þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Florida
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26-2792552
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(State or other jurisdiction of incorporation)
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(I.R.S. Employer Identification Number)
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60 Chastain Center Boulevard, Suite 60
Kennesaw, GA
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30144
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer o
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Accelerated filer þ
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Non-accelerated filer o
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Smaller reporting Company þ
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(Do not check if a smaller reporting company)
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●
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the advantages of our products;
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our ability to develop future products; |
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our belief regarding the growth of our direct sales force resulting in increased revenues;
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expectations regarding government and other third-party reimbursement for our products;
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our beliefs regarding our relationships with our two largest distributors; |
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expectations regarding future revenue growth; |
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our ability to procure sufficient quantities of donated placentas for our products and future products; |
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market opportunities for our products and future products; |
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prospects for obtaining additional patents covering our proprietary technology; and |
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our ability to compete effectively. |
Item 1.
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Business
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·
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Structural proteins; including:
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o
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Collagen types IV, V, and VII
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o
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Elastin
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·
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Specialized proteins; including:
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o
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Fibrillin
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o
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Fibronectin
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o
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Laminins
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o
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TIMPs 1,2,4, Tissue Inhibitor of Metalloproteinase 1, 2, 4
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Growth Factors; including:
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o
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Epidermal Growth Factor (EGF)
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o
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Transforming Growth Factor Beta (TGF-β)
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o
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Fibroblast Growth Factor (FGF)
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o
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Platelet Derived Growth Factors A & B (PDGF A&B)
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·
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AmnioFix® is provided in a sheet form. It is configured to enhance non-structural soft tissue healing and to minimize scar tissue formation after primary surgical repair. It is being used currently in spine, general and urology surgeries.
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AmnioFix® Wrap also is supplied in a sheet form and is configured for the same purposes and AmnioFix®, but is optimized for use as a “wrap” for nerves, tendons or ligaments.
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AmnioFix® Injectable is supplied in micronized powder form designed for injection into soft tissue areas. AmnioFix® is designed to reduce inflammation while enhancing healing of soft tissue micro tears. Currently, AmnioFix® is used being used to treat conditions such as tendonitis, plantar fasciitis, lateral epicondylitis, medial epicondylitis, bursitis, strains and sprains.
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Initial tests of cross-linked fibers appear to demonstrate they are stronger than existing collagenous tissue, including healthy tendons and ligaments. These fibers form the fundamental unit from which a variety of devices could be configured as follows:
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Linear and braided arrays for tendon and ligament repair;
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Cross-helical arrays forming tubular structures that also can be cut to form flat patches;
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Woven meshes for general surgical use;
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CollaFixTM biomaterials have been tested and results preliminarily suggest that the materials are biocompatible and biodegradable;
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CollaFixTM Biomaterials coupled with MiMedx proprietary NDGA (nordihydroguaiaretic acid) polymerization can be used to coat synthetic indwelling medical devices to improve their biocompatibility;
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NDGA treatment of xenograft (animal in origin) and allograft (human in origin) materials could make them more biocompatible and possibly improve functional lifetime; and
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Cross-linked collagen-based biorivets have the potential to be used for bone fracture fixation.
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It must be minimally manipulated;
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It must be intended for homologous use;
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Its manufacture does not involve combination with another article, except for water, crystalloids or a sterilizing, preserving or storage agent; and
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It does not have a systemic effect and is not dependent upon the metabolic activity of living cells for its primary function.
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Product design and development;
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Product testing;
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Product manufacturing;
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Product labeling;
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Product storage;
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Premarket clearance or approval;
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Advertising and promotion;
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Product sales and distribution; and
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Medical device reporting/Vigilance reporting.
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Fines, injunctions, and civil penalties;
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Recall or seizure of our products;
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Operating restrictions, partial suspension or total shutdown of production;
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Refusing our requests for 510(k) clearance or PMA approval of new products;
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Withdrawing 510(k) clearance or PMA approvals already granted; and
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Criminal prosecution.
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The announcement or introduction of new products by our competitors;
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Failure of government and private health plans to adequately and timely reimburse the users of our products;
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Our ability to upgrade and develop our systems and infrastructure to accommodate growth;
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Our ability to attract and retain key personnel in a timely and cost effective manner;
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The amount and timing of operating costs and capital expenditures relating to the expansion of our business, operations and infrastructure;
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Regulation by federal, state or local governments; and
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General economic conditions as well as economic conditions specific to the healthcare industry.
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Significantly greater name recognition;
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Established relations with surgeons, hospitals, other healthcare providers and third party payers;
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Large and established sales and distribution networks in the United States and/or in international markets;
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Greater experience in obtaining and maintaining regulatory approvals and/or clearances from the United States Food and Drug Administration and other regulatory agencies;
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Greater financial, managerial and other resources for product research and development, sales and marketing efforts and protecting and enforcing intellectual property rights.
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Their lack of experience with prior procedures in the field using our products;
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Lack of evidence supporting additional patient benefits and our products over conventional methods;
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Perceived liability risks generally associated with the use of new products and procedures;
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Limited availability of reimbursement from third party payers; and
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The time that must be dedicated to training.
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We may not be able to obtain regulatory clearance or approvals for such products, or the approved indication may be narrower than we seek;
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Such products may not prove to be safe and effective in preclinical or clinical trials;
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Physicians or hospitals may not receive any reimbursement from third party payers, or the level of reimbursement may be insufficient to support widespread adoption of such products;
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We may experience delays in our development programs;
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Any products that are approved may not be accepted in the marketplace by physicians or patients;
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We may not be able to manufacture any such products in commercial quantities or at an acceptable cost; and
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Rapid technological change may make such products obsolete.
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Fluctuations in currency exchange rates;
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Regulatory, product approval and reimbursement requirements;
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Tariffs and other trade barriers;
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Greater difficulty in accounts receivable collection and longer collection periods;
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Difficulties and costs of managing foreign distributors;
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Reduced protection for intellectual property rights in some countries;
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Burdens of complying with a wide variety of foreign laws;
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The impact of recessions in economies outside the U.S.;
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Political and economic instability; and
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U.S. Export regulatory restrictions.
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It must be minimally manipulated;
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It must be intended for homologous use;
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Its manufacture does not involve combination with another article, except for water, crystalloids or a sterilizing, preserving or storage agent; and
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It does not have a systemic effect and is not dependent upon the metabolic activity of living cells for its primary function.
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Untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties;
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Customer notifications for repair, replacement, refunds;
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Recall, detention or seizure of our products;
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Operating restrictions or partial suspension or total shutdown of production;
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Refusing or delaying our requests for 510(k) clearance or premarket approval of new products or modified products;
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Withdrawing 510(k) clearances or PMA approvals that have already been granted;
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Refusal to grant export approval for our products; or
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Fluctuations in stock market prices and trading volumes of similar companies or of the markets generally;
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Our ability to successfully launch, market and earn significant revenue from our products;
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Our ability to obtain additional financing to support our continuing operations;
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Disclosure of the details and results of regulatory applications and proceedings;
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Changes in government regulation;
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Additions or departures of key personnel;
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Our investments in research and development or other corporate resources;
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Announcements of technological innovations or new commercial products or services by us or our competitors;
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Developments in the patents or other proprietary rights owned or licensed by us or our competitors;
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The timing of new product introductions;
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Actual or anticipated fluctuations in our operating results, including any restatements of previously reported results;
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Our ability to effectively and consistently manufacture our products and avoid costs associated with the recall of defective or potentially defective products;
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Our ability and the ability of our distribution partners to market and sell our products;
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Changes in distribution channels; and
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The ability of our vendors to effectively and timely deliver necessary materials and product components.
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Make a special written suitability determination for the purchaser;
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Receive the purchaser’s written agreement to a transaction prior to sale;
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Provide the purchaser with risk disclosure documents which identify certain risks associated with investing in “penny stocks” and which describe the market for these “penny stocks” as well as a purchaser’s legal remedies;
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Obtain a signed and dated acknowledgment from the purchaser demonstrating that the purchaser has received the required risk disclosure document before a transaction in a “penny stock” can be completed; and
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Give bid and offer quotations and broker and salesperson compensation information to the customer orally or in writing before or with the confirmation.
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Authorizing the issuance of preferred stock which can be created and issued by the Board of Directors without prior common stock shareholder approval, with rights senior to those of the common stock;
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Restricting persons who may call shareholder meetings;
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Electing directors on a staggered basis; and
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●
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Allowing the Board to fill vacancies and to fix the number of directors.
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
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Year ended December 31, 2012
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High
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Low
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||||||
First Quarter
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$ | 1.40 | $ | 1.10 | ||||
Second Quarter
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2.20 | 1.03 | ||||||
Third Quarter
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2.99 | 1.97 | ||||||
Fourth Quarter
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3.85 | 2.59 | ||||||
Year ended December 31, 2011
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High
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Low
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First Quarter
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$ | 1.42 | $ | 1.04 | ||||
Second Quarter
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1.15 | 0.76 | ||||||
Third Quarter
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1.39 | 1.00 | ||||||
Fourth Quarter
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1.25 | 1.00 |
Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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·
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Significant underperformance relative to expected historical or projected future operating results,
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Significant negative industry or economic trends,
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Significant decline in the Company’s stock price for a sustained period, or
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Significant decline in the Company’s market capitalization relative to net book value.
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Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities;
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Level 2: Quoted prices in active markets for similar assets or liabilities or observable prices that are based on inputs not quoted on active markets, but corroborated by market data; and
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Level 3: Unobservable inputs or valuation techniques that are used when little or no market data is available.
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Year Ended December 31,
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Depreciation expense included in:
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2012
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2011
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Cost of products sold
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$ | 155,987 | $ | 104,950 | ||||
Research and development
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120,260 | 118,565 | ||||||
Selling, general and administrative
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189,120 | 222,987 | ||||||
$ | 465,367 | $ | 446,502 |
Year Ended December 31,
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||||||||
Share-based compensation included in:
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2012
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2011
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||||||
Cost of products sold
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$ | 97,970 | $ | 98,366 | ||||
Research and development
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289,341 | 254,997 | ||||||
Selling, general and administrative
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2,151,410 | 1,305,720 | ||||||
$ | 2,538,721 | $ | 1,659,083 |
Year Ended December 31,
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2012
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2011
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Amortization of
Debt Discount
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Accrued
Interest
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Interest Expense,
net
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Total
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Amortization of
Debt Discount
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Accrued
Interest
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Interest Expense,
net
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Total
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Convertible Line of Credit with Related Party
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$ | 561,202 | $ | 60,904 | $ | — | $ | 622,106 | $ | 33,254 | $ | 42,726 | $ | — | $ | 75,980 | ||||||||||||||||
Convertible Debt related to acquisition
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170,509 | 21,078 | — | 191,587 | 266,991 | 49,315 | — | 316,306 | ||||||||||||||||||||||||
Convertible Senior SecuredPromissory Notes
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961,941 | 500,000 | — | 1,461,941 | 14,907 | 7,732 | — | 22,639 | ||||||||||||||||||||||||
Deferred financing related to Senior Secured Promissory Notes
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20,449 | — | — | 20,449 | — | — | — | — | ||||||||||||||||||||||||
Other
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— | — | 10,910 | 10,910 | — | — | 18,045 | 18,045 | ||||||||||||||||||||||||
$ | 1,714,101 | $ | 581,982 | $ | 10,910 | $ | 2,306,993 | $ | 315,152 | $ | 99,773 | $ | 18,045 | $ | 432,970 |
less than
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More
than
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|||||||||||||||||||
Contractual Obligations
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TOTAL
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1 year
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1-3 years
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3-5 years
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5 years
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|||||||||||||||
Convertible senior secured promissory notes (a)
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$ | 5,313,645 | $ | 5,313,645 | — | — | ||||||||||||||
Capital lease obligation
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87,041 | 22,510 | 60,135 | 4,395 | — | |||||||||||||||
Operating lease obligations
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482,886 | 350,696 | 132,190 | — | — | |||||||||||||||
Royalty payments
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600,000 | 50,000 | 150,000 | 150,000 | 250,000 | |||||||||||||||
$ | 6,483,572 | $ | 5,736,851 | $ | 342,325 | $ | 154,395 | $ | 250,000 |
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(a)
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In January and February of 2013 all note holders elected to convert their notes including the Company’s Chairman and CEO, resulting in the issuance of 5,271,963 shares of common stock which represents the face value of their respective notes plus accrued but unpaid interest. The Company’s Chairman and CEO received 532,260 shares of common stock upon conversion of his note.
