Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 01, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-36046 | |
Entity Registrant Name | Axogen, Inc. | |
Entity Incorporation, State or Country Code | MN | |
Entity Tax Identification Number | 41-1301878 | |
Entity Address, Address Line One | 13631 Progress Blvd., Suite 400 | |
Entity Address, City or Town | Alachua, | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 32615 | |
City Area Code | 386 | |
Local Phone Number | 462-6800 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | AXGN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 42,283,715 | |
Entity Central Index Key | 0000805928 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 11,822,000 | $ 32,756,000 |
Restricted cash | 6,251,000 | 6,251,000 |
Investments | 46,210,000 | 51,330,000 |
Accounts receivable, net of allowance for doubtful accounts of $595 and $276, respectively | 20,370,000 | 18,158,000 |
Inventory | 19,222,000 | 16,693,000 |
Prepaid expenses and other | 2,900,000 | 1,861,000 |
Total current assets | 106,775,000 | 127,049,000 |
Property and equipment, net | 70,988,000 | 62,923,000 |
Operating lease right-of-use assets | 14,975,000 | 15,193,000 |
Intangible assets, net | 3,346,000 | 2,859,000 |
Total assets | 196,084,000 | 208,024,000 |
Current liabilities: | ||
Accounts payable and accrued expenses | 21,838,000 | 22,459,000 |
Current maturities of long-term lease obligations | 1,762,000 | 1,834,000 |
Total current liabilities | 23,600,000 | 24,293,000 |
Long-term debt, net of debt discount and financing fees | 45,263,000 | 44,821,000 |
Long-term lease obligations | 20,655,000 | 20,798,000 |
Debt derivative liabilities | 4,876,000 | 5,562,000 |
Total liabilities | 94,394,000 | 95,474,000 |
Commitments and contingencies - see Note 12 | ||
Shareholders’ equity: | ||
Common stock, $0.01 par value per share; 100,000,000 shares authorized; 42,134,504 and 41,736,950 shares issued and outstanding | 420,000 | 417,000 |
Additional paid-in capital | 351,117,000 | 342,765,000 |
Accumulated deficit | (249,847,000) | (230,632,000) |
Total shareholders’ equity | 101,690,000 | 112,550,000 |
Total liabilities and shareholders’ equity | $ 196,084,000 | $ 208,024,000 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 595 | $ 276 |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock issued (in shares) | 42,134,504 | 41,736,950 |
Common stock outstanding (in shares) | 42,134,504 | 41,736,950 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenues | $ 34,454 | $ 33,580 | $ 65,461 | $ 64,617 |
Cost of goods sold | 6,284 | 7,092 | 11,830 | 12,264 |
Gross profit | 28,170 | 26,488 | 53,631 | 52,353 |
Costs and expenses: | ||||
Sales and marketing | 19,669 | 19,250 | 40,557 | 37,224 |
Research and development | 7,022 | 5,723 | 13,296 | 11,471 |
General and administrative | 9,403 | 8,669 | 19,021 | 17,032 |
Total costs and expenses | 36,094 | 33,642 | 72,874 | 65,727 |
Loss from operations | (7,924) | (7,154) | (19,243) | (13,374) |
Other (expense) income: | ||||
Investment income (expense) | 32 | 29 | (15) | 63 |
Interest expense | (249) | (565) | (603) | (1,010) |
Change in fair value of derivatives | 434 | (84) | 686 | (105) |
Other expense | (33) | (124) | (40) | (132) |
Total other expense, net | 184 | (744) | 28 | (1,184) |
Net loss | $ (7,740) | $ (7,898) | $ (19,215) | $ (14,558) |
Weighted average common shares outstanding - basic (in shares) | 41,994,618 | 41,080,898 | 41,900,000 | 40,894,405 |
Weighted average common shares outstanding - diluted (in shares) | 41,994,618 | 41,080,898 | 41,900,000 | 40,894,405 |
Loss per common share - basic (in dollars per share) | $ (0.18) | $ (0.19) | $ (0.46) | $ (0.36) |
Loss per common share - diluted (in dollars per share) | $ (0.18) | $ (0.19) | $ (0.46) | $ (0.36) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (19,215) | $ (14,558) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,418 | 1,405 |
Amortization of right-of-use assets | 859 | 960 |
Amortization of intangible assets | 132 | 96 |
Amortization of debt discount and deferred financing fees | 442 | 227 |
Provision for bad debt | 550 | (65) |
Provision for inventory write-down | 928 | 2,455 |
Change in fair value of derivatives | (686) | 105 |
Investment losses | 145 | 31 |
Stock-based compensation | 7,588 | 6,499 |
Change in operating assets and liabilities: | ||
Accounts receivable | (2,719) | (498) |
Inventory | (3,458) | (3,341) |
Prepaid expenses and other | (1,081) | 199 |
Accounts payable and accrued expenses | (786) | (5,061) |
Operating lease obligations | (856) | 35 |
Cash paid for interest portion of finance leases | 0 | (1) |
Contract and other liabilities | 0 | (3) |
Net cash used in operating activities | (16,739) | (11,515) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (9,086) | (10,924) |
Purchase of investments | (6,024) | (23,966) |
Proceeds from sale of investments | 11,000 | 32,295 |
Cash payments for intangible assets | (852) | (692) |
Net cash used in investing activities | (4,962) | (3,287) |
Cash flows from financing activities: | ||
Proceeds from the issuance of long-term debt | 0 | 15,000 |
Cash paid for debt portion of finance leases | (1) | (8) |
Proceeds from exercise of stock options and ESPP stock purchases | 767 | 3,612 |
Net cash provided by financing activities | 766 | 18,604 |
Net decrease in cash, cash equivalents, and restricted cash | (20,935) | 3,802 |
Cash, cash equivalents, and restricted cash, beginning of period | 39,007 | 55,609 |
Cash, cash equivalents, and restricted cash, end of period | 18,073 | 59,411 |
Supplemental disclosures of cash flow activity: | ||
Cash paid for interest, net of capitalized interest | 0 | 739 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Acquisition of fixed assets in accounts payable and accrued expenses | 1,817 | 3,035 |
Obtaining a right-of-use asset in exchange for a lease liability | 700 | 371 |
Embedded derivative associated with the long-term debt | 0 | 1,173 |
Acquisition of intangible assets in accounts payable and accrued expenses | $ 186 | $ 190 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2020 | 40,618,766 | |||
Beginning balance at Dec. 31, 2020 | $ 123,149 | $ 406 | $ 326,390 | $ (203,647) |
Increase (Decrease) in Stockholders' Equity | ||||
Net loss | (14,558) | (14,558) | ||
Stock-based compensation | 6,499 | 6,499 | ||
Issuance of restricted and performance stock units (in shares) | 138,944 | |||
Issuance of restricted and performance stock units | 0 | $ 1 | (1) | |
Exercise of stock options and employee stock purchase plan (in shares) | 579,398 | |||
Exercise of stock options and employee stock purchase plan | 3,613 | $ 6 | 3,607 | |
Ending balance (in shares) at Jun. 30, 2021 | 41,337,108 | |||
Ending balance at Jun. 30, 2021 | 118,703 | $ 413 | 336,495 | (218,205) |
Beginning balance (in shares) at Mar. 31, 2021 | 40,842,717 | |||
Beginning balance at Mar. 31, 2021 | 119,704 | $ 408 | 329,603 | (210,307) |
Increase (Decrease) in Stockholders' Equity | ||||
Net loss | (7,898) | (7,898) | ||
Stock-based compensation | 3,804 | 3,804 | ||
Issuance of restricted and performance stock units (in shares) | 44,411 | |||
Issuance of restricted and performance stock units | 0 | |||
Exercise of stock options and employee stock purchase plan (in shares) | 449,980 | |||
Exercise of stock options and employee stock purchase plan | 3,093 | $ 5 | 3,088 | |
Ending balance (in shares) at Jun. 30, 2021 | 41,337,108 | |||
Ending balance at Jun. 30, 2021 | $ 118,703 | $ 413 | 336,495 | (218,205) |
Beginning balance (in shares) at Dec. 31, 2021 | 41,736,950 | 41,736,950 | ||
Beginning balance at Dec. 31, 2021 | $ 112,550 | $ 417 | 342,765 | (230,632) |
Increase (Decrease) in Stockholders' Equity | ||||
Net loss | (19,215) | (19,215) | ||
Stock-based compensation | 7,588 | 7,588 | ||
Issuance of restricted and performance stock units (in shares) | 259,341 | |||
Issuance of restricted and performance stock units | 0 | $ 2 | (2) | |
Exercise of stock options and employee stock purchase plan (in shares) | 138,213 | |||
Exercise of stock options and employee stock purchase plan | $ 767 | $ 1 | 766 | |
Ending balance (in shares) at Jun. 30, 2022 | 42,134,504 | 42,134,504 | ||
Ending balance at Jun. 30, 2022 | $ 101,690 | $ 420 | 351,117 | (249,847) |
Beginning balance (in shares) at Mar. 31, 2022 | 41,972,987 | |||
Beginning balance at Mar. 31, 2022 | 103,851 | $ 420 | 345,538 | (242,107) |
Increase (Decrease) in Stockholders' Equity | ||||
Net loss | (7,740) | (7,740) | ||
Stock-based compensation | 4,910 | 4,910 | ||
Issuance of restricted and performance stock units (in shares) | 44,054 | |||
Issuance of restricted and performance stock units | 0 | |||
Exercise of stock options and employee stock purchase plan (in shares) | 117,463 | |||
Exercise of stock options and employee stock purchase plan | $ 669 | $ 0 | 669 | |
Ending balance (in shares) at Jun. 30, 2022 | 42,134,504 | 42,134,504 | ||
Ending balance at Jun. 30, 2022 | $ 101,690 | $ 420 | $ 351,117 | $ (249,847) |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation General Unless the context otherwise requires, all references in these Notes to “Axogen,” the “Company,” “we,” “us” and “our” refer to Axogen, Inc. and its wholly owned subsidiaries Axogen Corporation (“AC”), Axogen Processing Corporation, and Axogen Europe GmbH. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company as of June 30, 2022, and December 31, 2021, and for the three and six months ended June 30, 2022, and 2021. The Company’s condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X, and; therefore, do not include all information and footnotes necessary for a fair presentation of consolidated financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2021, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The interim condensed consolidated financial statements are unaudited and in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of results for the periods presented. Results for interim periods are not necessarily indicative of results for the full year. All intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and six months ended June 30, 2022, are not necessarily indicative of the results to be expected for the full year due primarily to the impact of the continued uncertainty of general economic conditions that may impact our markets for the remainder of fiscal year 2022. Specifically, there can be no assurances that resurgences of COVID-19 will not affect future results. Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The accompanying condensed consolidated financial statements and notes follow the same significant accounting policies as those described in the notes to the audited consolidated financial statements of the Company for the year ended December 31, 2021, except as described below. Cash and Cash Equivalents and Concentration The Company considers highly liquid investments with maturities of three months or less at the date of acquisition as cash equivalents in the accompanying condensed consolidated financial statements. The Company has not experienced any losses related to these balances; however, as of June 30, 2022, $11,322 of the cash and cash equivalents balance was in excess of Federal Deposit Insurance Corporation limits. The Company had restricted cash balances of $6,251 for each of the periods ended June 30, 2022, and December 31, 2021. The June 30, 2022, and December 31, 2021, balances both include $6,000 and $250, which represent collateral for two irrevocable standby letters of credit. See "Note 8 - Long-Term Debt, Net of Debt Discount and Financing Fees." The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported in the condensed consolidated balance sheets that sum to the total of the same amounts shown in the condensed consolidated statements of cash flows: (In thousands) June 30, December 31, Cash and cash equivalents $ 11,822 $ 32,756 Restricted cash 6,251 6,251 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 18,073 $ 39,007 St ock-Based Compensation The Company measures stock options granted to employees and directors at a premium price based on market conditions, such as the trading price of the Company’s common stock, using a Monte Carlo Simulation in estimating the fair value at grant date. The determination of the fair value is affected by the Company's stock price, as well as assumptions regarding several subjective variables. These variables include, but are not limited to, the Company’s expected stock price volatility over the term of the awards. The Company determines the expected life of each award giving consideration to the contractual terms, vesting schedules, and post-vesting forfeitures. The Company uses the risk-free interest rate on the implied yield currently available on U.S. Treasury issues with an equivalent remaining term approximately equal to the expected life of the award. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the Company’s consolidated statements of operations. The expense has been reduced for forfeitures as they occur. The Company recognizes expense for all stock-based compensation awards, including stock options, restricted stock units ("RSUs"), and performance stock units ("PSUs") granted to employees eligible for retirement, as defined within the award notice and allowing for continued vesting post-retirement, over the retirement notice period and continuously updates its estimate of expense over the notice period each reporting period if a retirement notice has not been provided. Recent Accounting Pronouncements In November 2021, the Financial Accounting Standards ("FASB") amended ASC 832, Government Assistance (issued under Accounting Standards Update ("ASU") 2021-10, "Disclosures by Business Entities about Government Assistance"). This amendment requires annual disclosures about transaction with a government that are accounted for by applying a grant or contribution accounting model by analogy, including, (1) the types of transactions; (2) the financial statement line items affected by the transaction, and; (3) significant terms and conditions associated with the transactions. The Company adopted the guidance on January 1, 2022, the adoption of ASU 2021-10 is not expected to have a material impact on the the Company's condensed consolidated financial condition, results of operations or disclosures. |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Inventory consisted of the following (in thousands): June 30, December 31, Finished goods $ 12,492 $ 11,011 Work in process 929 813 Raw materials 5,801 4,869 Inventory $ 19,222 $ 16,693 For the six months ended June 30, 2022, and 2021, the Company had adjustments to the provision for inventory write downs of $928 and $2,455 (including the write-down of Avive inventory of $1,251), respectively. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, Net Property and equipment consisted of the following (in thousands): June 30, December 31, Furniture and equipment $ 5,192 $ 5,100 Leasehold improvements 15,490 14,952 Processing equipment 4,156 3,984 Land 731 731 Projects in process 54,341 45,660 Finance lease right-of-use assets 110 110 Property and equipment, at cost 80,020 70,537 Less: accumulated depreciation and amortization (9,032) (7,614) Property and equipment, net $ 70,988 $ 62,923 The Company further added to its projects in process total which is related to our Axogen Processing Center (“APC Facility”). See "Note 12 - Commitments and Contingencies." Depreciation expense consisted of following (in thousands): Three Months Ended June, 30 Six Months Ended June 30, 2022 2021 2022 2021 Depreciation expense $ 713 $ 633 $ 1,418 $ 1,405 |
Intangible Assets, Net
Intangible Assets, Net | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net | Intangible Assets, Net The Company’s intangible assets consisted of the following (in thousands): June 30, 2022 December 31, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizable intangible assets: Patents $ 3,083 $ (304) $ 2,780 $ 2,469 $ (234) $ 2,235 License agreements 1,101 (916) 185 1,101 (852) 249 Total amortizable intangible assets 4,184 (1,219) 2,965 3,570 (1,086) 2,484 Unamortized intangible assets Trademarks 380 — 380 375 — 375 Total intangible assets $ 4,565 $ (1,219) $ 3,346 $ 3,945 $ (1,086) $ 2,859 Amortization expense consisted of the following (in thousands): Three Months Ended June, 30 Six Months Ended June 30, 2022 2021 2022 2021 Amortization expense $ 63 $ 49 $ 132 $ 96 Expected future amortization of intangible assets as of June 30, 2022, is as follows (in thousands): Year Ending December 31, Expected Amortization Expense 2022 (excluding the six months ended June 30, 2022) $ 131 2023 229 2024 160 2025 159 2026 158 Thereafter 2,128 Total amortized intangible assets $ 2,965 License Agreements The Company has License Agreements with the University of Florida Research Foundation and the University of Texas at Austin in which certain royalty payments are paid quarterly. Royalty expense consisted of the following (in thousands): Three Months Ended June, 30 Six Months Ended June 30, 2022 2021 2022 2021 Royalty expense $ 766 $ 709 $ 1,439 $ 1,350 |
Fair Value Measurement
Fair Value Measurement | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurement Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy defines a three-level valuation hierarchy for classification and disclosure of fair value measurements as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. There has been no movement between Level 1 and Level 2 or between Level 2 and Level 3 from December 31, 2021 to June 30, 2022. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Debt Derivative Liabilities The Debt Derivative Liabilities are measured using a ‘with and without’ valuation model to compare the fair value of the Company's financing agreement with Oberland Capital including the identified embedded derivative features and the fair value of a plain vanilla note with the same terms. The fair value of the Oberland Facility including the embedded derivative features was determined using a probability-weighted expected return model based on four potential settlement scenarios for the Oberland Facility due to (a) a 5% probability of a mandatory prepayment event of the Oberland Facility on December 31, 2023; (b) a 15% probability of a mandatory prepayment event of the Oberland Facility on March 31, 2026; (c) a 5% probability of the prepayment of the Oberland Facility at the Company’s option on December 31, 2025; and (d) a 75% probability that the Oberland Facility will be held to its scheduled maturity dates in accordance with the terms of the debt agreement. The estimated settlement value of each scenario, which would include any required make-whole payment, is then discounted to present value using a discount rate that is derived based on the initial terms of the Oberland Facility at issuance and corroborated utilizing a synthetic credit rating analysis. The significant inputs that are included in the valuation of the Debt derivative liability - first tranche include: June 30, 2022 December 31, 2021 Input Remaining term (years) 5 5.5 Maturity date June 30, 2027 June 30, 2027 Coupon rate 9.50 % 9.50 % Revenue participation payments Maximum each year Maximum each year Discount rate 14.4% (1) 10.72% (1) Probability of mandatory prepayment before 2024 5.0 % (1) 5.0 % (1) Estimated timing of mandatory prepayment event before 2024 December 31, 2023 (1) December 31, 2023 (1) Probability of mandatory prepayment 2024 or after 15.0 % (1) 15.0 % (1) Estimated timing of mandatory prepayment event 2024 or after March 31, 2026 (1) March 31, 2026 (1) Probability of optional prepayment event 5.0 % (1) 5.0 % (1) Estimated timing of optional prepayment event December 31, 2025 (1) December 31, 2025 (1) (1) Represents a significant unobservable input The significant inputs that are included in the valuation of the Debt derivative liability - second tranche include: June 30, 2022 December 31, 2021 Input Remaining term (years) 6 6.5 Maturity date June 30, 2028 June 30, 2028 Coupon rate 9.5% 9.5% Revenue participation payments Maximum each year Maximum each year Discount rate 17.6 % (1) 13.21 % (1) Probability of mandatory prepayment before 2024 5.0% (1) 5.0% (1) Estimated timing of mandatory prepayment event before 2024 December 31, 2023 (1) December 31, 2023 (1) Probability of mandatory prepayment 2024 or after 15.0% (1) 15.0% (1) Estimated timing of mandatory prepayment event 2024 or after March 31, 2026 (1) March 31, 2026 (1) Probability of optional prepayment event 5.0% (1) 5.0% (1) Estimated timing of optional prepayment event December 31, 2025 (1) December 31, 2025 (1) (1) Represents a significant unobservable input The following table presents the financial assets and liabilities that the Company measured at fair value on a recurring basis as of June 30, 2022, classified in accordance with the fair value hierarchy (in thousands): Fair Value Measurements Using (Level 1) (Level 2) (Level 3) Total Assets: Money market funds $ 6,057 $ — $ — $ 6,057 U.S. government securities 17,920 — — 17,920 Commercial paper — 28,289 — 28,289 Total assets $ 23,977 $ 28,289 $ — $ 52,266 Liabilities Debt derivative liabilities — — 4,876 4,876 Total liabilities $ — $ — $ 4,876 $ 4,876 The following table presents the financial assets and liabilities that the Company measured at fair value on a recurring