Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 01, 2019 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
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 | true | |
Entity Ex Transition Period | false | |
Entity Address, State or Province | MA | |
Entity Shell Company | false | |
Title of 12(b) Security | Class A Common Stock | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 94,743,312 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash | $ 22,974 | $ 21,291 |
Restricted cash | 185 | 114 |
Accounts receivable, net | 34,383 | 34,077 |
Inventory | 20,184 | 13,321 |
Prepaid expenses and other current assets | 3,117 | 2,328 |
Total current assets | 80,843 | 71,131 |
Property and equipment, net | 44,254 | 39,623 |
Notes receivable from related parties | 536 | 477 |
Intangible assets, net | 22,314 | 26,091 |
Goodwill | 25,539 | 25,539 |
Deferred tax asset | 238 | 238 |
Other assets | 916 | 579 |
Total assets | 174,640 | 163,678 |
Current liabilities: | ||
Deferred acquisition consideration | 5,000 | 5,000 |
Redeemable common stock liability | 6,762 | |
Current portion of notes payable | 2,545 | |
Current portion of capital lease obligations | 2,872 | 2,236 |
Accounts payable | 28,251 | 19,165 |
Accrued expenses and other current liabilities | 20,606 | 20,388 |
Total current liabilities | 56,729 | 56,096 |
Line of credit | 33,484 | 26,484 |
Notes payable, net of current portion | 12,578 | |
Term loan | 49,599 | |
Deferred rent | 736 | 130 |
Capital lease obligations, net of current portion | 14,893 | 15,418 |
Other liabilities | 6,391 | 5,931 |
Total liabilities | 161,832 | 116,637 |
Commitments and contingencies (Note 13) | ||
Stockholders' equity (deficit): | ||
Common stock, $0.0001 par value; 400,000,000 shares authorized; 95,470,290 and 91,261,413 shares issued; 94,741,742 and 91,261,413 shares outstanding at September 30, 2019 and December 31, 2018, respectively | 9 | 9 |
Additional paid-in capital | 179,408 | 177,272 |
Accumulated deficit | (166,609) | (130,240) |
Total stockholders' equity | 12,808 | 47,041 |
Total liabilities and stockholders' equity | $ 174,640 | $ 163,678 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 95,470,290 | 91,261,413 |
Common stock, shares outstanding | 94,741,742 | 91,261,413 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Net revenue | $ 64,265 | $ 50,769 | $ 186,336 | $ 129,850 |
Cost of goods sold | 19,131 | 19,477 | 55,557 | 51,298 |
Gross profit | 45,134 | 31,292 | 130,779 | 78,552 |
Operating expenses: | ||||
Selling, general and administrative | 49,475 | 38,583 | 147,325 | 114,483 |
Research and development | 3,924 | 2,779 | 11,159 | 7,651 |
Write-off of deferred offering costs | 3,494 | |||
Total operating expenses | 53,399 | 41,362 | 158,484 | 125,628 |
Loss from operations | (8,265) | (10,070) | (27,705) | (47,076) |
Other income (expense), net: | ||||
Interest expense, net | (2,427) | (2,940) | (6,392) | (8,131) |
Change in fair value of warrants | (50) | (299) | ||
Loss on the extinguishment of debt | (1,862) | |||
Other income (expense), net | (1) | 9 | 11 | 12 |
Total other income (expense), net | (2,428) | (2,981) | (8,243) | (8,418) |
Net loss before income taxes | (10,693) | (13,051) | (35,948) | (55,494) |
Income tax expense | (48) | (27) | (108) | (82) |
Net loss | (10,741) | $ (13,078) | (36,056) | $ (55,576) |
Non-cash deemed dividend to warrant holders | (645) | 645 | ||
Net loss attributed to common shareholders | $ (11,386) | $ (36,701) | ||
Net loss per share attributed to common shareholders—basic and diluted | $ (0.12) | $ (0.19) | $ (0.40) | $ (0.83) |
Weighted average common shares outstanding—basic and diluted | 92,276,858 | 69,496,280 | 91,182,233 | 66,745,895 |
CONSOLIDATED STATEMENTS OF REDE
CONSOLIDATED STATEMENTS OF REDEEMABLE COMMON STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Redeemable Common Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Balance at Dec. 31, 2017 | $ (15,317) | $ 6,762 | $ 6 | $ 50,086 | $ (65,409) |
Balance (in shares) at Dec. 31, 2017 | 728,548 | 66,983,139 | |||
Proceeds from equity financing, net of issuance costs of $270 | 45,730 | $ 1 | 45,729 | ||
Proceeds from equity financing, net of issuance costs of $270 (in shares) | 6,538,732 | ||||
Exercise of stock options | 111 | 111 | |||
Exercise of stock options (in shares) | 73,257 | ||||
Stock-based compensation expense | 820 | 820 | |||
Net loss | (55,576) | (55,576) | |||
Balance at Sep. 30, 2018 | (24,232) | $ 6,762 | $ 7 | 96,746 | (120,985) |
Balance (in shares) at Sep. 30, 2018 | 728,548 | 73,595,128 | |||
Balance at Dec. 31, 2017 | (15,317) | $ 6,762 | $ 6 | 50,086 | (65,409) |
Balance (in shares) at Dec. 31, 2017 | 728,548 | 66,983,139 | |||
Balance at Dec. 31, 2018 | $ 47,041 | $ 9 | 177,272 | (130,240) | |
Balance (in shares) at Dec. 31, 2018 | 91,261,413 | 728,548 | 91,261,413 | ||
Balance at Jun. 30, 2018 | $ (57,169) | $ 6,762 | $ 6 | 50,732 | (107,907) |
Balance (in shares) at Jun. 30, 2018 | 728,548 | 67,040,639 | |||
Proceeds from equity financing, net of issuance costs of $270 | 45,730 | $ 1 | 45,729 | ||
Proceeds from equity financing, net of issuance costs of $270 (in shares) | 6,538,732 | ||||
Exercise of stock options | 33 | 33 | |||
Exercise of stock options (in shares) | 15,757 | ||||
Stock-based compensation expense | 252 | 252 | |||
Net loss | (13,078) | (13,078) | |||
Balance at Sep. 30, 2018 | (24,232) | $ 6,762 | $ 7 | 96,746 | (120,985) |
Balance (in shares) at Sep. 30, 2018 | 728,548 | 73,595,128 | |||
Balance at Dec. 31, 2018 | $ 47,041 | $ 9 | 177,272 | (130,240) | |
Balance (in shares) at Dec. 31, 2018 | 91,261,413 | 728,548 | 91,261,413 | ||
Adoption of ASC 606 | $ 332 | 332 | |||
Exercise of common stock warrants | 628 | 628 | |||
Exercise of common stock warrants (in shares) | 74,052 | ||||
Exercise of stock options | $ 163 | 163 | |||
Exercise of stock options (in shares) | 91,045 | 91,045 | |||
Common stock issued in warrant exchange | 645 | (645) | |||
Common stock issued in warrant exchange (shares) | 3,315,232 | ||||
Stock-based compensation expense | $ 700 | 700 | |||
Redemption of redeemable common stock placed into treasury (in shares) | (728,548) | ||||
Net loss | (36,056) | (36,056) | |||
Balance at Sep. 30, 2019 | $ 12,808 | $ 9 | 179,408 | (166,609) | |
Balance (in shares) at Sep. 30, 2019 | 94,741,742 | 94,741,742 | |||
Balance at Jun. 30, 2019 | $ 23,198 | $ 0 | $ 9 | 178,412 | (155,223) |
Balance (in shares) at Jun. 30, 2019 | 0 | 91,342,722 | |||
Exercise of common stock warrants (in shares) | 19,426 | ||||
Exercise of stock options | 109 | 109 | |||
Exercise of stock options (in shares) | 64,362 | ||||
Common stock issued in warrant exchange | 645 | (645) | |||
Common stock issued in warrant exchange (shares) | 3,315,232 | ||||
Stock-based compensation expense | 242 | 242 | |||
Net loss | (10,741) | (10,741) | |||
Balance at Sep. 30, 2019 | $ 12,808 | $ 9 | $ 179,408 | $ (166,609) | |
Balance (in shares) at Sep. 30, 2019 | 94,741,742 | 94,741,742 |
CONSOLIDATED STATEMENTS OF RE_2
CONSOLIDATED STATEMENTS OF REDEEMABLE COMMON STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Issuance costs | $ 270 | $ 270 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (36,056) | $ (55,576) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 2,553 | 2,608 |
Amortization of intangible assets | 4,526 | 2,752 |
Non-cash interest expense, net | 196 | 595 |
Deferred interest expense | 974 | 179 |
Deferred rent expense | 606 | 42 |
Gain on disposal of property and equipment | (1) | |
Write-off of deferred offering costs | 3,494 | |
Benefit recorded for sales returns and doubtful accounts | (29) | (18) |
Provision recorded for inventory reserve | 809 | 2,068 |
Stock-based compensation | 700 | 820 |
Change in fair value of warrant liability | 299 | |
Loss on extinguishment of debt | 1,862 | |
Changes in fair value of forfeiture rights | 589 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 553 | (815) |
Inventory | (7,840) | 145 |
Prepaid expenses and other current assets | (699) | (2,665) |
Accounts payable | 5,348 | (508) |
Accrued expenses and other current liabilities | 85 | (675) |
Accrued interest—affiliate debt | 2,859 | |
Other liabilities | (715) | 578 |
Net cash used in operating activities | (27,127) | (43,230) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (2,526) | (1,495) |
Proceeds from disposal of property and equipment | 1 | |
Acquisition of intangible asset | (250) | |
Net cash used in investing activities | (2,776) | (1,494) |
Cash flows from financing activities: | ||
Line of credit borrowings | 7,000 | 2,616 |
Proceeds from term loan | 50,000 | |
Proceeds from long—term debt—affiliates | 15,000 | |
Proceeds from notes payable | 5,000 | |
Proceeds from equity financing | 46,000 | |
Repayment of notes payable | (17,585) | (10) |
Proceeds from the exercise of stock options | 163 | 111 |
Proceeds from the exercise of common stock warrants | 628 | |
Redemption of redeemable common stock placed into treasury | (6,762) | |
Principal repayments of capital lease obligations | (863) | (17) |
Payment of debt issuance costs | (924) | (177) |
Payment of equity issuance costs | (270) | |
Net cash provided by financing activities | 31,657 | 68,253 |
Change in cash and restricted cash | 1,754 | 23,529 |
Cash and restricted cash, beginning of period | 21,405 | 2,358 |
Cash and restricted cash, end of period | 23,159 | 25,887 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 5,922 | 3,812 |
Cash paid for income taxes | 110 | 62 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Non-cash deemed dividend related to warrant exchange | 645 | |
Debt and equity issuance costs included in accounts payable | 91 | |
Purchases of property and equipment included in accounts payable and accrued expenses | 3,698 | $ 39 |
Equipment acquired under capital lease | 973 | |
Acquisition of intangible assets included in accrued expenses and other liabilities | $ 500 |
Nature of the Business and Basi
