Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 06, 2019 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-36046 | |
Entity Registrant Name | Axogen, Inc. | |
Entity Incorporation, State or Country Code | MN | |
Entity Tax Identification Number | 41-1301878 | |
Entity Address, Address Line One | 13631 Progress Blvd., Suite 400 | |
Entity Address, City or Town | Alachua | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 32615 | |
City Area Code | 386 | |
Local Phone Number | 462-6800 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | AXGN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 39,255,019 | |
Entity Central Index Key | 0000805928 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 24,878 | $ 24,294 |
Restricted cash | 6,000 | 6,000 |
Investments | 78,185 | 92,311 |
Accounts receivable, net of allowance for doubtful accounts of $959 and $1,117, respectively | 16,285 | 15,321 |
Inventory | 13,587 | 11,982 |
Prepaid expenses and other | 2,357 | 1,045 |
Total current assets | 141,292 | 150,953 |
Property and equipment, net | 9,757 | 8,039 |
Operating lease right-of-use assets | 4,051 | |
Finance lease right-of-use assets | 99 | |
Intangible assets | 1,404 | 1,181 |
Total assets | 156,603 | 160,173 |
Current liabilities: | ||
Accounts payable and accrued expenses | 14,382 | 12,998 |
Current maturities of long term obligations | 1,832 | 28 |
Contract liabilities, current | 19 | 18 |
Total current liabilities | 16,233 | 13,044 |
Long Term Obligations, net of current maturities | 2,381 | 35 |
Other long-term liabilities | 70 | |
Contract liabilities | 29 | 42 |
Total liabilities | 18,643 | 13,191 |
Commitments and contingencies - see Note 12 | ||
Shareholders' equity: | ||
Common stock, $0.01 par value per share; 100,000,000 shares authorized; 39,252,294 and 38,900,875 shares issued and outstanding | 393 | 389 |
Additional paid-in capital | 304,819 | 297,319 |
Accumulated deficit | (167,252) | (150,726) |
Total shareholders' equity | 137,960 | 146,982 |
Total liabilities and shareholders' equity | $ 156,603 | $ 160,173 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Condensed Consolidated Balance Sheets | ||
Accounts receivable, allowance for doubtful accounts | $ 959 | $ 1,117 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 39,252,294 | 38,900,875 |
Common stock, shares outstanding | 39,252,294 | 38,900,875 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Condensed Consolidated Statements of Operations | ||||
Revenues | $ 26,701 | $ 20,584 | $ 49,986 | $ 37,844 |
Cost of goods sold | 4,244 | 3,106 | 7,958 | 5,818 |
Gross profit | 22,457 | 17,478 | 42,028 | 32,026 |
Costs and expenses: | ||||
Sales and marketing | 18,467 | 14,026 | 34,901 | 26,495 |
Research and development | 4,282 | 2,601 | 8,421 | 4,660 |
General and administrative | 7,380 | 5,669 | 16,581 | 10,681 |
Total costs and expenses | 30,129 | 22,296 | 59,903 | 41,836 |
Loss from operations | (7,672) | (4,818) | (17,875) | (9,810) |
Other income (expense): | ||||
Investment income | 654 | 156 | 1,370 | 157 |
Interest expense | (11) | (544) | (25) | (1,130) |
Interest expense - deferred financing costs | (21) | (81) | ||
Loss on extinguishment of debt | (2,186) | (2,186) | ||
Other expense | 6 | (15) | 4 | (16) |
Total other income (expense), net | 649 | (2,610) | 1,349 | (3,256) |
Net Loss | $ (7,023) | $ (7,428) | $ (16,526) | $ (13,066) |
Weighted average common shares outstanding - basic and diluted | 39,174,712 | 36,677,074 | 39,055,013 | 35,605,054 |
Loss per common share - basic and diluted | $ (0.18) | $ (0.20) | $ (0.42) | $ (0.37) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (16,526) | $ (13,066) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 439 | 375 |
Amortization of right-of-use assets | 891 | |
Amortization of intangible assets | 56 | 40 |
Amortization of deferred financing costs | 81 | |
Loss on extinguishment of debt | 2,186 | |
Provision for bad debt | (159) | 130 |
Provision for inventory writedown | (95) | 582 |
Changes in investment gains and losses | (602) | |
Share-based compensation | 4,989 | 3,770 |
Change in operating assets and liabilities: | ||
Accounts receivable | (805) | (1,424) |
Inventory | (1,510) | (2,948) |
Prepaid expenses and other | (1,312) | (454) |
Accounts payable and accrued expenses | 816 | 839 |
Operating lease obligations | (846) | |
Cash paid for interest portion of finance leases | (2) | |
Contract and other liabilities | (12) | (31) |
Net cash used in operating activities | (14,678) | (9,920) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (1,685) | (654) |
Proceeds from sale of investments | 98,871 | |
Purchase of investments | (84,142) | |
Cash payments for intangible assets | (280) | (260) |
Net cash provided by / (used for) investing activities | 12,764 | (914) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 132,963 | |
Cash paid for equity offering | (257) | |
Borrowing on revolving loan | 26,253 | |
Payments on revolving loan and prepayment penalties | (30,489) | |
Repayments of long-term debt and prepayment penalties | (22,492) | |
Cash paid for debt portion of finance leases | (17) | |
Proceeds from exercise of stock options | 2,515 | 1,911 |
Net cash provided by financing activities | 2,498 | 107,889 |
Net increase in cash, cash equivalents, and restricted cash | 584 | 97,055 |
Cash, cash equivalents, and restricted cash, beginning of period | 30,294 | 36,507 |
Cash, cash equivalents and restricted cash, end of period | 30,878 | 133,562 |
Supplemental disclosures of cash flow activity: | ||
Cash paid for interest | 25 | $ 1,328 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Acquisition of fixed assets in accounts payable and accrued expenses | 567 | |
Right-of-use asset and operating lease liability | $ 26 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Beginning Balance at Dec. 31, 2017 | $ 343 | $ 153,168 | $ (128,329) | $ 25,182 |
Increase (Decrease) in Stockholders' Equity | ||||
Net Loss | (13,066) | (13,066) | ||
Issuance of common stock | 35 | 132,671 | 132,706 | |
Stock-based compensation | 3,770 | 3,770 | ||
Exercise of stock options and employee stock purchase plan | 5 | 1,906 | 1,911 | |
Ending Balance at Jun. 30, 2018 | 383 | 291,515 | (141,395) | 150,503 |
Beginning Balance at Mar. 31, 2018 | 346 | 155,313 | (133,968) | 21,692 |
Increase (Decrease) in Stockholders' Equity | ||||
Net Loss | (7,428) | (7,428) | ||
Issuance of common stock | 35 | 132,671 | 132,706 | |
Stock-based compensation | 2,041 | 2,041 | ||
Exercise of stock options | 2 | 1,490 | 1,492 | |
Ending Balance at Jun. 30, 2018 | 383 | 291,515 | (141,395) | 150,503 |
Beginning Balance at Dec. 31, 2018 | 389 | 297,319 | (150,726) | 146,982 |
Increase (Decrease) in Stockholders' Equity | ||||
Net Loss | (16,526) | (16,526) | ||
Stock-based compensation | 4,989 | 4,989 | ||
Exercise of stock options and employee stock purchase plan | 4 | 2,511 | 2,515 | |
Ending Balance at Jun. 30, 2019 | 393 | 304,819 | (167,252) | 137,960 |
Beginning Balance at Mar. 31, 2019 | 391 | 300,582 | (160,229) | 140,744 |
Increase (Decrease) in Stockholders' Equity | ||||
Net Loss | (7,023) | (7,023) | ||
Stock-based compensation | 2,674 | 2,674 | ||
Exercise of stock options | 2 | 1,563 | 1,565 | |
Ending Balance at Jun. 30, 2019 | $ 393 | $ 304,819 | $ (167,252) | $ 137,960 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2019 | |
Basis of Presentation | |
