x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Florida | 26-2792552 | |
(State or other jurisdiction of incorporation) | (I.R.S. Employer Identification Number) |
1775 West Oak Commons Ct NE Marietta, GA | 30062 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer x | Accelerated filer ¨ | Non-accelerated filer ¨ (Do not check if a smaller reporting company) | Smaller reporting company ¨ |
Part I FINANCIAL INFORMATION | |||
Item 1 | Condensed Consolidated Financial Statements | ||
Condensed Consolidated Balance Sheets (unaudited) March 31, 2016 and December 31, 2015 | |||
Condensed Consolidated Statements of Operations (unaudited) Three Months Ended March 31, 2016 and 2015 | |||
Condensed Consolidated Statement of Stockholders' Equity (unaudited) for Three Months Ended March 31, 2016 | |||
Condensed Consolidated Statements of Cash Flows (unaudited) Three Months Ended March 31, 2016 and 2015 | |||
Notes to the Unaudited Condensed Consolidated Financial Statements Three Months Ended March 31, 2016 and 2015 | 8 | ||
Item 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||
Item 3 | Quantitative and Qualitative Disclosures About Market Risk | ||
Item 4 | Controls and Procedures | ||
Part II OTHER INFORMATION | |||
Item 1 | Legal Proceedings | ||
Item 1A | Risk Factors | ||
Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds | ||
Item 3 | Defaults upon Senior Securities | ||
Item 4 | Mine Safety Disclosures | ||
Item 5 | Other Information | ||
Item 6 | Exhibits | ||
Signatures |
March 31, 2016 (unaudited) | December 31, 2015 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 15,117 | $ | 28,486 | |||
Short term investments | 2,500 | 3,000 | |||||
Accounts receivable, net | 53,882 | 53,755 | |||||
Inventory, net | 17,967 | 7,460 | |||||
Prepaid expenses and other current assets | 5,774 | 3,609 | |||||
Total current assets | 95,240 | 96,310 | |||||
Property and equipment, net of accumulated depreciation | 12,123 | 9,475 | |||||
Goodwill | 30,730 | 4,040 | |||||
Intangible assets, net of accumulated amortization | 33,710 | 10,763 | |||||
Deferred tax asset, net | 4,940 | 14,838 | |||||
Deferred financing costs and other assets | 477 | 487 | |||||
Total assets | $ | 177,220 | $ | 135,913 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 13,059 | $ | 6,633 | |||
Accrued compensation | 9,394 | 15,034 | |||||
Accrued expenses | 5,137 | 4,644 | |||||
Other current liabilities | 1,252 | 466 | |||||
Total current liabilities | 28,842 | 26,777 | |||||
Earn out liability | 33,240 | — | |||||
Other liabilities | 895 | 1,148 | |||||
Total liabilities | 62,977 | 27,925 | |||||
Commitments and contingencies (Note 14) | |||||||
Stockholders' equity: | |||||||
Preferred stock; $.001 par value; 5,000,000 shares authorized and 0 shares issued and outstanding | — | — | |||||
Common stock; $.001 par value; 150,000,000 shares authorized; 109,539,420 issued and 109,466,073 outstanding at March 31, 2016 and 109,467,416 issued and 107,361,471 outstanding at December 31, 2015 | 109 | 109 | |||||
Additional paid-in capital | 151,659 | 163,133 | |||||
Treasury stock at cost: 73,347 shares at March 31, 2016 and 2,105,945 shares at December 31, 2015 | (592 | ) | (17,124 | ) | |||
Accumulated deficit | (36,933 | ) | (38,130 | ) | |||
Total stockholders' equity | 114,243 | 107,988 | |||||
Total liabilities and stockholders' equity | $ | 177,220 | $ | 135,913 |
Three Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
Net sales | $ | 53,367 | $ | 40,767 | ||||
Cost of sales | 7,946 | 5,148 | ||||||
Gross margin | 45,421 | 35,619 | ||||||
Operating expenses: | ||||||||
Research and development expenses | 2,496 | 1,831 | ||||||
Selling, general and administrative expenses | 40,648 | 29,308 | ||||||
Amortization of intangible assets | 810 | 233 | ||||||
Operating income | 1,467 | 4,247 | ||||||
Other income (expense), net | ||||||||
Interest (expense), net | (56 | ) | (14 | ) | ||||
Income before income tax provision | 1,411 | 4,233 | ||||||
Income tax provision | (214 | ) | (146 | ) | ||||
Net income | $ | 1,197 | $ | 4,087 | ||||
Net income per common share - basic | $ | 0.01 | $ | 0.04 | ||||
Net income per common share - diluted | $ | 0.01 | $ | 0.04 | ||||
Weighted average shares outstanding - basic | 105,538,271 | 105,820,335 | ||||||
Weighted average shares outstanding - diluted | 112,039,860 | 113,638,551 |
Common Stock Issued | Treasury Stock | |||||||||||||||||||
Shares | Amount | Additional Paid - in Capital | Shares | Amount | Accumulated Deficit | Total | ||||||||||||||
Balance December 31, 2015 | 109,467,416 | $ | 109 | $ | 163,133 | 2,105,945 | $ | (17,124 | ) | $ | (38,130 | ) | $ | 107,988 | ||||||
Share-based compensation expense | — | — | 4,615 | — | — | — | 4,615 | |||||||||||||
Exercise of stock options | 72,004 | — | (3,259 | ) | (536,713 | ) | 4,397 | — | 1,138 | |||||||||||
Issuance of restricted stock | — | — | (12,750 | ) | (1,576,579 | ) | 12,750 | — | — | |||||||||||
Restricted stock shares cancelled/forfeited | — | — | 378 | 45,263 | (378 | ) | — | — | ||||||||||||
Shares issued for services performed | — | — | 4 | (20,406 | ) | 169 | — | 173 | ||||||||||||
Stock repurchase | — | — | — | 415,252 | (3,530 | ) | — | (3,530 | ) | |||||||||||
Shares repurchased for tax withholding | — | — | — | 81,594 | (684 | ) | — | (684 | ) | |||||||||||
Shares issued in conjunction with acquisition | — | — | (462 | ) | (441,009 | ) | 3,808 | — | 3,346 | |||||||||||
Net income | — | — | — | — | — | 1,197 | 1,197 | |||||||||||||
Balance March 31, 2016 | 109,539,420 | $ | 109 | $ | 151,659 | 73,347 | $ | (592 | ) | $ | (36,933 | ) | $ | 114,243 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 1,197 | $ | 4,087 | |||
Adjustments to reconcile net income to net cash from operating activities: | |||||||
Depreciation | 734 | 354 | |||||
Amortization of intangible assets | 810 | 233 | |||||
Amortization of inventory fair value step - up | 734 | — | |||||
Amortization of deferred financing costs | 49 | — | |||||
Share-based compensation | 4,615 | 3,933 | |||||
Increase (decrease) in cash, net of effects of acquisition, resulting from changes in: | |||||||
Accounts receivable | 1,874 | (4,329 | ) | ||||
Inventory | (264 | ) | 885 | ||||
Prepaid expenses and other current assets | (2,066 | ) | (801 | ) | |||
Other assets | 209 | (26 | ) | ||||
Accounts payable | (4,265 | ) | 1,789 | ||||
Accrued compensation | (5,640 | ) | (2,803 | ) | |||
Accrued expenses | 493 | 1,111 | |||||
Other liabilities | 543 | (223 | ) | ||||
Net cash flows from operating activities | (977 | ) | 4,210 | ||||
Cash flows from investing activities: | |||||||
Purchases of equipment | (2,008 | ) | (1,347 | ) | |||
Purchase of Stability Inc., net of cash acquired | (7,631 | ) | — | ||||
Fixed maturity securities redemption | 500 | 500 | |||||
Patent application costs | (147 | ) | (201 | ) | |||
Net cash flows from investing activities | (9,286 | ) | (1,048 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from exercise of stock options | 1,138 | 1,276 | |||||
Stock repurchase under repurchase plan | (3,530 | ) | (12,295 | ) | |||
Stock repurchase for tax withholdings on vesting of restricted stock | (684 | ) | — | ||||
Deferred financing costs | (20 | ) | — | ||||
Payments under capital lease obligations | (10 | ) | (29 | ) | |||
Net cash flows from financing activities | (3,106 | ) | (11,048 | ) | |||
Net change in cash | (13,369 | ) | (7,886 | ) | |||
Cash and cash equivalents, beginning of period | 28,486 | 46,582 | |||||
Cash and cash equivalents, end of period | $ | 15,117 | $ | 38,696 |
1. | Basis of Presentation |
2. | Significant Accounting Policies |
3. | Liquidity and Management’s Plans |
Cash paid at closing | $ | 6,000 | ||
Common stock issued (441,009 shares valued at $9.07 per share) | 3,346 | |||
Assumed debt | 1,771 | |||
Fair value of earn - out | 33,240 | |||
Total fair value of purchase price | $ | 44,357 | ||
Net assets acquired: | ||||
Debt-free working capital | $ | 2,382 | ||
Other assets, net | 199 | |||
Property, plant and equipment | 1,375 | |||
Deferred tax liability | (9,899 | ) | ||
Subtotal | (5,943 | ) | ||
Intangible assets: | ||||
Customer relationships | 8,920 | |||
Patents and know-how | 10,230 | |||
Trade names and trademarks | 1,000 | |||
Non compete agreements | 2,700 | |||
Licenses and permits | 760 | |||
Subtotal | 23,610 | |||
Goodwill | 26,690 | |||
Total Assets Purchased | $ | 44,357 |
Working capital: | ||||
Cash | $ | 140 | ||
Prepaid Expenses and other current assets | 100 | |||
Accounts Receivable | 2,001 | |||
Federal and state taxes receivable | 28 | |||
Inventory | 10,977 | |||
Accounts payable and accrued expenses | (10,864 | ) | ||
Debt-free working capital | $ | 2,382 | ||
Current portion of long term debt | $ | (194 | ) | |
Long-term debt | (560 | ) | ||
Line of credit | (932 | ) | ||
Shareholder loan | (85 | ) | ||
Net working capital | $ | 611 | ||
Other assets: | ||||
Other long term assets | $ | 199 |
Estimated useful | |
life (in years) | |
Intangible asset: | |
Customer relationships | 12 |
Patents and know-how | 20 |
Trade names and trademarks | indefinite |
Non compete agreements | 4 |
Licenses and permits | 2 |
Three months ended March 31, | ||||||
2016 | 2015 | |||||
Revenues | $ | 53,915 | $ | 45,921 | ||
Net income | $ | 1,611 | $ | 2,879 | ||
Income per share, fully diluted | $ | 0.01 | $ | 0.03 |
5. | Short Term Investments |
March 31, 2016 | December 31, 2015 | ||||||
Raw materials | $ | 1,127 | $ | 602 | |||
Work in process | 4,786 | 3,850 | |||||
Finished goods | 12,658 | 3,405 | |||||
Inventory, gross | 18,571 | 7,857 | |||||
Reserve for obsolescence | (604 | ) | (397 | ) | |||
Inventory, net | $ | 17,967 | $ | 7,460 |
March 31, 2016 | December 31, 2015 | ||||||
Leasehold improvements | $ | 3,233 | $ | 2,684 | |||
Lab and clean room equipment | 7,528 | 4,564 | |||||
Furniture and office equipment | 5,730 | 4,577 | |||||
Construction in progress | 1,539 | 2,629 | |||||
Property and equipment, gross | 18,030 | 14,454 | |||||
Less accumulated depreciation | (5,907 | ) | (4,979 | ) | |||
Property and equipment, net | $ | 12,123 | $ | 9,475 |
8. | Intangible Assets and Royalty Agreement |
Weighted Average Amortization Lives | March 31, 2016 | December 31, 2015 | |||||||
Cost | Cost | ||||||||
Licenses (a) (b) (d) | 7 years | $ | 1,769 | $ | 1,009 | ||||
Patents & Know How (b) (d) | 19 years | 18,233 | 8,001 | ||||||
Customer & Supplier Relationships (b) (d) | 13 years | 12,681 | 3,761 | ||||||
Tradenames & Trademarks (b) (d) | indefinite | 2,008 | 1,008 | ||||||
Non - compete agreements (d) | 4 years | 2,700 | — | ||||||
In Process Research & Development (b) | n/a | 25 | 25 | ||||||
Patents in Process (c) | n/a | 1,969 | 1,823 | ||||||
Total | 39,385 | 15,627 | |||||||
Less Accumulated amortization | (5,675 | ) | (4,864 | ) | |||||
Net | $ | 33,710 | $ | 10,763 |
(a) | On January 29, 2007, the Company acquired a license from Shriners Hospitals for Children and University of South Florida Research Foundation, Inc. in the amount of $996,000. Within 30 days after the receipt by the Company of approval by the FDA allowing the sale of the first licensed product, the Company is required to pay an additional $200,000 to the licensor. Due to its contingent nature, this amount is not recorded as a liability. The Company will also be required to pay a royalty of 3% on all commercial sales revenue from the licensed products. The Company is also obligated to pay a $50,000 minimum annual royalty payment over the life of the license. |
(b) | On January 5, 2011, the Company acquired Surgical Biologics, LLC. As a result, the Company recorded intangible assets for Customer & Supplier Relationships of $3,761,000, Patents & Know-How of $7,690,000, Licenses of $13,000, Tradenames & Trademarks of $1,008,000 and In-Process Research & Development of $25,000. For the three months ended March 31, 2016, approximately $1,000 of costs associated with patents granted during the period were capitalized and included in Patents & Know-How subject to amortization. |
(c) | Patents in Process consist of capitalized external legal and other registration costs in connection with internally developed tissue-based patents that are pending. Once issued, the costs associated with a given patent will be included in Patents & Know-How under intangible assets subject to amortization. |
