AxoGen (AXGN) 10-Q 30 Apr 14 2014 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Mar. 31, 2014	Apr. 29, 2014
Document and Entity Information	'	'
Entity Registrant Name	'AxoGen, Inc.	'
Entity Central Index Key	'0000805928	'
Document Type	'10-Q	'
Document Period End Date	31-Mar-14	'
Amendment Flag	'false	'
Current Fiscal Year End Date	'--12-31	'
Entity Current Reporting Status	'Yes	'
Entity Filer Category	'Smaller Reporting Company	'
Entity Common Stock, Shares Outstanding	'	17,466,091
Document Fiscal Year Focus	'2014	'
Document Fiscal Period Focus	'Q1	'

Condensed_Consolidated_Balance

Condensed Consolidated Balance Sheets (USD $)	Mar. 31, 2014	Dec. 31, 2013
Current assets:	'	'
Cash and cash equivalents	$16,807,753	$20,069,750
Accounts receivable, net of allowance for doubtful accounts of approximately $54,000 and $58,000, respectively	1,965,157	1,893,699
Inventory	3,466,099	3,398,438
Prepaid expenses and other	195,489	296,719
Total current assets	22,434,498	25,658,606
Property and equipment, net	543,227	381,689
Intangible assets	567,787	570,396
Deferred financing costs	1,022,363	1,073,579
Total Assets	24,567,875	27,684,270
Current liabilities:	'	'
Accounts payable and accrued expenses	1,908,743	2,083,942
Current Deferred Revenue	14,118	14,118
Total current liabilities	1,922,861	2,098,060
Note Payable - Revenue Interest Purchase Agreement	26,255,540	25,363,695
Long Term Deferred Revenue	82,311	85,882
Total liabilities	28,260,712	27,547,637
Commitments and contingencies	'	'
Shareholders' equity (deficit):	'	'
Common stock, $.01 par value; 50,000,000 shares authorized; 17,445,968 and 17,339,561 shares issued and outstanding	174,459	173,395
Additional paid-in capital	72,778,043	72,369,016
Accumulated deficit	-76,645,339	-72,405,778
Total shareholders' equity (deficit)	-3,692,837	136,633
Total Liabilities and Shareholders' equity	$24,567,875	$27,684,270

Condensed_Consolidated_Balance1

Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Condensed Consolidated Balance Sheets	'	'
Accounts receivable, allowance for doubtful accounts	$54,000	$59,000
Common stock, par value	$0.01	$0.01
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	17,445,968	17,339,561
Common stock, shares outstanding	17,445,968	17,339,561

Condensed_Consolidated_Stateme

Condensed Consolidated Statements of Operations (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Condensed Consolidated Statements of Operations	'	'
Revenues	$3,138,256	$2,142,932
Cost of goods sold	701,300	560,243
Gross profit	2,436,956	1,582,689
Costs and expenses:	'	'
Sales and marketing	2,720,707	1,893,541
Research and development	812,615	406,943
General and administrative	1,894,776	1,605,759
Total costs and expenses	5,428,098	3,906,243
Loss from operations	-2,991,142	-2,323,554
Other expense:	'	'
Interest expense	-1,191,317	-1,067,621
Interest expense - deferred financing costs	-51,216	-44,216
Other income (expense)	-5,889	-2,117
Total other expense	-1,248,422	-1,113,954
Net loss	-4,239,564	-3,437,508
Net loss available to common shareholders	($4,239,564)	($3,437,508)
Weighted Average Common Shares outstanding - basic and diluted	17,383,786	11,124,633
Loss Per Common share - basic and diluted (in dollars per share)	($0.24)	($0.31)

Condensed_Consolidated_Stateme1

Condensed Consolidated Statements of Cash Flows (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Cash flows from operating activities:	'	'
Net loss	($4,239,564)	($3,437,508)
Adjustments to reconcile net loss to net cash used for operating activities:	'	'
Depreciation	33,944	23,140
Amortization of intangible assets	10,955	14,687
Amortization of deferred financing costs	51,216	44,216
Share-based compensation	257,542	259,912
Stock grants	60,125	'
Interest added to note	891,845	858,151
Change in assets and liabilities:	'	'
Accounts receivable	-71,458	-129,049
Inventory	-67,661	-269,144
Prepaid expenses and other	101,230	45,223
Accounts payable and accrued expenses	-175,196	-60,814
Deferred revenue	-3,571	'
Net cash used for operating activities	-3,150,593	-2,651,186
Cash flows from investing activities:	'	'
Purchase of property and equipment	-195,482	-26,007
Acquisition of intangible assets	-8,346	-31,415
Net cash used for investing activities	-203,828	-57,422
Cash flows from financing activities:	'	'
Proceeds from exercise of stock options	92,424	1,654
Net cash provided by financing activities	92,424	1,654
Net decrease in cash and cash equivalents	-3,261,997	-2,706,954
Cash and cash equivalents, beginning of year	20,069,750	13,907,401
Cash and cash equivalents, end of period	16,807,753	11,200,447
Supplemental disclosures of cash flow activity:	'	'
Cash paid for interest	$303,919	$172,527

