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Cover Page - USD ($) $ in Millions	12 Months Ended
Cover Page - USD ($) $ in Millions	Dec. 31, 2018	Mar. 03, 2020	Jun. 28, 2019
Cover page.
Document Type	10-K
Document Annual Report	true
Document Transition Report	false
Document Period End Date	Dec. 31, 2018
Entity File Number	001-35887
Entity Registrant Name	MIMEDX GROUP, INC.
Entity Incorporation, State or Country Code	FL
Entity Tax Identification Number	26-2792552
Entity Address, Address Line One	1775 West Oak Commons Court, NE
Entity Address, City or Town	Marietta
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30062
City Area Code	770
Local Phone Number	651-9100
Title of 12(g) Security	Common Stock, par value $0.001 per share
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	No
Entity Interactive Data Current	No
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Public Float			$ 425.1
Entity Common Stock, Shares Outstanding		110,545,275
Entity Central Index Key	0001376339
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Amendment Flag	false

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 45,118	$ 27,476
Inventory, net	15,986	9,467
Prepaid expenses	6,673	2,125
Income tax receivable	454	656
Other current assets	5,818	9,023
Total current assets	74,049	48,747
Property and equipment, net	17,424	14,091
Goodwill	19,976	19,976
Intangible assets, net	9,608	10,033
Deferred tax asset, net	0	25,541
Other assets	1,787	2,867
Total assets	122,844	121,255
Current liabilities:
Accounts payable	14,864	8,454
Accrued compensation	23,024	20,941
Accrued expenses	31,842	15,768
Other current liabilities	1,817	647
Total current liabilities	71,547	45,810
Other liabilities	1,642	1,648
Total liabilities	73,189	47,458
Commitments and contingencies (Note 16)	0	0
Stockholders’ equity:
Preferred stock; $0.001 par value; 5,000,000 shares authorized and 0 shares issued and outstanding	0	0
Common stock; $0.001 par value; 150,000,000 shares authorized; 112,703,926 issued and 109,098,663 outstanding at December 31, 2018 and 112,703,926 issued and 109,347,517 outstanding at December 31, 2017	113	113
Additional paid-in capital	164,744	164,649
Treasury stock at cost: 3,605,263 shares at December 31, 2018 and 3,356,409 shares at December 31, 2017	(38,642)	(44,384)
Accumulated deficit	(76,560)	(46,581)
Total stockholders’ equity	49,655	73,797
Total liabilities and stockholders’ equity	$ 122,844	$ 121,255

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Stockholders' equity:
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0	0
Preferred stock, shares outstanding (in shares)	0	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	150,000,000	150,000,000	150,000,000
Common stock, shares issued (in shares)	112,703,926	112,703,926	110,212,547
Common stock, shares outstanding (in shares)	109,098,663	109,347,517	109,862,787
Treasury stock, shares (in shares)	3,605,263	3,356,409	349,760

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Statement [Abstract]
Net sales	$ 359,111	$ 321,139	$ 221,712
Cost of sales	36,386	35,219	30,938
Gross profit	322,725	285,920	190,774
Operating expenses:
Selling, general and administrative	258,528	220,119	173,412
Investigation, restatement and related	51,322	0	0
Research and development expenses	15,765	17,900	14,341
Amortization of intangible assets	1,034	1,678	2,137
Operating (loss) income	(3,924)	46,223	884
Other income (expense)
Loss on divestiture of Stability	0	(1,048)	0
Other income (expense), net	527	(87)	(339)
(Loss) income before income tax provision	(3,397)	45,088	545
Income tax provision (expense) benefit	(26,582)	19,639	(155)
Net (loss) income	$ (29,979)	$ 64,727	$ 390
Net (loss) income per common share - basic (in dollars per share)	$ (0.28)	$ 0.61	$ 0.00
Net (loss) income per common share - diluted (in dollars per share)	$ (0.28)	$ 0.56	$ 0.00
Weighted average shares outstanding - basic (in shares)	105,596,256	106,121,810	105,928,348
Weighted average shares outstanding - diluted (in shares)	105,596,256	116,113,736	112,645,640

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Treasury Stock	Accumulated Deficit
Balance, beginning of period (in shares) at Dec. 31, 2015		109,467,416		2,105,945
Balance, beginning of period at Dec. 31, 2015	$ 34,724	$ 109	$ 163,438	$ (17,125)	$ (111,698)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation	17,732		17,732
Tax benefit of share-based compensation	(423)		(423)
Exercise of stock options (in shares)		243,928		(918,544)
Exercise of stock options	3,494	$ 0	(3,767)	$ 7,261
Issuance of restricted stock (in shares)		501,203		(2,210,879)
Issuance of restricted stock	0	$ 1	(17,546)	$ 17,545
Restricted stock shares canceled/forfeited (in shares)				377,317
Restricted stock cancellation / forfeited	$ 0		2,503	$ (2,503)
Shares issued for services performed (in shares)	(43,344)			(43,344)
Shares issued for services performed	$ 346		6	$ 340
Shares issued in conjunction with acquisition of Stability (in shares)	(441,009)			(441,009)
Shares issued in conjunction with acquisition of Stability	$ 3,347		(462)	$ 3,809
Share repurchase (in shares)	(1,338,616)			1,338,616
Shares repurchased	$ (10,378)			$ (10,378)
Shares repurchased for tax withholding on vesting of restricted stock units (in shares)				141,658
Shares repurchased for tax withholding on vesting of restricted stock units	(1,165)			$ (1,165)
Net income (loss)	390				390
Balance, end of period (in shares) at Dec. 31, 2016		110,212,547		349,760
Balance, end of period at Dec. 31, 2016	48,067	$ 110	161,481	$ (2,216)	(111,308)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation	21,195		21,195
Exercise of stock options (in shares)		1,097,933		(1,396,803)
Exercise of stock options	11,987	$ 1	(3,433)	$ 15,419
Issuance of restricted stock (in shares)		1,393,446		(1,954,068)
Issuance of restricted stock	0	$ 2	(17,840)	$ 17,838
Restricted stock shares canceled/forfeited (in shares)				320,117
Restricted stock cancellation / forfeited	$ 0		3,205	$ (3,205)
Shares issued for services performed (in shares)	(17,539)			(17,539)
Shares issued for services performed	$ 166		41	$ 125
Shares issued in conjunction with acquisition of Stability	$ 0
Share repurchase (in shares)	(5,635,077)			5,635,077
Shares repurchased	$ (68,263)			$ (68,263)
Shares repurchased for tax withholding on vesting of restricted stock units (in shares)				419,865
Shares repurchased for tax withholding on vesting of restricted stock units	(4,082)			$ (4,082)
Net income (loss)	64,727				64,727
Balance, end of period (in shares) at Dec. 31, 2017		112,703,926		3,356,409
Balance, end of period at Dec. 31, 2017	73,797	$ 113	164,649	$ (44,384)	(46,581)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation	$ 14,768		14,768
Exercise of stock options (in shares)	786,708			(786,708)
Exercise of stock options	$ 3,555		(8,210)	$ 11,765
Issuance of restricted stock (in shares)				(1,947,475)
Issuance of restricted stock	0		(25,657)	$ 25,657
Restricted stock shares canceled/forfeited (in shares)				1,861,314
Restricted stock cancellation / forfeited	0		19,194	$ (19,194)
Shares issued for services performed	0
Shares issued in conjunction with acquisition of Stability	$ 0
Share repurchase (in shares)	(507,600)			507,600
Shares repurchased	$ (7,572)			$ (7,572)
Shares repurchased for tax withholding on vesting of restricted stock units (in shares)				614,123
Shares repurchased for tax withholding on vesting of restricted stock units	(4,914)			$ (4,914)
Net income (loss)	(29,979)
Balance, end of period (in shares) at Dec. 31, 2018		112,703,926		3,605,263
Balance, end of period at Dec. 31, 2018	$ 49,655	$ 113	$ 164,744	$ (38,642)	$ (76,560)

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash flows from operating activities:
Net (loss) income	$ (29,979)	$ 64,727	$ 390
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation	5,882	4,087	3,333
Amortization of intangible assets	1,034	1,678	2,137
Amortization of inventory fair value step-up	0	203	1,485
Amortization of deferred financing costs	137	176	151
Amortization of discount on notes receivable	(190)	(12)	0
Change in fair value of earn-out consideration	0	(3,560)	(1,650)
Intangible asset impairment	0	590	0
Share-based compensation	14,768	21,195	17,732
Change in deferred income taxes	25,541	(26,670)	(5,992)
Loss on divestiture of Stability	0	1,048	0
Increase (decrease) in cash, net of effects of acquisition and divestiture, resulting from changes in:
Accounts receivable	0	(479)	73
Inventory	(6,519)	2,747	(895)
Prepaid expenses	(4,548)	(305)	(793)
Income tax receivable	202	(656)	0
Other assets	3,562	225	(1,567)
Accounts payable	6,585	(1,324)	(3,478)
Accrued compensation	2,083	8,397	(2,586)
Accrued expenses	16,074	(3,534)	9,530
Income taxes	0	(5,611)	5,201
Other liabilities	1,164	17	778
Net cash flows provided by operating activities	35,796	62,939	23,849
Cash flows from investing activities:
Purchases of property and equipment	(9,419)	(5,126)	(6,205)
Proceeds from property and equipment sale	30	0	0
Principal payments from note receivable	778	0	0
Stability acquisition	0	0	(7,631)
Fixed maturity securities redemption	0	0	3,000
Patent application costs	(609)	(271)	(842)
Net cash flows used in investing activities	(9,220)	(5,397)	(11,678)
Cash flows from financing activities:
Proceeds from exercise of stock options	3,555	11,987	3,494
Shares repurchased under repurchase plan	(7,572)	(68,263)	(10,378)
Shares repurchased for tax withholdings on vesting of restricted stock	(4,914)	(4,082)	(1,165)
Payments under capital lease obligations	(3)	(29)	(102)
Net cash flows used in financing activities	(8,934)	(60,387)	(8,151)
Net change in cash	17,642	(2,845)	4,020
Cash and cash equivalents, beginning of year	27,476	30,321	26,301
Cash and cash equivalents, end of year	$ 45,118	$ 27,476	$ 30,321