basis as of December 31, 2021, classified in accordance with the fair value hierarchy (in thousands): Fair Value Measurements Using (Level 1) (Level 2) (Level 3) Total Assets: Money market funds $ 22,012 $ — $ — $ 22,012 U.S. government securities 12,081 — — 12,081 Commercial paper — 39,249 — 39,249 Total assets $ 34,093 $ 39,249 $ — $ 73,342 Liabilities Debt derivative liabilities $ — — $ 5,562 $ 5,562 Total liabilities $ — $ — $ 5,562 $ 5,562 The changes in Level 3 liabilities measured at fair value on a recurring basis for the three and six months ended June 30, 2022, were as follows (in thousands): Three Months Ended June 30, 2022 Beginning Balance, April 1, 2022 $ 5,310 Change in fair value included in net loss (434) Ending Balance, June 30, 2022 $ 4,876 Six Months Ended June 30, 2022 Beginning Balance, January 1, 2022 $ 5,562 Change in fair value included in net loss (686) Ending Balance, June 30, 2022 $ 4,876 The changes in Level 3 liabilities measured at fair value on a recurring basis for the three and six months ended June 30, 2021, were as follows (in thousands): Three Months Ended June 30, 2021 Beginning Balance, April 1, 2021 39,205 Addition of Oberland Facility - second tranche 13,827 Addition of debt derivative - second tranche 1,173 Change in fair value of Oberland Facility 150 Change in fair value of debt derivative 84 Ending Balance, June 30, 2021 $ 54,439 Six Months Ended June 30, 2021 Beginning Balance, January 1, 2021 $ 39,352 Addition of Oberland Facility - second tranche 13,827 Addition of debt derivative - second tranche 1,173 Change in fair value of Oberland Facility (18) Change in fair value of debt derivative 105 Ending Balance June 30, 2021 $ 54,439 The fair value of cash, restricted cash, accounts receivable, accounts payable and accrued expenses approximates the carrying values because of the short-term nature of these instruments. The Oberland Facility is classified as Level 3 within the fair value hierarchy. The carrying value and estimated fair value of the Oberland Facility were $45,263 and $47,759 at June 30, 2022, and $45,325 and $52,605 at December 31, 2021, respectively. See "Note 8 - Long-Term Debt, Net of Debt Discount and Financing Fees." |
Leases
Leases | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Leases | Leases The Company leases administrative, manufacturing, research and distribution facilities through operating leases. Several leases include fixed payments including rent and non-lease components such as common-area or other maintenance costs. On January 27, 2022, the Company entered into a Commercial Lease Amendment ("Amendment") with JA-Cole L.P., with an effective date of February 1, 2022, pursuant to the original Commercial Lease dated April 21, 2015, as amended (the "Lease"). The lease is for the office and warehouse facility located in Burleson, Texas. The Amendment revised the commencement date to May 1, 2022, and the expiration date to April 30, 2027. The Company accounted for the Lease revisions as a lease modification in accordance with Accounting Standard Codification ("ASC") 842, Leases, as the modification effectively terminated the existing lease and created a new lease which commenced on February 1, 2022. The Lease and related modification entries are included in the operating lease line items on the condensed consolidated balance sheet. Total operating lease expense for the three months ended June 30, 2022, and 2021 was $1,355 and $1,211 respectively and $2,763 and $2,437 for the six months ended June 30, 2022, and 2021, respectively. Supplemental balance sheet information related to the operating and financing leases is as follows: (In thousands, except lease term and discount rate ) June 30, 2022 December 31, 2021 Operating Leases Right-of-use operating assets $ 14,975 $ 15,193 Current maturities of long-term lease obligations $ 1,756 $ 1,825 Long-term lease obligations $ 20,653 $ 20,794 Financing Leases Right-of-use financing leases (1) $ 31 $ 42 Current maturities of long-term lease obligations $ 6 $ 9 Long-term lease obligations $ 2 $ 4 Weighted average operating lease term (in years): 11.4 12.1 Weighted average operating financing term (in years): 1.6 2.2 Weighted average discount rate operating leases 10.31 % 10.32% Weighted average discount rate financing leases 6.84% 7.23% (1) Financing leases are included within property and equipment, net on the condensed consolidated balance sheets. Future minimum lease payments under operating and financing leases at June 30, 2022, were as follows: (In thousands) 2022 (excluding the six months ended June 30, 2022) $ 2,152 2023 3,415 2024 3,186 2025 3,268 2026 3,276 2027 61 Thereafter 23,939 Total $ 39,296 Less: Imputed interest (16,879) Total lease liability $ 22,417 Less: Current lease liability (1,762) Long-term lease liability $ 20,655 |
Leases | Leases The Company leases administrative, manufacturing, research and distribution facilities through operating leases. Several leases include fixed payments including rent and non-lease components such as common-area or other maintenance costs. On January 27, 2022, the Company entered into a Commercial Lease Amendment ("Amendment") with JA-Cole L.P., with an effective date of February 1, 2022, pursuant to the original Commercial Lease dated April 21, 2015, as amended (the "Lease"). The lease is for the office and warehouse facility located in Burleson, Texas. The Amendment revised the commencement date to May 1, 2022, and the expiration date to April 30, 2027. The Company accounted for the Lease revisions as a lease modification in accordance with Accounting Standard Codification ("ASC") 842, Leases, as the modification effectively terminated the existing lease and created a new lease which commenced on February 1, 2022. The Lease and related modification entries are included in the operating lease line items on the condensed consolidated balance sheet. Total operating lease expense for the three months ended June 30, 2022, and 2021 was $1,355 and $1,211 respectively and $2,763 and $2,437 for the six months ended June 30, 2022, and 2021, respectively. Supplemental balance sheet information related to the operating and financing leases is as follows: (In thousands, except lease term and discount rate ) June 30, 2022 December 31, 2021 Operating Leases Right-of-use operating assets $ 14,975 $ 15,193 Current maturities of long-term lease obligations $ 1,756 $ 1,825 Long-term lease obligations $ 20,653 $ 20,794 Financing Leases Right-of-use financing leases (1) $ 31 $ 42 Current maturities of long-term lease obligations $ 6 $ 9 Long-term lease obligations $ 2 $ 4 Weighted average operating lease term (in years): 11.4 12.1 Weighted average operating financing term (in years): 1.6 2.2 Weighted average discount rate operating leases 10.31 % 10.32% Weighted average discount rate financing leases 6.84% 7.23% (1) Financing leases are included within property and equipment, net on the condensed consolidated balance sheets. Future minimum lease payments under operating and financing leases at June 30, 2022, were as follows: (In thousands) 2022 (excluding the six months ended June 30, 2022) $ 2,152 2023 3,415 2024 3,186 2025 3,268 2026 3,276 2027 61 Thereafter 23,939 Total $ 39,296 Less: Imputed interest (16,879) Total lease liability $ 22,417 Less: Current lease liability (1,762) Long-term lease liability $ 20,655 |
Long-Term Debt, Net of Debt Dis
Long-Term Debt, Net of Debt Discount and Financing Fees | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt, Net of Debt Discount and Financing Fees | Long-Term Debt, Net of Debt Discount and Financing Fees Long-term debt, net of debt discount and financing fees consists of the following: (In thousands) June 30, December 31, 2021 Oberland Facility - first tranche $ 35,000 $ 35,000 Oberland Facility - second tranche 15,000 15,000 Less - unamortized debt discount and deferred financing fees (4,737) (5,179) Long-term debt, net of debt discount and financing fees $ 45,263 $ 44,821 Oberland Facility On June 30, 2020, the Company entered into a seven-year financing agreement with Oberland Capital (the "Oberland Facility") and obtained the first tranche of $35,000 at closing. On June 30, 2021, the second tranche of $15,000 was drawn down by the Company. The Oberland Facility requires quarterly interest payments for seven years. Interest is calculated as 7.5% plus the greater of LIBOR or 2.0% (9.5% as of June 30, 2022). Each tranche of the Oberland Facility has a term of seven years from the date of issuance (with the first tranche issued on June 30, 2020, maturing on June 30, 2027 and the second tranche issued on June 30, 2021, maturing on June 30, 2028). In connection with the Oberland Facility, the Company entered into a revenue participation agreement with Oberland Capital, which provides that, among other things, a quarterly royalty payment as a percentage of the Company’s net revenues, up to $70 million in any given fiscal year, subject to certain limitations set forth therein, during the period commencing on the later of (i) April 1, 2021, and (ii) the date of funding of a tranche of the loan, and ending on the date upon which all amounts owed under the Oberland Facility have been paid in full (the “Revenue Participation Agreement”). Payments under the Revenue Participant Agreement commenced on September 30, 2021. The royalty structure of the Revenue Participant Agreement re s ults in approximately 1.0% per year of additional interest payments on the outstanding loan amount. The Company recorded interest expense $372 and $260 for this Revenue Participation Agreement for the three months ended June 30, 2022, and 2021 and $707 and $260 for the six months ended June 30, 2022 and 2021, respectively. The Company pays Oberland Capital quarterly debt interest on the last day of the quarter. The Company paid $1,201 and $840 for the three months ended June 30, 2022, and 2021, respectively, and $2,388 and $1,672 for the six months ended June 30, 2022, and 2021, respectively. The Company capitalized interest of $1,579 and $3,024 for the three and six months ended June 30, 2022, respectively and $645 and $1,690 for the three and six months ended June 30, 2021, respectively, towards the costs to construct and retrofit the APC Facility in Vandalia, OH. See "Note 12- Commitments and Contingencies." Since inception, the Company has capitalized interest of $8,298 related to this project. The capitalized interest is recorded as part of property and equipment, net in the condensed consolidated balance sheets. As of June 30, 2022, the Company was in compliance with all covenants. See "Note 12 - Commitments and Contingencies." Embedded Derivatives The Debt Derivative Liabilities are recorded at fair value, with the change in fair value reported in the condensed consolidated statements of operations at each reporting date. The fair values of the Debt Derivative Liabilities were $4,876 and $5,562 at June 30, 2022, and December 31, 2021, respectively. See "Note 6 - Fair Value Measurement." Unamortized Debt Discount and Financing Fees The unamortized debt discount consists of the remaining unamortized initial fair values of the embedded derivatives related to the first and second tranches of the Oberland Facility. The debt discount is amortized over the respective life of the related tranche and recorded in interest expense using the effective yield method. The financing fees for the Oberland Facility were $642 and were recorded as a contra liability to the debt facility. The financing fees are amortized over the life of the first tranche of the Oberland Facility and recorded in interest expense. Amortization of debt discount and deferred financing fees for the three months ended June 30, 2022, and 2021 was $223 and $153, respectively, and for the six months ended June 30, 2022, and 2021 was $442 and $227, respectively. Other credit facilities The Company had restricted cash of $6,251 at June 30, 2022, and December 31, 2021. The June 30, 2022, and December 31, 2021, balances both include $6,000 and $250, which represent collateral for two irrevocable standby letters of credit. |