Basis_of_Presentation

Basis of Presentation	3 Months Ended
	Mar. 31, 2014
Basis of Presentation	'
Basis of Presentation	'
	1.              Basis of Presentation
	The accompanying condensed consolidated financial statements include the accounts of AxoGen, Inc. (the “Company” or “AxoGen”) and its wholly owned subsidiary AxoGen Corporation (“AC”)  as of March 31, 2014 and December 31, 2013 and for the three month periods ended March 31, 2014 and 2013.  The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2013, which are included in the Annual Report on Form 10-K as of and for the year ended December 31, 2013.  The interim condensed consolidated financial statements are unaudited and in the opinion of management, reflect all adjustments necessary for a fair presentation of results for the periods presented.  Results for interim periods are not necessarily indicative of results for the full year. All significant intercompany accounts and transactions have been eliminated in consolidation.

Organization_and_Business

Organization and Business	3 Months Ended
	Mar. 31, 2014
Organization and Business	'
Organization and Business	'
	2.              Organization and Business
	Business Summary
	The Company is a leading medical technology company dedicated to peripheral nerve repair. AxoGen’s portfolio of regenerative medicine products is available in the United States, Canada and several European countries and includes Avance® Nerve Graft, the only off-the-shelf commercially available processed nerve allograft for bridging severed nerves without the comorbidities associated with a second surgical site, AxoGuard® Nerve Connector, a porcine submucosa extracellular matrix (“ECM”) coaptation aid for tensionless repair of severed nerves, and AxoGuard® Nerve Protector, a porcine submucosa ECM product used to wrap and protect injured peripheral nerves and reinforce the nerve reconstruction while preventing soft tissue attachments.
	Avance® Nerve Graft is processed in the United States by AxoGen. AxoGuard® Nerve Connector and AxoGuard® Nerve Protector are manufactured in the United States by Cook Biotech Incorporated, and are distributed exclusively by AxoGen. AxoGen maintains its corporate offices in Alachua, Florida and is the parent of its wholly owned operating subsidiary, AxoGen Corporation.

Summary_of_Significant_Account

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2014
Summary of Significant Accounting Policies	'
Summary of Significant Accounting Policies	'
	3.              Summary of Significant Accounting Policies
	Revenue Recognition
	Revenue is recognized when persuasive evidence of an arrangement exists, the price is fixed and determinable, delivery has occurred and there is a reasonable assurance of collection of the sales proceeds. Revenues for manufactured products and products sold to a customer or under a distribution agreement are recognized when the product is delivered to the customer or distributor, at which time title passes to the customer or distributor, provided, however, that in the case of revenue from consigned sales, delivery is determined when the product is utilized in a surgical procedure. Once a product is delivered, the Company has no further performance obligations. Delivery is defined as delivery to a customer location or segregation of product into a contracted distribution location. At such time, this product cannot be sold to any other customer. Fees charged to customers for shipping are recognized as revenues when products are shipped to the customer, distributor or end user.
	Cash and Cash Equivalents and Concentration
	For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances and does not believe it is exposed to any significant credit risk on cash and cash equivalents.
	Accounts Receivable and Concentration of Credit Risk
	Accounts receivable are carried at the original invoice amount less an estimate made for doubtful accounts based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history and current economic conditions. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received.
	We regularly review all accounts that exceed 60 days from the invoice date and based on an assessment of current credit worthiness, estimate the portion, if any, of the balance that will not be collected.  The analysis excludes certain government related receivables due to our past successful experience in collectability.  Specific accounts that are deemed uncollectible are reserved at 100% of their outstanding balance.  The remaining balances outstanding over 60 days have a percentage applied by aging category (5% for balances 61-90 days and 20% for balances over 90 days aged), based on a historical valuation that allows us to calculate the total reserve required.  The reserve balance was determined by applying a percentage to the cumulative balance between 60 and 90 days and a higher percentage to the balance over 90 days.  In the event that we exhaust all collection efforts and deem an account uncollectible, we would subsequently write off the account.  The write off process involves approval by senior management based on the write off amount.  The allowance for doubtful accounts reserve balance was approximately $54,000 and $59,000 at March 31, 2014 and December 31, 2013, respectively.
	Concentrations of credit risk with respect to accounts receivable are limited because a large number of geographically diverse customers make up the Company’s customer base, thus spreading the trade credit risk. The Company also controls credit risk through credit approvals, credit limits and monitoring procedures.
	Inventories
	Inventories are comprised of implantable tissue, nerve grafts, Avance® Nerve Graft, AxoGuard® Nerve Connector, AxoGuard® Nerve Protector, and supplies that are valued at the lower of cost (first-in, first-out) or market and consist of the following:
		March 31,			December 31,
		2014			2013
		(unaudited)
	Finished goods	$	2,215,469		$	2,131,336
	Work in process	222,760			235,966
	Raw materials	1,027,870			1,031,136
		$	3,466,099		$	3,398,438
	Inventories were net of reserve of approximately $300,000 and $383,000 at March 31, 2014 and December 31, 2013, respectively.
	Income Taxes
	The Company has not recorded current income tax expense due to the generation of net operating losses. Deferred income taxes are accounted for using the balance sheet approach which requires recognition of deferred tax assets and liabilities for the expected future consequences of temporary differences between the financial reporting basis and the tax basis of assets and liabilities. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized. A full valuation allowance has been established on the deferred tax asset as it is more likely than not that future tax benefit will not be realized. In addition, future utilization of the available net operating loss carryforward may be limited under Internal Revenue Code Section 382 as a result of changes in ownership.
	The Company identifies and evaluates uncertain tax positions, if any, and recognizes the impact of uncertain tax positions for which there is a less than more-likely-than-not probability of the position being upheld when reviewed by the relevant taxing authority. Such positions are deemed to be unrecognized tax benefits and a corresponding liability is established on the 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 the Internal Revenue Service include the years ended December 31, 2010 through 2013; there currently are no examinations in process.
	Fair Value of Financial Instruments
	The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash, accounts receivable, accounts payable and accrued expenses. The fair value of the Company’s long-term debt approximates its carrying value based upon current rates available to the Company.
	Share-Based Compensation
	Stock-based compensation cost related to stock options granted under the AC 2002 Stock Option Plan and AxoGen 2010 Stock Incentive Plan is measured at grant date, based on the fair value of the award, and is recognized as an expense over the employee’s requisite service period. The Company estimates the fair value of each option award issued under the Plan on the date of grant using a Black-Scholes-Merton option-pricing model that uses the assumptions noted in the table below. The Company estimates the volatility of its common stock at the date of grant based on the volatility of comparable peer companies which are publicly traded, for the periods prior to the merger, and based on the Company’s common stock for periods subsequent to the merger. The Company determines the expected life based on historical experience with similar awards, giving consideration to the contractual terms, vesting schedules and post-vesting forfeitures. The Company uses the risk-free interest rate on the implied yield currently available on U.S. Treasury issues with an equivalent remaining term approximately equal to the expected life of the award. The Company has never paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future. The Company used the following weighted-average assumptions for options granted during the three months ended March 31:
	Three months ended March 31,	2014		2013
	Expected term (in years)	4		4
	Expected volatility	81.26	%	84.9	%
	Risk free rate	1.12	%	0.56	%
	Expected dividends	0	%	0	%
	The Company estimates forfeitures when recognizing compensation expense and this estimate of forfeitures is adjusted over the requisite service period based on the extent to which actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures are recognized through a cumulative catch-up adjustment, which is recognized in the period of change, and also impact the amount of unamortized compensation expense to be recognized in future periods. The Company did not apply a forfeiture allocation to its unvested options outstanding during the three months ended March 31, 2014 and 2013 as they were deemed insignificant.
	Use of Estimates
	The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
	Recent Accounting Pronouncements
	The Company’s management has reviewed and considered all recent accounting pronouncements and believe there are none that could potentially have a material impact on the Company’s consolidated financial condition, results of operations, or disclosures.