Nature of the Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of the Business and Basis of Presentation | 1. Nature of the Business and Basis of Presentation Organogenesis Holdings Inc. (formerly Avista Healthcare Public Acquisition Corp.) (“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. The majority of the existing and pipeline products in the Company’s portfolio have Premarket Application approval, Business License Applicant 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 operates in one operating and reportable segment. Merger with Avista Healthcare Public Acquisition Corp On December 10, 2018, Avista Healthcare Public Acquisition Corp., our predecessor company (“AHPAC”), consummated the previously announced merger (the “Avista Merger”) pursuant to an Agreement and Plan of Merger, dated as of August 17, 2018 (as amended, the “Avista Merger Agreement”), by and among AHPAC, Avista Healthcare Merger Sub, Inc., a Delaware corporation and a direct wholly-owned subsidiary of AHPAC (“Avista Merger Sub”) and Organogenesis Inc., a Delaware corporation (“Organogenesis Inc.”). As a result of the Avista Merger and the other transactions contemplated by the Avista Merger Agreement, Avista Merger Sub merged with and into Organogenesis Inc., with Organogenesis Inc. surviving the Avista Merger and becoming a wholly-owned subsidiary of AHPAC. AHPAC changed its name to Organogenesis Holdings Inc. (ORGO). The Avista Merger was accounted for as a reverse merger in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Under this method of accounting, AHPAC was treated as the “acquired” company for accounting purposes. This determination was primarily based on Organogenesis Inc.’s equity holders having a majority of the voting power of the combined company, Organogenesis Inc. comprising the ongoing operations of the combined entity, Organogenesis Inc. comprising a majority of the governing body of the combined company, and Organogenesis Inc.’s senior management comprising the senior management of the combined company. Accordingly, for accounting purposes, the Avista Merger was treated as the equivalent of Organogenesis Inc. issuing stock for the net assets of AHPAC, accompanied by a recapitalization. The net assets of AHPAC were recorded at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Avista Merger are those of Organogenesis Inc. Liquidity and Financial Conditions In accordance with ASC 205-40, Going Concern 205-40”), a s for at least 12 months beyond the filing date of this quarterly report. The Company may seek to raise additional funding through public and/or private equity financings, debt financings or other strategic transactions. There can be no assurance that the Company will be able to obtain additional debt or equity financing on terms acceptable to the Company, on a timely basis or at all. The failure of the Company to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on the Company’s business, results of operations, and financial condition. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Unaudited Interim Financial Information The accompanying unaudited consolidated financial statements have been prepared by management in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles 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 Company’s Annual Report on Form 10-K The unaudited consolidated financial statements include the accounts and results of operations of Organogenesis Holdings Inc. and its wholly-owned or controlled subsidiaries. For periods prior to the closing of the Avista Merger on December 10, 2018, the notes to the unaudited consolidated financial statements have been updated to give effect to the Avista Merger. 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 nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019, any other interim periods, or any future year or period. 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 results of operations during the reporting period. Actual results could differ from those estimates. Summary of Significant Accounting Policies The Company’s significant accounting policies are described in Note 2, “Summary of Significant Accounting Policies,” to the Consolidated Financial Statements included in the Annual Report. There have been no material changes to the significant accounting policies previously disclosed in the Annual Report other than as noted below. Adoption of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) The Company adopted ASC 606 on January 1, 2019, using the modified retrospective method for all contracts not completed as of the date of adoption. The reported results for the fiscal year 2019 reflect the application of ASC 606 guidance while the reported results for the fiscal year 2018 were prepared under the guidance of ASC Topic 605, Revenue Recognition Historically, for certain customers, products were shipped in advance of the receipt of a purchase order and the Company recognized revenue on these products only upon receipt of the purchase order which is when the transaction price was deemed fixed and determinable. As control of these products has transferred upon use of the product in a procedure, the recognition of revenue is accelerated to the procedure date under ASC 606. The adoption of ASC 606 did not have a material impact on the Company’s consolidated financial position, results of operations, equity or cash flows as of the adoption date or for the three and nine months ended September 30, 2019. Product 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 product to customers based on specific payment and shipping terms in the arrangement. The entire transaction price is allocated to the single performance obligation. Product revenue is recognized when a customer obtains control of the Company’s product which occurs at a point in time and may be upon shipment, procedure date, or delivery, based on the terms of the contract. Reserves for Variable Consideration Revenues from product sales are recorded net of reserves for variable consideration which includes but is not limited to product return, discounts, rebates and group purchasing organization (“GPO”) fees that are offered within contracts between the Company and its customers relating to the Company’s sales of its products. These reserves are based on the amounts earned or to be claimed by its customers on the related sales and are recorded as reductions of accounts receivable or an establishment of a liability. Where appropriate, these estimates take into consideration a range of possible outcomes which are probability-weighted for relevant factors such as the Company’s historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the contract and is included in the net sales price to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately paid may differ from the Company’s estimates. If actual results in the future vary from the Company’s estimates, the Company adjusts these estimates, which would affect net product revenue and earnings in the period such variances become known. Product Returns Consistent with industry practice, the Company generally offers customers a limited right of return for product purchased. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized. The Company currently estimates product return reserves using its actual and historical return rates as well as factors that it becomes aware of that it believes could significantly impact its expected returns, including product recalls, pricing changes, or change in reimbursement rates. The Company does not record an asset for the returned product as the product is discarded upon receipt. Rebates and Allowances The Company provides certain customers with rebates and allowances that are explicitly stated in the Company’s contracts, resulting in a reduction o f GPO Fees The Company pays fees to GPOs for administrative services that the GPOs perform in connection with the purchases of product by the GPO members. These fees are based on a contractually-determined percentage of the Company’s applicable sales. The Company classifies these GPO fees as a reduction of revenue or as an operating expense based on the substance of the relationship of all parties involved in the transaction. For the three months ended September 30, 2019 and 2018, the Company recorded GPO fees of $880 and $581, respectively, as a direct reduction of revenue. For the nine months ended September 30, 2019 and 2018, the Company recorded GPO fees of $1,991 and $1,304 r Other Revenue Policies Sales, value add, and other taxes collected on behalf of third parties are excluded from revenue. Applying the practical expedient in paragraph ASC 606-10-32-18, Applying the practical expedient in ASC 340-40-25-4, applying the practical expedient in ASC 606-10-25-18B Disaggregation of Revenue The following table sets forth revenue by product category: Three Months Ended September 30, 2019 2018 Advanced Wound Care $ 54,310 $ 43,597 Surgical & Sports Medicine 9,955 7,172 Total net $ 64,265 $ 50,769 Nine Months Ended September 30, 2019 2018 Advanced Wound Care $ 157,365 $ 109,711 Surgical & Sports Medicine 28,971 20,139 Total net $ 186,336 $ 129,850 For the three and nine months ended September 30, 2019, net PuraPly revenue totaled $31,755 and $86,893, respectively. For the three and nine months ended September 30, 2018, net PuraPly revenue totaled $17,872 and $41,261, respectively. For all periods presented, n et net Reclassification of Prior Period Balances Reclassifications have been made to prior period amounts to conform to the current-year presentation of the reporting of deferred interest and principal on outstanding capital lease obligations and deferred tenant escalations as long-term liabilities on the consolidated balance sheets. The deferred interest and tenant escalation amounts were previously reported as accrued expenses on the consolidated balance sheets and the deferred principal on the capital lease obligations were recorded as part of the current portion of capital lease obligations on the consolidated balance sheet. These reclassifications have no effect on the reported net loss or equity for the periods ended September 30, 2018 or December 31, 2018. Reclassification has been made to prior period amounts reported in the cash flows from operating activities section of the cash flow statement to conform to the current year presentation. The provision recorded for inventory reserve has been reduced by amounts not related to excess and obsolete inventory and change in inventory has been increased by a corresponding amount. The reclassification has no effect on the reported balance sheet, net loss or equity for the periods ended September 30, 2018 or December 31, 2018. Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842) 2016-02”), 2018-10, Codification Improvements to Topic 842, Leases 2016-02, 2018-11, Leases (Topic 842): Targeted Improvements 2016-02, 2019-01, Leases (Topic 842): Codification Improvements 2016-02 right-of-use Recently Adopted Accounting Pronouncements In September 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Topic 718, Compensation—Stock Compensation |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets and Liabilities | 3. Fair Value of Financial Assets and Liabilities The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values as of December 31, 2018. The redeemable common stock liability was settled in March 2019 as described below. Fair Value Measurements as of December 31, 2018 Using: Level 1 Level 2 Level 3 Total Liabilities: Redeemable common stock liability $ — $ — $ 6,762 $ 6,762 $ — $ — $ 6,762 $ 6,762 Redeemable Common Stock On March 24, 2017, the Company issued 728,548 shares of Class A common stock in connection with the NuTech Medical acquisition |