Basis of Presentation | 1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company as of June 30, 2019 and December 31, 2018 and for the three and six-month periods ended June 30, 2019 and 2018. The Company’s condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X, and therefore, do not include all information and footnotes necessary for a fair presentation of consolidated financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2018, which are included in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2018. 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 intercompany accounts and transactions have been eliminated in consolidation. The 2018 provision for inventory write-downs of $582 has been reclassified and separately presented within the operating section of the statement of cash flows to conform to the 2019 presentation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Leases We adopted ASU No. 2016-02—Leases (Topic 842), as of January 1, 2019, (the “Application Date”) using the modified retrospective approach. We will continue to report financial information for fiscal years prior to 2019 under the previous lease accounting standards. The modified retrospective approach provides a method for recording on the balance sheet as of January 1, 2019, leases that have commenced on or before the Application Date. We elected the package of practical expedients permitted under the transition guidance, which allowed us to not reassess whether any existing contracts contain a lease, to not reassess historical lease classification as operating or finance leases, and to not reassess initial direct costs. We also elected the practical expedient allowing us to not separate the lease and non-lease components for all classes of underlying assets, apart from equipment. We did not elect the practical expedient to use hindsight to determine the lease term for leases at January 1, 2019. We made an accounting policy election to not recognize right-to-use assets and lease liabilities that arise from short term leases, which are defined as leases with a lease term of 12 months or less at the lease commencement date. Adoption of the new standard resulted in the recording of right-to-use assets and lease liabilities of approximately $3,786 and $3,823, respectively, and the derecognition of capital lease assets, capital lease liabilities, and operating lease deferred rent of $96, $63, and $70, respectively, as of January 1, 2019 with zero cumulative-effect adjustment to retained earnings. The new standard did not materially impact our consolidated net earnings. Share Based Payment Arrangements On January 1, 2019, we adopted ASU No. 2018-07, which supersedes ASC 505-50 and expands the scope of ASC 718 to include all share-based payment arrangements related to the acquisition of goods and services from both nonemployees and employees. As result, most of the guidance in ASC 718 associated with employee share-based payments, including most of its requirements related to classification and measurement, applies to nonemployee share-based payment arrangements. This standard did not have a material impact on our consolidated financial statements. Revenue Recognition On January 1, 2018, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 606, Revenue from Contracts with Customers, utilizing the modified retrospective method applied to contracts that were not completed. The Company enters into contracts to sell and distribute products and services to hospitals and surgical facilities for use in caring for patients with peripheral nerve damage or transection. Revenue is recognized when the Company has met its performance obligations pursuant to its contracts with its customers in an amount that the Company expects to be entitled to in exchange for the transfer of control of the products and services to the Company’s customers. In the case of products or services sold to a customer under a distribution or purchase agreement, the Company has no further performance obligations and revenue is recognized at the point control transfers which occurs either when: i) the product is shipped via common carrier; or ii) the product is delivered to the customer or distributor, in accordance with the terms of the agreement. A portion of the Company's product revenue is generated from consigned inventory maintained at hospitals and independent sales agencies, and also from inventory physically held by field sales representatives. For these types of product sales, the Company retains control until the product has been used or implanted, at which time revenue is recognized. The Company elected to account for shipping and handling activities as a fulfillment cost rather than a separate performance obligation. Amounts billed to customers for shipping and handling are included as part of the transaction price and recognized as revenue when control of the underlying products is transferred to the customer. The related shipping and freight charges incurred by the Company are included in the cost of sales. The Company operates in a single reportable segment of peripheral nerve repair, offers similar products to its customers, and enters into consistently structured arrangements with similar types of customers. As such, the Company does not disaggregate revenue from contracts with customers as the nature, amount, timing and uncertainty of revenue and cash flows does not materially differ within and among the contracts with customers. The contract with the customer states the final terms of the sale, including the description, quantity, and price of each implant distributed. The payment terms and conditions in the Company’s contracts vary; however, as a common business practice, payment terms are typically due in full within 30 to 60 days of delivery. Since the customer agrees to a stated price in the contract that does not vary over the contract term, the contracts do not contain any material types of variable consideration, and contractual rights of return are not material. The Company has several contracts with distributors in international markets which include consideration paid to the customer in exchange for distinct marketing and other services. The Company records such consideration paid to the customer as a reduction to revenue from the contracts with those distributor customers. In connection with our AcroVal ® Neurosensory and Motor Testing System, the Company sells extended warranty and service packages to some of its customers who purchase this evaluation and measurement tool, and the prepayment of these extended warranties represent contract liabilities until the performance obligations are satisfied ratably over the term of the contract. The sale of the aforementioned extended warranty represents the only performance obligation the Company satisfies over time and creates the contract liability disclosed below. The opening and closing balances of the Company’s contract receivables and liabilities are as follows: Contract Balances Net Receivables Contract Liabilities, Current Contract Liabilities, Long-Term Opening, January 1, 2018 $ 11,065 31 68 Closing, June 30, 2018 12,359 27 55 Increase (decrease) 1,294 (4) (13) Opening, January 1, 2019 $ 15,321 18 42 Closing, June 30, 2019 16,285 19 29 Increase (decrease) 964 1 (13) Loss Per Share of Common Stock Basic and diluted net loss per share is computed in accordance with FASB ASC No. 260, Earnings Per Share, by dividing the net loss by the weighted average number of common shares outstanding during the period. Since the Company has experienced net losses for all periods presented, options and awards of 1,712,834 and 3,099,606 which were outstanding as of June 30, 2019 and 2018, respectively, were not included in the computation of diluted EPS because they are anti-dilutive. |
Recently Issued Standards to be
Recently Issued Standards to be Adopted | 6 Months Ended |
Jun. 30, 2019 | |
Recently Issued Standards to be Adopted | |
Recently Issued Standards to be Adopted | 3. Recently Issued Standards to be Adopted Fair Value Measurements In August 2018, the FASB issued ASU 2018-13, Fair Value Measurements (Topic 820) Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 changes the fair value measurement disclosure requirements of ASC 820, “Fair Value Measurement” by adding, eliminating, and modifying certain disclosure requirements. ASU 2018-13 is effective for all entities for fiscal years beginning after December 15, 2019 and requires application of the prospective method of transition. The Company is currently assessing the impact the guidance will have on its consolidated financial statements. Financial Instruments – Credit Losses In May 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging and Topic 825, Financial Instruments. ASU 2019-04 clarifies certain aspects of accounting for credit losses, hedging activities, and financial instruments. This update is effective fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the impact the guidance will have on its consolidated financial statements. In May 2019, the FASB issued ASU No. 2019-05, Targeted Transition Relief. ASU 2019-05 provides transition relief for entities adopting ASU 2016-13, Measurement of Credit Losses on Financial Instruments. The amendment allows entities to irrevocably elect, upon adoption of ASU 2016-13, the fair value option on financial instruments that (1) were previously recorded at amortized costs and (2) are within the scope of ASC 326-20, Financial Instruments – Credit Losses: Measured at Amortized Costs, if the instruments are eligible for the fair value option under ASC 825-10, Financial Instruments: Overall. . This update is effective fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the impact the guidance will have on its consolidated financial statements. 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 | 6 Months Ended |
