Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2024 | Aug. 05, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
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 | |
Entity Address, Address Line Two | 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, $0.01 par value | |
Trading Symbol | AXGN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 43,829,801 | |
Entity Central Index Key | 0000805928 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 19,189 | $ 31,024 |
Restricted cash | 6,000 | 6,002 |
Investments | 1,944 | 0 |
Accounts receivable, net of allowance for doubtful accounts of $831 and $337, respectively | 25,152 | 25,147 |
Inventory, net | 28,015 | 23,020 |
Prepaid expenses and other | 1,962 | 2,811 |
Total current assets | 82,262 | 88,004 |
Property and equipment, net | 86,752 | 88,730 |
Operating lease right-of-use assets | 14,952 | 15,562 |
Intangible assets, net | 4,966 | 4,531 |
Total assets | 188,932 | 196,827 |
Current liabilities: | ||
Accounts payable and accrued expenses | 21,664 | 28,883 |
Current maturities of long-term lease obligations | 1,751 | 1,547 |
Total current liabilities | 23,415 | 30,430 |
Long-term debt, net of debt discount and financing fees | 47,047 | 46,603 |
Long-term lease obligations | 20,231 | 21,142 |
Debt derivative liabilities | 2,458 | 2,987 |
Other long-term liabilities | 94 | 0 |
Total liabilities | 93,245 | 101,162 |
Commitments and contingencies - see Note 12 | ||
Shareholders’ equity: | ||
Common stock, $0.01 par value per share; 100,000,000 shares authorized; 43,824,738 and 43,124,496 shares issued and outstanding | 438 | 431 |
Additional paid-in capital | 385,101 | 376,530 |
Accumulated deficit | (289,852) | (281,296) |
Total shareholders’ equity | 95,687 | 95,665 |
Total liabilities and shareholders’ equity | $ 188,932 | $ 196,827 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 831 | $ 337 |
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) | 43,824,738 | 43,124,496 |
Common stock outstanding (in shares) | 43,824,738 | 43,124,496 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Statement [Abstract] | ||||
Revenues | $ 47,912 | $ 38,155 | $ 89,289 | $ 74,819 |
Cost of goods sold | 12,567 | 8,503 | 21,325 | 16,675 |
Gross profit | 35,345 | 29,652 | 67,964 | 58,144 |
Costs and expenses: | ||||
Sales and marketing | 19,698 | 18,860 | 39,513 | 38,307 |
Research and development | 6,658 | 7,144 | 14,066 | 13,470 |
General and administrative | 9,417 | 10,550 | 19,373 | 20,611 |
Total costs and expenses | 35,773 | 36,554 | 72,952 | 72,388 |
Loss from operations | (428) | (6,902) | (4,988) | (14,244) |
Other income (expense): | ||||
Investment income | 227 | 235 | 520 | 784 |
Interest expense | (2,185) | (148) | (4,512) | (164) |
Change in fair value of derivatives | 464 | 432 | 529 | 247 |
Other expense | 1 | (277) | (105) | (357) |
Total other (expense) income, net | (1,493) | 242 | (3,568) | 510 |
Net loss | $ (1,921) | $ (6,660) | $ (8,556) | $ (13,734) |
Weighted average common shares outstanding - basic (in shares) | 43,713,313 | 42,862,384 | 43,473,541 | 42,719,096 |
Weighted average common shares outstanding - diluted (in shares) | 43,713,313 | 42,862,384 | 43,473,541 | 42,719,096 |
Loss per common share - basic (in USD per share) | $ (0.04) | $ (0.16) | $ (0.20) | $ (0.32) |
Loss per common share - diluted (in USD per share) | $ (0.04) | $ (0.16) | $ (0.20) | $ (0.32) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Cash flows from operating activities: | ||
Net loss | $ (8,556) | $ (13,734) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 3,177 | 1,506 |
Amortization of right-of-use assets | 642 | 642 |
Amortization of intangible assets | 138 | 144 |
Amortization of debt discount and deferred financing fees | 444 | 442 |
Provision for (recovery of) bad debt | 528 | (37) |
Provision for inventory write-down | 2,326 | 1,052 |
Change in fair value of derivatives | (529) | (247) |
Investment (gains) loss | (33) | (578) |
Share-based compensation | 7,826 | 8,344 |
Change in operating assets and liabilities: | ||
Accounts receivable | (533) | 650 |
Inventory | (7,321) | (3,384) |
Prepaid expenses and other | 957 | (639) |
Accounts payable and accrued expenses | (6,577) | (529) |
Operating lease obligations | (731) | (762) |
Cash paid for interest portion of finance leases | (2) | (1) |
Other liabilities | 143 | 0 |
Net cash used in operating activities | (8,101) | (7,131) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (1,834) | (8,719) |
Purchase of investments | (1,911) | (10,203) |
Proceeds from sale of investments | 0 | 32,974 |
Cash payments for intangible assets | (739) | (516) |
Net cash (used in) provided by investing activities | (4,484) | 13,536 |
Cash flows from financing activities: | ||
Cash paid for debt portion of finance leases | (4) | (12) |
Proceeds from exercise of stock options and ESPP stock purchases | 752 | 1,543 |
Net cash provided by financing activities | 748 | 1,531 |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (11,837) | 7,936 |
Cash, cash equivalents, and restricted cash, beginning of period | 37,026 | 21,535 |
Cash, cash equivalents, and restricted cash, end of period | 25,189 | 29,471 |
Supplemental disclosures of cash flow activity: | ||
Cash paid for interest, net of capitalized interest | 3,758 | 0 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Acquisition of fixed assets in accounts payable and accrued expenses | 178 | 1,818 |
Obtaining a right-of-use asset in exchange for a lease liability | 0 | 268 |
Acquisition of intangible assets in accounts payable and accrued expenses | $ 242 | $ 326 |
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, 2022 | 42,445,517 | |||
Beginning balance at Dec. 31, 2022 | $ 100,999 | $ 424 | $ 360,155 | $ (259,580) |
Increase (Decrease) in Stockholders' Equity | ||||
Net loss | (13,734) | (13,734) | ||
Stock-based compensation | 8,344 | 8,344 | ||
Issuance of restricted and performance stock units (in shares) | 296,378 | |||
Issuance of restricted and performance stock units | 0 | $ 4 | (4) | |
Exercise of stock options and employee stock purchase plan (in shares) | 237,646 | |||
Exercise of stock options and employee stock purchase plan | 1,543 | $ 2 | 1,541 | |
Ending balance (in shares) at Jun. 30, 2023 | 42,979,541 | |||
Ending balance at Jun. 30, 2023 | 97,152 | $ 430 | 370,036 | (273,314) |
Beginning balance (in shares) at Mar. 31, 2023 | 42,809,994 | |||
Beginning balance at Mar. 31, 2023 | 97,513 | $ 428 | 363,739 | (266,654) |
Increase (Decrease) in Stockholders' Equity | ||||
Net loss | (6,660) | (6,660) | ||
Stock-based compensation | 5,390 | 5,390 | ||
Issuance of restricted and performance stock units (in shares) | 57,659 | |||
Issuance of restricted and performance stock units | 0 | $ 1 | (1) | |
Exercise of stock options and employee stock purchase plan (in shares) | 111,888 | |||
Exercise of stock options and employee stock purchase plan | 909 | $ 1 | 908 | |
Ending balance (in shares) at Jun. 30, 2023 | 42,979,541 | |||
Ending balance at Jun. 30, 2023 | $ 97,152 | $ 430 | 370,036 | (273,314) |
Beginning balance (in shares) at Dec. 31, 2023 | 43,124,496 | 43,124,496 | ||
Beginning balance at Dec. 31, 2023 | $ 95,665 | $ 431 | 376,530 | (281,296) |
Increase (Decrease) in Stockholders' Equity | ||||
Net loss | (8,556) | (8,556) | ||
Stock-based compensation | 7,826 | 7,826 | ||
Issuance of restricted and performance stock units (in shares) | 583,386 | |||
Issuance of restricted and performance stock units | 0 | $ 6 | (6) | |
Exercise of stock options and employee stock purchase plan (in shares) | 116,856 | |||
Exercise of stock options and employee stock purchase plan | $ 752 | $ 1 | 751 | |
Ending balance (in shares) at Jun. 30, 2024 | 43,824,738 | 43,824,738 | ||
Ending balance at Jun. 30, 2024 | $ 95,687 | $ 438 | 385,101 | (289,852) |
Beginning balance (in shares) at Mar. 31, 2024 | 43,687,729 | |||
Beginning balance at Mar. 31, 2024 | 93,156 | $ 437 | 380,650 | (287,931) |
Increase (Decrease) in Stockholders' Equity | ||||
Net loss | (1,921) | (1,921) | ||
Stock-based compensation | 3,907 | 3,907 | ||
Issuance of restricted and performance stock units (in shares) | 44,153 | |||
Issuance of restricted and performance stock units | 0 | $ 0 | 0 | |
Exercise of stock options and employee stock purchase plan (in shares) | 92,856 | |||
Exercise of stock options and employee stock purchase plan | $ 545 | $ 1 | 544 | |
Ending balance (in shares) at Jun. 30, 2024 | 43,824,738 | 43,824,738 | ||
Ending balance at Jun. 30, 2024 | $ 95,687 | $ 438 | $ 385,101 | $ (289,852) |
Nature of Business
