Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 30, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | AxoGen, Inc. | |
Entity Central Index Key | 805,928 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 33,456,091 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 22,041,097 | $ 30,014,405 |
Accounts receivable, net of allowance for doubtful accounts of approximately $335,000 and $272,000, respectively | 10,200,560 | 8,052,203 |
Inventory | 6,698,943 | 5,458,840 |
Prepaid expenses and other | 571,912 | 511,804 |
Total current assets | 39,512,512 | 44,037,252 |
Property and equipment, net | 1,763,840 | 1,494,247 |
Intangible assets | 951,473 | 828,979 |
Total Assets | 42,227,825 | 46,360,478 |
Current liabilities: | ||
Borrowings under revolving loan agreement | 4,000,000 | 4,025,023 |
Accounts payable and accrued expenses | 7,072,530 | 7,002,165 |
Current maturities of long term obligations | 21,596 | 20,899 |
Deferred revenue, current | 43,576 | 33,282 |
Total current liabilities | 11,137,702 | 11,081,369 |
Long Term Obligations, net of current maturities and deferred financing fees | 20,356,698 | 20,265,745 |
Deferred lease | 105,261 | |
Deferred revenue, noncurrent | 76,027 | 92,215 |
Total liabilities | 31,675,688 | 31,439,329 |
Shareholders' equity: | ||
Common stock, $0.01 par value per share; 50,000,000 shares authorized; 33,393,804 and 33,008,865 shares issued and outstanding | 333,938 | 330,088 |
Additional paid-in capital | 136,048,305 | 132,474,884 |
Accumulated deficit | (125,830,106) | (117,883,823) |
Total shareholders' equity | 10,552,137 | 14,921,149 |
Total Liabilities and Shareholders' equity | $ 42,227,825 | $ 46,360,478 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Condensed Consolidated Balance Sheets | ||
Accounts receivable, allowance for doubtful accounts | $ 335,000 | $ 272,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 33,393,804 | 33,008,865 |
Common stock, shares outstanding | 33,393,804 | 33,008,865 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Condensed Consolidated Statements of Operations | ||||
Revenues | $ 16,046,253 | $ 11,205,224 | $ 43,455,390 | $ 29,698,866 |
Cost of goods sold | 2,504,278 | 1,697,443 | 6,697,127 | 4,637,446 |
Gross profit | 13,541,975 | 9,507,781 | 36,758,263 | 25,061,420 |
Costs and expenses: | ||||
Sales and marketing | 9,466,496 | 7,090,059 | 27,515,266 | 20,076,297 |
Research and development | 1,795,292 | 1,118,358 | 4,727,551 | 3,033,521 |
General and administrative | 3,778,612 | 2,481,051 | 10,659,756 | 7,362,063 |
Total costs and expenses | 15,040,400 | 10,689,468 | 42,902,573 | 30,471,881 |
Loss from operations | (1,498,425) | (1,181,687) | (6,144,310) | (5,410,461) |
Other income (expense): | ||||
Interest expense | (577,941) | (1,089,134) | (1,639,874) | (3,255,574) |
Interest expense-deferred financing costs | (46,110) | (31,748) | (136,711) | (95,254) |
Other (expense) | (1,603) | (2,804) | (25,388) | (22,871) |
Total other income (expense) | (625,654) | (1,123,686) | (1,801,973) | (3,373,699) |
Net Loss | $ (2,124,079) | $ (2,305,373) | $ (7,946,283) | $ (8,784,160) |
Weighted Average Common Shares outstanding - basic and diluted | 33,286,211 | 30,152,279 | 33,146,546 | 30,075,715 |
Loss Per Common share - basic and diluted (in dollars per share) | $ (0.06) | $ (0.08) | $ (0.24) | $ (0.29) |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (7,946,283) | $ (8,784,160) |
Adjustments to reconcile net loss to net cash used for operating activities: | ||
Depreciation | 346,839 | 263,133 |
Amortization of intangible assets | 60,459 | 48,050 |
Amortization of deferred financing costs | 136,711 | 95,253 |
Provision for bad debt | 83,733 | 80,934 |
Stock-based compensation | 2,491,992 | 1,046,364 |
Interest added to note payable | 199,124 | |
Change in assets and liabilities: | ||
Accounts receivable | (2,232,090) | (2,302,701) |
Inventory | (1,240,103) | (1,036,859) |
Prepaid expenses and other | (60,108) | (260,786) |
Accounts payable and accrued expenses | 70,365 | 864,267 |
Deferred liabiliies | 99,367 | 5,727 |
Net cash used for operating activities | (8,189,118) | (9,781,654) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (616,432) | (612,974) |
Acquisition of intangible assets | (182,953) | (157,491) |
Net cash used for investing activities | (799,385) | (770,465) |
Cash flows from financing activities: | ||
Borrowings on revolving loan | 41,553,210 | |
Payments on revolving loan | (41,578,233) | |
Repayments of long-term debt | (15,589) | |
Debt issuance costs | (29,472) | |
Proceeds from exercise of stock options | 1,085,279 | 645,864 |
Net cash provided by financing activities | 1,015,195 | 645,864 |
Net decrease in cash and cash equivalents | (7,973,308) | (9,906,255) |
Cash and cash equivalents, beginning of year | 30,014,405 | 25,909,500 |
Cash and cash equivalents, end of period | 22,041,097 | 16,003,245 |
Supplemental disclosures of cash flow activity: | ||
Cash paid for interest | $ 1,631,795 | $ 3,031,528 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
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 subsidiaries, AxoGen Corporation (“AC”) and AxoGen Europe GmbH, established in the fourth quarter of 2016, as of September 30, 2017 and December 31, 2016 and for the three and nine month periods ended September 30, 2017 and 2016. The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“USGAAP”) and should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2016, which are included in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2016. 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 | 9 Months Ended |
Sep. 30, 2017 | |
Organization and Business | |
Organization and Business | 2. Organization and Business Business Summary We are a global leader in innovative surgical solutions for peripheral nerve injuries. AxoGen is the leading company focused specifically on the science, development and commercialization of technologies for peripheral nerve regeneration and repair. We are passionate about restoring nerve function and quality of life to patients with peripheral nerve injuries by providing innovative, clinically proven and economically effective repair solutions for surgeons and health care providers. Peripheral nerves provide the pathways for both motor and sensory signals throughout the body. Every day, people suffer traumatic injuries or undergo surgical procedures that impact the function of their peripheral nerves. Damage to a peripheral nerve can result in the loss of muscle or organ function, the loss of sensory feeling, or the initiation of pain. AxoGen's portfolio of products includes Avance ® Nerve Graft, an off-the-shelf processed human 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, 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, and Avive ® Soft Tissue Membrane, a minimally processed human umbilical cord membrane that may be used as a resorbable soft tissue covering to separate tissue layers and modulate inflammation in the surgical bed. Along with these core surgical products, AxoGen also offers AcroVal ® Neurosensory & Motor Testing System and AxoTouch ® Two-Point Discriminator. These evaluation and measurement tools assist health care professionals in detecting changes in sensation, assessing return of sensory, grip, and pinch function, evaluating effective treatment interventions, and providing feedback to patients on nerve function. The AxoGen portfolio of products is available in the United States, Canada, the United Kingdom, and several other European and international countries. Avance ® Nerve Graft and Avive ® Soft Tissue Membrane are processed in the United States by AxoGen at its processing facility in Dayton, Ohio. AxoGuard ® Nerve Connector and AxoGuard ® Nerve Protector are manufactured in the United States by Cook Biotech Incorporated and are distributed worldwide exclusively by AxoGen. The AcroVal ® Neurosensory and Motor Testing System and AxoTouch ® Two Point Discriminator are contract manufactured by Viron Technologies, LLC. (formerly Cybernetics Research Laboratories) (“Viron”) Tucson, Arizona. Viron supplies the AcroVal ® and AxoTouch ® unpackaged and they are packaged at AxoGen’s distribution facility in Burleson, Texas. AxoGen maintains its corporate offices in Alachua, Florida and is the parent company of its wholly owned operating subsidiary, AC. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