Property_and_Equipment

Property and Equipment	3 Months Ended
	Mar. 31, 2014
Property and Equipment	'
Property and Equipment	'
	4.              Property and Equipment
	Property and equipment consist of the following:
		March 31,			December 31,
		2014			2013
		(unaudited)
	Furniture and equipment	$	877,742		$	893,973
	Leasehold improvements	90,260			53,864
	Processing equipment	1,190,704			1,015,388
	Less: accumulated depreciation and amortization	(1,615,479		)	(1,581,536		)
	Property and equipment	$	543,227		$	381,689

Intangible_Assets

Intangible Assets	3 Months Ended
	Mar. 31, 2014
Intangible Assets	'
Intangible Assets	'
	5.              Intangible Assets
	The Company’s intangible assets consist of the following:
		March 31,			December 31,
		2014			2013
		(unaudited)
	License agreements	$	821,231		$	816,300
	Patents	65,968			62,553
	Less: accumulated amortization	(319,412		)	(308,457		)
	Intangible assets, net	$	567,787		$	570,396
	License agreements are being amortized over periods ranging from 17-20 years. Patent costs were being amortized over three years. As of December 31, 2013, the patents were fully amortized, the remaining patents of $62,553 were pending patent costs and were not amortizable. Amortization expense for the three months ended March 31, 2014 and 2013 was approximately $11,000 and $15,000, respectively. As of March 31, 2014, future amortization of license agreements is expected to be $37,000 for the remainder of 2014 and $48,000 for 2015 through 2018.
	License Agreements
	The Company has entered into multiple license agreements (the “License Agreements”) with the University of Florida Research Foundation (“UFRF”) and University of Texas at Austin (“UTA”). Under the terms of the License Agreements, the Company acquired exclusive worldwide licenses for underlying technology used in repairing and regenerating nerves. The licensed technologies include the rights to issued patents and patents pending in the United States and international markets. The effective term of the License Agreements extends through the term of the related patents and the agreements may be terminated by the Company with 60 days prior written notice. Additionally, in the event of default, licensors may terminate an agreement if the Company fails to cure a breach after written notice. The License Agreements contain the key terms listed below:
	·                  AxoGen pays royalty fees ranging from 1% to 3% under the License Agreements based on net sales of licensed products. One of the agreements also contains a minimum royalty of $12,500 per quarter, which may include a credit in future quarters in the same calendar year for the amount the minimum royalty exceeds the royalty fees. Also, when AxoGen pays royalties to more than one licensor for sales of the same product, a royalty stack cap applies, capping total royalties at 3.75%;
	·                  If AxoGen sublicenses technologies covered by the License Agreements to third parties, AxoGen would pay a percentage of sublicense fees received from the third party to the licensor. Currently, AxoGen does not sublicense any technologies covered by License Agreements. The Company is not considered a sub-licensee under the License Agreements and does not owe any sublicensee fees for its own use of the technologies;
	·                  AxoGen reimburses the licensors for certain legal expenses incurred for patent prosecution and defense of the technologies covered by the License Agreements; and
	·                  Currently, under one of the License Agreements, AxoGen would owe a $15,000 milestone fee upon receiving a Phase II Small Business Innovation Research or Phase II Small Business Technology Transfer grant involving the licensed technology. The Company has not received either grant and does not owe such a milestone fee. Other milestone fees are due if AxoGen develops certain pharmaceutical or medical device products under the License Agreements. No such products are currently under development.
	Royalty fees were $60,668 and $47,031 during the three months ended March 31, 2014 and 2013, respectively, and are included in sales and marketing expense on the accompanying condensed consolidated statements of operations.

