Common Stock Placements

9 Months Ended

Sep. 30, 2012

Common Stock Placements [Abstract]

Common Stock Placements

9.         Common Stock Placements

October 2010 Private Placement

In October 2010, the Company commenced a private placement to sell common stock and warrants. From October 30, 2010, through December 31, 2010, the Company sold 2,405,000 shares of common stock at a price of $1.00 per share and received proceeds of $2,337,020 net of $67,980 in offering costs.  For the nine months ended September 30, 2011, the Company sold an additional 3,778,321 shares of Common Stock and issued an additional 1,889,161 warrants and received net cash proceeds of $3,730,587 net of $47,733 in offering costs.  Under the terms of the offering, for each share purchased, the investor received one 5-year warrant to purchase the common stock of the Company at an exercise price of $1.50 per share. The terms of the warrant, (the "Callable Warrant") are that for every two shares of common stock purchased, the holder is issued a 5-year warrant to purchase one share of the Company's Common Stock at an exercise price of $1.50 per share. The Callable Warrant does not carry registration rights and is callable by the Company at any time after the issuance if the closing sale price of the Stock exceeds $1.75 for fifteen (15) or more consecutive trading days. Upon written notice, the Company may redeem the Callable Warrant at a price of $0.01 per share.  Additionally, the Company issued a First Contingent Warrant ("First Contingent Warrant") and a Second Contingent Warrant ("Second Contingent Warrant") to Purchase Common Stock.

The First Contingent Warrant vested during the second quarter resulting in the issuance of 1,672,742 warrants at an exercise price of $0.01 per share.

The warrants met all the requirements for equity classification under GAAP and are recorded in stockholders' equity.

The Second Contingent Warrant was issued to each investor to purchase 25% of the number of shares of Stock purchased, at an exercise price of $0.01 per share, provided that the Second Contingent Warrant shall only be exercisable if the Company's Gross Revenues as reported in the Company's Audited Financial Statements for the year ended December 31, 2012, do not equal or exceed $31,150,000 and further provided that such Warrant shall be null and void in the event that prior to issuance of such Audited Financial Statements (the "Second Measurement Date") the closing trading price of the Stock is at least $1.75 per share for ten or more consecutive trading days.

On July 3, 2012, 1,672,742 Second Contingent Warrants were voided which represented the tenth consecutive trading day of the closing trading price of the Company stock being at least $1.75.

In July 2012, the Company decided to exercise its right to call approximately 3,345,000 warrants issued to investors in conjunction with the October 2010 Private Placement.  As a result of calling the warrants, the Company raised approximately $4,900,000 and issued 3,288,733 shares of MiMedx common stock as of August 3, 2012. The balance of 56,750 warrants were repurchased at $.01 per share.

The Company's Chairman and CEO invested $1,006,664 in the October 2010 Private Placement including the investment of principal and accrued interest from the October 2010 Bridge note converted under the same terms as the Private Placement, receiving 503,332 warrants with an exercise price of $1.50, 251,666 First Contingent warrants at an exercise price of $0.01 and 251,666 Second Contingent warrants at an exercise price of $0.01 as per the aforementioned terms of the offering. The First Contingent Warrants vested and were exercised in the second quarter. The Second Contingent warrants were voided on July 3, 2012 which represented the tenth consecutive trading day of the closing trading price of the Company stock being at least $1.75. A total of 503,332  Callable Warrants were exercised during the period at $1.50 per share.

In connection with the October 2010 Private Placement, the Company entered into a registration rights agreement that provides "Piggy-Back" registration rights to each investor.