 $ 1,087 $ - $ 1,087 Employee Other Total Liability balance as of December 31, 2021 $ 2,517 $ 651 $ 3,168 Expenses 115 149 264 Payments ( 2,517 ) ( 783 ) ( 3,300 ) Liability balance as of March 31, 2022 $ 115 $ 17 $ 132 |
Long-Term Debt Obligations
Long-Term Debt Obligations | 3 Months Ended |
Mar. 31, 2023 | |
Long-term Debt, Unclassified [Abstract] | |
Long-Term Debt Obligations | 13. Long-Term Debt Obligations Long-term debt obligations consisted of the following: March 31, December 31, 2023 2022 Line of credit $ - $ - Term loan 70,313 71,250 Less debt discount and debt issuance cost ( 444 ) ( 481 ) Term loan, net of debt discount and debt issuance cost $ 69,869 $ 70,769 2021 Credit Agreement In August 2021, the Company, as borrower, its subsidiaries, as guarantors, and Silicon Valley Bank ( “SVB”), and the several other lenders thereto (collectively, the “Lenders”) entered into a credit agreement, as amended (the “2021 Credit Agreement”), providing for a term loan facility not to exceed $ 75,000 (the “Term Loan Facility”) and a revolving credit facility not to exceed $ 125,000 (the “Revolving Facility”). The Company’s obligations to the Lenders are secured by substantially all of the Company’s assets, including intellectual property. Capitalized terms used herein and not otherwise defined are defined as set forth in the 2021 Credit Agreement. Advances made under the 2021 Credit Agreement may be either SOFR Loans or ABR Loans, at the Company’s option. For SOFR Loans, the interest rate is a per annum interest rate equal to the Adjusted Term SOFR plus an Applicable Margin between 2.00 % to 3.25 % based on the Total Net Leverage Ratio. For ABR Loans, the interest rate is equal to (1) the highest of (a) the Wall Street Journal Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) the Adjusted Term SOFR rate plus 1.0%, plus (2) an Applicable Margin between 1.00 % to 2.25 % based on the Total Net Leverage Ratio. The 2021 Credit Agreement requires the Company to make consecutive quarterly installment payments equal to the following: (a) from September 30, 2021 through and including June 30, 2022, $ 469 ; (b) from September 30, 2022 through and including June 30, 2023, $ 938 ; (c) from September 30, 2023 through and including June 30, 2025, $ 1,406 and (d) from September 30, 2025 and the last day of each quarter thereafter until August 6, 2026 (the “Term Loan Maturity Date”), $ 1,875 . The remaining principal balance of $ 50,625 is also due on the Term Loan Maturity Date. The Company may prepay the Term Loan Facility. Once repaid, amounts borrowed under the Term Loan Facility may not be re-borrowed. The Company must pay in arrears, on the first day of each quarter prior to August 6, 2026 (the “Revolving Termination Date”) and on the Revolving Termination Date, a fee for the Company’s non-use of available funds (the “Commitment Fee”). The Commitment Fee rate is between 0.25 % to 0.45 % based on the Total Net Leverage Ratio. The Company may elect to reduce or terminate the Revolving Facility in its entirety at any time by repaying all outstanding principal and unpaid accrued interest. Under the 2021 Credit Agreement, the Company is required to comply with certain financial covenants including the Consolidated Fixed Charge Coverage Ratio and Consolidated Total Net Leverage Ratio, tested quarterly. In addition, the Company is also required to make representations and warranties and comply with certain non-financial covenants that are customary in loan agreements of this type, including restrictions on the payment of dividends, repurchase of stock, incurrence of indebtedness, dispositions and acquisitions. The C ompany recorded debt issuance costs and related fees of $ 604 in connection with entering into the Term Loan Facility, as a reduction of the carrying value of the term loan on the Company’s consolidated balance sheets. In connection with entering into the Revolving Facility, the Company recorded debt issuance costs and related fees of $ 1,223 as other assets. Both of these costs are being amortized to interest expense through the maturity date of the facilities. As of March 31, 2023 and December 31, 2022, the Company had outstanding borrowings of $ 70,313 and $ 71,250 under the Term Loan Facility, respectively, and $ 0 under the Revolving Facility with $ 125,000 available for future revolving borrowings. Future payments of the 2021 Credit Agreement, as of March 31, 2023, are as follows for the calendar years ending December 31: 2023 3,750 2024 5,625 2025 6,563 2026 54,375 Total $ 70,313 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | 14. Stockholders’ Equity Common Stock As of March 31, 2023 , the issued shares of Class A common stock include 728,548 treasury shares that were reacquired in connection with the redemption of redeemable shares in March 2019. As of March 31, 2023 and December 31, 2022, the Company reserved the following shares of Class A common stock for future issuance: March 31, December 31, 2023 2022 Shares reserved for issuance for outstanding options 9,456,596 5,931,742 Shares reserved for issuance for outstanding restricted stock units 4,111,720 1,381,500 Shares reserved for issuance for future grants 4,831,088 11,394,962 Total shares of authorized common stock reserved for future issuance 18,399,404 18,708,204 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 15. Stock-Based Compensation Stock Incentive Plans-the 2018 Plan On November 28, 2018, the Board of Directors of the Company adopted, and on December 10, 2018 the Company’s stockholders approved, the Organogenesis 2018 Equity and Incentive Plan (the “2018 Plan”). The purposes of the 2018 Plan are to provide long-term incentives and rewards to the Company’s employees, officers, directors and other key persons (including consultants), to attract and retain persons with the requisite experience and ability, and to more closely align the interests of such employees, officers, directors and other key persons with the interests of the Company’s stockholders. The 2018 Plan authorizes the Company’s Board of Directors or a committee of not less than two independent directors (in either case, the “Administrator”) to grant the following types of awards: non-statutory stock options; incentive stock options; restricted stock awards; restricted stock units; stock appreciation rights; unrestricted stock awards; performance share awards; and dividend equivalent rights. The 2018 Plan is administered by the Company’s Board of Directors. At the adoption of the 2018 Plan, a total of 9,198,996 shares of Class A common stock was authorized to be issued (subject to adjustment in the case of any stock dividend, stock split, reverse stock split, or similar change in capitalization of the Company). In June 2022, the 2018 Plan was amended to increase the number of shares of Class A common stock reserved for issuance by 7,826,970 shares. Stock Incentive Plans-the 2003 Plan The Organogenesis 2003 Stock Incentive Plan (the “2003 Plan”), provides for the Company to issue restricted stock awards, or to grant incentive stock options or non-statutory stock options. Incentive stock options