Nature of Business	12 Months Ended
Nature of Business	Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Business	Nature of Business MiMedx Group, Inc. (together with its subsidiaries except where the context otherwise requires “MiMedx,” or the “Company”) is an advanced wound care and emerging therapeutic biologics company, developing and distributing human placental tissue allografts with patent-protected processes for multiple sectors of healthcare. The Company derives its products from human placental tissues processed using proprietary processing methodologies. The Company’s mission is to offer physicians products and tissues to help the body heal itself. MiMedx provides products in the wound care, burn, surgical, orthopedic, spine, sports medicine, ophthalmic and dental sectors of healthcare. All of the Company’s products are regulated by the United States Food and Drug Administration (“FDA”). MiMedx is the leading supplier of human placental allografts, which are human tissues that are transplanted from one person (a donor) to another person (a recipient). The Company operates in one business segment, Regenerative Biomaterials, which includes the design, manufacture, and marketing of products and tissue processing services for the Wound Care, Surgical, Sports Medicine, Ophthalmic and Dental market categories. The Company’s allograft product families include: dHACM family with AmnioFix® and EpiFix® brands; Umbilical family with EpiCord® and AmnioCord® brands; and Placental Collagen family with AmnioFill™ brands. AmnioFix and EpiFix are tissue allografts derived from amnion and chorion layers of human placental membrane; EpiCord and AmnioCord are tissue allografts derived from umbilical cord tissue. AmnioFill is a placental connective tissue matrix, derived from the placental disc and other placental tissue. The Company’s business model is focused primarily on the United States of America but is exploring international expansion opportunities in the future.

Liquidity and Capital Resources

12 Months Ended

Dec. 31, 2018

Liquidity and Capital Resources [Abstract]

Liquidity and Capital Resources

Net Working Capital

As of December 31, 2018, the Company had $45.1 million of cash and cash equivalents. The Company reported total current assets of $74.0 million and current liabilities of $71.5 million and had net working capital of $2.5 million as of December 31, 2018.

Overall Liquidity and Capital Resources

The Company’s largest cash requirement for the twelve months ended December 31, 2018 was cash for general working capital needs. In addition, the Company’s other cash requirements included capital expenditures, and repurchases of the Company’s common stock. The Company funded its cash requirements for 2018 through its existing cash reserves, and its operating activities which generated $35.8 million during the period. The Company believes that its anticipated cash from operating and financing activities and existing cash and cash equivalents, as well as the proceeds under the Term Loan Agreement (as defined below) will enable the Company to meet its operational liquidity needs and fund its planned investing activities for the twelve months from issuance of the consolidated financial statements.

As discussed in Note 16, “Commitments and Contingencies,” and further addressed in Note 21, “Subsequent Events,” of the consolidated financial statements, the Company anticipates additional cash requirements related to the following items within one year from the date in which the 2018 Form 10-K was available to be issued:


•	shareholder derivative lawsuits or potential settlements, for which the Company is not able to estimate a loss;


•	operating loss of $3.9 million and net loss of $30.0 million;


•	private securities lawsuits, for which the Company is currently not able to estimate a loss and for which it is unclear whether the Company would be indemnified under various insurance policies;

•

the Company’s self-disclosure to the Department of Veterans’ Affairs (“VA”) concerning the eligibility of one of its products for inclusion in the Company’s FSS contract. The Company recorded a liability of $6.9 million as of December 31, 2018 representing the Company’s best estimate for a potential loss. As explained below, the Company has reached an agreement in principle with the Department of Justice to resolve a qui tam matter relating to this issue. The settlement amount is within the Company’s previously-recorded liability.


•	litigation involving former employees of the Company. The Company has settled with one former employee for $4.8 million, but it has potential exposure in other such cases for which a loss is not currently estimable;


•	payments owed to the Company’s former Interim Chief Financial Officer, under a Separation and Transition Services Agreement dated November 18, 2019;


•	payments in connection with the Company’s operating and capital lease agreements; and


•	investments and other expenditures required in order to bring the Company’s facilities into compliance with current Good Manufacturing Practices (“cGMPs”).

In addition, on June 10, 2019, the Company entered into a Term Loan Agreement (the “Term Loan Agreement”) with Blue Torch Finance LLC, as administrative agent and collateral agent, to borrow funds with a face value of $75.0 million (the “Term Loan”), of which the full amount has been borrowed and funded. The proceeds from the Term Loan have been and will continue to be used (i) for working capital and general corporate purposes and (ii) to pay transaction fees, costs and expenses incurred in connection with the Term Loan and the related transactions. The Term Loan matures on June 20, 2022 and is repayable in quarterly installments of $0.9 million with the balance due on June 20, 2022.

The Term Loan Agreement contains financial covenants requiring the Company, on a consolidated basis, to maintain the following:


•	Maximum Total Leverage Ratio, defined as funded debt divided by consolidated adjusted EBITDA, of not more than 3.0 to 1.0 as of the last day of the previous four consecutive fiscal quarters.

•

Minimum Liquidity, defined as unrestricted cash and cash equivalents, of not less than $40.0 million as of the last business day of each fiscal month following the term loan closing date through and including the fiscal month ending May 31, 2020. For fiscal months beginning June 30, 2020, the Company is not permitted to have liquidity of less than $30.0 million. If, beginning December 31, 2020, the total leverage ratio is less than 2.50 to 1.0 as of the last business day of a fiscal month, the Company’s liquidity shall not be less than $20.0 million.

The Term Loan Agreement also specifies that any prepayment of the loan, voluntary or mandatory, as defined in the Term Loan Agreement, subjects MiMedx to a prepayment penalty as of the date of the prepayment with respect to the Term Loan of:


•	During the period from June 10, 2019 through June 10, 2020, an amount equal to 3% of the principal amount of the Term Loan prepaid on such date; and


•	During the period from June 11, 2020 through June 10, 2021, an amount equal to 2% of the principal amount of the Term Loan prepaid on such date.

Principal prepayments after June 10, 2021 are not subject to a prepayment penalty.

The Term Loan Agreement also includes events of default customary for facilities of this type, and upon the occurrence of such events of default, subject to customary cure rights, all outstanding loans under the Term Loan Agreement may be accelerated and/or the lenders’ commitments terminated.

As of the date of the issuance of the consolidated financial statements, the Company is currently in compliance with the financial covenants in the Term Loan Agreement. However, the violation of these covenants in the 12 months from such date could result in an acceleration of the repayment of the loan which, in combination with the Company’s current commitments and contingent liabilities, could cast doubt on the Company’s ability to continue as a going concern.

The Company has analyzed its ability to address the aforementioned commitments and potential liabilities while remaining compliant with the financial covenants set forth in the Term Loan Agreement for the 12 months from the date of the issuance of the consolidated financial statements, consistent with the guidance prescribed by Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-05, “Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.”

Based on this analysis, and in combination with existing cash and cash equivalents on hand, the Company expects to meet all obligations currently projected to come due in the next 12 months without violating the financial covenants set forth by the Term Loan Agreement. Therefore, the Company has concluded that it will continue as a going concern.

Significant Accounting Policies

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Significant Accounting Policies

Use of Estimates

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America (“U.S.”). Conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported consolidated statements of operations during the reporting period. Actual results could differ from those estimates. Significant estimates include estimated useful lives and potential impairment of property and equipment and intangible assets, estimate for contingent liabilities, management’s assessment of the Company’s ability to continue as a going concern, estimate of fair value of share-based payments and valuation of deferred tax assets.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of MiMedx Group, Inc. and its wholly-owned subsidiaries, including, for the periods prior to its divestiture further discussed in Note 5, Stability Biologics, LLC (formerly known as Stability, Inc.). All intercompany balances and transactions have been eliminated upon consolidation.

Segment Reporting

Accounting Standards Codification (“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 chief operating decision-maker (“CODM”) organizes segments within the Company for which separate discrete financial information is available regarding resource allocation and assessing performance. The Company has determined it has one operating segment.

Market Concentrations and Credit Risk

The Company places its cash and cash equivalents on deposit with financial institutions in the U.S. Federal Deposit Insurance Corporation (“FDIC”) coverage is $250,000 for substantially all depository accounts. As of December 31, 2018 and 2017, the Company had cash and cash equivalents of approximately $44.0 million and $26.2 million, respectively, in excess of the insured amounts in four depository institutions.

Cash and Cash Equivalents

Cash and cash equivalents include cash and FDIC insured certificates of deposit held at various banks with an original maturity of three months or less.