Accounts_Payable_and_Accrued_E

Accounts Payable and Accrued Expenses	3 Months Ended
	Mar. 31, 2014
Accounts Payable and Accrued Expenses	'
Accounts Payable and Accrued Expenses	'
	6.              Accounts Payable and Accrued Expenses
	Accounts payable and accrued expenses includes $148,438 and $203,380 for accrued payroll at March 31, 2014 and December 31, 2013, respectively, and $395,002 and $417,825 for accrued commissions at March 31, 2014 and December 31, 2013, respectively.

Notes_Payable

Notes Payable	3 Months Ended
	Mar. 31, 2014
Notes Payable	'
Notes Payable	'
	7.              Notes Payable
	Notes Payable consists of the following:
		March 31,		December 31,
		2014		2013
		(unaudited)
	Revenue Interest Purchase Agreement with PDL BioPharma, Inc. (“PDL”) for aggregate of $20,800,000 with amounts payable monthly at 9.95% of Net Revenues through September 2014; and the greater of (i) 9.95% of product revenue or (ii) specific quarterly amounts varying from approximately $1.3 million to $2.5 million per quarter through September 2020. The minimum annual payment amounts are as follows: 2014 - $1,250,805, 2015 - $6,781,440, 2016 - $9,232,642, 2017 and 2018 - $9,000,000, 2019 - $9,063,000 and 2020 - $6,939,000.	$	26,255,540	$	25,363,695
	Long-term Notes Payable	$	26,255,540	$	25,363,695
	Note Payable
	On October 5, 2012, AxoGen entered into a Revenue Interests Purchase Agreement (the “Royalty Contract”) with PDL BioPharma, Inc. (“PDL”), pursuant to which the Company sold to PDL the right to receive royalties equal to 9.95% of the Company’s Net Revenues (as defined in the Royalty Contract) generated by the sale, distribution or other use of AxoGen’s products Avance® Nerve Graft, AxoGuard® Nerve Connector and AxoGuard® Nerve Protector.  Proceeds from the PDL transaction were used to fully repay the MidCap Loan, as defined below, and extinguish AxoGen’s long-term debt obligations thereunder.  The Royalty Contract has a term of eight years. Under the Royalty Contract, PDL is to receive royalty payments based on a royalty rate 9.95% of the Company’s Net Revenues, subject to certain agreed upon minimum payment requirements, currently anticipated to be operative, of approximately $1.3 to $2.5 million per quarter which begin in the fourth quarter of 2014 through the third quarter of 2020 as provided in the Royalty Contract. The total consideration PDL paid to the Company was $20,800,000 (the “Funded Amount”), including $19,050,000 PDL paid to the Company on October 5, 2012, and $1,750,000 PDL paid to the Company on August 14, 2012 pursuant to an Interim Revenue Interest Purchase Agreement between the Company and PDL, dated August 14, 2012 (the “Interim Royalty Contract”). Upon the closing (the “Closing”) of PDL’s purchase of the specified royalties described above, which was concurrent with the execution of the Royalty Contract, the Interim Royalty Contract was terminated.
	The Company records interest using its best estimate of the effective interest rate. Currently the Company is accruing interest using the specified internal rate of return of the put option of 20%.  From time to time, the Company will reevaluate the expected cash flows and may adjust the effective interest rate.  Determining the effective interest rate requires judgment and is based on significant assumptions related to estimates of the amounts and timing of future revenue streams.
	Put Option
	Under the Royalty Contract, on October 5, 2016, or in the event of the occurrence of a material adverse event, our transfer of revenue interest or substantially all of our interest in the products or AxoGen’s bankruptcy or material breach of the Royalty Contract, PDL may require AxoGen to repurchase the Assigned Interests at the “Put Price.” The Put Price is equal to the sum of (i) an amount that, when paid to PDL, would generate a specified internal rate of return to PDL of 20% on the Funded Amount, taking into consideration payments made to PDL by the Company, and (ii) any “Delinquent Assigned Interest Payment” (as defined in the Royalty Contract) the Company owed to PDL.
	Change of Control; Call Option
	In addition, in the event of a “Change of Control” (as defined in the Royalty Contract), the Company must repurchase the assigned Interests from PDL for a repurchase price equal to the “Change of Control Price” on or prior to the third business day after the occurrence of the Change of Control. The Change of Control Price is equal to the sum of (i) an amount that, when paid to PDL, would generate a specified internal rate of return to PDL of thirty-two and one half percent (32.5%) on the Funded Amount, taking into consideration payments made to PDL by the Company, and (ii) any “Delinquent Assigned Interest Payment” (as defined in the Royalty Contract) the Company owed to PDL. In addition, at any time after October 5, 2016, the Company, at its option, can call the Royalty Contract for a price equal to the Change of Control Price.