may be granted only to the Company’s employees. Restricted stock awards and non-statutory stock options may be granted to employees, members of the Board of Directors, outside advisors and consultants of the Company. Effective December 10, 2018, no additional awards may be made under the 2003 Plan and as a result (i) any shares in respect of stock options that are expired or terminated under the 2003 Plan without having been fully exercised will not be available for future awards; (ii) any shares in respect of restricted stock that are forfeited to, or otherwise repurchased by the Company, will not be available for future awards; and (iii) any shares of Class A common stock that are tendered to the Company by a participant to exercise an award will not be available for future awards. Stock-Based Compensation Expense Stock options awarded under the stock incentive plans expire 10 years after the grant date and typically vest over four or five years . Restricted stock units awarded typically vest over four years. Stock-based c ompensation expense was $ 1,914 and $ 1,303 for the three months ended March 31, 2023 and 2022, respectively. The total amount of stock-based compensation expense was included within selling, general and administrative expenses on the consolidated statements of operations. Restricted Stock Units (RSUs) The Company granted 3,192,372 and 931,431 time-based restricted stock units to its employees, executives and the Board of Directors in the three months ended March 31, 2023 and 2022, respectively. Each restricted stock unit represents the contingent right to receive one share of the Company’s Class A common stock. A majority of the restricted stock units will vest in four equal annual installments. The fair value of the restricted stock units was based on the fair market value of the Company’s stock on the date of grant. The activity of restricted stock un its is set forth below: Number Weighted Average of Shares Grant Date Fair Value Unvested at December 31, 2022 1,381,500 $ 7.62 Granted 3,192,372 2.47 Vested ( 416,753 ) 7.71 Canceled/Forfeited ( 45,399 ) 7.25 Unvested at March 31, 2023 4,111,720 $ 3.61 As of March 31, 2023, the total unrecognized compensation cost related to unvested restricted stock units expected to vest was $ 10,551 and the weighted average remaining recognition period for unvested awards was 3.00 years. Stock Options The stock options granted during the three months ended March 31, 2023 and 2022 were 3,554,528 and 1,418,224 , respectively. The assumptions that the Company used to determine the grant-date fair value of stock options granted during these periods were as follows, presented on a weighted-average basis: March 31, March 31, 2023 2022 Risk-free interest rate 3.99 % 1.92 % Expected term (in years) 6.24 6.25 Expected volatility 51.00 % 50.66 % Expected dividend yield 0.0 % 0.0 % Exercise price $ 2.51 $ 8.03 Underlying stock price $ 2.47 $ 7.87 These assumptions resulted in an estimated weighted-average grant-date fair value per share of stock options granted during the three months ended March 31, 2023 and 2022 of $ 1.32 and $ 3.94 , respectively. The following table summarizes the Company’s stock option activity since December 31, 2022: Weighted Average Weighted Remaining Average Contractual Aggregate Number of Exercise Term Intrinsic Shares Price (in years) Value Outstanding as of December 31, 2022 5,931,042 $ 5.91 6.14 $ 2,245 Granted 3,554,528 2.51 Exercised - - - Canceled / forfeited ( 28,974 ) 11.12 Outstanding as of March 31, 2023 9,456,596 4.62 7.39 1,475 Options exercisable as of March 31, 2023 3,695,292 4.61 4.58 1,475 Options vested or expected to vest as of March 31, 2023 8,153,239 $ 4.67 7.06 $ 1,475 The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s Class A common stock for those stock options that have exercise prices lower than the fair value of the Company’s Class A common stock. The total fair value of options vested during the three months ended March 31, 2023 and 2022 was $ 2,653 and $ 1,612 , respectively. As of March 31, 2023 , the total unrecognized stock compensation expense related to unvested stock options expected to vest was $ 8,575 and was expected to be recognized over a weighted-average perio d of 2.95 years. |
Earnings (Loss) Per Share (EPS)
Earnings (Loss) Per Share (EPS) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) per Share (EPS) | 16. Earnings (Loss) per Share (EPS) Basic EPS is calculated by dividing net income (loss) by the weighted-average number of shares outstanding during the period. Diluted EPS is calculated by dividing net income (loss) by the weighted-average number of shares outstanding plus the dilutive effect, if any, of outstanding equity awards using the treasury stock method which includes consideration of unrecognized compensation expenses as additional proceeds. The Company’s potentially dilutive securities include restricted stock units and stock options to purchase shares of Class A common stock. As the Company had a net loss in the periods presented, the potentially dilutive securities have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same for these periods. For the three months ended March 31, 2023 and 2022, the Company excluded 800,395 and 4,016,433 potential shares of Class A common stock, respectively, presented based on the diluted effects of options and restricted stock units outstanding at each period end, from the computation of diluted net loss per share attributable to the common stockholders for these periods. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Leases | 17. Leases The Company’s leases consist primarily of real estate, equipment and vehicle leases. The Company leases real estate for office, lab, warehouse and production space under noncancelable leases that expire at various dates through 2035, subject to the Company’s options to terminate or renew certain leases for an additional five to ten years . The Company leases vehicles under operating leases for certain employees and has fleet services agreements for service on these vehicles. The minimum lease term for each newly leased vehicle is 367 days with renewal options. The Company may terminate the vehicle lease after the minimum lease term upon thirty days’ prior notice. The Company also leases other equipment under noncancelable operating leases that expire at various dates through 2025. On January 1, 2013, the Company entered into finance lease arrangements with 65 Dan Road SPE, LLC, 85 Dan Road Associates, LLC, Dan Road Equity I, LLC and 275 Dan Road SPE, LLC for office and laboratory space in Canton, Massachusetts. 