Jun. 30, 2019 | |
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 net realizable value and consist of the following: June 30, December 31, 2019 2018 Finished goods $ 10,367 $ 9,194 Work in process 558 454 Raw materials 2,662 2,334 Inventories $ 13,587 $ 11,982 For the six months ended June 30, 2019 and 2018, the Company had adjustments to the provision for inventory write downs of ($95) and $582 respectively. |
Fair Value of Investments
Fair Value of Investments | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value of Investments | |
Fair Value of Investments | 5. Fair Value of Investments The Company has elected the Fair Value Option for all investments in debt securities. Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy defines a three-level valuation hierarchy for classification and disclosure of fair value measurements as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company classifies cash equivalents and investments according to the hierarchy of techniques used to determine fair value based on the types of inputs. The following table represents the Company’s fair value hierarchy for its financial assets measured at fair value on a recurring basis as of June 30, 2019: (Level 1) (Level 2) (Level 3) Total June 30, 2019 Assets: Money market funds $ 13,421 $ — $ — $ 13,421 U.S. government securities 14,943 — — 14,943 Corporate bonds — 16,089 — 16,089 Commercial paper — 31,977 — 31,977 Asset-backed securities — 15,176 — 15,176 Total assets $ 28,364 $ 63,242 $ — $ 91,606 (Level 1) (Level 2) (Level 3) Total December 31, 2018 Assets: Money market funds $ 12,947 $ — $ — $ 12,947 U.S. government securities 15,923 — — 15,923 Corporate bonds — 31,495 — 31,495 Commercial paper — 27,869 — 27,869 Asset-backed securities — 17,025 — 17,025 Total assets $ 28,870 $ 76,389 $ — $ 105,259 There were no changes in the levels or methodology of the measurement of financial assets or liabilities during the three months ended June 30, 2019. The maturity date of the Company’s investments is less than one year. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2019 | |
Property and Equipment | |
Property and Equipment | 6. Property and Equipment Property and equipment consist of the following: June 30, December 31, 2019 2018 Furniture and equipment $ 1,936 $ 1,763 Leasehold improvements 1,276 1,151 Processing equipment 2,654 2,349 Land 731 731 Projects in process 6,430 4,906 Property and equipment, at cost 13,027 10,900 Less: accumulated depreciation and amortization (3,270) (2,861) Property and equipment, net $ 9,757 $ 8,039 Depreciation expense for the three months ended June 30, 2019 and 2018 was $228 and $195 , respectively. Depreciation expense for the six months ended June 30, 2019 and 2018 was |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2019 | |
Intangible Assets | |
Intangible Assets | 7. Intangible Assets The Company’s intangible assets consist of the following: June 30, December 31, 2019 2018 License agreements $ 1,046 $ 1,034 Less: accumulated amortization (600) (553) License agreements, net $ 446 $ 481 Patents 1,022 755 Less: accumulated amortization (64) (55) Patents, net $ 958 $ 700 Intangible assets, net $ 1,404 $ 1,181 License agreements are being amortized over periods ranging from 17-20 years. Patent costs are being amortized over periods up to 20 years. Amortization expense was approximately $30 and $20 for the three months ended June 30, 2019 and 2018, respectively and $56 and $40 for the six months ended June 30, 2019 and 2018, respectively. As of June 30, 2019, future amortization of license agreements and patents is $63 for remainder of 2019, $127 for 2020 through 2023, and $434 thereafter. 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 $12.5 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 milestone fee of $15 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 $125 is due if Axogen receives FDA approval of its Avance Nerve Graft, a milestone fee of $25 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 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 $547 and $399 during the three months ended June 30, 2019 and 2018, respectively, and approximately $996 and $754 during the six months ended June 30, 2019 and 2018, 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 | 6 Months Ended |
Jun. 30, 2019 | |
Accounts Payable and Accrued Expenses | |
Accounts Payable and Accrued Expenses | 8. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consist of the following: June 30, December 31, 2019 2018 Accounts payable $ 5,681 $ 4,517 Accrued expenses 3,175 2,004 Accrued compensation 5,526 6,477 Accounts Payable and Accrued Expenses $ 14,382 $ 12,998 |
Long Term Obligations
Long Term Obligations | 6 Months Ended |
Jun. 30, 2019 | |
Long Term Obligations | |
Long Term Obligations | 9. Long Term Obligations Long Term Obligations consist of the following: June 30, December 31, 2019 2018 Term Loan Agreement $ — $ — Revolving Loan Agreement — — Capital Lease Obligations — 63 Operating & Finance Lease Obligations 4,213 — Total 4,213 63 Less current maturities of long-term obligations (1,832) (28) Long-term portion $ 2,381 $ 35 On October 25, 2016, the Company entered into Term Loan and a Revolving Loan with MidCap Financial Trust (“MidCap”) maturing on May 1, 2021. Interest on the Term Loan was payable monthly at 8.0% per annum plus the greater of LIBOR or 0.5%. Interest on the Revolving Loan was payable monthly at 4.5% per annum plus the greater of LIBOR or 0.5% on outstanding advances. The Company had the option at any time to prepay the Term Loan in whole or in part, subject to payment of a prepayment fee and an exit fee. On May 22, 2018, the Company exercised its option and paid The Company also had the option to terminate or permanently reduce the Revolving Loan prior to the maturity date subject to its payment of a deferred origination fee. On May 22, 2018, the Company exercised its option to terminate and paid $3,000 to prepay the Revolving Loan in full, which amount included pre-payment fees of $236. |
Stock Incentive Plan
Stock Incentive Plan | 6 Months Ended |
Jun. 30, 2019 | |
Stock Incentive Plan | |
Stock Incentive Plan | 10. 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 (“PSUs”) and restricted stock units (“RSUs”) to employees, directors and consultants at exercise prices not less than the fair market value at the date of grant. 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 shares. As of June 30, 2019, 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 the Company’s common stock through payroll deductions at a discount from market value. The 2017 ESPP authorized a total of shares of the Company’s common stock to be provided under the plan. As of June 30, 2019, The options granted to employees prior to July 1, 2017 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. . The options granted to directors and certain options granted from time to time to certain executive officers have vested ratably over The Company recognized stock-based compensation expense, which consisted of compensation expense related to employee stock options, PSUs, RSUs and the 2017 ESPP based on the value of share-based payment awards that are ultimately expected to vest during the period, of approximately $2,674 and $2,041 for the three months ended June 30, 2019 and 2018, respectively and approximately $4,989 and $3,770 for the six months ended June 30, 2019 and 2018, respectively. The Company estimates the fair value of each option award issued under such plans on the date of grant 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 of each award giving consideration to the contractual terms, vesting schedules and post-vesting forfeitures. The Company uses the risk-free interest rate on the implied yield currently available on U.S. Treasury issues with an equivalent remaining term approximately equal to the expected life of the award. The Company used the following weighted-average assumptions for options granted during the periods indicated: Six months ended June 30, 2019 2018 Expected term (in years) 5.76 6.22 Expected volatility 53.90 % 49.74 % Risk free rate 1.87 % 2.55 % Expected dividends — % — % The Company granted stock-based awards for 285,091 shares of its common stock pursuant to the Axogen Plan during the six months ended June 30, 2019. The weighted average fair value of the awards granted at market during the six months ended June 30, 2019 and 2018 was At June 30, 2019, the total future stock compensation expense related to non-vested awards is expected to be approximately $23,180. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Taxes | |