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Year Ended December 31,
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2012
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2011
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Net Loss (Per GAAP)
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$ | (7,662,376 | ) | $ | (10,193,986 | ) | ||
Add back:
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||||||||
Financing expense associated with beneficial conversion of note payable issued in conjunction with acquisition
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170,509 | 266,991 | ||||||
Financing expense associated with beneficial conversion of Line of Credit with Related Party
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561,202 | 33,254 | ||||||
Financing expense associated with beneficial conversion of Senior Secured Promissory Notes
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982,390 | 14,907 | ||||||
Other interest expense, net
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592,891 | 117,818 | ||||||
Depreciation Expense
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465,367 | 446,502 | ||||||
Amortization Expense
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1,380,241 | 1,335,908 | ||||||
Employee Share Based Compensation
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2,075,680 | 1,307,869 | ||||||
Other Share Based Compensation
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463,041 | 351,214 | ||||||
Impairment of Intangible Assets
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1,798,495 | - | ||||||
Fair Value Adjustment of Earn-out Liability
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1,567,050 | 5,803 | ||||||
Income (Loss) Before Interest, Taxes, Depreciation, Amortization and Share Based Compensation
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$ | 2,394,490 | $ | (6,313,720 | ) |
49 | |
51 | |
52 | |
53 | |
55 | |
57 |
/s/ Cherry Bekaert LLP
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Atlanta, Georgia
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March 15, 2013
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/s/ Cherry Bekaert LLP
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Atlanta, Georgia
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March 15, 2013
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ASSETS
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December 31,
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2012
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2011
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Current assets:
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||||||||
Cash and cash equivalents
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$ | 6,754,485 | $ | 4,112,326 | ||||
Accounts receivable, net
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7,653,561 | 1,891,919 | ||||||
Inventory, net
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3,022,784 | 712,602 | ||||||
Prepaid expenses and other current assets
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657,961 | 164,664 | ||||||
Total current assets
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18,088,791 | 6,881,511 | ||||||
Property and equipment, net of accumulated depreciation of $2,279,840 and $1,814,473, respectively
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1,071,625 | 869,411 | ||||||
Goodwill
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4,040,443 | 4,040,443 | ||||||
Intangible assets, net of accumulated amortization of $4,848,756 and $3,468,515, respectively
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11,911,749 | 15,090,485 | ||||||
Deposits and other long term assets
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70,000 | 214,342 | ||||||
Total assets
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$ | 35,182,608 | $ | 27,096,192 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
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||||||||
Current liabilities:
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||||||||
Accounts payable
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$ | 1,251,684 | $ | 1,517,449 | ||||
Accrued expenses
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3,743,934 | 783,189 | ||||||
Other current liabilities
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75,154 | 6,620 | ||||||
Current portion of line of credit with related party
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- | 1,295,980 | ||||||
Current portion of long term convertible debt related to acquisition
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- | 1,128,806 | ||||||
Total current liabilities
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5,070,772 | 4,732,044 | ||||||
Earn-out liability payable in MiMedx common stock
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5,792,330 | 7,410,503 | ||||||
Convertible Senior Secured Promissory Notes
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4,012,442 | 2,744,587 | ||||||
Other liabilities
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299,762 | 312,493 | ||||||
Total liabilities
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15,175,306 | 15,199,627 | ||||||
Commitments and contingency (Notes 14 and 15)
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||||||||
Stockholders' equity:
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||||||||
Preferred stock; $.001 par value; 5,000,000 shares authorized and 0 shares issued and outstanding
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- | - | ||||||
Common stock; $.001 par value; 130,000,000 shares authorized; 88,423,169 issued and 88,373,169 outstanding for 2012 and 74,306,895 issued and 74,256,895 outstanding for 2011
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88,423 | 74,307 | ||||||
Additional paid-in capital
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89,627,601 | 73,868,604 | ||||||
Treasury stock (50,000 shares at cost)
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(25,000 | ) | (25,000 | ) | ||||
Accumulated deficit
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(69,683,722 | ) | (62,021,346 | ) | ||||
Total stockholders' equity
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20,007,302 | 11,896,565 | ||||||
Total liabilities and stockholders' equity
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$ | 35,182,608 | $ | 27,096,192 |
Years Ended December 31,
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||||||||
2012
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2011
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|||||||
REVENUES:
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||||||||
Net sales
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$ | 27,053,773 | $ | 7,760,446 | ||||
OPERATING COSTS AND EXPENSES:
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||||||||
Cost of products sold
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5,188,378 | 3,357,909 | ||||||
Research and development expenses
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2,884,546 | 2,976,313 | ||||||
Selling, general and administrative expenses
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20,970,687 | 11,181,437 | ||||||
Impairment of intangible assets
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1,798,495 | - | ||||||
Fair value adjustment of earn-out liability
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1,567,050 | 5,803 | ||||||
LOSS FROM OPERATIONS
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(5,355,383 | ) | (9,761,016 | ) | ||||
OTHER INCOME (EXPENSE), net
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||||||||
Amortization of debt discount
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(1,714,101 | ) | (315,152 | ) | ||||
Interest expense, net
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(592,892 | ) | (117,818 | ) | ||||
LOSS BEFORE INCOME TAXES
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(7,662,376 | ) | (10,193,986 | ) | ||||
Income taxes
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- | - | ||||||
NET LOSS
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$ | (7,662,376 | ) | $ | (10,193,986 | ) | ||
Net loss per common share
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||||||||
Basic and diluted
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$ | (0.09 | ) | $ | (0.14 | ) | ||
Shares used in computing net loss per common share | ||||||||
Basic and diluted
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81,646,295 | 72,450,337 |
Preferred Stock
Series A
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Common
Stock
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Additional
Paid-in
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Treasury
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Accumulated
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||||||||||||||||||||||||||
Shares
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Amount
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Shares
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Amount
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Capital
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Stock
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Deficit
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Total
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|||||||||||||||||||||||||
Balances, December 31, 2010
|
- | $ | - | 64,381,910 | $ | 64,382 | $ | 57,888,506 | $ | (25,000 | ) | $ | (51,827,360 | ) | $ | 6,100,528 | ||||||||||||||||
Employee share-based compensation expense
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- | - | - | - | 1,307,869 | - | - | 1,307,869 | ||||||||||||||||||||||||
Other share-based compensation expense
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- | - | - | - | 351,214 | - | - | 351,214 | ||||||||||||||||||||||||
Exercise of stock options
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- | - | 490,000 | 490 | 295,263 | - | - | 295,753 | ||||||||||||||||||||||||
Sale of common stock and warrants (net of $47,733 of offering costs)
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- | - | 3,778,321 | 3,779 | 3,726,808 | - | - | 3,730,587 | ||||||||||||||||||||||||
Shares issued in conjunction with conversion of convertible debt
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- | - | 406,664 | 406 | 406,257 | - | - | 406,663 | ||||||||||||||||||||||||
Shares issued in conjunction with acquisition of Surgical Biologics, LLC
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- | - | 5,250,000 | 5,250 | 7,082,250 | - | - | 7,087,500 | ||||||||||||||||||||||||
Beneficial conversion feature recognized on convertible debt
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- | - | - | - | 2,715,552 | - | - | 2,715,552 | ||||||||||||||||||||||||
Warrants issued in conjunction with convertible promissory notes
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- | - | - | - | 14,885 | - | - | 14,885 | ||||||||||||||||||||||||
Discount on beneficial conversion feature recognized on line of credit with related party
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- | - | - | - | 80,000 | - | - | 80,000 | ||||||||||||||||||||||||
Net loss
|
- | - | - | - | - | - | (10,193,986 | ) | (10,193,986 | ) | ||||||||||||||||||||||
Balances, December 31, 2011
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- | $ | - | 74,306,895 | $ | 74,307 | $ | 73,868,604 | $ | (25,000 | ) | $ | (62,021,346 | ) | $ | 11,896,565 |
Convertible
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||||||||||||||||||||||||||||||||
Preferred Stock Series A
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Common Stock
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Additional Paid-in
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Treasury
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Accumulated
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||||||||||||||||||||||||||
Shares
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Amount
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Shares
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Amount
|
Capital
|
Stock
|
Deficit
|
Total
|
|||||||||||||||||||||||||
Balances, December 31, 2011
|
- | $ | - | 74,306,895 | $ | 74,307 | $ | 73,868,604 | $ | (25,000 | ) | $ | (62,021,346 | ) | $ | 11,896,565 | ||||||||||||||||
Employee share-based compensation expense
|
- | - | - | - | 2,075,680 | - | - | 2,075,680 | ||||||||||||||||||||||||
Other share-based compensation expense
|
- | - | - | - | 463,041 | - | - | 463,041 | ||||||||||||||||||||||||
Exercise of stock options
|
- | - | 843,863 | 844 | 1,051,824 | - | - | 1,052,668 | ||||||||||||||||||||||||
Exercise of warrants
|
- | - | 7,959,767 | 7,960 | 5,993,103 | - | - | 6,001,063 | ||||||||||||||||||||||||
Repurchase warrants
|
- | - | - | - | (568 | ) | - | - | (568 | ) | ||||||||||||||||||||||
Cashless exercise of warrants
|
- | - | 216,085 | 216 | (216 | ) | - | - | - | |||||||||||||||||||||||
Common stock issued for accrued director fees
|
- | - | 167,086 | 167 | 184,486 | - | - | 184,653 | ||||||||||||||||||||||||
Common stock issued for earn-out liability
|
- | - | 2,632,576 | 2,632 | 3,182,591 | - | - | 3,185,223 | ||||||||||||||||||||||||
Discount on beneficial conversion feature
|
- | - | - | - | 514,456 | - | - | 514,456 | ||||||||||||||||||||||||
Common stock issued for acquisition note
|
- | - | 893,267 | 893 | 892,374 | - | - | 893,267 | ||||||||||||||||||||||||
Conversion of line of credit with related party
|
1,403,630 | 1,404 | 1,402,226 | 1,403,630 | ||||||||||||||||||||||||||||
Net loss
|
- | - | - | - | - | - | (7,662,376 | ) | (7,662,376 | ) | ||||||||||||||||||||||
Balances, December 31, 2012
|
- | $ | - | 88,423,169 | $ | 88,423 | $ | 89,627,601 | $ | (25,000 | ) | $ | (69,683,722 | ) | $ | 20,007,302 |
Years Ended December 31,
|
||||||||
2012
|
2011
|
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$ | (7,662,376 | ) | $ | (10,193,986 | ) | ||
Adjustments to reconcile net loss to net cash flows from operating activities:
|
||||||||
Depreciation
|
465,367 | 446,502 | ||||||
Amortization of intangible assets
|
1,380,241 | 1,335,908 | ||||||
Impairment of intangible assets
|
1,798,495 | - | ||||||
Amortization of debt discount and deferred financing costs
|
1,714,101 | 315,152 | ||||||
Employee share-based compensation expense
|
2,075,680 | 1,307,869 | ||||||
Other share-based compensation expense
|
463,041 | 351,214 | ||||||
Change in fair value of earn-out liability
|
1,567,050 | 5,803 | ||||||
Increase (decrease) in cash resulting from changes in (net of effects of acquisition):
|
||||||||
Accounts receivable
|
(5,761,642 | ) | (1,208,456 | ) | ||||
Inventory
|
(2,310,182 | ) | (253,942 | ) | ||||
Prepaid expenses and other current assets
|
(466,060 | ) | (70,980 | ) | ||||
Other assets
|
96,657 | (80,375 | ) | |||||
Accounts payable
|
(81,112 | ) | 929,039 | |||||
Accrued expenses
|
2,960,744 | 327,212 | ||||||
Accrued interest
|
387,896 | 107,886 | ||||||
Other liabilities
|
(12,731 | ) | 16,383 | |||||
Net cash flows from operating activities
|
(3,384,831 | ) | (6,664,771 | ) | ||||
Cash flows from investing activities:
|
||||||||
Purchases of equipment
|
(582,931 | ) | (486,091 | ) | ||||
Proceeds from grant
|
- | 250,000 | ||||||
Cash paid for acquisition, net of cash acquired of $33,583
|
- | (466,417 | ) | |||||
Net cash flows from investing activities
|
(582,931 | ) | (702,508 | ) | ||||
Cash flows from financing activities:
|
||||||||
Proceeds from exercise of warrants
|
6,001,063 | - | ||||||
Proceeds from exercise of stock options
|
1,052,668 | 295,753 | ||||||
Repayment of convertible debt related to acquisition
|
(427,126 | ) | - | |||||
Repayment of equipment lease
|
(16,116 | ) | - | |||||
Repurchase of warrants
|
(568 | ) | - | |||||
Proceeds from Senior Secured Promissory Notes
|
- | 5,000,000 | ||||||
Proceeds from Line of Credit with related party
|
- | 1,300,000 | ||||||
Repayment of Line of Credit
|
- | (99,000 | ) | |||||
Repayment of Note Payable
|
- | (88,657 | ) | |||||
Proceeds from sale of common stock and warrants and common stock with registration rights, net
|
- | 3,730,587 | ||||||
Net cash flows from financing activities
|
6,609,921 | 10,138,683 | ||||||
Net change in cash
|
2,642,159 | 2,771,404 | ||||||
Cash, beginning of period
|
4,112,326 | 1,340,922 | ||||||
Cash, end of period
|
$ | 6,754,485 | $ | 4,112,326 |
Years Ended December 31,
|
||||||||
2012
|
2011
|
|||||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid for interest
|
$ | 13,322 | $ | 15,456 | ||||
Cash paid for income taxes
|
$ | - | $ | - |
Supplemental disclosure of non-cash financing activity:
|
|
During the year ended December 31, 2012:
|
|
*
|
the Company issued 167,086 shares of stock valued at $184,653 for accrued Director's fees
|
|
*
|
the Company issued 216,085 shares of stock for cashless exercise of warrants
|
|
*
|
the Company recognized a beneficial conversion feature valued at $514,456 related to the vested contingent warrants on the line of credit with related party
|
|
*
|
the Company issued 2,632,576 shares of stock valued at $3,185,223 for payment of the 2011 Earn-out liability related to its acquisition of Surgical Biologics
|
|
*
|
the Company acquired equipment under a capital lease in the amount of $84,650
|
|
*
|
the Company issued 893,267 shares of stock valued at $893,267 for payment of the Convertible Secured Promissory Notes related to the acquisition of Surgical Biologics
|
|
*
|
The Company issued 1,403,630 shares of stock valued at $1,403,630 for payment of the Line of Credit with related party
|
|
During the year ended December 31, 2011:
|
|
*
|
the Company converted its outstanding convertible debt and accrued interest to equity by issuing 406,664 shares of common stock
|
|
*
|
the Company issued 5,250,000 shares of stock valued at $7,087,500 and issued convertible secured promissory notes for $1,250,000 in conjunction with its acquisition of Surgical Biologics
|
|
*
|
the Company recognized a beneficial conversion feature valued at $437,500 related to the convertible debt issued with regard to its acquisition of Surgical Biologics, LLC
|
|
*
|
the Company recognized a beneficial conversion feature valued at $80,000 related to the convertible debt issued with regard the Note Payable to related party
|
|
*
|
the Company recognized a beneficial conversion feature valued at $2,278,052 related to the convertible debt issued with regard to the Senior Secured Promissory Notes
|
|
*
|
the Company issued warrants valued at $14,885 for placement fees associated with the Senior Secured Promissory Notes
|
Year Ended December 31,
|
||||||||
Depreciation expense included in:
|
2012
|
2011
|
||||||
Cost of products sold
|
$ | 155,987 | $ | 104,950 | ||||
Research and development
|
120,260 | 118,565 | ||||||
Selling, general and administrative
|
189,120 | 222,987 | ||||||
$ | 465,367 | $ | 446,502 |
Year Ended December 31,
|
||||||||
Share-based compensation included in:
|
2012
|
2011
|
||||||
Cost of products sold
|
$ | 97,970 | $ | 98,366 | ||||
Research and development
|
289,341 | 254,997 | ||||||
Selling, General and administrative
|
2,151,410 | 1,305,720 | ||||||
$ | 2,538,721 | $ | 1,659,083 |
·
|
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities;
|
·
|
Level 2: Quoted prices in active markets for similar assets or liabilities or observable prices that are based on inputs not quoted on active markets, but corroborated by market data; and
|
·
|
Level 3: Unobservable inputs or valuation techniques that are used when little or no market data is available.
|
Year ended December 31,
|
||||||||
2012
|
2011
|
|||||||
Net loss
|
$ | (7,662,376 | ) | $ | (10,193,986 | ) | ||
Denominator for basic earnings per share - weighted average shares
|
81,646,295 | 72,450,337 | ||||||
Effect of dilutive securities: Stock options and warrants outstanding and convertible debt (a)
|
— | — | ||||||
Denominator for diluted earnings per share - weighted average shares adjusted for dilutive securities
|
81,646,295 | 72,450,337 | ||||||
Loss per common share - basic and diluted
|
$ | (0.09 | ) | $ | (0.14 | ) |
December 31, 2012
|
December 31, 2011
|
|||||||
Outstanding Stock Options
|
13,614,135 | 10,333,583 | ||||||
Outstanding Warrants
|
3,129,168 | 9,388,817 | ||||||
Convertible Debt, promissory notes
|
5,313,645 | 5,007,732 | ||||||
Convertible Line of Credit with Related Party
|
- | 1,342,726 | ||||||
Convertible Debt, Acquisition
|
- | 1,299,315 | ||||||
22,056,948 | 27,372,173 |
3.
|
Liquidity and Management’s Plans
|
2012
|
2011
|
|||||||
Beginning balance at January 1,
|
$ | 7,410,503 | $ | - | ||||
Valuation at acquisition date
|
7,404,700 | |||||||
Remeasurement adjustments
|
1,567,050 | 5,803 | ||||||
Common stock issued on earn - out
|
(3,185,223 | ) | - | |||||
Ending balance at December 31,
|
$ | 5,792,330 | $ | 7,410,503 |
Value of 5,250,000 shares issued at $1.35 per share
|
$ | 7,087,500 | ||
Cash paid at closing
|
350,000 | |||
Cash retained for working capital
|
150,000 | |||
Assumed Debt
|
182,777 | |||
Convertible Secured Promissory Note
|
1,250,000 | |||
Fair value of earn-out
|
7,404,700 | |||
Total fair value of purchase price
|
$ | 16,424,977 | ||
Assets purchased:
|
||||
Tangible assets:
|
||||
Debt-free working capital
|
$ | 671,880 | ||
Other assets, net
|
385 | |||
Property, plant and equipment
|
72,866 | |||
745,131 | ||||
Intangible assets:
|
||||
Customer relationships
|
3,520,000 | |||
Supplier relationships
|
241,000 | |||
Patents and know-how
|
5,530,000 | |||
Trade names and trademarks
|
1,008,000 | |||
In-process research and development – liquid
|
2,160,000 | |||
In-process research and development – other
|
25,000 | |||
Licenses and permits
|
13,000 | |||
12,497,000 | ||||
Goodwill
|
3,182,846 | |||
Total Assets Purchased
|
$ | 16,424,977 |
Working capital:
|
||||
Cash
|
$ | 33,583 | ||
Prepaid Expenses
|
2,738 | |||
Accounts Receivable
|
181,087 | |||
License Receivable
|
340,000 | |||
Inventory
|
347,106 | |||
Accounts payable and accrued expenses
|
(196,101 | ) | ||
Deferred rent and customer deposits
|
(36,533 | ) | ||
Debt-free working capital
|
671,880 | |||
Current portion of debt
|
(62,590 | ) | ||
Long-term debt
|
(21,187 | ) | ||
Line of credit
|
(99,000 | ) | ||
Net working capital
|
$ | 489,103 | ||
Deposits
|
$ | 16,582 | ||
Deferred rent (non-current)
|
(16,197 | ) | ||
$ | 385 |
Estimated useful
|
|
Intangible asset:
|
life (in years)
|
Customer relationships
|
14
|
Supplier relationships
|
14
|
Patents and know-how
|
14
|
Trade names and trademarks
|
indefinite
|
In-process research and development – liquid
|
indefinite(a)
|
In-process research and development – other
|
indefinite
|
Licenses and permits
|
3
|
5.