Nature of Business | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | Nature of Business Axogen, Inc. (together with its wholly-owned subsidiaries, the “Company”) was incorporated in Minnesota. Our business is focused on the science, development and commercialization of the technologies used for peripheral nerve regeneration and repair. The Company's products include Avance ® Nerve Graft, Axoguard Nerve Connector ® , Axoguard Nerve Protector ® , Axoguard HA+ Nerve Protector™, Axoguard Nerve Cap ® , Avive+ Soft Tissue Matrix™, and Axotouch ® Two-Point Discriminator . The Company is headquartered in Florida. The Company has processing, warehousing, and distribution facilities in Texas and Ohio. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Please see Note 2 to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission ("SEC") on March 5, 2024, for a description of all significant accounting policies. Reclassifications Certain reclassifications have been made to the prior period financial information to conform to the presentation used in the condensed consolidated statement of operations for the three and six months ended June 30, 2024. Effective in the first quarter of 2024, the Company voluntarily changed its accounting policy for shipping and handling costs. Under the new accounting policy, these costs are included in Costs of goods sold, whereas they were previously included in Sales and marketing expenses. Including these expenses in Costs of goods sold better aligns these costs with the related revenue in the gross profit calculation. Although the prior method of accounting continues to be an accepted alternative, the new accounting policy is more widely used in the industry and provides improved comparability of the Company's financial statements to its peers. This change in accounting policy has been applied retrospectively. The consolidated statement of operations for the three and six months ended June 30, 2023, has been reclassified to reflect this change in accounting policy. The impact of this reclassification was an increase of $1,278 and $2,743 to Cost of goods sold for the three and six months ended June 30, 2023, respectively, and a corresponding decrease to Sales and marketing expenses in the same periods. Effective in the first quarter of 2024, the Company also ceased allocating certain costs to and from certain departments. Previously such costs had been allocated based on the Company’s estimate of the proportionate share of total expense to Cost of goods sold, Sales and marketing, Research and development, and General and administrative. The Company determined that these changes would better reflect industry practice and would provide more meaningful information as well as increased transparency of its operations. To conform the 2023 presentation to the current quarter and year to date presentation, $922 and $1,984 was reclassified to General and administrative, of which $219 and $572 was previously included in Research and development, $699 and $1,406 was previously included in Sales and marketing, and $3 and $6 was previously included in Cost of goods sold for the three and six months ended June 30, 2023, respectively, in the condensed consolidated statement of operations. These reclassifications had no impact on net revenue, loss from operations, net loss, or loss per common share for prior periods and do not represent a restatement of the Company's previously issued condensed consolidated financial statements. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company as of June 30, 2024, and December 31, 2023, and for the three and six months ended June 30, 2024, and 2023. 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 ("U.S. GAAP") and should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2023, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. 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. The results of operations for the three and six months ended June 30, 2024, 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 the Company's markets for the remainder of fiscal year 2024. All intercompany accounts and transactions have been eliminated in consolidation. Cash and Cash Equivalents and Concentration Cash and cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less from the date of acquisition. Certain of the Company's cash and cash equivalents balances exceed Federal Deposit Insurance Corporation ("FDIC") insured limits or are invested in money market accounts with investment banks that are not FDIC-insured. The Company places its cash and cash equivalents in what they believe to be credit-worthy financial institutions. As of June 30, 2024, $18,439 of the cash and cash equivalents balance was in excess of FDIC limits. Restricted Cash Amounts included in restricted cash represent those required to be set aside to meet contractual terms of a lease agreement held by the Company. See Note 8 - Long-Term Debt, Net of Debt Discount and Financing Fees, Other Credit Facilities. 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 $ 19,189 $ 31,024 Restricted cash 6,000 6,002 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 25,189 $ 37,026 Shipping and Handling All shipping and handling costs, including facility and warehousing overhead, directly related to bringing the Company’s products to their final selling destination are included in cost of goods sold on the consolidated statements of operations. The Company has elected to account for shipping and handling costs for products shipped to customers as a fulfillment activity as the costs are incurred as part of the transfer of the goods to the customer in accordance with ASC 606. See Reclassifications above. Recent Accounting Pronouncements All other Accounting Standards Updates ("ASU's") issued and not yet effective as of June 30, 2024, and through the date of this report, were assessed and determined to be either not applicable or are expected to have minimal impact on the Company’s current or future financial position or results of operations except for the following: In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update 2023-09 — Income Taxes (Topic 740) — Improvements to Income Tax Disclosures ("ASU 2023-09"). The new guidance provides for disclosure on an annual basis of the following: (i) specific categories in the rate reconciliation, and (ii) additional information for reconciling items that meet a quantitative threshold of greater than 5% of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate. The amendment in ASU 2023-09 is effective for the annual periods beginning after December 15, 2025, early adoption is permitted. The Company expects to enhance annual income tax reporting disclosures based on the new requirements. In November 2023, the FASB issued Accounting Standard Update 2023-07 — Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"). The new guidance requires disclosure on an annual and interim basis of the following: (i) significant segment expenses regularly provided to the chief operating decision maker ("CODM") and a measure of segment profit or loss; (ii) an amount for other segment items by reportable segment and a description of its composition; (iii) all annual disclosures about a reportable segment's profit and loss and assets as currently required by Topic 280; (iv) clarify if the CODM uses more than one measure of a segment's profit or loss in assessing segment performance and deciding how to allocate resources; and (v) disclose title and position of the CODM and how the CODM uses the reported measures. Public entities with a single reportable segment are required to provide all the disclosures required by this amendment. The amendment in ASU 2023-07 is effective for the annual periods beginning after December 15, 2023, and for the quarters in the years after December 15, 2024, early adoption is permitted. The Company expects to enhance annual segment reporting disclosures based on the new requirements. |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2024 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Inventory consists of the following: (in thousands) June 30, December 31, Finished goods $ 20,652 $ 13,545 Work in process 1,018 2,120 Raw materials 6,345 7,355 Inventory $ 28,015 $ 23,020 |
Property and Equipment, Net
Property and Equipment, Net | 6 Months Ended |
Jun. 30, 2024 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net consist of the following: (in thousands) June 30, December 31, Land $ 731 $ 731 Building 60,679 60,679 Leasehold improvements 17,859 15,348 Processing equipment 13,833 13,116 Furniture and equipment 9,530 8,741 Projects in process 713 3,674 Finance lease right-of-use assets 138 138 Property and equipment, at cost 103,485 102,427 Less: accumulated depreciation and amortization (16,733) (13,697) Property and equipment, net $ 86,752 $ 88,730 Depreciation expense is as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 Depreciation expense $ 1,657 $ 798 $ 3,177 $ 1,506 |
Intangible Assets, Net
Intangible Assets, Net | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net | Intangible Assets , Net Intangible assets consist of the following: June 30, 2024 December 31, 2023 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizable intangible assets: Patents $ 5,467 $ (944) $ 4,523 $ 4,905 $ (820) $ 4,085 License agreements — — — 1,101 (1,087) 14 Total amortizable intangible assets 5,467 (944) 4,523 6,006 (1,907) 4,099 Unamortized intangible assets: Trademarks 443 — 443 432 — 432 Total intangible assets $ 5,910 $ (944) $ 4,966 $ 6,438 $ (1,907) $ 4,531 Amortization expense is as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 Amortization expense $ 76 $ 73 $ 138 $ 144 As of June 30, 2024, future amortization of patents and license agreements is as follows: Year Ending December 31, (in thousands) 2024 (excluding the six months ended June 30, 2024) $ 129 2025 261 2026 261 2027 261 2028 261 Thereafter 3,350 Total $ 4,523 License Agreements The Company had various license agreements that require the payment of royalty fees. Royalty fee expense included in sales and marketing expense is as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 Royalty fee expense (1) $ — $ 868 $ — $ 1,698 (1) Royalty fees are no longer being paid due to the expiration of the patents in 2023. |
Fair Value Measurement