(d) | On January 13, 2016, the Company acquired Stability Inc. As a result, the Company recorded intangible assets for Patents & Know - How of $10,230,000, Customer Relationships of$8,920,000, Non - compete agreements of $2,700,000, Tradenames & Trademarksy of $1,000,000 and Licenses of $760,000. |
Year ending December 31, | Estimated Amortization Expense | ||
2016 (a) | $ | 2,434 | |
2017 | 3,156 | ||
2018 | 2,766 | ||
2019 | 2,766 | ||
2020 | 2,091 | ||
Thereafter | 18,489 | ||
$ | 31,702 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Net income | $ | 1,197 | $ | 4,087 | |||
Denominator for basic earnings per share - weighted average shares | 105,538,271 | 105,820,335 | |||||
Effect of dilutive securities: Stock options, restricted stock, and warrants outstanding(a) | 6,501,589 | 7,818,216 | |||||
Denominator for diluted earnings per share - weighted average shares adjusted for dilutive securities | 112,039,860 | 113,638,551 | |||||
Income per common share - basic | $ | 0.01 | $ | 0.04 | |||
Income per common share - diluted | $ | 0.01 | $ | 0.04 |
Three Months Ended March 31, | |||||
2016 | 2015 | ||||
Outstanding Stock Options | 5,981,250 | 7,392,355 | |||
Outstanding Warrants | — | 42,400 | |||
Restricted Stock Awards | 520,339 | 383,461 | |||
6,501,589 | 7,818,216 |
Number of Shares | Weighted- Average Exercise Price | Weighted-Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | |||||||||
Outstanding at January 1, 2016 | 14,019,629 | $ | 3.62 | |||||||||
Granted | — | $ | — | |||||||||
Exercised | (608,717 | ) | $ | 1.87 | ||||||||
Unvested options forfeited | (120,563 | ) | $ | 6.05 | ||||||||
Vested options expired | (12,497 | ) | $ | 6.34 | ||||||||
Outstanding at March 31, 2016 | 13,277,852 | $ | 3.69 | 6.3 | $ | 67,341,642 | ||||||
Vested at March 31, 2016 | 11,714,483 | $ | 3.24 | 6.1 | $ | 64,456,036 | ||||||
Vested or expected to vest at March 31, 2016 (a) | 13,210,155 | $ | 3.67 | 6.3 | $ | 67,231,821 |
(a) | Includes forfeiture adjusted unvested shares. |
Options Outstanding | Options Exercisable | ||||||||||||||
Range of Exercise Prices | Number outstanding | Weighted-Average Remaining Contractual Term (in years) | Weighted- Average Exercise Price | Number Exercisable | Weighted- Average Exercise Price | ||||||||||
$0.50 - $0.76 | 441,429 | 3.2 | $ | 0.72 | 441,429 | $ | 0.72 | ||||||||
$0.87 - $1.35 | 4,431,970 | 5.4 | 1.19 | 4,431,970 | 1.19 | ||||||||||
$1.40 - $2.45 | 1,460,924 | 4.7 | 1.92 | 1,460,924 | 1.92 | ||||||||||
$2.66 - $3.99 | 894,120 | 6.6 | 3.06 | 894,120 | 3.06 | ||||||||||
$4.19 - $6.38 | 3,426,178 | 7.2 | 5.35 | 2,897,570 | 5.26 | ||||||||||
$6.45 - $9.78 | 2,512,065 | 7.9 | 7.29 | 1,556,144 | 7.24 | ||||||||||
$9.90- $10.99 | 111,166 | 8.6 | 10.44 | 32,326 | 10.51 | ||||||||||
13,277,852 | 6.3 | $ | 3.69 | 11,714,483 | $ | 3.24 |
Three Months Ended March 31, | ||||
2016 | 2015 | |||
Expected volatility | n/a | 56.8 - 58.1% | ||
Expected life (in years) | n/a | 6.0 | ||
Expected dividend yield | n/a | — | ||
Risk-free interest rate | n/a | 1.57% - 1.66% |
Number of Shares | Weighted-Average Grant Date Fair Value | ||||
Unvested at January 1, 2016 | 2,613,267 | $9.14 | |||
Granted | 1,576,579 | 8.18 | |||
Vested | (644,903 | ) | 8.42 | ||
Forfeited | (45,263 | ) | 8.87 | ||
Unvested at March 31, 2016 | 3,499,680 | $8.84 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Cost of sales | $ | 96 | $ | 95 | |||
Research and development | 205 | 186 | |||||
Selling, general and administrative | 4,314 | 3,652 | |||||
$ | 4,615 | $ | 3,933 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Cash paid for interest, net | $ | 56 | $ | 14 | |||
Income taxes paid | 139 | 363 | |||||
Stock issuance of 441,009 shares in connection with acquisition | 3,346 | — | |||||
Stock issuance of 20,406 and 11,321 shares in exchange for services performed, respectively | 173 | 108 |
12-month period ended March 31 | |||
2017 | $ | 2,998 | |
2018 | 2,246 | ||
2019 | 2,199 | ||
2020 | 1,742 | ||
Thereafter | 765 | ||
$ | 9,950 |
MIMEDX GROUP, INC. AND SUBSIDIARIES SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS | |||||||||||||
Three Months Ended March 31, 2016 and 2015 (in thousands) | |||||||||||||
Balance at Beginning of Period | Additions charged to Expense or Revenue | Deductions and write-offs | Balance at End of Period | ||||||||||
For the three months ended March 31, 2016 | |||||||||||||
Allowance for doubtful accounts | $ | 3,270 | $ | 602 | $ | — | $ | 3,872 | |||||
Allowance for product returns | 1,262 | 1,300 | (911 | ) | 1,651 | ||||||||
Allowance for obsolescence | 397 | 235 | (28 | ) | 604 | ||||||||
For the three months ended March 31, 2015 | |||||||||||||
Allowance for doubtful accounts | $ | 1,750 | 260 | $ | — | $ | 2,010 | ||||||
Allowance for product returns | 841 | 709 | (606 | ) | 944 | ||||||||
Allowance for obsolescence | 527 | 130 | (105 | ) | 552 |
Less than | |||||||||||||||||||
Contractual Obligations | TOTAL | 1 year | 1-3 years | 3-5 years | Thereafter | ||||||||||||||
Capital lease obligations | $ | 103 | $ | 82 | $ | 21 | $ | — | $ | — | |||||||||
Operating lease obligations | 8,331 | 2,015 | 3,880 | 1,957 | 479 | ||||||||||||||
Charitable contribution obligations | 325 | 325 | — | — | — | ||||||||||||||
Software license | 355 | 95 | 189 | 71 | — | ||||||||||||||
Meeting space commitments | 939 | 562 | 376 | — | — | ||||||||||||||
$ | 10,053 | $ | 3,079 | $ | 4,466 | $ | 2,028 | $ | 479 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Net Income (Per GAAP) | $ | 1,197 | $ | 4,087 | |||
Add back: | |||||||
Income taxes | 214 | 146 | |||||
One time costs incurred in connection with acquisition | 713 | — | |||||
Amortization of inventory fair value step - up | 734 | — | |||||
Other interest (income) expense, net | 56 | 14 | |||||
Depreciation expense | 734 | 354 | |||||
Amortization of intangible assets | 810 | 233 | |||||
Share-based compensation | 4,615 | 3,933 | |||||
Adjusted EBITDA | $ | 9,073 | $ | 8,767 |
Total number of shares purchased (a) | Average price paid per share | Total number of shares purchased under publicly announced plan(b) | Total amount spent under the plan | Remaining amount to be spent under the plan | ||||||||||||
Total amount remaining January 1, 2016 | $ | 14,273,639 | ||||||||||||||
January 1, 2016 - January 31, 2016 | 400,252 | $ | 8.51 | 400,252 | $ | 3,404,558 | $ | 10,869,081 | ||||||||
February 1, 2016 - February 29, 2016 | 82,294 | $ | 8.42 | 15,000 | $ | 113,069 | $ | 10,756,012 | ||||||||
March 1, 2016 - March 31, 2016 | 14,300 | $ | 9.01 | — | $ | — | $ | 10,756,012 | ||||||||
Total for the quarter | 496,846 | 415,252 | $ | 3,517,627 |
Exhibit Number | Reference | Description |
2.1## | Agreement and Plan of Merger dated January 10, 2016, by and among MiMedx Group, Inc., Titan Acquisition Sub I, Inc., Titan Acquisition Sub II, LLC, Stability Inc., certain stockholders of Stability Inc. and Brian Martin as representative of the Stability stockholders (incorporated by reference to Exhibit 2.1 filed with Registrant's Form 8-K filed on January 13, 2016) | |
3.1 | Articles of Incorporation as filed with the Secretary of State of Florida on March 31, 2008 (incorporated by reference to Exhibit 3.1 filed with the Registrant's Form 10-Q on August 8, 2013) | |
3.2 | Articles of Amendment to Articles of Incorporation as filed with the Secretary of the State of Florida on May 14, 2010 (incorporated by reference to Exhibit 3.2 filed with the Registrant's Form 10-Q on August 8, 2013) | |
3.3 | Articles of Amendment to Articles of Incorporation as filed with the Secretary of the State of Florida on August 8, 2012 (incorporated by reference to Exhibit 3.3 filed with the Registrant's Form 10-Q on August 8, 2013) | |
3.4 | Articles of Amendment to Articles of Incorporation as filed with the Secretary of the State of Florida on November 8, 2012 (incorporated by reference to Exhibit 3.4 filed with the Registrant's Form 10-Q on August 8, 2013) | |
3.5 | Articles of Amendment to Articles of Incorporation as filed with the Secretary of the State of Florida on May 15, 2015 (incorporated by reference to Exhibit 3.5 filed with the Registrant's Form 10-Q on August 7, 2015) | |
3.6 | Bylaws of MiMedx Group, Inc. (incorporated by reference to Exhibit 3.2 filed with Registrant's Form 8-K filed on April 2, 2008) | |
3.7 | Amendment to the Bylaws of MiMedx Group, Inc. adopted by the Board of Directors on May 11, 2010 (incorporated by reference to Exhibit 3.2 to the Registrant's Form 8-K filed on May 14, 2010) | |
10.1 | First Amendment to the Credit Agreement dated October 12, 2015, by and among MiMedx Group, Inc., the Guarantors identified therein, Bank of America, N.A. and the other Lenders party thereto (incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K filed on January 13, 2016) | |
10.2#* | Fourth Amendment to Product Distribution Agreement effective as of January 1, 2016 between MiMedx Group, Inc. and AvKARE, Inc. | |
31.1 # | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
31.2 # | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
32.1 # | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
32.2 # | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
# | Filed herewith |
* | Certain confidential material appearing in this document, marked by [*****], has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment under rule 24b-2 promulgated under the Securities Exchange Act of 1934, as amended. |
## | Certain exhibits and schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K, but a copy will be furnished supplementally to the Securities and Exchange Commission upon request) |
May 10, 2016 | ||
By: | /s/ Michael J. Senken | |
Michael J. Senken | ||
Chief Financial Officer | ||
(principal financial and accounting officer) |
1. | Section 1.1 shall be amended by inserting the following language at the end of the current Section: |
2. | Sections 1.2 and 1.3 each shall be deleted in its entirety. |
3. | Section 1.6 shall be amended by inserting the following language at the end of the current Section: |
4. | Section 1.8 shall be deleted in its entirety and replaced with the following: |
5. | Section 3.3 shall be amended by adding a new sentence at the end of Section 3.3 which new sentence reads: |
6. | Section 3.5 shall be deleted in its entirety and replaced with the following language: |
7. | Section 18.1 shall be deleted in its entirety and replaced with the following language: |
8. | Section 18.3 shall be deleted in its entirety and replaced with the following language: |
a. | This Agreement may be terminated (and in such case the repurchase obligation specified in Section 18.1 shall be triggered): (i) by either party, if the other party is in material breach of any provision of this Agreement and such breach is not cured within thirty (30) days following notice of such breach given to the breaching party in accordance with Section 19.4 below; (ii) by Company, upon five (5) days’ written notice in accordance with Section 19.4 below, if AvKARE’s governmental approval to sell on the Federal Supply Schedule is revoked and has remained so for thirty (30) consecutive days and has not been reinstated prior to the written notice; (iii) by either party immediately if all of the Products are removed from the Federal Supply Schedule for any reason and have not been reinstated within thirty (30) days of removal; (iv) by either party immediately if Company is otherwise unable to sell its Products for any reason; (v) by AvKARE, if its monthly sales drop below [*****]; or (vi) by Company, in accordance with Section 18.4. If some, but not all, Products are removed from the Federal Supply Schedule or the Company is otherwise unable to sell some, but not all, Products on the Federal Supply Schedule, the affected Products will be removed from the Agreement, but the Agreement will otherwise continue in accordance with these terms for any remaining Products on the Federal Supply Schedule. Termination of this Agreement under this subpart (a) shall not affect Company’s obligation to honor all Purchase Orders submitted to Company prior to such termination unless Company is prevented from doing so by law. |
b. | The following sections shall survive termination or expiration of this Agreement: 7, 8, 9, 12, 13, 14, 16, and 19.5.” |
9. | Section 18.4 shall be deleted in its entirety and replaced with the following: |
10. | Section 18.5 shall be deleted in its entirety. |