|
Inventories
|
December 31,
|
||||||||
2012
|
2011
|
|||||||
Raw materials
|
$ | 233,747 | $ | 95,288 | ||||
Work in process
|
1,598,537 | 308,763 | ||||||
Finished goods
|
1,349,121 | 361,007 | ||||||
Inventory, gross
|
3,181,405 | 765,058 | ||||||
Reserve for obsolescence
|
(158,621 | ) | (52,456 | ) | ||||
Inventory, net
|
$ | 3,022,784 | $ | 712,602 |
6.
|
Property and Equipment
|
December 31,
|
||||||||
2012
|
2011
|
|||||||
Leasehold improvements
|
$ | 1,022,230 | $ | 925,086 | ||||
Lab and clean room equipment
|
1,887,645 | 1,463,144 | ||||||
Furniture and equipment
|
431,563 | 295,654 | ||||||
Construction in Progress
|
10,027 | - | ||||||
Property, Equipment, gross
|
3,351,465 | 2,683,884 | ||||||
Less accumulated depreciation
|
(2,279,840 | ) | (1,814,473 | ) | ||||
Property, Equipment, net
|
$ | 1,071,625 | $ | 869,411 |
7.
|
Intangible Assets and Royalty Agreement
|
December 31, 2012
|
December 31, 2011
|
||||||||||||||||||||||||||||
Average
|
Gross
|
Net
|
Gross
|
Net
|
|||||||||||||||||||||||||
Amortization
|
Carrying
|
Impairment
|
Accumulated
|
Carrying
|
Carrying
|
Accumulated
|
Carrying
|
||||||||||||||||||||||
Lives
|
Value
|
Adjustment
|
Amortization
|
Value
|
Value
|
Amortization
|
Value
|
||||||||||||||||||||||
License-Shriners Hsp for Children & USF Research (a)
|
10 years
|
$ | 996,000 | $ | — | $ | (587,633 | ) | $ | 408,367 | $ | 996,000 | $ | (488,033 | ) | $ | 507,967 | ||||||||||||
License - SaluMedica LLC Spine Repair (b)
|
10 years
|
2,399,000 | (851,676 | ) | (1,547,324 | ) | — | 2,399,000 | (1,313,573 | ) | 1,085,427 | ||||||||||||||||||
License - Polyvinyl Alcohol Cryogel (c)
|
10 years
|
2,667,000 | (946,819 | ) | (1,223,561 | ) | 496,620 | 2,667,000 | (998,932 | ) | 1,668,068 | ||||||||||||||||||
Customer Relationships (d)
|
14 years
|
3,520,000 | — | (502,857 | ) | 3,017,143 | 3,520,000 | (251,429 | ) | 3,268,571 | |||||||||||||||||||
Supplier Relationships (d)
|
14 years
|
241,000 | — | (34,429 | ) | 206,571 | 241,000 | (17,215 | ) | 223,785 | |||||||||||||||||||
Patents & Know-How (d)
|
14 years
|
5,530,000 | — | (790,000 | ) | 4,740,000 | 5,530,000 | (395,000 | ) | 5,135,000 | |||||||||||||||||||
Micronized Processing Know-How (d)
|
14 years
|
2,160,000 | — | (154,286 | ) | 2,005,714 | 2,160,000 | — | 2,160,000 | ||||||||||||||||||||
Licenses/Permits (d)
|
3 years
|
13,000 | — | (8,667 | ) | 4,333 | 13,000 | (4,333 | ) | 8,667 | |||||||||||||||||||
17,526,000 | (1,798,495 | ) | (4,848,756 | ) | 10,878,749 | 17,526,000 | (3,468,515 | ) | 14,057,485 | ||||||||||||||||||||
Trade Names/Trademarks (d)
|
indefinite
|
1,008,000 | — | — | 1,008,000 | 1,008,000 | — | 1,008,000 | |||||||||||||||||||||
In-process Research & Development-Other (d)
|
indefinite
|
25,000 | — | — | 25,000 | 25,000 | — | 25,000 | |||||||||||||||||||||
$ | 18,559,000 | $ | (1,798,495 | ) | $ | (4,848,756 | ) | $ | 11,911,749 | $ | 18,559,000 | $ | (3,468,515 | ) | $ | 15,090,485 |
Estimated
|
||||
Amortization
|
||||
Year ending December 31,
|
Expense
|
|||
2013
|
$ | 1,050,380 | ||
2014
|
1,046,047 | |||
2015
|
1,022,651 | |||
2016
|
976,998 | |||
2017
|
886,927 | |||
Thereafter
|
5,895,746 | |||
$ | 10,878,749 |
8.
|
Accrued Expenses
|
December 31,
|
||||||||
2012
|
2011
|
|||||||
Accrued Personnel Related Costs
|
$ | 1,761,760 | $ | 311,849 | ||||
Accrued Commissions
|
1,469,925 | 112,905 | ||||||
Other Accrued Expenses
|
512,249 | 358,435 | ||||||
Total Accrued Expenses
|
$ | 3,743,934 | $ | 783,189 |
9.
|
Long-Term Debt
|
December 31,
|
||||||||
2012
|
2011
|
|||||||
$5M Convertible Senior Secured Promissory Notes including interest at 5% per annum payable quarterly through December 31, 2013, and an additional one time 5% interest charge payable on January 15, 2013 if not repaid by December 31, 2012, collateralized by a first priority lien shared equally with holder of the Convertible Line of Credit with Related Party in all of the patents and intellectual property owned by the Company subordinated to the Convertible Debt related to acquisition for Surgical Biologics intellectual property until repaid. (a)
|
$ | 5,313,645 | $ | 5,007,732 | ||||
Convertible Line of Credit with Related Party with 5% interest; principal and interest payable in full December 31, 2012 collateralized by a first priority lien shared equally with holders of Convertible Senior Secured Promissory Notes in all patents and intellectual property of the Company subordinated to the Convertible debt related to the acquisition for Surgical Biologics intellectual property until repaid. (b)
|
- | 1,342,726 | ||||||
Convertible debt related to acquisition with 4% interest; principal and interest payable in full on July 5, 2012, collateralized by a first priority lien in all the intellectual property owned by Surgical Biologics immediately after the closing. (c)
|
- | 1,299,315 | ||||||
Total debt
|
$ | 5,313,645 | $ | 7,649,773 | ||||
Less unamortized debt discount
|
(1,301,203 | ) | (2,480,400 | ) | ||||
Less current portion
|
- | (2,424,786 | ) | |||||
Long-term portion
|
$ | 4,012,442 | $ | 2,744,587 |
11.
|
Equity
|
Number of
Shares
|
Weighted-
Average
Exercise
Price
|
Weighted-
Average
Remaining
Contractual
Term
(in years)
|
Aggregate
Intrinsic
Value
|
|||||||||||||
Outstanding at January 1, 2011
|
8,257,650 | $ | 1.20 | |||||||||||||
Granted
|
3,918,500 | $ | 1.17 | |||||||||||||
Exercised
|
(490,000 | ) | $ | 0.60 | ||||||||||||
Unvested options forfeited
|
(217,252 | ) | $ | 1.10 | ||||||||||||
Vested options expired
|
(1,135,315 | ) | $ | 1.70 | ||||||||||||
Outstanding at December 31, 2011
|
10,333,583 | $ | 1.17 | 7.1 | $ | 1,457,218 | ||||||||||
Vested or expected to vest at December 31, 2011
|
10,283,583 | $ | 1.17 | 5.7 | $ | 1,395,223 | ||||||||||
Outstanding at January 1, 2012
|
10,333,583 | $ | 1.17 | |||||||||||||
Granted
|
5,307,500 | $ | 1.90 | |||||||||||||
Exercised
|
(843,862 | ) | $ | 1.25 | ||||||||||||
Unvested options forfeited
|
(387,171 | ) | $ | 1.17 | ||||||||||||
Vested options expired
|
(795,915 | ) | $ | 1.55 | ||||||||||||
Outstanding at December 31, 2012
|
13,614,135 | $ | 1.42 | 8.0 | $ | 32,924,881 | ||||||||||
Vested or expected to vest at December 31, 2012
|
13,367,278 | $ | 1.41 | 7.9 | $ | 32,490,930 |
2012
|
|||||||||||||||||||||
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 | 2,372,500 | 5.3 | $ | 0.66 | 2,372,500 | $ | 0.66 | ||||||||||||||
$0.87 - $1.35 | 7,048,668 | 8.6 | $ | 1.15 | 1,674,638 | $ | 1.15 | ||||||||||||||
$1.40 - $2.18 | 1,958,467 | 6.8 | $ | 1.68 | 1,189,459 | $ | 1.68 | ||||||||||||||
$2.29 - $3.47 | 2,177,000 | 9.7 | $ | - | - | $ | - | ||||||||||||||
$3.49 - $3.85 | 57,500 | 10.0 | $ | - | - | $ | - | ||||||||||||||
13,614,135 | 8.0 | $ | 1.42 | 5,236,597 | $ | 1.05 |
2011 | |||||||||||||||||||||
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 | 587,250 | 2.9 | $ | 0.50 | 513,268 | $ | 0.50 | ||||||||||||||
$0.65 - $1.00 | 2,967,500 | 5.7 | $ | 0.79 | 2,730,224 | $ | 0.79 | ||||||||||||||
$1.04 - $1.80 | 6,228,833 | 8.8 | $ | 1.30 | 2,207,005 | $ | 1.45 | ||||||||||||||
$2.40 | 550,000 | 0.7 | $ | 2.40 | 550,000 | $ | 2.40 | ||||||||||||||
10,333,583 | 7.1 | $ | 1.17 | 6,000,497 | $ | 1.16 |
Unvested Stock Options
|
Number of
Shares
|
Weighted-
Average
Grant Date Fair Value
|
||||||
Unvested at January 1, 2012
|
4,333,086 | $ | 0.72 | |||||
Granted
|
5,307,500 | $ | 1.90 | |||||
Cancelled/expired
|
(387,171 | ) | $ | 1.17 | ||||
Vested
|
(875,877 | ) | $ | 1.05 | ||||
Unvested at December 31, 2012
|
8,377,538 | $ | 0.96 |
Unvested Stock Options
|
Number of
Shares
|
Weighted-
Average
Grant Date Fair Value
|
||||||
Unvested at January 1, 2011
|
2,679,787 | $ | 0.87 | |||||
Granted
|
3,918,500 | $ | 0.63 | |||||
Cancelled/expired
|
(1,352,567 | ) | $ | 0.59 | ||||
Vested
|
(912,634 | ) | $ | 0.81 | ||||
Unvested at December 31, 2011
|
4,333,086 | $ | 0.72 |
Year ended December 31,
|
||||||||
2012
|
2011
|
|||||||
Expected volatility
|
45.7-64.3 | % | 57.3-58.1 | % | ||||
Expected life (in years)
|
6 | 6 | ||||||
Expected dividend yield
|
— | — | ||||||
Risk-free interest rate
|
.62%-1.77 | % | 0.86% - 2.24 | % |
Number of
Warrants
|
Weighted-
Average
Exercise Price per Warrant
|
Number of
Contingent Warrants
|
Weighted-
Average
Exercise Price per Contingent Warrant
|
|||||||||||||
Warrants outstanding at January 1, 2011
|
6,003,924 | $ | 1.21 | 1,252,990 | $ | 0.01 | ||||||||||
Issued in connection with private placement of common stock
|
1,889,161 | 1.50 | 1,889,162 | 0.01 | ||||||||||||
Issued in connection with convertible promissory notes
|
203,332 | 1.50 | 203,332 | 0.01 | ||||||||||||
Issued in connection with line of credit with related party
|
— | — | 650,000 | 0.01 | ||||||||||||
Issued in connection with Senior Secured Promissory Notes
|
1,250,000 | 0.01 | 1,250,000 | 0.01 | ||||||||||||
Placement agent
|
42,400 | 1.09 | — | — | ||||||||||||
Warrants outstanding at December 31, 2011
|
9,388,817 | $ | 1.00 | 5,245,484 | $ | 0.01 | ||||||||||
Warrants issued:
|
||||||||||||||||
Vested contingent warrants related to private placement of common stock
|
1,672,743 | $ | 0.01 | (1,672,743 | ) | $ | 0.01 | |||||||||
Vested contingent warrants related to line of credit with related party
|
325,000 | 0.01 | (325,000 | ) | 0.01 | |||||||||||
Contingent warrants voided
|
— | — | (3,247,741 | ) | 0.01 | |||||||||||
Warrants exercised:
|
||||||||||||||||
Contingent warrants related to convertible note
|
(1,249,750 | ) | 0.01 | — | — | |||||||||||
Contingent warrants related to private placement of common stock
|
(1,608,802 | ) | 0.01 | — | — | |||||||||||
Contingent warrants related to line of credit with related party
|
(325,000 | ) | 0.01 | — | — | |||||||||||
Callable warrants
|
(3,288,733 | ) | 1.50 | — | — | |||||||||||
Other
|
(1,703,568 | ) | 0.63 | — | — | |||||||||||
Warrants expired
|
(10,000 | ) | 1.00 | — | — | |||||||||||
Warrants redeemed for cashless exercises
|
(14,789 | ) | 0.53 | — | — | |||||||||||
Repurchased callable warrants (a)
|
(56,750 | ) | 1.50 | — | — | |||||||||||
Warrants outstanding at December 31, 2012
|
3,129,168 | $ | 1.04 | — | $ | — |
|
(a)
|
The Company repurchased the callable warrants at $0.01 per share.
|
•
|
Notice given by the holder accompanied by payment of an amount equal to the warrant exercise price multiplied by the number of warrant shares being purchased; or
|
•
|
Election by the holder to exchange the warrant (or portion thereof) for that number of shares equal to the product of (a) the number of shares issuable upon exercise of the warrant (or portion) and (b) a fraction, (x) the numerator of which is the market price of the shares at the time of exercise minus the warrant exercise price per share at the time of exercise and (y) the denominator of which is the market price per share at the time of exercise.
|
12.