	Board Designee
	Under the Royalty Contract, during the term of the Royalty Contract, PDL is entitled to designate, and AxoGen shall appoint an individual designated by PDL, who shall serve on the Board of Directors of the Company (the “Board”).  The PDL designee was elected at the Company’s 2013 Annual Meeting of Shareholders.  At each annual meeting thereafter during the term of the Royalty Contract, the Board shall nominate and recommend the PDL designee as a director nominee to serve on the Board until the next annual meeting and shall include such nomination in AxoGen’s proxy statement for each annual meeting thereafter, provided that the election of the PDL designee is subject to shareholders’ approval.
	Should at any time there become a vacancy on the Board as a result of (i) the resignation, death or removal of the PDL designee or (ii) such PDL designee failing to obtain the requisite approval of the Company’s shareholders at any annual or special meeting of the Company’s shareholders and where no other individual is elected to such vacancy, PDL shall have the right to designate an individual to fill such vacancy, and AxoGen shall take such actions necessary to appoint, such individual to the Board.
	Preemptive Rights
	Under the Royalty Contract, PDL has preemptive rights with respect to certain new issuances of AxoGen’s equity securities and securities convertible, exchangeable or exercisable into such equity securities.
	Restriction on Dividends
	Under the Royalty Contract, during the period from the October 5, 2012 to December 4, 2016 (or the payment of the Put Price in the event PDL exercises its put option on or prior to December 4, 2016), AxoGen shall not, nor shall it permit any subsidiary to, declare, pay or make any dividend or distribution on any shares of the common stock or preferred stock of such entity (other than dividends or distributions payable in its stock, or split-ups or reclassifications of its stock) or apply any of its funds, property or assets to the purchase, redemption or other retirement of any common or preferred stock, or of any options to purchase or acquire any such shares of common or preferred stock of any such entity (collectively, “Restricted Payments”), except that: (i) each subsidiary may make direct or indirect Restricted Payments to the Company; and (ii) the Company and each subsidiary may purchase, redeem or otherwise acquire Equity Interests issued by it solely with the proceeds received from the substantially concurrent issue of new shares of its common stock or other common Equity Interests. For purposes of the Royalty Contract, “Equity Interests” of any person means any and all shares, rights to purchase, options, warrants, general, limited or limited liability partnership interests, member interests, participation or other equivalents of or interest in (regardless of how designated) equity of such entity, whether voting or nonvoting, including common stock, preferred stock, convertible securities or any other “equity security” (as such term is defined in Rule 3a11-1under the Securities Exchange Act of 1934, as amended).
	Guarantee and Collateral Agreement
	In connection with the Royalty Contract, on October 5, 2012, AxoGen and AC, entered into a Guarantee and Collateral Agreement (the “Guarantee and Collateral Agreement”) with PDL, pursuant to which (i) AC unconditionally and irrevocably guarantees to PDL the prompt and complete payment and performance by AxoGen when due of the “Secured Obligations,” which include the Company’s obligations under the Royalty Contract, and any other obligations that AxoGen may owe to PDL under the Royalty Contract and other transaction documents; and (ii) each of the Company and AC grants to PDL a security interest in certain collateral as specified in the Guarantee and Collateral Agreement for the prompt and complete payment and performance when due of the Secured Obligations.

Stock_Options

Stock Options	3 Months Ended
	Mar. 31, 2014
Stock Options	'
Stock Options	'
	8.              Stock Options
	The Company granted 226,000 shares of stock options pursuant to its 2010 Stock Incentive Plan for the three months ended March 31, 2014.  Stock-based compensation expense was $257,542 and $259,912 for the three months ended March 31, 2014 and 2013, respectively. Total future stock compensation expense related to nonvested awards is expected to be approximately $1,610,000 at March 31, 2014.