Accounts receivable, net
Accounts receivable, net | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
Accounts receivable, net | 4. Accounts Receivable, Net Accounts receivable consisted of the following: September 30, December 31, 2019 2018 Accounts receivable $ 37,318 $ 37,497 Less — allowance for sales returns and doubtful accounts (2,935 ) (3,420 ) $ 34,383 $ 34,077 The Company’s allowance for sales returns and doubtful accounts was comprised of the following: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Balance at beginning of period $ 3,021 $ 2,853 $ 3,420 $ 3,225 Additions (reductions) (56 ) 289 (29 ) (18 ) Write-offs (30 ) (51 ) (456 ) (116 ) Balance at end of period $ 2,935 $ 3,091 $ 2,935 $ 3,091 |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | 5. Inventories Inventories, net of related reserves for excess and obsolescence, consisted of the following: September 30, December 31, 2019 2018 Raw materials $ 7,430 $ 4,711 Work in process 1,355 1,759 Finished goods 11,399 6,851 $ 20,184 $ 13,321 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 September 30, 2019 and 2018, the Company charged $286 and $370, respectively, for inventory excess and obsolescence to cost of goods sold within the consolidated statements of operations. During the nine months ended September 30, 2019 and 2018, the Company charged $809 and $2,068, respectively, for inventory excess and obsolescence to cost of goods sold within the consolidated statements of operations. As of September 30, 2019 and December 31, 2018, the Company recorded a reserve for excess and obsolete inventory of $1,262 and $1,206, respectively. |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 6. Property and Equipment, Net Property and equipment consisted of the following: September 30, December 31, 2019 2018 Leasehold improvements $ 35,092 $ 34,345 Furniture, computers and equipment 46,038 44,752 81,130 79,097 Accumulated depreciation and amortization (64,977 ) (62,435 ) Construction in progress 28,101 22,961 $ 44,254 $ 39,623 Depreciation expense was $792 and $861 for the three months ended September 30, 2019 and 2018, respectively. Depreciation expense was $2,553 and $2,608 for the nine months ended September 30, 2019 and 2018, respectively. As of September 30, 2019 and December 31, 2018, the Company had $21,689 of buildings under capital leases recorded within leasehold improvements. As of September 30, 2019 and December 31, 2018, the Company had $13,477 and $12,579 recorded within accumulated depreciation and amortization related to buildings under capital leases, respectively. Construction in progress primarily represents unfinished construction work on the 275 Dan Road SPE, LLC property and, more recently, improvements at the Company’s leased facilit ies |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 7. Goodwill and Intangible Assets Goodwill was $25,539 as of September 30, 2019 and December 31, 2018. There were no impairments recorded against goodwill during the three and nine months ended September 30, 2019 and year ended December 31, 2018. In April, 2019, the Company purchased $750 of intangibles related to patent and know-how the ing Original Accumulated Net Book Cost Amortization Value Developed technology $ 30,570 $ (10,556 ) $ 20,014 Trade names and trademarks 2,000 (592 ) 1,408 Independent sales agency network 4,500 (3,767 ) 733 Non-compete 260 (101 ) 159 Total $ 37,330 $ (15,016 ) $ 22,314 Identifiable intangible assets consisted of the following as of December 31, 2018: Original Accumulated Net Book Cost Amortization Value Developed technology $ 29,820 $ (8,454 ) $ 21,366 Trade names and trademarks 2,000 (413 ) 1,587 Independent sales agency network 4,500 (1,569 ) 2,931 Non-compete 260 (53 ) 207 Total $ 36,580 $ (10,489 ) $ 26,091 Amortization of intangible assets, calculated on a straight - or ver ere , |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | 8. Accrued Expenses Accrued expenses and other current liabilities consisted of the following: September 30, December 31, 2019 2018 Accrued personnel costs $ 15,100 $ 15,218 Other 5,506 5,170 $ 20,606 $ 20,388 |
Line of Credit and Notes Payabl
Line of Credit and Notes Payable | 9 Months Ended |
Sep. 30, 2019 | |
Line of Credit Facility [Abstract] | |
Line of Credit and Notes Payable | 9. Line of Credit and Notes Payable Line of credit and notes payable consisted of the following: September 30, December 31, 2019 2018 Line of credit $ 33,484 $ 26,484 Term loan 50,000 — Less debt discount and debt issuance cost (401 ) — less current maturities — — Term loan, net of debt discount and debt issuance cost $ 49,599 $ — Notes payable — 15,885 Less debt discount and debt issuance cost — (762 ) less current maturities — (2,545 ) Notes payable, net of debt discount and debt issuance cost $ — $ 12,578 New Credit Agreemen t In March 2019, the Company and its subsidiaries, Organogenesis Inc. and Prime Merger Sub, LLC (collectively, and jointly and severally, “Borrower”), and Silicon Valley Bank (“SVB”), as Administrative Agent, Issuing Lender and Swingline Lender, and the several other lenders thereto (the “Lenders”) entered into a Credit Agreement (the “New Credit Agreement”) providing for a term loan (the “Term Loan Facility”) and a revolving credit facility (the “Revolving Facility”, and together with the Term Loan Facility, the “Debt Facility”) in an aggregate principal amount of $100,000. The Term Loan Facility is structured in three tranches, as follows: (i) the first tranche of $40,000 was made available to Borrower and fully funded on March 14, 2019; (ii) the second tranche of $10,000 was made available to Borrower in September 2019 upon: (a) Borrower’s demonstrated compliance with the financial covenants in the New Credit Agreement and (b) Borrower’s achievement of trailing twelve month Consolidated Revenue of not less than $221,250 and a trailing three month Adjusted EBITDA (as defined in the New Credit Agreement) loss not in excess of $5,000; and (iii) the third tranche of $10,000 w ould March 31, 2020 subject to thirty-six Borrower’s final payment on the Term Loan Facility, due on the Term Loan Maturity Date, will include all outstanding principal and accrued and unpaid interest under the Term Loan Facility, plus a final payment (the “Final Payment”) equal to the original aggregate principal amount of the Term Loan Facility multiplied by 6.25%. Borrower may prepay the Term Loan Facility, subject to paying the Prepayment Premium (described below) and the Final Payment. The Prepayment Premium is equal to 3.00% of the outstanding principal amount of the Term Loan Facility if the prepayment occurs on or prior to the one year anniversary of the closing, 2.00% of the outstanding principal amount of the Term Loan Facility if the prepayment occurs after such one year anniversary and prior to the second anniversary of the closing, and 1.00% of the outstanding principal amount of the Term Loan Facility if the prepayment occurs after the two year anniversary but prior to the three year anniversary of the closing, and 0% thereafter. Once repaid, amounts borrowed under the Term Loan Facility may not be re-borrowed. The Revolving Facility is equal to the lesser of $40,000 and the amount determined by the Borrowing Base, which is defined as a percentage of the Company’s book value of qualifying finished goods inventory and eligible accounts receivable. The interest rate for advances under the Revolving Facility is a floating per annum interest rate equal to the Wall Street Journal Prime Rate. In the event that the aggregate amount of interest earned by the Lenders from the Revolving Facility in any given month is less than the interest that would have been earned if Borrower had average outstanding advances in an amount equal to 25% of the then-available Revolving Commitments (as defined in the New Credit Agreement) then Borrower must pay the Administrative the minus Borrower may elect to reduce or terminate the Revolving Facility in its entirety at any time by repaying all outstanding principal, unpaid accrued interest and a reduction or termination fee equal to 4.00% of the aggregate Revolving Commitments so reduced or terminated if the reduction or termination occurs on or prior to the one year anniversary of the closing, 3.00% of the aggregate Revolving Commitments so reduced or terminated if the reduction or termination occurs after such one year anniversary and prior to the second anniversary of the closing, and 2.00% of the aggregate Revolving Commitments so reduced or terminated if the reduction or termination occurs after the two year anniversary but prior to the three year anniversary of the closing, and $0 thereafter. Under the New Credit Agreement, Borrower is required to achieve Minimum Trailing