|
Income Taxes
|
December 31,
|
||||||||
2012
|
2011
|
|||||||
Deferred tax assets and liabilities:
|
||||||||
Accrued liabilities
|
$ | (73,000 | ) | $ | 131,000 | |||
Beneficial conversion feature on convertible financial instruments
|
(449,000 | ) | (927,000 | ) | ||||
Intangible assets
|
1,117,000 | 249,000 | ||||||
Property and equipment
|
89,000 | (18,000 | ) | |||||
R&D Credit Carryforward
|
1,407,356 | 494,000 | ||||||
Stock Compensation
|
213,000 | — | ||||||
Adjust accrued earn-out liability
|
567,947 | —- | ||||||
Charitable Contributions
|
3,000 | — | ||||||
Patent fees
|
6,000 | — | ||||||
Net operating loss
|
15,487,000 | 15,524,000 | ||||||
Net deferred tax assets
|
$ | 18,368,303 | $ | 15,453,000 | ||||
Valuation allowance
|
(18,368,303 | ) | (15,453,000 | ) | ||||
$ | — | $ | — |
12/31/2012
|
12/31/2011
|
|||||||
Federal statutory rate
|
34.00 | % | 34.00 | % | ||||
State taxes, net of federal benefit
|
3.40 | % | 5.34 | % | ||||
Permanent items & other
|
6.51 | % | (11.30 | %) | ||||
Valuation allowance
|
(43.91 | %) | (28.04 | %) | ||||
— | % | — | % |
13.
|
Related Party Transactions
|
December 31,
|
||||||||
2012
|
2011
|
|||||||
Office space lease (a)
|
$ | 48,182 | $ | 41,000 | ||||
Aircraft use (b)
|
— | 1,100 | ||||||
Hybrid debt instrument (c)
|
— | 3,232 | ||||||
Line of credit (d)
|
103,630 | 42,726 | ||||||
Convertible senior secured promissory notes (e)
|
50,000 | 4,507 | ||||||
$ | 201,812 | $ | 92,565 |
14.
|
401k Plan
|
15.
|
Commitments
|
Year ended December 31,
|
||||
2013
|
$ | 423,206 | ||
2014
|
204,700 | |||
Thereafter
|
542,021 | |||
$ | 1,169,927 |
16.
|
Subsequent Events
|
Item 9A.
|
Controls and Procedures
|
Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
|
(a)
|
Documents filed as part of this report:
|
(1)
|
Financial Statements
|
(2)
|
Financial Statement Schedules
|
(3)
|
Exhibits
|
(b)
|
Exhibits
|
Exhibit
Number
|
Description
|
|
2.1
|
Agreement and Plan of Merger is entered into as of the 22nd day of December, 2010 by and among MiMedx Group, Inc., MP Holdings Acquisition Sub, LLC, ORCI Acquisition Sub, LLC, Membrane Products Holdings, LLC, Onramp Capital Investments, LLC, each of the OnRamp Members (as defined therein); John R. Daniel, in his capacity as the representative of the Members and Surgical Biologics, LLC (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) (Incorporated by reference to Exhibit 2.2 filed with Registrant’s Form 10-K filed on March 31, 2011)
|
|
3.1
|
Articles of Incorporation of MiMedx Group, Inc. (Incorporated by reference to Exhibit 3.1 filed with Registrant’s Form 8-K on November 5, 2012)
|
|
3.2
|
Bylaws of MiMedx Group, Inc. (Incorporated by reference to Exhibit 3.2 filed with Registrant’s Form 8-K filed on April 2, 2008)
|
|
10.1*
|
MiMedx, Inc. 2006 Stock Incentive Plan (Incorporated by reference to the Exhibit 10.1 filed with the Registrant’s Form 8-K filed February 8, 2008)
|
|
10.2*
|
Form of Incentive Award Agreement under the MiMedx, Inc. 2006 Stock Incentive Plan (Incorporated by reference to the Exhibit 10.3 filed with the Registrant’s Form 8-K filed February 8, 2008)
|
|
10.3*
|
Form of Nonqualified Incentive Award Agreement under the MiMedx, Inc. 2006 Stock Incentive Plan (Incorporated by reference to the Exhibit 10.4 filed with the Registrant’s Form 8-K filed February 8, 2008)
|
|
10.4*
|
MiMedx, Inc. 2005 Amended and Assumed Stock Plan (Incorporated by reference to the Exhibit 10.4 filed with the Registrant’s Form 8-K filed February 8, 2008)
|
|
10.5*
|
Declaration of Amendment to MiMedx, Inc. 2005 Assumed Stock Plan (Incorporated by reference to the Exhibit 10.6 filed with the Registrant’s Form 8-K filed February 8, 2008)
|
|
10.6*
|
Form of Incentive Award Agreement under the MiMedx, Inc. Assumed 2005 Stock Plan (formerly the SpineMedica Corp. 2005 Employee, Director and Consultant Stock Plan), including a list of officers and directors receiving options thereunder (Incorporated by reference to the Exhibit 10.7 filed with the Registrant’s Form 8-K filed February 8, 2008)
|
|
10.7*
|
Form of Nonqualified Incentive Award Agreement under the MiMedx, Inc. Assumed 2005 Stock Plan (formerly the SpineMedica Corp. 2005 Employee, Director and Consultant Stock Plan) (Incorporated by reference to the Exhibit 10.8 filed with the Registrant’s Form 8-K filed February 8, 2008)
|
|
10.8*
|
MiMedx, Inc. Assumed 2007 Stock Plan (formerly the SpineMedica Corp. 2007 Stock Incentive Plan) (Incorporated by reference to the Exhibit 10.9 filed with the Registrant’s Form 8-K filed February 8, 2008)
|
|
10.9*
|
Declaration of Amendment to MiMedx, Inc. Assumed 2007 Stock Plan (formerly the SpineMedica Corp. 2007 Stock Incentive Plan) (Incorporated by reference to the Exhibit 10.10 with the same number filed with the Registrant’s Form 8-K filed February 8, 2008)
|
|
10.10*
|
Form of Incentive Award Agreement under the MiMedx, Inc. Assumed 2007 Stock Plan (formerly the SpineMedica Corp. 2007 Stock Incentive Plan) (Incorporated by reference to the Exhibit 10.11 filed with the Registrant’s Form 8-K filed February 8, 2008)
|
|
10.11*
|
Form of Nonqualified Incentive Award Agreement under the MiMedx, Inc. Assumed 2007 Stock Plan (formerly the SpineMedica Corp. 2007 Stock Incentive Plan) (Incorporated by reference to the Exhibit 10.12 filed with the Registrant’s Form 8-K filed February 8, 2008)
|
10.12
|
Form of MiMedx, Inc. Employee Proprietary Information and Inventions Assignment Agreement (Incorporated by reference to the Exhibit 10.13 filed with the Registrant’s Form 8-K filed February 8, 2008)
|
|
10.13
|
Technology License Agreement between MiMedx, Inc., Shriners Hospitals for Children, and University of South Florida Research Foundation dated January 29, 2007 (Incorporated by reference to the Exhibit 10.32 filed with the Registrant’s Form 8-K filed February 8, 2008)
|
|
10.14
|
Technology License Agreement between SpineMedica Corp. and SaluMedica, LLC dated August 12, 2005 (Incorporated by reference to the Exhibit 10.33 filed with the Registrant’s Form 8-K filed February 8, 2008)
|
|
10.15
|
Technology License Agreement between SpineMedica Corp. and SaluMedica, LLC dated August 3, 2007 (Incorporated by reference to the Exhibit 10.35 filed with the Registrant’s Form 8-K filed February 8, 2008)
|
|
10.16
|
First Amendment Technology License Agreement between SpineMedica Corp. and SaluMedica, LLC dated August 3, 2007 (Incorporated by reference to the Exhibit 10.36 filed with the Registrant’s Form 8-K filed February 8, 2008)
|
|
10.17
|
Second Amendment to Technology License Agreement between SpineMedica Corp. and SaluMedica, LLC dated August 3, 2007 (Incorporated by reference to the Exhibit 10.36.1 filed with the Registrant’s Form 8-K filed February 8, 2008)
|
|
10.18
|
Acknowledgement of Georgia Tech Research Corporation dated August 12, 2005 (Incorporated by reference to the Exhibit 10.38 filed with the Registrant’s Form 8-K filed February 8, 2008)
|
|
10.19
|
License Agreement between Georgia Tech Research Corporation and Restore Therapeutics, Inc. dated March 5, 1998 (Incorporated by reference to the Exhibit 10.39 filed with the Registrant’s Form 8-K filed February 8, 2008)
|
|
10.20
|
First Amendment to License Agreement between Georgia Tech Research Corporation and Restore Therapeutics, Inc. dated November 18, 1998 (Incorporated by reference to the Exhibit 10.40 filed with the Registrant’s Form 8-K filed February 8, 2008)
|
|
10.21
|
Second Amendment to License Agreement between Georgia Tech Research Corporation and SaluMedica, LLC (f/k/a Restore Therapeutics, Inc.) dated February 28, 2005 (Incorporated by reference to the Exhibit 10.41 filed with the Registrant’s Form 8-K filed February 8, 2008)1
|
|
10.22
|
Third Amendment to License Agreement between Georgia Tech Research Corporation and SaluMedica, LLC dated August 12, 2005 (Incorporated by reference to the Exhibit 10.42 filed with the Registrant’s Form 8-K filed February 8, 2008)
|
|
10.23
|
Assignment of Invention and Non-Provisional Patent Application from David N. Ku to SaluMedica Corp. dated August 11, 2005 (Incorporated by reference to the Exhibit 10.43 filed with the Registrant’s Form 8-K filed February 8, 2008)
|
|
10.24
|
Assignment of Invention and Non-Provisional Patent Application from SaluMedica, LLC to SpineMedica, LLC dated August 12, 2005 (Incorporated by reference to the Exhibit 10.44 filed with the Registrant’s Form 8-K filed February 8, 2008)
|
|
10.25
|
Form of SpineMedica, Corp. Employee Proprietary Information and Inventions Assignment Agreement (Incorporated by reference to the Exhibit 10.45 filed with the Registrant’s Form 8-K filed February 8, 2008)
|
|
10.26
|
Purchase Agreement between SpineMedica Corp. and SaluMedica, LLC dated March 12, 2007 (Incorporated by reference to the Exhibit 10.46 filed with the Registrant’s Form 8-K filed February 8, 2008)
|
10.27
|
Letter Agreement between MiMedx, Inc. and SaluMedica, LLC dated June 26, 2007, (Incorporated by reference to the Exhibit 10.47 filed with the Registrant’s Form 8-K filed February 8, 2008)
|
|
10.28
|
Investment Agreement dated March 31, 2008 between MiMedx Group, Inc. and SaluMedica, LLC (Incorporated by reference to the Exhibit 10.54 filed with the Registrant’s Form 8-K filed April 4, 2008)
|
|
10.29
|
Technology License Agreement dated March 31, 2008, between MiMedx Group, Inc. and SaluMedica, LLC (Incorporated by reference to the Exhibit 10.55 filed with the Registrant’s Form 8-K filed April 4, 2008)
|
|
10.30
|
First Amendment to Technology License Agreement dated March 31, 2008 between MiMedx Group, Inc. and SaluMedica, LLC (Incorporated by reference to the Exhibit 10.55.1 filed with the Registrant’s Form 8-K filed April 4, 2008)
|
|
10.31
|
Form of Indemnification Agreement (Incorporated by reference to the Exhibit 10.65 filed with the Registrant’s Form 8 -K filed July 15, 2008)
|
|
10.32*
|
MiMedx Group, Inc. Amended and Restated Assumed 2005 Stock Plan (Incorporated by reference to exhibit 10.4 filed with the Registrant’s Form S-8 filed August 29, 2008) 10.67
|
|
10.33*
|
Form of Incentive Stock Option Award Agreement under MiMedx Group, Inc. Amended and Restated Assumed 2005 Stock Plan (Incorporated by reference to the Exhibit 10.68 filed with the Registrant’s Form 8 -K on September 4, 2008)
|
|
10.34*
|
Form of Nonqualified Stock Option Award Agreement under MiMedx Group, Inc. Amended and Restated Assumed 2005 Stock Plan (Incorporated by reference to the Exhibit 10.69 filed with the Registrant’s Form 8 -K on September 4, 2008)
|
|
10.35
|
Sale and Purchase Agreement with UPex Holdings, LLC (Incorporated by reference to Exhibit 2.1 to the Registrant’s Form 8-K filed October 22, 2009)
|
|
10.36
|
Warrant to Purchase Common Stock dated September 22, 2009 (Incorporated by reference to Exhibit 10.3 filed with Registrant’s Form 8-K filed September 28, 2009)
|
|
10.37
|
Form of Warrant to Purchase Common Stock (Incorporated by reference to Exhibit 10.4 filed with Registrant’s Form 8-K filed January 7, 2010)
|
|
10.38
|
Form of Subscription Agreement 5% Convertible Promissory Note (Incorporated by reference to Exhibit 10.1 filed with Registrant’s Form 8-K filed October 25, 2010)
|
|
10.39
|
Form of 5% Convertible Promissory Note (Incorporated by referent to Exhibit 10.2 filed with Registrant’s Form 8-K filed October 25, 2010)
|
|
10.40
|
Form of Warrant to Purchase Common Stock (Incorporated by reference to Exhibit 10.3 filed with Registrant’s Form 8-K filed October 25, 2010)
|
|
10.41
|
Revolving Secured Line of Credit Agreement dated March 31, 2011 (Incorporated by reference to Exhibit 10.89 filed with Registrant’s Form 10-K filed March 31, 2011)
|
|
10.42
|
Amendment dated January 2, 2012, to Revolving Secured Line of Credit Agreement (Incorporated by reference to Exhibit 10.6 filed with Registrant’s Form 8-K filed January 3, 2012)
|
|
10.43
|
Form of Subscription Agreement 5% Convertible Promissory Note (Incorporated by reference to Exhibit 10.1 of Registrant’s Form 8-K filed January 3, 2012)
|
|
10.44
|
Form of 5% Convertible Promissory Note (Incorporated by reference to Exhibit 10.2 filed with Registrant’s Form 8-K filed January 3, 2012)
|
|
10.45
|
Form of Warrant to Purchase Common Stock (Incorporated by reference to Exhibit 10.3 filed with Registrant’s Form 8-K filed January 3, 2012)
|
10.46
|
Form of Warrant to Purchase Common Stock (Incorporated by reference to Exhibit 10.4 filed with Registrant’s Form 8-K filed January 3, 2012)
|
|
10.47
|
Form of Warrant to Purchase Common (Incorporated by reference to Exhibit 10.5 filed with Registrant’s Form 8-K filed January 3, 2012)
|
|
10.48
|
Form of Amended and Restated Security and Intercreditor Agreement Form of Registration Rights Agreement (Incorporated by reference to Exhibit 10.6 filed with Registrant’s Form 8-K filed January 3, 2012)
|
|
10.49
|
2011 Declaration of Amendment to 2006 Stock Incentive Plan (Incorporated by reference to Exhibit 10.3 filed with Registrant’s Form 8-K filed January 3, 2012)
|
|
10.50*
|
Change of Control Agreement Severance Compensation and Restrictive Covenant Agreement dated November 11, 2011 with Parker H. Petit (Incorporated by reference to Exhibit 10.91 filed with Registrant’s Form 10-Q filed on November 14, 2011)
|
|
10.51*
|
Change of Control Agreement Severance Compensation and Restrictive Covenant Agreement dated November 11, 2011 with William C. Taylor (Incorporated by reference to Exhibit 10.92 filed with Registrant’s Form 10-Q filed on November 14, 2011)
|
|
10.52*
|
Change of Control Agreement Severance Compensation and Restrictive Covenant Agreement dated November 11, 2011 with Michael J. Senken(Incorporated by reference to Exhibit 10.93 filed with Registrant’s Form 10-Q filed on November 14, 2011)
|
|
10.53*
|
2012 Management Incentive Plan (Incorporated by reference to Exhibit 10.14 filed with Registrant’s Form 8-K filed February 29, 2012)
|
|
Consulting Agreement by & between Mimedx Group, Inc. and Roberta L. McCaw dated us of January 1, 2012.