65 Dan Road SPE, LLC, 85 Dan Road Associates, LLC, Dan Road Equity I, LLC and 275 Dan Road SPE, LLC are related parties as the owners of these entities are also directors, former directors and / or stockholders of the Company. In August 2021, the Company purchased the building under the lease with 275 Dan Road SPE, LLC (the “275 Dan Road Building”) for $ 6,013 and the lease was terminated. Other than the lease with 275 Dan Road SPE, LLC which was terminated in August 2021, the remaining three leases were set to terminate on December 31, 2022, and each contained a renewal option for a five-year period with a rental rate at the greater of (i) rent for the last year of the prior term, or (ii) the then fair market value. The Company exercised the option to extend the leases for an additional five years in November 2021. It remeasured the lease assets and liabilities based on its best estimate of the market rental rate in the renewal period and reassessed the classification for these leases according to ASC 842-10-25-1 Lease Classification. As a result, these leases were reclassified from finance leases to operating leases . The related finance lease assets and liabilities were reclassified to operating lease right-of-use assets and operating lease obligations on the consolidated balance sheet as of December 31, 2021. In December 2022, the Company and the landlord finalized the market rental rate in the renewal period for these properties, resulting in an additional $ 8,060 to be recorded as variable lease expenses over the renewal period. The Company owes some accrued but unpaid lease obligations under the aforementioned leases. Effective April 1, 2019, the Company agreed to accrue interest on the accrued but unpaid lease obligations at an interest rate equal to the rate charged under the 2019 Credit Agreement. In connection with the purchase of the 275 Dan Road Building in August 2021, the Company paid 50 % of the accrued but unpaid lease obligations associated with this building and the accrued interest thereof. The remaining balance for this building was paid off in five quarterly installments ending on January 3, 2023. The accrued but unpaid lease obligations as well as the related interest accruals are shown below. March 31, December 31, 2023 2022 Principal portion of rent in arrears 5,273 5,779 Total accrued but unpaid lease obligations 5,273 5,779 Accrued interest on accrued but unpaid lease obligations 1,960 1,956 Before being paid off in January 2023, the principal portion of rent in arrears related to the 275 Dan Road Building as well as the interest accrual were included in accrued expenses and other current liabilities on the consolidated balance sheet as of December 31, 2022. For the other three buildings, the principal portion of rent in arrears was included in the short-term portion of operating lease obligations on the consolidated balance sheets as of March 31, 2023 and December 31, 2022. The accrued interest on the accrued but unpaid lease obligations was included in accrued expenses and other current liabilities on the consolidated balance sheets as of March 31, 2023 and December 31, 2022. The components of lease co st were as follows: Classification Three Months Ended 2023 2022 Finance lease Amortization of right-of-use assets COGS and SG&A $ - $ 107 Interest on lease liabilities Interest Expense - 5 Total Finance lease cost - 112 Operating lease cost COGS, R&D, SG&A 2,291 2,434 Short-term lease cost COGS, R&D, SG&A 758 669 Variable lease cost COGS, R&D, SG&A 1,794 918 Total lease cost $ 4,843 $ 4,133 Supplemental balance sheet information related to finance l eases was as follows: March 31, 2023 December 31, 2022 Property and equipment, gross $ 1,174 $ 1,174 Accumulated depreciation ( 1,174 ) ( 1,174 ) Property and equipment, net $ - $ - Finance lease obligations $ - $ - Supplemental cash flow information related t o leases was as follows: Three Months Ended 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases 2,468 2,337 Operating cash flows for finance leases - 5 Financing cash flows for finance leases - 99 Right-of-use assets obtained in exchange for lease obligations Operating leases 1,586 171 Finance leases - - March 31, 2023 December 31, 2022 Weighted-average remaining lease term Finance leases - - Operating leases 7.25 7.54 March 31, 2023 December 31, 2022 Weighted-average discount rate Finance leases - - Operating leases 4.65 % 4.61 % As of March 31, 2023, maturities of lease liabilities were as follows: Operating leases 2023 (remaining 9 months) $ 12,157 2024 7,798 2025 7,678 2026 7,542 2027 8,002 Thereafter 18,612 Total lease payments 61,789 Less: interest ( 9,304 ) Total lease liabilities $ 52,485 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure | 18. Commitments and Contingencies Royalties The Company entered into a license agreement with a university for certain patent rights related to the development, use, and production of one of its advanced wound care products. Under this agreement, the Company incurred a royalty based on a percentage of net product sales, for the use of these patents until the patents expired, which was in November 2006. Accrued royalties totaled $ 1,187 as of March 31, 2023 and December 31, 2022 , respectively, and were classified as part of accrued expenses and other current liabilities on the Company’s consolidated balance sheets. There was no royalty expense incurred during the three months ended March 31, 2023 or 2022 related to this agreement. In October 2017, the Company entered into a license agreement with a third party. Under the license agreement, the Company is required to pay royalties based on a percentage of net sales of the licensed product that occur, after December 31, 2017, through the expiration of the underlying patent in October 2026, subject to minimum royalty payment provisions. The Company recorded royalty expense of $ 1,440 and $ 1,601 during the three months ended March 31, 2023 and 2022, respectively, within selling, general and administrative expenses on the consolidated statements of operations. Legal Matters In conducting its activities, the Company, from time to time, is subject to various claims and also has claims against others. In management’s opinion, the ultimate resolution of such claims would not have a material effect on the financial position, operating results or cash flows of the Company. The Company accrues for these claims when amounts due are probable and estimable. The Compan y accrued $ 150 as of March 31, 2023 and December 31, 2022 , for certain pending lawsuits. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 19. Related Party Transactions Lease obligations to affiliates, including accrued but unpaid lease obligations, purchase of an asset under a finance lease with an affiliate, and renewal of leases with affiliates are further described in Note “17. Leases.” |
Taxes
Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Taxes | 20. Taxes The Company is principally subject to taxation in the United States. The Company has a history of net operating losses both federally and in various states and began utilizing those losses to offset current taxable income in 2020. As net operating loss carryovers become limited or are fully utilized, the Company will accrue current federal and state income tax expense. The Company’s wholly owned Swiss subsidiary, Organogenesis GmbH, is subject to taxation in Switzerland and has a transfer pricing arrangement in place with Organogenesis Inc., its U.S. parent. The income tax rate for the three months ended March 31, 2023 varied from the U.S. statutory rate of 21 % primarily due to the tax adjustments related to executive compensation, other permanent tax adjustments, and discrete items. The Company has a pre-tax book loss for the three months ended March 31, 2023 and expects to benefit from this loss through the forecasted pre-tax book income for the twelve months ended December 31, 2023. The income tax benefit for the three months ended March 31, 2023 was $ 1,658 , wh ich included a discrete ta x expense of $ 22 related primarily to the interest on certain uncertain tax positions. Income tax expense for the three months ended March 31, 2022 was $ 45 , which included a discrete tax expense of $ 10 related to the interest on certain uncertain tax positions. The Company examines all positive and negative evidence to estimate whether sufficient future taxable income in the U.S. will be generated to permit the use of existing deferred tax assets. In the fourth quarter of 2021, the Company released the valuation allowance recorded against its U.S. deferred tax assets. Upon reviewing the positive evidence of net operating loss utilization, cumulative profits, and forecasted taxable income, the Company believed that it was more likely than not that these U.S. deferred tax assets would be utilized. There are no material deferred tax assets in the other jurisdictions. On a quarterly basis, the Company reassesses the need for a valuation allowance on deferred income tax assets, weighing positive and negative evidence to assess the recoverability of the deferred tax assets. After assessing both the positive and negative evidence, including net operating loss utilization, cumulative profits, and forecasted taxable income, the Company determined that it is more likely than not the U.S. deferred assets will be realized in full. As such, the Company did not record a valuation allowance against its U.S. deferred tax assets as of March 31, 2023 and December 31, 2022 . |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | 21. Subsequent Events The Company has evaluated subsequent events through May 10, 2023, the date on which these consolidated financial statements were issued and has determined that there are no such events to report. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Unaudited Interim Financial Information | Unaudited Interim Financial Information The accompanying unaudited consolidated financial statements have been prepared by management in accordance with generally accepted accounting principles in the United States (“GAAP”), and the rules and regulations of the SEC regarding interim financial reporting. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. While we believe that the disclosures presented are adequate in order to make the information not misleading, these unaudited quarterly financial statements should be read in conjunction with the financial statements and notes thereto included in the Annual Report. The unaudited consolidated financial statements include the accounts and results of operations of Organogenesis Holdings Inc. and its wholly-owned subsidiaries, Organogenesis Inc., Organogenesis GmbH (a Switzerland corporation) and Prime Merger Sub, LLC. All intercompany balances and transactions have been eliminated in consolidation. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. In the opinion of management, the unaudited consolidated financial statements reflect all adjustments of a normal recurring nature necessary for a fair presentation of the Company’s financial position, results of operations and cash flows at the dates and for the periods indicated. The results for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 , any other interim periods, or any future years or periods. |
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, disclosure of contingent assets and liabilities at the date of the financial statements and the reported results of operations during the reporting periods. In preparing the consolidated financial statements, the estimates and assumptions that management consider to be significant and that present the greatest amount of uncertainty include: revenue recognition; sales returns and credit losses; inventory reserve; recognition and measurement of current and deferred income tax assets and liabilities; the assessment of recoverability of long-lived and indefinite lived assets (including intangible assets); assessing impairment of goodwill; valuation of assets and liabilities that use unobservable inputs; and the valuation and recognition of stock-based compensation. Actual results and outcomes may differ significantly from those estimates and assumptions. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents. The Company invests its cash equivalents in highly rated money market funds. Deposits may exceed federally insured limits, and the Company is exposed to credit risk on deposits in the event of default by the financial institutions to the extent account balances exceed the amount insured by the Federal Deposit Insurance Corporation (“FDIC”). However, the Company mitigates the risk by sweeping cash daily overnight and diversifies among financial institutions to reduce such exposure. |
Recently Adopted Accounting Pronouncements | Recently Issued Accounting Pronouncements Adopted Credit Loss In June 2016, the FASB issued ASU 2016-13 , Financial Instruments—Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments . The FASB subsequently issued a few amendments to ASU 2016-13. ASU 2016-13 and all the related updates replace the incurred loss impairment methodology previously required under generally accepted accounting principles, with an expected loss methodology that requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company adopted the standard as of January 1, 2023 using the modified retrospective method. Under this method, the Company applied the new credit loss measurement guidance to trade accounts receivable, the only financial asset of the Company that is impacted by the ASU and the related updates. The Company recorded a net reduction of $ 615 to the opening balance of retained earnings as the cumulative effect of initially applying the standard. Results for reporting periods beginning after January 1, 2023 are presented in accordance with Topic 326 . Prior period amounts have not been restated and are reported in accordance with legacy GAAP requirements. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue by Product Category | The following tables set forth revenue by product category: Three Months Ended 2023 2022 Advanced Wound Care $ 100,917 $ 90,090 Surgical & Sports Medicine 6,725 7,027 Total net revenue $ 107,642 $ 97,117 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Accounts receiva ble consisted of the following: March 31, December 31, 2023 2022 Accounts receivable $ 98,942 $ 95,812 Less — allowance for credit losses ( 6,921 ) ( 6,362 ) $ 92,021 $ 89,450 |