Income Taxes | 11. 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, 2015 through 2018. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | 12. Commitments and Contingencies Leases We lease office space, medical lab and research space, a distribution center, a tissue processing center and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Certain of our leases include options for the Company to extend the lease term. None of the options were reasonably certain of exercise and therefore are not included in the measure of our lease obligations and right-to-use assets. Certain of our lease agreements include provisions for the Company to reimburse the lessor for common area maintenance, real estate taxes, and insurance, which the Company accounts for as variable lease costs. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The components of total lease expense for the three months ended June 30, 2019 were as follows: Amount For the Three months Ended June 30, 2019: Finance lease costs Amortization of right-to-use assets $ 6 Interest on lease liabilities 2 Operating lease costs 475 Short term lease costs 4 Variable lease costs 14 Total lease cost $ 501 For the Six Months Ended June 30, 2019: Finance lease costs Amortization of right-to-use assets $ 11 Interest on lease liabilities 2 Operating lease costs 964 Short term lease costs 16 Variable lease costs 15 Total lease cost $ 1,008 The short-term lease cost shown above reasonably reflects the Company’s ongoing short-term lease commitment. Supplemental balance sheet information related to leases as of June 30, 2019 was as follows: Amount Operating Leases Operating lease right-of-use assets $ 4,051 Current maturities of long-term obligations $ 1,810 Long term obligations $ 2,345 Finance Leases Finance lease right-of-use assets $ 99 Current maturities of long-term obligations $ 22 Long term obligations $ 36 Other information related to leases was as follows: Amount Cash paid for amounts included in the measurement of operating lease liabilities $ 949 Right-to-use assets obtained in exchange for new finance lease liabilities $ 15 Weighted-average remaining lease term - finance leases 3.22 Yrs Weighted-average remaining lease term - operating leases 2.31 Yrs Weighted-average discount rate - finance leases 7.09% Weighted-average discount rate - operating leases 6.28% The weighted-average discount rate for the majority of the Company’s leases is based on the Company’s estimated incremental borrowing rate since the rates implicit in the leases were not determinable. The Company’s incremental borrowing rate is based on Management’s estimate of the rate of interest the Company would have to pay to borrow on a fully collateralized basis over a similar term an amount equal to the lease payments. Future minimum lease payments under non-cancellable leases as of June 30, 2019 were as follows: Operating Finance Year Ending December 31, Leases Leases 2019 (excluding six months ended June 30, 2019) $ 985 $ 13 2020 2,664 19 2021 4,007 19 2022 2,573 10 2023 2,581 3 2024 2,644 1 Thereafter 27,251 — Total Future Minimum Lease Payments $ 42,705 $ 65 Less future payments for leases that have not yet commenced (38,246) — Less imputed interest on commenced leases (304) (7) Total Lease Liability $ 4,155 $ 58 The lease for office space in Tampa, Florida with Heights Union, LLC, a Florida limited liability company, has not commenced and is therefore not included in the measurement of right-to-use assets and lease liabilities. As previously disclosed in our 2018 Annual Report on Form 10-K, which followed the lease accounting guidance prior to our adoption of ASC 842, future commitments relating to noncancelable operating and capital leases as of December 31, 2018 were as follows: Year Ending December 31, Operating Capital 2019 1,866 28 2020 2,540 13 2021 3,970 15 2022 2,518 7 2023 2,574 — Thereafter 30,111 — Total $ 43,579 $ 63 Rent expense for the three months and six months ended June 30, 2018 was $109 and $224, respectively. Service Agreements On August 6, 2015, the Company entered into a License and Services Agreement (the “CTS 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 initially had a term ending August 31, 2020. On February 22, 2019, the agreement was amended to extend the term through December 31, 2021. The amendment also gives the Company the right to terminate the agreement on or after March 1, 2021 with six-months advance notice. Under the CTS Agreement, the Company pays CTS a facility fee for use of clean room/manufacturing, storage and office space, which the Company accounts for as an embedded lease in accordance with ASC 842, “Leases”. The Company also pays CTS for services in support of its manufacturing process such as for routine sterilization of daily supplies, providing disposable supplies, microbial services and office support. During the three months ended June 30, 2019 and 2018, the Company paid fees to CTS of approximately In August 2008, the Company entered into an agreement with Cook Biotech to distribute the Axoguard products worldwide in the field of peripheral nerve repair, and the parties subsequently amended the agreement on February 26, 2018. Pursuant to the February 2018 amendment, the agreement expires on June 30, 2027. The Cook Biotech agreement 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 Certain executive officers of the Company are parties to employment contracts. Such contracts have severance payments for certain conditions including change of control. Concentrations Vendor Substantially all of Axogen’s revenue is currently derived from four products, Avance Nerve Graft, Axoguard Nerve Protector, Axoguard Nerve Connector and Avive Soft Tissue Membrane. Axogen has an exclusive distribution agreement with Cook Biotech for the purchase of Axoguard which expires June 30, 2027. The agreement with Cook Biotech requires certain minimum purchases by Axogen, 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. The agreement allows for termination provisions for both parties. Although there are products that Axogen believes it could develop or obtain that would replace the Axoguard products, the loss of the ability to sell the Axoguard products could have a material adverse effect on Axogen’s business until other replacement products would be available. Processor Axogen is highly dependent on the continued availability of its processing facilities at CTS in Dayton Ohio and could be harmed if the physical infrastructure of this facility is unavailable for any prolonged period of time. In addition, disruptions could lead to significant costs and reductions in revenues, as well as a potential harm to Axogen’s business reputation and financial results. In the event of disruption, Axogen believes it can find and make operational a new leased facility in less than six months, but the regulatory process for approval of facilities is time-consuming and unpredictable. Axogen’s ability to rebuild or find acceptable lease facilities could take a considerable amount of time and expense and could cause a significant disruption in service to its customers. Although Axogen has business interruption insurance, which would cover certain costs, it may not cover all costs nor help to regain Axogen’s standing in the market. In July 2018, Axogen purchased a facility (the “APC”) in Vandalia, Ohio, located near the CTS processing facility where Avance Nerve Graft and Avive Soft Tissue Membrane are currently processed. The APC, when and if operational, will be biologic product. The APC On July 9, 2019, Axogen entered into a Standard Form of Agreement Between Owner and Design-Builder (the “Design-Build Agreement”) with CRB Builders, L.L.C., a Missouri limited liability company (“CRB”), pursuant to which CRB will renovate and retrofit the APC. The Design-Build Agreement contains several design phase milestones beginning in July 2019 and sets the date for Substantial Completion (as defined in the Design-Build Agreement) in the third quarter of 2020, subject to adjustment in accordance with the terms of the Design-Build Agreement. The estimated cost pursuant to the Design-Build Agreement is $29,000,000. Additional costs associated with the renovation, purchasing of furniture and equipment, validation and certification of the APC are estimated to be $13,000,000. These capital expenditure costs will be incurred as they arise until the anticipated full transition of material processing to the APC by early 2022. Axogen expects to receive certain economic development grants from state and local authorities totaling up to $2.7 million including $1.3 million of cash grants to offset costs to acquire and develop the APC. The economic development grants are subject to certain job creation milestones by 2023 and related contingencies. Litigation On January 9, 2019, Plaintiff Neil Einhorn, on behalf of himself and others similarly situated, filed a putative class action complaint in the United Stated District Court for the Middle District of Florida alleging violations of the federal securities laws against Axogen, Inc., certain of its directors and officers (“Individual Defendants”), and Axogen’s 2017 Offering Underwriters and 2018 Offering Underwriters (collectively, with the Individual Defendants, the “Defendants”), captioned Einhorn v. Axogen, Inc., et al., No. 8:19-cv-00069 (M.D. Fla.). Plaintiff asserts that Defendants made false or misleading statements in connection with the Company’s November 2017 registration statement issued regarding its secondary public offering in November 2017 and May 2018 registration statement issued regarding its secondary public offering in May 2018, and during a class period of August 7, 2017 to December 18, 2018. In particular, Plaintiff asserts that Defendants issued false and misleading statements and failed to disclose to investors: (1) that the Company aggressively increased prices to mask lower sales; (2) that the Company’s pricing alienated customers and threatened the Company’s future growth; (3) that ambulatory surgery centers form a significant part of the market for the Company’s products; (4) that such centers were especially sensitive to price increases; (5) that the Company was dependent on a small number of surgeons whom the Company paid to generate sales; (6) that the Company’s consignment model for inventory was reasonably likely to lead to channel stuffing; (7) that the Company offered purchase incentives to sales representatives to encourage channel stuffing; (8) that the Company’s sales representatives were encouraged to backdate revenue to artificially inflate metrics; (9) that the Company lacked adequate internal controls to prevent such channel stuffing and backdating of revenue; (10) that the Company’s key operating metrics, such as number of active accounts, were overstated; and (11) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis. Axogen was served on January 15, 2019. On February 4, 2019, the court granted the parties’ stipulated motion which provided that Axogen is not required to file a response to the complaint until thirty days after Plaintiff files a consolidated amended complaint. On June 19, 2019, Plaintiff filed an Amended Class Action Complaint, and on July 22, 2019, Defendants filed a motion to dismiss. Plaintiff must file opposing papers by August 12, 2019. The parties must also meet and confer by August 19, 2019 for the purposes of filing a Case Management Report by September 2, 2019. On or before On February 4, 2019, a complaint in Jerry Espinoza, Jr., et al. v. Megan M. Hess, et al. (2019-cv-30016) was filed in the District Court, Montrose County, Colorado. Plaintiffs, who are relatives of decedents, allege that Axogen purchased specimens from a vendor who failed to obtain consent before procuring the specimen from four decedents. Against Axogen, Plaintiffs allege claims of: (1) outrageous conduct; (2) unjust enrichment; (3) negligence; (4) negligence per se; (5) aiding and abetting; (6) civil conspiracy; and (7) violation of the Colorado Organized Crime Control Act. Plaintiffs seek compensatory damages for emotional distress and anxiety. Axogen was served with the complaint on February 13, 2019. The Company disputes the allegations and intends to vigorously defend against the complaint. On June 30, 2019, the law firm representing Plaintiffs in the Jerry Espinoza, Jr. matter filed a nearly identical complaint on behalf of additional Plaintiffs in the same Montrose County, Colorado District Court. That action is captioned, Lisa Wabel, et al. v. Megan M. Hess, et al. (2019-cv-30071). The claims alleged against Axogen in the Wabel complaint are nearly identical to the claims alleged in the Espinoza matter. Axogen was served with the complaint effective on July 17, 2019. The Company disputes the allegations and intends to vigorously defend against the complaint. |
Retirement Plan
Retirement Plan | 6 Months Ended |
Jun. 30, 2019 | |
Retirement Plan | |
Retirement Plan | 13. Retirement Plan Axogen 401(k) Plan The Company sponsors the Axogen 401(k) plan (the “401(k) Plan”), a defined contribution plan covering substantially all employees of the Company. 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. Employer contributions to the 401(k) Plan for the three months ended June 30, 2019 and 2018 were approximately |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Summary of Significant Accounting Policies | |
Leases | Leases We adopted ASU No. 2016-02—Leases (Topic 842), as of January 1, 2019, (the “Application Date”) using the modified retrospective approach. We will continue to report financial information for fiscal years prior to 2019 under the previous lease accounting standards. The modified retrospective approach provides a method for recording on the balance sheet as of January 1, 2019, leases that have commenced on or before the Application Date. We elected the package of practical expedients permitted under the transition guidance, which allowed us to not reassess whether any existing contracts contain a lease, to not reassess historical lease classification as operating or finance leases, and to not reassess initial direct costs. We also elected the practical expedient allowing us to not separate the lease and non-lease components for all classes of underlying assets, apart from equipment. We did not elect the practical expedient to use hindsight to determine the lease term for leases at January 1, 2019. We made an accounting policy election to not recognize right-to-use assets and lease liabilities that arise from short term leases, which are defined as leases with a lease term of 12 months or less at the lease commencement date. Adoption of the new standard resulted in the recording of right-to-use assets and lease liabilities of approximately $3,786 and $3,823, respectively, and the derecognition of capital lease assets, capital lease liabilities, and operating lease deferred rent of $96, $63, and $70, respectively, as of January 1, 2019 with zero cumulative-effect adjustment to retained earnings. The new standard did not materially impact our consolidated net earnings. |
Share Based Payment Arrangements | Share Based Payment Arrangements On January 1, 2019, we adopted ASU No. 2018-07, which supersedes ASC 505-50 and expands the scope of ASC 718 to include all share-based payment arrangements related to the acquisition of goods and services from both nonemployees and employees. As result, most of the guidance in ASC 718 associated with employee share-based payments, including most of its requirements related to classification and measurement, applies to nonemployee share-based payment arrangements. This standard did not have a material impact on our consolidated financial statements. |