Notes Receivable

Notes receivable represent formal payment agreements with customers which generally arise in situations where amounts shipped and billed have aged significantly as well as the promissory note issued by Stability Biologics, LLC as part of the divestiture discussed in Note 5. The Company’s notes receivable are included in other current and long-term assets in the accompanying consolidated balance sheets and were valued taking into consideration cost of the market participant inputs, market conditions, liquidity, operating results and other qualitative factors.

Inventories

Inventories are valued at the lower of cost or net realizable value, using the first–in, first-out (“FIFO”) method. Inventory is tracked through raw material, work-in-progress, and finished goods stages as the product progresses through various production steps and stocking locations. Labor and overhead costs are absorbed through the various production processes up to when the work order closes. 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 demand.

Property and Equipment

Property and equipment are recorded at cost and depreciated on a straight-line method over their estimated useful lives, principally three years to seven years. Leasehold improvements are depreciated on a straight-line method over the shorter of the estimated useful lives or the lease term. The Company is party to various lease arrangements for its facility space and equipment. These arrangements include interest, scheduled rent increases and rent holidays which are included in the determination of minimum lease payments when assessing lease classification, and are included in rent expense on a straight line basis over the lease term. See Notes 7, “Property and Equipment,” and 16, “Commitments and Contingencies,” for further information regarding capital leases, operating leases and rent expense.

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.

Goodwill and Indefinite-lived Intangible Assets

Goodwill represents the excess of purchase price over the fair value of net assets of acquired businesses. The Company assesses the recoverability of its goodwill at least annually on September 30, or more frequently whenever events or substantive changes in circumstances indicate that the asset may be impaired. The Company may first choose to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the Company performs a quantitative analysis. The Company may also choose to bypass the qualitative assessment and proceed directly to the quantitative analysis.

If the carrying value exceeds the fair value of the reporting unit, goodwill impairment is recorded for the amount that the reporting unit’s carrying value exceeds its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. At present, the Company has only one reporting unit. The Company determines the fair value utilizing the income and market approaches. Under the income approach, the fair value of the Company is the present value of its future economic benefits. These benefits can include revenue, cost savings, tax deductions, and proceeds from its disposition. Value indications are developed by discounting expected cash flows to their present value at a rate of return that incorporates the risk-free rate for the use of funds, trends within the industry, and risks associated with particular investments of similar type and quality as of the goodwill impairment testing date. 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. The Company’s estimates associated with the goodwill impairment test are considered critical due to the amount of goodwill recorded on its consolidated balance sheets and the judgment required in determining fair value, including projected future cash flows.

Acquired intangible assets are tested for impairment annually on September 30 or whenever events or changes in circumstances indicate that the carrying amount of an intangible asset may not be recoverable. The Company’s impairment reviews are based on an estimated future cash flow approach that requires significant judgment with respect to future revenue and expense growth estimates. The Company uses estimates consistent with business plans and a market participant view of the assets being evaluated. Actual results may differ from the estimates used in these analyses.

There were no recorded impairment losses related to goodwill in 2018, 2017, or 2016. The Company recorded impairment losses of $0, $0.6 million, and $0 related to the abandonment of patents in process during 2018, 2017, and 2016, respectively.

Impairment of Intangible Assets with Finite Lives

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 using a two-step impairment test. In step one, the Company determines the sum of the undiscounted future cash flows of the assets based on management’s estimates and compare it to the carrying value of the assets. If the carrying amount is greater than the sum of the undiscounted cash flows, then the asset is impaired and step two is required. In step two, the impairment loss is calculated as the difference between the fair value of the assets and the carrying value of the assets.

Impairment reviews are based on an estimated future cash flow approach that requires significant judgment with respect to future revenue and expense growth rates, selection of appropriate discount rate, asset groupings, and other assumptions and estimates.

The Company uses estimates that are consistent with its business plans and a market participant view of the assets being evaluated. Actual results may differ from these estimates.

There were no impairment losses recognized with respect to intangible assets with finite lives in 2018, 2017, or 2016.

Patent Costs

The Company incurs certain legal and related costs in connection with patent applications for tissue based products and processes. The Company capitalizes such costs to be amortized over the expected life of the patent to the extent that an economic benefit is anticipated from the resulting patent or alternative future use is available to the Company. The Company capitalized $0.6 million of patent costs during 2018, $0.3 million of patent costs during 2017 and $0.8 million of patent costs during 2016.

Contingencies

The Company is subject to various patent challenges, product liability claims, government investigations, shareholder derivative suits, former employee matters and other legal proceedings, see Note 16 “Commitments and Contingencies.” Legal fees and other expenses related to litigation are expensed as incurred and included in selling, general and administrative expenses in the accompanying consolidated statements of operations. The Company records an accrual for legal settlements and other contingencies in the consolidated financial statements when the Company determines that a loss is both probable and reasonably estimable. The Company discloses all ongoing legal matters for which a loss is probable, regardless of whether an estimate can be reasonably determined.

Due to the fact that legal proceedings and other contingencies are inherently unpredictable, the Company’s estimates of the probability and amount of any such liabilities involve significant judgment regarding future events. The actual costs of resolving a claim may be substantially different from the amount of reserve the Company recorded. The Company records a receivable from its product liability insurance carriers only when the resolution of any dispute has been reached and realization of the amounts equal to the potential claim for recovery is considered probable. Any recovery of an amount in excess of the related recorded contingent loss will be recognized on when all contingencies relating to recovery have been resolved.

Revenue Recognition

The Company sells its products primarily to individual customers and independent distributors (collectively referred to as “customers”). Prior to 2015, substantially all federal healthcare providers, including the Department of Veterans Affairs, purchased Company product from one distributor customer of the Company, AvKARE Inc. (“AvKARE”), which is a veteran-owned General Services Administration Federal Supply Schedule contractor. In 2015, the Company began selling product directly to federal customers rather than exclusively allowing federal healthcare providers to purchase Company product from AvKARE. Upon expiration of the Company’s agreement with AvKARE on June 30, 2017, the Company had an obligation to repurchase AvKARE’s remaining inventory within 90 days in accordance with the terms of the agreement. As of September 30, 2017, the Company had satisfied the repurchase obligation.

For sales of the Company’s products to customers for all periods presented prior to January 1, 2018 (except sales from the Company’s wholly owned subsidiary Stability Biologics, LLC discussed below), the Company recognized revenue under ASC 605 only when both of the following events had occurred: (1) the Company has fulfilled the customer’s purchase order by delivering all product ordered; and (2) the Company has collected payment for the product delivered. Furthermore, the amount of revenue recognized was limited to the amount of payment received in a given period less the amount expected to be refunded or credited to customers for sales returns made after payment. The existence of extra-contractual or undocumented terms or arrangements initiated by former executives and other members of former Company management at the onset of the transactions, such as sales above established customer credit limits, concessions agreed to by former executives of the Company and other members of former Company management subsequent to the initial transaction (e.g., significantly extended payment terms, granting return or exchange rights) and contingent payment obligations caused the related sales transactions to fail the criteria required to be met under then applicable GAAP to recognize revenue.

On January 13, 2016, the Company completed the acquisition of Stability, a provider of human tissue products to surgeons, facilities, and distributors serving the surgical, spine, and orthopedic sectors of the healthcare industry. For sales of the Company’s products through Stability the Company recognized revenue under ASC 605 only when both of the following events had occurred: (1) the Company has fulfilled the customer’s purchase order by delivering all product ordered; and (2) the product has been delivered to the customer. Total sales from Stability were $7.0 million and $11.7 million for December 31, 2017 and 2016, respectively. Stability was divested on September 30, 2017.

The Company adopted ASC 606 on January 1, 2018 by using the modified retrospective method. ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. The Company has assessed the impact of the ASC 606 guidance by reviewing existing customer contracts and accounting policies and practices to identify differences, including identification of the contract and the evaluation of the Company’s performance obligations, transaction price, customer payments, transfer of control and principal versus agent considerations.

When evaluating its customer relationships and agreements with respect to customer sales, the Company concluded that although a contract may exist from a legal perspective upon fulfillment of a purchase order by the Company a contract does not exist from an accounting perspective at the time because certain implicit arrangements (e.g. rights of return or exchange, extended payment terms and sales exceeding established credit limits) modified the explicit terms of the contract.

The Company therefore determined that it did not meet the criteria necessary for its revenue arrangements to qualify as “contracts” under the requirements of ASC 606 upon physical delivery of the product. Subsequent to the delivery of product, uncertainties surrounding contractual adjustment are not resolved until either: (1) the customer returns the product prior to payment; or (2) the Company receives payment from the customer. At that point, the Company has determined that an accounting contract exists and the performance obligations of the Company to deliver product and the customer to pay for the product are satisfied. The Company has determined the transaction price of its contracts to equal the amount of consideration received from customers less the amount expected to be refunded or credited to customers, which is recognized as a refund liability that is updated at the end of each reporting period for changes in circumstances. The refund liability is included within accrued expenses in our consolidated balance sheet and is presented as estimated returns in Note 9, “Accrued Expenses.” The change in the balance of this reserve between December 31, 2017 and 2018 increased revenue by $0.6 million for the year ended December 31, 2018.