|
||
10.55 | Amendment to Consulting Agreement by & between Mimedx Group, Inc. and Roberta L. McCaw dated as of December 31, 2012. | |
Product Distribution Agreement by and between AvKare, Inc. and MiMedx Group, Inc. dated April 19, 2012
|
||
21.1
|
Subsidiaries of MiMedx Group, Inc. (Incorporated by reference to Exhibit 21.1 filed with Registrant’s Form 10-K filed on March 31, 2011)
|
|
Consent of Independent Registered Public Accounting Firm
|
||
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Acts of 2002
|
||
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Acts of 2002
|
||
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
||
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
||
99.1
|
The audited consolidated financial statements as of and for the years ended December 31, 2010 and 2009, for Surgical Biologics, LLC, including the notes to such financial statements and the report of the independent auditor thereon (Incorporated by reference to Exhibit 99.1 to the Registrant’s Form 8-K/A filed on March 16, 2011)
|
*
|
Indicates a management contract or compensatory plan or arrangement
|
#
|
Filed herewith
|
March 15, 2013
|
MIMEDX GROUP, INC.
|
|
By:
|
/s/ Michael J. Senken
|
|
Michael J. Senken
|
||
Chief Financial Officer
|
Signature / Name
|
Title
|
Date
|
||
/s/: Parker H. Petit
|
Chief Executive Officer
|
March 15, 2013
|
||
Parker H. Petit
|
(principal executive officer)
|
|||
/s/: Michael J. Senken
|
Chief Financial Officer
|
March 15, 2013
|
||
Michael J. Senken
|
(principal financial and accounting officer)
|
|||
/s/: Joseph G. Bleser
|
Director
|
March 15, 2013
|
||
Joseph G. Bleser
|
||||
/s/: J. Terry Dewberry
|
Director
|
March 15, 2013
|
||
J. Terry Dewberry
|
||||
/s/: Charles Evans
|
Director
|
March 15, 2013
|
||
Charles Evans
|
||||
/s/: Steve Gorlin
|
Director
|
March 15, 2013
|
||
Steve Gorlin
|
||||
/s/: Bruce Hack
|
Director
|
March 15, 2013
|
||
Bruce Hack
|
||||
/s/: Charles E. Koob
|
Director
|
March 15, 2013
|
||
Charles E. Koob
|
||||
/s/: Larry W. Papasan
|
Director
|
March 15, 2013
|
||
Larry W. Papasan
|
||||
/s/: William C. Taylor
|
Director
|
March 15, 2013
|
||
William C. Taylor
|
||||
/s/: Neil Yeston
|
Director
|
March 15, 2013
|
||
Neil Yeston
|
(a)
|
the death of the Consultant;
|
|
(b)
|
ten (10) days following written notice to the Consultant from MIMEDX indicating MIMEDX’s decision to terminate the Agreement; or
|
|
(c)
|
ten (10) days following written notice to MIMEDX from the Consultant indicating the Consultant’s decision to terminate the Agreement.
|
|
(a)
|
The term “Trade Secrets” means any scientific or technical information, design, process, procedure or formula or improvement that is commercially valuable and secret in the sense that its confidentiality affords MIMEDX a competitive advantage over its competitors and is not generally known to competitors of MIMEDX.
|
|
(b)
|
The term “Confidential Information” means any data or information and documentation, other than Trade Secrets, that is competitively sensitive material, and not generally known to the public including, but not limited to, MIMEDX’s marketing methods, pricing information, financial information, operating or training ideas and concepts, referral sources, business methods, processes and techniques, and the special products, preparations, devices, techniques and services MIMEDX may offer or provide to its customers from time to time.
|
(“MIMEDX”)
|
(“CONSULTANT”)
|
||
MiMedx Group, Inc.
|
Roberta L. McCaw
|
||
By:
|
/s/ William C. Taylor |
|
/s/ Roberta L. McCaw |
Title:
|
President & COO |
|
1.
|
Effective January 7, 2013, Section 2 of the Consulting Agreement shall be deleted and replaced with the following:
|
|
2.
|
Effective December 31, 2012, Section 3 of the Consulting Agreement shall be deleted and replaced with the following:
|
(a)
|
the death of the Consultant;
|
|
(b)
|
thirty (30) days following written notice to the Consultant from MIMEDX indicating MIMEDX’s decision to terminate the Agreement; or
|
|
(c)
|
thirty (30) days following written notice to MIMEDX from the Consultant indicating the Consultant’s decision to terminate the Agreement.
|
|
3.
|
Effective January 7, 2013, Section 4 of the Consulting Agreement shall be deleted and replaced with the following:
|
|
4.
|
In all other respects, the Consulting Agreement shall remain in full force and effect.
|
MIMEDX GROUP, INC.
|
ROBERTA L. MCCAW
|
||||
/s/: Roberta L. McCaw | |||||
By:
|
/s/ William C. Taylor | ||||
Its:
|
President & COO |
1.
|
Appointment of AVI.
|
1.1
|
Subject to the terms and conditions set forth in this Agreement, Company appoints AVI, and AVI accepts such appointment, as Company's authorized, [*****] distributor for the sale of the Products in the Market. AVI shall use best efforts to promote and sell the Products in the Market as set forth in this Agreement. If Company desires to have new Products added to the Federal Supply Schedule, AVI shall use reasonable commercial efforts to add such new Products to the Federal Supply Schedule within a commercially reasonable amount of time of Company’s request and when such Products are added to the Federal Supply Schedule, the schedules to this Agreement shall be amended to include such new Products. [*****]
|
1.2
|
AVI and the Company will cooperatively direct all sales and marketing efforts for the Market as listed on Schedule 2. AVI will confer with Company on strategies and plans of action.
|
1.3
|
The Company and AVI will agree on specific accounts to be assigned to AVI as [*****] accounts. The initial list of such accounts will be set forth on Schedule 3 to this Agreement within two (2) weeks of execution of this Agreement. The parties may add to the list of assigned accounts from time to time by written agreement (which may be via e-mail). A complete list of Company’s stocking distributors, key personnel names, contact information and their territories as of the date of the Agreement is listed on Schedule 4 to this Agreement.
|
1.4
|
AVI will discuss the appropriate pricing for the Market with Company. Although Company will have the final say on pricing in the Market, Company will take into account all reasonable input from AVI
|
1.5
|
In addition to the discount referenced in Section 3.2, AVI will receive a [*****] commission on the selling price for all sales into the Market from accounts assigned to AVI within the Market. AVI will absorb all credit card fees and Industrial Funding Fee (IFF). All orders will be received and processed by AVI Company will receive a purchase order from AVI and will then procure the product from an FDA approved tissue bank. Company will use reasonable commercial efforts to ship Products within twenty-four (24) hours after receipt of a purchase order.
|
1.7
|
The parties are independent contractors and no other relationship is intended under this Agreement. Neither party shall act in a manner which expresses or implies a relationship other than that of an independent contractor or bind the other party. Unless otherwise provided in this Agreement, AVI and Company shall each be responsible for all of its own expenses and employees.
|
2.
|
Sales Outside of the Market
|
2.1
|
AVI shall sell the Products to the governmental entities operating within the Market (the “Customers”). AVI will accept no orders from any other market customer unless preapproved in writing by Company.
|
3.
|
Product Prices; Payment Terms
|
3.1
|
This Agreement constitutes the sole and exclusive terms and conditions for the purchase of the Products. Neither party shall add any additional and/or conflicting terms and/or conditions by purchase order or otherwise without the signature of an officer of both parties hereto.
|
3.2
|
Unless otherwise agreed in writing by Company, sales by AVI must be in accordance with Company’s pricing policy as in effect from time to time. The prices for Products sold to AVI hereunder shall be [*****] of AVI’s sales price for the Products to its Customer. AVI shall be responsible for the reporting and payment of all Industrial Funding Fees (IFF) and credit card fees, as applicable. All Products will be shipped FOB Destination. Company shall have the right to audited sales reports for MiMedx sales from AVI The initial price at which Products are to be sold to AVI’s Customers and the initial prices for Products sold to AVI shall be as stated in Schedule 1 hereof. Company represents that it shall abide by all applicable requirements promulgated by AVI’s Customers from time to time, including, without limitation, all requirements related to Federal Acquisition Regulations and like rules.
|
3.3
|
Company may change the selling price of any Product on a proactive basis only by providing AVI at least ninety (90) days advance written notice of such change.
|
3.4
|
All sales, use, value added and other taxes, and all duties, fees and other charges, now or hereafter imposed with respect to the sale and purchase of the Products to AVI shall be the responsibility of Company and shall be included as a separate item in an invoice for the purchase of the Products.
|
3.5
|
Payment on Products orders shall be made within forty-five (45) days from the date of the invoice or receipt of goods, whichever is later.
|
3.6
|
All Products prices are stated and shall be paid in United States Dollars.
|
4.
|
Order Processing
|
4.1
|
AVI shall order Products from Company by submitting a purchase order identifying the ordered Products, quantities, sales price, proposed delivery dates, and prices for each Product ordered, together with a bill-to and shipping address (a “Purchase Order”).
|
4.2
|
Company shall use commercially reasonable efforts to acknowledge receipt of an order within two (2) business days after its receipt of such Purchase Order, and confirm in writing that the order can be supplied.
|
4.3
|
Company shall comply with all accepted delivery schedules set forth in an accepted Purchase Order. All ordered Products shall be shipped by Company directly to locations designated by AVI without delay as designated in the Purchase Order. Unless otherwise approved by AVI in writing, Company shall be solely responsible for all costs and expenses of Products delivery, including, without limitation, insurance related to such shipments. Any delays or anticipated delays in Delivery shall be reported to AVI promptly, and AVI and Company shall work in good faith to negotiate a reasonable solution to such delay; provided, however Company shall be solely responsible for all additional costs and expenses arising therefrom. AVI may return over-shipments to Company at Company’s sole expense. Delivery shall not be deemed to be complete until AVI or its designee has received and approved the Products in accordance with Section 9 hereof at the destination set forth on the Purchase Order. Title to the Products and risk of loss shall pass to AVI after the Products have been received FOB at AVI’s designated location in the applicable Purchase Order.
|
5.
|
Products Specifications and Changes
|
5.1
|
Company shall confirm that all Products conform to the all written specifications provided to AVI or to the Customer (the “Specifications”).
|
5.2
|
From time to time and only upon at least ninety (90) days advance written notice to AVI, Company may discontinue a Product or change a specification; provided, however, in no event shall Company modify Products so that it results in a derogation of the performance of the Products without the prior written approval of AVI In the event a Product specification is changed, or a Product is discontinued, any replacement product shall be subject to the terms of this Agreement. If Company requires a change in the Specifications for its own benefit, Company shall pay all costs associated with such a Company-requested change. Agreed changes to the Specifications for the benefit of AVI shall be at the expense of AVI
|
6.
|
Personnel; Support
|
6.1
|
Company shall provide AVI without charge, master copies of Company’s standard brochures, marketing materials, and technical data for the Products.
|
6.2
|
Company is responsible for providing technical support to Customers. Company shall use commercially reasonable efforts to respond to all support requests in no later than three (3) business days. If such issue cannot be resolved, Company shall provide updates on the status of the support request on a daily basis. Company shall use commercially reasonable efforts to respond to all communications from AVI in no later than two (2) business days.
|
7.
|
Records and Regulatory Matters
|
7.1
|
At the time of delivery of each shipment of Products to AVI, Company shall provide AVI with properly completed copies of all documentation reasonably requested by AVI, including, without limitation, manufacturing, quality testing, packaging and delivery records.
|
7.2
|
Company and AVI shall maintain true and accurate books, records, test results, data, and reports and all other information relating to manufacturing, testing, performance and delivery of the Products, including, without limitation, all information required to be maintained to document that the Products are certified for use in the Market. Such information shall be maintained for a period of at least five (5) years from the relevant finished Products delivery date or longer if required under applicable laws.
|
7.3
|
Company shall be solely responsible for all licenses and other regulatory compliance issues including obtaining and maintaining all certifications that the Products are fit for use in the Market. Company shall maintain all permits and licenses required with respect to its facilities, equipment and manufacturing processes as required by applicable law, rule or regulation.
|
7.4
|
Company shall immediately advise AVI if an authorized agent of any regulatory authority issues any adverse finding related to the Products or any loss of certification status.
|
7.5
|
Throughout the term of this Agreement, AVI shall be responsible for insuring that the Products are on the Federal Supply Schedule and must remain in good standing to sell Products to the Market.
|
8.
|
Products Warranty; Customer Warranty
|
8.1
|
Subject to the provisions of this Section 8, Company warrants for a period of one (1) year after shipment (i) that each non-amnion based Product is free from material defects in material and workmanship and has a shelf-life of at least one (1) year from the date of shipment and (ii) that each amnion based Product has been collected, processed and stored in compliance with all applicable laws and standards, including the AATB Standards and Title 21, Code of Federal Regulations 1271, Human Cells, Tissues, and Cellular and Tissue-Based Products, and has a shelf-life of at least two (2) years from the date of shipment. Inspection, testing, acceptance or use of the Products by AVI shall not affect Company’s representations and warranties under this Section. Company shall, at its sole expense, promptly replace or correct defects in Products not in conformance with this Section.
|
8.2
|
EXCEPT AS EXPRESSLY PROVIDED IN SECTION 8.1 ABOVE, COMPANY MAKES NO WARRANTIES OR CONDITIONS, EXPRESS, STATUTORY, IMPLIED, OR OTHERWISE, AND COMPANY SPECIFICALLY DISCLAIMS THE IMPLIED WARRANTIES AND CONDITIONS OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. NOTWITHSTANDING THE FOREGOING, COMPANY DOES NOT EXCLUDE LIABILITY TO THE EXTENT THAT SUCH LIABILITY MAY NOT BE EXCLUDED OR LIMITED BY LAW.
|
8.3
|
Company shall honor and be responsible for all claims arising out of Company’s warranty for the applicable Products as set forth in Section 8.1. AVI shall provide such warranty to its Customers hereunder. AVI shall not pass on to its Customers a warranty of greater scope or protection than the warranty (including the limited remedy, exclusions, and limitation of liability) set forth in Section 8.1.
|
9.
|
Products Returns and Recalls
|
9.1
|
AVI will inspect all shipments of Products received from Company following its receipt and will report any non-conforming Products to Company. AVI and its designees reserve the right to inspect the Products and to reject any or all of the Products which are in AVI’s reasonable judgment defective Products or are otherwise unacceptable. Payment by AVI for the Products delivered shall not constitute AVI’s acceptance thereof. Rejected and/or unacceptable Products may be returned to Company at Company’s sole expense. In the event Products are delivered whose defects or nonconformity are not reasonably apparent upon AVI’s or its designees’ initial examination, and such latent defects or nonconformity results in deficiency of the Products or the failure of the Products to perform as intended, AVI reserves the right to require replacement of the defective or nonconforming Products, as well as payment by Company of any resulting damages.
|
10.
|
Advertising
|
10.1
|
Both the Company and AVI must approve all advertising and promotion materials which either party intends to use in relation to the sale of Products by AVI in the Market. Company will use commercially reasonable efforts to review such materials and communicate its approval thereof or the reasons for not approving the same within ten (10) days of the delivery of the applicable materials to Company.
|
11.
|
Products Stocking Requirements
|
11.1
|
Company shall use commercially reasonable efforts to maintain adequate inventory levels of Products as may be necessary to meet the needs of AVI.
|
12.
|
Proprietary Rights
|
12.1
|
AVI acknowledges that any property rights in the Products and technical, advertising and promotion material relating thereto, shall remain the property of Company.