Stock-Based Incentive Plans
Stock-Based Incentive Plans | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Incentive Plans | Stock-Based Incentive Plans The Company maintains two share-based incentive plans: the Axogen, Inc. Second Amended and Restated 2019 Long-Term Incentive Plan, (“2019 Plan”), and the Axogen 2017 Employee Stock Purchase Plan (“2017 ESPP”). As of June 30, 2022, 3,116,758 shares of common stock were available for issuance under the 2019 Plan.The Company recognized share-based compensation expense, which consisted of compensation expense related to stock options, PSUs and RSUs based on the value of share-based payment awards that are ultimately expected to vest during the period and stock-based compensation expense of $4,910 and $3,805 for the three months ended June 30, 2022, and 2021, respectively, and $7,588 and $6,499 for the six months ended June 30, 2022, and 2021, respectively. A summary of the stock option activity is as follows: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value (in thousands) Outstanding, December 31, 2021 3,194,738 $15.65 6.45 $ 2,236 Granted 1,109,754 $9.20 Exercised (41,209) $4.27 Cancelled (118,100) $16.41 Outstanding, June 30, 2022 4,145,183 $14.02 6.98 $ 1,140 Exercisable, June 30, 2022 2,145,901 $15.07 5.03 $ 1,138 The Company used the following weighted-average assumptions for options granted during the six months June 30, 2022: Expected term (in years) 6.05 Expected volatility 60.95 % Risk free rate 2.22 % Expected dividends — % As of June 30, 2022, there was approximately $9,860 of total unrecognized compensation costs related to unvested stock options. These costs are expected to be recognized over a weighted-average period of 2.7 years. Restricted and Performance Stock Units A summary of the restricted and performance stock unit activity is as follows: Outstanding Stock Units Stock Units Weighted-Average Fair Value at Date of Grant per Share Weighted Average Remaining Vesting Life Aggregate Intrinsic Value (in thousands) Unvested, December 31, 2021 1,730,765 $ 18.45 1.51 $ 19,633 Granted 1,874,047 $ 8.29 Released (259,341) $ 14.21 Forfeited (125,477) $ 16.61 Unvested, June 30, 2022 3,219,994 $ 12.95 2.01 $ 26,372 Performance Stock Units At June 30, 2022, the total future stock compensation expense related to non-vested performance awards at maximum target payout is expected to be approximately $5,332. As of June 30, 2022, there was approximately $21,381 of total unrecognized compensation costs related to both the PSU and RSU unvested awards. The Company expects to recognize these costs over a weighted-average period of 3.0 years. On March 16, 2022, the Compensation Committee of the Board of Directors approved PSUs that were tied to 2022, 2023 and 2024 revenue (the “2022 PSU award.”) The 2022 PSU award consists of a targeted award of 526,467 shares with a payout ranging from 0% to 150% upon achievement of specific revenue goals. Employee Stock Purchase Plan |
Net Loss Per Common Share
Net Loss Per Common Share | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Common Share | Net Loss Per Common Share The following reflects the net loss attributable to common shareholders and share data used in the basic and diluted earnings per share computations using the two class method: Three Months Ended June 30, Six Months Ended June 30, (In thousands, except per share amounts) 2022 2021 2022 2021 Numerator: Net loss $ (7,740) $ (7,898) $ (19,215) $ (14,558) Denominator: Weighted-average common shares outstanding (Basic) 41,994,618 41,080,898 41,900,000 40,894,405 Weighted-average common shares outstanding (Diluted) 41,994,618 41,080,898 41,900,000 40,894,405 Net loss per common share (Basic and Diluted) $ (0.18) $ (0.19) $ (0.46) $ (0.36) Anti-dilutive shares excluded from the calculation of diluted earnings per share (1) Stock options 3,796,254 1,308,583 3,377,594 1,188,243 Restricted stock units 591,824 17,828 574,431 296,327 (1) These common equivalent shares are not included in the diluted per share calculations as they would be anti-dilutive, if the Company was in a net income position. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company has not recorded current income tax expense due to the generation of net operating losses. Deferred income taxes are accounted for using the balance sheet approach, which requires recognition of deferred tax assets and liabilities for the expected future consequences of temporary differences between the financial reporting basis and the tax basis of assets and liabilities. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized. A full valuation allowance has been established on the deferred tax asset as it is more likely than not that a future tax benefit will not be realized. In addition, future utilization of the available net operating loss carryforward may be limited under Internal Revenue Code Section 382 as a result of changes in ownership. The Company identifies and evaluates uncertain tax positions, if any, and recognizes the impact of uncertain tax positions for which there is a less than more likely than not probability of the position being upheld when reviewed by the relevant taxing authority. Such positions are deemed to be unrecognized tax benefits and a corresponding liability is established on the condensed consolidated balance sheet. The Company has not recognized a liability for uncertain tax positions. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company’s remaining open tax years subject to examination by federal tax authorities include the years ended December 31, 2019 through 2021. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Service Agreements On August 6, 2015, the Company entered into a License and Service Agreement ("CTS Agreement") with Community Blood Center, (d/b/a Community Tissue Service) ("CTS") which has been extended through December 31, 2023 . In accordance with the CTS Agreement, the Company pays CTS a facility fee for use of clean room/manufacturing, storage and office space, which the Company accounts for as an embedded lease in accordance with ASC 842, “Leases.” The Company also pays CTS for service in support of its manufacturing process such as for routine sterilization of daily supplies, providing disposable supplies, microbial services and office support. The Company paid fees to CTS during the three months ended June 30, 2022, and 2021, of approximately $622 and $628, respectively, and during the six months ended June 30, 2022, and 2021 of approximately $1,245 and $1,271 which are included in cost of goods sold on the accompanying condensed consolidated statements of operations. In December 2011, the Company entered into a Master Services Agreement for Clinical Research and Related Services. The Company was required to pay $151 upon execution of this agreement and the remainder monthly based on activities associated with the execution of Axogen’s phase 3 pivotal clinical trial to support the BLA for Avance Nerve Graft. Payments made under this agreement were $356 and $154 for the three months ended June 30, 2022, and 2021, respectively, and $684 and $432 for the six months ended June 30, 2022, and 2021, respectively. Concentrations Vendor Substantially all of the Company’s revenue is currently derived from five products, Avance Nerve Graft, Avive Soft Tissue Membrane (currently, market availability is suspended), Axoguard Nerve Protector, Axoguard Nerve Connector, and Axoguard Nerve Cap for the treatment of peripheral nerve damage. Of these five products, Avance Nerve Graft represents approximately half of the Company’s total revenue. The Company has an exclusive distribution agreement with Cook Biotech for the purchase of Axoguard which expires June 30, 2027. The agreement with Cook Biotech establishes a formula for the transfer cost of the Axoguard products and requires certain minimum purchases by the Company, although, through mutual agreement, the parties have not established such minimums and to date have not enforced such provision. The agreement allows for termination provisions for both parties. The loss of the ability to sell the Axoguard products could have a material adverse effect on the Company’s business until other replacement products would be available. Axogen Processing Center Facility The Company is highly dependent on the continued availability of its processing facilities at the Community Blood Center facility (“CTS”) in Dayton, Ohio and could be harmed if the physical infrastructure of this facility is unavailable for any prolonged period of time. On July 31, 2018, the Company purchased the APC Facility in Vandalia, Ohio, located near the CTS processing facility where Avance Nerve Graft is currently processed. The APC Facility, when and if operational, will be the new processing facility for Avance Nerve Graft to provide continued capacity for growth and to support the transition of Avance Nerve Graft to a biologic product. The APC Facility is comprised of a 107,000 square foot building on approximately 8.6 acres of land. The Company paid $731 for the land, which is recorded as land in property and equipment on the condensed consolidated balance sheet. The Company paid $4,300 for the building which is recorded in projects in process in property and equipment, net on