Summary of Allowance for Credit Losses | The Company ’s allowance for credit losses was comprised of the following: Three Months Ended 2023 2022 Balance at beginning of period $ 6,362 $ 5,153 Cumulative effect of adopting ASU 2016-13 615 - Additions 243 40 Write-offs ( 299 ) ( 66 ) Balance at end of period $ 6,921 $ 5,127 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventories, net of related reserves for excess and obsolescence, consisted of the following: March 31, December 31, 2023 2022 Raw materials $ 13,126 $ 12,282 Work in process 1,158 1,022 Finished goods 11,255 11,479 $ 25,539 $ 24,783 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of prepaid expenses and other current assets | Prepaid expenses and other current assets consist ed of the following: March 31, December 31, Subscriptions $ 5,334 $ 4,211 Conferences and marketing expenses 1,277 106 Deposits 652 635 Insurance 2,519 54 Other 65 80 $ 9,847 $ 5,086 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and equipme nt consisted of the following: March 31, December 31, 2023 2022 Leasehold improvements $ 52,369 $ 37,607 Buildings 4,943 4,943 Furniture, computers and equipment 58,282 57,147 115,594 99,697 Accumulated depreciation ( 65,490 ) ( 62,798 ) Construction in progress 56,533 65,564 $ 106,637 $ 102,463 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Identifiable intangible assets consisted of the following as of March 31, 2023: Original Accumulated Net Book Cost Amortization Value Developed technology $ 32,620 $ ( 22,040 ) $ 10,580 Trade names and trademarks 2,080 ( 1,442 ) 638 Customer relationships 10,690 ( 2,717 ) 7,973 Independent sales agency network 4,500 ( 4,500 ) - Patent 7,623 ( 7,623 ) - Non-compete agreements 1,010 ( 641 ) 369 Total $ 58,523 $ ( 38,963 ) $ 19,560 Identifiable intangible assets consisted of the following as of December 31, 2022: Original Accumulated Net Book Cost Amortization Value Developed technology $ 32,620 $ ( 21,164 ) $ 11,456 Trade names and trademarks 2,080 ( 1,393 ) 687 Customer relationship 10,690 ( 2,450 ) 8,240 Independent sales agency network 4,500 ( 4,500 ) - Patent 7,623 ( 7,623 ) - Non-compete agreements 1,010 ( 604 ) 406 Total $ 58,523 $ ( 37,734 ) $ 20,789 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Accrued expenses and other current liabilities consisted of the following: March 31, December 31, 2023 2022 Personnel costs $ 22,049 $ 17,113 Royalties 3,041 3,320 Accrued but unpaid lease obligations and interest 1,960 2,463 Accrued taxes 771 2,625 Other 776 926 $ 28,597 $ 26,447 |
Restructuring (Tables)
Restructuring (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Summary of liability related to the restructuring activities | The following table provides a roll-forward of the restructuring liabilities. Employee Other Total Liability balance as of December 31, 2022 $ 1,010 $ 182 $ 1,192 Expenses 1,817 91 1,908 Payments ( 1,740 ) ( 273 ) ( 2,013 ) Liability balance as of March 31, 2023 $ 1,087 $ - $ 1,087 Employee Other Total Liability balance as of December 31, 2021 $ 2,517 $ 651 $ 3,168 Expenses 115 149 264 Payments ( 2,517 ) ( 783 ) ( 3,300 ) Liability balance as of March 31, 2022 $ 115 $ 17 $ 132 |
Long-Term Debt Obligations (Tab
Long-Term Debt Obligations (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Long-term Debt, Unclassified [Abstract] | |
Schedule of long-term debt obligations | Long-term debt obligations consisted of the following: March 31, December 31, 2023 2022 Line of credit $ - $ - Term loan 70,313 71,250 Less debt discount and debt issuance cost ( 444 ) ( 481 ) Term loan, net of debt discount and debt issuance cost $ 69,869 $ 70,769 |
Schedule of future payments of term loan facility | Future payments of the 2021 Credit Agreement, as of March 31, 2023, are as follows for the calendar years ending December 31: 2023 3,750 2024 5,625 2025 6,563 2026 54,375 Total $ 70,313 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Schedule Of Common Stock Shares Reserved For Future Issuance | As of March 31, 2023 and December 31, 2022, the Company reserved the following shares of Class A common stock for future issuance: March 31, December 31, 2023 2022 Shares reserved for issuance for outstanding options 9,456,596 5,931,742 Shares reserved for issuance for outstanding restricted stock units 4,111,720 1,381,500 Shares reserved for issuance for future grants 4,831,088 11,394,962 Total shares of authorized common stock reserved for future issuance 18,399,404 18,708,204 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Unvested Restricted Stock Units | The activity of restricted stock un its is set forth below: Number Weighted Average of Shares Grant Date Fair Value Unvested at December 31, 2022 1,381,500 $ 7.62 Granted 3,192,372 2.47 Vested ( 416,753 ) 7.71 Canceled/Forfeited ( 45,399 ) 7.25 Unvested at March 31, 2023 4,111,720 $ 3.61 |
Schedule of Fair Value of Stock Options Granted to Employees and Directors | The assumptions that the Company used to determine the grant-date fair value of stock options granted during these periods were as follows, presented on a weighted-average basis: March 31, March 31, 2023 2022 Risk-free interest rate 3.99 % 1.92 % Expected term (in years) 6.24 6.25 Expected volatility 51.00 % 50.66 % Expected dividend yield 0.0 % 0.0 % Exercise price $ 2.51 $ 8.03 Underlying stock price $ 2.47 $ 7.87 |
Summary of Stock Option Activity | The following table summarizes the Company’s stock option activity since December 31, 2022: Weighted Average Weighted Remaining Average Contractual Aggregate Number of Exercise Term Intrinsic Shares Price (in years) Value Outstanding as of December 31, 2022 5,931,042 $ 5.91 6.14 $ 2,245 Granted 3,554,528 2.51 Exercised - - - Canceled / forfeited ( 28,974 ) 11.12 Outstanding as of March 31, 2023 9,456,596 4.62 7.39 1,475 Options exercisable as of March 31, 2023 3,695,292 4.61 4.58 1,475 Options vested or expected to vest as of March 31, 2023 8,153,239 $ 4.67 7.06 $ 1,475 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Schedule of Accrued But Unpaid Lease Obligations | The accrued but unpaid lease obligations as well as the related interest accruals are shown below. March 31, December 31, 2023 2022 Principal portion of rent in arrears 5,273 5,779 Total accrued but unpaid lease obligations 5,273 5,779 Accrued interest on accrued but unpaid lease obligations 1,960 1,956 |
Schedule of Lease Cost | The components of lease co st were as follows: Classification Three Months Ended 2023 2022 Finance lease Amortization of right-of-use assets COGS and SG&A $ - $ 107 Interest on lease liabilities Interest Expense - 5 Total Finance lease cost - 112 Operating lease cost COGS, R&D, SG&A 2,291 2,434 Short-term lease cost COGS, R&D, SG&A 758 669 Variable lease cost COGS, R&D, SG&A 1,794 918 Total lease cost $ 4,843 $ 4,133 |
Summary of Balance Sheet Information Related To Finance Leases | Supplemental balance sheet information related to finance l eases was as follows: March 31, 2023 December 31, 2022 Property and equipment, gross $ 1,174 $ 1,174 Accumulated depreciation ( 1,174 ) ( 1,174 ) Property and equipment, net $ - $ - Finance lease obligations $ - $ - |