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 revenues 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. Revenues from research grants are recognized in the period the associated costs are incurred. 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 receivables due to our past successful experience in collectability. Specific accounts that are deemed uncollectible are reserved at 100% of their outstanding balance. In the event that we exhaust all collection efforts and deem an account uncollectible, we would subsequently write off the account. The allowance for doubtful accounts reserve balance was approximately $335,000 and $272,000 at September 30, 2017 and December 31, 2016, 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 and monitoring procedures. Inventories Inventories are comprised of unprocessed tissue, work-in-process, Avance ® Nerve Graft, AxoGuard ® Nerve Connector, AxoGuard ® Nerve Protector, Avive ® Soft Tissue Membrane, AcroVal ® Neurosensory and Motor Testing System, AxoTouch ® Two-Point Discriminator and supplies and are valued at the lower of cost (first-in, first-out) or market. We regularly review the inventory status to determine the expected reserve level required. The Company policy is to monitor the shelf life of its products and reserve amounts based on the expiration date of the finished goods inventory. We also reserve a portion of raw materials based on our historical experience of tissue that fails during the inspection and debridement stage due to medical history, serology compliance or poor quality. Income Taxes The Company has not recorded current income tax expense due to the generation of net operating losses. Deferred income taxes are accounted for using the balance sheet approach which requires recognition of deferred tax assets and liabilities for the expected future consequences of temporary differences between the financial reporting basis and the tax basis of assets and liabilities. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized. A full valuation allowance has been established on the deferred tax asset as it is more likely than not that a future tax benefit will not be realized. In addition, future utilization of the available net operating loss carryforward may be limited under Internal Revenue Code Section 382 as a result of changes in ownership. The Company identifies and evaluates uncertain tax positions, if any, and recognizes the impact of uncertain tax positions for which there is a less than more-likely-than-not probability of the position being upheld when reviewed by the relevant taxing authority. Such positions are deemed to be unrecognized tax benefits and a corresponding liability is established on the 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, 2014 through 2016; however, 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 The Company measures all employee stock-based compensation awards using a fair value method and records such expense in its consolidated financial statements. The estimated value of the portion of the award that is ultimately expected to vest, taking into consideration estimated forfeitures based on the Company’s historical forfeiture rate, is recognized as expense over the requisite service periods in the Company’s consolidated statements of operations. The Company estimates the grant date fair value of stock option awards generally on the date of grant using the Black-Scholes option pricing model. With respect to performance stock units (“PSUs”), the number of shares that vest and are issued to the recipient is based upon the Company’s performance as measured against specified targets over the measurement period. The fair value of the PSUs is based on the Company’s closing stock price on the grant date and its estimate of achieving such performance targets. See further discussion and disclosures in Note 9: “Stock Incentive Plan.” Use of Estimates The preparation of consolidated financial statements in conformity with USGAAP 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. Earnings (Loss) Per Share of Common Stock There were no dilutive instruments as of September 30, 2017 and 2016. The basic and diluted weighted average shares outstanding were 33,286,211 and 30,152,279 shares for the three months ended September 30, 2017 and 2016, respectively, and 33,146,546 and 30,075,715 shares for the nine months ended September 30, 2017 and 2016, respectively. Basic and diluted net loss per share of common stock for all periods presented is computed by dividing the net loss attributable to common shareholders by the weighted-average number of shares of common stock outstanding and common stock equivalents outstanding, when dilutive. Potentially dilutive common stock equivalents include shares of common stock which would potentially be issued pursuant to stock warrants and stock options. Common stock equivalents are not included in determining the fully diluted loss per share if their effect is antidilutive. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the “FASB”) issued a new standard on revenue recognition which outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard is designed to create greater comparability for financial statement users across industries and jurisdictions and also requires enhanced disclosures. The guidance will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the adoption date. During the quarter ended September 30, 2017, we completed the evaluation of the new standard and a related assessment and review of a representative sample of existing revenue contracts with our customers on our most significant revenue streams. Based upon this assessment, we do not believe there will be a material change to the timing of our revenue recognition. However, during the fourth quarter of 2017 we will continue our preparation for adopting the standard and periodically brief our Audit Committee on our progress. It is likely we will be required to provide additional disclosures in the notes to the consolidated financial statements upon adoption. We have not yet determined the effect of the ASU on our internal control over financial reporting or other changes in business practices and processes but will do so in the design and implementation phase to occur during the remainder of 2017. Additionally, we have not made a decision on which adoption method to utilize. Our evaluation of ASU 2014-09 is ongoing. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”. This update will increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This update is effective for annual and interim reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact this standard will have on our consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments (Topic 230). The ASU was issued intending to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the Consolidated Statement of Cash Flows by providing guidance on eight specific cash flow issues. The new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2017 with early adoption permitted. We do not believe the adoption of this standard will have a material impact on our consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230), guidance that a statement of cash flows explains the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The new guidance is effective for fiscal years beginning after December 15, 2017 with early adoption permitted. We do not believe the adoption of this guidance will have a material impact on our Statement of Cash Flows. In May 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting.” ASU 2017-09 provides clarity on which changes to the terms or conditions of share-based payment awards require entities to apply the modification accounting provisions required in Topic 718. ASU 2017-09 is effective for all entities for annual reporting periods beginning after December 15, 2017, with early adoption permitted, including adoption in any interim period for which financial statements have not yet been issued. The Company does not expect that the adoption of ASU 2017-09 will have a material impact on the Company’s results of operations and financial condition. The Company’s management has reviewed and considered all other 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 . |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2017 | |
Inventories | |
Inventories | 4. Inventories Inventories are comprised of unprocessed tissue, work-in-process, Avance ® Nerve Graft, AxoGuard ® Nerve Connector, AxoGuard ® Nerve Protector, Avive ® Soft Tissue Membrane, AcroVal ® Neurosensory and Motor Testing System, AxoTouch ® Two-Point Discriminator and supplies and are valued at the lower of cost (first-in, first-out) or market and consist of the following: September 30, December 31, 2017 2016 Finished goods $ 5,157,260 $ 4,132,036 Work in process 306,942 205,116 Raw materials 1,234,741 1,121,688 Inventories $ 6,698,943 $ 5,458,840 Inventories are net of reserve of approximately $642,000 and $960,000 at September 30, 2017 and December 31, 2016, respectively. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2017 | |
Property and Equipment | |
Property and Equipment | 5. Property and Equipment Property and equipment consist of the following: September 30, December 31, 2017 2016 Furniture and equipment $ 1,436,733 $ 1,270,173 Leasehold improvements 711,319 447,650 Processing equipment 1,763,764 1,577,561 Less: accumulated depreciation and amortization (2,147,976) (1,801,137) Property and equipment, net $ 1,763,840 $ 1,494,247 |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2017 | |
Intangible Assets | |