the condensed consolidated balance sheet. On July 9, 2019, the Company entered into a Standard Form of Agreement Between Owner and Design-Builder with CRB Builders, L.L.C., (“CRB”), in which CRB will renovate and retrofit the APC Facility. For the three and six months ended June 30, 2022 the Company recorded $2,842 and $5,431, respectively, of expenditures related to renovations and design and build in projects in progress. The Company has recorded $40,847 from inception-to-date related to this project. In addition to these project costs, the Company has capitalized interest of $1,579 and $3,004 for the three and six months ended June 30, 2022 and $8,298 inception-to-date to the project. These items are recorded as projects in process in property and equipment, net on the condensed consolidated balance sheet. Fair Value of the Debt Derivative Liabilities The fair value of the Debt Derivative Liabilities was determined using a probability-weighted expected return model based upon four potential settlement scenarios for the Oberland Facility discounted to present value, and compared to fair value of a plain vanilla note. The Company estimated the make-whole payments required under the Oberland Facility to generate an internal rate of return equal to 11.5% through the scheduled maturity dates, less the total of all quarterly interest and royalty payments previously paid to Oberland Capi tal. The calculation utilized the XIRR function in Microsoft Excel as required by the Oberland Facility. If the debt is not prepaid but instead is held to its scheduled maturities, the Company’s estimate of the make- whole payment for the first tranche and second tranches due on June 30, 2027 and June 30 2029, respectively, is approximately zero. The Company has consistently applied this approach since the inception of the debt agreement on June 30, 2020. In the first quarter of 2022, the Company became aware that Oberland Capital may have an alternative interpretation of the calculation of the make-whole payments that the Company believes does not properly utilize the same methodology utilized by the XIRR function in Microsoft Excel as described in the Oberland Facility. The Company estimates the top end of the range of the make-whole payments if the debt is held to scheduled maturity under an alternative interpretation to be approximately $13,000 for the first tranche of the Oberland Facility on June 30, 2027 and approximately $5,000 for the second tranche of the Oberland Facility on June 30, 2028. Further, if the debt is prepaid prior to the scheduled maturity dates and subject to the alternative interpretation, the make-whole payment would be larger than the amounts herein. There have been no updates since reported in the Company's Annual Report on Form 10-K as of and for the year ended December 31, 2021. Legal Proceedings The Company is and may be subject to various claims, lawsuits, and proceedings in the ordinary course of the Company's business. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. While there can be no assurances as to the ultimate outcome of any legal proceeding or other loss contingency involving the Company. In the opinion of management, such claims are either adequately covered by insurance or otherwise indemnified, or are not expected, individually or in the aggregate, to result in a material, adverse effect on the Comp any's financial condition, results of operations or cash flows. However, it is possible that the Company's results of operations, financial position and cash flows in a particular period could be materially affected by these contingencies. On January 9, 2019, Plaintiff Neil Einhorn, on behalf of himself and others similarly situated, filed a putative class action complaint in the United States District Court for the Middle District of Florida alleging violations of the federal securities laws against Axogen, Inc., certain of its directors and officers (“Individual Defendants”), and Axogen’s 2017 Offering Underwriters and 2018 Offering Underwriters (collectively, with the Individual Defendants, the “Defendants”), captioned Einhorn v. Axogen, Inc., et al., No. 8:19-cv-00069 (M.D. Fla.). Plaintiff asserts that Defendants made false or misleading statements in connection with the Company’s November 2017 registration statement issued regarding its secondary public offering in November 2017 and May 2018 registration statement issued regarding its secondary public offering in May 2018, and during a class period of August 7, 2017 to December 18, 2018. In particular, Plaintiff asserts that Defendants issued false and misleading statements and failed to disclose to investors: (1) that the Company aggressively increased prices to mask lower sales; (2) that the Company’s pricing alienated customers and threatened the Company’s future growth; (3) that ambulatory surgery centers form a significant part of the market for the Company’s products; (4) that such centers were especially sensitive to price increases; (5) that the Company was dependent on a small number of surgeons whom the Company paid to generate sales; (6) that the Company’s consignment model for inventory was reasonably likely to lead to channel stuffing; (7) that the Company offered purchase incentives to sales representatives to encourage channel stuffing; (8) that the Company’s sales representatives were encouraged to backdate revenue to artificially inflate metrics; (9) that the Company lacked adequate internal controls to prevent such channel stuffing and backdating of revenue; (10) that the Company’s key operating metrics, such as the number of active accounts, were overstated; and (11) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis. Axogen was served on January 15, 2019. On February 4, 2019, the Court granted the parties’ stipulated motion which provided that Axogen is not required to file a response to the complaint until thirty days after Plaintiff files a consolidated amended complaint. On June 19, 2019, Plaintiff filed an Amended Class Action Complaint, and on July 22, 2019, Defendants filed a motion to dismiss. Plaintiff filed opposing papers on August 12, 2019. The Court held a status hearing on September 11, 2019 and stayed all deadlines regarding the parties’ obligations to file a case management report. On December 4, 2019, the parties presented oral arguments. On April 21, 2020, the Court dismissed the complaint without prejudice, finding the Plaintiff failed to state a claim upon which relief could be granted. The Plaintiff filed a Second Amended Class Action Complaint on June 22, 2020. Axogen filed a motion to dismiss on August 6, 2020. The Plaintiff filed an opposition on September 20, 2020. The Court held oral argument on February 25, 2021. On March 19, 2021, the Court dismissed the Second Amended Complaint with prejudice, finding again that the Plaintiff failed to state a claim upon which relief could be granted. On April 14, 2021, Plaintiff filed a notice of appeal. Plaintiff filed its opening brief on June 28, 2021. The Company filed its appellee brief on August 11, 2021. The Plaintiff filed a reply brief on September 14, 2021. The Eleventh Circuit heard oral argument the week of March 8, 2022. On August 1, 2022, the Eleventh Circuit affirmed the dismissal of the complaint with prejudice. The amount of loss, if any, cannot be reasonably estimated at this time. This matter is subject to various uncertainties and it is possible that it may be resolved unfavorably to the Company. However, while it is not possible to predict with certainty the outcome of the matter, the Company and the Individual Defendants dispute the allegations and intend to vigorously defend themselves. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Cash and Cash Equivalents and Concentration | Cash and Cash Equivalents and Concentration The Company considers highly liquid investments with maturities of three months or less at the date of acquisition as cash equivalents in the accompanying condensed consolidated financial statements. The Company has not experienced any losses related to these balances; however, as of June 30, 2022, $11,322 of the cash and cash equivalents balance was in excess of Federal Deposit Insurance Corporation limits. The Company had restricted cash balances of $6,251 for each of the periods ended June 30, 2022, and December 31, 2021. The June 30, 2022, and December 31, 2021, balances both include $6,000 and $250, which represent collateral for two irrevocable standby letters of credit. See "Note 8 - Long-Term Debt, Net of Debt Discount and Financing Fees." |
Share-Based Compensation | St ock-Based Compensation The Company measures stock options granted to employees and directors at a premium price based on market conditions, such as the trading price of the Company’s common stock, using a Monte Carlo Simulation in estimating the fair value at grant date. The determination of the fair value is affected by the Company's stock price, as well as assumptions regarding several subjective variables. These variables include, but are not limited to, the Company’s expected stock price volatility over the term of the awards. The Company determines the expected life of each award giving consideration to the contractual terms, vesting schedules, and post-vesting forfeitures. The Company uses the risk-free interest rate on the implied yield currently available on U.S. Treasury issues with an equivalent remaining term approximately equal to the expected life of the award. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the Company’s consolidated statements of operations. The expense has been reduced for forfeitures as they occur. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2021, the Financial Accounting Standards ("FASB") amended ASC 832, Government Assistance (issued under Accounting Standards Update ("ASU") 2021-10, "Disclosures by Business Entities about Government Assistance"). This amendment requires annual disclosures about transaction with a government that are accounted for by applying a grant or contribution accounting model by analogy, including, (1) the types of transactions; (2) the financial statement line items affected by the transaction, and; (3) significant terms and conditions associated with the transactions. The Company adopted the guidance on January 1, 2022, the adoption of ASU 2021-10 is not expected to have a material impact on the the Company's condensed consolidated financial condition, results of operations or disclosures. |