Twelve Month Consolidated Revenue (as defined in the New Credit Agreement), tested quarterly, at the following levels: $200,000 for the trailing twelve months ending March 31, 2019; $213,500 for the trailing twelve months ending June 30, 2019; $221,250 for the trailing twelve months ending September 30, 2019 As of September 30, 2019, the Company was in compliance with the financial covenants under the New Credit Agreement and had borrowings Future payments of Term Loan Facility, as of September 30, 2019, are as follows for the calendar years ended December 31: 2019 $ — 2020 — 2021 13,888 2022 16,667 2023 16,667 2024 2,778 Total $ 50,000 Credit Agreement On March 21, 2017, the Company entered into a credit agreement (the “Credit Agreement”) with SVB whereby SVB agreed to extend to the Company a revolving credit facility in an aggregate amount not to exceed $30,000 with a letter of credit sub-facility sub-facility sub-facilities On March 14, 2019, $26,541, representing all outstanding unpaid principal and accrued interest relating to the revolving borrowing due under the Credit Agreement, was rolled into the New Credit Agreement. Master Lease Agreement On April 28, 2017, the Company entered into the Master Lease Agreement (the “ML Agreement”) with Eastward Fund Management LLC that allowed the Company to borrow up to $20,000 on or prior to June |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | 10. Stockholders’ Equity Common Stock As of September 30, 2019, the authorized capital stock of the Company included 400,000,000 shares of Class A common stock, $0.0001 par value. 95,470,290 shares of Class A common stock were issued as of September 30, 2019 which includes 728,548 shares that were reacquired in connection with the redemption of redeemable shares in March 2019. See Note 3. At September 30, 2019 and December 31, 2018, the Company has reserved the following shares of Class A common stock for future issuance: September 30, December 31, 2019 2018 Shares reserved for issuance for outstanding options 6,588,000 6,590,195 Shares reserved for issuance for future option grant 9,008,996 9,108,996 Shares reserved for issuance under the warrants — 17,732,700 Total shares of authorized common stock reserved for future issuance 15,596,996 33,431,891 Warrant Exchange and Warrant Exercise On July 22, 2019, the Company made an exchange offer (the “Exchange Offer”) to all holders of the Company’s 30.9 million outstanding warrants, that were issued in connection with the Company’s initial public offering pursuant to a prospectus dated October 10, 2016 (the “Public Warrants”), to exchange 0.095 shares of Class A common stock for each Public Warrant tendered. On August 16, 2019, the expiration date of the Exchange Offer, a total of 29,950,150 warrants were tendered, resulting in the issuance of 2,845,280 shares of common stock. On August 19, 2019, the Company executed an amendment to the warrant agreement, dated October 10, 2016, governing its outstanding Public Warrants to provide the Company with the right to require the Public Warrants holders to exchange one share of their Public Warrant for 0.0855 shares of the Company’s Class A common stock. Pursuant to the amendment, the Company issued 80,451 additional shares in exchange for all remaining untendered Public Warrants. Pursuant to the terms of the Company’s previously announced Warrant Exchange Agreement dated July 12, 2019, with Avista Capital Partners IV L.P., and Avista Capital Partners IV (Offshore), L.P. (collectively, the “PIPE Investors”), the Company issued an aggregate of 389,501 shares of Class A common stock, to the PIPE Investors, at the same exchange ratio offered to the Public Warrant holders in the Exchange Offer, in exchange for an aggregate of 4,100,000 private placement warrants. On August 13, 2019, Massachusetts Capital Resource Company and Life Insurance Community Investment Initiative, LLC (the “Lender Warrant Holders”) net exercised outstanding warrants to purchase an aggregate of 182,700 shares of the Company’s Class A common stock at an exercise price of $3.95 per share. The Company issued an aggregate of 19,426 shares of common stock in connection with this transaction. As a result of these transactions, the Company issued an aggregate of 3,334,658 shares of common stock, representing approximately 3% of the total Class A common stock outstanding after such issuances. As of September 30, 2019, no warrants were outstanding. As the fair value of the warrants exchanged in the warrant exchange transactions immediately prior to the exchanges was less than the fair value of the common stock issued, the Company recorded a non-cash deemed dividend for the incremental fair value provided to the warrant holders in the three months ended September 30, 2019. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 11. Stock-Based Compensation Stock Incentive Plans 2018 Stock Incentive 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 As of September 30, 2019, a total of 9,198,996 shares of Class A common stock have been authorized to be issued under the 2018 Plan (subject to adjustment in the case of any stock dividend, stock split, reverse stock split, or similar change in capitalization of the Company). As of September 30, 2019, options to purchase 190,000 shares of Class A common stock were outstanding under the 2018 Plan. No other awards have been issued under the 2018 Plan. 2003 Stock Incentive 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 non-statutory As of the closing of the Avista Merger on December 10, 2018, a total of 7,176,715 shares of Class A common stock were issuable upon exercise of outstanding options under the 2003 Plan. Effective as of the closing of the Avista Merger on 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 common stock that are tendered to the Company by a participant to exercise an award will not be available for future awards. Following the closing of the Avista Merger, the 2003 Plan is administered by the Company’s board of directors. Stock-Based Compensation Expenses Stock options awarded under the 2018 Plan and the 2003 Plan expire 10 years after the grant date and typically vest over four or five years. Stock-based compensation expense was $242 and $252 for the three months ended September 30, 2019 and 2018, respectively, and was $700 and $820 for the nine months ended September 30, 2019 and 2018, respectively. The total amount of stock-based compensation expenses was included within selling, general and administrative on the consolidated statements of operations. Stock Option Valuation The stock options granted during the nine months ended September 30, 2019 and September 30, 2018 were 100,000 and 78,111, 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: September 30, September 30, Risk-free interest rate 2.24 % 2.74 % Expected term (in years) 6.50 5.82 Expected volatility 42.7 % 42.9 % Expected dividend yield 0.0 % 0.0 % Exercise price $ 7.08 $ 5.40 Underlying stock price $ 7.08 $ 5.40 These assumptions resulted in an estimated weighted - Stock Option Activity The following table summarizes the Company’s stock option activity since December 31, 2018 (in thousands, except share and per share amounts): Number of Weighted Weighted Aggregate Outstanding as of December 31, 2018 7,266,185 $ 1.92 5.89 $ 33,909 Granted 100,000 7.08 Canceled / forfeited (11,150 ) 2.87 Exercised (91,045 ) 1.77 382 Outstanding as of September 30, 2019 7,263,990 1.99 5.31 33,359 Options exercisable as of September 30, 2019 5,736,926 1.59 4.69 28,546 Options vested or expected to vest as of September 30, 2019 7,025,841 $ 1.91 5.20 $ 32,797 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 had exercise prices lower than the fair value of the Company’s Class A common stock. The total fair value of options vested during the nine months ended September 30, 2019 and 2018 was $538 and $503, respectively. As of September 30, 2019, the total unrecognized stock compensation expense was $1,444 and is expected to be recognized over a weighted-average period of 2.59 years. A s of paid-in o in prior periods |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 12. Net Loss per Share The Company’s potentially dilutive securities, which include redeemable common stock and and warrants , - The Company excluded the following potential shares of Class A common stock, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to the common stockholders of Organogenesis Holdings Inc. for the periods indicated because including them would have had an anti-dilutive effect: Nine Months Ended September 30, 2019 2018 Options to purchase common stock 7,263,990 7,178,774 Redeemable common stock — 728,548 Warrants to purchase common stock — 1,561,485 7,263,990 9,468,807 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure | 13. Commitments and Contingencies Capitalized Leases On January 1, 2013, the Company entered into capital 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 stockholders of the Company. The leases terminate on December 31, 2022 and each contains a renewal option for a five-year period with the The Company records the capital lease asset within property and equipment and the liability is recorded within the capital lease obligations on the consolidated balance sheets. As of September 30, 2019 and December 31, 2018, the Company owed an aggregate of $10,336 and $10,293, respectively, of accrued but unpaid lease obligations. These accrued but unpaid lease obligations are subordinated to the New Credit Agreement and will not be paid until the debt under the New Credit Agreement is paid off. The principal portion of rent in arrears on the capital leases totaled $6,042 and $5,265 as of September 30, 2019 and December 31, 2018, respectively, and is included in the long-term portion of capital lease obligations. The interest portion of rent in arrears totaled $3,650 and $4,174 as of September 30, 2019 and December 31, 2018, respectively, and is included in other liabilities on the consolidated balance sheets. In addition to rent, the Company is responsible for payment of all operating costs and common area maintenance under the aforementioned leases. As of September 30, 2019 and December 31, 2018, the Company owed $644 and $854, respectively, of operating and common area maintenance costs which are included in other liabilities on the consolidated balance sheets. 