Summary_of_Significant_Account1

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2014
Summary of Significant Accounting Policies	'
Revenue Recognition	'
	Revenue Recognition
	Revenue is recognized when persuasive evidence of an arrangement exists, the price is fixed and determinable, delivery has occurred and there is a reasonable assurance of collection of the sales proceeds. Revenues for manufactured products and products sold to a customer or under a distribution agreement are recognized when the product is delivered to the customer or distributor, at which time title passes to the customer or distributor, provided, however, that in the case of revenue from consigned sales, delivery is determined when the product is utilized in a surgical procedure. Once a product is delivered, the Company has no further performance obligations. Delivery is defined as delivery to a customer location or segregation of product into a contracted distribution location. At such time, this product cannot be sold to any other customer. Fees charged to customers for shipping are recognized as revenues when products are shipped to the customer, distributor or end user.
Cash and Cash Equivalents and Concentration	'
	Cash and Cash Equivalents and Concentration
	For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances and does not believe it is exposed to any significant credit risk on cash and cash equivalents.
Accounts Receivable and Concentration of Credit Risk	'
	Accounts Receivable and Concentration of Credit Risk
	Accounts receivable are carried at the original invoice amount less an estimate made for doubtful accounts based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history and current economic conditions. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received.
	We regularly review all accounts that exceed 60 days from the invoice date and based on an assessment of current credit worthiness, estimate the portion, if any, of the balance that will not be collected.  The analysis excludes certain government related receivables due to our past successful experience in collectability.  Specific accounts that are deemed uncollectible are reserved at 100% of their outstanding balance.  The remaining balances outstanding over 60 days have a percentage applied by aging category (5% for balances 61-90 days and 20% for balances over 90 days aged), based on a historical valuation that allows us to calculate the total reserve required.  The reserve balance was determined by applying a percentage to the cumulative balance between 60 and 90 days and a higher percentage to the balance over 90 days.  In the event that we exhaust all collection efforts and deem an account uncollectible, we would subsequently write off the account.  The write off process involves approval by senior management based on the write off amount.  The allowance for doubtful accounts reserve balance was approximately $54,000 and $59,000 at March 31, 2014 and December 31, 2013, respectively.
	Concentrations of credit risk with respect to accounts receivable are limited because a large number of geographically diverse customers make up the Company’s customer base, thus spreading the trade credit risk. The Company also controls credit risk through credit approvals, credit limits and monitoring procedures.
Inventories	'
	Inventories
	Inventories are comprised of implantable tissue, nerve grafts, Avance® Nerve Graft, AxoGuard® Nerve Connector, AxoGuard® Nerve Protector, and supplies that are valued at the lower of cost (first-in, first-out) or market and consist of the following:
		March 31,			December 31,
		2014			2013
		(unaudited)
	Finished goods	$	2,215,469		$	2,131,336
	Work in process	222,760			235,966
	Raw materials	1,027,870			1,031,136
		$	3,466,099		$	3,398,438
	Inventories were net of reserve of approximately $300,000 and $383,000 at March 31, 2014 and December 31, 2013, respectively.
Income Taxes	'
	Income Taxes
	The Company has not recorded current income tax expense due to the generation of net operating losses. Deferred income taxes are accounted for using the balance sheet approach which requires recognition of deferred tax assets and liabilities for the expected future consequences of temporary differences between the financial reporting basis and the tax basis of assets and liabilities. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized. A full valuation allowance has been established on the deferred tax asset as it is more likely than not that future tax benefit will not be realized. In addition, future utilization of the available net operating loss carryforward may be limited under Internal Revenue Code Section 382 as a result of changes in ownership.
	The Company identifies and evaluates uncertain tax positions, if any, and recognizes the impact of uncertain tax positions for which there is a less than more-likely-than-not probability of the position being upheld when reviewed by the relevant taxing authority. Such positions are deemed to be unrecognized tax benefits and a corresponding liability is established on the 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 the Internal Revenue Service include the years ended December 31, 2010 through 2013; there currently are no examinations in process.
Fair Value of Financial Instruments	'
	Fair Value of Financial Instruments
	The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash, accounts receivable, accounts payable and accrued expenses. The fair value of the Company’s long-term debt approximates its carrying value based upon current rates available to the Company.
Share-Based Compensation	'
	Share-Based Compensation
	Stock-based compensation cost related to stock options granted under the AC 2002 Stock Option Plan and AxoGen 2010 Stock Incentive Plan is measured at grant date, based on the fair value of the award, and is recognized as an expense over the employee’s requisite service period. The Company estimates the fair value of each option award issued under the Plan on the date of grant using a Black-Scholes-Merton option-pricing model that uses the assumptions noted in the table below. The Company estimates the volatility of its common stock at the date of grant based on the volatility of comparable peer companies which are publicly traded, for the periods prior to the merger, and based on the Company’s common stock for periods subsequent to the merger. The Company determines the expected life based on historical experience with similar awards, giving consideration to the contractual terms, vesting schedules and post-vesting forfeitures. The Company uses the risk-free interest rate on the implied yield currently available on U.S. Treasury issues with an equivalent remaining term approximately equal to the expected life of the award. The Company has never paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future. The Company used the following weighted-average assumptions for options granted during the three months ended March 31:
	Three months ended March 31,	2014		2013
	Expected term (in years)	4		4
	Expected volatility	81.26	%	84.9	%
	Risk free rate	1.12	%	0.56	%
	Expected dividends	0	%	0	%
	The Company estimates forfeitures when recognizing compensation expense and this estimate of forfeitures is adjusted over the requisite service period based on the extent to which actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures are recognized through a cumulative catch-up adjustment, which is recognized in the period of change, and also impact the amount of unamortized compensation expense to be recognized in future periods. The Company did not apply a forfeiture allocation to its unvested options outstanding during the three months ended March 31, 2014 and 2013 as they were deemed insignificant.
Use of Estimates	'
	Use of Estimates
	The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Recent Accounting Pronouncements	'
	Recent Accounting Pronouncements
	The Company’s management has reviewed and considered all recent accounting pronouncements and believe there are none that could potentially have a material impact on the Company’s consolidated financial condition, results of operations, or disclosures.