Fair Value Measurement | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurement The following tables present the Company's fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2024, and December 31, 2023: June 30, 2024 (in thousands) (Level 1) (Level 2) (Level 3) Total Assets: Money market funds (1) $ 8,962 $ — $ — $ 8,962 U.S. government securities 1,944 — — 1,944 Total assets $ 10,906 $ — $ — $ 10,906 Liabilities: Debt derivative liabilities $ — $ — $ 2,458 $ 2,458 Total liabilities $ — $ — $ 2,458 $ 2,458 (1) Money market funds are included in Cash and cash equivalents on the Condensed Consolidated Balance Sheet. December 31, 2023 (in thousands) (Level 1) (Level 2) (Level 3) Total Assets: Money market funds (1) $ 24,977 $ — $ — $ 24,977 Total assets $ 24,977 $ — $ — $ 24,977 Liabilities: Debt derivative liabilities $ — $ — $ 2,987 $ 2,987 Total liabilities $ — $ — $ 2,987 $ 2,987 (1) Money market funds are included in Cash and cash equivalents on the Condensed Consolidated Balance Sheet. The changes in Level 3 liabilities measured at fair value on a recurring basis for the three and six months ended June 30, 2024, were as follows (in thousands): Three Months Ended June 30, 2024 Beginning Balance, April 1, 2024 $ 2,922 Change in fair value included in net loss (464) Ending Balance, June 30, 2024 $ 2,458 Six Months Ended June 30, 2024 Beginning Balance, January 1, 2024 $ 2,987 Change in fair value included in net loss (529) Ending Balance, June 30, 2024 $ 2,458 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 carrying value and fair value of the Credit Facility were $47,047 and $52,144 at June 30, 2024, and $46,603 and $51,486 at December 31, 2023, respectively. See Note 8 - Long-Term Debt, Net of Debt Discount and Financing Fees. The debt derivative liabilities are measured using a ‘with and without’ valuation model to compare the fair value of each tranche of the Credit Facility including the identified embedded derivative features and the fair value of a plain vanilla note with the same terms. The fair value of the Credit Facility including the identified embedded derivative features was determined using a probability-weighted expected return model based on four potential settlement scenarios, one of which ended December 31, 2023, for the financing agreement as disclosed in the table below. The estimated settlement value of each scenario, which would include any required make-whole payment, (see Note 8 - Long-Term Debt, Net of Debt Discount and Financing Fees), is then discounted to present value using a discount rate that is derived based on the initial terms of the financing agreement 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, 2024 December 31, 2023 Input Remaining term (years) 3 years 3.5 years Maturity date June 30, 2027 June 30, 2027 Coupon rate 9.5% - 13.2% 9.5% - 13.2% Revenue participation payments Maximum each year Maximum each year Discount rate 12.14% (1) 12.06% (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) Probability of note held-to-maturity (2) 80.0% (1) 80.0% (1) (1) Represents a significant unobservable input . (2) See Maturity date in table. The significant inputs that are included in the valuation of the debt derivative liability - second tranche include: June 30, 2024 December 31, 2023 Input Remaining term (years) 4 years 4.5 years Maturity date June 30, 2028 June 30, 2028 Coupon rate 9.5% - 13.2% 9.5% - 13.2% Revenue participation payments Maximum each year Maximum each year Discount rate 14.77 % (1) 15.60 % (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) Probability of held-to-maturity (2) 80.0% 80.0% (1) Represents a significant unobservable input . (2) See Maturity date in table. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
Leases | Leases The Company leases administrative, processing, research and distribution facilities through operating leases. Several of the leases include fixed payments, including rent and non-lease components such as common area or other maintenance costs. Operating lease expense is as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 Operating lease expense $ 1,283 $ 1,242 $ 2,489 $ 2,540 Supplemental balance sheet information related to the operating and financing leases is as follows: (in thousands, except lease term and discount rate) June 30, 2024 December 31, 2023 Operating Leases Right-of-use operating assets $ 14,952 $ 15,562 Current maturities of long-term lease obligations $ 1,746 $ 1,541 Long-term lease obligations $ 20,215 $ 21,123 Financing Leases Right-of-use financing leases (1) $ 22 $ 28 Current maturities of long-term lease obligations $ 5 $ 6 Long-term lease obligations $ 16 $ 19 Weighted average operating lease term (in years): 9.2 9.6 Weighted average financing lease term (in years): 3.5 6.5 Weighted average discount rate operating leases 10.98% 10.99% Weighted average discount rate financing leases 13.40% 13.22% (1) Financing leases are included in property and equipment, net on the condensed consolidated balance sheets. Future minimum lease payments under operating and financing leases at June 30, 2024, are as follows: (in thousands) 2024 (excluding six months ended June 30, 2024) $ 1,981 2025 4,143 2026 4,278 2027 3,115 2028 3,113 Thereafter 18,568 Total 35,198 Less: Imputed interest (13,216) Total lease liability 21,982 Less: Current lease liability (1,751) Long-term lease liability $ 20,231 Sublease Agreement |
Leases | Leases The Company leases administrative, processing, research and distribution facilities through operating leases. Several of the leases include fixed payments, including rent and non-lease components such as common area or other maintenance costs. Operating lease expense is as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 Operating lease expense $ 1,283 $ 1,242 $ 2,489 $ 2,540 Supplemental balance sheet information related to the operating and financing leases is as follows: (in thousands, except lease term and discount rate) June 30, 2024 December 31, 2023 Operating Leases Right-of-use operating assets $ 14,952 $ 15,562 Current maturities of long-term lease obligations $ 1,746 $ 1,541 Long-term lease obligations $ 20,215 $ 21,123 Financing Leases Right-of-use financing leases (1) $ 22 $ 28 Current maturities of long-term lease obligations $ 5 $ 6 Long-term lease obligations $ 16 $ 19 Weighted average operating lease term (in years): 9.2 9.6 Weighted average financing lease term (in years): 3.5 6.5 Weighted average discount rate operating leases 10.98% 10.99% Weighted average discount rate financing leases 13.40% 13.22% (1) Financing leases are included in property and equipment, net on the condensed consolidated balance sheets. Future minimum lease payments under operating and financing leases at June 30, 2024, are as follows: (in thousands) 2024 (excluding six months ended June 30, 2024) $ 1,981 2025 4,143 2026 4,278 2027 3,115 2028 3,113 Thereafter 18,568 Total 35,198 Less: Imputed interest (13,216) Total lease liability 21,982 Less: Current lease liability (1,751) Long-term lease liability $ 20,231 Sublease Agreement |
Long-Term Debt, Net of Debt Dis
Long-Term Debt, Net of Debt Discount and Financing Fees | 6 Months Ended |
Jun. 30, 2024 | |
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, 2024 December 31, 2023 Credit Facility - first tranche $ 35,000 $ 35,000 Credit Facility - second tranche 15,000 15,000 Less - unamortized debt discount and deferred financing fees (2,953) (3,397) Long-term debt, net of debt discount and financing fees $ 47,047 $ 46,603 Credit Facility On June 29, 2023, the Company amended its Credit Facility with Oberland Capital and its affiliates TPC Investments II LP and Argo LLC (collectively, the "Lender"). The term loan agreement for the Credit Facility was amended to transition the base interest rate from three-month LIBOR to Adjusted SOFR. The Company obtained the first tranche of $35,000 at closing on June 30, 2020. On June 30, 2021, the second tranche of $15,000 was drawn down by the Company. Each tranche under the Credit Facility requires quarterly interest payments for seven years. Interest is calculated as 7.5% plus the greater of Adjusted SOFR o r 2.0% (12.90% at June 30, 2024 ), provided that the interest rate shall never be less than 9.5%. Each tranche of the Credit 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 Credit Facility, the Company entered into a revenue participation agreement (the “Revenue Participation Agreement”) with the Lender, which provided that, among other things, a quarterly royalty payment as a percentage of the Company’s net revenues, up to $70 million in any given year, after April 1, 2021, ending on the date upon which all amounts owed under the Credit Facility have been paid in full. This structure re s ults in approximately 1.5% per year of additional interest payments on the outstanding loan amount. The Company recorded $309 and $360 as interest expense for this Revenue Participation Agreement for the three months ended June 30, 2024, and 2023, respectively, and $756 and $756 for the six months ended June 30, 2024, and 2023, respectively. The Company pays the quarterly debt interest on the last day of the quarter and for the three months ended June 30, 2024, and 2023, paid $1,631 and $1,602, respectively, and $3,265 and $3,134 for the six months ended June 30, 2024, and 2023, respectively, to the Lender. The Company capitalized interest of $0 and $2,049 for the three months ended June 30, 2024, and 2023, respectively, and $0 and $4,196 for the six months ended June 30, 2024, and 2023, towards the costs to construct and retrofit the Axogen Processing Center ("APC Facility") in Vandalia, Ohio which was completed during 2023. As of June 30, 2024, the Company was in compliance with all financial covenants. The borrowings under the Credit Facility are secured by substantially all of the assets of the Company. Embedded Derivatives The fair values of the debt derivative liabilities were $2,458 and $2,987 at June 30, 2024, and December 31, 2023, respectively. See Note 6 - Fair Value Measurement. Unamortized Debt Discount and Financing Fees The unamortized debt discount consists of the remaining initial fair values of the embedded derivatives related to the Credit Facility. The financing fees for the Credit Facility were $642 and were recorded as a contra liability to long-term debt on the consolidated balance sheet. Amortization of debt discount and deferred financing fees for the three months ended June 30, 2024, and 2023 was $222 and $223, respectively, and for the six months ended June 30, 2024, and 2023, was $444 and $442, respectively. Other Credit Facilities |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company's stock-based compensation plans are described in Note 11. Stock-Based Compensation to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. During the fiscal year 2024, the following stock compensation was awarded to officers and employees. All awards were granted under the 2019 Amended and Restated Long-Term Incentive Plan ("2019 Plan"), with the exception of