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 in the New Credit Agreement (see Note 9). The accrued interest is also subordinated to the New Credit Agreement and, as such, is included in other liabilities on the consolidated balance sheet. Interest accrued as of September 30, 2019 totaled $478. Future obligations under capital leases in the aggregate and for the next five years is as follows: 2019 (remaining three months) $ 1,180 2020 4,721 2021 4,721 2022 4,945 2023 — Thereafter 9,692 25,259 Less amount representing interest (7,494 ) Present value of minimum lease payments 17,765 Less current maturities (2,872 ) Long-term portion $ 14,893 Operating Leases The Company leases vehicles for certain employees and have fleet services agreements for service on these vehicles. The minimum lease term for each newly leased vehicle is one year with three consecutive one-year In i I ten-year Operating lease expense s ere 1,218 , 3,630 Future minimum lease payments due under noncancelable operating lease agreements as of September 30, 2019 are as follows: 2019 (remaining three months) $ 1,218 2020 5,714 2021 5,053 2022 2,558 2023 1,180 Thereafter 8,123 $ 23,846 Royalty Commitments 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 September 30, 2019 and December 31, 2018, and are classified as part of accrued expenses on the Company’s consolidated balance sheets. There was no royalty expense incurred during the three and nine months ended September 30, 2019 and 2018 related to this agreement. In October 2017, the Company entered into a license agreement to resolve a patent infringement claim by 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, 2016, through the expiration date of the underlying patent, subject to minimum royalty payment provisions. The Company recorded royalty expense of $991 and $506 during the three months ended September 30, 2019 and 2018, respectively, within selling, general and administrative expenses on the consolidated statement of operations. The Company recorded royalty expense of $2,695 and $1,207 during the nine months ended September 30, 2019 and 2018, respectively, within selling, general and administrative expenses on the consolidated statement of operations. Legal Proceedings 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 of the Company. The Company accrues for these claims when amounts due are probable and estimable. The Company accrued $ 542 , respectively, The purchase price for NuTech Medical included $7,500 of future payments issued as deferred acquisition consideration. As of September 30, 2019, the Company has paid $2,500 in deferred acquisition consideration. The amount, if any, of the remaining $5,000 of deferred acquisition consideration plus accrued interest owed to the sellers of NuTech Medical is currently in dispute. As of September 30, 2019, the Company recorded $842 of accrued interest related to the deferred acquisition consideration which is recorded in accrued expenses and other current liabilities. The Company has asserted certain claims for indemnification that would offset in whole or in part its payment obligation and the sellers of NuTech Medical have filed a lawsuit alleging breach of contract and seeking specific performance of the alleged payment obligation and attorneys’ fees. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 14. Related Party Transactions Capital lease obligations to affiliates are further described in Note 13. During 2010, the Company’s board of directors approved a loan program that permitted the Company to make loans to three executives of the Company (the “Employer Loans”) to (i) provide them with liquidity (“Liquidity Loans”) and (ii) fund the exercise of vested stock options (“Option Loans”). The Employer Loans mature with all principal and accrued interest due on the tenth anniversary of the issuance date of each subject loan, except that in certain circumstances , In connection with the acquisition of NuTech Medical, the Company entered into an operating lease with Oxmoor Holdings, LLC, an entity that is affiliated with the former sole shareholder of NuTech Medical, related to the facility at NuTech Medical’s headquarters in Birmingham, Alabama. Under the lease, the Company is required to make monthly rent payments of approximately $21 through December 31, 2020. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events The Company has evaluated subsequent events through November 12, 2019, 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) | 9 Months Ended |
Sep. 30, 2019 | |
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 accounting principles generally accepted in the United States of America (“GAAP”) and in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles 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 Company’s Annual Report on Form 10-K The unaudited consolidated financial statements include the accounts and results of operations of Organogenesis Holdings Inc. and its wholly-owned or controlled subsidiaries. For periods prior to the closing of the Avista Merger on December 10, 2018, the notes to the unaudited consolidated financial statements have been updated to give effect to the Avista Merger. 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 nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019, any other interim periods, or any future year or period. |
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 results of operations during the reporting period. Actual results could differ from those estimates. |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The Company’s significant accounting policies are described in Note 2, “Summary of Significant Accounting Policies,” to the Consolidated Financial Statements included in the Annual Report. There have been no material changes to the significant accounting policies previously disclosed in the Annual Report other than as noted below. |
Revenue from Contract with Customer | Adoption of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) The Company adopted ASC 606 on January 1, 2019, using the modified retrospective method for all contracts not completed as of the date of adoption. The reported results for the fiscal year 2019 reflect the application of ASC 606 guidance while the reported results for the fiscal year 2018 were prepared under the guidance of ASC Topic 605, Revenue Recognition Historically, for certain customers, products were shipped in advance of the receipt of a purchase order and the Company recognized revenue on these products only upon receipt of the purchase order which is when the transaction price was deemed fixed and determinable. As control of these products has transferred upon use of the product in a procedure, the recognition of revenue is accelerated to the procedure date under ASC 606. The adoption of ASC 606 did not have a material impact on the Company’s consolidated financial position, results of operations, equity or cash flows as of the adoption date or for the three and nine months ended September 30, 2019. Product 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 product to customers based on specific payment and shipping terms in the arrangement. The entire transaction price is allocated to the single performance obligation. Product revenue is recognized when a customer obtains control of the Company’s product which occurs at a point in time and may be upon shipment, procedure date, or delivery, based on the terms of the contract. Reserves for Variable Consideration Revenues from product sales are recorded net of reserves for variable consideration which includes but is not limited to product return, discounts, rebates and group purchasing organization (“GPO”) fees that are offered within contracts between the Company and its customers relating to the Company’s sales of its products. These reserves are based on the amounts earned or to be claimed by its customers on the related sales and are recorded as reductions of accounts receivable or an establishment of a liability. Where appropriate, these estimates take into consideration a range of possible outcomes which are probability-weighted for relevant factors such as the Company’s historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the contract and is included in the net sales price to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately paid may differ from the Company’s estimates. If actual results in the future vary from the Company’s estimates, the Company adjusts these estimates, which would affect net product revenue and earnings in the period such variances become known. Product Returns Consistent with industry practice, the Company generally offers customers a limited right of return for product purchased. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized. The Company currently estimates product return reserves using its actual and historical return rates as well as factors that it becomes aware of that it believes could significantly impact its expected returns, including product recalls, pricing changes, or change in reimbursement rates. The Company does not record an asset for the returned product as the product is discarded upon receipt. Rebates and Allowances The Company provides certain customers with rebates and allowances that are explicitly stated in the Company’s contracts, resulting in a reduction o f GPO Fees The Company pays fees to GPOs for administrative services that the GPOs perform in connection with the purchases of product by the GPO members. These fees are based on a contractually-determined percentage of the Company’s applicable sales. The Company classifies these GPO fees as a reduction of revenue or as an operating expense based on the substance of the relationship of all parties involved in the transaction. For the three months ended September 30, 2019 and 2018, the Company recorded GPO fees of $880 and $581, respectively, as a direct reduction of revenue. For the nine months ended September 30, 2019 and 2018, the Company recorded GPO fees of $1,991 and $1,304 r Other Revenue Policies Sales, value add, and other taxes collected on behalf of third parties are excluded from revenue. Applying the practical expedient in paragraph ASC 606-10-32-18, Applying the practical expedient in ASC 340-40-25-4, applying the practical expedient in ASC 606-10-25-18B Disaggregation of Revenue The following table sets forth revenue by product category: Three Months Ended September 30, 2019 2018 Advanced Wound Care $ 54,310 $ 43,597 Surgical & Sports Medicine 9,955 7,172 Total net $ 64,265 $ 50,769 Nine Months Ended September 30, 2019 2018 Advanced Wound Care $ 157,365 $ 109,711 Surgical & Sports Medicine 28,971 20,139 Total net $ 186,336 $ 129,850 For the three and nine months ended September 30, 2019, net PuraPly revenue totaled $31,755 and $86,893, respectively. For the three and nine months ended September 30, 2018, net PuraPly revenue totaled $17,872 and $41,261, respectively. For all periods presented, n et net |