Based on the assessment, the Company concluded that during the year ended December 31, 2018 there was no substantial change to the timing and pattern of revenue recognition for the Company’s current revenue streams, and therefore there was no change to the Company's consolidated financial statements upon adoption of ASC 606, as the Company continued deferring revenue recognition until the time the Company receives cash consideration subsequent to the control of the product being transferred.

The Company sells to Group Purchasing Organization (“GPO”) members who transact directly with the Company at GPO-agreed pricing. GPOs are funded by administrative fees that are paid by the Company. These fees are set as a percentage of the purchase volume, which is typically 3% of sales made to the GPO members. Prior to adoption of ASC 606, for all periods presented prior to January 1, 2018, the Company presented the administrative fees paid to GPOs as a reduction of revenues as the benefit received by the Company in exchange for the GPO fees was not sufficiently separable from the GPO member’s purchase of the Company’s products. Upon adoption of ASC 606, the Company concluded that although it benefited from the access that a GPO provides to its members, this benefit was neither distinct from other promises in the Company’s contracts with GPOs nor was the benefit separable from the sale of goods by the Company to the end customer. Therefore, the Company continued presenting fees paid to GPOs as a reduction of product revenues.

Additionally, the Company considered how to account for costs associated with the delivered products of the contract for which revenue has been deferred, which is whether to match the related cost of sales expense with revenue or to recognize expense upon shipment. In making this assessment, the Company considered the financial viability of its distributors and customers based on their creditworthiness to determine if collectability of amounts sufficient to realize the costs of the products shipped was reasonably assured at the time of shipment. As the Company determined that there was a probable future economic benefit associated with the sales transactions, the Company deferred the costs of sales until the revenue was recognized. See section “Cost of Sales” below for the policy.

The Company offsets deferred revenue with the associated accounts receivable obligations in connection with the sales of products to its customers. The Company believes that because the conditions for revenue recognition have not yet been met and payment has not been received, neither party has fulfilled its obligations under the contract. Amounts shipped and billed but not recorded as revenue were $51.0 million and $64.8 million, for the years ended December 31, 2018 and 2017, respectively.

Cost of Sales

Cost of sales includes all costs directly related to bringing the Company’s products to their final selling destination. Amounts include direct and indirect costs to manufacture products including raw materials, personnel costs and direct overhead expenses necessary to convert collected tissues into finished goods, product testing costs, quality assurance costs, facility costs associated with the Company’s manufacturing and warehouse facilities, including depreciation, freight charges, costs to operate equipment and other shipping and handling costs for products shipped to customers.

Deferred cost of sales result from transactions where title to inventory transferred from the Company to the customer, but for which all revenue recognition criteria have not yet been met. Once all revenue recognition criteria have been met, the revenue and associated cost of sales is recognized. These amounts have been recorded within other current assets on the consolidated balance sheet in the amounts of $4.3 million and $5.9 million, as of December 31, 2018 and 2017, respectively.

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.

Advertising expense

Advertising expense consists primarily of print media promotional materials. Advertising costs are expensed as incurred. Advertising expense for the years ended December 31, 2018, 2017 and 2016 amounted to $0.1 million, $0.1 million and $0.1 million, respectively.

Income Taxes

Income tax expense (benefit), deferred tax assets and liabilities, and liabilities for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid. The Company is subject to income taxes in the United States, including numerous state jurisdictions. Significant judgments and estimates are required in determining the consolidated income tax expense.

Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in the future. In evaluating the Company’s ability to recover its deferred tax assets within the jurisdiction from which they arise, management considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. In projecting future taxable income, the Company begins with historical results adjusted for the results of discontinued operations and incorporate assumptions about the amount of future state and federal pretax operating income adjusted for items that do not have tax consequences. The assumptions about future taxable income require significant judgment and are consistent with the plans and estimates the Company uses to manage the underlying businesses. In evaluating the objective evidence that historical results provide, management considers three years of cumulative income (loss). The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the tax provision (benefit) in the period that includes the enactment date.

The Company recognizes deferred tax assets to the extent that it believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income exclusive of temporary differences, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

The calculation of income tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations both for U.S. federal income tax purposes and across numerous state jurisdictions. ASC Topic 740 (“ASC 740”) states that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits. The Company (1) records unrecognized tax benefits as liabilities in accordance with ASC 740, and (2) adjusts these liabilities when management’s judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some

of these uncertainties, the ultimate resolution may result in a payment that is materially different from management’s current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available.

The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process whereby (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position, and (2) for those tax positions that meet the more-likely-than-not recognition threshold, it recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

The Company recognizes interest and penalties related to unrecognized tax benefits within the income tax expense line in the accompanying consolidated statements of operations. Accrued interest and penalties, if any, are included within the related tax liability line in the consolidated balance sheet and recorded as a component of income tax expense.

Share-based Compensation

The Company grants share-based awards to employees and members of the Company’s Board of Directors (the “Board”). Such awards are recognized as share-based payment expense over the requisite service period, to the extent such awards are expected to vest in accordance with Financial Accounting Standards Board (“FASB”) ASC Topic 718 “Compensation—Stock Compensation.” The amount of expense to be recognized is determined by the fair value of the award using inputs available as of the grant date.

The fair value of restricted common stock is the value of common stock on the grant date. The fair value of stock option grants is estimated using the Black-Scholes option pricing model. Use of the valuation model requires management to make certain assumptions with respect to selected model inputs. The Company uses the simplified method for share-based compensation to estimate the expected term. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for the estimated option expected term. Historically, the Company did not have enough history to establish volatility based upon its own stock trading. Therefore, the expected volatility was based on similar publicly traded peer companies. The Company routinely reviews its calculation of volatility for potential changes in future volatility, the Company’s life cycle, its peer group, and other factors. In addition, an expected dividend yield of zero is used in the option valuation model because the Company does not pay cash dividends and does not expect to pay any cash dividends in the foreseeable future. For awards with service conditions only, the Company recognizes share-based compensation expense on a straight-line basis over the requisite service period.

For restricted common stock and stock options granted as consideration for services rendered by non-employees, the Company recognizes compensation expense in accordance with the requirements of FASB ASC Topic 505-50, “Equity Based Payments to Non-Employees.” Non-employee restricted common stock and stock option grants that do not vest immediately upon grant, and whose terms are known, are recorded as an expense over the vesting period of the underlying instrument granted. At the end of each financial reporting period prior to vesting, the value of the instruments granted, is re-measured using the fair value of the Company’s common stock and the stock-based compensation recognized during the period is adjusted accordingly.

Basic and Diluted Net (Loss) Income per Share

Basic net (loss) income per share is determined by dividing net (loss) income by the weighted average ordinary shares outstanding during the period. Diluted net income per ordinary share is based on the weighted average number of ordinary shares outstanding and potentially dilutive ordinary shares outstanding determined by using the treasury stock method. For all periods presented with a net loss, the shares underlying the common share options, warrants and restricted stock have been excluded from the calculation because their effect would have been anti‑dilutive. Therefore, the weighted average shares outstanding used to calculate both basic and diluted loss per share are the same for periods with a net loss.

Fair Value of Financial Instruments and Fair Value Measurements

The respective carrying value of certain on-balance sheet financial instruments approximated their fair values due to the short-term nature and type of these instruments. These financial instruments include cash and cash equivalents, accounts receivable, notes receivable, and certain current financial liabilities. The carrying cost of the Company’s investments also reflects their fair values due to the type of these investments, and the fair value of capital leases approximates their carrying value based upon current rates available to the Company.

The Company 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 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.

Fair value financial instruments are recorded in accordance with the fair value measurement framework. 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:


•	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.


•	Level 3: Unobservable inputs or valuation techniques that are used when little or no market data is available.

The determination of fair value and the assessment of a measurement’s placement within the hierarchy require 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.

Recently Adopted Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASC 606”) that requires companies to recognize revenue when a customer obtains control rather than when companies have transferred substantially all risks and rewards of a good or service. The underlying principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASC 606 defines a five-step process to achieve this core principle and more judgment and estimates are required within the revenue recognition process than are required under existing guidance, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation, among others. This update is effective for annual reporting periods beginning on or after December 15, 2017 and interim periods therein and requires expanded disclosures.

The Company’s analysis entailed a full review of existing revenue streams upon which the Company applied the core principles of the standard. Through this analysis, the Company identified one revenue stream from contracts with customers: product sales. The Company concluded that the timing and amount of revenue recognized for the year ended December 31, 2018 should not change following our adoption of the standard and the Company should continue deferring revenue recognition until the time the Company realized non-refundable cash receipts subsequent to the control of the product being transferred. Adoption of the standard had no impact on the Company’s consolidated financial statements. See “Revenue Recognition” accounting policy above for further information.