the inducement shares awarded as inducements material to new employees entering into employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4). Type of Award Quarter Awarded Target Shares or Units Weighted Average Grant Date Fair Value Stock Options (1) 1st Quarter — $ — 2nd Quarter 145,984 $ 4.11 Restricted Stock Units (2) 1st Quarter 787,688 $ 9.05 2nd Quarter 200,108 $ 7.56 Performance Stock Units (3)(4) 1st Quarter 911,400 $ 8.92 2nd Quarter 424,400 $ 3.06 Inducement Shares (5) Stock Options 1st Quarter 18,700 $ 6.04 Restricted Stock Units 1st Quarter 310,000 $ 7.00 (1) Options granted to the Board of Directors during the second quarter for their annual fee vest in one year from the date of grant. (2) Restricted Stock Units (RSUs) awarded to certain officers and employees during the first and second quarter vest over a four-year period. Included in the second quarter RSUs are 85,224 units awarded to the Board of Directors for their annual fee which vest in one year from the date of the award. Upon vesting, the outstanding number of RSUs vested are converted into common stock. (3) Performance Stock Units (PSUs) awarded to certain officers and employees related to their work on the BLA ("2024 BLA PSUs") totaled 487,000 shares during the first quarter of 2024. Participants with 2024 BLA PSUs will earn from 0% to 100% upon achievement of certain milestones related to the BLA submission and FDA approval. The number of shares available for grant is linked to certain milestones related to the BLA submission to and approval by the FDA. These awards will vest provided the participants remain in continuous service to the Company through the achievement of the applicable performance goal and the one-year anniversary of the grant date. (4) PSUs were awarded to certain officers and employees with a target of 424,400 shares with performance metrics tied to the achievement of stock price goals between February 2024 through February 2027 ("TSR PSU") during the first quarter of 2024. Participants with TSR PSUs will earn from 0% to 200% upon achievement of specific stock price goals. The maximum number of shares that can be issued under this award is 848,800 . Vesting occurs at the end of the three-year performance period upon Compensation Committee certification of the results at the end of the performance period. (5 ) Inducement shares were issued to officers during the first quarter of 2024, to new employees entering into employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4). Vesting for both the stock options and restricted stock units are over both a three Total stock-based compensation expense is as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 Stock-based compensation expense $ 3,907 $ 5,390 $ 7,826 $ 8,344 |
Net Loss Per Common Share
Net Loss Per Common Share | 6 Months Ended |
Jun. 30, 2024 | |
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) 2024 2023 2024 2023 Numerator: Net loss $ (1,921) $ (6,660) $ (8,556) $ (13,734) Denominator: Weighted-average common shares outstanding (Basic) 43,713,313 42,862,384 43,473,541 42,719,096 Weighted-average common shares outstanding (Diluted) 43,713,313 42,862,384 43,473,541 42,719,096 Net loss per common share (Basic and Diluted) $ (0.04) $ (0.16) $ (0.20) $ (0.32) Anti-dilutive shares excluded from the calculation of diluted earnings per share (1) Stock options 4,239,311 3,923,737 4,113,080 3,645,690 Restricted stock units 1,433,829 251,112 439,583 330,036 (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, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company has no recorded income tax expense or income tax benefit for the three and six months ended June 30, 2024 , and 2023 due to the generation of net operating losses, the benefits of which have been fully reserved. 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 tax 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 2023, and we have received notice of examination from federal tax authorities for tax year 2021 . For tax years 2005 through 2018, federal taxing authorities may examine and adjust loss carryforwards in the years in which those loss carryforwards are ultimately utilized. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Service Agreements The Company pays Community Blood Center, (d/b/a Solvita), formerly d/b/a Community Tissue Service, ("Solvita") a facility fee for the use of clean rooms/manufacturing, storage, and office space and for services in support of its tissue processing including for routine sterilization of daily supplies, providing disposable supplies and microbial services, and office support. Pursuant to the Solvita Agreement, the Company recorded expenses of $281 and $582 for the three months ended June 30, 2024, and 2023, respectively, and $473 and $1,311 during the six months ended June 30, 2024, and 2023, is included in cost of goods sold. The Solvita Agreement was amended on March 31, 2024, extending the term through December 31, 2026. The Solvita Agreement may be terminated by either party by providing an eighteen-month written notice. The Company is continuing its use of Solvita for Avive+. Distribution and Supply Agreements In August 2008, the Company entered into an exclusive distribution agreement with Cook Biotech Incorporated ("Cook Biotech") to distribute the Axoguard Nerve Connector and Axoguard Nerve Protector products worldwide and the parties subsequently amended the agreement on August 4, 2023. The distribution agreement expires on December 31, 2030. The Cook Biotech agreement 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. Under the Cook Biotech agreement, the Company provides purchase orders to Cook Biotech, and Cook Biotech fulfills the purchase orders. 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. In June 2017, the Company entered into the Nerve End Cap Supply Agreement (the "Supply Agreement") with Cook Biotech whereby Cook Biotech is the exclusive contract manufacturer of the Axoguard Nerve Cap; the parties subsequently amended the agreement on August 4, 2023. The Supply Agreement expires on December 31, 2030. The Supply Agreement establishes the terms and conditions in which Cook Biotech will manufacture the product for the Company. Under the Supply Agreement the Company provides purchase orders to Cook Biotech and Cook Biotech fulfills the purchase orders. The Supply Agreement allows for termination provisions for both parties. The loss of the Company's ability to sell the Axoguard Nerve Cap products could have a material adverse effect on the Company's business until other replacement products would become available. In May 2023, the Company entered into a Supply and Manufacturing Agreement ("HA+ Supply Agreement") with Cook Biotech whereby Cook Biotech is the exclusive contract manufacturer of the Axoguard HA+ Nerve Protector. The HA+ Supply Agreement expires on July 1, 2030. The HA+ Supply Agreement establishes the terms and conditions in which Cook Biotech will manufacture, package, label and deliver the product to the Company. Under the HA+ Supply Agreement, the Company provides purchase orders to Cook Biotech, and Cook Biotech fulfills the purchase orders. The HA+ Supply Agreement allows for termination provisions for both parties. The loss of the Company's ability to sell the Axoguard products could have a material adverse effect on the Company's business until other replacement products would become available. On January 31, 2024, RTI Surgical, Inc. announced the acquisition of Cook Biotech. The acquisition of Cook Biotech has not had any material impact on our relationship with Cook Biotech or our operations. Insurance Finance Agreement We finance certain of our commercial insurance policies ("Insurance Financing Agreement"). Outstanding payments owed under the Insurance Financing Agreement are recorded as "prepaid expenses and other" in our condensed consolidated balance sheets. The amounts owed under the Insurance Financing Agreement included in prepaid expenses and other were $1,012 and $0 as of June 30, 2024, and December 31, 2023, respectively. Processing Facilities The Company is highly dependent on the continued availability of its processing facilities at CTS and APC in Dayton, Ohio and could be harmed if the physical infrastructure of these facilities is unavailable for any prolonged period of time. Certain Economic Development Grants The Company obtained certain economic development grants from state and local authorities totaling up to $2,685 including $1,250 of cash grants to offset costs to acquire and develop the APC Facility. The economic development grants are subject to certain job creation milestones through December 31, 2023, and have clawback clauses if the Company does not meet the job creation milestones The Company requested an extension from the grant authorities to extend the job creation milestones and received approval to extend the evaluation date to December 31, 2024, and the expiration date to December 31, 2026. As of June 30, 2024, the Company has received $1,188 from the cash grants. Fair Value of the Debt Derivative Liabilities The fair value of the debt derivative liabilities is $2,458 as of June 30, 2024. The fair value of the debt derivative liabilities is determined using a probability-weighted expected return model based upon four potential settlement scenarios, one of which ended December 31, 2023, with the Credit Facility. The estimated settlement value of each scenario, which includes any required make-whole payment, is discounted to present value using a discount rate that is derived based upon the initial terms of the Credit Facility at issuance and corroborated utilizing a synthetic rating analysis. The calculated fair values under the four scenarios are then compared to the fair value of a plain vanilla note, with the difference reflecting the fair value of the debt derivative liabilities. The Company estimated the make-whole payments required under each scenario according to the terms of the Credit Facility to generate an internal rate of return equal to 11.5% thr ough the scheduled maturity dates, less the total of all quarterly interest and royalty payments previously paid to the Lender . The calculation utilized the XIRR function in Microsoft Excel as required by the Credit 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 tranche of the Credit Facility due on June 30, 2027, and June 30, 2028, respectively, are approximately zero. The Company has consistently applied this approach since the inception of the debt agreement on June 30, 2020. The Company is aware that the Lender may have an alternative interpretation of the calculation of the make-whole payments that the Company believ es does not properly utilize the same methodology utilized by the XIRR function in Microsoft Excel as described in the Credit 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 $8,000 f or the first tranche of the Credit Facility due on June 30, 2027, and approximately $4,000 for the second tranche of the Credit Facility due on June 30, 2028. Further, if the debt is prepaid prior to the scheduled maturity dates and subject to the alternative interpretation, the make-whole payment would be larger than the amounts herein. Legal Proceedings The Company is and may be subject to various claims, lawsuits, and proceedings in the ordinary course of the Company's business. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. While there can be no assurances as to the ultimate outcome of any legal proceeding or other loss contingency involving the Company, in the opinion of management, such claims are either adequately covered by insurance or otherwise indemnified, or are not expected individually or in the aggregate, to result in a material, adverse effect on the Comp any's financial condition, results of operations or cash flows. However, it is possible that the Company's results of operations, financial position and cash flows in a particular period could be materially affected by these contingencies. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Pay vs Performance Disclosure | ||||
Net loss | $ (1,921) | $ (6,660) | $ (8,556) | $ (13,734) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 6 Months Ended |
Jun. 30, 2024 shares | Jun. 30, 2024 shares | |
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | During the quarter ended June 30, 2024, our Section 16 officers and directors adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” as each term is defined in Item 408(a) of Regulation S-K as noted below: Trading Arrangement Name and Title Action Taken Date of Action Date of Plan Rule 10b5-1* Non-Rule 10b5-1** Aggregate Number of Securities to be Sold Expiration Date Karen Zaderej Terminate 5/6/2024 6/13/2024 X 740,000 12/31/2024 Karen Zaderej Adopt 5/22/2024 8/23/2024 X 710,000 12/31/2024 *Intended to satisfy the affirmative defense of Rule 10b5-1(c) ** Not intended to satisfy the affirmative defense of Rule 10b5-1(c) | |
Non-Rule 10b5-1 Arrangement Adopted | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Karen Zaderej, May 2024 Terminated Plan [Member] | Karen Zaderej [Member] | ||
Trading Arrangements, by Individual | ||
Name | Karen Zaderej | |
Rule 10b5-1 Arrangement Terminated | true | |
Termination Date | 6/13/2024 | |
Expiration Date | 12/31/2024 | |
Aggregate Available | 740,000 | 740,000 |
Karen Zaderej, May 2024 Adopted Plan [Member] | Karen Zaderej [Member] | ||
Trading Arrangements, by Individual | ||
Name | Karen Zaderej | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | 8/23/2024 | |
Expiration Date | 12/31/2024 | |
Arrangement Duration | 223 days | |
Aggregate Available | 710,000 | 710,000 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Reclassifications | Reclassifications Certain reclassifications have been made to the prior period financial information to conform to the presentation used in the condensed consolidated statement of operations for the three and six months ended June 30, 2024. Effective in the first quarter of 2024, the Company voluntarily changed its accounting policy for shipping and handling costs. Under the new accounting policy, these costs are included in Costs of goods sold, whereas they were previously included in Sales and marketing expenses. Including these expenses in Costs of goods sold better aligns these costs with the related revenue in the gross profit calculation. Although the prior method of accounting continues to be an accepted alternative, the new accounting policy is more widely used in the industry and provides improved comparability of the Company's financial statements to its peers. This change in accounting policy has been applied retrospectively. The consolidated statement of operations for the three and six months ended June 30, 2023, has been reclassified to reflect this change in accounting policy. The impact of this reclassification was an increase of $1,278 and $2,743 to Cost of goods sold for the three and six months ended June 30, 2023, respectively, and a corresponding decrease to Sales and marketing expenses in the same periods. Effective in the first quarter of 2024, the Company also ceased allocating certain costs to and from certain departments. Previously such costs had been allocated based on the Company’s estimate of the proportionate share of total expense to Cost of goods sold, Sales and marketing, Research and development, and General and administrative. The Company determined that these changes would better reflect industry practice and would provide more meaningful information as well as increased transparency of its operations. To conform the 2023 presentation to the current quarter and year to date presentation, $922 and $1,984 was reclassified to General and administrative, of which $219 and $572 was previously included in Research and development, $699 and $1,406 was previously included in Sales and marketing, and $3 and $6 was previously included in Cost of goods sold for the three and six months ended June 30, 2023, respectively, in the condensed consolidated statement of operations. These reclassifications had no impact on net revenue, loss from operations, net loss, or loss per common share for prior periods and do not represent a restatement of the Company's previously issued condensed consolidated financial statements. |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company as of June 30, 2024, and December 31, 2023, and for the three and six months ended June 30, 2024, and 2023. 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 ("U.S. GAAP") and should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2023, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. 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. The results of operations for the three and six months ended June 30, 2024, 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 the Company's markets for the remainder of fiscal year 2024. All intercompany accounts and transactions have been eliminated in consolidation. |
Cash and Cash Equivalents and Concentration and Restricted Cash | Cash and Cash Equivalents and Concentration Cash and cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less from the date of acquisition. Certain of the Company's cash and cash equivalents balances exceed Federal Deposit Insurance Corporation ("FDIC") insured limits or are invested in money market accounts with investment banks that are not FDIC-insured. The Company places its cash and cash equivalents in what they believe to be credit-worthy financial institutions. As of June 30, 2024, $18,439 of the cash and cash equivalents balance was in excess of FDIC limits. Restricted Cash |
Shipping and Handling | Shipping and Handling All shipping and handling costs, including facility and warehousing overhead, directly related to bringing the Company’s products to their final selling destination are included in cost of goods sold on the consolidated statements of operations. The Company has elected to account for shipping and handling costs for products shipped to customers as a fulfillment activity as the costs are incurred as part of the transfer of the goods to the customer in accordance with ASC 606. See Reclassifications above. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements All other Accounting Standards Updates ("ASU's") issued and not yet effective as of June 30, 2024, and through the date of this report, were assessed and determined to be either not applicable or are expected to have minimal impact on the Company’s current or future financial position or results of operations except for the following: In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update 2023-09 — Income Taxes (Topic 740) — Improvements to Income Tax Disclosures ("ASU 2023-09"). The new guidance provides for disclosure on an annual basis of the following: (i) specific categories in the rate reconciliation, and (ii) additional information for reconciling items that meet a quantitative threshold of greater than 5% of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate. The amendment in ASU 2023-09 is effective for the annual periods beginning after December 15, 2025, early adoption is permitted. The Company expects to enhance annual income tax reporting disclosures based on the new requirements. In November 2023, the FASB issued Accounting Standard Update 2023-07 — Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"). The new guidance requires disclosure on an annual and interim basis of the following: (i) significant segment expenses regularly provided to the chief operating decision maker ("CODM") and a measure of segment profit or loss; (ii) an amount for other segment items by reportable segment and a description of its composition; (iii) all annual disclosures about a reportable segment's profit and loss and assets as currently required by Topic 280; (iv) clarify if the CODM uses more than one measure of a segment's profit or loss in assessing segment performance and deciding how to allocate resources; and (v) disclose title and position of the CODM and how the CODM uses the reported measures. Public entities with a single reportable segment are required to provide all the disclosures required by this amendment. The amendment in ASU 2023-07 is effective for the annual periods beginning after December 15, 2023, and for the quarters in the years after December 15, 2024, early adoption is permitted. The Company expects to enhance annual segment reporting disclosures based on the new requirements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 $ 19,189 $ 31,024 Restricted cash 6,000 6,002 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 25,189 $ 37,026 |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consists of the following: (in thousands) June 30, December 31, Finished goods $ 20,652 $ 13,545 Work in process 1,018 2,120 Raw materials 6,345 7,355 Inventory $ 28,015 $ 23,020 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net consist of the following: (in thousands) June 30, December 31, Land $ 731 $ 731 Building 60,679 60,679 Leasehold improvements 17,859 15,348 Processing equipment 13,833 13,116 Furniture and equipment 9,530 8,741 Projects in process 713 3,674 Finance lease right-of-use assets 138 138 Property and equipment, at cost 103,485 102,427 Less: accumulated depreciation and amortization (16,733) (13,697) Property and equipment, net $ 86,752 $ 88,730 Depreciation expense is as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 Depreciation expense $ 1,657 $ 798 $ 3,177 $ 1,506 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consist of the following: June 30, 2024 December 31, 2023 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizable intangible assets: Patents $ 5,467 $ (944) $ 4,523 $ 4,905 $ (820) $ 4,085 License agreements — — — 1,101 (1,087) 14 Total amortizable intangible assets 5,467 (944) 4,523 6,006 (1,907) 4,099 Unamortized intangible assets: Trademarks 443 — 443 432 — 432 Total intangible assets $ 5,910 $ (944) $ 4,966 $ 6,438 $ (1,907) $ 4,531 |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets consist of the following: June 30, 2024 December 31, 2023 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizable intangible assets: Patents $ 5,467 $ (944) $ 4,523 $ 4,905 $ (820) $ 4,085 License agreements — — — 1,101 (1,087) 14 Total amortizable intangible assets 5,467 (944) 4,523 6,006 (1,907) 4,099 Unamortized intangible assets: Trademarks 443 — 443 432 — 432 Total intangible assets $ 5,910 $ (944) $ 4,966 $ 6,438 $ (1,907) $ 4,531 |
Schedule of Amortization Expense | Amortization expense is as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 Amortization expense $ 76 $ 73 $ 138 $ 144 |
Schedule of Future Amortization | As of June 30, 2024, future amortization of patents and license agreements is as follows: Year Ending December 31, (in thousands) 2024 (excluding the six months ended June 30, 2024) $ 129 2025 261 2026 261 2027 261 2028 261 Thereafter 3,350 Total $ 4,523 |
Schedule of Royalty Expenses | Royalty fee expense included in sales and marketing expense is as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 Royalty fee expense (1) $ — $ 868 $ — $ 1,698 (1) Royalty fees are no longer being paid due to the expiration of the patents in 2023. |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Financial Assets Measured on a Recurring Basis | The following tables present the Company's fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2024, and December 31, 2023: June 30, 2024 (in thousands) (Level 1) (Level 2) (Level 3) Total Assets: Money market funds (1) $ 8,962 $ — $ — $ 8,962 U.S. government securities 1,944 — — 1,944 Total assets $ 10,906 $ — $ — $ 10,906 Liabilities: Debt derivative liabilities $ — $ — $ 2,458 $ 2,458 Total liabilities $ — $ — $ 2,458 $ 2,458 (1) Money market funds are included in Cash and cash equivalents on the Condensed Consolidated Balance Sheet. December 31, 2023 (in thousands) (Level 1) (Level 2) (Level 3) Total Assets: Money market funds (1) $ 24,977 $ — $ — $ 24,977 Total assets $ 24,977 $ — $ — $ 24,977 Liabilities: Debt derivative liabilities $ — $ — $ 2,987 $ 2,987 Total liabilities $ — $ — $ 2,987 $ 2,987 (1) Money market funds are included in Cash and cash equivalents on the Condensed Consolidated Balance Sheet. |
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, 2024, were as follows (in thousands): Three Months Ended June 30, 2024 Beginning Balance, April 1, 2024 $ 2,922 Change in fair value included in net loss (464) Ending Balance, June 30, 2024 $ 2,458 Six Months Ended June 30, 2024 Beginning Balance, January 1, 2024 $ 2,987 Change in fair value included in net loss (529) Ending Balance, June 30, 2024 $ 2,458 |
Schedule 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, 2024 December 31, 2023 Input Remaining term (years) 3 years 3.5 years Maturity date June 30, 2027 June 30, 2027 Coupon rate 9.5% - 13.2% 9.5% - 13.2% Revenue participation payments Maximum each year Maximum each year Discount rate 12.14% (1) 12.06% (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) Probability of note held-to-maturity (2) 80.0% (1) 80.0% (1) (1) Represents a significant unobservable input . (2) See Maturity date in table. The significant inputs that are included in the valuation of the debt derivative liability - second tranche include: June 30, 2024 December 31, 2023 Input Remaining term (years) 4 years 4.5 years Maturity date June 30, 2028 June 30, 2028 Coupon rate 9.5% - 13.2% 9.5% - 13.2% Revenue participation payments Maximum each year Maximum each year Discount rate 14.77 % (1) 15.60 % (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) Probability of held-to-maturity (2) 80.0% 80.0% (1) Represents a significant unobservable input . (2) See Maturity date in table. |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
Schedule of Operating Lease Expense | Operating lease expense is as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 Operating lease expense $ 1,283 $ 1,242 $ 2,489 $ 2,540 |
Schedule of 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, 2024 December 31, 2023 Operating Leases Right-of-use operating assets $ 14,952 $ 15,562 Current maturities of long-term lease obligations $ 1,746 $ 1,541 Long-term lease obligations $ 20,215 $ 21,123 Financing Leases Right-of-use financing leases (1) $ 22 $ 28 Current maturities of long-term lease obligations $ 5 $ 6 Long-term lease obligations $ 16 $ 19 Weighted average operating lease term (in years): 9.2 9.6 Weighted average financing lease term (in years): 3.5 6.5 Weighted average discount rate operating leases 10.98% 10.99% Weighted average discount rate financing leases 13.40% 13.22% (1) |
Schedule of Operating Lease Maturity | Future minimum lease payments under operating and financing leases at June 30, 2024, are as follows: (in thousands) 2024 (excluding six months ended June 30, 2024) $ 1,981 2025 4,143 2026 4,278 2027 3,115 2028 3,113 Thereafter 18,568 Total 35,198 Less: Imputed interest (13,216) Total lease liability 21,982 Less: Current lease liability (1,751) Long-term lease liability $ 20,231 |
Schedule of Finance Lease Maturity | Future minimum lease payments under operating and financing leases at June 30, 2024, are as follows: (in thousands) 2024 (excluding six months ended June 30, 2024) $ 1,981 2025 4,143 2026 4,278 2027 3,115 2028 3,113 Thereafter 18,568 Total 35,198 Less: Imputed interest (13,216) Total lease liability 21,982 Less: Current lease liability (1,751) Long-term lease liability $ 20,231 |
Long-Term Debt, Net of Debt D_2
Long-Term Debt, Net of Debt Discount and Financing Fees (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of 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, 2024 December 31, 2023 Credit Facility - first tranche $ 35,000 $ 35,000 Credit Facility - second tranche 15,000 15,000 Less - unamortized debt discount and deferred financing fees (2,953) (3,397) Long-term debt, net of debt discount and financing fees $ 47,047 $ 46,603 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock Unit Activity | During the fiscal year 2024, the following stock compensation was awarded to officers and employees. All awards were granted under the 2019 Amended and Restated Long-Term Incentive Plan ("2019 Plan"), with the exception of the inducement shares awarded as inducements material to new employees entering into employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4). Type of Award Quarter Awarded Target Shares or Units Weighted Average Grant Date Fair Value Stock Options (1) 1st Quarter — $ — 2nd Quarter 145,984 $ 4.11 Restricted Stock Units (2) 1st Quarter 787,688 $ 9.05 2nd Quarter 200,108 $ 7.56 Performance Stock Units (3)(4) 1st Quarter 911,400 $ 8.92 2nd Quarter 424,400 $ 3.06 Inducement Shares (5) Stock Options 1st Quarter 18,700 $ 6.04 Restricted Stock Units 1st Quarter 310,000 $ 7.00 (1) Options granted to the Board of Directors during the second quarter for their annual fee vest in one year from the date of grant. (2) Restricted Stock Units (RSUs) awarded to certain officers and employees during the first and second quarter vest over a four-year period. Included in the second quarter RSUs are 85,224 units awarded to the Board of Directors for their annual fee which vest in one year from the date of the award. Upon vesting, the outstanding number of RSUs vested are converted into common stock. (3) Performance Stock Units (PSUs) awarded to certain officers and employees related to their work on the BLA ("2024 BLA PSUs") totaled 487,000 shares during the first quarter of 2024. Participants with 2024 BLA PSUs will earn from 0% to 100% upon achievement of certain milestones related to the BLA submission and FDA approval. The number of shares available for grant is linked to certain milestones related to the BLA submission to and approval by the FDA. These awards will vest provided the participants remain in continuous service to the Company through the achievement of the applicable performance goal and the one-year anniversary of the grant date. (4) PSUs were awarded to certain officers and employees with a target of 424,400 shares with performance metrics tied to the achievement of stock price goals between February 2024 through February 2027 ("TSR PSU") during the first quarter of 2024. Participants with TSR PSUs will earn from 0% to 200% upon achievement of specific stock price goals. The maximum number of shares that can be issued under this award is 848,800 . Vesting occurs at the end of the three-year performance period upon Compensation Committee certification of the results at the end of the performance period. (5 ) three |