Reclassification of Prior Period Balances | Reclassification of Prior Period Balances Reclassifications have been made to prior period amounts to conform to the current-year presentation of the reporting of deferred interest and principal on outstanding capital lease obligations and deferred tenant escalations as long-term liabilities on the consolidated balance sheets. The deferred interest and tenant escalation amounts were previously reported as accrued expenses on the consolidated balance sheets and the deferred principal on the capital lease obligations were recorded as part of the current portion of capital lease obligations on the consolidated balance sheet. These reclassifications have no effect on the reported net loss or equity for the periods ended September 30, 2018 or December 31, 2018. Reclassification has been made to prior period amounts reported in the cash flows from operating activities section of the cash flow statement to conform to the current year presentation. The provision recorded for inventory reserve has been reduced by amounts not related to excess and obsolete inventory and change in inventory has been increased by a corresponding amount. The reclassification has no effect on the reported balance sheet, net loss or equity for the periods ended September 30, 2018 or December 31, 2018. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842) 2016-02”), 2018-10, Codification Improvements to Topic 842, Leases 2016-02, 2018-11, Leases (Topic 842): Targeted Improvements 2016-02, 2019-01, Leases (Topic 842): Codification Improvements 2016-02 right-of-use |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In September 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Topic 718, Compensation—Stock Compensation |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Revenue by Product Category | The following table sets forth revenue by product category: Three Months Ended September 30, 2019 2018 Advanced Wound Care $ 54,310 $ 43,597 Surgical & Sports Medicine 9,955 7,172 Total net $ 64,265 $ 50,769 Nine Months Ended September 30, 2019 2018 Advanced Wound Care $ 157,365 $ 109,711 Surgical & Sports Medicine 28,971 20,139 Total net $ 186,336 $ 129,850 |
Fair Value of Financial Asset_2
Fair Value of Financial Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping | The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values as of December 31, 2018. The redeemable common stock liability was settled in March 2019 as described below. Fair Value Measurements as of December 31, 2018 Using: Level 1 Level 2 Level 3 Total Liabilities: Redeemable common stock liability $ — $ — $ 6,762 $ 6,762 $ — $ — $ 6,762 $ 6,762 |
Accounts receivable, net (Table
Accounts receivable, net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
Schedule of accounts receivable | Accounts receivable consisted of the following: September 30, December 31, 2019 2018 Accounts receivable $ 37,318 $ 37,497 Less — allowance for sales returns and doubtful accounts (2,935 ) (3,420 ) $ 34,383 $ 34,077 |
Schedule of allowance for sales returns and doubtful accounts | The Company’s allowance for sales returns and doubtful accounts was comprised of the following: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Balance at beginning of period $ 3,021 $ 2,853 $ 3,420 $ 3,225 Additions (reductions) (56 ) 289 (29 ) (18 ) Write-offs (30 ) (51 ) (456 ) (116 ) Balance at end of period $ 2,935 $ 3,091 $ 2,935 $ 3,091 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventories, net of related reserves for excess and obsolescence, consisted of the following: September 30, December 31, 2019 2018 Raw materials $ 7,430 $ 4,711 Work in process 1,355 1,759 Finished goods 11,399 6,851 $ 20,184 $ 13,321 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and equipment consisted of the following: September 30, December 31, 2019 2018 Leasehold improvements $ 35,092 $ 34,345 Furniture, computers and equipment 46,038 44,752 81,130 79,097 Accumulated depreciation and amortization (64,977 ) (62,435 ) Construction in progress 28,101 22,961 $ 44,254 $ 39,623 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Original Accumulated Net Book Cost Amortization Value Developed technology $ 30,570 $ (10,556 ) $ 20,014 Trade names and trademarks 2,000 (592 ) 1,408 Independent sales agency network 4,500 (3,767 ) 733 Non-compete 260 (101 ) 159 Total $ 37,330 $ (15,016 ) $ 22,314 Identifiable intangible assets consisted of the following as of December 31, 2018: Original Accumulated Net Book Cost Amortization Value Developed technology $ 29,820 $ (8,454 ) $ 21,366 Trade names and trademarks 2,000 (413 ) 1,587 Independent sales agency network 4,500 (1,569 ) 2,931 Non-compete 260 (53 ) 207 Total $ 36,580 $ (10,489 ) $ 26,091 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Accrued expenses and other current liabilities consisted of the following: September 30, December 31, 2019 2018 Accrued personnel costs $ 15,100 $ 15,218 Other 5,506 5,170 $ 20,606 $ 20,388 |
Line of Credit and Notes Paya_2
Line of Credit and Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Line of Credit Facility [Abstract] | |
Schedule of line of credit facilities | Line of credit and notes payable consisted of the following: September 30, December 31, 2019 2018 Line of credit $ 33,484 $ 26,484 Term loan 50,000 — Less debt discount and debt issuance cost (401 ) — less current maturities — — Term loan, net of debt discount and debt issuance cost $ 49,599 $ — Notes payable — 15,885 Less debt discount and debt issuance cost — (762 ) less current maturities — (2,545 ) Notes payable, net of debt discount and debt issuance cost $ — $ 12,578 |
Schudle of future payments of term loan facility | Future payments of Term Loan Facility, as of September 30, 2019, are as follows for the calendar years ended December 31: 2019 $ — 2020 — 2021 13,888 2022 16,667 2023 16,667 2024 2,778 Total $ 50,000 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Schedule Of Common Stock Shares Reserved For Future Issuance [Table Text Block] | At September 30, 2019 and December 31, 2018, the Company has reserved the following shares of Class A common stock for future issuance: September 30, December 31, 2019 2018 Shares reserved for issuance for outstanding options 6,588,000 6,590,195 Shares reserved for issuance for future option grant 9,008,996 9,108,996 Shares reserved for issuance under the warrants — 17,732,700 Total shares of authorized common stock reserved for future issuance 15,596,996 33,431,891 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
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: September 30, September 30, Risk-free interest rate 2.24 % 2.74 % Expected term (in years) 6.50 5.82 Expected volatility 42.7 % 42.9 % Expected dividend yield 0.0 % 0.0 % Exercise price $ 7.08 $ 5.40 Underlying stock price $ 7.08 $ 5.40 |
Summary of Stock Option Activity | The following table summarizes the Company’s stock option activity since December 31, 2018 (in thousands, except share and per share amounts): Number of Weighted Weighted Aggregate Outstanding as of December 31, 2018 7,266,185 $ 1.92 5.89 $ 33,909 Granted 100,000 7.08 Canceled / forfeited (11,150 ) 2.87 Exercised (91,045 ) 1.77 382 Outstanding as of September 30, 2019 7,263,990 1.99 5.31 33,359 Options exercisable as of September 30, 2019 5,736,926 1.59 4.69 28,546 Options vested or expected to vest as of September 30, 2019 7,025,841 $ 1.91 5.20 $ 32,797 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The Company excluded the following potential shares of Class A common stock, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to the common stockholders of Organogenesis Holdings Inc. for the periods indicated because including them would have had an anti-dilutive effect: Nine Months Ended September 30, 2019 2018 Options to purchase common stock 7,263,990 7,178,774 Redeemable common stock — 728,548 Warrants to purchase common stock — 1,561,485 7,263,990 9,468,807 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Lease Payments | 2019 (remaining three months) $ 1,180 2020 4,721 2021 4,721 2022 4,945 2023 — Thereafter 9,692 25,259 Less amount representing interest (7,494 ) Present value of minimum lease payments 17,765 Less current maturities (2,872 ) Long-term portion $ 14,893 |
Schedule Of Operating Leased Assets | 2019 (remaining three months) $ 1,218 2020 5,714 2021 5,053 2022 2,558 2023 1,180 Thereafter 8,123 $ 23,846 |
Nature of the Business and Ba_2
Nature of the Business and Basis of Presentation - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Organization and Financing | |||||
Working capital | $ 24,100 | $ 24,100 | |||
Cash | 22,974 | 22,974 | $ 21,291 | ||
Accumulated deficit | (166,609) | (166,609) | $ (130,240) | ||
Net loss | $ (10,741) | $ (13,078) | (36,056) | $ (55,576) | |
Cash used in operation | (27,127) | $ (43,230) | |||
Accounting Standards Update 2013-07 [Member] | |||||
Organization and Financing | |||||
Net loss | 36,100 | ||||
Cash used in operation | $ 27,100 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Schedule of Revenue by Product Category (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Total net revenue | $ 64,265 | $ 50,769 | $ 186,336 | $ 129,850 |