|
12.2
|
Notwithstanding the provisions of Section 12.1, Company has no liability to AVI for (i) any infringement of patent or copyright claims alleging infringement by completed equipment or any assembly, combination, method or process in which any of the Products may be used but not covering the Products standing alone; (ii) any trademark infringements involving any marking or branding not applied by or requested by Company , or involving any marking or branding applied by Company at the request of AVI; or (iii) the modification of the Products, or any part thereof, unless such modification was made by Company, where such infringement would not have occurred but for such modifications. THE FOREGOING PROVISIONS OF THIS SECTION 12 STATE THE ENTIRE LIABILITY AND OBLIGATIONS OF COMPANY AND THE EXCLUSIVE REMEDY OF AVI AND ITS CUSTOMERS, WITH RESPECT TO ANY ALLEGED PATENT, COPYRIGHT OR TRADEMARK INFRINGEMENT BY THE PRODUCTS OR ANY PART THEREOF.
|
13.
|
Trademarks
|
14.
|
Indemnification; Insurance; Limitation on Consequential Damages
|
14.1
|
Each party shall indemnify, defend, and hold the other party, its affiliates, and their respective officers, directors, representatives, and agents, harmless from and against any and all third party claims, demands, causes of actions, costs of litigation (including reasonable attorneys fees and expenses incurred in the enforcement of this Section and otherwise) and judgments arising out of, connected with, or resulting from: (i) a breach of its representations, warranties and covenants set forth herein; or (ii) its negligence. Company shall further indemnify, defend, and hold AVI harmless for all Products liability claims arising from its manufacture and design of the Products.
|
14.2
|
Company shall, at its own cost and expense, obtain and maintain in full force and effect the following insurance during the term of this Agreement: Umbrella/Commercial General Liability / Products Liability insurance with per-occurrence and general aggregate limits of not less than [*****]. In the event that any of the required policies of insurance are written on a claims made basis, then such policies shall be maintained during the entire term of this Agreement and for a period of not less than three (3) years following the termination or expiration of this Agreement. Company shall name AVI as an additional insured on such policies. Company will provide AVI with a certificate of insurance evidencing the Umbrella/Commercial General Liability / Products Liability insurance coverages described above.
|
14.3
|
Notwithstanding any terms of this Agreement, except with respect to the parties’ indemnification obligations with respect to third party claims, or with respect to violations of Section 1.2 or Section 16 hereof, in no event shall either party be liable for lost profits, cost of procurement of substitute goods, or any other special, reliance, incidental, or consequential damages incurred by the other party, however caused and under any theory of liability whether based in contract, tort (including negligence), or otherwise. The foregoing limitations shall apply regardless of whether such party has been advised of the possibility of such damages and notwithstanding the failure of essential purpose of any limited remedy stated herein.
|
15.
|
Additional Obligations of Company
|
15.1
|
Company shall supply the Products to AVI upon the terms and conditions of this Agreement and as required by any Federal Contract to which the items are added.
|
15.2
|
Company shall at its reasonable discretion offer technical and commercial assistance to AVI for the sale and service of the Products.
|
16.
|
Confidential Information
|
16.1
|
For purposes of this Agreement, “Confidential Information” means any and all marketing, Products, technical or engineering information, know-how, data, designs, diagrams, plans, specifications, computer codes, trade secrets, ideas, concepts, processes, systems, technologies, business or financial information, procurement and sales strategies, and other confidential or proprietary information of the parties, in any form, whether or not identified as being confidential.
|
16.2
|
Confidential Information is a valuable and proprietary asset and shall remain the sole and exclusive property of the disclosing party. The receiving party shall use Confidential Information solely in connection with the performance of this Agreement. The receiving party shall not disclose or cause the disclosure of any of the Confidential Information to any party other than to those employees, agents and subcontractors with a ‘need to know’ to perform this Agreement; provided, that such employees, agents and subcontractors shall be advised of the existence and scope of this provision and subcontractors shall be subject to legally binding nondisclosure restrictions which are at least as restrictive as the terms of this provision. A breach by any employee, agent or subcontractor of any agreement of confidentiality related to the Confidential Information shall be considered a breach by the applicable party to this Agreement.
|
16.3
|
The confidentiality provisions herein shall not apply to information that: (i) can be demonstrated as lawfully known to the receiving party prior to disclosure thereof by the disclosing party; (ii) is or becomes generally available to the public other than as a result of a breach or violation of any obligation of confidentiality; or (iii) is specifically approved for release by the prior written authorization of the disclosing party.
|
16.4
|
If the receiving party is ordered in any legal proceeding or process to disclose any of the Confidential Information, such party shall take all reasonable steps to resist or narrow such order and to obtain appropriate protective orders or other reliable assurances of nondisclosure in order to maintain the confidential nature of the Confidential Information. The parties acknowledge that a monetary remedy for a breach or violation of this section will be inadequate, and that any such breach or violation would cause irreparable harm. In the event of any breach or violation hereof, in addition to any other available rights and remedies in law or equity, the disclosing party shall be entitled to temporary and permanent injunctive relief without the necessity of posting a bond and without the necessity of proving actual damages.
|
16.5
|
The provisions of this Section 16 supersede any non-disclosure agreement entered into by the parties hereto and shall survive termination of this Agreement for two (2) years or such longer period as such information is entitled to protection under applicable law.
|
17.
|
Sub-Distribution
|
17.1
|
Without limiting the generality of the foregoing, AVI may not engage sub-distributors unless the Company shall have consented to such engagement and approved the written agreement between the Company and such sub-distributor. Minimally, any such agreement must obligate such sub-distributor to terms substantially identical to the terms of this Agreement, provide that Company is a third-party beneficiary of such agreement and be cancellable upon request of Company upon thirty (30) days’ written notice.
|
18.
|
Term and Termination
|
18.1
|
This Agreement will have an initial term beginning on the Effective Date and shall have an initial term of three (3) years. After the initial term, the Agreement will automatically renew for two (2) successive terms of one (1) year unless this agreement is terminated. This Agreement may be terminated 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. The following sections shall survive termination or expiration of this Agreement: 7, 8, 9, 12, 13, 14, 16, 19.5. Termination of this Agreement shall not affect Company’s obligation to honor all Purchase Orders submitted to Company prior to such termination.
|
18.2
|
Regardless of the foregoing, each party may terminate this Agreement immediately upon the filing of any petition in bankruptcy by the other party hereto, whether voluntarily or involuntarily, or the initiation of any action of insolvency by or against a party hereto.
|
18.3
|
Either party may terminate this Agreement without cause, effective after the initial three (3) year contract period has been reached, upon one hundred eighty (180) days’ notice to the other party specifying the date of termination. [*****] Upon receipt of request for termination until the effective date of termination, Company also agrees to pay AVI full commissions on all sales to assigned accounts made during this period. [*****]will be paid in full on or before the effective termination date of this Agreement. If all commissions due and [*****]are not paid in full on or before the termination date (or, if later, when due), this Agreement will not be terminated until said fees and commissions are received.
|
18.4
|
If Company desires to terminate this Agreement without cause during the initial three (3) year term, the Company shall so notify AVI and [*****].
|
19.
|
Miscellaneous
|
19.1
|
Neither party shall be liable for any failure to perform due to unforeseen circumstances or causes beyond such party’s reasonable control, including, but not limited to acts of God, war, terrorism, riot, embargoes, acts of civil or military authorities, fire, flood, accident, communication line failure, which failure is not the fault of the affected party.
|
19.2
|
Neither party may assign this Agreement, in whole or in part, without the prior written consent of the other party, except that either party may without the other party’s consent assign this Agreement to an affiliate or to a successor to substantially all of the business or assets of the assigning party, provided that any assignment by AVI to an entity that sells Competing Products shall require Company’s prior written consent. Notwithstanding the foregoing, this Agreement will be binding upon and inure to the benefit of the parties, their successors and permitted assigns.
|
19.3
|
This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter of this Agreement, and supersedes all previous negotiations, agreements, commitments (if any) and shall not be discharged, changed or modified in any manner except by instruments signed by duly authorized representatives of both parties hereto.
|
19.4
|
Any notices or other communications to be served on or sent to either party hereunder shall be deemed adequately served or sent if posted by prepaid registered post or overnight courier to such party at its address as set out above or of such other address as such party may notify in writing to the other party from time to time. Notices to Company shall be addressed to the attention of the General Counsel.
|
19.5
|
This Agreement shall be governed by and construed in accordance with the laws of the State of [*****], without giving effect to its conflict of laws principles or rules.
|
19.6
|
The parties shall each appoint a qualified manager to act as liaison related to their performance under this Agreement, and shall provide the other with contact information for such managers at the Effective Date. Unless otherwise agreed, the parties shall schedule periodic meetings and/or telephone conferences between the managers to review the parties’ progress. Additional informal meetings between other representatives of the parties shall be held as reasonably necessary at mutually acceptable times and places.
|
19.7
|
This Agreement contains the entire agreement between the parties concerning the subject matter hereof and supersedes all prior agreement and understanding between the parties with respect to the subject matter hereof and no modification or amendment of this Agreement or of the terms and conditions hereof will be binding upon either of the parties unless in a written document signed by both parties.
|
19.8
|
This Agreement may be executed in one or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument.
|
AvKare, Inc. | MiMedx Group, Inc. | ||
By: |
/s/ Troy A. Mizell
|
By: |
/s/ William C. Taylor
|
Troy A. Mizell
|
William C. Taylor
|
||
Title: |
President & CEO
|
Title: |
President & COO
|
Date: |
4/19/12
|
Date: |
4/19/12
|
1.
|
I have reviewed this annual report on Form 10-K of MiMedx Group, Inc.;
|
2.
|
Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared,
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles,
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation, and
|
(d)
|
disclosed in this annual report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/: Parker H. Petit
|
||
Parker H. Petit
|
||
Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of MiMedx Group, Inc.;
|
2.
|
Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared,
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles,
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation, and
|
(d)
|
disclosed in this annual report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/: Michael J. Senken
|
||
Michael J. Senken
|
||
Chief Financial Officer
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/: Parker H. Petit
|
||
Parker H. Petit
|
||
Chief Executive Officer
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/: Michael J. Senken
|
||
Michael J. Senken
|
||
Chief Financial Officer
|
Liquidity and Management's Plans (Details) (USD $)
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
---|---|---|---|
Liquidity and Management's Plans [Abstract] | |||
Cash and cash equivalents | $ 6,754,485 | $ 4,112,326 | $ 1,340,922 |
Total current assets | 18,088,791 | 6,881,511 | |
Current liabilities, net of short term earn-out liability | $ 5,071,000 |
Common Stock Placements (Details) (USD $)
|
1 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 31, 2012
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2011
Common Stock [Member]
|
Jul. 31, 2012
Callable Warrants [Member]
|
Dec. 31, 2012
Callable Warrants [Member]
|
Dec. 31, 2011
Callable Warrants [Member]
|
Jun. 30, 2012
First Contingent Warrants [Member]
|
Dec. 31, 2012
First Contingent Warrants [Member]
|
Jul. 03, 2012
Second Contingent Warrants [Member]
|
Jul. 31, 2012
Chairman and CEO [Member]
Callable Warrants [Member]
|
Dec. 31, 2011
Chairman and CEO [Member]
Callable Warrants [Member]
|
Jun. 30, 2012
Chairman and CEO [Member]
First Contingent Warrants [Member]
|
|
Sale of stocks and warrants [Line Items] | |||||||||||||
Shares issued (in shares) | 3,778,321 | 1,889,161 | 1,673,000 | ||||||||||
Warrants voided (in shares) | 1,672,742 | ||||||||||||
Share issue price (in dollars per share) | $ 0.01 | $ 1.50 | |||||||||||
Private placement offering costs | $ 47,733 | ||||||||||||
Net proceeds from private placement | 3,730,587 | ||||||||||||
Warrants, term | 5 years | 5 years | |||||||||||
Redemption price of callable warrant (in dollars per share) | $ 0.01 | ||||||||||||
Number of shares to be purchased to receive one warrant (in shares) | 2 | ||||||||||||
Number of shares covered under each warrant (in shares) | 1 | ||||||||||||
Minimum closing price to exercise callable rights (in dollars per share) | $ 1.75 | ||||||||||||
Number of consecutive trading days, minimum | 20 days | 15 days | |||||||||||
Number of warrants called (in shares) | 3,345,000 | ||||||||||||
Proceeds from shares issued | $ 4,900,000 | ||||||||||||
Common stock, shares issued (in shares) | 3,289,000 | 88,423,169 | 74,306,895 | ||||||||||
Number of warrants exercised (in shares) | 1,609,000 | 503,332 | |||||||||||
Number of callable warrants repurchased (in shares) | 56,750 | ||||||||||||
Purchase price of warrants repurchased | $ 0.01 | ||||||||||||
Number of warrants vested (in shares) | 252,000 |
Equity (Tables)
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Dec. 31, 2012
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock options activity | Activity with respect to the stock options is summarized as follows:
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Summary of stock options outstanding and exercisable | The following is a summary of stock options outstanding for years ended December 31, 2012 and 2011, respectively:
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Unvested Stock Options Roll Forward | A summary of the status of the Company's unvested stock options as of December 31, 2012 and December 31, 2011 is presented below:
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Fair value of options valuation assumptions | 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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Summary of warrants outstanding | Common Stock warrants activity and resulting balances for the years ended December 31, 2012 and 2011, are as follows:
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Significant Accounting Policies (Policies)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
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Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles ("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. |
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Principles of Consolidation | Principles of Consolidation The accompanying financial statements include the accounts of MiMedx Group, Inc. and its wholly-owned subsidiaries MiMedx, Inc., SpineMedica, LLC., and Surgical Biologics, LLC. All significant inter-company balances and transactions have been eliminated |
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Reclassifications | Reclassifications Certain amounts in the prior year financial statements have been reclassified to conform to the current year financial statement presentation. Historically, the Company has reported depreciation and share-based compensation expense as part of Selling, General and Administrative expense. The Company decided to report these expenses in each functional area in order to more accurately present all of the costs attributable to each functional area. During the years ended December 31, 2012 and 2011, we recorded a total of approximately $465,000 and $447,000 in depreciation expense allocated to each functional area per the table below. The overall $19,000 increase in depreciation was attributable to the purchase of additional production and office equipment and leasehold build-out to support our revenue growth and additional staff. We depreciate our assets on a straight-line basis, principally over five to seven years. The following table shows the allocation of depreciation for the years ended December 31, 2012 and 2011, to operating departments:
Share-based compensation for the years ended December 31, 2012 and 2011, was approximately $2,539,000 and $1,659,000, respectively, an increase of approximately $880,000 or 53.0%. Increased employee stock option grants reflecting management's philosophy of aligning employee compensation with investor objectives and the increase in the market price of MiMedx common stock was the primary reason for the increase in expense. The following table shows the allocation of share-based compensation for the years ended December 31, 2012 and 2011, to operating departments:
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Segment Reporting | Segment Reporting ASC 280, "Segment Reporting" requires use of the "management approach" model for segment reporting. The management approach model is based on the way a company's management organizes segments within the company for making operating decisions and assessing performance. The Company determined it has one operating segment. Disaggregation of the Company's operating results is impracticable, because the Company's research and development activities and its assets overlap, and management reviews its business as a single operating segment. Thus, discrete financial information is not available by more than one operating segment. |
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Market Concentrations and Credit Risk | Market Concentrations and Credit Risk The Company places its cash and cash equivalents on deposit with financial institutions in the United States. In July 2010, the Federal Deposit Insurance Corporation ("FDIC") increased coverage to $250,000 for substantially all depository accounts and temporarily provides unlimited coverage for certain qualifying and participating non-interest bearing transaction accounts. The temporary unlimited coverage expired on December 31, 2012, at which time the amounts insured by the FDIC returned to $250,000. As of January 1, 2013, the Company had cash and cash equivalents of approximately $6,254,000 in excess of these insured amounts. The Company's principal market concentration of risk is related to its limited distribution channels. Three customers accounted for approximately 68% of revenues for the year ended December 31, 2012, including one customer who represented 40% and another customer which represented 21% of total revenue. Two customers accounted for approximately 37% of the revenues for the year ended December 31, 2011, including one customer who represented 19% and another customer which represented 18% of total revenue. The Company's accounts receivable are derived from customers primarily located in the United States of America. As of December 31, 2012 two customers accounted for 78% of total accounts receivable, 53% and 25% respectively compared to December 31, 2011 when two customers accounted for 43% of total accounts receivable, 33% and 10%, respectively. |
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Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include all highly liquid investments with an original maturity of three months or less. |
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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, customer's current creditworthiness, customer concentration, age of accounts receivable balance and general economic conditions that may affect the customer's ability to pay. As of December 31, 2012, and 2011, the Company has $49,400 and $19,500, respectively, in the allowance for doubtful accounts. Actual customer collections could differ from estimates. The approximate provision during the year ended December 31, 2012 was $56,900, with charge-offs of approximately $27,000 as compared to the approximate provision during the year ended December 31, 2011 of $57,900 with charge-offs of approximately $60,000. |
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Inventories | Inventories Inventories are valued at the lower of cost or market, using the first–in, first-out (FIFO) method. Inventory is tracked through Raw Material, WIP, and Finished Good stages as the product progresses through various production steps and stocking locations. Within WIP labor and overhead costs are absorbed through the various production processes upon work order closes in our ERP (Enterprise Resource Planning) system. Historical yields and normal capacities are utilized in the calculation of production overhead rates. Reserves for inventory obsolescence are utilized to account for slow-moving inventory as well as inventory no longer needed due to diminished market demand. |
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Goodwill and Purchased Intangible Assets | Goodwill and Purchased Intangible Assets Goodwill and purchased intangible assets with indefinite useful lives are not amortized but are tested for impairment at least annually. The Company reviews goodwill and purchased intangible assets with indefinite lives for impairment annually at the beginning of its fourth fiscal quarter and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. For goodwill, the Company performs a two-step impairment test. In the first step, the Company compares the fair value of the Company to its carrying value. The Company determines the fair value utilizing the market approach. Under the market approach, the Company uses its market capitalization which is calculated by taking the Company's share price times the number of outstanding shares. If the fair value of the Company exceeds the carrying value of the net assets, goodwill is not impaired, and no further testing is required. If the fair value of the Company is less than the carrying value, the Company must perform the second step of the impairment test to measure the amount of impairment loss, if any. In the second step, the Company's value is allocated to all of the assets and liabilities, including any unrecognized intangible assets, in a hypothetical analysis that calculates the implied fair value of goodwill in the same manner as if the Company was being acquired in a business combination. If the implied fair value of the reporting unit's goodwill is less than the carrying value, the difference is recorded as an impairment loss. The Company estimates the fair value of indefinite-lived purchased intangible assets using a market approach. The Company recognizes an impairment loss when the estimated fair value of the indefinite-lived purchased intangible assets is less than the carrying value. The Company reviews purchased intangible assets with finite lives for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. Recoverability of these intangible assets is assessed based on the undiscounted future cash flows expected to result from the use of the asset. If the undiscounted future cash flows are less than the carrying value, the purchased intangible assets with finite lives are considered to be impaired. The amount of the impairment loss, if any, is measured as the difference between the carrying amount of these assets and the fair value based on a discounted cash flow approach or, when available and appropriate, to comparable market values. The Company amortizes purchased intangible assets with finite lives using the straight-line method over the estimated economic lives of the assets. Intangible assets with finite useful lives are amortized into Selling, General and Administrative Expenses in the consolidated statement of operations using the straight-line method over various periods depending upon the specific asset. |
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Impairment of Goodwill | Impairment of Goodwill We tested for impairment of the Intangible Assets related to the Licenses for SaluMedica LLC, Spine Repair and Polyvinyl Alcohol Cryogel as of September 30, 2012 using an undiscounted cash flow methodology. The impairment was the result of the HydroFix® product line experiencing slower than projected growth in each of its markets. Our test indicated that the carrying value of the assets related to HydroFix® exceeded its fair value, an impairment loss of approximately $1,798,000 was recognized and the intangible asset carrying amount was adjusted to its new basis. The impairment was reported as a separate line item in the Consolidated Statement of Operations and included in the Loss From Operations. |
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Property and Equipment | Property and Equipment Property and equipment are recorded at cost and depreciated on a straight-line basis over their estimated useful lives, principally five to seven years. Leasehold improvements are depreciated on a straight-line basis over the lesser of the estimated useful lives or the life of the lease. |
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Impairment of Long-lived Assets | Impairment of Long-lived Assets The Company evaluates the recoverability of its long-lived assets (property and equipment) whenever adverse events or changes in business climate indicate that the expected undiscounted future cash flows from the related assets may be less than previously anticipated. If the net book value of the related assets exceeds the expected undiscounted future cash flows of the assets, the carrying amount would be reduced to the present value of their expected future cash flows and an impairment loss would be recognized. |
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Deferred Grant Income | Deferred Grant Income The Company received a Regional Economic Business Assistance ("REBA") grant in the amount of $250,000 from the State of Georgia to help the Company defray certain expenses and capital expenditures related to the Company's expansion of manufacturing activities in the State. To retain the grant monies the Company must add a certain number of full time positions and spend a certain amount on capital and operations expenditures by December 31, 2014. The Company recorded the grant monies received as Deferred Grant Income which is included in the Other Liabilities section of the balance sheet per ASC 450-30 Gain Contingencies where an existing condition, situation, or set of circumstances involving uncertainty as to possible gain will ultimately be resolved when one or more future events occur or fail to occur. A contingency that might result in a gain should not be reflected in the financial statements because to do so might be to recognize the gain before its realization. As part of the transaction, the Company sold and is leasing back $250,000 of the assets from the State for $100 payable at the time the performance standards are achieved or at the termination date of the lease whichever is earlier. Once the Company has met the headcount and expenditure goals of the project the Company shall notify the State and pay the fixed rent amount of $100 at which time ownership of the equipment will transfer back to the Company. The Company also entered into a Performance and Accountability Agreement with the State of Georgia which defines the performance standard that if the Company fails to reach by no later than December 31, 2014, the Company shall repay a portion of the Grant amount. |
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Debt Instruments with Detachable Warrants and Beneficial Conversion Features | Debt Instruments with Detachable Warrants and Beneficial Conversion Features According to ASC-470 Debt Instruments with Detachable Warrants, proceeds from the sale of convertible debt instruments with stock purchase warrants (detachable call options) shall be allocated to the two elements based upon the relative fair values of the debt instrument without the warrants and of the warrants themselves at the time of issuance. The portion of the proceeds so allocated to the warrants shall be accounted for as paid-in capital. The remainder of the proceeds shall be allocated to the debt instrument portion of the transaction. Also, the embedded beneficial conversion feature present in the convertible instrument shall be recognized separately at issuance by allocating a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. |
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Revenue Recognition | Revenue Recognition The Company sells its products primarily through a combination of independent stocking distributors and representatives in the U.S. and independent distributors in international markets. The Company recognizes revenue when title to the goods and risk of loss 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 utilized distributors or ships products directly to the end user, it recognizes revenue according to the shipping terms of the agreement provided all revenue recognition criteria have been met. A portion of the Company's revenue is generated from inventory maintained at hospitals or with field representatives. 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. |
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Research and Development Costs | Research and Development Costs Research and development costs consist of direct and indirect costs associated with the development of the Company's technologies. These costs are expensed as incurred. |
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Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that included the enactment date. Valuation allowances are recorded for deferred tax assets when the recoverability of such assets is not deemed more likely than not. |
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Uncertain Tax Positions | Uncertain Tax Positions Tax positions are evaluated in a two-step process. The Company first determines whether it is more likely than not that a tax position will be sustained upon examination. If a tax position meets the more-likely-than-not recognition threshold it is then measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company classifies gross interest and penalties and unrecognized tax benefits that are not expected to result in payment or receipt of cash within one year as non-current liabilities in the Consolidated Balance Sheets. |
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Share-based Compensation | Share-based Compensation The Company follows the provisions of ASC topic 718 "Compensation — Stock compensation" which requires the use of the fair-value based method to determine compensation for all arrangements under which employees and others receive shares of stock or equity instruments (options and warrants). All awards are amortized on a straight-line basis over their vesting terms. |
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Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying value of accounts payable and accrued expenses approximate their fair value due to the short-term nature of these liabilities. The fair value of our convertible debt approximates $4,012,000 which represents the face value less the unamortized discount of any beneficial conversion feature plus accrued but unpaid interest at December 31, 2012, as compared to the fair value of our short term and long term convertible debt of approximately $5,169,000 which represented the face value less the unamortized discount of any beneficial conversion feature plus accrued but unpaid interest at December 31, 2011. As of December 31, 2012, and December 31, 2011, the fair value of warrants issued in conjunction with placement fees was approximately $20,500 and $15,000, respectively, which represents the face value less the unamortized discount of any beneficial conversion feature. |
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Fair Value Measurements | Fair Value Measurements The Company records certain financial instruments at fair value, including: cash equivalents and contingent consideration. The Company may make an irrevocable election to measure other financial instruments at fair value on an instrument-by-instrument basis; although as of December 31, 2012 the Company has not chosen to make any such elections. Fair value financial instruments are recorded in accordance with the fair value measurement framework. The Company also measures certain non-financial assets at fair value on a non-recurring basis. These non-recurring valuations include evaluating assets such as long-lived assets, and non-amortizing intangible assets for impairment; allocating value to assets in an acquired asset group; and applying accounting for business combinations. The Company uses the fair value measurement framework to value these assets and reports these fair values in the periods in which they are recorded or written down. The fair value measurement framework includes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair values in their broad levels. These levels from highest to lowest priority are as follows:
The determination of fair value and the assessment of a measurement's placement within the hierarchy requires judgment. Level 3 valuations often involve a higher degree of judgment and complexity. Level 3 valuations may require the use of various cost, market, or income valuation methodologies applied to unobservable management estimates and assumptions. Management's assumptions could vary depending on the asset or liability valued and the valuation method used. Such assumptions could include: estimates of prices, earnings, costs, actions of market participants, market factors, or the weighting of various valuation methods. The Company may also engage external advisors to assist it in determining fair value, as appropriate. Although the Company believes that the recorded fair value of its financial instruments is appropriate, these fair values may not be indicative of net realizable value or reflective of future fair values. |
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Net loss Per Share | Net loss Per Share Basic net loss per common share is computed using the weighted-average number of common shares outstanding during the period. For all periods presented, diluted net loss per share is the same as basic net loss per share, as the inclusion of equivalent shares from outstanding common stock options, warrants, and convertible debt would be anti-dilutive. The following table sets forth the computation of basic and diluted net loss per share for the fiscal years ended December 31, 2012 and 2011:
(a) Securities outstanding that were excluded from the computation, prior to the use of the treasury stock method, because they would have been anti-dilutive are as follows:
The table above excludes all securities with contingencies including the earnout liability and contingent warrants. |