Schedule of Stock Based Compensation Expense | Total stock-based compensation expense is as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 Stock-based compensation expense $ 3,907 $ 5,390 $ 7,826 $ 8,344 |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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) 2024 2023 2024 2023 Numerator: Net loss $ (1,921) $ (6,660) $ (8,556) $ (13,734) Denominator: Weighted-average common shares outstanding (Basic) 43,713,313 42,862,384 43,473,541 42,719,096 Weighted-average common shares outstanding (Diluted) 43,713,313 42,862,384 43,473,541 42,719,096 Net loss per common share (Basic and Diluted) $ (0.04) $ (0.16) $ (0.20) $ (0.32) Anti-dilutive shares excluded from the calculation of diluted earnings per share (1) Stock options 4,239,311 3,923,737 4,113,080 3,645,690 Restricted stock units 1,433,829 251,112 439,583 330,036 (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 | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Cost of goods sold increase (decrease) | $ 12,567 | $ 8,503 | $ 21,325 | $ 16,675 |
General and administrative | 9,417 | 10,550 | 19,373 | 20,611 |
Decrease in research and development | (6,658) | (7,144) | (14,066) | (13,470) |
Reduction to sales and marketing expense | (19,698) | (18,860) | (39,513) | (38,307) |
Cash and cash equivalents balance outside of FDIC limit | $ 18,439 | $ 18,439 | ||
Revision of Prior Period, Reclassification, Adjustment | ||||
Cost of goods sold increase (decrease) | (3) | (6) | ||
General and administrative | 922 | 1,984 | ||
Decrease in research and development | 219 | 572 | ||
Reduction to sales and marketing expense | 699 | 1,406 | ||
Shipping and Handling | Revision of Prior Period, Change in Accounting Principle, Adjustment | ||||
Cost of goods sold increase (decrease) | $ 1,278 | $ 2,743 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Reconciliation of Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 19,189 | $ 31,024 | ||
Restricted cash | 6,000 | 6,002 | ||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | $ 25,189 | $ 37,026 | $ 29,471 | $ 21,535 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 20,652 | $ 13,545 |
Work in process | 1,018 | 2,120 |
Raw materials | 6,345 | 7,355 |
Inventory | 28,015 | 23,020 |
Inventory valuation reserves | $ 2,835 | $ 1,342 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Finance lease right-of-use assets | $ 138 | $ 138 |
Property and equipment, at cost | 103,485 | 102,427 |
Less: accumulated depreciation and amortization | (16,733) | (13,697) |
Property and equipment, net | 86,752 | 88,730 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 731 | 731 |
Building | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 60,679 | 60,679 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 17,859 | 15,348 |
Processing equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 13,833 | 13,116 |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 9,530 | 8,741 |
Projects in process | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | $ 713 | $ 3,674 |
Property and Equipment, Net -_2
Property and Equipment, Net - Schedule of Depreciation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 1,657 | $ 798 | $ 3,177 | $ 1,506 |
Intangible Assets, Net - Compon
Intangible Assets, Net - Components of Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Amortizable intangible assets: | ||
Gross Carrying Amount | $ 5,467 | $ 6,006 |
Accumulated Amortization | (944) | (1,907) |
Net Carrying Amount | 4,523 | 4,099 |
Unamortized intangible assets: | ||
Intangible assets, gross | 5,910 | 6,438 |
Intangible assets, net | 4,966 | 4,531 |
Trademarks | ||
Unamortized intangible assets: | ||
Carrying amount | 443 | 432 |
Patents | ||
Amortizable intangible assets: | ||
Gross Carrying Amount | 5,467 | 4,905 |
Accumulated Amortization | (944) | (820) |
Net Carrying Amount | 4,523 | 4,085 |
License agreements | ||
Amortizable intangible assets: | ||
Gross Carrying Amount | 0 | 1,101 |
Accumulated Amortization | 0 | (1,087) |
Net Carrying Amount | $ 0 | $ 14 |
Intangible Assets, Net - Amorti
Intangible Assets, Net - Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 76 | $ 73 | $ 138 | $ 144 |
Intangible Assets, Net - Future
Intangible Assets, Net - Future Amortization of Patents and License Agreements (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Intangible assets | ||
Net Carrying Amount | $ 4,523 | $ 4,099 |
Patents and License Agreements | ||
Intangible assets | ||
2024 (excluding the six months ended June 30, 2024 | 129 | |
2025 | 261 | |
2026 | 261 | |
2027 | 261 | |
2028 | 261 | |
Thereafter | 3,350 | |
Net Carrying Amount | $ 4,523 |
Intangible Assets, Net - Schedu
Intangible Assets, Net - Schedule of Royalty Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Selling and Marketing Expense | ||||
Intangible assets | ||||
Royalty fee expense | $ 0 | $ 868 | $ 0 | $ 1,698 |
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, 2024 | Dec. 31, 2023 |
Debt derivative liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt derivative liabilities | $ 2,458 | $ 2,987 |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 10,906 | 24,977 |
Total liabilities | 2,458 | 2,987 |
Recurring | Money market funds (1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 8,962 | 24,977 |
Recurring | U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 1,944 | |
Recurring | Debt derivative liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt derivative liabilities | 2,458 | 2,987 |
(Level 1) | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 10,906 | 24,977 |
Total liabilities | 0 | 0 |
(Level 1) | Recurring | Money market funds (1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 8,962 | 24,977 |
(Level 1) | Recurring | U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 1,944 | |
(Level 1) | Recurring | Debt derivative liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt derivative liabilities | 0 | 0 |
(Level 2) | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Total liabilities | 0 | 0 |
(Level 2) | Recurring | Money market funds (1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
(Level 2) | Recurring | U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | |
(Level 2) | Recurring | Debt derivative liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt derivative liabilities | 0 | 0 |
(Level 3) | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Total liabilities | 2,458 | 2,987 |
(Level 3) | Recurring | Money market funds (1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
(Level 3) | Recurring | U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | |
(Level 3) | Recurring | Debt derivative liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt derivative liabilities | $ 2,458 | $ 2,987 |
Fair Value Measurement - Fair V
Fair Value Measurement - Fair Value of Instruments Classified as Level 3 (Details) - Recurring - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2024 | Jun. 30, 2024 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 2,922 | $ 2,987 |
Ending balance | 2,458 | 2,458 |
Debt derivative liabilities | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Change in fair value included in net loss | $ (464) | $ (529) |
Fair Value Measurement - Narrat
Fair Value Measurement - Narrative (Details) - Oberland Facility $ in Thousands | Jun. 30, 2024 USD ($) | Dec. 31, 2023 USD ($) settlementScenario |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Long-term debt | $ 47,047 | $ 46,603 |
Fair value of long-term debt | $ 52,144 | $ 51,486 |
Debt derivative liabilities | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Number of potential settlement scenarios | settlementScenario | 4 |
Fair Value Measurement - Signif
Fair Value Measurement - Significant Inputs Included in the Valuation of the Debt Derivative Liability (Details) | Jun. 30, 2024 | Dec. 31, 2023 |
First Tranche | Mandatory prepayment rate | Probability of note held-to-maturity | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input (as a percent) | 0.800 | 0.800 |
First Tranche | Debt derivative liabilities | Remaining term (years) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input (as a percent) | 3 | 3.5 |
First Tranche | Debt derivative liabilities | Coupon rate | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input (as a percent) | 0.095 | 0.095 |
First Tranche | Debt derivative liabilities | Coupon rate | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input (as a percent) | 0.132 | 0.132 |
First Tranche | Debt derivative liabilities | Discount rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input (as a percent) | 0.1214 | 0.1206 |
First Tranche | Debt derivative liabilities | Mandatory prepayment rate | Probability of mandatory prepayment 2024 or after | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input (as a percent) | 0.150 | 0.150 |
First Tranche | Debt derivative liabilities | Mandatory prepayment rate | Probability of optional prepayment event | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input (as a percent) | 0.050 | 0.050 |
Second Tranche | Mandatory prepayment rate | Probability of note held-to-maturity | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input (as a percent) | 0.800 | 0.800 |
Second Tranche | Debt derivative liabilities | Remaining term (years) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input (as a percent) | 4 | 4.5 |