In July 2015, the FASB issued ASU 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory,” which requires companies to measure inventory within the scope of this Update at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The Company adopted this standard as on January 1, 2017 and this standard did not have a material impact on the Company’s consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting,” which simplifies several aspects of the accounting for share-based payment award transactions including (a) income tax consequences; (b) classification of awards as either debt or equity liabilities; and (c) classification on the statement of cash flows. The amendments are effective for public business entities for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company adopted this ASU as of January 1, 2017. The primary amendment impacting the Company’s financial statements is the requirement for excess tax benefits or shortfalls on the exercise of share-based compensation awards to be presented in income tax expense in the consolidated statements of operations during the period the award is exercised as opposed to being recorded in additional paid-in capital on the consolidated balance sheets. The excess tax benefit or shortfall is calculated as the difference between the fair value of the award on the date of exercise and the fair value of the award used to measure the expense to be recognized over the service period. Changes are required to be applied

prospectively to all excess tax benefits and deficiencies resulting from the exercise of awards after the date of adoption. The ASU requires a “modified retrospective” approach application for excess tax benefits that were not previously recognized in situations where the tax deduction did not reduce current taxes payable. For the twelve months ended December 31, 2017, the Company recorded an income tax benefit of $4.8 million related to the excess tax benefit of exercised awards during the period that would have been recorded in additional paid-in capital during prior years. As the end result is dependent on the future value of the Company’s stock as well as the timing of employee exercises, the amount of future impact cannot be quantified at this time. The Company has elected to continue to estimate forfeitures expected to occur to determine the share-based compensation expense.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” The primary purpose of ASU 2016-15 is to reduce the diversity in practice that has resulted from the lack of consistent principles on this topic. The ASU 2016-15 addresses the following eight specific cash flow issues: Debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies; distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. ASU 2016-15 is effective for the Company for annual periods beginning after December 15, 2017, and early adoption is permitted for all entities. Entities must apply the guidance retrospectively to all periods presented but may apply it prospectively from the earliest date practicable if retrospective application would be impracticable. The Company adopted this standard as of January 1, 2018 and applied the ASU 2016-15 retrospectively for all periods presented.

In January 2017, the FASB issued ASU 2017‐01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” which clarifies the definition of a business. This ASU provides a screen to determine when a set is not a business by stating that when substantially all of the fair value of gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, that the set of assets acquired is not a business. If the screen is not met, it (1) requires that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) removes the evaluation of whether a market participant could replace the missing elements. The Company adopted this guidance on January 1, 2018 and this standard did not have a material impact on the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” ASC 350 currently requires an entity to perform a two-step test to determine the amount, if any, of goodwill impairment. ASU 2017-04 removes the second step of the test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. The ASC amendments are effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2020 with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted this standard as of January 1, 2017.

In March 2018, the FASB issued ASU 2018-05, “Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118,” which adds Securities and Exchange Commission (“SEC”) paragraphs pursuant to the SEC Staff Accounting Bulletin No. 118, which expresses the view of the SEC staff regarding application of Topic 740, Income Taxes, in the reporting period that includes December 22, 2017 - the date on which the Tax Cuts and Jobs Act was signed into law. ASU 2018-05 was effective immediately upon issuance. The Company considered this additional guidance in determining the impact of the Tax Cuts and Jobs Act as of and for the year ended December 31, 2018. The Company’s accounting for the tax implications of the Tax Cuts and Jobs Act is complete as of December 31, 2018.

Recently Issued Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” This ASU will require lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use (“ROU”) assets. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. The Company adopted the standard as of January 1, 2019 using a modified retrospective approach and applying the standard’s transition provisions at January 1, 2019, the effective date. The Company elected the package of practical expedients permitted under the transition guidance which, among other things, allows the Company to carryforward the historical lease classification. In addition, the Company elected to combine the lease and non-lease components for the asset categories comprising existing leases and is making an accounting policy election to exclude from balance sheet reporting those leases with initial terms of 12 months or less. The Company has implemented new controls and processes to enable the preparation of financial information as necessitated by the new standard. The Company estimates that adoption of this standard will result in recognition of additional lease ROU assets and lease liabilities of approximately$4.6 million and $5.2 million, respectively. The Company does not expect adoption of the standard to materially affect its consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” that introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. This includes accounts receivable, trade receivables, loans, held-to-maturity debt securities, net investments in leases and certain off-balance sheet credit exposures. The guidance also modifies the impairment model for available-for-sale debt securities. The update is effective for fiscal years beginning after December 15, 2020. The Company is currently assessing the potential effects this update may have on its consolidated financial statements.

In June 2018, the FASB issued ASU 2018-07, “Improvements to Non-employee Share-Based Payment Accounting” (“ASU 2018-07”), which simplifies the accounting for share-based payments to non-employees by aligning it with the accounting for share-based payments to employees, with certain exceptions. The Company adopted ASU 2018-07 prospectively as of January 1, 2019. The cumulative effect of the adoption of ASU 2018-07 on retained earnings as of January 1, 2019 was a $0.1 million reduction of previously recognized share-based compensation expense.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”), which changes the fair value measurement disclosure requirements of ASC 820 “Fair Value Measurement,” based on the concepts in the FASB Concepts Statement, Conceptual Framework for Financial Reporting-Chapter 8: “Notes to Financial Statements,” including the consideration of costs and benefits. The ASU 2018-13 is effective for all entities for fiscal years beginning after December 15, 2019. Early adoption is permitted for any eliminated or modified disclosures upon issuance of ASU 2018-13. The Company is currently evaluating the impact the adoption of ASU 2018-13 will have on its consolidated financial statements.

All other ASUs issued and not yet effective for the twelve months ended December 31, 2018, and through the date of this report, were assessed and determined to be either not applicable or are expected to have minimal impact on the Company’s financial position or results of operations.

Restatement of the Consolidated Financial Statements

12 Months Ended

Dec. 31, 2018

Accounting Changes and Error Corrections [Abstract]

Restatement of the Consolidated Financial Statements

In February 2018, the Audit Committee (the “Audit Committee”) of the Board retained King & Spalding LLP (“King & Spalding”) as counsel to the Audit Committee to assist in conducting an independent investigation into current and prior-period matters relating to allegations regarding certain sales and distribution practices at the Company and certain other matters (the “Investigation” or the “Audit Committee Investigation”). Following its engagement by the Audit Committee, King & Spalding retained KPMG LLP (“KPMG”) to assist with the Investigation.

As a result of the Investigation, the Company determined that the financial statements as of period ended December 31, 2016, 2015, 2014, 2013, and 2012 should no longer be relied upon and accordingly would need to be restated. A summary of the impact of the Restatement on the Company’s consolidated statement of operations includes, but is not limited to, the following:


•	the timing of revenue recognition for sales through all distributors and direct sales to all customers, as discussed above;


•	the impact of bad debt expense as a result of the timing of revenue recognition;


•	the presentation of net revenue instead of gross revenue for administrative fees paid to GPOs;


•	the impact of changes in revenue recognition on cost of goods sold;


•	the timing of recognizing certain general and administrative expenses;


•	the impact on losses associated with contingency exposures;


•	the impact of other miscellaneous adjustments, such as patent cost and share-based compensation, and


•	the impact of the above on income tax.

The impact of the Restatement on the Company’s consolidated balance sheet includes, but is not limited to, the following:


•	changes in the amount of reported cash, due to the timing of certain cash collections;


•	changes to reported accounts receivable and other current assets and the related reserves on each, due to the restatement of revenue recognition;


•	accrual balances that are impacted by the expense and contingency determinations discussed above; and


•	the related income tax effects of the above.

The effect of adjustments made to the Company’s previously filed consolidated statements of operations as a result of these matters are shown in the table below. The tax effect of the adjustments is estimated based on the Company’s effective tax rate of 28.46%.



	Year Ended December 31, 2016
	(in thousands, except share and per share data)
	Previously Reported			Adjustments			Restated
Net sales	$	245,015		$	(23,303	)	$	221,712
Cost of sales	32,407			(1,469		)	30,938
Gross profit	212,608			(21,834		)	190,774

Operating expenses:
Selling, general and administrative	179,997			(6,585		)	173,412
Research and development	12,038			2,303			14,341
Amortization of intangible assets	2,127			10			2,137
Operating income	18,446			(17,562		)	884

Other expense, net	(339		)	—			(339		)

Income before income tax provision	18,107			(17,562		)	545
Income tax provision (expense)	(6,133		)	5,978			(155		)

Net income (loss)	$	11,974		$	(11,584	)	$	390

Net income (loss) per common share - basic	$	0.11		$	—		$	—

Net income (loss) per common share - diluted	$	0.11		$	—		$	—

Weighted average shares outstanding - basic	105,928,348			—			105,928,348

Weighted average shares outstanding - diluted	112,441,709			—			112,645,640

The effects of the restatements on the Company’s consolidated statement of operations by category for the year ended December 31, 2016 are shown in the table below. The tax effect of the adjustments is estimated based on the Company’s effective tax rate of 28.46%.