Intangible Assets | 6. Intangible Assets The Company’s intangible assets consist of the following: September 30, December 31, 2017 2016 License agreements $ 1,003,512 $ 984,342 Patents 461,712 308,212 Less: accumulated amortization (513,751) (463,575) Intangible assets, net $ 951,473 $ 828,979 License agreements are being amortized over periods ranging from 17-20 years. Patent costs of $22,000 were being amortized over three years. As of September 30, 2017, those patents were fully amortized, and the remaining patents of $461,712 are pending patent costs and are being amortized over periods up to 20 years. Amortization expense was approximately $19,000 and $16,000 for the three months ended September 30, 2017 and 2016, respectively, and approximately $60,000 and $48,000 for the nine months ended September 30, 2017 and 2016, respectively. As of September 30, 2017, future amortization of license agreements and patents (i) for the remainder of fiscal year 2017 is $19,000, (ii) for the fiscal years 2018 through 2022 is expected to be $74,000 per year, and (iii) after 2022 an aggregate $563,000. License Agreements The Company has entered into multiple license agreements (together, the “License Agreements”) with the University of Florida Research Foundation and the University of Texas at Austin. 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 sub-licensee 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 the University of Texas at Austin’s agreement, 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. A milestone fee to the University of Florida Research Foundation of $2,000 is due if AxoGen receives FDA approval of its Avance ® Nerve Graft, a milestone fee of $25,000 is due upon the first commercial use of certain licensed technology to provide services to manufacture products for third parties and a milestone fee of $10,000 is due upon the first use to manufacture products that utilize certain technology that is not currently incorporated into AxoGen products. Royalty fees were approximately $319,000 and $214,000 during the three months ended September 30, 2017 and 2016, respectively, and approximately $860,000 and $583,000 during the nine months ended September 30, 2017 and 2016, respectively, and are included in sales and marketing expense on the accompanying condensed consolidated statements of operations. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 9 Months Ended |
Sep. 30, 2017 | |
Accounts Payable and Accrued Expenses | |
Accounts Payable and Accrued Expenses | 7. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consist of the following: September 30, December 31, 2017 2016 Accounts payable $ 2,104,119 $ 3,614,015 Accrued expenses 1,361,769 804,691 Accrued compensation 3,606,642 2,583,459 Accounts Payable and Accrued Expenses $ 7,072,530 $ 7,002,165 |
Term Loan Agreements and Long T
Term Loan Agreements and Long Term Debt | 9 Months Ended |
Sep. 30, 2017 | |
Term Loan Agreements and Long Term Debt | |
Term Loan Agreements and Long Term Debt | 8. Term Loan Agreements and Long-Term Debt Term Loan Agreement and Long Term Debt consist of the following: September 30, December 31, 2017 2016 Term Loan Agreement with MidCap Financial Trust (“MidCap”) for a total of $21,000,000, net of $663,946 of unamortized deferred financing fees at September 30, 2017, and $771,185 at December 31, 2016. Interest is payable monthly at 8.0% per annum plus the greater of LIBOR or 0.5% which as of September 30, 2017 resulted in a 8.5% rate. $ 20,336,054 $ 20,228,815 Revolving Loan Agreement with MidCap for up to $10,000,000 with borrowings based upon eligible accounts receivable and inventory. Interest is payable monthly at 4.5% per annum plus the greater of LIBOR or 0.5% which as of September 30, 2017 resulted in a 5.0% rate. 4,000,000 4,025,023 Equipment Lease Agreement with Cisco Capital for a total lease amount of $58,875 which has a 36 month term and requires no lease payments for the first three months of the lease and 33 equal payments of principal and interest until the end of the term. Interest on the lease is payable monthly at 3.5% per annum. 42,240 57,829 Total 24,378,294 24,311,667 Less current revolving loan (4,000,000) (4,025,023) Less current maturities of long term debt (21,596) (20,899) Long-term portion $ 20,356,698 $ 20,265,745 Credit Facilities Three Peaks Term Loan Agreement and Revenue Interest Agreement On November 12, 2014, AxoGen, as borrower, and AC, as guarantor, entered into that certain Term Loan Agreement (the “Three Peaks Term Loan Agreement”), dated November 12, 2014, by and among AxoGen, as borrower, AC, as guarantor, the lenders party thereto and Three Peaks Capital S.a.r.l. (“Three Peaks”), an indirect wholly-owned subsidiary of Oberland Capital Healthcare Master Fund LP, as administrative and collateral agent for the lenders. Under the Three Peaks Term Loan Agreement, Three Peaks provided AxoGen a term loan of $25 million which had a six-year term and required interest only payments and a final principal payment due at the end of the term. Interest was payable quarterly at 9.0% per annum plus the greater of LIBOR or 1.0% which as of November 13, 2014 resulted in a 10% rate. In addition, on November 12, 2014, AxoGen entered into that certain Revenue Interest Agreement (the “Revenue Interest Agreement”) with Three Peaks. Royalty payments were based on a royalty rate of 3.75% of AxoGen’s revenues up to a maximum of $30 million in revenues in any 12-month period. On October 26, 2016, the Three Peaks Term Loan Agreement and Revenue Interest Agreement were paid in full and the Company had no further obligations pursuant to such agreements. MidCap Term Loan Agreement On October 25, 2016 (the “Closing Date”), AxoGen and AC, each as borrowers, entered into a Credit and Security Agreement (Term Loan) (the ''MC Term Loan Agreement") with the lenders party thereto and MidCap Financial Trust (“MidCap”), as administrative agent and a lender. Under the MC Term Loan Agreement, MidCap provided the Company a term loan in the aggregate principal amount of $21 million (the "Term Loan") which has a maturity date of May 1, 2021 and requires interest only payments through December 1, 2018, and thereafter, 30 monthly payments of principal and interest resulting in the Term Loan being fully paid by the maturity date. Interest is payable monthly at 8.0% per annum plus the greater of LIBOR or 0.5%. In addition to the interest charged on the Term Loan, the Company is also obligated to pay certain fees, including an annual agency fee of 0.25% of the aggregate principal amount of the Term Loan. The Company has the option at any time to prepay the Term Loan in whole or in part, subject to certain conditions, a prepayment fee, and a 5.0% exit fee as specified in the MC Term Loan Agreement. The prepayment fee is determined by multiplying the amount being prepaid by the following applicable percentage amount: (a) 3.0% during the first year following the Closing Date; (b) 2.0% during the second year following the Closing Date, and (c) 1.0% thereafter. However, no prepayment fee is due in the event the prepayment is a result of refinancing the Term Loan and Revolving Loan with MidCap or an affiliate of MidCap. MidCap Revolving Loan Agreement In addition, on October 25, 2016, AxoGen and AC, each as borrowers, also entered into a Credit and Security Agreement (Revolving Loan) (the ''Revolving Loan Agreement") with the lenders party thereto and MidCap, as administrative agent and a lender. Under the Revolving Loan Agreement, MidCap agreed to lend to the Company up to $10 million under a revolving credit facility (the "Revolving Loan") which amount may be drawn down by the Company based upon an available borrowing base which includes certain accounts receivable and inventory. The Revolving Loan may be increased to up to $15 million at the Company’s request and with the approval of MidCap. The maturity date of the Revolving Loan is May 1, 2021. Interest is payable monthly at 4.5% per annum plus the greater of LIBOR or 0.5% on outstanding advances. In addition to the interest charged on the Revolving Loan, the Company is also obligated to pay certain fees, including a collateral management fee of 0.5% per annum of the principal amount outstanding on the Revolving Loan from time to time and an unused line fee of 0.5% per annum on the difference between the average amount outstanding on the Revolving Loan minus the total amount of the Revolving Loan commitment. The Revolving Loan is subject to a minimum balance, such that the Company pays the greater of: (i) interest accrued on the actual amount drawn under the Revolving Loan Facility; and (ii) interest accrued on 30% of the average borrowing base. If the Revolving Loan is terminated or permanently reduced prior to the maturity date, MidCap is owed a deferred revolving loan origination fee as specified in the Revolving Loan Agreement. No deferred revolving loan origination fee is due in the event the Revolving Loan is paid in full or the termination of the revolving credit facility is a result of refinancing the Term Loan and Revolving Loan with MidCap or