11. | Section 19.2 shall be amended by deleting the following phrase: “provided that any assignment by AvKARE, Inc. to an entity that sells Competing Products shall require Company’s prior written consent”. |
12. | Schedule 5 to the Distribution Agreement shall be deleted in its entirety and replaced with the attached Schedule 5. |
13. | [*****]. |
14. | In all other respects, the Distribution Agreement is and shall remain in full force and effect in accordance with its terms and interpreted in a manner consistent with the past practices of the parties. |
MiMedx Group, Inc. /s/ William C. Taylor By: William C. Taylor Its: President & COO | AvKARE, Inc. /s/ Troy A. Mizell By: Troy A. Mizell Its: President & CEO |
Date: | May 10, 2016 | /s/ Parker H. Petit |
Parker H. Petit | ||
Chief Executive Officer |
Date: | May 10, 2016 | /s/ Michael J. Senken |
Michael J. Senken | ||
Chief Financial Officer |
Date: | May 10, 2016 | /s/ Parker H. Petit |
Parker H. Petit | ||
Chief Executive Officer |
Date: | May 10, 2016 | /s/ Michael J. Senken |
Michael J. Senken | ||
Chief Financial Officer |
Document and Entity Information - shares |
3 Months Ended | |
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Mar. 31, 2016 |
Apr. 15, 2016 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | MIMEDX GROUP, INC. | |
Entity Central Index Key | 0001376339 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 109,548,431 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 |
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - $ / shares |
Mar. 31, 2016 |
Dec. 31, 2015 |
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Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 109,539,420 | 109,467,416 |
Common stock, shares outstanding (in shares) | 109,466,073 | 107,361,471 |
Treasury stock, shares (in shares) | 73,347 | 2,105,945 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2016 |
Mar. 31, 2015 |
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Income Statement [Abstract] | ||
Net sales | $ 53,367 | $ 40,767 |
Cost of sales | 7,946 | 5,148 |
Gross margin | 45,421 | 35,619 |
Operating expenses: | ||
Research and development expenses | 2,496 | 1,831 |
Selling, general and administrative expenses | 40,648 | 29,308 |
Amortization of intangible assets | 810 | 233 |
Operating income | 1,467 | 4,247 |
Other income (expense), net | ||
Interest (expense), net | (56) | (14) |
Income before income tax provision | 1,411 | 4,233 |
Income tax provision | (214) | (146) |
Net income | $ 1,197 | $ 4,087 |
Net income per common share - basic (in dollars per share) | $ 0.01 | $ 0.04 |
Net income per common share - diluted (in dollars per share) | $ 0.01 | $ 0.04 |
Weighted average shares outstanding - basic | 105,538,271 | 105,820,335 |
Weighted average shares outstanding - diluted | 112,039,860 | 113,638,551 |
Basis of Presentation |
3 Months Ended |
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Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) from interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASU’’) to the FASB’s Accounting Standards Codification (“ASC”). In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results of operations for the periods presented have been included. Operating results for the three months ended March 31, 2016 and 2015, are not necessarily indicative of the results that may be expected for the fiscal year. The balance sheet at December 31, 2015, has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. You should read these condensed consolidated financial statements together with the historical consolidated financial statements of the Company for the year ended December 31, 2015, included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on February 29, 2016. The Company operates in one business segment, Regenerative Biomaterials, which includes the design, manufacture, and marketing of products and tissue processing services for the Wound Care, Surgical, Sports Medicine, Ophthalmic and Dental market categories. The Company's biomaterial platform technologies include tissue technologies, AmnioFix® and EpiFix®, amniotic fluid derived allograft, OrthoFlo, and anticipated device technology, CollaFix™, which the Company has yet to commercialize. Through the recent acquisition of Stability Inc., our newest proprietary platforms include Physio™, a unique bone grafting material comprised of 100% bone tissue with no added carrier, thus maximizing bone forming potential, a demineralized bone matrix (DBM) to complement our product portfolio offerings within the Orthopedic market and AlloBurn, a skin product for burns. |
Significant Accounting Policies |
3 Months Ended |
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Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Please see Note 2 to the Company's Consolidated Financial Statements included in the Company’s Form 10-K for the fiscal year ended December 31, 2015, for a description of all significant accounting policies. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Accounts Receivable Accounts receivable represent amounts due from customers for which revenue has been recognized. Generally, the Company does not require collateral or any other security to support its receivables. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing receivables. The Company determines the allowance based on factors such as historical collection experience, customers' current creditworthiness, customer concentrations, age of accounts receivable balance and general economic conditions that may affect the customers' ability to pay. Inventories Inventory is valued at the lower of cost or market value. The Company assesses the valuation of its inventory on a periodic basis and makes adjustments to the value for estimated excess and obsolete inventory based on estimates about future demand. The excess balance determined by this analysis becomes the basis for the Company's excess inventory charge. The Company's excess inventory review process includes analysis of sales forecasts, managing product rollovers and working with operations to maximize recovery of excess inventory. The value of inventory as of March 31, 2016 includes a fair value step - up connected with the January 2016 acquisition of Stability Inc. of approximately $1.6 million, which is comprised of approximately $2.3 million as of the date of the acquisition less amortization of approximately $734,000 during the quarter. Please see Note 4 contained herein. Revenue Recognition The Company sells its products through a combination of a direct sales force and independent stocking distributors and representatives in the U.S. and independent distributors in international markets. The Company recognizes revenue when title to the goods transfers to customers, provided there are no material remaining performance obligations required of the Company or any matters of customer acceptance. In cases where the Company utilizes distributors or ships product directly to the end user, it recognizes revenue upon shipment provided all other revenue recognition criteria have been met. A portion of the Company's revenue is generated from inventory maintained at hospitals, clinics and doctor's offices. For these products, revenue is recognized at the time the product has been used or implanted. The Company records estimated sales returns, discounts and allowances as a reduction of net sales in the same period revenue is recognized. Acquisitions Results of operations of acquired companies are included in the Company’s results of operations as of the respective acquisition dates. The purchase price of each acquisition is allocated to the net assets acquired based on estimates of their fair values at the date of the acquisition. Any purchase price in excess of these net assets is recorded as goodwill. The allocation of purchase price in certain cases may be subject to revision based on the final determination of fair values during the measurement period, which may be up to one year from the acquisition date. Contingent consideration is recognized at the estimated fair value on the acquisition date. Subsequent changes to the fair value of contingent payments are recognized in earnings. Contingent payments related to acquisitions consist of an earn out based on sales less direct production costs, and are valued using discounted cash flow techniques. The fair value of these payments is based upon probability-weighted future revenue estimates and increases or decreases as revenue estimates or expectation of timing of payments changes. Patent Costs The Company incurs certain legal and related costs in connection with patent applications for tissue-based products and processes. The Company capitalizes such costs to be amortized over the expected life of the patent to the extent that an economic benefit is anticipated from the resulting patent or alternative future use is available to the Company and are included in Intangible Assets in the Condensed Consolidated Balance Sheets. The Company capitalized approximately $147,000 of patent costs during the first three months of 2016. The Company capitalized approximately $201,000 of patent costs during the first three months of 2015. Treasury Stock The Company accounts for the purchase of treasury stock under the cost method. Treasury stock which is reissued for the exercise of option grants and the issuance of restricted stock grants is accounted for on a first - in first - out (FIFO) basis. Recent Accounting Pronouncements The Company considers the applicability and impact of all Accounting Standards Updates ("ASUs") issued both effective and not yet effective. In May 2014, the FASB issued ASU 2014-09, “Revenue Recognition - Revenue from Contracts with Customers” (ASU 2014-09) that requires companies to recognize revenue when a customer obtains control rather than when companies have transferred substantially all risks and rewards of a good or service. This update is effective for annual reporting periods beginning on or after December 15, 2017 and interim periods therein and requires expanded disclosures. The Company is currently assessing the impact the adoption of ASU 2014-09 will have on our condensed consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. ASU 2015-17 simplifies the presentation of deferred taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. ASU 2015-17 is effective for public companies for annual reporting periods beginning after December 15, 2016, and interim periods within those fiscal years. The guidance may be adopted prospectively or retrospectively and early adoption is permitted. The Company adopted this standard, prospectively, at the beginning of the fourth quarter 2015 to simplify reporting with the release of the valuation allowance as disclosed in Note 12. Prior periods were not retrospectively adjusted. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. ASU 2016-02 is effective for public companies for annual reporting periods beginning after December 15, 2018, and interim periods within those fiscal years. The guidance may be adopted prospectively or retrospectively and early adoption is permitted. The Company is currently assessing the impact the adoption of ASU 2016-02 will have on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718). The standard is intended to simplify several areas of accounting for share - based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. This ASU is effective for fiscal years beginning after December 15, 2016. The Company is currently assessing the impact the adoption of ASU 2016-09 will have on its consolidated financial statements. All other ASUs issued and not yet effective for the three months ended March 31, 2016, and through the date of this report, were assessed and determined to be either not applicable or are expected to have minimal impact on the Company's financial position or results of operations. |
Liquidity and Management's Plans |
3 Months Ended |
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Mar. 31, 2016 | |
Liquidity and management's plans [Abstract] | |
Liquidity and Management's Plans | Liquidity and Management’s Plans As of March 31, 2016, the Company had approximately $15,117,000 of cash and cash equivalents. The Company reported total current assets of approximately $95,240,000 and current liabilities of approximately $28,842,000 as of March 31, 2016. The Company believes that its anticipated cash from operating and financing activities, existing cash and cash equivalents, short term investments and availability under its line of credit will enable the Company to meet its operational liquidity needs and fund its planned investing activities for the next twelve months. |