	Year Ended December 31, 2016
	Adjustments by Category
(in thousands)	Previously			Cash						Revenue						Total
	Reported			Revenue			GPO Fees			Related			Other			Adjustments			Restated
Net sales	$	245,015		$	(14,725	)	$	(4,487	)	$	(4,091	)	$	—		$	(23,303	)	$	221,712
Cost of sales	32,407			—			—			(1,469		)	—			(1,469		)	30,938
Gross profit	212,608			(14,725		)	(4,487		)	(2,622		)	—			(21,834		)	190,774

Operating expenses:
Selling, general and administrative expenses	179,997			—			(4,487		)	(1,744		)	(354		)	(6,585		)	173,412
Research and development expenses	12,038			—			—			—			2,303			2,303			14,341
Amortization of intangible assets	2,127			—			—			—			10			10			2,137
Operating income	18,446			(14,725		)	—			(878		)	(1,959		)	(17,562		)	884

Other expense, net	(339		)	—			—			—			—			—			(339		)

Income before income tax provision	18,107			(14,725		)	—			(878		)	(1,959		)	(17,562		)	545
Income tax provision (expense) benefit	(6,133		)	—			—			—			5,978			5,978			(155		)

Net income (loss)	$	11,974		$	(14,725	)	$	—		$	(878	)	$	4,019		$	(11,584	)	$	390

The effects of the restatements on the Company’s consolidated statement of stockholders’ equity for the year ended December 31, 2016 are as follows:



	Year-ended December 31, 2016
	(in thousands)
				Adjustments by Category
	Previously Reported			Cash Revenue			Revenue Related			Other			Total Adjustments			Restated
Total stockholders' equity, December 31, 2015	$	107,988		$	(60,064	)	$	6,669		$	(19,869	)	$	(73,264	)	$	34,724
Share-based compensation	17,818			—			—			(86		)	(86		)	17,732
Tax benefit of share-based compensation	(424		)	—			—			1			1			(423		)
Exercise of stock options	3,494			—			—			—			—			3,494
Issuance of restricted stock	1			—			—			(1		)	(1		)	—
Shares issued for services performed	346			—			—			—			—			346
Shares repurchased	(10,378		)	—			—			—			—			(10,378		)
Shares repurchased for tax withholding	(1,165		)	—			—			—			—			(1,165		)
Shares issued in conjunction with acquisition of Stability	3,346			—			—			1			1			3,347
Net income (loss)	11,974			(14,725		)	(878		)	4,019			(11,584		)	390
Total stockholders' equity, December 31, 2016	$	133,000		$	(74,789	)	$	5,791		$	(15,935	)	$	(84,933	)	$	48,067

The effects of the restatements on the Company’s consolidated statement of stockholders’ equity as of December 31, 2016 are as follows:



	As of December 31, 2016
	(in thousands)
				Adjustments by Category
	Previously Reported			Cash Revenue			Revenue Related		Other			Total Adjustments			Restated
Common stock	$	110		$	—		$	—	$	—		$	—		$	110
Additional paid-in capital	161,261			—			—		220			220			161,481
Treasury stock	(2,216		)	—			—		—			—			(2,216		)
Accumulated deficit	(26,155		)	(74,789		)	5,791		(16,155		)	(85,153		)	(111,308		)
Total stockholders' equity	$	133,000		$	(74,789	)	$	5,791	$	(15,935	)	$	(84,933	)	$	48,067

The effects of the restatements on the Company’s consolidated balance sheet as of December 31, 2016 are as follows:



	Year Ended December 31, 2016
	(in thousands)
	Previously Reported			Adjustments			Restated
ASSETS
Current assets:
Cash and cash equivalents	$	34,391		$	(4,070	)	$	30,321
Accounts receivable, net	67,151			(65,224		)	1,927
Inventory, net	17,814			(1,942		)	15,872
Prepaid expenses	5,894			(4,056		)	1,838
Other current assets	1,288			8,228			9,516
Total current assets	126,538			(67,064		)	59,474

Property and equipment, net	13,786			199			13,985
Goodwill	20,203			—			20,203
Intangible assets, net	23,268			(10		)	23,258
Deferred tax asset, net	9,114			(9,114		)	—
Other assets	354			—			354
Total assets	$	193,263		$	(75,989	)	$	117,274
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	11,436		$	976		$	12,412
Accrued compensation	12,365			326			12,691
Accrued expenses	10,941			8,266			19,207
Current portion of earn out liability	8,740			(480		)	8,260
Deferred tax liability, net	—			1,129			1,129
Income taxes	5,768			(157		)	5,611
Other current liabilities	1,482			—			1,482
Total current liabilities	50,732			10,060			60,792

Earn out liability	8,710			(1,170		)	7,540
Other liabilities	821			54			875
Total liabilities	60,263			8,944			69,207

Stockholders' equity:
Preferred stock; $.001 par value; 5,000,000 shares authorized and 0 shares issued and outstanding	—			—			—
Common stock; $0.001 par value; 150,000,000 shares authorized; 110,212,547 issued and 109,862,787 outstanding at December 31, 2016	110			—			110
Additional paid-in capital	161,261			220			161,481
Treasury stock at cost: 349,760 shares at December 31, 2016	(2,216		)	—			(2,216		)
Accumulated deficit	(26,155		)	(85,153		)	(111,308		)
Total stockholders' equity	133,000			(84,933		)	48,067
Total liabilities and stockholders' equity	$	193,263		$	(75,989	)	$	117,274

The effects of the restatements on the Company’s consolidated statement of cash flows for the year ended December 31, 2016 are as follows:



	Year Ended December 31, 2016
	(in thousands)
	Previously Reported			Adjustments			Restated
Cash flows provided by operating activities:
Net (loss) income	$	11,974		$	(11,584	)	$	390
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation	3,333			—			3,333
Amortization of intangible assets	2,127			10			2,137
Amortization of inventory fair value step-up	1,485			—			1,485
Amortization of deferred financing costs	181			(30		)	151
Change in fair value of earn-out consideration	—			(1,650		)	(1,650		)
Share-based compensation	17,818			(86		)	17,732
Change in deferred income taxes	(594		)	(5,398		)	(5,992		)
Increase (decrease) in cash, net of effects of acquisition and divestiture, resulting from changes in:
Accounts receivable	(11,396		)	11,469			73
Inventory	(2,837		)	1,942			(895		)
Prepaid expenses	(2,400		)	1,607			(793		)
Other assets	(384		)	(1,183		)	(1,567		)
Accounts payable	(3,665		)	187			(3,478		)
Accrued compensation	(2,669		)	83			(2,586		)
Accrued expenses	6,297			3,233			9,530
Income taxes	5,835			(634		)	5,201
Other liabilities	723			55			778
Net cash flows provided by operating activities	25,828			(1,979		)	23,849

Cash flows used in investing activities:
Purchases of property and equipment	(6,269		)	64			(6,205		)
Stability acquisition	(7,631		)	—			(7,631		)
Fixed maturity securities redemption	3,000			—			3,000
Patent application costs	(842		)	—			(842		)
Net cash flows used in investing activities	(11,742		)	64			(11,678		)

Cash flows used in financing activities:
Proceeds from exercise of stock options	3,494			—			3,494
Shares repurchased under repurchase plan	(10,378		)	—			(10,378		)
Shares repurchased for tax withholdings on vesting of restricted stock	(1,165		)	—			(1,165		)
Deferred financing costs	(30		)	30			—
Payments under capital lease obligations	(102		)	—			(102		)
Net cash flows used in financing activities	(8,181		)	30			(8,151		)

Net change in cash	5,905			(1,885		)	4,020

Cash and cash equivalents, beginning of year	28,486			(2,185		)	26,301
Cash and cash equivalents, end of year	$	34,391		$	(4,070	)	$	30,321

The following include descriptions of the significant adjustments to the Company’s financial position and results of operations from the previously reported consolidated financial statements.

Revenue Recognition

Under the Company’s previous revenue recognition policy utilized in the preparation of the financial statements for each of the years ended December 31, 2016, 2015, 2014, 2013 and 2012 and each of the quarters ended March 31, 2017, June 30, 2017 and September 30, 2017, revenue was recorded as follows:


•	For sales to distributors, revenue was recorded upon shipment to the distributor;


•	Certain sales to direct customers were treated as consignment sales as the customer could return the product at any time and was not required to pay until the product was used, despite no formal consignment agreement being in place. Therefore, the Company did not record revenue until the product was sold to an end-user (i.e., the recipient of the product); and


•	For other sales to direct customers, revenue was recorded upon shipment to the customer.

Under ASC 605, revenue should not be recognized until it is realized or realizable and earned. SEC Staff Accounting Bulletin (“SAB”) Topic 13.A.1 (as codified in ASC 605-10-S99-1) outlines four criteria that generally indicate when revenue is realized or realizable and earned. If any of these criteria are not met, revenue recognition should be deferred until all criteria have been met. Therefore, the Company assessed these four criteria as follows:

Persuasive evidence of an arrangement exists - The Company’s sales are driven either by contracts or purchase orders. These types of documents are typically used to establish persuasive evidence of an arrangement. The Company’s customary business practices, however, must be taken into account as a contract can be written, oral, or modified based on customary business practices. Throughout 2012-2017, although the Company may have created a legal contract upon the execution of a contract and/or fulfillment of a purchase order, the lack of clarity around the final terms of the arrangement due to the pervasive side agreements with customers preclude the Company’s sales transactions from meeting this criterion upon shipment of product. Therefore, even though there may have been a legal contract governing the arrangement (which typically would indicate persuasive evidence of an arrangement), the Company’s selling and collection practices amended the stated contract terms. After considering these factors, the Company concluded that persuasive evidence of an arrangement did not exist upon shipment of product.

Delivery has occurred or services have been rendered - For sales to customers, physical possession and title transferred upon shipment to the customer. However, the Company concluded that it did not pass the risks of ownership to the customer upon shipment because customers were allowed to return product for multiple reasons, which included being unable to sell the product, damages which may have occurred subsequent to delivery, and dropped product. See below for additional discussion of the Company’s rationale for concluding that delivery had not yet occurred upon shipment to the customer.