an affiliate of MidCap. The MC Term Loan Agreement and the Revolving Loan Agreement each contain covenants that place restrictions on AxoGen’s operations, including, without limitation, covenants related to debt restrictions, investment restrictions, dividend restrictions, restrictions on transactions with affiliates and certain revenue covenants. MidCap, on behalf of the lenders under the agreements, has a first perfected security interest in the assets of the Company to guarantee the payment in full of the agreements. Upon the payment in full to MidCap and the lenders of the Term Loan Agreement and Revolving Loan Agreement, the Company would have no further obligations to MidCap or the lenders under the Term Loan Agreement or the Revolving Loan Agreement. As of September 30, 2017, we were in compliance with the loan covenants. The Company used the aggregate proceeds of $25 million from the Term Loan and the Revolving Loan to pay the outstanding indebtedness owed to Three Peaks and the other lenders to terminate the Three Peaks Term Loan Agreement and the Revenue Interest Agreement. Expenses and fees of approximately $800,000 to complete the negotiation and documentation of the Term Loan and the Revolving Loan and prepayment fees of approximately $2.3 million owed to Three Peaks were paid from the Company’s own funds. Interest expense for the year ended December 31, 2016 was approximately $5,386,000 compared to $3,989,000 for the year ended December 31, 2015. The 2016 amount includes a final payment to Three Peaks of approximately $2,447,000 inclusive of prepayment fees and accrued interest through October 25, 2016. In addition, as a result of the accounting treatment for the Three Peaks transaction, the Company had previously recorded a total of $747,000 of deferred interest charges which were offset against these prepayment fees. The net impact of these transactions resulted in a net interest charge of approximately $1,700,000 in the year which was included in interest expense for the year ended December 31, 2016. Additionally, as the result of the extinguishment of the debt facility with Three Peaks, the Company wrote off approximately $750,000 of prepaid financing fees to interest expense – deferred financing costs in 2016. As of September 30, 2017, the Term Loan had an outstanding balance of $21.0 million, with an interest rate of 8.5%. Also, at September 30, 2017, the borrowing base under the Revolving Loan Agreement was approximately $6,879,000 and the Company had an outstanding balance on the Revolving Loan facility of $4,000,000 with an interest rate of 5.0%. Annual maturities of the Company’s long-term obligations are as follows: Year Ending December 31 Amount 2017 $ 5,310 2018 1,421,834 2019 8,415,096 2020 8,400,000 2021 2,800,000 21,042,240 Less unamortized debt issuance costs (663,946) TOTAL $ 20,378,294 |
Stock Incentive Plan
Stock Incentive Plan | 9 Months Ended |
Sep. 30, 2017 | |
Stock Incentive Plan | |
Stock Incentive Plan | 9. Stock Incentive Plan The Company maintains the AxoGen 2010 Stock Incentive Plan, as amended and restated (the “AxoGen Plan”), which allows for issuance of incentive stock options, non-qualified stock options, performance stock units (PSU) and restricted stock awards (RSU) to employees, directors and consultants at exercise prices not less than the fair market value at the date of grant. At the 2016 Annual Meeting of Shareholders, the AxoGen Plan was amended to increase the number of shares of common stock authorized for issuance under the AxoGen Plan to 5,500,000 shares. Additionally, at the 2017 Annual Meeting of Shareholders held on May 24, 2017, the AxoGen Plan was amended to increase the number of shares of common stock authorized for issuance under the AxoGen Plan to 7,700,000 shares. At the 2017 Annual Meeting of Shareholders, the shareholders approved the adoption of the AxoGen 2017 Employee Stock Purchase Plan (the “2017 ESPP”), which allows for eligible employees to acquire shares of our common stock through payroll deductions at a discount from market value. The 2017 ESPP authorized a total of 600,000 shares of our common stock with the first offering period expected to begin January 1, 2018. The options granted to employees typically vest 25% one year after the grant date and 12.5% every six months thereafter for the remaining three-year period until fully vested after four years and those to directors and certain executive officers have vested 25% per quarter over one year or had no vesting period. Options issued to consultants have vesting provisions based on the engagement ranging from no vesting to vesting over the service period ranging from three to four years. Options typically have terms ranging from seven to ten years. The Company recognized stock-based compensation expense of $919,026 and $293,575 for the three months ended September 30, 2017 and 2016, respectively, and $2,491,992 and $1,046,364 for the nine months ended September 30, 2017 and 2016, respectively, which consisted of compensation expense related to employee stock options, PSUs and RSUs based on the value of share-based payment awards that are ultimately expected to vest during the period. The Company estimates the fair value of each option award issued under such plans on the date of grant using the 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 Company’s merger with LecTec Corporation in 2011 (the “Merger”), and based on the Company’s common stock for periods subsequent to the Merger. However, for options granted on and after December 29, 2016 the Company began using a Multiple Point Black-Scholes option-pricing model which uses a weighted average of historical volatility and peer company volatility. The Company determines the expected life 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 used the following weighted-average assumptions for options granted during the nine months ended September 30: Nine months ended September 30, 2017 2016 Expected term (in years) 6.16 4.00 Expected volatility 50.72 % 61.71 % Risk free rate 2.07 % 1.22 % Expected dividends — % — % The Company granted stock options to purchase 635,525 shares of its common stock pursuant to the AxoGen Plan, for the nine months ended September 30, 2017. The weighted average fair value of options granted at market during the nine months ended September 30, 2017 and 2016 was $6.77 and $3.00 per option, respectively At September 30, 2017, the total future stock compensation expense related to non-vested awards is expected to be approximately $9,086,000. |
Public Offering of Common Stock
Public Offering of Common Stock | 9 Months Ended |
Sep. 30, 2017 | |
Public Offering of Common Stock | |
Public Offering of Common Stock | 10. Public Offering of Common Stock On October 7, 2016, AxoGen entered into an underwriting agreement with JMP Securities LLC, as representative of the several underwriters (collectively, the “Underwriters”), to issue and sell 2,333,334 shares of the Company’s common stock in an underwritten registered public offering (the “2016 Offering”) at an offering price of $7.50 per share. Pursuant to the underwriting agreement, the Company also granted the Underwriters a 30-day option to purchase up to an additional 350,000 shares of common stock, which the underwriters exercised in full on October 7, 2016. Five of the Company’s directors and officers purchased an aggregate of approximately 32,666 shares of common stock in the 2016 Offering and such purchases were made on the same terms and conditions as purchases by the public in the 2016 Offering. The 2016 Offering closed on October 13, 2016, and the Company received net proceeds of approximately $18.67 million from the sale of 2,683,334 shares of common stock, which includes the additional 350,000 shares of common stock, after deducting the underwriting discounts and commissions and estimated offering expenses. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | 11. Commitments and Contingencies Operating Leases On March 16, 2016, AxoGen entered into the Fourth Amendment to Lease (“Fourth Amendment”) with SNH Medical Office Properties Trust (“SNH”). SNH is the landlord of AC’s currently leased 11,761 square foot corporate headquarters facility at 13631 Progress Boulevard, Suite 400, Alachua, Florida 32615 (the “Current Premises”) pursuant to that certain lease dated as of February 6, 2007, as amended (the “Existing SNH Lease”). The Fourth Amendment expands the Current Premises by 7,050 square feet (the “Expansion Premises”). The Fourth Amendment also provides that the Expiration Date (as defined in the Fourth Amendment) of the Existing SNH Lease will be extended to approximately five years from the Occupancy Date (as defined in the Fourth Amendment) which was June 2016. The original expiration date of the Current Premises remains unchanged; provided, however, that AC shall have the right to extend the Current Premises Term (as defined in the Fourth Amendment) for three additional periods (the “Current Premises Extended Term”), the first such Current Premises Extended Term to commence on November 1, 2018 and end on October 31, 2019, the second such Current Premises Extended Term to commence on November 1, 2019 and end on October 31, 2020, and the third such Current Premises Extended Term to commence on November 1, 2020 and end on the Expiration Date. AC also has the right to extend the term of the then current Leased Premises (as defined in the Fourth Amendment) for an additional period of five years commencing on the day immediately after the Expiration Date. AxoGen’s annual cost of such property ranges from approximately $248,000 to $332,000 per year. On October 25, 2013, AC entered into a commercial lease with Ja-Cole L.P. (“Ja-Cole”). Under the terms of the commercial lease, AxoGen occupied 5,400 square feet of warehouse/office space in its Burleson, Texas Distribution Facility until November 30, 2016 at an annual cost of $43,200. On April 21, 2015, AxoGen entered into a new commercial lease, as amended by the addendum on such date (as amended, the “Ja-Cole Lease”), with Ja-Cole. The new commercial lease superseded and replaced the original lease with Ja-Cole dated October 25, 2013. Under the terms of the Ja-Cole Lease, AxoGen leased an additional 2,100 square feet of warehouse space at the Distribution Facility. The Ja-Cole Lease is for a three-year term expiring April 21, 2018. On October 25, 2016, AC entered into Commercial Lease Amendment 2 (the “Ja-Cole Amendment”) to the Ja-Cole Lease. Under the terms of the Ja-Cole Amendment, AxoGen leased an additional 2,500 square feet of warehouse/office space at the Distribution Facility. The Distribution Facility now comprises a total of 10,000 square feet, all of which, pursuant to the Ja-Cole Amendment, will be leased until March 31, 2019. The annual rental cost of the entire Distribution Facility is now approximately $88,000. The Burleson facility houses raw material storage and product distribution while allowing same day fulfillment of orders for both coasts of the United States. On January 23, 2017, AC entered into a lease (the “New SNH Lease”) for a five year term commencing April 1, 2017 with SNH Medical Office Properties Trust, a Maryland real estate investment trust (“SNH”), for 1,431 square feet at 13709 Progress Boulevard, Alachua, Florida 32615. Pursuant to the New SNH Lease, AC is to use the space for general office and biomedical research uses. SNH is the landlord of AC’s currently leased corporate headquarters facility at 13631 Progress Boulevard, Alachua, Florida 32615. AC’s additional annual cost of the Premises range from approximately $25,800 to $29,000 over the life of the lease. In addition, AxoGen leases space and maintains records at certain other facilities, including the Company’s prior corporate headquarters at 1407 South Kings Highway, Texarkana, Texas 75501. Estimated future minimum rental payments on the leases are as follows: Year Ending December 31 Amount 2017 (9 months ended) $ 98,835 2018 437,900 2019 182,250 2020 165,116 2021 86,638 TOTAL $ 970,739 Total rent expense for the Company’s leased office and lab space for the nine months ended September 30, 2017 and 2016 was approximately $368,000 and $340,000, respectively. Service Agreements From 2009 to February 2016, AxoGen processed and packaged Avance ® Nerve Graft using its employees and equipment located at LifeNet Health, Virginia Beach, Virginia (“LifeNet Health”). Business requirements of LifeNet Health led to their need for additional space and they notified AxoGen that AxoGen would need to transition out of the Virginia Beach facility on or before February 27, 2016. On August 6, 2015, AxoGen entered into a License and Services Agreement with Community Blood Center (d/b/a Community Tissue Services) (“CTS”), Dayton, Ohio, an FDA registered tissue establishment. Processing of the Avance ® Nerve Graft pursuant to the CTS agreement began in February 2016. The CTS agreement is for a five-year term, subject to earlier termination by either party for cause, or after August 6, 2017 without cause, upon 18 months’ notice. Under the CTS agreement, AxoGen pays CTS a facility fee for clean room/manufacturing, storage and office space. CTS also provides services in support of AxoGen’s manufacturing such as routine sterilization of daily supplies, providing disposable supplies, microbial services and office support. In August 2008, the Company entered into an agreement to distribute the AxoGuard ® products worldwide in the field of peripheral nerve repair, and the parties subsequently amended the agreement in March, 2012. The agreement expires in August 2022. The Cook Biotech agreement also requires certain minimum purchases, although through mutual agreement the parties have not established such minimums and to date have not enforced such provision, and establishes a formula for the transfer cost of the AxoGuard ® products. Under the agreement, AxoGen provides purchase orders to Cook Biotech, and Cook Biotech fulfills the purchase orders. In December 2011, the Company also entered into a Master Services Agreement for Clinical Research and Related Services. The Company was required to pay $151,318 upon execution of this agreement and the remainder monthly based on activities associated with the execution of AxoGen’s phase 3 pivotal clinical trial to support a biologics license application (BLA) for Avance ® Nerve Graft. Certain executive officers of the Company are parties to employment contracts. Such contracts have severance payments for certain conditions including change of control. |
Retirement Plan
Retirement Plan | 9 Months Ended |
Sep. 30, 2017 | |
Retirement Plan | |
Retirement Plan | 12. Retirement Plan AxoGen 401(k) Plan The Company adopted the AxoGen 401(k) plan (the “401(k) Plan”) in December 2015 with contributions starting in January 2016. All full-time employees who have attained the age of 18 are eligible to participate in the 401(k) Plan. Eligibility is immediate upon employment and enrollment is available any time during employment. Participating employees may make annual pretax contributions to their accounts up to a maximum amount as limited by law. The 401(k) Plan requires the Company to make matching contributions of 3% on the first 3% of the employee’s annual salary and 1% of the next 2% of the employee’s annual salary as long as the employee participates in the 401(k) Plan. Both employee contributions and Company contributions vest immediately. The Company contributed approximately $334,000 in matching funds during 2016. Employer contributions to the 401(k) Plan for the three months ending September 30, 2017 and 2016 were approximately $114,000 and $76,000, respectively, and for the nine months ending September 30, 2017 and 2016 were approximately $320,000 and $247,000, respectively. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
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 revenues 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. Revenues from research grants are recognized in the period the associated costs are incurred. |
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 receivables due to our past successful experience in collectability. Specific accounts that are deemed uncollectible are reserved at 100% of their outstanding balance. In the event that we exhaust all collection efforts and deem an account uncollectible, we would subsequently write off the account. The allowance for doubtful accounts reserve balance was approximately $335,000 and $272,000 at September 30, 2017 and December 31, 2016, 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 and monitoring procedures. |
Inventories | Inventories Inventories are comprised of unprocessed tissue, work-in-process, Avance ® Nerve Graft, AxoGuard ® Nerve Connector, AxoGuard ® Nerve Protector, Avive ® Soft Tissue Membrane, AcroVal ® Neurosensory and Motor Testing System, AxoTouch ® Two-Point Discriminator and supplies and are valued at the lower of cost (first-in, first-out) or market. We regularly review the inventory status to determine the expected reserve level required. The Company policy is to monitor the shelf life of its products and reserve amounts based on the expiration date of the finished goods inventory. We also reserve a portion of raw materials based on our historical experience of tissue that fails during the inspection and debridement stage due to medical history, serology compliance or poor quality. |