Fair Value Measurement | Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy defines a three-level valuation hierarchy for classification and disclosure of fair value measurements as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. There has been no movement between Level 1 and Level 2 or between Level 2 and Level 3 from December 31, 2021 to June 30, 2022. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of cash and cash equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported in the condensed consolidated balance sheets that sum to the total of the same amounts shown in the condensed consolidated statements of cash flows: (In thousands) June 30, December 31, Cash and cash equivalents $ 11,822 $ 32,756 Restricted cash 6,251 6,251 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 18,073 $ 39,007 |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventory consisted of the following (in thousands): June 30, December 31, Finished goods $ 12,492 $ 11,011 Work in process 929 813 Raw materials 5,801 4,869 Inventory $ 19,222 $ 16,693 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consisted of the following (in thousands): June 30, December 31, Furniture and equipment $ 5,192 $ 5,100 Leasehold improvements 15,490 14,952 Processing equipment 4,156 3,984 Land 731 731 Projects in process 54,341 45,660 Finance lease right-of-use assets 110 110 Property and equipment, at cost 80,020 70,537 Less: accumulated depreciation and amortization (9,032) (7,614) Property and equipment, net $ 70,988 $ 62,923 Depreciation expense consisted of following (in thousands): Three Months Ended June, 30 Six Months Ended June 30, 2022 2021 2022 2021 Depreciation expense $ 713 $ 633 $ 1,418 $ 1,405 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | The Company’s intangible assets consisted of the following (in thousands): June 30, 2022 December 31, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizable intangible assets: Patents $ 3,083 $ (304) $ 2,780 $ 2,469 $ (234) $ 2,235 License agreements 1,101 (916) 185 1,101 (852) 249 Total amortizable intangible assets 4,184 (1,219) 2,965 3,570 (1,086) 2,484 Unamortized intangible assets Trademarks 380 — 380 375 — 375 Total intangible assets $ 4,565 $ (1,219) $ 3,346 $ 3,945 $ (1,086) $ 2,859 |
Schedule of future amortization | Amortization expense consisted of the following (in thousands): Three Months Ended June, 30 Six Months Ended June 30, 2022 2021 2022 2021 Amortization expense $ 63 $ 49 $ 132 $ 96 Expected future amortization of intangible assets as of June 30, 2022, is as follows (in thousands): Year Ending December 31, Expected Amortization Expense 2022 (excluding the six months ended June 30, 2022) $ 131 2023 229 2024 160 2025 159 2026 158 Thereafter 2,128 Total amortized intangible assets $ 2,965 |
Schedule of royalty expenses | Royalty expense consisted of the following (in thousands): Three Months Ended June, 30 Six Months Ended June 30, 2022 2021 2022 2021 Royalty expense $ 766 $ 709 $ 1,439 $ 1,350 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Summary of significant inputs in liability valuation | The significant inputs that are included in the valuation of the Debt derivative liability - first tranche include: June 30, 2022 December 31, 2021 Input Remaining term (years) 5 5.5 Maturity date June 30, 2027 June 30, 2027 Coupon rate 9.50 % 9.50 % Revenue participation payments Maximum each year Maximum each year Discount rate 14.4% (1) 10.72% (1) Probability of mandatory prepayment before 2024 5.0 % (1) 5.0 % (1) Estimated timing of mandatory prepayment event before 2024 December 31, 2023 (1) December 31, 2023 (1) Probability of mandatory prepayment 2024 or after 15.0 % (1) 15.0 % (1) Estimated timing of mandatory prepayment event 2024 or after March 31, 2026 (1) March 31, 2026 (1) Probability of optional prepayment event 5.0 % (1) 5.0 % (1) Estimated timing of optional prepayment event December 31, 2025 (1) December 31, 2025 (1) (1) Represents a significant unobservable input The significant inputs that are included in the valuation of the Debt derivative liability - second tranche include: June 30, 2022 December 31, 2021 Input Remaining term (years) 6 6.5 Maturity date June 30, 2028 June 30, 2028 Coupon rate 9.5% 9.5% Revenue participation payments Maximum each year Maximum each year Discount rate 17.6 % (1) 13.21 % (1) Probability of mandatory prepayment before 2024 5.0% (1) 5.0% (1) Estimated timing of mandatory prepayment event before 2024 December 31, 2023 (1) December 31, 2023 (1) Probability of mandatory prepayment 2024 or after 15.0% (1) 15.0% (1) Estimated timing of mandatory prepayment event 2024 or after March 31, 2026 (1) March 31, 2026 (1) Probability of optional prepayment event 5.0% (1) 5.0% (1) Estimated timing of optional prepayment event December 31, 2025 (1) December 31, 2025 (1) (1) Represents a significant unobservable input |
Summary of fair value financial assets measured on a recurring basis | The following table presents the financial assets and liabilities that the Company measured at fair value on a recurring basis as of June 30, 2022, classified in accordance with the fair value hierarchy (in thousands): Fair Value Measurements Using (Level 1) (Level 2) (Level 3) Total Assets: Money market funds $ 6,057 $ — $ — $ 6,057 U.S. government securities 17,920 — — 17,920 Commercial paper — 28,289 — 28,289 Total assets $ 23,977 $ 28,289 $ — $ 52,266 Liabilities Debt derivative liabilities — — 4,876 4,876 Total liabilities $ — $ — $ 4,876 $ 4,876 The following table presents the financial assets and liabilities that the Company measured at fair value on a recurring basis as of December 31, 2021, classified in accordance with the fair value hierarchy (in thousands): Fair Value Measurements Using (Level 1) (Level 2) (Level 3) Total Assets: Money market funds $ 22,012 $ — $ — $ 22,012 U.S. government securities 12,081 — — 12,081 Commercial paper — 39,249 — 39,249 Total assets $ 34,093 $ 39,249 $ — $ 73,342 Liabilities Debt derivative liabilities $ — — $ 5,562 $ 5,562 Total liabilities $ — $ — $ 5,562 $ 5,562 |
Schedule of fair value instruments classified Level 3 | The changes in Level 3 liabilities measured at fair value on a recurring basis for the three and six months ended June 30, 2022, were as follows (in thousands): Three Months Ended June 30, 2022 Beginning Balance, April 1, 2022 $ 5,310 Change in fair value included in net loss (434) Ending Balance, June 30, 2022 $ 4,876 Six Months Ended June 30, 2022 Beginning Balance, January 1, 2022 $ 5,562 Change in fair value included in net loss (686) Ending Balance, June 30, 2022 $ 4,876 The changes in Level 3 liabilities measured at fair value on a recurring basis for the three and six months ended June 30, 2021, were as follows (in thousands): Three Months Ended June 30, 2021 Beginning Balance, April 1, 2021 39,205 Addition of Oberland Facility - second tranche 13,827 Addition of debt derivative - second tranche 1,173 Change in fair value of Oberland Facility 150 Change in fair value of debt derivative 84 Ending Balance, June 30, 2021 $ 54,439 Six Months Ended June 30, 2021 Beginning Balance, January 1, 2021 $ 39,352 Addition of Oberland Facility - second tranche 13,827 Addition of debt derivative - second tranche 1,173 Change in fair value of Oberland Facility (18) Change in fair value of debt derivative 105 Ending Balance June 30, 2021 $ 54,439 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Supplemental balance sheet information | Supplemental balance sheet information related to the operating and financing leases is as follows: (In thousands, except lease term and discount rate ) June 30, 2022 December 31, 2021 Operating Leases Right-of-use operating assets $ 14,975 $ 15,193 Current maturities of long-term lease obligations $ 1,756 $ 1,825 Long-term lease obligations $ 20,653 $ 20,794 Financing Leases Right-of-use financing leases (1) $ 31 $ 42 Current maturities of long-term lease obligations $ 6 $ 9 Long-term lease obligations $ 2 $ 4 Weighted average operating lease term (in years): 11.4 12.1 Weighted average operating financing term (in years): 1.6 2.2 Weighted average discount rate operating leases 10.31 % 10.32% Weighted average discount rate financing leases 6.84% 7.23% |
Summary of operating lease maturity | Future minimum lease payments under operating and financing leases at June 30, 2022, were as follows: (In thousands) 2022 (excluding the six months ended June 30, 2022) $ 2,152 2023 3,415 2024 3,186 2025 3,268 2026 3,276 2027 61 Thereafter 23,939 Total $ 39,296 Less: Imputed interest (16,879) Total lease liability $ 22,417 Less: Current lease liability (1,762) Long-term lease liability $ 20,655 |
Summary of finance lease maturity | Future minimum lease payments under operating and financing leases at June 30, 2022, were as follows: (In thousands) 2022 (excluding the six months ended June 30, 2022) $ 2,152 2023 3,415 2024 3,186 2025 3,268 2026 3,276 2027 61 Thereafter 23,939 Total $ 39,296 Less: Imputed interest (16,879) Total lease liability $ 22,417 Less: Current lease liability (1,762) Long-term lease liability $ 20,655 |
Long-Term Debt, Net of Debt D_2
Long-Term Debt, Net of Debt Discount and Financing Fees (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt, net of debt discount and financing fees consists of the following: (In thousands) June 30, December 31, 2021 Oberland Facility - first tranche $ 35,000 $ 35,000 Oberland Facility - second tranche 15,000 15,000 Less - unamortized debt discount and deferred financing fees (4,737) (5,179) Long-term debt, net of debt discount and financing fees $ 45,263 $ 44,821 |
Stock-Based Incentive Plans (Ta
Stock-Based Incentive Plans (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Stock Option Activity | A summary of the stock option activity is as follows: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value (in thousands) Outstanding, December 31, 2021 3,194,738 $15.65 6.45 $ 2,236 Granted 1,109,754 $9.20 Exercised (41,209) $4.27 Cancelled (118,100) $16.41 Outstanding, June 30, 2022 4,145,183 $14.02 6.98 $ 1,140 Exercisable, June 30, 2022 2,145,901 $15.07 5.03 $ 1,138 |
Schedule of Weighted-Average Assumptions for Options Granted | The Company used the following weighted-average assumptions for options granted during the six months June 30, 2022: Expected term (in years) 6.05 Expected volatility 60.95 % Risk free rate 2.22 % Expected dividends — % |