The seller’s price to the buyer is fixed or determinable - At certain quarter-ends, the Company was significantly increasing sales to customers without having visibility into the level of product remaining unsold at the customer’s location. This practice made it difficult to develop an appropriate estimate of future credits to be issued to customers at the time of sale, which, in turn, impacted whether the price at the time of transfer of physical possession to the customer was fixed or determinable. This previous practice in combination with the following actions of the Company preclude the price of the Company’s sales transactions from being fixed or determinable upon shipment of product:


a.	Offering customers an unconditional right of return with many items being returned over a year after the initial sale,


b.	Offering extended payment terms to customers with days sales outstanding averaging almost 3 months, and


c.	A history of exceeding established credit limits for customers.


4.	Collectability is reasonably assured - At the time of transfer of physical possession to the customer, collectability of the sales was questionable. As determined in the Investigation and described further below, the customers’ intention to pay amounts when due was uncertain in light of the conflicting messages customers received with respect to the payment

terms, rights of return and lack of adherence to credit limits. Although the Company did have a process in place to establish credit limits, the evidence indicates that those credit limits were overridden by certain sales personnel and members of management. Despite these overrides, the Company recovered the majority of its billings made between 2012 and 2017 with insignificant write-offs recorded; however, a significant amount of these billings were collected well after payment was due under the contractual terms. Furthermore, the quantitative and qualitative evidence gathered by the Company raised considerable doubt as to the collectability of its billings at the time of shipment, but this evidence was not persuasive enough for the Company to reach a conclusion as to whether collectability was reasonably assured.

In the Company’s evaluation of the point at which delivery occurred (the second criterion discussed above), the Company further considered the fact that there are instances under ASC 605 where the transfer of title of the product did not coincide with revenue recognition. Based on its review of all facts and circumstances, the Company determined that it did not meet all of the criteria to recognize revenue at the time of shipment of product to the customer. Specifically, the Company determined that the Company did not transfer the risks of ownership upon the transfer of physical possession because the Company’s customers were routinely granted an extended return period with very limited restrictions on the right of return and extended payment terms which raised doubt as to the intent or ability of customers to use and pay for the product delivered. Customers were allowed to return product for multiple reasons which included being unable to sell the product, damages which may have occurred subsequent to delivery, and dropped product (i.e., product that becomes contaminated and unusable). In other words, only upon use of the product in a surgical application (whether by the customer or by the ultimate end user in the case of distributors) would the customer no longer have the ability to return the product.

Accordingly, the Company concluded that, from 2012 to 2017, its previous decision to recognize revenue at the time of shipment of product to the customer was not appropriate. The Company determined that the aforementioned revenue recognition criteria were met only when both of the following events had occurred: (1) the Company fulfilled the customer's purchase order by delivering product ordered, and (2) the Company collected payment for the product delivered. Furthermore, the Company determined that the amount of revenue to be recognized should be limited to the amount of payment received in a given period less the amount expected to be refunded or credited to customers for sales returns made after payment.

GPO Fees (Net Revenue Presentation)

The Company sells its products to GPO members who transact directly with the Company at GPO agreed pricing. GPOs are funded by administrative fees that are paid by the Company. These fees are set as a percentage of the purchase volume, which is typically 3% of sales made to the GPO members. In prior years, Company concluded that these fees should be accounted for consistent with purchases of services from other suppliers within General and Administrative expenses and not as a reduction in transaction price. Based on analysis performed as part of the Restatement discussed above, the Company determined that the administrative fees paid to GPOs should be presented as a reduction of revenues, as the benefit received by the Company in exchange for the GPO fees was not sufficiently separable from the GPO member’s purchase of the Company’s products.

Revenue-Related Adjustments

As discussed above under “Revenue Recognition,” based on the results of the Audit Committee Investigation and subsequent management review, the Company determined that all distributor and customer transactions should be transitioned to the cash collection method of accounting as of January 1, 2012.

The Company considered the accounting treatment for the related cost of sales when distributor revenue is recognized on a cash collection basis. Previously, cost of sales were recognized upon shipment of the Company’s products, which was consistent with the previous revenue recognition policy. However, the Company believes the matching of the recognition of costs of sales with the recognition of revenue is preferred, and the Company’s product is such that upon return the Company could resell the product if it is not damaged. Therefore, the Company determined that such costs should be deferred until revenue is recognized. The capitalized costs associated with delivered products are classified as deferred costs and reported within current assets, separately from inventory. The adjustment to Cost of sales in the consolidated statement of operations and to Other current assets in the consolidated balance sheet reflects this change.

The Company also considers the financial viability of its customers based on their creditworthiness to determine if collectability of amounts sufficient to recover the costs of the products shipped is reasonably assured. In cases where the Company has concluded that collectability is not reasonably assured, the condition in paragraph ASC 450-20-25-2(a) is met and a loss contingency should be accrued. The Company therefore estimates this loss in each period and records a reserve against its deferred cost balance and charges income for the estimated loss. The adjustment to Selling, general and administrative expenses in the consolidated statement of operations and to Other current assets in the consolidated balance sheet reflects this change.

Deposits in Transit

The Company reduced the amount of reported cash and decreased revenue for incorrectly reflected deposits in transit, due to the timing of certain cash collections. The adjustments to net (loss) income and net change in cash in the consolidated statement of cash flows reflect this change.

Other Adjustments

In addition to the adjustments recorded to address the Company’s errors in accounting for revenue recognition, deposits in transit and gross versus net revenue presentation, the Company has identified other errors that have been recorded in connection with the Restatement, as follows:


•	timing adjustments for prepaid expenses and expense accruals for research and development expenses related to clinical trials, employee compensation and other employee-related costs, legal costs and other accruals;


•	adjustments to stock-based compensation, primarily to reflect share-based awards granted to consultants as non-employee instead of as employee awards; and

•

an adjustment for a change in fair value of $1.7 million for earn-out discussed further in Note 5. “Stability Biologics, L

Stability Biologics, LLC

12 Months Ended

Dec. 31, 2018

Discontinued Operations and Disposal Groups [Abstract]

Stability Biologics, LLC

On January 13, 2016, the Company completed the acquisition of Stability Inc., a provider of human tissue products to surgeons, facilities, and distributors serving the surgical, spine, and orthopedic sectors of the healthcare industry. As a result of this transaction, the Company acquired all of the outstanding shares of Stability in exchange for $6.0 million cash, $3.3 million (or 441,009 shares) of the Company’s common stock, and assumed debt of $1.8 million. Additional one-time costs incurred in connection with the transaction totaled $1.1 million and were included within selling, general and administrative expenses on the consolidated statements of operations. Contingent consideration might have been payable based on a formula determined by sales less certain expenses for the years 2016 and 2017. The contingent consideration was valued at $17.5 million as of January 13, 2016 and is shown in the schedule below as fair value of earn-out. The contingent consideration was classified as a liability.

The Company evaluated the contingent consideration for accounting purposes under GAAP and determined that the classification of the contingent consideration is within the scope of ASC 480 “Distinguishing Liabilities from Equity” whereby a financial instrument, other than an outstanding share, that embodies a conditional obligation that the issuer may settle by issuing a variable number of its equity shares shall be classified as a liability if, at inception, the monetary value of the obligation is based solely or predominantly on variations in something other than the fair value of the issuer’s equity shares.

The actual purchase price was based on cash paid, the fair value of the Company’s stock on the date of the acquisition, and direct costs associated with the acquisition. The fair value of stock consideration was determined as set forth below:



Common Share Price at Closing on 1/13/2016		$	8.43
Multiplied by: Number of Common Shares Transferred to the Sellers		441.009
Indicated Value of Equity Consideration (on a Freely Tradable Interest Basis)		$	3,718
Less: Marketability Discount @ 10%	[a]	(371		)
Fair Value of Equity Consideration Transferred		$	3,347
[a] Shares transferred to the Sellers were restricted securities pursuant to Rule 144. As such, the Sellers were prevented from selling the shares until July 13, 2016. In addition, they were subject to contractual lockups which restricted sales for up to twelve months following the closing of the transaction.

The actual purchase price has been allocated as follows (in thousands):



Cash paid at closing	$	6,000
Working capital adjustment	(481		)
Common stock issued (441,009 shares)	3,347
Assumed debt	1,771
Fair value of earn-out	17,450
Total fair value of purchase price	$	28,087

Net assets acquired:
Debt-free working capital	$	2,456
Other long-term assets	199
Property, plant and equipment	1,375
Deferred tax liability	(5,896		)
Subtotal	(1,866		)
Intangible assets:
Customer relationships	5,330
Patents and know-how	6,790
Trade names and trademarks	450
Non compete agreements	830
Licenses and permits	390
Subtotal	13,790
Goodwill	16,163
Total assets purchased	$	28,087

Working capital and other assets were composed of the following (in thousands):
Working capital
Cash	$	140
Prepaid Expenses and other current assets	100
Accounts receivable	2,001
Federal and state taxes receivable	28
Inventory	9,002
Accounts payable and accrued expenses	(8,815		)
Debt-free working capital	$	2,456

Current portion of long-term debt	$	(194	)
Long-term debt	(560		)
Line of Credit	(932		)
Shareholder loan	(85		)
Assumed debt	$	(1,771	)

Net working capital	$	685

The acquisition was accounted for as a purchase business combination as defined by ASC 805, “Business Combinations.” The fair value of the contingent consideration is measured as a Level 3 instrument. The contingent consideration liability was recorded at fair value on the acquisition date. Increases or decreases in the fair value of contingent consideration can result from changes in anticipated revenue levels and changes in assumed discount periods and rates. As the fair value measured is based on significant

inputs that are not observable in the market, they are categorized as Level 3. The income valuation approach was applied in determining the fair value of the contingent consideration using a discounted cash flow valuation technique with significant unobservable inputs comprised of projected sales and certain expenses. The values assigned to intangible assets are subject to amortization. The intangible assets were assigned the following lives for amortization purposes:



		Estimated useful life (in years)
Intangible asset:
Customer relationships		12
Patents and know-how		20
Trade name and trademarks		Indefinite
Non compete agreements		4
Licenses and permits		2

Goodwill consists of the excess of the purchase price paid over the identifiable net assets and liabilities acquired at fair value. Goodwill is attributable to the assembled workforce of Stability and the synergies expected to arise following the acquisition. Goodwill acquired is not deductible for tax purposes. Goodwill was determined using the residual method based on an independent appraisal of the assets and liabilities acquired in the transaction. Goodwill is tested for impairment on an annual basis as defined by ASC 350, “Intangibles - Goodwill and Other.”