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Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In January 2012 the Company adopted Accounting Standards Update ("ASU") 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs, which clarifies some existing concepts and expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. The adoption of ASU 2011-04 did not have a material effect on the Company's financial condition, profitability, and cash flows. In January 2012 the Company adopted ASU 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. The amendments to the Codification in this ASU will require companies to present the components of net income and other comprehensive income either as one continuous statement or as two consecutive statements. It eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders' equity. The standard does not change the items which must be reported in other comprehensive income, how such items are measured or when they must be reclassified to net income. This standard is effective for interim and annual periods beginning after December 15, 2011. Because this ASU impacts presentation only, it had no effect on our financial condition, results of operations or cash flows. In January 2012 the Company adopted ASU 2011-08, Intangibles-Goodwill and Other (Topic 350): Testing Goodwill for Impairment, which gives entities testing goodwill for impairment the option of performing a qualitative assessment before calculating the fair value of a reporting unit in step 1 of the goodwill impairment test. The adoption of ASU 2011-08 did not have a material effect on the Company's financial condition, profitability, and cash flows. In July 2012, the FASB issued ASU No. 2012-02, which amends the guidance in ASC 350-30 on testing indefinite-lived intangible assets, other than goodwill, for impairment. Under the revised guidance, companies testing an indefinite-lived intangible asset for impairment have the option of performing a qualitative assessment before calculating the fair value of the asset (i.e. step 1 of the impairment test). If companies determine, on the basis of qualitative factors, that the fair value of the indefinite-lived intangible asset is more likely than not less than the carrying amount, the two-step impairment test would be required. This update is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The Company adopted the revised guidance, and it did not have a material impact on the Company's Consolidated Financial Statements. |
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Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted Disclosures about offsetting assets and liabilities – In December 2011, the FASB issued accounting guidance on disclosures about offsetting assets and liabilities. The guidance requires entities to disclose both gross and net information about instruments and transactions that are offset in the statement of financial position, as well as instruments and transactions that are subject to an enforceable master netting arrangement or similar agreement. In January 2013, the FASB issued guidance clarifying the scope of the disclosures to apply only to derivatives, including bifurcated embedded derivatives, repurchase and reverse repurchase agreements, and securities lending and securities borrowing transactions. This guidance is effective January 1, 2013, with retrospective application required. We do not expect the adoption to have a material impact on our financial statements. Reporting of amounts reclassified out of accumulated other comprehensive income – In February 2013, the FASB issued accounting guidance on the reporting of reclassifications out of accumulated other comprehensive income. The guidance requires an entity to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income if the amount is reclassified to net income in its entirety in the same reporting period. For other amounts not required to be reclassified in their entirety to net income in the same reporting period, a cross reference to other disclosures that provide additional detail about the reclassification amounts is required. This guidance is effective January 1, 2013. We do not expect the adoption to have a material impact on our financial statements. |
401k Plan (Details) (USD $)
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12 Months Ended |
---|---|
Dec. 31, 2012
|
|
401k Plan [Abstract] | |
Minimum age require to qualify for pension plan | 21 years |
Minimum service period require to qualify for pension plan | 3 months |
Maximum wages deferred (in hundredths) | 100.00% |
Maximum eligible wages deferred by participants per year | $ 17,000 |
Minimum age for additional contribution beyond normal plan | 50 years |
Defined benefit plan, contributions by plan participants | $ 5,500 |
Employer matching contribution (in hundredths) | 6.00% |
Property and Equipment (Details) (USD $)
|
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
Property and equipment [Line Items] | ||
Property and equipment, gross | $ 3,351,465 | $ 2,683,884 |
Less accumulated depreciation | (2,279,840) | (1,814,473) |
Property and equipment, net | 1,071,625 | 869,411 |
Leasehold Improvements [Member]
|
||
Property and equipment [Line Items] | ||
Property and equipment, gross | 1,022,230 | 925,086 |
Lab and clean room equipment [Member]
|
||
Property and equipment [Line Items] | ||
Property and equipment, gross | 1,887,645 | 1,463,144 |
Furniture and office equipment [Member]
|
||
Property and equipment [Line Items] | ||
Property and equipment, gross | 431,563 | 295,654 |
Construction in Progress [Member]
|
||
Property and equipment [Line Items] | ||
Property and equipment, gross | $ 10,027 | $ 0 |
Nature of Business (Details)
|
12 Months Ended |
---|---|
Dec. 31, 2012
Businesssegments
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|
Nature of Business [Abstract] | |
Number of business segments | 1 |
Subsequent Events (Details) (USD $)
|
12 Months Ended | 2 Months Ended | 12 Months Ended | 2 Months Ended | ||
---|---|---|---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2012
Subsequent Event [Member]
|
Jan. 31, 2013
Subsequent Event [Member]
sqft
|
Feb. 28, 2013
Subsequent Event [Member]
Issuance of Equity [Member]
|
Dec. 31, 2012
Subsequent Event [Member]
Issuance of Equity [Member]
|
Feb. 28, 2013
Subsequent Event [Member]
Issuance of Equity [Member]
Chairman and CEO [Member]
|
|
Subsequent Event [Line Items] | ||||||
Square feet of office the company will lease | 80,000 | |||||
Initial lease term | 69 months | |||||
Base rental payments | $ 7,100,000 | |||||
Security deposit | 250,000 | 499,087 | ||||
Total amount of debt plus accrued interest | $ 5,271,963 | |||||
Shares of common stock (in shares) | 893,267 | 5,271,963 | 532,260 |
Equity (Details) (USD $)
|
12 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
Plans
|
Dec. 31, 2011
|
Dec. 31, 2012
Warrants [Member]
|
Dec. 31, 2010
Warrants [Member]
|
Dec. 31, 2012
Contingent Warrants [Member]
|
Dec. 31, 2010
Contingent Warrants [Member]
|
Dec. 31, 2012
Warrants Issued in Connection with Private Placement [Member]
Warrants [Member]
|
Dec. 31, 2011
Warrants Issued in Connection with Private Placement [Member]
Warrants [Member]
|
Dec. 31, 2012
Warrants Issued in Connection with Private Placement [Member]
Contingent Warrants [Member]
|
Dec. 31, 2011
Warrants Issued in Connection with Private Placement [Member]
Contingent Warrants [Member]
|
Dec. 31, 2011
Warrants Issued in Connection with Convertible Promissory Notes [Member]
Warrants [Member]
|
Dec. 31, 2011
Warrants Issued in Connection with Convertible Promissory Notes [Member]
Contingent Warrants [Member]
|
Dec. 31, 2012
Warrants Issued In Connection With Line of Credit with Related Party [Member]
Warrants [Member]
|
Dec. 31, 2011
Warrants Issued In Connection With Line of Credit with Related Party [Member]
Warrants [Member]
|
Dec. 31, 2012
Warrants Issued In Connection With Line of Credit with Related Party [Member]
Contingent Warrants [Member]
|
Dec. 31, 2011
Warrants Issued In Connection With Line of Credit with Related Party [Member]
Contingent Warrants [Member]
|
Dec. 31, 2011
Warrants Issued in Connection with Senior Secured Promissory Notes. [Member]
Warrants [Member]
|
Dec. 31, 2011
Warrants Issued in Connection with Senior Secured Promissory Notes. [Member]
Contingent Warrants [Member]
|
Dec. 31, 2012
Callable warrants [Member]
Warrants [Member]
|
Dec. 31, 2012
Callable warrants [Member]
Contingent Warrants [Member]
|
Dec. 31, 2012
Warrants expired [Member]
Warrants [Member]
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Dec. 31, 2012
Warrants expired [Member]
Contingent Warrants [Member]
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Dec. 31, 2012
Contingent warrants related to convertible note [Member]
Warrants [Member]
|
Dec. 31, 2012
Contingent warrants related to convertible note [Member]
Contingent Warrants [Member]
|
Dec. 31, 2012
Other [Member]
Warrants [Member]
|
Dec. 31, 2012
Other [Member]
Contingent Warrants [Member]
|
Dec. 31, 2012
Warrants Redeemed for Cashless Exercises [Member]
Warrants [Member]
|
Dec. 31, 2012
Warrants Redeemed for Cashless Exercises [Member]
Contingent Warrants [Member]
|
Dec. 31, 2012
Repurchase of callable warrants [Member]
Warrants [Member]
|
Dec. 31, 2012
Repurchase of callable warrants [Member]
Contingent Warrants [Member]
|
Dec. 31, 2011
Placement Agent [Member]
Warrants [Member]
|
Dec. 31, 2011
Placement Agent [Member]
Contingent Warrants [Member]
|
Dec. 31, 2011
$0.50 [Member]
|
Dec. 31, 2011
$0.65-$1.00 [Member]
|
Dec. 31, 2011
$1.04-$1.80 [Member]
|
Dec. 31, 2011
$2.40 [Member]
|
Dec. 31, 2012
$0.50-$0.76 [Member]
|
Dec. 31, 2012
$0.87-$1.35 [Member]
|
Dec. 31, 2012
$1.40-$2.18 [Member]
|
Dec. 31, 2012
$2.29-$3.47 [Member]
|
Dec. 31, 2012
$3.49-$3.85 [Member]
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||
Number of share-based compensation plans | 3 | ||||||||||||||||||||||||||||||||||||||||
Outstanding assumed options (in shares) | 375,000 | ||||||||||||||||||||||||||||||||||||||||
Shares authorized (in shares) | 16,500,000 | 12,500,000 | |||||||||||||||||||||||||||||||||||||||
Increase of shares (in shares) | 4,000,000 | ||||||||||||||||||||||||||||||||||||||||
Number of shares [Roll forward] | |||||||||||||||||||||||||||||||||||||||||
Outstanding, beginning of period (in shares) | 10,333,583 | 8,257,650 | |||||||||||||||||||||||||||||||||||||||
Granted (in shares) | 5,307,500 | 3,918,500 | |||||||||||||||||||||||||||||||||||||||
Exercised (in shares) | (843,862) | (490,000) | |||||||||||||||||||||||||||||||||||||||
Unvested options forfeited (in shares) | (387,171) | (217,252) | |||||||||||||||||||||||||||||||||||||||
Vested options expired (in shares) | (795,915) | (1,135,315) | |||||||||||||||||||||||||||||||||||||||
Outstanding, end of period (in shares) | 13,614,135 | 10,333,583 | |||||||||||||||||||||||||||||||||||||||
Vested or expected to vest at end of period (in shares) | 13,367,278 | 10,283,583 | |||||||||||||||||||||||||||||||||||||||
Weighted-Average Exercise Price [Roll forward] | |||||||||||||||||||||||||||||||||||||||||
Outstanding, weighted average exercise price, beginning of period (in dollars per share) | $ 1.17 | $ 1.20 | |||||||||||||||||||||||||||||||||||||||
Granted, weighted average exercise price (in dollars per share) | $ 1.90 | $ 1.17 | |||||||||||||||||||||||||||||||||||||||
Exercised, weighted average exercise price (in dollars per share) | $ 1.25 | $ 0.60 | |||||||||||||||||||||||||||||||||||||||
Unvested options forfeited weighted-average exercise price (in dollars per share) | $ 1.17 | $ 1.10 | |||||||||||||||||||||||||||||||||||||||
Vested options expired weighted-average exercise price (in dollars per share) | $ 1.55 | $ 1.70 | |||||||||||||||||||||||||||||||||||||||
Outstanding, weighted average exercise price, end of period (in dollars per share) | $ 1.42 | $ 1.17 | |||||||||||||||||||||||||||||||||||||||
Vested or expected to vest at end of period weighted average exercise price (in dollars per share) | $ 1.41 | $ 1.17 | |||||||||||||||||||||||||||||||||||||||
Stock options, additional disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Outstanding, weighted average remaining contractual term | 8 years | 7 years 1 month 6 days | |||||||||||||||||||||||||||||||||||||||
Vested and expected to vest, weighted average remaining contractual term | 7 years 10 months 24 days | 5 years 8 months 12 days | |||||||||||||||||||||||||||||||||||||||
Outstanding, aggregate intrinsic value | $ 32,924,881 | $ 1,457,218 | |||||||||||||||||||||||||||||||||||||||
Vested and expected to vest, aggregate intrinsic value | 32,490,930 | 1,395,223 | |||||||||||||||||||||||||||||||||||||||
Exercised options, intrinsic value | 718,978 | 258,000 | |||||||||||||||||||||||||||||||||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||||||||||||||||||||||||||||||||||||||||
Exercise Price Range, lower range limit (in dollars per share) | $ 0.65 | $ 1.04 | $ 0.50 | $ 0.87 | $ 1.40 | $ 2.29 | $ 3.49 | ||||||||||||||||||||||||||||||||||
Exercise Price Range, upper range limit (in dollars per share) | $ 0.50 | $ 1.00 | $ 1.80 | $ 2.40 | $ 0.76 | $ 1.35 | $ 2.18 | $ 3.47 | $ 3.85 | ||||||||||||||||||||||||||||||||
Number of outstanding options (in shares) | 13,614,135 | 10,333,583 | 587,250 | 2,967,500 | 6,228,833 | 550,000 | 2,372,500 | 7,048,668 | 1,958,467 | 2,177,000 | 57,500 | ||||||||||||||||||||||||||||||
Outstanding Options, weighted average remaining contractual term | 8 years | 7 years 1 month 6 days | 2 years 10 months 24 days | 5 years 8 months 12 days | 8 years 9 months 18 days | 8 months 12 days | 5 years 3 months 18 days | 8 years 7 months 6 days | 6 years 9 months 18 days | 9 years 8 months 12 days | 10 years | ||||||||||||||||||||||||||||||
Outstanding Options, weighted average exercise price (in dollars per share) | $ 1.42 | $ 1.17 | $ 0.50 | $ 0.79 | $ 1.30 | $ 2.40 | $ 0.66 | $ 1.15 | $ 1.68 | $ 0 | $ 0 | ||||||||||||||||||||||||||||||
Number of exercisable options (in shares) | 5,236,597 | 6,000,497 | 513,268 | 2,730,224 | 2,207,005 | 550,000 | 2,372,500 | 1,674,638 | 1,189,459 | 0 | 0 | ||||||||||||||||||||||||||||||
Exercisable Options, weighted average exercise price (in dollars per share) | $ 1.05 | $ 1.16 | $ 0.50 | $ 0.79 | $ 1.45 | $ 2.40 | $ 0.66 | $ 1.15 | $ 1.68 | $ 0 | $ 0 | ||||||||||||||||||||||||||||||
Total unrecognized compensation expense | $ 6,151,000 | ||||||||||||||||||||||||||||||||||||||||
Unvested Stock Options [Rollforward] | |||||||||||||||||||||||||||||||||||||||||
Unvested at beginning of year (in shares) | 4,333,086 | 2,679,787 | |||||||||||||||||||||||||||||||||||||||
Granted (in shares) | 5,307,500 | 3,918,500 | |||||||||||||||||||||||||||||||||||||||
Called/expired (in shares) | (387,171) | (1,352,567) | |||||||||||||||||||||||||||||||||||||||
Vested (in shares) | (875,877) | (912,634) | |||||||||||||||||||||||||||||||||||||||
Unvested at end of year (in shares) | 8,377,538 | 4,333,086 | |||||||||||||||||||||||||||||||||||||||
Unvested Stock Option Weighted Average Grant Date Fair Value [Roll Forward] | |||||||||||||||||||||||||||||||||||||||||
Unvested at beginning of year (in dollars per share) | $ 0.72 | $ 0.87 | |||||||||||||||||||||||||||||||||||||||
Granted (in dollars per share) | $ 1.90 | $ 0.63 | |||||||||||||||||||||||||||||||||||||||
Cancelled/expired (in dollars per share) | $ 1.17 | $ 0.59 | |||||||||||||||||||||||||||||||||||||||
Vested (in dollars per share) | $ 1.05 | $ 0.81 | |||||||||||||||||||||||||||||||||||||||
Unvested at end of year (in dollars per share) | $ 0.96 | $ 0.72 | |||||||||||||||||||||||||||||||||||||||
Fair value options valuation assumptions [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Expected volatility, minimum (in hundredths) | 45.70% | 57.30% | |||||||||||||||||||||||||||||||||||||||
Expected volatility, maximum (in hundredths) | 64.30% | 58.10% | |||||||||||||||||||||||||||||||||||||||
Expected life (in years) | 6 years | 6 years | |||||||||||||||||||||||||||||||||||||||
Expected dividend yield (in hundredths) | 0.00% | 0.00% | |||||||||||||||||||||||||||||||||||||||
Risk-free interest rate, minimum (in hundredths) | 0.62% | 0.86% | |||||||||||||||||||||||||||||||||||||||
Risk-free interest rate, maximum (in hundredths) | 0.177% | 2.24% | |||||||||||||||||||||||||||||||||||||||
Weighted-average grant date fair value for options granted during the period (in dollars per share) | $ 1.07 | $ 0.63 | |||||||||||||||||||||||||||||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||||||||||||||||||||||||||||||
Warrants, term | 5 years | ||||||||||||||||||||||||||||||||||||||||
Warrants, Number of Warrants [Roll Forward] | |||||||||||||||||||||||||||||||||||||||||
Warrants outstanding, beginning of period (in shares) | 9,388,817 | 6,003,924 | 5,245,484 | 1,252,990 | |||||||||||||||||||||||||||||||||||||
Contingent warrants issued (in shares) | 1,672,743 | 1,889,161 | (1,672,743) | 1,889,162 | 203,332 | 203,332 | 325,000 | 0 | (325,000) | 650,000 | 1,250,000 | 1,250,000 | 42,400 | 0 | |||||||||||||||||||||||||||
Warrants voided (in shares) | 0 | (3,247,741) | |||||||||||||||||||||||||||||||||||||||
Warrants exercised (in shares) | (1,608,802) | 0 | (325,000) | 0 | (3,288,733) | 0 | (1,249,750) | 0 | (1,703,568) | 0 | (14,789) | 0 | (56,750) | 0 | |||||||||||||||||||||||||||
Expired warrants (in shares) | (10,000) | 0 | |||||||||||||||||||||||||||||||||||||||
Warrants outstanding, end of period (in shares) | 3,129,168 | 6,003,924 | 0 | 1,252,990 | |||||||||||||||||||||||||||||||||||||
Warrants, Weighted-Average Exercise Price per Warrant [Roll Forward] | |||||||||||||||||||||||||||||||||||||||||
Warrants outstanding, beginning of period (in dollars per share) | $ 1.00 | $ 1.21 | $ 0.01 | $ 0.01 | |||||||||||||||||||||||||||||||||||||
Warrants issued (in dollars per share) | $ 0 | $ 0.01 | $ 0.01 | $ 1.50 | $ 0.01 | $ 0.01 | $ 1.50 | $ 0.01 | $ 0.01 | $ 0 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 1.09 | $ 0 | |||||||||||||||||||||||||
Warrants exercised (in dollars per share) | $ 0.01 | $ 0 | $ 0.01 | $ 0 | $ 1.50 | $ 0 | $ 0.01 | $ 0 | $ 0.63 | $ 0 | $ 0.53 | $ 0 | $ 1.50 | $ 0 | |||||||||||||||||||||||||||
Warrants Expired Weighted Average Exercise Price (in dollars per share) | $ 1.00 | $ 0 | |||||||||||||||||||||||||||||||||||||||
Warrants outstanding, end of period (in dollars per share) | $ 1.04 | $ 1.21 | $ 0 | $ 0.01 |
Nature of Business
|
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2012
|
|||
Nature of Business [Abstract] | |||
Nature of Business |
MiMedx Group, Inc. ("MiMedx," "The Company," "we," or "us") operates in one business segment, Regenerative Biomaterials, which includes the design, manufacture, and marketing of products and tissue processing services for the Wound Care, Orthopedics, Spine, Ophthalmic and Dental market categories. Our biomaterial platform technologies include the device technologies HydroFix® and CollaFixTM, and our tissue technologies, AmnioFix® and EpiFix®. The Company is focused primarily on the United States but will pursue other individual markets based upon the specific opportunity. The adoption of the technologies may vary depending on each country's regulations, but the opportunities to help individuals in the different disease states remain similar and large. |