Summary_of_Significant_Account2

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2014
Summary of Significant Accounting Policies	'
Schedule of inventories	'
		March 31,			December 31,
		2014			2013
		(unaudited)
	Finished goods	$	2,215,469		$	2,131,336
	Work in process	222,760			235,966
	Raw materials	1,027,870			1,031,136
		$	3,466,099		$	3,398,438
Schedule of weighted-average assumptions for options granted	'
	Three months ended March 31,	2014		2013
	Expected term (in years)	4		4
	Expected volatility	81.26	%	84.9	%
	Risk free rate	1.12	%	0.56	%
	Expected dividends	0	%	0	%

Property_and_Equipment_Tables

Property and Equipment (Tables)	3 Months Ended
	Mar. 31, 2014
Property and Equipment	'
Summary of Property and equipment	'
		March 31,			December 31,
		2014			2013
		(unaudited)
	Furniture and equipment	$	877,742		$	893,973
	Leasehold improvements	90,260			53,864
	Processing equipment	1,190,704			1,015,388
	Less: accumulated depreciation and amortization	(1,615,479		)	(1,581,536		)
	Property and equipment	$	543,227		$	381,689

Intangible_Assets_Tables

Intangible Assets (Tables)	3 Months Ended
	Mar. 31, 2014
Intangible Assets	'
Schedule of intangible assets	'
		March 31,			December 31,
		2014			2013
		(unaudited)
	License agreements	$	821,231		$	816,300
	Patents	65,968			62,553
	Less: accumulated amortization	(319,412		)	(308,457		)
	Intangible assets, net	$	567,787		$	570,396

Notes_Payable_Tables

Notes Payable (Tables)	3 Months Ended
	Mar. 31, 2014
Notes Payable	'
Schedule of notes payable	'
		March 31,		December 31,
		2014		2013
		(unaudited)
	Revenue Interest Purchase Agreement with PDL BioPharma, Inc. (“PDL”) for aggregate of $20,800,000 with amounts payable monthly at 9.95% of Net Revenues through September 2014; and the greater of (i) 9.95% of product revenue or (ii) specific quarterly amounts varying from approximately $1.3 million to $2.5 million per quarter through September 2020. The minimum annual payment amounts are as follows: 2014 - $1,250,805, 2015 - $6,781,440, 2016 - $9,232,642, 2017 and 2018 - $9,000,000, 2019 - $9,063,000 and 2020 - $6,939,000.	$	26,255,540	$	25,363,695
	Long-term Notes Payable	$	26,255,540	$	25,363,695

Summary_of_Significant_Account3

Summary of Significant Accounting Policies (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2014	Mar. 31, 2014	Mar. 31, 2014	Mar. 31, 2014	Mar. 31, 2014	Mar. 31, 2014
			Minimum	61-90 days	61-90 days	61-90 days	Over 90 days	Over 90 days
					Minimum	Maximum		Minimum
Accounts Receivable and Concentration of Credit Risk	'	'	'	'	'	'	'	'
Reserve for accounts deemed uncollectible (as a percent)	100.00%	'	'	'	'	'	'	'
Age of doubtful accounts	'	'	'60 days	'	'61 days	'90 days	'	'90 days
Reserve for doubtful accounts (as a percent)	'	'	'	5.00%	'	'	20.00%	'
Allowance for doubtful accounts reserve balance	$54,000	$59,000	'	'	'	'	'	'

Summary_of_Significant_Account4

Summary of Significant Accounting Policies (Details 2) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Summary of Significant Accounting Policies	'	'
Finished goods	$2,215,469	$2,131,336
Work in process	222,760	235,966
Raw materials	1,027,870	1,031,136
Inventory, Net	3,466,099	3,398,438
Inventory valuation reserves	$300,000	$383,000

Summary_of_Significant_Account5

Summary of Significant Accounting Policies (Details 3)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Summary of Significant Accounting Policies	'	'
Expected term	'4 years	'4 years
Expected volatility (as a percent)	81.26%	84.90%
Risk free rate (as a percent)	1.12%	0.56%
Expected dividends (as a percent)	0.00%	0.00%