Acquisition of Stability Inc. |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of Stability Inc. | Acquisition of Stability Inc. On January 13, 2016, the Company completed the acquisition of Stability Inc., d/b/a Stability Biologics, a provider of human tissue products to surgeons, facilities, and distributors serving the surgical, spine, and orthopedic sectors of the healthcare industry. As a result of this transaction, the Company acquired all of the outstanding shares of Stability in exchange for $6,000,000 cash, $3,346,000 in stock, represented by 441,009 shares of our common stock, and assumed debt of $1,771,000. Additional one time costs incurred in connection with the transaction totaled $713,000. Contingent consideration may be payable in a formula determined by sales less certain expenses for the years 2016 and 2017. As of March 31, 2016, the contingent consideration was valued at $33,240,000 and is shown in the schedule below as fair value of earn-out. The Company used a third party specialist to assist us with the valuation. The contingent consideration was classified as a liability. The Company has evaluated the contingent consideration for accounting purposes under GAAP and has determined that the contingent consideration is within the scope of ASC 480 Distinguishing Liabilities from Equity whereby a financial instrument other than an outstanding share, that embodies a conditional obligation that the issuer may settle by issuing a variable number of its equity shares, shall be classified as a liability if, at inception, the monetary value of the obligation is based solely or predominantly on variations in something other than the fair value of the issuer’s equity shares. The actual purchase price was based on cash paid, the fair value of our stock on the date of the acquisition, and direct costs associated with the combination. The actual purchase price has been preliminarily allocated as of March 31, 2016 (in thousands) and is subject to change:
Working capital and other assets were composed of the following (in thousands):
The acquisition was accounted for as a purchase business combination as defined by FASB Topic 805 - Business Combinations. The fair value of the contingent consideration is measured as a Level 3 instrument. The contingent consideration liability is recorded at fair value on the acquisition date and will be remeasured quarterly based on the assessed fair value and adjusted if necessary. The increases or decreases in the fair value of contingent consideration can result from changes in anticipated revenue levels and changes in assumed discount periods and rates. As the fair value measured is based on significant inputs that are not observable in the market, they are categorized as Level 3. The income valuation approach was applied in determining the fair value of the contingent consideration using a discounted cash flow valuation technique with significant unobservable inputs comprised of projected sales and certain expenses. The values assigned to intangible assets are subject to amortization. The intangible assets were assigned the following lives for amortization purposes:
Goodwill consists of the excess of the purchase price paid over the identifiable net assets and liabilities acquired at fair value. Goodwill was determined using the residual method based on an independent appraisal of the assets and liabilities acquired in the transaction and is preliminary as of March 31, 2016 and is subject to change. Goodwill is tested for impairment as defined by FASB Topic 350 - Intangibles - Goodwill and Other. The following unaudited pro forma summary financial information presents the consolidated results of operations as if the acquisition had occurred on January 1, 2015. The pro forma results are shown for illustrative purposes only and do not purport to be indicative of the results that would have been reported if the acquisition had occurred on the date indicated or indicative of the results that may occur in the future. Unaudited pro forma information for the three months ended March 31, 2016 and 2015 (in thousands) is as follows:
The 2016 supplemental pro forma earnings were adjusted to exclude $713,000 of acquisition-related legal, audit and other costs, net of tax. The 2015 supplemental pro forma earnings were adjusted to include $577,000 of amortization costs related to recorded intangible assets with defined useful lives, and $1,038,000 of inventory step up charges as a result of the acquisition for comparability to 2016. The shares outstanding used in calculating the income per share for 2015 was adjusted to include 441,009 shares issued as part of the purchase price and assumed to be issued on January 1, 2015. |
Short Term Investments |
3 Months Ended |
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Mar. 31, 2016 | |
Cash and Cash Equivalents [Abstract] | |
Short Term Investments | Short Term Investments Short term investments consist of approximately $2,500,000 of FDIC insured certificates of deposit held with various financial institutions as of March 31, 2016. Short term investments consisted of approximately $3,000,000 of FDIC insured certificates of deposit at December 31, 2015. The cost of these instruments approximates their fair market value at March 31, 2016 and December 31, 2015. |
Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories consisted of the following items as of March 31, 2016, and December 31, 2015 (in thousands):
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Property and Equipment |
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Property and Equipment | Property and Equipment Property and equipment consist of the following as of March 31, 2016, and December 31, 2015 (in thousands):
Included in net property and equipment is approximately $427,000 of equipment covered under capital leases. The corresponding liability of approximately $103,000 is included in other liabilities in the accompanying Condensed Consolidated Balance Sheets. Interest rates for these leases range from approximately 3% to 12% with maturity dates from September 2016 to January 2018. Also included is approximately $1.0 million in leasehold improvements paid for by the landlord of the Company's main facility with a corresponding liability included in other liabilities which is amortized over the term of the lease. Depreciation expense for the three months ended March 31, 2016 and 2015, was approximately $734,000 and $354,000, respectively. |
Intangible Assets and Royalty Agreement |
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Intangible Assets and Royalty Agreement | Intangible Assets and Royalty Agreement Intangible assets are summarized as follows (in thousands):
Amortization expense for the three months ended March 31, 2016 and 2015, was approximately $810,000 and $233,000, respectively. Expected future amortization of intangible assets as of March 31, 2016, is as follows (in thousands):
(a) Estimated amortization expense for the year ending December 31, 2016, includes only amortization to be recorded after March 31, 2016. |
Credit Facility |
3 Months Ended |
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Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Credit Facility | Credit Facility On October 12, 2015, the Company and its subsidiaries entered into a Credit Agreement (the "Credit Agreement") with certain lenders and Bank of America, N.A., as administrative agent. The Credit Agreement establishes a senior secured revolving credit facility in favor of the Company with a maturity date of October 12, 2018 and an aggregate lender commitment of up to $50 million. The Credit Agreement also provides for an uncommitted incremental facility of up to $35 million, which can be exercised as one or more revolving commitment increases or new term loans, all subject to certain customary terms and conditions set forth in the Credit Agreement. Borrowings under the facility will bear interest at LIBOR plus 1.5% to 2.25%. Fees paid in connection with the initiation of the credit facility totaled approximately $500,000. These deferred financing costs are being amortized to interest expense over the three-year life of the facility. The Credit Agreement contains customary representations, warranties, covenants, and events of default. As of March 31, 2016, there were no outstanding revolving loans under the credit facility. |
Net Income Per Share |
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Net Income Per Share | Net Income Per Share Basic net income per common share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income per common share is computed using the weighted-average number of common and dilutive common equivalent shares from stock options, restricted stock, and warrants using the treasury stock method. The following table sets forth the computation of basic and diluted net income per share (in thousands except share data):
(a) Securities outstanding that are included in the computation above, utilizing the treasury stock method are as follows:
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Equity |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Equity Stock Incentive Plans The Company has three share-based compensation plans: the MiMedx Group, Inc. Assumed 2006 Stock Incentive Plan (the “Assumed 2006 Plan”), the MiMedx Inc. 2007 Assumed Stock Plan (the “Assumed 2007 Plan”) and the MiMedx Group Inc. Amended and Restated Assumed 2005 Stock Plan (the “Assumed 2005 Plan”) which provide for the granting of qualified incentive and non-qualified stock options, stock appreciation awards and restricted stock awards to employees, directors, consultants and advisors. The awards are subject to a vesting schedule as set forth in each individual agreement. The Company intends to use only the Assumed 2006 Plan to make future grants. The number of assumed options under the Assumed 2005 Plan and Assumed 2007 Plan outstanding at March 31, 2016 totaled 70,000. The maximum number of shares of common stock that can be issued under the Assumed 2006 Plan was 26,500,000 at March 31, 2016. During the three months ended March 31 2016, 20,406 shares of common stock valued at approximately $173,000 were issued under the Assumed 2006 Plan to a consultant in return for services performed. Activity with respect to the stock options is summarized as follows:
The intrinsic value of the options exercised during the three months ended March 31, 2016, was approximately $4,440,694. Following is a summary of stock options outstanding and exercisable at March 31, 2016:
Total unrecognized compensation expense related to granted stock options at March 31, 2016, was approximately $4,501,863 and will be charged to expense ratably over a weighted average period through April 2017. The fair value of options granted by the Company is estimated on the date of grant using the Black-Scholes-Merton option-pricing model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. Expected volatilities are based on historical volatility of peer companies and other factors estimated over the expected term of the options. The term of employee options granted is derived using the “simplified method,” which computes expected term as the mid point between the weighted average time to vesting and the contractual maturity. The simplified method was used due to the Company's lack of sufficient historical data to provide a reasonable basis upon which to estimate the expected term due to the limited period of time its equity shares have been publicly traded. The term for non-employee options is generally based upon the contractual term of the option. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term or contractual term as described. The assumptions used in calculating the fair value of options using the Black-Scholes-Merton option-pricing model are set forth in the following table:
Their were no options granted during the three months ended March 31, 2016. Restricted Stock Awards Activity with respect to restricted stock awards is summarized as follows:
As of March 31, 2016, there was approximately $24,965,395 of total unrecognized stock-based compensation related to time-based, nonvested restricted stock. That expense is expected to be recognized on a straight-line basis over a weighted-average period of 2.3 years, which approximates the remaining vesting period of these grants. All shares noted above as unvested are considered issued and outstanding at March 31, 2016. For the three months ended March 31, 2016 and 2015, the Company recognized stock-based compensation as follows (in thousands):
Treasury Stock On May 12, 2014, our Board of Directors authorized the repurchase of up to $10 million of our common stock from time to time, through December 31, 2014. The Board subsequently extended the program until December 31, 2016. In December 2014, the Board increased the authorization to $20 million and further increased the authorization in 2015 to $60 million. The timing and amount of repurchases will depend upon the Company's stock price, economic and market conditions, regulatory requirements, and other corporate considerations. The Company may initiate, suspend or discontinue purchases under the stock repurchase program at any time. For the three months ended March 31, 2016, the Company purchased 415,252 shares of its common stock for a purchase price of approximately $3,518,000, before brokerage commissions of approximately $12,000 bringing the total amount spent under the program to approximately $49,244,000 since inception. As of March 31, 2016, the Company had approximately $10,756,000 remaining under the repurchase program. In addition, the Company purchased during the quarter 81,594 shares surrendered by employees to satisfy tax withholding obligations upon vesting of restricted stock. Additionally, for the three months ended March 31, 2016, the Company reissued 2,529,444 shares from the Treasury for common and restricted stock grants and stock option exercises, net of forfeitures, and the acquisition of Stability Inc. with an aggregate carrying value of approximately $20,746,000. |
Income taxes |
3 Months Ended |
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Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes The effective tax rates for continuing operations of 15.2% and 3.40% for the three months ended March 31, 2016 and March 31, 2015, respectively, were determined using an estimated annual effective tax rate and includes in 2016 the impact of a discrete item of approximately $350,000. The effective tax rate increased 11.8% when compared to the same period of 2015, primarily due to the $15.4 million valauation allowance release recorded in 2015 and discussed in our annual report on Form 10-K for the year ended December 31, 2015. Due to the valuation allowance previously recorded against the Company's U.S. deferred tax assets, the effective tax rate for the three months ended March 31, 2015, did not include the expense of the current period U.S. taxable income. As of the end of March 2016, the projected annual effective tax rate for 2016 is 40.4%. |
Supplemental disclosure of cash flow and non-cash investing and financing activities |
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Supplemental disclosure of cash flow and non-cash investing and financing activities | Supplemental disclosure of cash flow and non-cash investing and financing activities: Selected cash payments, receipts, and noncash activities are as follows (in thousands):
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Contractual Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
Contractual Commitments and Contingencies | Contractual Commitments and Contingencies Contractual Commitments In addition to the capital leases noted above in Note 7, the Company has entered into operating lease agreements for facility space and equipment. These leases expire over the next six years and generally contain renewal options. The Company anticipates that most of these leases will be renewed or replaced upon expiration. The Company also has commitments for meeting space and to various charitable organizations. The estimated annual lease payments, meeting space and charitable organization commitments are as follows (in thousands):
Rent expense for the three months ended March 31, 2016 and 2015, was approximately $423,000 and $284,000, respectively, and is allocated among cost of sales, research and development, and selling, general and administrative expenses. Letters of Credit As a condition of the lease for the Company's main facility, the Company is obligated under standby letters of credit in the amount of approximately $235,000. These obligations are reduced at various times over the life of the lease. FDA Untitled Letter, Draft Guidance and Related Litigation FDA Untitled Letter and Draft Guidance On August 28, 2013, the FDA issued an Untitled Letter alleging that the Company's micronized allografts do not meet the criteria for regulation solely under Section 361 of the Public Health Service Act and that, as a result, MiMedx would need a biologics license to lawfully market those micronized products. Since the issuance of the Untitled Letter, the Company has been in discussions with the FDA to communicate its disagreement with the FDA's assertion that the Company's allografts are more than minimally manipulated. To date, the FDA has not changed its position that the Company's micronized products are not eligible for marketing solely under Section 361 of the Public Health Service Act, but discussions are continuing. The Company continues to market its micronized products but is also pursuing the Biologics License Application (“BLA”) process for certain of its micronized products. On December 22, 2014, the FDA issued for comment “Draft Guidance for Industry and FDA Staff: Minimal Manipulation of Human Cells, Tissues, and Cellular and Tissue-Based Products.” Essentially the Minimal Manipulation draft guidance takes the same position with respect to micronized amniotic tissue that it took in the Untitled Letter to MiMedx 16 months earlier. The Company submitted comments asserting that the Minimal Manipulation draft guidance represents agency action that goes far beyond the FDA’s statutory authority, is inconsistent with existing HCT/P regulations and the FDA’s prior positions, and is internally inconsistent and scientifically unsound. On October 28, 2015, the FDA issued for comment, "Draft Guidance for Industry and FDA Staff: Homologous Use of Human Cells, Tissues, and Cellular and Tissue-Based Products." The Company submitted comments on this Homologous Use draft guidance. The FDA has indicated that it will hold a public hearing on September 12 and 13, 2016 to obtain input on the Homologous Use draft guidance and the previously released Minimal Manipulation draft guidance, as well as other recently issued guidance documents on HCT/Ps. The hearing was originally scheduled for April 13, 2016, but was rescheduled to allow stakeholders additional time to provide comments due to the considerable interest in the hearing. The Company has requested an opportunity to speak at the rescheduled hearing. If the FDA does allow the Company to continue to market a micronized form of its sheet allografts without a biologics license either prior to or after finalization of the draft guidance documents, it may impose conditions, such as labeling restrictions and compliance with cGMP. Although the Company is preparing for these requirements in connection with its pursuit of a BLA for certain of its micronized products, earlier compliance with these conditions would require significant additional time and cost investments by the Company. It is also possible that the FDA will not allow the Company to market any form of a micronized product without a biologics license even prior to finalization of the draft guidance documents and could even require the Company to recall its micronized products. Revenues from micronized products comprised approximately 12% of the Company's revenues for fiscal-year 2015. Related Litigation Following the publication of the Untitled Letter from the FDA regarding the Company’s micronized products in September 2013, the trading price of the Company’s stock declined and several putative shareholder class action lawsuits were filed against the Company and certain of its executive officers asserting violations of the Securities Exchange Act of 1934. The cases were consolidated in the United States District Court for the Northern District of Georgia. On November 17, 2015, the parties entered into a stipulation of settlement to settle the consolidated case in its entirety. The stipulation of settlement was filed with the Court on November 18, 2015 and preliminarily approved by the Court on November 19, 2015. The final settlement hearing was held on April 5, 2016 and the Court approved the settlement. The Company does not believe the terms of the settlement will have a material adverse effect on its operating results or financial condition. Patent Litigation MiMedx continues to diligently enforce its intellectual property against several entities. Currently, there are four actions pending, as described below: The Liventa Action First, there is an action pending against several entities in the in the United States District Court for the Northern District of Georgia, i.e., “the Liventa Action”. On April 22, 2014, the Company filed a patent infringement lawsuit against Liventa Bioscience, Inc. ("Liventa"), Medline Industries, Inc. ("Medline") and Musculoskeletal Transplant Foundation, Inc. ("MTF") for permanent injunctive relief and unspecified damages. In addition to the allegations of infringement of MiMedx's patents, the lawsuit asserts that Liventa and Medline knowingly and willfully made false and misleading representations about their respective products to providers, patients, and in some cases, prospective investors. The Liventa Action was filed in the United States District Court for the Northern District of Georgia. MiMedx asserts that Liventa (formerly known as AFCell Medical, Inc.), Medline and MTF infringed and continue to infringe certain of the Company's patents relating to the MiMedx dehydrated human amnion/chorion membrane ("dHACM") allografts. MTF is the tissue processor while Liventa and Medline are the distributors of the allegedly infringing products. On May 30, 2014, defendants filed answers to the Complaint, denying the allegations in the Complaint. They also raised affirmative defenses of non-infringement, invalidity, laches and estoppel. MTF and Medline also filed counterclaims seeking declaratory judgments of non-infringement and invalidity. On June 30, 2014, fact discovery began and the parties have engaged in extensive fact discovery. MiMedx served Infringement Contentions on August 29, 2014, and Defendants served Invalidity Contentions and Responses to Infringement Contentions on September 29, 2014. After a protracted series of meet and confers, MiMedx required Defendants to supplement their invalidity contentions in view of parallel Inter Partes Review ("IPR")(see further discussion, infra) proceedings. MTF complied on June 26, 2015. In September 2015, the Defendants filed a renewed Motion to Stay in light of the Patent Trial and Appeal Board's ("PTAB") decisions to institute IPRs on the ’437 and ’687 Patents, seeking a partial stay of the litigation as to the ’437, ’687, and ’494 Patents (i.e., the ’437 Patent family). MiMedx opposed the Motion to Stay with respect to the ’494 Patent and once again successfully defeated Defendants’ motion to stay. Claim Construction proceedings began in October 2014. The parties submitted proposed constructions for key terms for the ’701, ’092, ’437, ’687, ’207, and ’494 Patents. Briefing was completed in March 2015. On December 22, 2015, a Markman Hearing was held before Special Master Sumner C. Rosenberg. Over thirty disputed claim terms were at issue. One week later, on December 30, 2015, the Special Master issued its Report and Recommendation. Except for one term, the Special Master’s Report essentially adopted MiMedx’s proposed constructions. The parties are awaiting a final Court decision pending their respective objections. On March 9, 2016, the Court adopted the Special Master’s Report. Since then the Court has entered a scheduling order in this action. Notably, fact discovery is set to close on May 25, 2016. Expert discovery begins in June 2016 and is expected to close in early September 2016. The Bone Bank Action On May 16, 2014, the Company also filed a patent infringement lawsuit against Transplant Technology, Inc. d/b/a Bone