Income Taxes | Income Taxes The Company has not recorded current income tax expense due to the generation of net operating losses. Deferred income taxes are accounted for using the balance sheet approach which requires recognition of deferred tax assets and liabilities for the expected future consequences of temporary differences between the financial reporting basis and the tax basis of assets and liabilities. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized. A full valuation allowance has been established on the deferred tax asset as it is more likely than not that a future tax benefit will not be realized. In addition, future utilization of the available net operating loss carryforward may be limited under Internal Revenue Code Section 382 as a result of changes in ownership. The Company identifies and evaluates uncertain tax positions, if any, and recognizes the impact of uncertain tax positions for which there is a less than more-likely-than-not probability of the position being upheld when reviewed by the relevant taxing authority. Such positions are deemed to be unrecognized tax benefits and a corresponding liability is established on the 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, 2014 through 2016; however, 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 The Company measures all employee stock-based compensation awards using a fair value method and records such expense in its consolidated financial statements. The estimated value of the portion of the award that is ultimately expected to vest, taking into consideration estimated forfeitures based on the Company’s historical forfeiture rate, is recognized as expense over the requisite service periods in the Company’s consolidated statements of operations. The Company estimates the grant date fair value of stock option awards generally on the date of grant using the Black-Scholes option pricing model. With respect to performance stock units (“PSUs”), the number of shares that vest and are issued to the recipient is based upon the Company’s performance as measured against specified targets over the measurement period. The fair value of the PSUs is based on the Company’s closing stock price on the grant date and its estimate of achieving such performance targets. See further discussion and disclosures in Note 9: “Stock Incentive Plan.” |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with USGAAP 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. |
Earnings (Loss) Per Share of Common Stock | Earnings (Loss) Per Share of Common Stock There were no dilutive instruments as of September 30, 2017 and 2016. The basic and diluted weighted average shares outstanding were 33,286,211 and 30,152,279 shares for the three months ended September 30, 2017 and 2016, respectively, and 33,146,546 and 30,075,715 shares for the nine months ended September 30, 2017 and 2016, respectively. Basic and diluted net loss per share of common stock for all periods presented is computed by dividing the net loss attributable to common shareholders by the weighted-average number of shares of common stock outstanding and common stock equivalents outstanding, when dilutive. Potentially dilutive common stock equivalents include shares of common stock which would potentially be issued pursuant to stock warrants and stock options. Common stock equivalents are not included in determining the fully diluted loss per share if their effect is antidilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the “FASB”) issued a new standard on revenue recognition which outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard is designed to create greater comparability for financial statement users across industries and jurisdictions and also requires enhanced disclosures. The guidance will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the adoption date. During the quarter ended September 30, 2017, we completed the evaluation of the new standard and a related assessment and review of a representative sample of existing revenue contracts with our customers on our most significant revenue streams. Based upon this assessment, we do not believe there will be a material change to the timing of our revenue recognition. However, during the fourth quarter of 2017 we will continue our preparation for adopting the standard and periodically brief our Audit Committee on our progress. It is likely we will be required to provide additional disclosures in the notes to the consolidated financial statements upon adoption. We have not yet determined the effect of the ASU on our internal control over financial reporting or other changes in business practices and processes but will do so in the design and implementation phase to occur during the remainder of 2017. Additionally, we have not made a decision on which adoption method to utilize. Our evaluation of ASU 2014-09 is ongoing. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”. This update will increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This update is effective for annual and interim reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact this standard will have on our consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments (Topic 230). The ASU was issued intending to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the Consolidated Statement of Cash Flows by providing guidance on eight specific cash flow issues. The new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2017 with early adoption permitted. We do not believe the adoption of this standard will have a material impact on our consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230), guidance that a statement of cash flows explains the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The new guidance is effective for fiscal years beginning after December 15, 2017 with early adoption permitted. We do not believe the adoption of this guidance will have a material impact on our Statement of Cash Flows. In May 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting.” ASU 2017-09 provides clarity on which changes to the terms or conditions of share-based payment awards require entities to apply the modification accounting provisions required in Topic 718. ASU 2017-09 is effective for all entities for annual reporting periods beginning after December 15, 2017, with early adoption permitted, including adoption in any interim period for which financial statements have not yet been issued. The Company does not expect that the adoption of ASU 2017-09 will have a material impact on the Company’s results of operations and financial condition. The Company’s management has reviewed and considered all other 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 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventories | |
Schedule of inventories | September 30, December 31, 2017 2016 Finished goods $ 5,157,260 $ 4,132,036 Work in process 306,942 205,116 Raw materials 1,234,741 1,121,688 Inventories $ 6,698,943 $ 5,458,840 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property and Equipment | |
Schedule of Property and equipment | September 30, December 31, 2017 2016 Furniture and equipment $ 1,436,733 $ 1,270,173 Leasehold improvements 711,319 447,650 Processing equipment 1,763,764 1,577,561 Less: accumulated depreciation and amortization (2,147,976) (1,801,137) Property and equipment, net $ 1,763,840 $ 1,494,247 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Intangible Assets | |
Schedule of intangible assets | September 30, December 31, 2017 2016 License agreements $ 1,003,512 $ 984,342 Patents 461,712 308,212 Less: accumulated amortization (513,751) (463,575) Intangible assets, net $ 951,473 $ 828,979 |
Accounts Payable and Accrued 22
Accounts Payable and Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounts Payable and Accrued Expenses | |
Schedule of accounts payable and accrued expenses | September 30, December 31, 2017 2016 Accounts payable $ 2,104,119 $ 3,614,015 Accrued expenses 1,361,769 804,691 Accrued compensation 3,606,642 2,583,459 Accounts Payable and Accrued Expenses $ 7,072,530 $ 7,002,165 |
Term Loan Agreements and Long23
Term Loan Agreements and Long Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Term Loan Agreements and Long Term Debt | |
Schedule of Term Loan Agreements and Long Term Debt | September 30, December 31, 2017 2016 Term Loan Agreement with MidCap Financial Trust (“MidCap”) for a total of $21,000,000, net of $663,946 of unamortized deferred financing fees at September 30, 2017, and $771,185 at December 31, 2016. Interest is payable monthly at 8.0% per annum plus the greater of LIBOR or 0.5% which as of September 30, 2017 resulted in a 8.5% rate. $ 20,336,054 $ 20,228,815 Revolving Loan Agreement with MidCap for up to $10,000,000 with borrowings based upon eligible accounts receivable and inventory. Interest is payable monthly at 4.5% per annum plus the greater of LIBOR or 0.5% which as of September 30, 2017 resulted in a 5.0% rate. 4,000,000 4,025,023 Equipment Lease Agreement with Cisco Capital for a total lease amount of $58,875 which has a 36 month term and requires no lease payments for the first three months of the lease and 33 equal payments of principal and interest until the end of the term. Interest on the lease is payable monthly at 3.5% per annum. 42,240 57,829 Total 24,378,294 24,311,667 Less current revolving loan (4,000,000) (4,025,023) Less current maturities of long term debt (21,596) (20,899) Long-term portion $ 20,356,698 $ 20,265,745 |
Schedule of Maturities of Long Term Debt | Year Ending December 31 Amount 2017 $ 5,310 2018 1,421,834 2019 8,415,096 2020 8,400,000 2021 2,800,000 21,042,240 Less unamortized debt issuance costs (663,946) TOTAL $ 20,378,294 |