Property_and_Equipment_Details

Property and Equipment (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Property and equipment	'	'
Less: accumulated depreciation and amortization	($1,615,479)	($1,581,536)
Property and equipment	543,227	381,689
Furniture and equipment	'	'
Property and equipment	'	'
Property and equipment, Gross	877,742	893,973
Leasehold improvements	'	'
Property and equipment	'	'
Property and equipment, Gross	90,260	53,864
Processing equipment	'	'
Property and equipment	'	'
Property and equipment, Gross	$1,190,704	$1,015,388

Intangible_Assets_Details

Intangible Assets (Details) (USD $)	3 Months Ended					3 Months Ended			12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2014	Mar. 31, 2014	Mar. 31, 2014	Dec. 31, 2013
				License agreements	License agreements	License agreements	License agreements	Patents	Patents
						Minimum	Maximum
Intangible assets consist of:	'	'	'	'	'	'	'	'	'
Finite-lived intangible assets, gross	'	'	'	$821,231	$816,300	'	'	$65,968	$62,553
Less: accumulated amortization	-319,412	'	-308,457	'	'	'	'	'	'
Intangible assets, net	567,787	'	570,396	'	'	'	'	'	'
Amortization period of intangible assets	'	'	'	'	'	'17 years	'20 years	'3 years	'
Non-amortizable pending costs	'	'	'	'	'	'	'	'	62,553
Amortization of intangible assets	$10,955	$14,687	'	'	'	'	'	'	'

Intangible_Assets_Details_2

Intangible Assets (Details 2) (USD $)	Dec. 31, 2013
Future amortization of license and patent agreements	'
Remainder of 2014	$37,000
2015	48,000
2016	48,000
2017	48,000
2018	$48,000

Intangible_Assets_Details_3

Intangible Assets (Details 3) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2012
Selling and marketing expense	'	'
Intangible assets	'	'
Royalty fees included in sales and marketing expense	$60,668	$47,031
License agreements	'	'
Intangible assets	'	'
License agreements extended period	'60 days	'
Minimum royalty of agreements	12,500	'
Milestone fee upon receiving a Phase II Small Business Innovation Research	$15,000	'
Number of products under development	0	'
License agreements | Minimum	'	'
Intangible assets	'	'
Royalty fees range under the license agreements (as a percent)	1.00%	'
License agreements | Maximum	'	'
Intangible assets	'	'
Royalty fees range under the license agreements (as a percent)	3.00%	'
Royalty stack cap for royalties paid to more than one licensor for sales of the same product (as a percent)	3.75%	'

Accounts_Payable_and_Accrued_E1

Accounts Payable and Accrued Expenses (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Accounts Payable and Accrued Expenses	'	'
Accrued payroll	$148,438	$203,380
Accrued commissions	$395,002	$417,825

Notes_Payable_Details

Notes Payable (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Notes Payable	'	'
Total Debt	$26,255,540	$25,363,695
Long-term Notes Payable	26,255,540	25,363,695
Revenue Interest Purchase Agreement	'	'
Notes Payable	'	'
Total Debt	$26,255,540	$25,363,695

Notes_Payable_Details_2

Notes Payable (Details 2) (Revenue Interest Purchase Agreement, USD $)	0 Months Ended		2 Months Ended	3 Months Ended
	Oct. 05, 2012	Aug. 14, 2012	Oct. 05, 2012	Mar. 31, 2014
Debt Instrument	'	'	'	'
Royalty percentage on net revenue	'	'	'	9.95%
Royalty payments, frequency through September 2014	'	'	'	'monthly
Royalty percentage on product revenue	'	'	'	9.95%
Royalty payments estimated range calculated from September 2014 through September 2020, frequency	'	'	'	'quarterly
Total debt	'	'	'	$20,800,000
Minimum annual payment amounts	'	'	'	'
2014	'	'	'	1,250,805
2015	'	'	'	6,781,440
2016	'	'	'	9,232,642
2017	'	'	'	9,000,000
2018	'	'	'	9,000,000
2019	'	'	'	9,063,000
2020	'	'	'	6,939,000
Term	'8 years	'	'	'
Funded amount	19,050,000	1,750,000	20,800,000	'
Internal rate of return on funded amount (as a percent)	'	'	'	20.00%
Minimum	'	'	'	'
Debt Instrument	'	'	'	'
Varying amount	'	'	'	1,300,000
Maximum	'	'	'	'
Debt Instrument	'	'	'	'
Varying amount	'	'	'	$2,500,000

Notes_Payable_Details_3

Notes Payable (Details 3) (Revenue Interest Purchase Agreement)	Mar. 31, 2014
Revenue Interest Purchase Agreement	'
Long-Term Debt	'
Internal rate of return on funded amount related to put option (as a percent)	20.00%
Internal rate of return on funded amount related to change of control (as a percent)	32.50%

Stock_Options_Details

Stock Options (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Stock Options	'	'
Stock options granted under 2010 Stock Incentive Plan (in shares)	226,000	'
Stock-based compensation	$257,542	$259,912
Total future stock compensation expense related to nonvested awards	$1,610,000	'