Bank Allografts ("Bone Bank") and Texas Human Biologics, Ltd. ("Biologics") for permanent injunctive relief and unspecified damages (the "Bone Bank Action"). The Bone Bank Action was filed in the United States District Court for the Western District of Texas. This lawsuit similarly asserts that Bone Bank and Biologics infringed certain of the Company's patents through the manufacturing and sale of their placental-derived tissue graft products. On July 10, 2014, defendants filed an answer to the Complaint, denying the allegations in the Complaint. They also raised affirmative defenses of non-infringement and invalidity and filed counterclaims seeking declaratory judgments of non-infringement and invalidity. The Bone Bank Action is in an advanced stage. The parties have (i) substantially completed document production; (ii) taken several fact depositions (both party and non-party); and (iii) completed claim construction briefing. The Markman hearing in this case was held on October 2, 2015. Except for one term, the Court adopted MiMedx’s proposed construction of the disputed terms. The parties have submitted a proposed scheduling order to the Court and are awaiting the Court’s order in this regard. Meanwhile, the parties continue with fact discovery in view of recent depositions. The NuTech Action On March 2, 2015, the Company filed a patent infringement lawsuit against NuTech Medical, Inc. ("NuTech") and DCI Donor Services, Inc. ("DCI") for permanent injunctive relief and unspecified damages. This lawsuit was filed in the United States District Court for the Northern District of Alabama. The lawsuit alleges that NuTech and DCI have infringed and continue to infringe the Company's patents through the manufacture, use, sale, and/or offering of their tissue graft product. The lawsuit also asserts that NuTech knowingly and willfully made false and misleading representations about its products to customers and/or prospective customers. On April 17, 2015, NuTech filed a motion to dismiss the case purportedly for lack of patentable subject matter, which the Company opposed. NuTech also filed a motion to stay the case pending disposition of the motion to dismiss, which MiMedx also opposed, and on which the Court declined to rule. Hearing on the motion to dismiss occurred on August 20, 2015. On November 24, 2015, the court ruled on NuTech’s Motion to Dismiss, granting in part, and denying in part. MiMedx still has claims against NuTech for infringement of the ‘494 and ‘687 patents, as well as violations of the Lanham Act; these claims shall proceed. On December 30, 2015, the parties submitted a Joint Rule 26(f) Report of Parties’ Planning Meeting and Proposed Case Management Order to the Court. In the Report, the parties requested that the Court stay the proceedings with respect to the ’687 patent pending the completion of the inter partes review on that patent. On January 8, 2016, MiMedx served its infringement contentions. Judge Hopkins entered the parties’ Case Management Order and granted the parties’ request to stay proceedings with respect to the ’687 patent pending the completion of the inter partes review. On January 8, 2016, the parties submitted their Initial Disclosures, and MiMedx submitted its preliminary infringement contentions. On March 14, 2016, Defendants submitted their preliminary invalidity contentions. On April 15, 2016, the parties exchanged proposed terms for construction and over the next several months the parties will engage in claim construction briefing. Discovery is ongoing. The Vivex Action On April 1, 2016, the Company also filed a patent infringement lawsuit against Vivex BioMedical (“Vivex”) for permanent injunctive relief and unspecified damages (the "Vivex Action"). The lawsuit was filed in the United States District Court for the Northern District of Georgia. The patent at issue is the ’494 patent. Pending IPRs In addition to defending the claims in the pending district court litigations, defendants in the Liventa and Bone Bank cases have challenged certain of the Company's patents in several IPR proceedings to avoid the high burden of proof of proving invalidity by "clear and convincing evidence" in the district court litigations. An inter partes review (or "IPR") is a request for a specialized group within the United States Patent and Trademark Office to review the validity of a plaintiff's patent claims. The defendants in the Bone Bank Action have challenged the validity of the Company's 8,597,687 and 8,709,494 patents (the "'687" and "'494" patents, respectively); while the defendants in the Liventa Action have challenged the validity of the Company's 8,372,437 and 8,323,701 patents (the "'437" and "'701" patents, respectively). On June 29, 2015, the Patent Trial and Appeals Board ("PTAB") denied defendants' request for institution of an IPR with respect to the '494 patent on all seven challenged grounds. On August 18, 2015, the PTAB also denied defendants' request for institution of an IPR with respect to the '701 patent on all six challenged grounds. That is, the PTAB decided in each case that the defendants failed to establish a reasonable likelihood that defendants would prevail in showing any of the challenged claims of the '494 or the '701 patent were unpatentable. On July 10, 2015 the PTAB issued an opinion allowing a review of the '687 patent to proceed, although on only two of the five challenged grounds. The PTAB also adopted MiMedx's construction of the claims which will govern the Board's review of the '687 patent. The parties decided to forego oral arguments. A decision is expected no later than July 10, 2016. On August 18, 2015, the PTAB issued an opinion allowing a review of the '437 patent to proceed, although only on one of the seven challenged grounds. Briefing and expert discovery is ongoing. Oral argument is scheduled for April 26, 2016. A decision is expected no later than August of 2016. |
Subsequent Events |
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Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events None |
Schedule II - Valuation and Qualifying Accounts |
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Schedule II - Valuation and Qualifying Accounts | Schedule II Valuation and Qualifying Accounts
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Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) from interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASU’’) to the FASB’s Accounting Standards Codification (“ASC”). In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results of operations for the periods presented have been included. Operating results for the three months ended March 31, 2016 and 2015, are not necessarily indicative of the results that may be expected for the fiscal year. The balance sheet at December 31, 2015, has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. You should read these condensed consolidated financial statements together with the historical consolidated financial statements of the Company for the year ended December 31, 2015, included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on February 29, 2016. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Accounts Receivable | Accounts Receivable Accounts receivable represent amounts due from customers for which revenue has been recognized. Generally, the Company does not require collateral or any other security to support its receivables. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing receivables. The Company determines the allowance based on factors such as historical collection experience, customers' current creditworthiness, customer concentrations, age of accounts receivable balance and general economic conditions that may affect the customers' ability to pay. |
Inventories | Inventories Inventory is valued at the lower of cost or market value. The Company assesses the valuation of its inventory on a periodic basis and makes adjustments to the value for estimated excess and obsolete inventory based on estimates about future demand. The excess balance determined by this analysis becomes the basis for the Company's excess inventory charge. The Company's excess inventory review process includes analysis of sales forecasts, managing product rollovers and working with operations to maximize recovery of excess inventory. |
Revenue Recognition | Revenue Recognition The Company sells its products through a combination of a direct sales force and independent stocking distributors and representatives in the U.S. and independent distributors in international markets. The Company recognizes revenue when title to the goods transfers to customers, provided there are no material remaining performance obligations required of the Company or any matters of customer acceptance. In cases where the Company utilizes distributors or ships product directly to the end user, it recognizes revenue upon shipment provided all other revenue recognition criteria have been met. A portion of the Company's revenue is generated from inventory maintained at hospitals, clinics and doctor's offices. For these products, revenue is recognized at the time the product has been used or implanted. The Company records estimated sales returns, discounts and allowances as a reduction of net sales in the same period revenue is recognized. |
Acquisitions | Acquisitions Results of operations of acquired companies are included in the Company’s results of operations as of the respective acquisition dates. The purchase price of each acquisition is allocated to the net assets acquired based on estimates of their fair values at the date of the acquisition. Any purchase price in excess of these net assets is recorded as goodwill. The allocation of purchase price in certain cases may be subject to revision based on the final determination of fair values during the measurement period, which may be up to one year from the acquisition date. Contingent consideration is recognized at the estimated fair value on the acquisition date. Subsequent changes to the fair value of contingent payments are recognized in earnings. Contingent payments related to acquisitions consist of an earn out based on sales less direct production costs, and are valued using discounted cash flow techniques. The fair value of these payments is based upon probability-weighted future revenue estimates and increases or decreases as revenue estimates or expectation of timing of payments changes. |
Patent Costs | Patent Costs The Company incurs certain legal and related costs in connection with patent applications for tissue-based products and processes. The Company capitalizes such costs to be amortized over the expected life of the patent to the extent that an economic benefit is anticipated from the resulting patent or alternative future use is available to the Company and are included in Intangible Assets in the Condensed Consolidated Balance Sheets. |
Treasury Stock | Treasury Stock The Company accounts for the purchase of treasury stock under the cost method. Treasury stock which is reissued for the exercise of option grants and the issuance of restricted stock grants is accounted for on a first - in first - out (FIFO) basis. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company considers the applicability and impact of all Accounting Standards Updates ("ASUs") issued both effective and not yet effective. In May 2014, the FASB issued ASU 2014-09, “Revenue Recognition - Revenue from Contracts with Customers” (ASU 2014-09) that requires companies to recognize revenue when a customer obtains control rather than when companies have transferred substantially all risks and rewards of a good or service. This update is effective for annual reporting periods beginning on or after December 15, 2017 and interim periods therein and requires expanded disclosures. The Company is currently assessing the impact the adoption of ASU 2014-09 will have on our condensed consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. ASU 2015-17 simplifies the presentation of deferred taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. ASU 2015-17 is effective for public companies for annual reporting periods beginning after December 15, 2016, and interim periods within those fiscal years. The guidance may be adopted prospectively or retrospectively and early adoption is permitted. The Company adopted this standard, prospectively, at the beginning of the fourth quarter 2015 to simplify reporting with the release of the valuation allowance as disclosed in Note 12. Prior periods were not retrospectively adjusted. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. ASU 2016-02 is effective for public companies for annual reporting periods beginning after December 15, 2018, and interim periods within those fiscal years. The guidance may be adopted prospectively or retrospectively and early adoption is permitted. The Company is currently assessing the impact the adoption of ASU 2016-02 will have on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718). The standard is intended to simplify several areas of accounting for share - based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. This ASU is effective for fiscal years beginning after December 15, 2016. The Company is currently assessing the impact the adoption of ASU 2016-09 will have on its consolidated financial statements. All other ASUs issued and not yet effective for the three months ended March 31, 2016, and through the date of this report, were assessed and determined to be either not applicable or are expected to have minimal impact on the Company's financial position or results of operations. |