Summary of Cash Flow Information Related To Leases | Supplemental cash flow information related t o leases was as follows: Three Months Ended 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases 2,468 2,337 Operating cash flows for finance leases - 5 Financing cash flows for finance leases - 99 Right-of-use assets obtained in exchange for lease obligations Operating leases 1,586 171 Finance leases - - March 31, 2023 December 31, 2022 Weighted-average remaining lease term Finance leases - - Operating leases 7.25 7.54 March 31, 2023 December 31, 2022 Weighted-average discount rate Finance leases - - Operating leases 4.65 % 4.61 % |
Summary of Maturities of Lease Liabilities | As of March 31, 2023, maturities of lease liabilities were as follows: Operating leases 2023 (remaining 9 months) $ 12,157 2024 7,798 2025 7,678 2026 7,542 2027 8,002 Thereafter 18,612 Total lease payments 61,789 Less: interest ( 9,304 ) Total lease liabilities $ 52,485 |
Nature of Business and Basis _2
Nature of Business and Basis of Presentation - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2023 Segments | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of Operating Segments | 1 |
Number of Reportable Segments | 1 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Significant Accounting Policies [Line Items] | ||
Net reduction retained earnings | $ (48,885) | $ (45,301) |
Accounting Standards Update [Extensible Enumeration] | ASC 2016-13 | |
ASC 2016-13 | ||
Significant Accounting Policies [Line Items] | ||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Jan. 01, 2023 | |
Net reduction retained earnings | $ (615) |
Acquisition - Additional Inform
Acquisition - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | |||
Sep. 17, 2020 | Apr. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | |
Business Acquisitions, Contingent Consideration Liability Noncurrent | $ 3,782 | $ 0 | $ 0 | |
CPN Biosciences, LLC | ||||
Business Acquisitions, Aggregate Consideration | 19,024 | |||
Payments to acquire businesses gross | 5,820 | |||
Consideration heldback | $ 1,436 | |||
Earnout Calculation | 70% | |||
CPN Biosciences, LLC | Total Consideration Including Holdback [Member] | ||||
Payments to acquire businesses gross | $ 6,427 | |||
CPN Biosciences, LLC | Payment Of Holdback [Member] | ||||
Payments to acquire businesses gross | $ 608 | |||
Common Stock | CPN Biosciences, LLC | ||||
Issuance of common stock associated with business acquisition | 1,947,953 | |||
Common Stock | CPN Biosciences, LLC | Total Consideration Including Holdback [Member] | ||||
Business Acquisitions, Number Of Shares Issued | 2,151,438 | |||
Business Acquisitions, Equity Interests Issued And Issuable | $ 8,815 | |||
Common Stock | CPN Biosciences, LLC | Payment Of Holdback [Member] | ||||
Issuance of common stock associated with business acquisition | 203,485 |
Revenue - Schedule of Revenue b
Revenue - Schedule of Revenue by Product Category (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Total net revenue | $ 107,642 | $ 97,117 |
Advanced Wound Care | ||
Total net revenue | 100,917 | 90,090 |
Surgical & Sports Medicine | ||
Total net revenue | $ 6,725 | $ 7,027 |
Revenue - Additional Informatio
Revenue - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Significant Accounting Policies [Line Items] | ||
Group purchase organization rebate | $ 1,424 | $ 1,619 |
Sales Revenue | Geographic Concentration Risk | International | ||
Significant Accounting Policies [Line Items] | ||
Concentration Risk, Percentage | 1% |
Fair Value Measurement of Fin_2
Fair Value Measurement of Financial Assets and Liabilities - Additional Information (Detail) - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 | Sep. 17, 2020 |
Earnout liability | $ 0 | $ 0 | $ 3,782 |
Accounts Receivable, Net - Summ
Accounts Receivable, Net - Summary of Accounts Receivable (Detail) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Receivables [Abstract] | ||
Accounts receivable | $ 98,942 | $ 95,812 |
Less - allowance for credit losses | (6,921) | (6,362) |
Accounts receivable | $ 92,021 | $ 89,450 |
Accounts Receivable, Net - Su_2
Accounts Receivable, Net - Summary of Allowance for Credit Losses (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Balance at beginning of period | $ 6,362 | $ 5,153 |
Additions | 243 | 40 |
Write-offs | (299) | (66) |
Balance at end of period | 6,921 | $ 5,127 |
Cumulative Effect of Adoption | ||
Balance at beginning of period | $ 615 |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Detail) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Raw materials | $ 13,126 | $ 12,282 |
Work in process | 1,158 | 1,022 |
Finished goods | 11,255 | 11,479 |
Inventory | $ 25,539 | $ 24,783 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Inventory reserve and obsolescence charged to cost of goods | $ 1,407 | $ 2,205 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Detail) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Subscriptions | $ 5,334 | $ 4,211 |
Conferences and marketing expenses | 1,277 | 106 |
Deposits | 652 | 635 |
Insurance | 2,519 | 54 |
Other | 65 | 80 |
Prepaid Expense | $ 9,847 | $ 5,086 |
Property and Equipment, Net (De
Property and Equipment, Net (Detail) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Property and equipment, gross | $ 115,594 | $ 99,697 |
Accumulated depreciation | (65,490) | (62,798) |
Property and Equipment, Net, Total | 106,637 | 102,463 |
Leasehold improvements | ||
Property and equipment, gross | 52,369 | 37,607 |
Buildings | ||
Property and equipment, gross | 4,943 | 4,943 |
Furniture, computers and equipment | ||
Property and equipment, gross | 58,282 | 57,147 |
Construction in progress | ||
Property and Equipment, Net, Total | $ 56,533 | $ 65,564 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Depreciation expense | $ 2,694 | $ 1,347 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Identifiable intangible assets (Detail) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Original Cost | $ 58,523 | $ 58,523 |
Accumulated Amortization | (38,963) | (37,734) |
Net Book Value | 19,560 | 20,789 |
Developed technology | ||
Original Cost | 32,620 | 32,620 |
Accumulated Amortization | (22,040) | (21,164) |
Net Book Value | 10,580 | 11,456 |
Trade names and trademarks | ||
Original Cost | 2,080 | 2,080 |
Accumulated Amortization | (1,442) | (1,393) |
Net Book Value | 638 | 687 |
Customer relationships | ||
Original Cost | 10,690 | 10,690 |
Accumulated Amortization | (2,717) | (2,450) |
Net Book Value | 7,973 | 8,240 |
Independent sales agency network | ||
Original Cost | 4,500 | 4,500 |
Accumulated Amortization | (4,500) | (4,500) |
Patent | ||
Original Cost | 7,623 | 7,623 |
Accumulated Amortization | (7,623) | (7,623) |
Non-compete agreements | ||
Original Cost | 1,010 | 1,010 |
Accumulated Amortization | (641) | (604) |
Net Book Value | $ 369 | $ 406 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Goodwill | $ 28,772 | $ 28,772 | |
Amortization of Intangible Assets | $ 1,230 | $ 1,221 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Detail) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Personnel costs | $ 22,049 | $ 17,113 |
Royalties | 3,041 | 3,320 |
Accrued but unpaid lease obligations and interest | 1,960 | 2,463 |
Accrued taxes | 771 | 2,625 |
Other | 776 | 926 |
Total Accrued Expenses and Other Current Liabilities | $ 28,597 | $ 26,447 |
Restructuring - Summary of liab