Summary of Stock Unit Activity | A summary of the restricted and performance stock unit activity is as follows: Outstanding Stock Units Stock Units Weighted-Average Fair Value at Date of Grant per Share Weighted Average Remaining Vesting Life Aggregate Intrinsic Value (in thousands) Unvested, December 31, 2021 1,730,765 $ 18.45 1.51 $ 19,633 Granted 1,874,047 $ 8.29 Released (259,341) $ 14.21 Forfeited (125,477) $ 16.61 Unvested, June 30, 2022 3,219,994 $ 12.95 2.01 $ 26,372 |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of net loss per common share | The following reflects the net loss attributable to common shareholders and share data used in the basic and diluted earnings per share computations using the two class method: Three Months Ended June 30, Six Months Ended June 30, (In thousands, except per share amounts) 2022 2021 2022 2021 Numerator: Net loss $ (7,740) $ (7,898) $ (19,215) $ (14,558) Denominator: Weighted-average common shares outstanding (Basic) 41,994,618 41,080,898 41,900,000 40,894,405 Weighted-average common shares outstanding (Diluted) 41,994,618 41,080,898 41,900,000 40,894,405 Net loss per common share (Basic and Diluted) $ (0.18) $ (0.19) $ (0.46) $ (0.36) Anti-dilutive shares excluded from the calculation of diluted earnings per share (1) Stock options 3,796,254 1,308,583 3,377,594 1,188,243 Restricted stock units 591,824 17,828 574,431 296,327 (1) These common equivalent shares are not included in the diluted per share calculations as they would be anti-dilutive, if the Company was in a net income position. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Cash and cash equivalents balance outside of FDIC limit | $ 11,322 | |
Restricted cash | 6,251 | $ 6,251 |
Restricted Cash | ||
Collateral amount | $ 6,000 | $ 250 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Reconciliation of Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 11,822 | $ 32,756 | ||
Restricted cash | 6,251 | 6,251 | ||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | $ 18,073 | $ 39,007 | $ 59,411 | $ 55,609 |
Inventory (Details)
Inventory (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Inventory [Line Items] | |||
Finished goods | $ 12,492,000 | $ 11,011,000 | |
Work in process | 929,000 | 813,000 | |
Raw materials | 5,801,000 | 4,869,000 | |
Inventory | 19,222,000 | $ 16,693,000 | |
Provision for inventory write-down | $ 928,000 | $ 2,455,000 | |
Avive | |||
Inventory [Line Items] | |||
Provision for inventory write-down | $ 1,251,000 |
Property and Equipment -Schedul
Property and Equipment -Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Finance lease right-of-use assets | $ 110 | $ 110 |
Property and equipment, at cost | 80,020 | 70,537 |
Less: accumulated depreciation and amortization | (9,032) | (7,614) |
Property and equipment, net | 70,988 | 62,923 |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 5,192 | 5,100 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 15,490 | 14,952 |
Processing equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 4,156 | 3,984 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 731 | 731 |
Projects in process | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | $ 54,341 | $ 45,660 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Depreciation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 713 | $ 633 | $ 1,418 | $ 1,405 |
Intangible Assets, Net - Compon
Intangible Assets, Net - Components of Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Finite-lived Intangible Assets [Roll Forward] | ||
Gross Carrying Amount | $ 4,184 | $ 3,570 |
Accumulated Amortization | (1,219) | (1,086) |
Total amortized intangible assets | 2,965 | 2,484 |
Indefinite-lived Intangible Assets [Roll Forward] | ||
Intangible assets, gross | 4,565 | 3,945 |
Intangible assets, net | 3,346 | 2,859 |
Trademarks | ||
Indefinite-lived Intangible Assets [Roll Forward] | ||
Carrying Amount | 380 | 375 |
Patents | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Gross Carrying Amount | 3,083 | 2,469 |
Accumulated Amortization | (304) | (234) |
Total amortized intangible assets | 2,780 | 2,235 |
License agreements | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Gross Carrying Amount | 1,101 | 1,101 |
Accumulated Amortization | (916) | (852) |
Total amortized intangible assets | $ 185 | $ 249 |
Intangible Assets, Net - Future
Intangible Assets, Net - Future Amortization of Patents and License Agreements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Intangible assets | |||||
Amortization of intangible assets | $ 63 | $ 49 | $ 132 | $ 96 | |
Total amortized intangible assets | 2,965 | 2,965 | $ 2,484 | ||
Patents And License Agreements | |||||
Intangible assets | |||||
2022 (excluding six months ended June 30, 2022) | 131 | 131 | |||
2023 | 229 | 229 | |||
2024 | 160 | 160 | |||
2025 | 159 | 159 | |||
2026 | 158 | 158 | |||
Thereafter | 2,128 | 2,128 | |||
Total amortized intangible assets | $ 2,965 | $ 2,965 |
Intangible Assets, Net - Schedu
Intangible Assets, Net - Schedule of Royalty Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Sales and Marketing Expense | ||||
Intangible assets | ||||
Royalty expense | $ 766 | $ 709 | $ 1,439 | $ 1,350 |
Fair Value Measurement - Narrat
Fair Value Measurement - Narrative (Details) - Oberland Facility $ in Thousands | Jun. 30, 2022 USD ($) settlementScenario | Dec. 31, 2021 USD ($) |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Long-term debt | $ 45,263 | $ 45,325 |
Fair value of long-term debt | $ 47,759 | $ 52,605 |
Debt derivative liabilities | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Number of potential settlement scenarios | settlementScenario | 4 | |
Debt derivative liabilities | Period One | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input | 0.05 | |
Debt derivative liabilities | Period Three | Oberland Option | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input | 0.05 | |
Debt derivative liabilities | Period Two | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input | 0.15 | |
Debt derivative liabilities | Period Four | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input | 0.75 |
Fair Value Measurement - Signif
Fair Value Measurement - Significant Inputs Included in the Valuation of the Debt Derivative Liability (Details) - Debt derivative liabilities | Jun. 30, 2022 | Dec. 31, 2021 |
First Tranche | Remaining term (years) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input | 5 | 5.5 |
First Tranche | Coupon rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input | 0.0950 | 0.0950 |
First Tranche | Discount rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input | 0.144 | 0.1072 |
First Tranche | Mandatory prepayment rate | Probability of mandatory prepayment before 2024 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input | 0.050 | 0.050 |
First Tranche | Mandatory prepayment rate | Probability of mandatory prepayment 2024 or after | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input | 0.150 | 0.150 |
First Tranche | Mandatory prepayment rate | Probability of optional prepayment event | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input | 0.050 | 0.050 |
Second Tranche | Remaining term (years) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input | 6 | 6.5 |
Second Tranche | Coupon rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input | 0.095 | 0.095 |
Second Tranche | Discount rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input | 0.176 | 0.1321 |
Second Tranche | Mandatory prepayment rate | Probability of mandatory prepayment before 2024 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input | 0.050 | 0.050 |
Second Tranche | Mandatory prepayment rate | Probability of mandatory prepayment 2024 or after | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input | 0.150 | 0.150 |
Second Tranche | Mandatory prepayment rate | Probability of optional prepayment event | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input | 0.050 | 0.050 |
Fair Value Measurement - Schedu
Fair Value Measurement - Schedule of Assets and Liabilities at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Debt derivative liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt derivative liabilities | $ 4,876 | $ 5,562 |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 52,266 | 73,342 |
Total liabilities | 4,876 | 5,562 |
Recurring | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 6,057 | 22,012 |
Recurring | U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 17,920 | 12,081 |
Recurring | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 28,289 | 39,249 |
Recurring | Debt derivative liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt derivative liabilities | 4,876 | 5,562 |
Recurring | (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 23,977 | 34,093 |
Total liabilities | 0 | 0 |
Recurring | (Level 1) | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 6,057 | 22,012 |
Recurring | (Level 1) | U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 17,920 | 12,081 |
Recurring | (Level 1) | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Recurring | (Level 1) | Debt derivative liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt derivative liabilities | 0 | 0 |
Recurring | (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 28,289 | 39,249 |
Total liabilities | 0 | 0 |
Recurring | (Level 2) | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Recurring | (Level 2) | U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Recurring | (Level 2) | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 28,289 | 39,249 |
Recurring | (Level 2) | Debt derivative liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt derivative liabilities | 0 | 0 |
Recurring | (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Total liabilities | 4,876 | 5,562 |
Recurring | (Level 3) | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Recurring | (Level 3) | U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Recurring | (Level 3) | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Recurring | (Level 3) | Debt derivative liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt derivative liabilities | $ 4,876 | $ 5,562 |
Fair Value Measurement - Fair V
Fair Value Measurement - Fair Value of Instruments Classified as Level 3 (Details) - (Level 3) - Recurring - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | $ 5,310 | $ 39,205 | $ 5,562 | $ 39,352 |
Change in fair value | (434) | (686) | ||
Ending balance | $ 4,876 | 54,439 | $ 4,876 | 54,439 |
Oberland facility | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Additions | 13,827 | 13,827 | ||
Change in fair value | 150 | (18) | ||
Debt derivative liabilities | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Additions | 1,173 | 1,173 | ||
Change in fair value | $ 84 | $ 105 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Leases [Abstract] | ||||
Operating lease expense | $ 1,355 | $ 1,211 | $ 2,763 | $ 2,437 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Operating Leases | ||
Operating lease right-of-use assets | $ 14,975 | $ 15,193 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Current maturities of long-term lease obligations | Current maturities of long-term lease obligations |