Revenue Recognition | Revenue Recognition On January 1, 2018, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 606, Revenue from Contracts with Customers, utilizing the modified retrospective method applied to contracts that were not completed. The Company enters into contracts to sell and distribute products and services to hospitals and surgical facilities for use in caring for patients with peripheral nerve damage or transection. Revenue is recognized when the Company has met its performance obligations pursuant to its contracts with its customers in an amount that the Company expects to be entitled to in exchange for the transfer of control of the products and services to the Company’s customers. In the case of products or services sold to a customer under a distribution or purchase agreement, the Company has no further performance obligations and revenue is recognized at the point control transfers which occurs either when: i) the product is shipped via common carrier; or ii) the product is delivered to the customer or distributor, in accordance with the terms of the agreement. A portion of the Company's product revenue is generated from consigned inventory maintained at hospitals and independent sales agencies, and also from inventory physically held by field sales representatives. For these types of product sales, the Company retains control until the product has been used or implanted, at which time revenue is recognized. The Company elected to account for shipping and handling activities as a fulfillment cost rather than a separate performance obligation. Amounts billed to customers for shipping and handling are included as part of the transaction price and recognized as revenue when control of the underlying products is transferred to the customer. The related shipping and freight charges incurred by the Company are included in the cost of sales. The Company operates in a single reportable segment of peripheral nerve repair, offers similar products to its customers, and enters into consistently structured arrangements with similar types of customers. As such, the Company does not disaggregate revenue from contracts with customers as the nature, amount, timing and uncertainty of revenue and cash flows does not materially differ within and among the contracts with customers. The contract with the customer states the final terms of the sale, including the description, quantity, and price of each implant distributed. The payment terms and conditions in the Company’s contracts vary; however, as a common business practice, payment terms are typically due in full within 30 to 60 days of delivery. Since the customer agrees to a stated price in the contract that does not vary over the contract term, the contracts do not contain any material types of variable consideration, and contractual rights of return are not material. The Company has several contracts with distributors in international markets which include consideration paid to the customer in exchange for distinct marketing and other services. The Company records such consideration paid to the customer as a reduction to revenue from the contracts with those distributor customers. In connection with our AcroVal ® Neurosensory and Motor Testing System, the Company sells extended warranty and service packages to some of its customers who purchase this evaluation and measurement tool, and the prepayment of these extended warranties represent contract liabilities until the performance obligations are satisfied ratably over the term of the contract. The sale of the aforementioned extended warranty represents the only performance obligation the Company satisfies over time and creates the contract liability disclosed below. The opening and closing balances of the Company’s contract receivables and liabilities are as follows: |
Loss Per Share of Common Stock | Loss Per Share of Common Stock Basic and diluted net loss per share is computed in accordance with FASB ASC No. 260, Earnings Per Share, by dividing the net loss by the weighted average number of common shares outstanding during the period. Since the Company has experienced net losses for all periods presented, options and awards of 1,712,834 and 3,099,606 which were outstanding as of June 30, 2019 and 2018, respectively, were not included in the computation of diluted EPS because they are anti-dilutive. |
Recently Issued Standards to be Adopted | Recently Issued Standards to be Adopted Fair Value Measurements In August 2018, the FASB issued ASU 2018-13, Fair Value Measurements (Topic 820) Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 changes the fair value measurement disclosure requirements of ASC 820, “Fair Value Measurement” by adding, eliminating, and modifying certain disclosure requirements. ASU 2018-13 is effective for all entities for fiscal years beginning after December 15, 2019 and requires application of the prospective method of transition. The Company is currently assessing the impact the guidance will have on its consolidated financial statements. Financial Instruments – Credit Losses In May 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging and Topic 825, Financial Instruments. ASU 2019-04 clarifies certain aspects of accounting for credit losses, hedging activities, and financial instruments. This update is effective fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the impact the guidance will have on its consolidated financial statements. In May 2019, the FASB issued ASU No. 2019-05, Targeted Transition Relief. ASU 2019-05 provides transition relief for entities adopting ASU 2016-13, Measurement of Credit Losses on Financial Instruments. The amendment allows entities to irrevocably elect, upon adoption of ASU 2016-13, the fair value option on financial instruments that (1) were previously recorded at amortized costs and (2) are within the scope of ASC 326-20, Financial Instruments – Credit Losses: Measured at Amortized Costs, if the instruments are eligible for the fair value option under ASC 825-10, Financial Instruments: Overall. . This update is effective fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the impact the guidance will have on its consolidated financial statements. 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. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Summary of Significant Accounting Policies | |
Schedule of balances of contract receivables and liabilities | Contract Balances Net Receivables Contract Liabilities, Current Contract Liabilities, Long-Term Opening, January 1, 2018 $ 11,065 31 68 Closing, June 30, 2018 12,359 27 55 Increase (decrease) 1,294 (4) (13) Opening, January 1, 2019 $ 15,321 18 42 Closing, June 30, 2019 16,285 19 29 Increase (decrease) 964 1 (13) |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Inventories | |
Schedule of inventories | June 30, December 31, 2019 2018 Finished goods $ 10,367 $ 9,194 Work in process 558 454 Raw materials 2,662 2,334 Inventories $ 13,587 $ 11,982 |
Fair Value of Investments (Tabl
Fair Value of Investments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value of Investments | |
Summary of fair value financial assets measured on a recurring basis | (Level 1) (Level 2) (Level 3) Total June 30, 2019 Assets: Money market funds $ 13,421 $ — $ — $ 13,421 U.S. government securities 14,943 — — 14,943 Corporate bonds — 16,089 — 16,089 Commercial paper — 31,977 — 31,977 Asset-backed securities — 15,176 — 15,176 Total assets $ 28,364 $ 63,242 $ — $ 91,606 (Level 1) (Level 2) (Level 3) Total December 31, 2018 Assets: Money market funds $ 12,947 $ — $ — $ 12,947 U.S. government securities 15,923 — — 15,923 Corporate bonds — 31,495 — 31,495 Commercial paper — 27,869 — 27,869 Asset-backed securities — 17,025 — 17,025 Total assets $ 28,870 $ 76,389 $ — $ 105,259 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Property and Equipment | |
Schedule of property and equipment | June 30, December 31, 2019 2018 Furniture and equipment $ 1,936 $ 1,763 Leasehold improvements 1,276 1,151 Processing equipment 2,654 2,349 Land 731 731 Projects in process 6,430 4,906 Property and equipment, at cost 13,027 10,900 Less: accumulated depreciation and amortization (3,270) (2,861) Property and equipment, net $ 9,757 $ 8,039 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Intangible Assets | |
Schedule of intangible assets | June 30, December 31, 2019 2018 License agreements $ 1,046 $ 1,034 Less: accumulated amortization (600) (553) License agreements, net $ 446 $ 481 Patents 1,022 755 Less: accumulated amortization (64) (55) Patents, net $ 958 $ 700 Intangible assets, net $ 1,404 $ 1,181 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounts Payable and Accrued Expenses | |
Schedule of accounts payable and accrued expenses | June 30, December 31, 2019 2018 Accounts payable $ 5,681 $ 4,517 Accrued expenses 3,175 2,004 Accrued compensation 5,526 6,477 Accounts Payable and Accrued Expenses $ 14,382 $ 12,998 |
Long Term Obligations (Tables)
Long Term Obligations (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Long Term Obligations | |
Schedule of long term obligations | June 30, December 31, 2019 2018 Term Loan Agreement $ — $ — Revolving Loan Agreement — — Capital Lease Obligations — 63 Operating & Finance Lease Obligations 4,213 — Total 4,213 63 Less current maturities of long-term obligations (1,832) (28) Long-term portion $ 2,381 $ 35 |
Stock Incentive Plan (Tables)