Second Tranche | Debt derivative liabilities | Coupon rate | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input (as a percent) | 0.095 | 0.095 |
Second Tranche | Debt derivative liabilities | Coupon rate | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input (as a percent) | 0.132 | |
Second Tranche | Debt derivative liabilities | Discount rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input (as a percent) | 0.1477 | 0.1560 |
Second Tranche | Debt derivative liabilities | Mandatory prepayment rate | Probability of mandatory prepayment 2024 or after | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input (as a percent) | 0.150 | 0.150 |
Second Tranche | Debt derivative liabilities | Mandatory prepayment rate | Probability of optional prepayment event | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input (as a percent) | 0.050 | 0.050 |
Leases - Operating Lease Expens
Leases - Operating Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Leases [Abstract] | ||||
Operating lease expense | $ 1,283 | $ 1,242 | $ 2,489 | $ 2,540 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Operating Leases | ||
Right-of-use operating assets | $ 14,952 | $ 15,562 |
Current maturities of long-term lease obligations | 1,746 | 1,541 |
Long-term lease obligations | 20,215 | 21,123 |
Financing Leases | ||
Right-of-use financing leases | 22 | 28 |
Current maturities of long-term lease obligations | 5 | 6 |
Long-term lease obligations | $ 16 | $ 19 |
Weighted average operating lease term (in years): | 9 years 2 months 12 days | 9 years 7 months 6 days |
Weighted average financing lease term (in years): | 3 years 6 months | 6 years 6 months |
Weighted average discount rate operating leases | 10.98% | 10.99% |
Weighted average discount rate financing leases | 13.40% | 13.22% |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Current maturities of long-term lease obligations | Current maturities of long-term lease obligations |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Long-term lease obligations | Long-term lease obligations |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Current maturities of long-term lease obligations | Current maturities of long-term lease obligations |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Long-term lease obligations | Long-term lease obligations |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) $ in Thousands | Jun. 30, 2024 USD ($) |
Leases [Abstract] | |
2024 (excluding six months ended June 30, 2024) | $ 1,981 |
2025 | 4,143 |
2026 | 4,278 |
2027 | 3,115 |
2028 | 3,113 |
Thereafter | 18,568 |
Total | 35,198 |
Less: Imputed interest | (13,216) |
Total lease liability | 21,982 |
Less: Current lease liability | (1,751) |
Long-term lease liability | $ 20,231 |
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, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Less - unamortized debt discount and deferred financing fees | $ (2,953) | $ (3,397) |
Long-term debt, net of debt discount and financing fees | 47,047 | 46,603 |
Credit Facility - first tranche | ||
Debt Instrument [Line Items] | ||
Long-term debt | 35,000 | 35,000 |
Credit Facility - second tranche | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 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. 29, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | Jun. 30, 2021 | Jun. 30, 2020 | |
Debt Instrument [Line Items] | ||||||||
Interest capitalized | $ 0 | $ 2,049 | $ 0 | $ 4,196 | ||||
Amortization of debt discount and deferred financing fees | 222 | 223 | 444 | 442 | ||||
Restricted cash | 6,000 | 6,000 | $ 6,002 | |||||
Debt derivative liabilities | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt derivative liabilities | $ 2,458 | $ 2,458 | $ 2,987 | |||||
Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt | $ 15,000 | $ 35,000 | ||||||
Period for which quarterly interest payments should be made | 7 years | |||||||
Interest rate | 7.50% | |||||||
Additional interest floor rate | 2% | |||||||
Interest rate at period end | 12.90% | 12.90% | ||||||
Term of debt (in years) | 7 years | |||||||
Threshold revenue achievement for payment of additional quarterly royalty | $ 70,000 | |||||||
Additional payment | 1.50% | |||||||
Interest costs incurred | $ 309 | 360 | $ 756 | 756 | ||||
Cash paid for interest | 1,631 | $ 1,602 | 3,265 | $ 3,134 | ||||
Financing costs | $ 642 | $ 642 | ||||||
Credit Facility | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate | 9.50% |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-based Compensation Activity (Details) - $ / shares | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2024 | |
2024 BLA PSU | Minimum | |||
Weighted Average Granted Date Fair Value | |||
Payout opportunity target | 0% | ||
2024 BLA PSU | Maximum | |||
Weighted Average Granted Date Fair Value | |||
Payout opportunity target | 100% | ||
TSR PSU | Minimum | |||
Weighted Average Granted Date Fair Value | |||
Payout opportunity target | 0% | ||
TSR PSU | Maximum | |||
Weighted Average Granted Date Fair Value | |||
Payout opportunity target | 200% | ||
Stock Options | |||
Target Shares or Units | |||
Stock options granted (in shares) | 145,984 | 0 | |
Weighted Average Granted Date Fair Value | |||
Stock options granted (in USD per share) | $ 4.11 | $ 0 | |
Vesting period | 1 year | ||
Restricted Stock Units | |||
Target Shares or Units | |||
Stock units granted (in shares) | 200,108 | 787,688 | |
Weighted Average Granted Date Fair Value | |||
Stock options/units granted (in USD per share) | $ 7.56 | $ 9.05 | |
Vesting period | 4 years | ||
Restricted Stock Units | Board of Directors | |||
Target Shares or Units | |||
Stock units granted (in shares) | 85,224 | ||
Weighted Average Granted Date Fair Value | |||
Vesting period | 1 year | ||
Performance Stock Units | |||
Target Shares or Units | |||
Stock units granted (in shares) | 424,400 | 911,400 | |
Weighted Average Granted Date Fair Value | |||
Stock options/units granted (in USD per share) | $ 3.06 | $ 8.92 | |
Performance Stock Units | 2024 BLA PSU | |||
Target Shares or Units | |||
Stock units granted (in shares) | 487,000 | ||
Performance Stock Units | TSR PSU | |||
Target Shares or Units | |||
Stock units granted (in shares) | 424,400 | ||
Weighted Average Granted Date Fair Value | |||
Vesting period | 3 years | ||
Shares authorized for issuance (in shares) | 848,800 | ||
Inducement Shares, Stock Options | |||
Target Shares or Units | |||
Stock options granted (in shares) | 18,700 | ||
Weighted Average Granted Date Fair Value | |||
Stock options granted (in USD per share) | $ 6.04 | ||
Inducement Shares, Stock Options | Inducement Shares | |||
Weighted Average Granted Date Fair Value | |||
Vesting period | 3 years | ||
Inducement Shares, Restricted Stock Units | |||
Target Shares or Units | |||
Stock units granted (in shares) | 310,000 | ||
Weighted Average Granted Date Fair Value | |||
Stock options/units granted (in USD per share) | $ 7 | ||
Inducement Shares, Restricted Stock Units | Inducement Shares | |||
Weighted Average Granted Date Fair Value | |||
Vesting period | 4 years |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | ||||
Stock-based compensation expense | $ 3,907 | $ 5,390 | $ 7,826 | $ 8,344 |
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, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Numerator: | ||||
Net loss | $ (1,921) | $ (6,660) | $ (8,556) | $ (13,734) |
Denominator: | ||||
Weighted-average common shares outstanding (Basic) (in shares) | 43,713,313 | 42,862,384 | 43,473,541 | 42,719,096 |
Weighted-average common shares outstanding (Diluted) (in shares) | 43,713,313 | 42,862,384 | 43,473,541 | 42,719,096 |
Net loss per common share - Basic (in USD per share) | $ (0.04) | $ (0.16) | $ (0.20) | $ (0.32) |
Net loss per common share - Diluted (in USD per share) | $ (0.04) | $ (0.16) | $ (0.20) | $ (0.32) |
Stock options | ||||
Denominator: | ||||
Anti-dilutive shares excluded from the calculation of diluted earnings per share (in shares) | 4,239,311 | 3,923,737 | 4,113,080 | 3,645,690 |
Restricted stock units | ||||
Denominator: | ||||
Anti-dilutive shares excluded from the calculation of diluted earnings per share (in shares) | 1,433,829 | 251,112 | 439,583 | 330,036 |
Commitments and Contingencies -
Commitments and Contingencies - Service Agreements Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Insurance Finance Agreement | |||||
Service Agreements | |||||
Prepaid commitment | $ 1,012 | $ 1,012 | $ 0 | ||
CTS Agreement | |||||
Service Agreements | |||||
License fee amount | $ 281 | $ 582 | $ 473 | $ 1,311 | |
License fee termination period | 18 months |
Commitment and Contingencies -
Commitment and Contingencies - Certain Economic Development Grants Narrative (Details) - APC Facility - Design Build Agreement $ in Thousands | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Service Agreements | |
Grants receivable | $ 2,685 |
Cash grants receivable | 1,250 |
Economic development grant proceeds | $ 1,188 |
Commitments and Contingencies_2
Commitments and Contingencies - Fair Value of the Debt Derivative Liabilities (Details) | Jun. 30, 2024 USD ($) settlementScenario | Dec. 31, 2023 USD ($) |
Debt derivative liabilities | ||
Debt Instrument [Line Items] | ||
Debt derivative liabilities | $ 2,458,000 | $ 2,987,000 |
Credit Facility | Debt derivative liabilities | ||
Debt Instrument [Line Items] | ||
Number of potential settlement scenarios | settlementScenario | 4 | |
Make-whole payment required under each scenario, internal rate of return (as a percent) | 11.50% | |
Credit Facility - first tranche | ||
Debt Instrument [Line Items] | ||
Debt instrument, held to maturity make-whole payment | $ 0 | |
Held to maturity make-whole payment, alternative interpretation | 8,000,000 | |
Credit Facility - second tranche | ||
Debt Instrument [Line Items] | ||
Debt instrument, held to maturity make-whole payment | 0 | |
Held to maturity make-whole payment, alternative interpretation | $ 4,000,000 |