Advanced Wound Care | ||||
Total net revenue | 54,310 | 43,597 | 157,365 | 109,711 |
Surgical & Sports Medicine | ||||
Total net revenue | $ 9,955 | $ 7,172 | $ 28,971 | $ 20,139 |
Significant Accounting Policies
Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Significant Accounting Policies [Line Items] | ||||
Revenue | $ 64,265 | $ 50,769 | $ 186,336 | $ 129,850 |
GPO Fees | $ 880 | $ 581 | $ 1,991 | $ 1,304 |
Sales Revenue | ||||
Significant Accounting Policies [Line Items] | ||||
Concentration Risk, Percentage | 1.00% | 1.00% | 1.00% | 1.00% |
PuraPly | ||||
Significant Accounting Policies [Line Items] | ||||
Revenue | $ 31,755 | $ 17,872 | $ 86,893 | $ 41,261 |
Fair Value Measurement of Finan
Fair Value Measurement of Financial Instruments - Financial Assets And Liabilities Measured At Fair Value (Detail) - Fair Value, Measurements, Recurring $ in Thousands | Dec. 31, 2018USD ($) |
Liabilities: | |
Redeemable common stock liability | $ 6,762 |
Redeemable common stock liability | |
Liabilities: | |
Redeemable common stock liability | 6,762 |
Fair Value, Inputs, Level 3 | |
Liabilities: | |
Redeemable common stock liability | 6,762 |
Fair Value, Inputs, Level 3 | Redeemable common stock liability | |
Liabilities: | |
Redeemable common stock liability | $ 6,762 |
Fair Value of Financial Asset_3
Fair Value of Financial Assets and Liabilities - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Mar. 24, 2017 | Mar. 24, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Company issued acquisition of shares | 728,548 | |||
Treasury stock | 728,548 | |||
NuTech Medical | ||||
Temporary Equity, Redemption Price Per Share | $ 9.28 | |||
Common Class A | ||||
Redeemable common stock, Carrying amount | $ 6,762 | |||
Common Class A | NuTech Medical | ||||
Company issued acquisition of shares | 728,548 | |||
Business Acquisition, Share Price | $ 8.69 |
Accounts receivable, net (Detai
Accounts receivable, net (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Accounts receivable | $ 37,318 | $ 37,497 |
Less — allowance for sales returns and doubtful accounts | (2,935) | (3,420) |
Accounts receivable | $ 34,383 | $ 34,077 |
Accounts receivable, net - Sale
Accounts receivable, net - Sales Returns and Doubtful Accounts (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Balance | $ 3,021 | $ 2,853 | $ 3,420 | $ 3,225 |
Additions (reductions) | (56) | 289 | (29) | (18) |
Write-offs | (30) | (51) | (456) | (116) |
Balance | $ 2,935 | $ 3,091 | $ 2,935 | $ 3,091 |
Inventories (Detail)
Inventories (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Raw materials | $ 7,430 | $ 4,711 |
Work in process | 1,355 | 1,759 |
Finished goods | 11,399 | 6,851 |
Inventory | $ 20,184 | $ 13,321 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Inventory Reserve And Obsolence Charged To Cost Of Goods Sold | $ 286 | $ 370 | $ 809 | $ 2,068 | |
Reserve for excess and obsolete inventory | $ 1,262 | $ 1,262 | $ 1,206 |
Property and Equipment, Net (De
Property and Equipment, Net (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment, Gross | $ 81,130 | $ 79,097 |
Accumulated depreciation and amortization | (64,977) | (62,435) |
Property, Plant and Equipment, Net | 44,254 | 39,623 |
Leasehold improvements | ||
Property, Plant and Equipment, Gross | 35,092 | 34,345 |
Furniture, computers and equipment | ||
Property, Plant and Equipment, Gross | 46,038 | 44,752 |
Construction in progress | ||
Property, Plant and Equipment, Net | $ 28,101 | $ 22,961 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Depreciation expense | $ 792 | $ 861 | $ 2,553 | $ 2,608 | |
Leasehold improvements | |||||
Capital leases recorded within leasehold improvements | 21,689 | 21,689 | $ 21,689 | ||
Capital leases recorded | $ 13,477 | $ 13,477 | $ 12,579 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Identifiable intangible assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Original Cost | $ 37,330 | $ 36,580 |
Accumulated Amortization | (15,016) | (10,489) |
Net Book Value | 22,314 | 26,091 |
Developed technology | ||
Original Cost | 30,570 | 29,820 |
Accumulated Amortization | (10,556) | (8,454) |
Net Book Value | 20,014 | 21,366 |
Trade names and trademarks | ||
Original Cost | 2,000 | 2,000 |
Accumulated Amortization | (592) | (413) |
Net Book Value | 1,408 | 1,587 |
Independent sales agency network | ||
Original Cost | 4,500 | 4,500 |
Accumulated Amortization | (3,767) | (1,569) |
Net Book Value | 733 | 2,931 |
Non-compete agreements | ||
Original Cost | 260 | 260 |
Accumulated Amortization | (101) | (53) |
Net Book Value | $ 159 | $ 207 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Apr. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Goodwill | $ 25,539 | $ 25,539 | $ 25,539 | |||
Amortization of Intangible Assets | $ 1,529 | $ 918 | 4,526 | $ 2,752 | ||
Intangible asset purchase, cash paid | 250 | |||||
Intangible asset purchase, remaining payables | 500 | |||||
Developed Technology Rights [Member] | ||||||
Intangible asset purchase, value | $ 750 | |||||
Intangible asset purchase, cash paid | $ 250 | |||||
Intangible asset purchase, remaining payables | $ 500 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accrued personnel costs | $ 15,100 | $ 15,218 |
Other | 5,506 | 5,170 |
Total Accrued Expenses and Other Current Liabilities | $ 20,606 | $ 20,388 |
Line of Credit and Notes Paya_3
Line of Credit and Notes Payable (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Line of credit | $ 26,484 | |
Term loan | $ 50,000 | |
Notes payable | 15,885 | |
Less debt discount and debt issuance cost | (762) | |
less current maturities | (2,545) | |
Notes payable, net of debt discount and debt issuance cost | $ 12,578 | |
New Credit Facility [Member] | ||
Line of credit | 33,484 | |
Term loan | 50,000 | |
Term loan, net of debt discount and debt issuance cost | 49,599 | |
Less debt discount and debt issuance cost | $ (401) |
Line of Credit and Notes Paya_4
Line of Credit and Notes Payable - Future payments of term loan (Detail) $ in Thousands | Sep. 30, 2019USD ($) |
2019 | $ 0 |
2020 | 0 |
2021 | 13,888 |
2022 | 16,667 |
2023 | 16,667 |
2024 | 2,778 |
Total | $ 50,000 |
Line of Credit and Notes Paya_5
Line of Credit and Notes Payable - Additional Information (Detail) - USD ($) $ in Thousands | Mar. 14, 2019 | Dec. 31, 2019 | Apr. 30, 2018 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Apr. 28, 2018 | May 01, 2017 | Mar. 21, 2017 |
Letter of credit sub facility | $ 26,484 | |||||||||||||||
Revenues | $ 64,265 | $ 50,769 | $ 186,336 | $ 129,850 | ||||||||||||
Loss on the extinguishment of loan | (1,862) | |||||||||||||||
ML Agreement | ||||||||||||||||
Loss on the extinguishment of loan | $ 1,862 | |||||||||||||||
Credit Agreement | ||||||||||||||||
Letter of credit sub facility | $ 26,541 | |||||||||||||||
Future revolving borrowings | $ 3,516 | |||||||||||||||
Additional fund | $ 5,000 | |||||||||||||||
Aggregate amounts of term loan | 35,000 | |||||||||||||||
New Credit Agreement | ||||||||||||||||
Term Loan Facility, financial covenants | Borrower's achievement of trailing twelve month Consolidated Revenue of not less than $221,250 and a trailing three month Adjusted EBITDA (as defined in the New Credit Agreement) loss not in excess of $5,000; | maintain Minimum Liquidity (as defined in the New Credit Agreement) equal to the greater of (i) 6 months Monthly Burn (as defined in the New Credit Agreement) and (ii) $10,000. | ||||||||||||||
Aggregate amounts of term loan | 100,000 | $ 100,000 | ||||||||||||||
Proceeds from Issuance of Debt | 50,000 | |||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 3.75% | |||||||||||||||
Debt Instrument, Description of Variable Rate Basis | interest rate equal to 3.75% above the Wall Street Journal Prime Rate | |||||||||||||||
Additional payment in aggregate of the principal amount percentage | 6.25% | |||||||||||||||
Advance outstanding amount revolving facility | 25.00% | |||||||||||||||
Unused Line Fee | 0.25% | |||||||||||||||
EBITDA income (loss) | $ 5,000 | |||||||||||||||
New Credit Agreement | Repaid Before One year | ||||||||||||||||
Termination fee percentage | 4.00% | |||||||||||||||
Prepayment premium percentage | 3.00% | |||||||||||||||
New Credit Agreement | Repaid After One year Before Two Years | ||||||||||||||||
Termination fee percentage | 3.00% | |||||||||||||||
Prepayment premium percentage | 2.00% | |||||||||||||||
New Credit Agreement | Repaid After Two year Before Three Years [Member] | ||||||||||||||||
Termination fee percentage | 2.00% | |||||||||||||||
Prepayment premium percentage | 1.00% | |||||||||||||||
New Credit Agreement | Repaid After Three Years [Member] | ||||||||||||||||
Termination fee amount | $ 0 | |||||||||||||||
Prepayment premium percentage | 0.00% | |||||||||||||||
New Credit Agreement | Tranche One [Member] | ||||||||||||||||
Aggregate principal amount | $ 40,000 | |||||||||||||||
New Credit Agreement | Tranche Two [Member] | ||||||||||||||||
Aggregate principal amount | $ 10,000 | 10,000 | $ 10,000 | |||||||||||||
Expiration Date | Sep. 30, 2019 | |||||||||||||||
New Credit Agreement | Tranche Three [Member] | ||||||||||||||||
Aggregate principal amount | 10,000 | 10,000 | 10,000 | |||||||||||||
Expiration Date | Mar. 31, 2020 | |||||||||||||||
New Credit Agreement | Minimum Trailing Twelve Month Achievement [Member] | ||||||||||||||||
Revenues | $ 231,500 | 221,250 | 221,250 | $ 213,500 | 200,000 | |||||||||||
Eastward fund LLC | ||||||||||||||||
Letter of credit sub facility | $ 16,000 | |||||||||||||||
Aggregate amounts of term loan | $ 20,000 | |||||||||||||||
Percentage of final payment fee | 6.50% | |||||||||||||||
Eastward fund LLC | Repaid Before Two Years | ||||||||||||||||
Prepayment fees | 3.00% | |||||||||||||||
Eastward fund LLC | Repaid After Two Years | ||||||||||||||||
Prepayment fees | 2.00% | |||||||||||||||
Term Loan | Credit Agreement | ||||||||||||||||
Aggregate amounts of term loan | $ 5,000 | |||||||||||||||
Term Loan | New Credit Agreement | ||||||||||||||||
Debt Issuance Costs, Net | 554 | 554 | 554 | |||||||||||||