Stock Incentive Plan (Tables)
Stock Incentive Plan (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Stock Incentive Plan | |
Schedule of weighted-average assumptions for options granted | Nine months ended September 30, 2017 2016 Expected term (in years) 6.16 4.00 Expected volatility 50.72 % 61.71 % Risk free rate 2.07 % 1.22 % Expected dividends — % — % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies | |
Schedule of estimated future minimum rental payments | Year Ending December 31 Amount 2017 (9 months ended) $ 98,835 2018 437,900 2019 182,250 2020 165,116 2021 86,638 TOTAL $ 970,739 |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |||||
Reserve for accounts deemed uncollectible (as a percent) | 100.00% | 100.00% | |||
Allowance for doubtful accounts reserve balance | $ 335,000 | $ 335,000 | $ 272,000 | ||
Earnings (Loss) Per Share of Common Stock | |||||
Dilutive instruments outstanding | 0 | 0 | |||
Weighted Average Common Shares outstanding - basic and diluted | 33,286,211 | 30,152,279 | 33,146,546 | 30,075,715 |
Inventories (Details)
Inventories (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Inventories | ||
Finished goods | $ 5,157,260 | $ 4,132,036 |
Work in process | 306,942 | 205,116 |
Raw materials | 1,234,741 | 1,121,688 |
Inventory, net | 6,698,943 | 5,458,840 |
Inventory valuation reserves | $ 642,000 | $ 960,000 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Property and equipment | ||
Less: accumulated depreciation and amortization | $ (2,147,976) | $ (1,801,137) |
Property and equipment, net | 1,763,840 | 1,494,247 |
Furniture and Equipment | ||
Property and equipment | ||
Property and equipment, Gross | 1,436,733 | 1,270,173 |
Leasehold Improvements | ||
Property and equipment | ||
Property and equipment, Gross | 711,319 | 447,650 |
Processing Equipment | ||
Property and equipment | ||
Property and equipment, Gross | $ 1,763,764 | $ 1,577,561 |
Intangible Assets - Components
Intangible Assets - Components of Intangible Assets (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Intangible assets consist of: | |||||
Less: accumulated amortization | $ (513,751) | $ (513,751) | $ (463,575) | ||
Intangible assets, net | 951,473 | 951,473 | 828,979 | ||
Patent costs | 22,000 | ||||
Amortization of Intangible Assets | 19,000 | $ 16,000 | 60,459 | $ 48,050 | |
Future amortization of license and patent agreements | |||||
Remainder of this year | 19,000 | 19,000 | |||
Next five years | 74,000 | 74,000 | |||
After year five | 563,000 | 563,000 | |||
License Agreements | |||||
Intangible assets consist of: | |||||
Finite-lived intangible assets, gross | 1,003,512 | $ 1,003,512 | 984,342 | ||
License Agreements | Minimum | |||||
Intangible assets consist of: | |||||
Amortization period of intangible assets | 17 years | ||||
License Agreements | Maximum | |||||
Intangible assets consist of: | |||||
Amortization period of intangible assets | 20 years | ||||
Patents | |||||
Intangible assets consist of: | |||||
Finite-lived intangible assets, gross | $ 461,712 | $ 461,712 | $ 308,212 | ||
Amortization period of intangible assets | 3 years | ||||
Non-amortizable pending costs | $ 461,712 | ||||
Patents | Maximum | |||||
Intangible assets consist of: | |||||
Amortization period of intangible assets | 20 years |
Intangible Assets - License Agr
Intangible Assets - License Agreements (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Intangible assets | ||||
Royalty fees included in sales and marketing expense | $ 860,000 | $ 583,000 | ||
Sales and Marketing Expense | ||||
Intangible assets | ||||
Royalty fees included in sales and marketing expense | $ 319,000 | $ 214,000 | ||
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 | |||
Milestone fee upon FDA approval | 2,000 | |||
Milestone fee upon first commercial use of certain licensed technology | 25,000 | |||
Milestone fee upon first use to manufacture products that utilize certain technology not currently incorporated into AxoGen products | $ 10,000 | |||
License Agreements | Minimum | ||||
Intangible assets | ||||
Royalty fees range under the license agreements | 1.00% | |||
License Agreements | Maximum | ||||
Intangible assets | ||||
Royalty fees range under the license agreements | 3.00% | |||
Royalty stack cap for royalties paid to more than one licensor for sales of the same product | 3.75% |
Accounts Payable and Accrued 31
Accounts Payable and Accrued Expenses (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Accounts Payable and Accrued Liabilities | ||
Accounts payable | $ 2,104,119 | $ 3,614,015 |
Accrued expenses | 1,361,769 | 804,691 |
Accrued compensation | 3,606,642 | 2,583,459 |
Accounts Payable and Accrued Expenses | $ 7,072,530 | $ 7,002,165 |
Term Loan Agreements and Long32
Term Loan Agreements and Long Term Debt - Schedule of Debt (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Note Payable | ||
Long term debt | $ 24,378,294 | $ 24,311,667 |
Less current revolving loan | (4,000,000) | (4,025,023) |
Less current maturities of long term debt | (21,596) | (20,899) |
Long-term portion | 20,356,698 | 20,265,745 |
Equipment Lease Agreement | ||
Note Payable | ||
Long term debt | 42,240 | 57,829 |
MidCap Loan | Term Loan Agreement | ||
Note Payable | ||
Long term debt | 20,336,054 | 20,228,815 |
MidCap Loan | Revolver Credit facility | ||
Note Payable | ||
Long term debt | $ 4,000,000 | $ 4,025,023 |
Term Loan Agreements and Long33
Term Loan Agreements and Long Term Debt - Schedule of Debt - Terms (Details) - USD ($) | Oct. 25, 2016 | Nov. 12, 2014 | Sep. 30, 2017 | Dec. 31, 2016 | Nov. 13, 2014 |
Term Loan | |||||
Note Payable | |||||
Interest payable, percent | 8.50% | ||||
Revolver Credit facility | |||||
Note Payable | |||||
Interest payable, percent | 5.00% | ||||
Equipment Lease Agreement | |||||
Note Payable | |||||
Face amount | $ 58,875 | $ 58,875 | |||
Interest payable, percent | 3.50% | 3.50% | |||
Term of debt | 36 months | 36 months | |||
No payments required, term | 3 months | 3 months | |||
Interest and principal payments, term | 33 months | 33 months | |||
Three Peaks Loan | Term Loan Agreement | |||||
Note Payable | |||||
Face amount | $ 25,000,000 | ||||
Interest payable, percent | 9.00% | ||||
Interest rate spread | 1.00% | ||||
Effective interest rate (as a percent) | 10.00% | ||||
Term of debt | 6 years | ||||
MidCap Loan | Term Loan Agreement | |||||
Note Payable | |||||
Face amount | $ 21,000,000 | $ 21,000,000 | $ 21,000,000 | ||
Unamortized deferred financing fees | $ 663,946 | $ 771,185 | |||
Interest payable, percent | 8.00% | 8.00% | 8.00% | ||
Interest rate spread | 0.50% | 0.50% | 0.50% | ||
Effective interest rate (as a percent) | 0.25% | 8.50% | 8.50% | ||
MidCap Loan | Revolver Credit facility | |||||
Note Payable | |||||
Maximum line of credit amount | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 | ||
Interest payable, percent | 4.50% | 4.50% | 4.50% | ||
Interest rate spread | 0.50% | 0.50% | 0.50% | ||
Effective interest rate (as a percent) | 5.00% | 5.00% |
Term Loan Agreements and Long34
Term Loan Agreements and Long Term Debt - Term Loan Agreement and Revenue Interest Agreement (Details) - USD ($) $ in Millions | Nov. 12, 2014 | Sep. 30, 2017 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Interest payable, percent | 8.50% | |
Three Peaks Loan | Revenue Interest Purchase Agreement | ||
Debt Instrument [Line Items] | ||
Royalty percentage on net revenue | 3.75% | |
Maximum revenue subject to royalties payable calculation | $ 30 | |
Aggregate revenues subject to royalties payable, term | 12 months |
Term Loan Agreements and Long35
Term Loan Agreements and Long Term Debt - Term Loan Agreement and Revolving Loan (Details) | Oct. 26, 2016 | Oct. 25, 2016USD ($)item | Nov. 12, 2014USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) | Nov. 13, 2014 |
Debt Instrument [Line Items] | ||||||
Exit fee percent | 5.00% | |||||
Debt issuance costs | $ 29,472 | |||||
Three Peaks Loan | ||||||
Debt Instrument [Line Items] | ||||||
Payments of Debt Extinguishment Costs | $ 2,300,000 | |||||
MidCap Loan | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from issuance of debt | 25,000,000 | |||||
Debt issuance costs | 800,000 | |||||
Term Loan Agreement | Three Peaks Loan | ||||||
Debt Instrument [Line Items] | ||||||
Face amount | $ 25,000,000 | |||||
Interest payable, percent | 9.00% | |||||
Interest rate spread | 1.00% | |||||
Effective interest rate (as a percent) | 10.00% | |||||
Term Loan Agreement | MidCap Loan | ||||||
Debt Instrument [Line Items] | ||||||
Face amount | $ 21,000,000 | $ 21,000,000 | $ 21,000,000 | |||
Number of months requiring principal and interest payments | item | 30 | |||||
Interest payable, percent | 8.00% | 8.00% | 8.00% | |||
Interest rate spread | 0.50% | 0.50% | 0.50% | |||
Effective interest rate (as a percent) | 0.25% | 8.50% | 8.50% | |||
Revolver Credit facility | ||||||
Debt Instrument [Line Items] | ||||||
Interest payable, percent | 5.00% | |||||