Acquisition of Stability Inc. (Tables) |
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Mar. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Acquisition of Stability Inc. | The actual purchase price has been preliminarily allocated as of March 31, 2016 (in thousands) and is subject to change:
Working capital and other assets were composed of the following (in thousands):
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Finite-Lived and Indefinite-Lived Intangible Assets Acquired | The intangible assets were assigned the following lives for amortization purposes:
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Business Acquisition Pro Forma Information | Unaudited pro forma information for the three months ended March 31, 2016 and 2015 (in thousands) is as follows:
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Inventories (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory | Inventories consisted of the following items as of March 31, 2016, and December 31, 2015 (in thousands):
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Property and Equipment (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment | Property and equipment consist of the following as of March 31, 2016, and December 31, 2015 (in thousands):
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Intangible Assets and Royalty Agreement (Tables) |
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets Activity Summary | Intangible assets are summarized as follows (in thousands):
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Estimated Future Amortization Expense for Intangible Assets | Expected future amortization of intangible assets as of March 31, 2016, is as follows (in thousands):
(a) Estimated amortization expense for the year ending December 31, 2016, includes only amortization to be recorded after March 31, 2016. |
Net Income Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Net Income per Share | The following table sets forth the computation of basic and diluted net income per share (in thousands except share data):
(a) Securities outstanding that are included in the computation above, utilizing the treasury stock method are as follows:
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Equity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Activity with respect to the stock options | Activity with respect to the stock options is summarized as follows:
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Following is a summary of stock options outstanding and exercisable | Following is a summary of stock options outstanding and exercisable at March 31, 2016:
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Assumptions used in calculating the fair value of options using the Black-Scholes-Merton option-pricing model | The assumptions used in calculating the fair value of options using the Black-Scholes-Merton option-pricing model are set forth in the following table:
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Activity with respect to restricted stock awards | Activity with respect to restricted stock awards is summarized as follows:
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Allocation of share-based compensation | For the three months ended March 31, 2016 and 2015, the Company recognized stock-based compensation as follows (in thousands):
|
Supplemental disclosure of cash flow and non-cash investing and financing activities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Disclosure of Cash Flow and Non-cash Investing and Financing Activities | Selected cash payments, receipts, and noncash activities are as follows (in thousands):
|
Contractual Commitments and Contingencies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
Estimated Annual Lease, Royalty and Employment Agreement Expenses | The estimated annual lease payments, meeting space and charitable organization commitments are as follows (in thousands):
|
Basis of Presentation (Details) |
3 Months Ended |
---|---|
Mar. 31, 2016
segment
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of business segments | 1 |
Significant Accounting Policies (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Jan. 13, 2016 |
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Finite-Lived Intangible Assets [Line Items] | |||
Increase (decrease) in inventories | $ 264 | $ (885) | |
Amortization of inventory fair value step - up | 734 | 0 | |
Patents and know-how | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, net of accumulated amortization | 147 | $ 201 | |
Fair Value Adjustment to Inventory | |||
Finite-Lived Intangible Assets [Line Items] | |||
Increase (decrease) in inventories | $ 2,300 | $ 1,600 |
Liquidity and Management's Plans (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
---|---|---|---|---|
Liquidity and management's plans [Abstract] | ||||
Cash and cash equivalents | $ 15,117 | $ 28,486 | $ 38,696 | $ 46,582 |
Total current assets | 95,240 | 96,310 | ||
Total current liabilities | $ 28,842 | $ 26,777 |
Acquisition of Stability Inc. - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Jan. 13, 2016 |
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Business Acquisition [Line Items] | |||
Amortization of intangible assets | $ 810 | $ 233 | |
Net income | 1,611 | 2,879 | |
Stability Biologics, LLC | |||
Business Acquisition [Line Items] | |||
Cash paid at closing | $ 6,000 | ||
Common stock issued | $ 3,346 | ||
Common stock issued (in shares) | 441,009 | ||
Assumed debt | $ 1,771 | ||
Acquisition related costs | 713 | ||
Fair value of earn - out | $ 33,240 | $ 33,240 | |
Fair Value Adjustment to Inventory | |||
Business Acquisition [Line Items] | |||
Net income | (1,038) | ||
Pro Forma | |||
Business Acquisition [Line Items] | |||
Amortization of intangible assets | $ 577 |
Acquisition of Stability Inc. - Intangible Assets Acquired as Part of Acquisition (Details) - Stability Biologics, LLC |
Jan. 13, 2016 |
---|---|
Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 12 years |
Patents and know-how | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 20 years |
Non compete agreements | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 4 years |
Licenses and permits | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 2 years |
Acquisition of Stability Inc. - Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Business Combinations [Abstract] | ||
Revenues | $ 53,915 | $ 45,921 |
Net income | $ 1,611 | $ 2,879 |
Income per share, fully diluted (in dollars per share) | $ 0.01 | $ 0.03 |
Short Term Investments (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Investment [Line Items] | ||
Short term investments | $ 2,500 | $ 3,000 |
Certificates of Deposit | ||
Investment [Line Items] | ||
Short term investments | $ 2,500 | $ 3,000 |
Inventories (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,127 | $ 602 |
Work in process | 4,786 | 3,850 |
Finished goods | 12,658 | 3,405 |
Inventory, gross | 18,571 | 7,857 |
Reserve for obsolescence | (604) | (397) |
Inventory, net | $ 17,967 | $ 7,460 |
Credit Facility (Details) - Revolving Credit Facility - Credit Agreement - USD ($) |
Oct. 12, 2015 |
Mar. 31, 2016 |
---|---|---|
Debt Instrument [Line Items] | ||
Maximum borrowing capacity (up to) | $ 50,000,000 | |
Uncommitted incremental facility (up to) | 35,000,000 | |
Debt issuance cost | $ 500,000 | |
Debt term | 3 years | |
Outstanding line of credit | $ 0 | |
Minimum | London Interbank Offered Rate (LIBOR) | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.50% | |
Maximum | London Interbank Offered Rate (LIBOR) | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.25% |
Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|||
Computation of basic and diluted net loss per share [Abstract] | ||||
Net income | $ 1,197 | $ 4,087 | ||
Denominator for basic earnings per share - weighted average shares | 105,538,271 | 105,820,335 | ||
Effect of dilutive securities: Stock options, restricted stock, and warrants outstanding (in shares) | [1] | 6,501,589 | 7,818,216 | |
Denominator for diluted earnings per share - weighted average shares adjusted for dilutive securities | 112,039,860 | 113,638,551 | ||
Income per common share - basic (in dollars per share) | $ 0.01 | $ 0.04 | ||
Income per common share - diluted (in dollars per share) | $ 0.01 | $ 0.04 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 6,501,589 | 7,818,216 | ||
Outstanding Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 5,981,250 | 7,392,355 | ||
Outstanding Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 42,400 | ||
Restricted Stock Awards | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 520,339 | 383,461 | ||
|
Equity (Details) |
3 Months Ended | 23 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016
USD ($)
plan
$ / shares
shares
|
Mar. 31, 2015
USD ($)
shares
|
Mar. 31, 2016
USD ($)
$ / shares
shares
|
Dec. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
|
May. 12, 2014
USD ($)
|
||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of share-based compensation plans | plan | 3 | ||||||||
Outstanding assumed options (in shares) | shares | 70,000 | 70,000 | |||||||
Shares authorized (in shares) | shares | 26,500,000 | 26,500,000 | |||||||
Common stock shares issued (in shares) | shares | 20,406 | 11,321 | |||||||
Shares issued for services performed | $ | $ 173,000 | $ 108,000 | |||||||
Total unrecognized compensation expense | $ | $ 4,501,863 | $ 4,501,863 | |||||||
Number of shares [Roll forward] | |||||||||
Outstanding, beginning of period (in shares) | shares | 14,019,629 | ||||||||
Granted (in shares) | shares | 0 | ||||||||
Exercised (in shares) | shares | (608,717) | ||||||||
Unvested options forfeited (in shares) | shares | (120,563) | ||||||||
Vested options expired (in shares) | shares | (12,497) | ||||||||
Outstanding, end of period (in shares) | shares | 13,277,852 | 13,277,852 | |||||||
Vested at end of period (in shares) | shares | 11,714,483 | 11,714,483 | |||||||
Exercisable options, vested and expected to vest (in shares) | shares | [1] | 13,210,155 | 13,210,155 | ||||||
Weighted-Average Exercise Price [Roll forward] | |||||||||
Outstanding, weighted average exercise price, beginning of period (in dollars per share) | $ 3.62 | ||||||||
Granted, weighted average exercise price (in dollars per share) | 0.00 | ||||||||
Exercised, weighted average exercise price (in dollars per share) | 1.87 | ||||||||
Unvested options forfeited weighted-average exercise price (in dollars per share) | 6.05 | ||||||||
Vested options expired weighted-average exercise price (in dollars per share) | 6.34 | ||||||||
Outstanding, weighted average exercise price, end of period (in dollars per share) | 3.69 | $ 3.69 | |||||||
Vested at end of period weighted average exercise price (in dollars per share) | 3.24 | 3.24 | |||||||
Vested and expected to vest, weighted average exercise price (in dollars per share) | [1] | $ 3.67 | $ 3.67 | ||||||
Stock options, additional disclosures [Abstract] | |||||||||
Vested at end of period weighted average remaining contractual term | 6 years 1 month 6 days | ||||||||
Vested and expected to vest, weighted average remaining contractual term | [1] | 6 years 3 months 18 days | |||||||