Restructuring - Summary of liability related to the restructuring activities (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||
Liability balance as of beginning | $ 1,192 | $ 3,168 |
Expenses | 1,908 | 264 |
Payments | (2,013) | (3,300) |
Liability balance as of ending | 1,087 | 132 |
Employee | ||
Restructuring Cost and Reserve [Line Items] | ||
Liability balance as of beginning | 1,010 | 2,517 |
Expenses | 1,817 | 115 |
Payments | (1,740) | (2,517) |
Liability balance as of ending | 1,087 | 115 |
Other | ||
Restructuring Cost and Reserve [Line Items] | ||
Liability balance as of beginning | 182 | 651 |
Expenses | 91 | 149 |
Payments | $ (273) | (783) |
Liability balance as of ending | $ 17 |
Restructuring - Additional Info
Restructuring - Additional Information (Detail) $ in Thousands | 3 Months Ended | |||||
Feb. 03, 2023 USD ($) Employees | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Mar. 09, 2022 Employees | Oct. 21, 2020 Employees | |
Restructuring Cost and Reserve [Line Items] | ||||||
Number of reduction in employees | Employees | 71 | |||||
Percentage of reduction in employees | 7% | |||||
Severance payments | $ 1,817 | |||||
Restructuring Charges | $ 1,908 | $ 264 | ||||
Restructuring Reserve Current | 1,087 | $ 1,192 | ||||
Birmingham Restructuring | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Number of employees to retention Benefits | Employees | 24 | |||||
Employee Cost | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 1,817 | 115 | ||||
Facility and Other | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | $ 91 | $ 149 | ||||
La Jolla Restructuring | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Number of employees to retention Benefits | Employees | 65 |
Long-Term Debt Obligations (Det
Long-Term Debt Obligations (Detail) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Line of credit | $ 0 | $ 0 |
Term loan | 70,313 | 71,250 |
Less debt discount and debt issuance cost | (444) | (481) |
Term loan, net of debt discount and debt issuance cost | $ 69,869 | $ 70,769 |
Long-Term Debt Obligations - Ad
Long-Term Debt Obligations - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |||
Aug. 06, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Line of credit | $ 0 | $ 0 | ||
Secured debt | 70,313 | 71,250 | ||
Term payment | 938 | $ 469 | ||
2021 Credit Agreement | ||||
Financial covenants | Under the 2021 Credit Agreement, the Company is required to comply with certain financial covenants including the Consolidated Fixed Charge Coverage Ratio and Consolidated Total Net Leverage Ratio, tested quarterly. In addition, the Company is also required to make representations and warranties and comply with certain non-financial covenants that are customary in loan agreements of this type, including restrictions on the payment of dividends, repurchase of stock, incurrence of indebtedness, dispositions and acquisitions. | |||
Debt Instrument, Description of Variable Rate Basis | For SOFR Loans, the interest rate is a per annum interest rate equal to the Adjusted Term SOFR plus an Applicable Margin between 2.00% to 3.25% based on the Total Net Leverage Ratio. For ABR Loans, the interest rate is equal to (1) the highest of (a) the Wall Street Journal Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) the Adjusted Term SOFR rate plus 1.0%, plus (2) an Applicable Margin between 1.00% to 2.25% based on the Total Net Leverage Ratio. | |||
2021 Credit Agreement | Maximum [Member] | SOFR Loans [Member] | Applicable Margin [Member] | ||||
'Debt instrument interest and applicable margin rate percentage | 3.25% | |||
2021 Credit Agreement | Maximum [Member] | ABR Loans [Member] | Applicable Margin [Member] | ||||
'Debt instrument interest and applicable margin rate percentage | 2.25% | |||
2021 Credit Agreement | Minimum [Member] | SOFR Loans [Member] | Applicable Margin [Member] | ||||
'Debt instrument interest and applicable margin rate percentage | 2% | |||
2021 Credit Agreement | Minimum [Member] | ABR Loans [Member] | Applicable Margin [Member] | ||||
'Debt instrument interest and applicable margin rate percentage | 1% | |||
Term Loan [Member] | 2021 Credit Agreement | ||||
Secured debt | 70,313 | $ 71,250 | ||
Debt Issuance Costs, Net | $ 604 | |||
Debt instrument face amount | 75,000 | |||
Term Loan [Member] | 2021 Credit Agreement | September 30, 2021 through and including June 30, 2022 | ||||
Debt instrument quarterly installment payment to original principal amount | 469 | |||
Term Loan [Member] | 2021 Credit Agreement | September 30, 2022 through and including June 30, 2023 | ||||
Debt instrument quarterly installment payment to original principal amount | 938 | |||
Term Loan [Member] | 2021 Credit Agreement | September 30, 2023 through and including June 30, 2025 | ||||
Debt instrument quarterly installment payment to original principal amount | 1,406 | |||
Term Loan [Member] | 2021 Credit Agreement | September 30, 2025 and the last day of each quarter thereafter until August 6, 2026 | ||||
Debt instrument quarterly installment payment to original principal amount | 1,875 | |||
Term Loan [Member] | 2021 Credit Agreement | Due on Term Loan Maturity Date | ||||
Remaining principal balance | 50,625 | |||
Revolving Credit Facility [Member] | 2021 Credit Agreement | ||||
Line of credit | 0 | |||
Maximum borrowing capacity | 125,000 | $ 125,000 | ||
Debt Issuance Costs, Net | $ 1,223 | |||
Revolving Credit Facility [Member] | 2021 Credit Agreement | Maximum [Member] | ||||
Line of credit facility unused capacity commitment fee percentage | 0.45% | |||
Revolving Credit Facility [Member] | 2021 Credit Agreement | Minimum [Member] | ||||
Line of credit facility unused capacity commitment fee percentage | 0.25% |
Long-Term Debt Obligations - Fu
Long-Term Debt Obligations - Future payments of term loan (Detail) $ in Thousands | Mar. 31, 2023 USD ($) |
2023 | $ 3,750 |
2024 | 5,625 |
2025 | 6,563 |
2026 | 54,375 |
Total | $ 70,313 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule Of Common Stock Shares Reserved For Future Issuance (Detail) - shares | Mar. 31, 2023 | Dec. 31, 2022 |
Equity [Abstract] | ||
Shares reserved for issuance for outstanding options | 9,456,596 | 5,931,742 |
Shares reserved for issuance for outstanding restricted stock units | 4,111,720 | 1,381,500 |
Shares reserved for issuance for future grants | 4,831,088 | 11,394,962 |
Total shares of authorized common stock reserved for future issuance | 18,399,404 | 18,708,204 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) | 1 Months Ended |
Mar. 24, 2019 shares | |
Common Class A | |
Company issued acquisition of shares | 728,548 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2018 | |
Fair value of option vested | $ 2,653 | $ 1,612 | ||
Options granted | 3,554,528 | 1,418,224 | ||
Weighted average grant-date fair value | $ 1.32 | $ 3.94 | ||
Restricted Stock Units [Member] | ||||
Unrecognized stock compensation expense | $ 10,551 | |||
Share-based compensation expected to be recognized over a weighted-average period | 3 years | |||
RSU granted during the period | 3,192,372 | 931,431 | ||
Option | ||||