Stock Incentive Plan (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Stock Incentive Plan | |
Schedule of weighted-average assumptions for options granted | Six months ended June 30, 2019 2018 Expected term (in years) 5.76 6.22 Expected volatility 53.90 % 49.74 % Risk free rate 1.87 % 2.55 % Expected dividends — % — % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies | |
Schedule of total lease expense | Amount For the Three months Ended June 30, 2019: Finance lease costs Amortization of right-to-use assets $ 6 Interest on lease liabilities 2 Operating lease costs 475 Short term lease costs 4 Variable lease costs 14 Total lease cost $ 501 For the Six Months Ended June 30, 2019: Finance lease costs Amortization of right-to-use assets $ 11 Interest on lease liabilities 2 Operating lease costs 964 Short term lease costs 16 Variable lease costs 15 Total lease cost $ 1,008 |
Schedule of supplemental balance sheet information related to leases | Amount Operating Leases Operating lease right-of-use assets $ 4,051 Current maturities of long-term obligations $ 1,810 Long term obligations $ 2,345 Finance Leases Finance lease right-of-use assets $ 99 Current maturities of long-term obligations $ 22 Long term obligations $ 36 |
Schedule of other information related to leases | Amount Cash paid for amounts included in the measurement of operating lease liabilities $ 949 Right-to-use assets obtained in exchange for new finance lease liabilities $ 15 Weighted-average remaining lease term - finance leases 3.22 Yrs Weighted-average remaining lease term - operating leases 2.31 Yrs Weighted-average discount rate - finance leases 7.09% Weighted-average discount rate - operating leases 6.28% |
Schedule of future minimum lease payments | Operating Finance Year Ending December 31, Leases Leases 2019 (excluding six months ended June 30, 2019) $ 985 $ 13 2020 2,664 19 2021 4,007 19 2022 2,573 10 2023 2,581 3 2024 2,644 1 Thereafter 27,251 — Total Future Minimum Lease Payments $ 42,705 $ 65 Less future payments for leases that have not yet commenced (38,246) — Less imputed interest on commenced leases (304) (7) Total Lease Liability $ 4,155 $ 58 |
Schedule of commitments relating to noncancelable operating and capital leases prior to adoption of ASC 842 | Year Ending December 31, Operating Capital 2019 1,866 28 2020 2,540 13 2021 3,970 15 2022 2,518 7 2023 2,574 — Thereafter 30,111 — Total $ 43,579 $ 63 |
Basis of Presentation (Details)
Basis of Presentation (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Provision for Inventory Write-Down | |
Reclassification adjustment to prior year amounts | $ 582 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Jun. 30, 2019 | Jun. 30, 2018 |
Right-of-use assets recorded | $ 3,786 | ||
Lease liabilities recorded | $ 3,823 | ||
Derecognition of capital lease assets | $ 96 | ||
Derecognition of capital lease liabilities | 63 | ||
Derecognition of deferred rent | $ 70 | ||
Anti-dilutive securities excluded from computation of net loss per share | 1,712,834 | 3,099,606 | |
Minimum | |||
Age of doubtful accounts | 30 days | ||
Maximum | |||
Age of doubtful accounts | 60 days |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Contract Balances (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Summary of Significant Accounting Policies | ||
Net Receivables, Opening balance | $ 15,321 | $ 11,065 |
Net Receivables, Closing balance | 16,285 | 12,359 |
Increase/(decrease) | 964 | 1,294 |
Contract Liabilities, Current, Opening balance | 18 | 31 |
Contract Liabilities, Current, Closing balance | 19 | 27 |
Increase/(decrease) | 1 | (4) |
Contract Liabilities, Long-Term, Opening balance | 42 | 68 |
Contract Liabilities, Long-Term, Closing balance | 29 | 55 |
Increase/(decrease) | $ (13) | $ (13) |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Inventories | |||
Finished goods | $ 10,367 | $ 9,194 | |
Work in process | 558 | 454 | |
Raw materials | 2,662 | 2,334 | |
Inventories | 13,587 | $ 11,982 | |
Inventory write-downs | $ (95) | $ 582 |
Fair Value of Investments (Deta
Fair Value of Investments (Details) - Recurring - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | $ 91,606 | $ 105,259 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 13,421 | 12,947 |
U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 14,943 | 15,923 |
Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 16,089 | 31,495 |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 31,977 | 27,869 |
Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 15,176 | 17,025 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 28,364 | 28,870 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 13,421 | 12,947 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 14,943 | 15,923 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 63,242 | 76,389 |
Significant Other Observable Inputs (Level 2) | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 16,089 | 31,495 |
Significant Other Observable Inputs (Level 2) | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 31,977 | 27,869 |
Significant Other Observable Inputs (Level 2) | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | $ 15,176 | $ 17,025 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Property and equipment | |||||
Property and equipment, at cost | $ 13,027 | $ 13,027 | $ 10,900 | ||
Less: accumulated depreciation and amortization | (3,270) | (3,270) | (2,861) | ||
Property and equipment, net | 9,757 | 9,757 | 8,039 | ||
Depreciation expense | 228 | $ 195 | 439 | $ 375 | |
Furniture and equipment | |||||
Property and equipment | |||||
Property and equipment, at cost | 1,936 | 1,936 | 1,763 | ||
Leasehold improvements | |||||
Property and equipment | |||||
Property and equipment, at cost | 1,276 | 1,276 | 1,151 | ||
Processing equipment | |||||
Property and equipment | |||||
Property and equipment, at cost | 2,654 | 2,654 | 2,349 | ||
Land | |||||
Property and equipment | |||||
Property and equipment, at cost | 731 | 731 | 731 | ||
Projects in process | |||||
Property and equipment | |||||
Property and equipment, at cost | $ 6,430 | $ 6,430 | $ 4,906 |
Intangible Assets - Components
Intangible Assets - Components of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Intangible assets consist of: | |||||
Intangible assets, net | $ 1,404 | $ 1,404 | $ 1,181 | ||
Cost of goods sold | 4,244 | $ 3,106 | 7,958 | $ 5,818 | |
Amortization of intangible assets | 30 | $ 20 | 56 | $ 40 | |
Future amortization of license agreements | |||||
Remainder of 2019 | 63 | 63 | |||
2020 | 127 | 127 | |||
2021 | 127 | 127 | |||
2022 | 127 | 127 | |||
2023 | 127 | 127 | |||
Thereafter | 434 | ||||
License Agreements | |||||
Intangible assets consist of: | |||||
Finite-lived intangible assets, gross | 1,046 | 1,046 | 1,034 | ||
Less: accumulated amortization | (600) | (600) | (553) | ||
Intangible assets, net | 446 | $ 446 | 481 | ||
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 | 1,022 | $ 1,022 | 755 | ||
Less: accumulated amortization | (64) | (64) | (55) | ||
Intangible assets, net | $ 958 | $ 958 | $ 700 | ||
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 | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Sales and Marketing Expense | ||||
Intangible assets | ||||
Royalty fees included in sales and marketing expense | $ 547,000 | $ 399,000 | $ 996,000 | $ 754,000 |
License Agreements | ||||
Intangible assets | ||||
Notice period for termination of license agreements | 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 | 125,000 | |||
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 _3
Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Accounts Payable and Accrued Liabilities | ||
Accounts payable | $ 5,681 | $ 4,517 |
Accrued expenses | 3,175 | 2,004 |
Accrued compensation | 5,526 | 6,477 |
Accounts Payable and Accrued Expenses | $ 14,382 | $ 12,998 |
Long Term Obligations - Schedul
Long Term Obligations - Schedule of Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Note Payable | ||
Long term obligations | $ 4,213 | $ 63 |
Less current maturities of long-term obligations | (1,832) | (28) |
Long-term portion | 2,381 | 35 |
Capital Lease Obligations | ||
Note Payable | ||
Long term obligations | $ 63 | |
Operating & Finance Lease Obligations [member] | ||
Note Payable | ||
Long term obligations | $ 4,213 |
Long Term Obligations - Narrati
Long Term Obligations - Narrative (Details) - USD ($) $ in Thousands | May 22, 2018 | Oct. 25, 2016 | Jun. 30, 2018 |
Debt Instrument [Line Items] | |||
Repayment of long-term obligations | $ 22,492 | ||