Current maturities of long-term lease obligations | $ 1,825 | |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Long-term lease obligations | Long-term lease obligations |
Long-term lease obligations | $ 20,794 | |
Financing Leases | ||
Finance lease right-of-use assets | $ 31 | $ 42 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Current maturities of long-term lease obligations | Current maturities of long-term lease obligations |
Current maturities of long-term lease obligations | $ 6 | $ 9 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Long-term lease obligations | Long-term lease obligations |
Long-term lease obligations | $ 2 | $ 4 |
Weighted average operating lease term (in years): | 11 years 4 months 24 days | 12 years 1 month 6 days |
Weighted average operating financing term (in years): | 1 year 7 months 6 days | 2 years 2 months 12 days |
Weighted average discount rate operating leases | 10.31% | 10.32% |
Weighted average discount rate financing leases | 6.84% | 7.23% |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Leases [Abstract] | |
2022 | $ 2,152 |
2023 | 3,415 |
2024 | 3,186 |
2025 | 3,268 |
2026 | 3,276 |
2027 | 61 |
Thereafter | 23,939 |
Total | 39,296 |
Less: Imputed interest | (16,879) |
Total lease liability | 22,417 |
Less: Current lease liability | (1,762) |
Long-term lease liability | $ 20,655 |
Long-Term Debt, Net of Debt D_3
Long-Term Debt, Net of Debt Discount and Financing Fees - Carrying Value of Outstanding Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Jun. 30, 2020 |
Debt Instrument [Line Items] | ||||
Less - unamortized debt discount and deferred financing fees | $ (4,737) | $ (5,179) | ||
Long-term debt, net of debt discount and financing fees | 45,263 | 44,821 | ||
First Tranche | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 35,000 | 35,000 | $ 35,000 | |
Second Tranche | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | $ 15,000 | $ 15,000 | $ 15,000 |
Long-Term Debt, Net of Debt D_4
Long-Term Debt, Net of Debt Discount and Financing Fees - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||||||
Amortization of debt discount and deferred financing fees | $ 223 | $ 153 | $ 442 | $ 227 | ||
Restricted cash | 6,251 | 6,251 | $ 6,251 | |||
Restricted Cash | ||||||
Debt Instrument [Line Items] | ||||||
Collateral amount | 6,000 | 6,000 | 250 | |||
Debt derivative liabilities | ||||||
Debt Instrument [Line Items] | ||||||
Fair value of derivatives | 4,876 | 4,876 | 5,562 | |||
Oberland Facility | ||||||
Debt Instrument [Line Items] | ||||||
Term of debt | 7 years | |||||
Long-term debt | $ 45,263 | $ 45,263 | 45,325 | |||
Period for which quarterly interest payments should be made | 7 years | |||||
Interest rate | 7.50% | |||||
Interest rate at period end | 9.50% | 9.50% | ||||
Threshold revenue achievement for payment of additional quarterly royalty | $ 70,000 | |||||
Additional payment percentage | 1% | |||||
Interest costs incurred | $ 372 | 260 | $ 707 | 260 | ||
Cash paid for interest | 1,201 | 840 | 2,388 | 1,672 | ||
Interest capitalized | 1,579 | 645 | 3,024 | 1,690 | ||
Accumulated capitalized interest costs | 8,298 | 8,298 | ||||
Financing costs | 642 | 642 | ||||
Oberland Facility | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Additional interest floor rate | 2% | |||||
First Tranche | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 35,000 | 35,000 | 35,000 | 35,000 | ||
Second Tranche | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 15,000 | $ 15,000 | $ 15,000 | $ 15,000 | $ 15,000 |
Stock-Based Incentive Plans - N
Stock-Based Incentive Plans - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 16, 2022 shares | Jun. 30, 2022 USD ($) shares | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) plan shares | Jun. 30, 2021 USD ($) | |
Stock Option Disclosures | |||||
Share-based incentive plans | plan | 2 | ||||
Share-based compensation expense | $ | $ 4,910 | $ 3,805 | $ 7,588 | $ 6,499 | |
Unrecognized compensation costs related to non-vested stock options and performance stock awards | $ | 9,860 | $ 9,860 | |||
Stock options | |||||
Stock Option Disclosures | |||||
Weighted average period of recognition of unrecognized compensation expense | 2 years 8 months 12 days | ||||
Restricted and Performance Stock Units | |||||
Stock Option Disclosures | |||||
Unrecognized compensation costs related to non-vested stock options and performance stock awards | $ | 21,381 | $ 21,381 | |||
Weighted average period of recognition of unrecognized compensation expense | 3 years | ||||
PSUs | |||||
Stock Option Disclosures | |||||
Unrecognized compensation costs related to non-vested stock options and performance stock awards | $ | $ 5,332 | $ 5,332 | |||
PSUs | Two Thousand Twenty-Two | |||||
Stock Option Disclosures | |||||
Shares authorized for issuance (in shares) | shares | 526,467 | ||||
PSUs | Minimum | Two Thousand Twenty-Two | |||||
Stock Option Disclosures | |||||
Payout opportunity | 0% | ||||
PSUs | Maximum | Two Thousand Twenty-Two | |||||
Stock Option Disclosures | |||||
Payout opportunity | 150% | ||||
2019 Plan | |||||
Stock Option Disclosures | |||||
Shares authorized for issuance (in shares) | shares | 3,116,758 | 3,116,758 | |||
2017 ESPP | |||||
Stock Option Disclosures | |||||
Shares authorized for issuance (in shares) | shares | 600,000 | 600,000 | |||
Additional shares authorized for future issuance (in shares) | shares | 126,674 |
Stock-Based Incentive Plans - S
Stock-Based Incentive Plans - Stock Option Activity (Details) - Stock options - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Options | ||
Outstanding at the beginning of the period (in shares) | 3,194,738 | |
Granted (in shares) | 1,109,754 | |
Exercised (in shares) | (41,209) | |
Cancelled (in shares) | (118,100) | |
Outstanding at the end of the period (in shares) | 4,145,183 | 3,194,738 |
Exercisable (in shares) | 2,145,901 | |
Weighted Average Exercise Price | ||
Outstanding at the beginning of the period (in USD per share) | $ 15.65 | |
Granted (in USD per share) | 9.20 | |
Exercised (in USD per share) | 4.27 | |
Cancelled (in USD per share) | 16.41 | |
Outstanding at the end of the period (in USD per share) | 14.02 | $ 15.65 |
Exercisable (in USD per share) | $ 15.07 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Weighted Average Remaining Contractual Life, Outstanding (in years) | 6 years 11 months 23 days | 6 years 5 months 12 days |
Weighted Average Remaining Contractual Life, Exercisable (in years) | 5 years 10 days | |
Aggregate Intrinsic Value, Outstanding | $ 1,140 | $ 2,236 |
Aggregate Intrinsic Value, Exercisable | $ 1,138 |
Stock-Based Incentive Plans -_2
Stock-Based Incentive Plans - Summary of Weighted-Average Assumptions Used (Details) | 6 Months Ended |
Jun. 30, 2022 | |
Weighted-average assumptions | |
Expected term (in years) | 6 years 18 days |
Expected volatility | 60.95% |
Risk free rate | 2.22% |
Expected dividends | 0% |
Stock-Based Incentive Plans - R
Stock-Based Incentive Plans - RSU and PSU Award Activity (Details) - Restricted and Performance Stock Units - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Stock Units | ||
Unvested beginning balance (in shares) | 1,730,765 | |
Granted (in shares) | 1,874,047 | |
Released (in shares) | (259,341) | |
Forfeited (in shares) | (125,477) | |
Unvested ending balance (in shares) | 3,219,994 | 1,730,765 |
Weighted-Average Fair Value at Date of Grant per Share | ||
Unvested beginning balance (in USD per share) | $ 18.45 | |
Granted (in USD per share) | 8.29 | |
Released (in USD per share) | 14.21 | |
Forfeited (in USD per share) | 16.61 | |
Unvested ending balance (in USD per share) | $ 12.95 | $ 18.45 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | ||
Unvested, Weighted Average Remaining Vesting Life (in years) | 2 years 3 days | 1 year 6 months 3 days |
Unvested, Aggregate Intrinsic Value | $ 26,372 | $ 19,633 |
Net Loss Per Common Share (Deta
Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Numerator: | ||||
Net loss | $ (7,740) | $ (7,898) | $ (19,215) | $ (14,558) |
Denominator: | ||||
Weighted average common shares outstanding - basic (in shares) | 41,994,618 | 41,080,898 | 41,900,000 | 40,894,405 |
Weighted average common shares outstanding - diluted (in shares) | 41,994,618 | 41,080,898 | 41,900,000 | 40,894,405 |
Loss per common share - diluted (in dollars per share) | $ (0.18) | $ (0.19) | $ (0.46) | $ (0.36) |
Loss per common share - basic (in dollars per share) | $ (0.18) | $ (0.19) | $ (0.46) | $ (0.36) |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of net loss per share (in shares) | 3,796,254 | 1,308,583 | 3,377,594 | 1,188,243 |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of net loss per share (in shares) | 591,824 | 17,828 | 574,431 | 296,327 |
Commitments and Contingencies -
Commitments and Contingencies - Service Agreements Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2011 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
CTS Agreement | Cost of Sales | |||||
Service Agreements | |||||
Payments made under agreement | $ 622 | $ 628 | $ 1,245 | $ 1,271 | |
Master Services Agreement For Clinical Research and Related Services | |||||
Service Agreements | |||||
Payments made under agreement | $ 356 | $ 154 | $ 684 | $ 432 | |
Service agreement amount paid upon execution of agreement | $ 151 |
Commitments and Contingencies_2
Commitments and Contingencies - Axogen Processing Center Facility Narrative (Details) ft² in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | 36 Months Ended | |
Jul. 31, 2018 USD ($) a ft² | Jun. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | |
Projects in process | Design Build Agreement | ||||
Concentrations | ||||
Property, plant and equipment, additions | $ 2,842 | $ 5,431 | $ 40,847 | |
Interest capitalized | 1,579 | 3,004 | ||
Accumulated capitalized interest costs | $ 8,298 | $ 8,298 | $ 8,298 | |
APC Facility | ||||
Concentrations | ||||
Size of building space | ft² | 107 | |||
Area of land where building resides | a | 8.6 | |||
Payments to acquire land | $ 731 | |||
Payments to acquire building | $ 4,300 |
Commitments and Contingencies_3
Commitments and Contingencies - Overland Facility Make-Whole Payment (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Oberland Facility | Debt derivative liabilities | |
Debt Instrument [Line Items] | |
Make-whole payment required under each scenario, internal rate of return | 11.50% |
First Tranche | |
Debt Instrument [Line Items] | |
Held to maturity make-whole payment, alternative interpretation | $ 13,000 |
Second Tranche | |
Debt Instrument [Line Items] | |
Held to maturity make-whole payment, alternative interpretation | $ 5,000 |