Outstanding intrinsic value | $ | $ 67,341,642 | $ 67,341,642 | |||||||
Vested at end of period aggregate intrinsic value | $ | 64,456,036 | 64,456,036 | |||||||
Vested and expected to vest, aggregate intrinsic value | $ | [1] | 67,231,821 | $ 67,231,821 | ||||||
Exercised options, intrinsic value | $ | $ 4,440,694 | ||||||||
Number of outstanding options (in shares) | shares | 13,277,852 | 13,277,852 | |||||||
Outstanding Options, weighted average remaining contractual term | 6 years 3 months 18 days | ||||||||
Outstanding Options, weighted average exercise price (in dollars per share) | $ 3.69 | $ 3.69 | |||||||
Number of exercisable options (in shares) | shares | 11,714,483 | 11,714,483 | |||||||
Exercisable Options, weighted average exercise price (in dollars per share) | $ 3.24 | $ 3.24 | |||||||
Fair value options valuation assumptions [Abstract] | |||||||||
Expected volatility Minimum | 56.80% | ||||||||
Expected volatility Maximum | 58.10% | ||||||||
Expected life (in years) | 6 years | ||||||||
Expected dividend yield | 0.00% | ||||||||
Risk-free interest rate Minimum | 1.57% | ||||||||
Risk-free interest rate Maximum | 1.66% | ||||||||
Share-based Compensation [Abstract] | |||||||||
Share-based compensation expense | $ | $ 4,615,000 | $ 3,933,000 | |||||||
Authorized share amount for repurchase | $ | $ 60,000,000 | $ 20,000,000 | $ 10,000,000 | ||||||
Stock repurchase (in shares) | shares | 415,252 | ||||||||
Payments for repurchase of common stock, net | $ | $ 3,518,000 | ||||||||
Brokerage commissions | $ | 12,000 | ||||||||
Shares repurchased, value | $ | 3,530,000 | 12,295,000 | $ 49,244,000 | ||||||
Remaining authorizations under the repurchase program | $ | $ 10,756,000 | 10,756,000 | |||||||
Shares reissued from the treasury | shares | 2,529,444 | ||||||||
Shares reissued from the treasury, value | $ | $ 20,746,000 | ||||||||
Cost of Products Sold | |||||||||
Share-based Compensation [Abstract] | |||||||||
Share-based compensation expense | $ | 96,000 | 95,000 | |||||||
Research and Development | |||||||||
Share-based Compensation [Abstract] | |||||||||
Share-based compensation expense | $ | 205,000 | 186,000 | |||||||
Selling, General and Administrative | |||||||||
Share-based Compensation [Abstract] | |||||||||
Share-based compensation expense | $ | 4,314,000 | $ 3,652,000 | |||||||
Restricted Stock Awards | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Total unrecognized stock-based compensation related to time-based, nonvested restricted stock | $ | $ 24,965,395 | $ 24,965,395 | |||||||
Expenses expected to be recognized over a weighted-average period (in years) | 2 years 3 months 18 days | ||||||||
Number of Shares | |||||||||
Beginning Balance | shares | 2,613,267 | ||||||||
Granted | shares | 1,576,579 | ||||||||
Vested | shares | (644,903) | ||||||||
Forfeited | shares | (45,263) | ||||||||
Ending Balance | shares | 3,499,680 | 3,499,680 | |||||||
Weighted- Average Grant Date Fair Value | |||||||||
Beginning Balance (in dollars per share) | $ 9.14 | ||||||||
Granted (in dollars per share) | 8.18 | ||||||||
Vested (in dollars per share) | 8.42 | ||||||||
Forfeited (in dollars per share) | 8.87 | ||||||||
Beginning Balance (in dollars per share) | $ 8.84 | $ 8.84 | |||||||
Share-based Compensation [Abstract] | |||||||||
Shares paid for tax withholding | shares | 81,594 | ||||||||
$0.50 - $0.76 | |||||||||
Stock options, additional disclosures [Abstract] | |||||||||
Exercise Price Range, lower range limit (in dollars per share) | $ 0.50 | ||||||||
Exercise Price Range, upper range limit (in dollars per share) | $ 0.76 | ||||||||
Number of outstanding options (in shares) | shares | 441,429 | 441,429 | |||||||
Outstanding Options, weighted average remaining contractual term | 3 years 2 months 12 days | ||||||||
Outstanding Options, weighted average exercise price (in dollars per share) | $ 0.72 | $ 0.72 | |||||||
Number of exercisable options (in shares) | shares | 441,429 | 441,429 | |||||||
Exercisable Options, weighted average exercise price (in dollars per share) | $ 0.72 | $ 0.72 | |||||||
$0.87 - $1.35 | |||||||||
Stock options, additional disclosures [Abstract] | |||||||||
Exercise Price Range, lower range limit (in dollars per share) | 0.87 | ||||||||
Exercise Price Range, upper range limit (in dollars per share) | $ 1.35 | ||||||||
Number of outstanding options (in shares) | shares | 4,431,970 | 4,431,970 | |||||||
Outstanding Options, weighted average remaining contractual term | 5 years 4 months 24 days | ||||||||
Outstanding Options, weighted average exercise price (in dollars per share) | $ 1.19 | $ 1.19 | |||||||
Number of exercisable options (in shares) | shares | 4,431,970 | 4,431,970 | |||||||
Exercisable Options, weighted average exercise price (in dollars per share) | $ 1.19 | $ 1.19 | |||||||
$1.40 - $2.45 | |||||||||
Stock options, additional disclosures [Abstract] | |||||||||
Exercise Price Range, lower range limit (in dollars per share) | 1.40 | ||||||||
Exercise Price Range, upper range limit (in dollars per share) | $ 2.45 | ||||||||
Number of outstanding options (in shares) | shares | 1,460,924 | 1,460,924 | |||||||
Outstanding Options, weighted average remaining contractual term | 4 years 8 months 12 days | ||||||||
Outstanding Options, weighted average exercise price (in dollars per share) | $ 1.92 | $ 1.92 | |||||||
Number of exercisable options (in shares) | shares | 1,460,924 | 1,460,924 | |||||||
Exercisable Options, weighted average exercise price (in dollars per share) | $ 1.92 | $ 1.92 | |||||||
$2.66 - $3.99 | |||||||||
Stock options, additional disclosures [Abstract] | |||||||||
Exercise Price Range, lower range limit (in dollars per share) | 2.66 | ||||||||
Exercise Price Range, upper range limit (in dollars per share) | $ 3.99 | ||||||||
Number of outstanding options (in shares) | shares | 894,120 | 894,120 | |||||||
Outstanding Options, weighted average remaining contractual term | 6 years 7 months 6 days | ||||||||
Outstanding Options, weighted average exercise price (in dollars per share) | $ 3.06 | $ 3.06 | |||||||
Number of exercisable options (in shares) | shares | 894,120 | 894,120 | |||||||
Exercisable Options, weighted average exercise price (in dollars per share) | $ 3.06 | $ 3.06 | |||||||
$4.19 - $6.38 | |||||||||
Stock options, additional disclosures [Abstract] | |||||||||
Exercise Price Range, lower range limit (in dollars per share) | 4.19 | ||||||||
Exercise Price Range, upper range limit (in dollars per share) | $ 6.38 | ||||||||
Number of outstanding options (in shares) | shares | 3,426,178 | 3,426,178 | |||||||
Outstanding Options, weighted average remaining contractual term | 7 years 2 months 12 days | ||||||||
Outstanding Options, weighted average exercise price (in dollars per share) | $ 5.35 | $ 5.35 | |||||||
Number of exercisable options (in shares) | shares | 2,897,570 | 2,897,570 | |||||||
Exercisable Options, weighted average exercise price (in dollars per share) | $ 5.26 | $ 5.26 | |||||||
$6.45 - $9.78 | |||||||||
Stock options, additional disclosures [Abstract] | |||||||||
Exercise Price Range, lower range limit (in dollars per share) | 6.45 | ||||||||
Exercise Price Range, upper range limit (in dollars per share) | $ 9.78 | ||||||||
Number of outstanding options (in shares) | shares | 2,512,065 | 2,512,065 | |||||||
Outstanding Options, weighted average remaining contractual term | 7 years 10 months 24 days | ||||||||
Outstanding Options, weighted average exercise price (in dollars per share) | $ 7.29 | $ 7.29 | |||||||
Number of exercisable options (in shares) | shares | 1,556,144 | 1,556,144 | |||||||
Exercisable Options, weighted average exercise price (in dollars per share) | $ 7.24 | $ 7.24 | |||||||
$9.90- $10.99 | |||||||||
Stock options, additional disclosures [Abstract] | |||||||||
Exercise Price Range, lower range limit (in dollars per share) | 9.90 | ||||||||
Exercise Price Range, upper range limit (in dollars per share) | $ 10.99 | ||||||||
Number of outstanding options (in shares) | shares | 111,166 | 111,166 | |||||||
Outstanding Options, weighted average remaining contractual term | 8 years 7 months 6 days | ||||||||
Outstanding Options, weighted average exercise price (in dollars per share) | $ 10.44 | $ 10.44 | |||||||
Number of exercisable options (in shares) | shares | 32,326 | 32,326 | |||||||
Exercisable Options, weighted average exercise price (in dollars per share) | $ 10.51 | $ 10.51 | |||||||
Assumed 2006 Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Common stock shares issued (in shares) | shares | 20,406 | ||||||||
Shares issued for services performed | $ | $ 173,000 | ||||||||
|
Income taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Income Tax Contingency [Line Items] | ||||
Effective tax rate | 15.20% | 3.40% | ||
Effective income tax rate increase (decrease), amount | $ 350 | |||
Effective income tax rate increase (decrease), percent | 11.80% | |||
Change in valuation allowance | $ (15,400) | |||
Forecast | ||||
Income Tax Contingency [Line Items] | ||||
Effective tax rate | 40.40% |
Supplemental disclosure of cash flow and non-cash investing and financing activities (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Supplemental Cash Flow Elements [Abstract] | ||
Cash paid for interest, net | $ 56 | $ 14 |
Income taxes paid | 139 | 363 |
Stock issuance of 441,009 shares in connection with acquisition | $ 3,346 | 0 |
Shares issued in conjunction with acquisition (in shares) | 441,009 | |
Stock issuance of 20,406 and 11,321 shares in exchange for services performed, respectively | $ 173 | $ 108 |
Shares issued for services performed (in shares) | 20,406 | 11,321 |
Contractual Commitments and Contingencies (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016
USD ($)
claim
|
Mar. 31, 2015
USD ($)
|
Dec. 31, 2015 |
Dec. 30, 2015
term
|
Dec. 22, 2015
term
|
Oct. 02, 2015
term
|
Aug. 18, 2015
claim
|
Jul. 10, 2015
claim
|
Jun. 29, 2015
claim
|
|
Estimated annual lease, royalty, and employment agreement expenses [Abstract] | |||||||||
2017 | $ 2,998 | ||||||||
2018 | 2,246 | ||||||||
2019 | 2,199 | ||||||||
2020 | 1,742 | ||||||||
Thereafter | 765 | ||||||||
Total Contractual commitments | $ 9,950 | ||||||||
Loss Contingencies [Line Items] | |||||||||
Lessee expiration period (years) | 6 years | ||||||||
Rent expense | $ 423 | $ 284 | |||||||
Sales Revenue, Net | Product Concentration Risk | |||||||||
Loss Contingencies [Line Items] | |||||||||
Percentage of revenue | 12.00% | ||||||||
Standby Letters of Credit | |||||||||
Loss Contingencies [Line Items] | |||||||||
Standby letters of credit | $ 235 | ||||||||
Pending Litigation | |||||||||
Loss Contingencies [Line Items] | |||||||||
Number of patent challenged grounds | claim | 4 | ||||||||
Pending Litigation | Bone Bank Action | |||||||||
Loss Contingencies [Line Items] | |||||||||
Number of patent challenged grounds | claim | 5 | 7 | |||||||
Number of pending disputed claim terms | term | 1 | ||||||||
Opinion allowing a review of patent | claim | 2 | ||||||||
Pending Litigation | Liventa Action | |||||||||
Loss Contingencies [Line Items] | |||||||||
Number of pending disputed claim terms | term | 1 | 30 | |||||||
Pending Litigation | Liventa Action, 701 Patent | |||||||||
Loss Contingencies [Line Items] | |||||||||
Number of patent challenged grounds | claim | 6 | ||||||||
Pending Litigation | Liventa Action, 437 Patent | |||||||||
Loss Contingencies [Line Items] | |||||||||
Number of patent challenged grounds | claim | 7 | ||||||||
Opinion allowing a review of patent | claim | 1 |
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Allowance for doubtful accounts | ||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at Beginning of Period | $ 3,270 | $ 1,750 |
Additions charged to Expense or Revenue | 602 | 260 |
Deductions and write-offs | 0 | 0 |
Balance at End of Period | 3,872 | 2,010 |
Allowance for product returns | ||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at Beginning of Period | 1,262 | 841 |
Additions charged to Expense or Revenue | 1,300 | 709 |
Deductions and write-offs | (911) | (606) |
Balance at End of Period | 1,651 | 944 |
Allowance for obsolescence | ||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at Beginning of Period | 397 | 527 |
Additions charged to Expense or Revenue | 235 | 130 |
Deductions and write-offs | (28) | (105) |
Balance at End of Period | $ 604 | $ 552 |
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