Term Loan Agreement [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | ||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | ||
Repayment of long-term obligations | $ 22,500 | ||
Exit and/or prepayment fees paid | 1,500 | ||
Revolving Loan Agreement [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 4.50% | ||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | ||
Repayment of long-term obligations | 3,000 | ||
Exit and/or prepayment fees paid | $ 236 |
Stock Incentive Plan - Narrativ
Stock Incentive Plan - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | May 24, 2017 | |
Stock Option Disclosures | |||||
Share-based compensation expense | $ 2,674 | $ 2,041 | $ 4,989 | $ 3,770 | |
Granted | 285,091 | ||||
Weighted average estimated grant date fair value per share | $ 19.13 | $ 24.45 | |||
Directors and Officers Stock Options [Member] | Per Quarter, Over One Year | |||||
Stock Option Disclosures | |||||
Vesting percentage | 25.00% | ||||
Vesting period (in years) | 1 year | ||||
Stock Options | |||||
Stock Option Disclosures | |||||
Unrecognized compensation costs related to non-vested stock options and restricted stock awards | $ 23,180 | $ 23,180 | |||
AxoGen 2010 Stock Incentive Plan [Member] | |||||
Stock Option Disclosures | |||||
Shares authorized for issuance | 7,700,000 | ||||
Number of shares available for issuance | 423,094 | 423,094 | |||
AxoGen 2010 Stock Incentive Plan [Member] | Minimum | |||||
Stock Option Disclosures | |||||
Vesting period (in years) | 7 years | ||||
AxoGen 2010 Stock Incentive Plan [Member] | Maximum | |||||
Stock Option Disclosures | |||||
Vesting period (in years) | 10 years | ||||
AxoGen 2010 Stock Incentive Plan [Member] | Stock Options | |||||
Stock Option Disclosures | |||||
Vesting period (in years) | 4 years | ||||
AxoGen 2010 Stock Incentive Plan [Member] | Stock Options | One Year After Grant Date | |||||
Stock Option Disclosures | |||||
Vesting percentage | 25.00% | ||||
Vesting period (in years) | 1 year | ||||
AxoGen 2010 Stock Incentive Plan [Member] | Stock Options | Every Six Months | |||||
Stock Option Disclosures | |||||
Vesting percentage | 12.50% | ||||
Vesting period (in years) | 3 years | ||||
AxoGen 2017 Employee Stock Purchase Plan [Member] | |||||
Stock Option Disclosures | |||||
Shares authorized for issuance | 600,000 | ||||
Number of shares available for issuance | 486,563 | 486,563 | |||
AxoGen 2017 Employee Stock Purchase Plan [Member] | Directors and Officers Stock Options [Member] | |||||
Stock Option Disclosures | |||||
Vesting period (in years) | 3 years | ||||
AxoGen 2017 Employee Stock Purchase Plan [Member] | Stock Options | |||||
Stock Option Disclosures | |||||
Vesting period (in years) | 4 years | ||||
AxoGen 2017 Employee Stock Purchase Plan [Member] | Stock Options | Every Six Months | |||||
Stock Option Disclosures | |||||
Vesting percentage | 12.50% | ||||
Vesting period (in years) | 2 years | ||||
AxoGen 2017 Employee Stock Purchase Plan [Member] | Stock Options | Two Years After Grant Date | |||||
Stock Option Disclosures | |||||
Vesting percentage | 50.00% | ||||
Vesting period (in years) | 2 years |
Stock Incentive Plan - Summary
Stock Incentive Plan - Summary of Weighted-Average Assumptions Used (Details) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Weighted-average assumptions | ||
Expected term (in years) | 5 years 9 months 3 days | 6 years 2 months 19 days |
Expected volatility (as a percent) | 53.90% | 49.74% |
Risk free rate (as a percent) | 1.87% | 2.55% |
Commitments and Contingencies -
Commitments and Contingencies - Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Finance lease costs | ||
Amortization of right-of-use assets | $ 6 | $ 11 |
Interest on lease liabilities | 2 | 2 |
Operating lease costs | 475 | 964 |
Short term lease costs | 4 | 16 |
Variable lease costs | 14 | 15 |
Total lease cost | $ 501 | $ 1,008 |
Commitments and Contingencies_2
Commitments and Contingencies - Supplemental Balance Sheet Information Related to Leases (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Operating Leases | |
Operating lease right-of-use assets | $ 4,051 |
Current maturities of long-term obligations | 1,810 |
Long term obligations | 2,345 |
Finance Leases | |
Finance lease right-of-use assets | 99 |
Current maturities of long-term obligations | 22 |
Long term obligations | $ 36 |
Commitments and Contingencies_3
Commitments and Contingencies - Other Information Related to Leases (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Commitments and Contingencies | |
Cash paid for amounts included in the measurement of operating lease liabilities | $ 949 |
Right-to-use assets obtained in exchange for new finance lease liabilities | $ 15 |
Weighted-average remaining lease term - finance leases | 3 years 2 months 19 days |
Weighted-average remaining lease term - operating leases | 2 years 3 months 21 days |
Weighted-average discount rate - finance leases | 7.09% |
Weighted-average discount rate - operating leases | 6.28% |
Commitments and Contingencies_4
Commitments and Contingencies - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2019 | Dec. 31, 2018 | |
Operating Leases | ||||
2019 (excluding six months ended June 30, 2019) | $ 985 | |||
2020 | 2,664 | |||
2021 | 4,007 | |||
2022 | 2,573 | |||
2023 | 2,581 | |||
2024 | 2,644 | |||
Thereafter | 27,251 | |||
Total Future Minimum Lease Payments | 42,705 | |||
Less future payments for leases that have not yet commenced | (38,246) | |||
Less imputed interest on commenced leases | (304) | |||
Total Lease Liability | 4,155 | |||
Finance Leases | ||||
2019 (excluding six months ended June 30, 2019) | 13 | |||
2020 | 19 | |||
2021 | 19 | |||
2022 | 10 | |||
2023 | 3 | |||
2024 | 1 | |||
Total Future Minimum Lease Payments | 65 | |||
Less imputed interest on commenced leases | (7) | |||
Total Lease Liability | $ 58 | |||
Operating | ||||
2019 | $ 1,866 | |||
2020 | 2,540 | |||
2021 | 3,970 | |||
2022 | 2,518 | |||
2023 | 2,574 | |||
Thereafter | 30,111 | |||
Total | 43,579 | |||
Capital | ||||
2019 | 28 | |||
2020 | 13 | |||
2021 | 15 | |||
2022 | 7 | |||
Total | $ 63 | |||
Rent expense | $ 109 | $ 224 |
Commitments and Contingencies_5
Commitments and Contingencies - Service Agreements (Details) - USD ($) $ in Thousands | Aug. 06, 2015 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2011 |
Service Agreements | ||||||
Term of agreement | 5 years | |||||
Amount required to pay for execution of the agreement | $ 151 | |||||
Cost of goods sold | ||||||
Service Agreements | ||||||
Service agreement license fees | $ 574 | $ 454 | $ 1,057 | $ 873 |
Commitments and Contingencies_6
Commitments and Contingencies - Concentrations (Details) | 6 Months Ended | ||
Jun. 30, 2019product | Jul. 09, 2019USD ($) | Jul. 31, 2018aft² | |
Concentrations | |||
Size of building space | ft² | 70,000 | ||
Area of land where building resides | a | 8.6 | ||
Design build agreement | |||
Concentrations | |||
Estimated cost relating to design build agreement | $ 29,000,000 | ||
Additional costs associated with design build agreement | 13,000,000 | ||
Maximum | Design build agreement | |||
Concentrations | |||
Cash grants | 1,300,000 | ||
Expected | Maximum | Design build agreement | |||
Concentrations | |||
Receivable economic development grants from state and local authorities | $ 2,700,000 | ||
Vendor | |||
Concentrations | |||
Number of products from which revenue is derived | product | 4 |
Commitments and Contingencies_7
Commitments and Contingencies - Litigation (Details) | Jun. 19, 2019 | Feb. 04, 2019 |
Commitments and Contingencies | ||
Threshold period for not filing response to complaint | 30 days | |
Period to file motion for class certification | 30 days | |
Period for opposition by defendants | 30 days |
Retirement Plan (Details)
Retirement Plan (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)item | Jun. 30, 2018USD ($) | |
Defined Benefit Plan | ||||
Age limit for eligibility to participate in the plan | item | 18 | |||
AxoGen 401K Plan | ||||
Defined Benefit Plan | ||||
Employer contributions | $ | $ 258 | $ 171 | $ 475 | $ 310 |
Axogen 401K Plan, employer's contribution on first 3% of employee contribution | ||||
Defined Benefit Plan | ||||
Employer matching contributions | 3.00% | |||
Employee contribution matched, percent | 3.00% | |||
Axogen 401K Plan, employer's contribution on next 2% of employee contribution | ||||
Defined Benefit Plan | ||||
Employer matching contributions | 1.00% | |||
Employee contribution matched, percent | 2.00% |