Term Loan | New Credit Agreement | Tranche Three [Member] | ||||||||||||||||
Debt Issuance Costs, Net | 92 | 92 | ||||||||||||||
Term Loan | New Credit Agreement | Tranche One and Tranche Two | ||||||||||||||||
Debt Issuance Costs, Net | 462 | 462 | 462 | |||||||||||||
Revolving Credit Facility | Credit Agreement | ||||||||||||||||
Letter of credit sub facility | $ 30,000 | |||||||||||||||
Aggregate under revolving credit facility | $ 26,484 | |||||||||||||||
Aggregate amounts of term loan | $ 30,000 | |||||||||||||||
Revolving Credit Facility | New Credit Agreement | ||||||||||||||||
Letter of credit sub facility | 33,484 | $ 40,000 | 33,484 | 33,484 | $ 40,000 | |||||||||||
Future revolving borrowings | $ 6,516 | $ 6,516 | $ 6,516 | |||||||||||||
Debt Issuance Costs, Net | $ 370 | $ 370 |
Stockholders' Equity (Detail)
Stockholders' Equity (Detail) - shares | Sep. 30, 2019 | Dec. 31, 2018 |
Equity [Abstract] | ||
Shares reserved for issuance for outstanding options | 6,588,000 | 6,590,195 |
Shares reserved for issuance for future option grant | 9,008,996 | 9,108,996 |
Shares reserved for issuance under the warrants | 0 | 17,732,700 |
Common Stock, Capital Shares Reserved for Future Issuance | 15,596,996 | 33,431,891 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Jul. 22, 2019 | Mar. 24, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Aug. 19, 2019 | Aug. 16, 2019 | Aug. 13, 2019 | Jul. 12, 2019 | Dec. 31, 2018 |
Common stock, shares authorized | 400,000,000 | 400,000,000 | 400,000,000 | ||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||
Company issued acquisition of shares | 728,548 | ||||||||
Common Stock, Shares, Issued | 95,470,290 | 95,470,290 | 91,261,413 | ||||||
Class of Warrant or Right, Outstanding | 0 | 0 | |||||||
Common stock issuable upon warrant exercise | 0 | 0 | 17,732,700 | ||||||
Non-cash deemed dividend to warrant holders | $ (645) | $ 645 | |||||||
Pipe warrants [Member] | |||||||||
Class of Warrant or Right, Outstanding | 4,100,000 | ||||||||
Warrant Exchange agreement [Member] | |||||||||
Class of Warrant or Right, Outstanding | 30,900,000 | ||||||||
Number of warrants exchanged for share issue | 29,950,150 | ||||||||
Massachusetts Capital Resource Company Life Insurance Community Investment Initiative LLC [Member] | |||||||||
Common stock issuable upon warrant exercise | 19,426 | ||||||||
Common Class A | |||||||||
Common Stock, Shares, Issued | 95,470,290 | 95,470,290 | |||||||
Percentage of common stock outstanding as a result of warrant conversion | 3.00% | 3.00% | |||||||
Common Class A | Pipe warrants [Member] | |||||||||
Common stock issuable upon warrant exercise | 389,501 | ||||||||
Common Class A | Warrant Exchange agreement [Member] | |||||||||
Number Of Securities Called By Each Warrant | 0.095 | ||||||||
Common stock issuable upon warrant exercise | 2,845,280 | ||||||||
Common Class A | Warrant Exchange Amendment Agreement [Member] | |||||||||
Number Of Securities Called By Each Warrant | 0.0855 | ||||||||
Common stock issuable upon warrant exercise | 80,451 | ||||||||
Common Class A | Warrant Exchange Agreement Total | |||||||||
Common stock issuable upon warrant exercise | 3,334,658 | 3,334,658 | |||||||
Common Class A | Massachusetts Capital Resource Company Life Insurance Community Investment Initiative LLC [Member] | |||||||||
Excecise price of warrants per unit | $ 3.95 | ||||||||
Common stock issuable upon warrant exercise | 182,700 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Common stock options outstanding | 7,263,990 | 7,263,990 | 7,266,185 | ||
Share-based compensation expense | $ 242 | $ 252 | $ 700 | $ 820 | |
Weighted average grant-date fair value | $ 3.24 | $ 2.39 | |||
Fair value of option vested | $ 538 | $ 503 | |||
Unrecognized stock compensation expense | 1,444 | $ 1,444 | |||
Share-based compensation expected to be recognized over a weighted-average period | 2 years 7 months 2 days | ||||
Exercise of stock options | 91,045 | ||||
Option Loans | |||||
Related Parties Notes Receivable | $ 635 | $ 635 | |||
Number of shares issued as collateral for the option loans | 675,990 | 675,990 | |||
2003 and 2018 Stock Incentive Plan | |||||
Stock option expiration period | 10 years | ||||
Common Class A | Executive Officer | |||||
Exercise of stock options | 7,176,715 | ||||
Common Class A | 2018 Stock Incentive Plan | |||||
Common stock options authorized | 9,198,996 | 9,198,996 | |||
Common stock options outstanding | 190,000 | 190,000 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Fair Value of Stock Options Granted to Employees and Directors (Detail) - $ / shares | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Risk-free interest rate | 2.24% | 2.74% |
Expected term (in years) | 6 years 6 months | 5 years 9 months 25 days |
Expected volatility | 42.70% | 42.90% |
Expected dividend yield | 0.00% | 0.00% |
Exercise price | $ 7.08 | $ 5.40 |
Underlying stock price | $ 7.08 | $ 5.40 |
Stock-Based Compensation -Paren
Stock-Based Compensation -Parenthetical (Detail) - shares | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
options granted | 100,000 | 78,111 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Number of Shares Outstanding | 7,266,185 | ||
Number of Shares Granted | 100,000 | 78,111 | |
Number of Shares Canceled / forfeited | (11,150) | ||
Number of Shares Exercised | (91,045) | ||
Number of Shares Outstanding | 7,263,990 | 7,266,185 | |
Number of Shares Options Exercisable | 5,736,926 | ||
Number of Shares Options vested or expected to vest | 7,025,841 | ||
Weighted Average Exercise Price Outstanding | $ 1.92 | ||
Weighted Average Exercise Price Granted | 7.08 | ||
Weighted Average Exercise Price Cancelled / forfeited | 2.87 | ||
Weighted Average Exercise Price Exercised | 1.77 | ||
Weighted Average Exercise Price Outstanding | 1.99 | $ 1.92 | |
Weighted Average Exercise Price Options Exercisable | 1.59 | ||
Weighted Average Exercise Price Options Vested or Expected to Vest | $ 1.91 | ||
Weighted Average Remaining Contractual Term (in years) Outstanding | 5 years 3 months 21 days | 5 years 10 months 20 days | |
Weighted Average Remaining Contractual Term (in years) Options Exercisable | 4 years 8 months 8 days | ||
Weighted Average Remaining Contractual Term (in years) Options Vested or Expected to Vest | 5 years 2 months 12 days | ||
Aggregate Intrinsic Value Outstanding | $ 33,359 | $ 33,909 | |
Aggregate Intrinsic Value Options Exercised | 382 | ||
Aggregate Intrinsic Value Options Exercisable | 28,546 | ||
Aggregate Intrinsic Value Options Vested or Expected to Vest | $ 32,797 |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Detail) - shares | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 7,263,990 | 9,468,807 |
Employee Stock Option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 7,263,990 | 7,178,774 |
Redeemable Common Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 728,548 |
Warrant | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 1,561,485 |
Commitments and Contingencies_2
Commitments and Contingencies (Schedule of leases payments) (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
2019 | $ 1,180 | |
2020 | 4,721 | |
2021 | 4,721 | |
2022 | 4,945 | |
2023 | 0 | |
Thereafter | 9,692 | |
Total | 25,259 | |
Less amount representing interest | (7,494) | |
Present value of minimum lease payments | 17,765 | |
Less current maturities | (2,872) | $ (2,236) |
Long-term portion | $ 14,893 | $ 15,418 |
Commitments and Contingencies_3
Commitments and Contingencies (Schedule Of Operating Leased Assets) (Detail) $ in Thousands | Sep. 30, 2019USD ($) |
2019 (remaining three months) | $ 1,218 |
2020 | 5,714 |
2021 | 5,053 |
2022 | 2,558 |
2023 | 1,180 |
Thereafter | 8,123 |
Total | $ 23,846 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) ft² in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019USD ($)ft² | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)ft² | Sep. 30, 2018USD ($) | Jan. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Accrued Legal Expenses | $ 542 | $ 542 | $ 1,000 | |||
Capital lease rental arrears | 6,042 | 6,042 | 5,265 | |||
Operating Lease, Expense | 1,766 | $ 1,218 | 4,993 | $ 3,630 | ||
Business Combination Contingent Consideration Liability Accrued Interest | $ 842 | $ 842 | ||||
Land Subject to Ground Leases | ft² | 43,850 | 43,850 | ||||
Annual lease payments during the first year | $ 1,052 | $ 1,052 | ||||
Annual lease payments ten year lease term | 44 | 44 | ||||
Annual lease payments five year lease term | 33 | 33 | ||||
Security Deposit | 526 | 526 | ||||
Increase (Decrease) in Security Deposits | 263 | |||||
Accrued Interest | 478 | 478 | ||||
Principal and Interest | ||||||
Capital lease rental arrears | 10,336 | 10,336 | 10,293 | |||
Selling, General and Administrative Expenses | ||||||
Royalty Expense | 991 | $ 506 | 2,695 | $ 1,207 | ||
CAM Portion of Accrued Rent | ||||||
Capital lease rental arrears | 644 | 644 | 854 | |||
Accounts Payable and Accrued Liabilities | ||||||
Accrued Royalties | $ 1,187 | $ 1,187 | ||||
Dan Road Associates | ||||||
Capital Lease Obligations | $ 4,308 | |||||
Capital Leases Aggregate Annual Lease Payments Rent Percentage | 10.00% | 10.00% | ||||
Dan Road Associates | Interest | ||||||
Capital lease rental arrears | $ 3,650 | $ 3,650 | $ 4,174 | |||
NuTech Medical | ||||||
Deferred Acquisition Cost Paid | 2,500 | |||||
The amount, if any, of the remaining $5,000 of deferred acquisition consideration plus accrued interest owed to the sellers of NuTech Medical is currently in dispute. | 5,000 | 5,000 | ||||
Business Combination Deferred Consideration | $ 7,500 | $ 7,500 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Net principal and interest receivable | $ 536 | $ 477 |
NuTech Medical | ||
Under the lease, the Company is required to make monthly rent payments of approximately | 21 | |
Option Loans | ||
Related Parties Notes Receivable | 635 | |
Liquidity Loan to Two Former Employee | ||
Note Receivable | $ 2,350 | $ 2,350 |
Class A | ||
Stock Held By Employee | 675,990 | 675,990 |
Maximum | Liquidity Loan and Option Loans | ||
Interest Rate | 3.86% | |
Minimum | Liquidity Loan and Option Loans | ||
Interest Rate | 2.30% |