Unrecognized stock compensation expense | $ 8,575 | |||
Share-based compensation expected to be recognized over a weighted-average period | 2 years 11 months 12 days | |||
Selling, General and Administrative Expenses | ||||
Stock-based compensation expense | $ 1,914 | $ 1,303 | ||
2003 and 2018 Stock Incentive Plan | Maximum | ||||
Stock option granted vesting period | 5 years | |||
2003 and 2018 Stock Incentive Plan | Minimum | ||||
Stock option granted vesting period | 4 years | |||
2003 and 2018 Stock Incentive Plan | Option | ||||
Stock option expiration period | 10 years | |||
Common Class A | 2018 Stock Incentive Plan | ||||
Common stock awards authorized | 7,826,970 | 9,198,996 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Fair Value of Stock Options Granted to Employees and Directors (Detail) - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Risk-free interest rate | 3.99% | 1.92% |
Expected term (in years) | 6 years 2 months 26 days | 6 years 3 months |
Expected volatility | 51% | 50.66% |
Expected dividend yield | 0% | 0% |
Exercise price | $ 2.51 | $ 8.03 |
Underlying stock price | $ 2.47 | $ 7.87 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Restricted Stock Units (Detail) - Restricted Stock Units (RSUs) [Member] - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unvested at December 31, 2022 | 1,381,500 | |
Unvested Granted | 3,192,372 | 931,431 |
Unvested Vested | (416,753) | |
Unvested Canceled/Forfeited | (45,399) | |
Unvested at March 31, 2023 | 4,111,720 | |
Unvested at December 31, 2022 | $ 7.62 | |
Unvested Granted | 2.47 | |
Unvested Vested | 7.71 | |
Unvested Canceled/Forfeited | 7.25 | |
Unvested at March 31, 2023 | $ 3.61 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Number of Shares Outstanding | 5,931,042 | ||
Number of Shares Granted | 3,554,528 | 1,418,224 | |
Number of Shares Canceled / forfeited | (28,974) | ||
Number of Shares Outstanding | 9,456,596 | 5,931,042 | |
Number of Shares Options Exercisable | 3,695,292 | ||
Number of Shares Options vested or expected to vest | 8,153,239 | ||
Weighted Average Exercise Price Outstanding | $ 5.91 | ||
Weighted Average Exercise Price Granted | 2.51 | ||
Weighted Average Exercise Price Cancelled / forfeited | 11.12 | ||
Weighted Average Exercise Price Outstanding | 4.62 | $ 5.91 | |
Weighted Average Exercise Price Options Exercisable | 4.61 | ||
Weighted Average Exercise Price Options Vested or Expected to Vest | $ 4.67 | ||
Weighted Average Remaining Contractual Term (in years) Outstanding | 7 years 4 months 20 days | 6 years 1 month 20 days | |
Weighted Average Remaining Contractual Term (in years) Options Exercisable | 4 years 6 months 29 days | ||
Weighted Average Remaining Contractual Term (in years) Options Vested or Expected to Vest | 7 years 21 days | ||
Aggregate Intrinsic Value Outstanding | $ 2,245 | ||
Aggregate Intrinsic Value Outstanding | 1,475 | $ 2,245 | |
Aggregate Intrinsic Value Options Exercisable | 1,475 | ||
Aggregate Intrinsic Value Options Vested or Expected to Vest | $ 1,475 |
Stock-Based Compensation - Pare
Stock-Based Compensation - Parenthetical (Detail) - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | ||
Options granted | 3,554,528 | 1,418,224 |
Earnings (Loss) per Share (EP_2
Earnings (Loss) per Share (EPS) - Additional Information (Detail) - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Common Class A | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares excluded from the diluted EPS | 800,395 | 4,016,433 |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 60 Months Ended | |||
Aug. 11, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2027 | Dec. 31, 2022 | |
Variable lease cost | $ 1,794 | $ 918 | |||
Property and equipment, gross | $ 115,594 | $ 99,697 | |||
275 Dan Road SPE LLC [Member] | |||||
Purchase of building under the lease amount | $ 6,013 | ||||
Percentage of amount required to pay for the accrued but unpaid lease obligations associated with building | 50% | ||||
Dan Road Leases [Member] | Scenario Forecast [Member] | |||||
Variable lease cost | $ 8,060 | ||||
Fleet Lease | |||||
Lessee, operating lease, term of contract | 367 days | ||||
Maximum | |||||
Lessee, operating lease, renewal term | 10 years | ||||
Minimum | |||||
Lessee, operating lease, renewal term | 5 years |
Leases - Schedule of Accrued bu
Leases - Schedule of Accrued but Unpaid Lease Obligations (Detail) - Accrued But Unpaid Lease Obligation [Member] - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Schedule Of Accrued But Unpaid Lease Obligations [Line Items] | ||
Accrued interest on accrued but unpaid lease obligations | $ 1,960 | $ 1,956 |
Principal [Member] | ||
Schedule Of Accrued But Unpaid Lease Obligations [Line Items] | ||
Total accrued but unpaid lease obligations | 5,273 | 5,779 |
Principal, Interest and CAM [Member] | ||
Schedule Of Accrued But Unpaid Lease Obligations [Line Items] | ||
Total accrued but unpaid lease obligations | $ 5,273 | $ 5,779 |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Cost (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases [Abstract] | ||
Finance lease Amortization of right-of-use assets | $ 107 | |
Finance lease Interest on lease liabilities | 5 | |
Total Finance lease cost | 112 | |
Operating lease cost | $ 2,291 | 2,434 |
Short-term lease cost | 758 | 669 |
Variable lease cost | 1,794 | 918 |
Total lease cost | $ 4,843 | $ 4,133 |
Leases - Summary of Balance She
Leases - Summary of Balance Sheet Information Related To Finance Leases (Detail) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Lessee Disclosure [Abstract] | ||
Property and equipment, gross | $ 1,174 | $ 1,174 |
Accumulated depreciation | $ (1,174) | $ (1,174) |
Leases - Summary of Cash Flow I
Leases - Summary of Cash Flow Information Related To Leases (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows for operating leases | $ 2,468 | $ 2,337 | |
Operating cash flows for finance leases | 5 | ||
Financing cash flows for finance leases | 99 | ||
Right-of-use assets obtained in exchange for lease obligations | |||
Operating leases | $ 1,586 | $ 171 | |
Weighted-average remaining lease term | |||
Operating leases | 7 years 3 months | 7 years 6 months 14 days | |
Weighted-average discount rate | |||
Operating leases | 4.65% | 4.61% |
Leases - Summary of Maturities
Leases - Summary of Maturities of Lease Liabilities (Detail) $ in Thousands | Mar. 31, 2023 USD ($) |
Lessee Disclosure [Abstract] | |
2023 (remaining 9 months) | $ 12,157 |
2024 | 7,798 |
2025 | 7,678 |
2026 | 7,542 |
2027 | 8,002 |
Thereafter | 18,612 |
Total lease payments | 61,789 |
Less: interest | (9,304) |
Total lease liabilities | $ 52,485 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Accrued Legal Expenses | $ 150 | $ 150 | |
Selling, General and Administrative Expenses | |||
Royalty Expense | 1,440 | $ 1,601 | |
License Agreement University | |||
Accrued Royalties | 1,187 | $ 1,187 | |
Royalty Expense | $ 0 | $ 0 |
Taxes - Additional Information
Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Federal corporate income tax rate | 21% | |
Income tax benefit (expense) | $ 1,658 | $ (45) |
Discreet tax expense | $ 22 | $ 10 |