Revolver Credit facility | MidCap Loan | ||||||
Debt Instrument [Line Items] | ||||||
Interest payable, percent | 4.50% | 4.50% | 4.50% | |||
Interest rate spread | 0.50% | 0.50% | 0.50% | |||
Effective interest rate (as a percent) | 5.00% | 5.00% | ||||
Prepayment fee percent, year one | 3.00% | |||||
Prepayment fee percent, year two | 2.00% | |||||
Prepayment fee percent, thereafter | 1.00% | |||||
Maximum line of credit amount | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 | |||
Collateral management fee, percent | 0.50% | |||||
Unused line fee, percent | 0.50% | |||||
Percent of Borrowing Base which accrues interest | 30.00% | |||||
Revolver Credit facility | MidCap Loan | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Maximum line of credit amount | $ 15,000,000 |
Term Loan Agreements and Long36
Term Loan Agreements and Long Term Debt - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||||||
Interest Expense | $ 577,941 | $ 1,089,134 | $ 1,639,874 | $ 3,255,574 | $ 5,386,000 | $ 3,989,000 |
Repayments of Long-term Debt | 15,589 | |||||
Amortization of Financing Costs and Discounts | 46,110 | $ 31,748 | 136,711 | $ 95,254 | ||
Write Off Of Deferred Financing Costs | 750,000 | |||||
Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Amount outstanding | $ 21,000,000 | $ 21,000,000 | ||||
Interest payable, percent | 8.50% | 8.50% | ||||
Revolver Credit facility | ||||||
Debt Instrument [Line Items] | ||||||
Amount outstanding | $ 4,000,000 | $ 4,000,000 | ||||
Interest payable, percent | 5.00% | 5.00% | ||||
Borrowing amount available | $ 6,879,000 | $ 6,879,000 | ||||
Three Peaks Loan | ||||||
Debt Instrument [Line Items] | ||||||
Interest Expense | 1,700,000 | |||||
Repayments of Long-term Debt | 2,447,000 | |||||
Amortization of Financing Costs and Discounts | $ 747,000 |
Term Loan Agreements and Long37
Term Loan Agreements and Long Term Debt - Annual Maturities (Details) | Sep. 30, 2017USD ($) |
Minimum annual payment amounts | |
2,017 | $ 5,310 |
2,018 | 1,421,834 |
2,019 | 8,415,096 |
2,020 | 8,400,000 |
2,021 | 2,800,000 |
Total, before debt issuance costs | 21,042,240 |
Less unamortized debt issuance costs | (663,946) |
Total | $ 20,378,294 |
Stock Incentive Plan - Narrativ
Stock Incentive Plan - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | May 24, 2017 | |
Stock Option disclosures | |||||
Options, Granted (in shares) | 635,525 | ||||
Weighted average grant-date fair value of options granted (in dollars per share) | $ 6.77 | $ 3 | |||
Stock Options | |||||
Stock Option disclosures | |||||
Total future stock compensation expense related to nonvested awards | $ 9,086,000 | $ 9,086,000 | |||
AxoGen 2010 Stock Incentive Plan [Member] | |||||
Stock Option disclosures | |||||
Shares authorized for issuance | 5,500,000 | 5,500,000 | 7,700,000 | ||
AxoGen 2010 Stock Incentive Plan [Member] | Employee Consultants and Directors Stock Options [Member] | Minimum | |||||
Stock Option disclosures | |||||
Vesting period | 7 years | ||||
AxoGen 2010 Stock Incentive Plan [Member] | Employee Consultants and Directors Stock Options [Member] | Maximum | |||||
Stock Option disclosures | |||||
Vesting period | 10 years | ||||
AxoGen 2010 Stock Incentive Plan [Member] | Stock Options | |||||
Stock Option disclosures | |||||
Vesting period | 4 years | ||||
Share-based compensation expense | $ 919,026 | $ 293,575 | $ 2,491,992 | $ 1,046,364 | |
AxoGen 2010 Stock Incentive Plan [Member] | Stock Options | One Year After Grant Date | |||||
Stock Option disclosures | |||||
Vesting percentage | 25.00% | ||||
AxoGen 2010 Stock Incentive Plan [Member] | Stock Options | Every Six Months | |||||
Stock Option disclosures | |||||
Vesting percentage | 12.50% | ||||
Vesting period | 3 years | ||||
AxoGen 2010 Stock Incentive Plan [Member] | Directors and Officers Stock Options [Member] | |||||
Stock Option disclosures | |||||
Vesting percentage | 25.00% | ||||
Vesting period | 1 year | ||||
AxoGen 2010 Stock Incentive Plan [Member] | Directors and Officers Stock Options [Member] | Minimum | |||||
Stock Option disclosures | |||||
Vesting period | 3 years | ||||
AxoGen 2010 Stock Incentive Plan [Member] | Directors and Officers Stock Options [Member] | Maximum | |||||
Stock Option disclosures | |||||
Vesting period | 4 years | ||||
AxoGen 2017 Employee Stock Purchase Plan [Member] | |||||
Stock Option disclosures | |||||
Shares authorized for issuance | 600,000 |
Stock Incentive Plan - Summary
Stock Incentive Plan - Summary of Weighted-Average Assumptions Used for Options Granted (Details) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Weighted-average assumptions | ||
Expected term | 6 years 1 month 28 days | 4 years |
Expected volatility (as a percent) | 50.72% | 61.71% |
Risk free rate (as a percent) | 2.07% | 1.22% |
Public Offering of Common Sto40
Public Offering of Common Stock (Details) $ / shares in Units, $ in Thousands | Oct. 13, 2016USD ($)shares | Oct. 07, 2016item$ / sharesshares | Sep. 30, 2017$ / sharesshares | Dec. 31, 2016$ / sharesshares |
Shares of common stock sold | 33,393,804 | 33,008,865 | ||
Par value of common stock | $ / shares | $ 0.01 | $ 0.01 | ||
October 2016 Offering | ||||
Shares of common stock sold | 2,333,334 | |||
Public offering price (in dollars per share) | $ / shares | $ 7.50 | |||
Number of days to underwriter to sell additional common shares | 30 days | |||
October 2016 Offering inclusive of over-allotment option | ||||
Shares of common stock sold | 2,683,334 | |||
Proceeds from Issuance of Common Stock | $ | $ 18,670 | |||
Underwriting Agreement | ||||
Shares of common stock sold | 350,000 | 350,000 | ||
Directors and officers | October 2016 Offering | ||||
Shares of common stock sold | 32,666 | |||
Number of directors and officers who purchased common stock | item | 5 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) | Jan. 23, 2017USD ($)ft² | Oct. 25, 2016USD ($)ft² | Mar. 16, 2016USD ($)ft² | Oct. 25, 2013USD ($)ft² |
SNH | 13631 Progress Boulevard, Suite 400, Alachua, Florida 32615 | ||||
Commitments and Contingencies | ||||
Additional leased office space in square feet | ft² | 7,050 | |||
Leased office space in square feet | ft² | 11,761 | |||
Term of agreement | 5 years | |||
Additional term of agreement, if extended | 3 years | |||
Additional extension term after expiration date | 5 years | |||
SNH | 13709 Progress Boulevard, Alachua, Florida 32615 | ||||
Commitments and Contingencies | ||||
Leased office space in square feet | ft² | 1,431 | |||
Term of agreement | 5 years | |||
SNH | Minimum | 13631 Progress Boulevard, Suite 400, Alachua, Florida 32615 | ||||
Commitments and Contingencies | ||||
Annual lease expense | $ | $ 248,000 | |||
SNH | Minimum | 13709 Progress Boulevard, Alachua, Florida 32615 | ||||
Commitments and Contingencies | ||||
Annual lease expense | $ | $ 25,800 | |||
SNH | Maximum | 13631 Progress Boulevard, Suite 400, Alachua, Florida 32615 | ||||
Commitments and Contingencies | ||||
Annual lease expense | $ | $ 332,000 | |||
SNH | Maximum | 13709 Progress Boulevard, Alachua, Florida 32615 | ||||
Commitments and Contingencies | ||||
Annual lease expense | $ | $ 29,000 | |||
Ja-Cole | ||||
Commitments and Contingencies | ||||
Additional leased office space in square feet | ft² | 2,500 | 2,100 | ||
Leased office space in square feet | ft² | 10,000 | 5,400 | ||
Term of agreement | 3 years | |||
Annual lease expense | $ | $ 88,000 | $ 43,200 |
Commitments and Contingencies42
Commitments and Contingencies - Estimated Future Minimum Rental Payments (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Estimated future minimum rental payments on the leases | ||
2,017 | $ 98,835 | |
2,018 | 437,900 | |
2,019 | 182,250 | |
2,020 | 165,116 | |
2,021 | 86,638 | |
TOTAL | 970,739 | |
Total rent expense | $ 368,000 | $ 340,000 |
Commitments and Contingencies43
Commitments and Contingencies - Service Agreements (Details) - USD ($) | Aug. 06, 2015 | Sep. 30, 2017 | Dec. 31, 2011 |
Tissue Processing Agreement [Member] | |||
Service Agreements | |||
Term of agreement | 5 years | ||
Commitment extension period | 18 months | ||
Master Services Agreement For Clinical Research and Related Services [Member] | |||
Service Agreements | |||
Company is required to pay execution of the agreement | $ 151,318 |
Retirement Plan (Details)
Retirement Plan (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)item | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Defined Benefit Plan | |||||
Age limit for eligibility to participate in the plan | item | 18 | ||||
AxoGen 401K Plan | |||||
Defined Benefit Plan | |||||
Employer contributions | $ | $ 114,000 | $ 76,000 | $ 320,000 | $ 247,000 | $ 334,000 |
Axogen 401K Plan, employee's contribution of first 3% of annual salary | |||||
Defined Benefit Plan | |||||
Matching contributions | 3.00% | ||||
Employee contribution matched, percent | 3.00% | ||||
Axogen 401K Plan, employee's contribution of next 2% of annual salary | |||||
Defined Benefit Plan | |||||
Matching contributions | 1.00% | ||||
Employee contribution matched, percent | 2.00% |