Pursuant to the terms of the earn-out arrangement, the Company was obligated to pay, for each of the years ended December 31, 2016 and 2017, an amount equal to one times the gross profit margin from (a) the net sales of Stability products sold by Stability's or the Company's sales personnel and (b) the net sales of Company products sold by Stability's sales personnel; provided, however, if the amount of such net sales for either earn-out period was less than $12 million, the earn-out amount would decrease to 0.5 times the gross profit margin for such earn-out period.

The following unaudited pro forma summary financial information presents the consolidated results of operations for the Company as if the acquisition had occurred on January 1, 2016, as required by ASC 805, “Business Combinations.” The Company does not present the consolidated financial statements as of and for the year ended December 31, 2015 and did not provide pro forma financial information for the year then ended. The pro forma results are shown for illustrative purposes only and do not purport to be indicative of the results that would have been reported if the acquisition had occurred on the date indicated.

Unaudited pro forma information for the twelve months ended December 31, 2016 (in thousands) is as follows:



	Year Ended December 31,
	2016
Revenue	$	233,986

Net income	$	1,318

Income per share, fully diluted	$	0.01

The 2016 supplemental pro forma earnings were adjusted to exclude $1.1 million of acquisition-related legal, audit and other costs, net of tax. The number of shares outstanding used in calculating the income per share for 2016 was adjusted to include 441,009 shares issued as part of the purchase price.

On September 30, 2017, the Company completed its divestiture of Stability pursuant to the Membership Interest Purchase Agreement by and among the Company, Stability LLC, each person that, as of January 13, 2016, was a stockholder of Stability Inc., a Florida corporation and a predecessor-in-interest to Stability LLC (“Stability, Inc.”), and Brian Martin, as stockholder representative. Under the agreement the Company was released from its obligations with respect to the contingent consideration.

A summary of the assets divested and consideration received follows (in thousands):



	Year ended
	December 31, 2017

Assets divested
Trade receivables	$	2,406
Inventories	3,455
Prepaid expenses and other assets	955
Goodwill (a)	227
Intangible assets	11,857
Property and equipment, net	1,446
Total assets divested	20,346

Liabilities divested
Accounts payable and accrued liabilities	3,488
Total liabilities divested	3,488

Total net assets divested	$	16,858

Transaction costs	400

Consideration received
Non-trade receivable (b)	150
Note receivable (c)	3,190
Intangible assets (d)	630
Extinguishment of earn out liability (e)	12,240
Total consideration received	$	16,210

Loss on sale	$	(1,048	)

(a) In accordance with ASC 350-20-35-52 when a portion of a reporting unit is disposed of, goodwill associated with that business shall be included in the carrying amount of the business in determining the gain on disposal. In accordance with ASC 350-20-35-53, the amount of goodwill to be included in that carrying amount shall be based on the relative fair values of the business to be disposed of and the portion of the reporting unit that will be retained. Based on an estimated fair value of Stability LLC of $16.2 million representing a consideration received for the business compared to the fair value of business retained determined based on the market approach, approximately $0.2 million of the total goodwill of $20.2 million residing in the reporting unit was included in the carrying amount of the business sold.

(b) non-trade receivable represents a cash payment due within 60 days of closing.

(c) a promissory note issued by Stability LLC in the principal amount of $3.5 million in favor of the Company recognized at a discounted value of $3.2 million.

(d) a fair value of $0.5 million for the distributor agreements with Stability LLC and a fair value of $0.1 million for the non-compete agreements with the former stockholders of Stability Inc.

(e) a waiver by the former stockholders of Stability Inc. of all claims and rights to earn-out consideration, which was recorded as a liability at a fair value of $12.2 million immediately prior to the divestiture. The fair value of the earn-out liability was determined based on the income approach and includes the actual realized results of operations and expected future performance over the remaining earn-out period.

The total loss on the Stability Divestiture of $(0.5) million is comprised of a pretax book loss of $(1.0) million and an associated tax benefit of $0.5 million.

The earn-out arrangement was classified as a liability on the Stability LLC acquisition date of January 13, 2016 and remeasured at fair value each reporting period until the Stability LLC was divested on September 30, 2017. A decrease in fair value of $1.7 million and $3.6 million for the years ended December 31, 2016 and 2017, respectively, are included in selling, general and administration expenses on the Consolidated Statements of Operations.

Inventories

12 Months Ended

Dec. 31, 2018

Inventory Disclosure [Abstract]

Inventories

Inventories consisted of the following items as of (in thousands):



	December 31,
	2018			2017
Raw materials	$	516		$	644
Work in process	11,123			4,685
Finished goods	4,936			4,905
Inventory, gross	16,575			10,234
Reserve for obsolescence	(589		)	(767		)
Inventory, net	$	15,986		$	9,467

Property and Equipment

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and equipment consist of the following (in thousands):



	December 31,
	2018			2017
Leasehold improvements	$	4,804		$	3,393
Laboratory and clean room equipment	13,787			9,982
Furniture and equipment	15,145			10,483
Construction in progress	1,507			2,200
Property and equipment, gross	35,243			26,058
Less accumulated depreciation and amortization	(17,819		)	(11,967		)
Property and equipment, net	$	17,424		$	14,091

Included in property and equipment is $1.0 million in leasehold improvements paid for by the landlord of the Company’s main operating facility with a corresponding liability included in other liabilities in the consolidated financial statements, which is amortized over the term of the lease or its useful life, whichever is shorter.

Assets recorded under capital leases were as follows (in thousands):



	December 31,
	2018			2017
Leasehold improvements	$	997		$	997
Less accumulated amortization	(768		)	(711		)
Net leasehold improvements	$	229		$	286

Obligations under capitalized leases	$	229		$	286

Depreciation expense, included in selling, general and administrative expenses in the accompanying consolidated statements of operations, for the years ended December 31, 2018, 2017, and 2016 was $5.9 million, $4.1 million, and $3.3 million, respectively.

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Intangible Assets

Intangible assets are summarized as follows (in thousands):



	December 31, 2018							December 31, 2017
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Amortized intangible assets
Licenses	$	1,414	$	(1,066	)	$	348	$	1,009	$	(1,009	)	$	—
Patents and know how	9,180		(4,475		)	4,705		8,732		(3,840		)	4,892
Customer and supplier relationships	4,271		(2,202		)	2,069		4,271		(1,891		)	2,380
Non-compete agreements	120		(38		)	82		120		(8		)	112
Total amortized intangible assets	$	14,985	$	(7,781	)	$	7,204	$	14,132	$	(6,748	)	$	7,384

Unamortized intangible assets
Trade names and trademarks	$	1,008				$	1,008	$	1,008				$	1,008
Patents in process	1,396					1,396		1,641					1,641
Total intangible assets	$	17,389				$	9,608	$	16,781				$	10,033

Amortization expense for the years ended December 31, 2018, 2017, and 2016, was $1.0 million, $1.7 million, and $2.1 million, respectively. Patents and patents in process related write-downs due to abandonment were $0.0 million and $0.6 million during the years ended December 31, 2018 and 2017, respectively.

Expected future amortization of intangible assets as of December 31, 2018, is as follows (in thousands):



	Estimated
	Amortization
Year ending December 31,	Expense
2019	$	976
2020	976
2021	969
2022	946
2023	946
Thereafter	2,391
	$	7,204

Goodwill is evaluated for impairment on an annual basis on September 30 and in interim periods when events or changes indicate the carrying value may not be recoverable. The Company operates under one reporting unit. For the years ended December 31, 2018 and 2017, the Company performed a quantitative analysis to determine if there was any impairment. As a result of this assessment, the Company determined that there was no impairment for the years ended December 31, 2018 and 2017.

The following represents the changes in the carrying amount of goodwill 2018 and 2017 (in thousands):



	Goodwill
Balance as of January 1, 2017	$	20,203
Divestment of Stability	(227		)
Balance as of December 31, 2017	19,976
Activity	—
Balance as of December 31, 2018	$	19,976

Accrued Expenses

12 Months Ended

Dec. 31, 2018

Payables and Accruals [Abstract]

Accrued Expenses

Accrued expenses include the following at December 31, 2018 and December 31, 2017 (in thousands):



	December 31,
	2018		2017
Legal costs	$	10,056	$	3,760
Settlement costs	8,673		—
Pricing adjustment settlement with Veterans Affairs	6,894		5,600
Estimated returns	2,325		3,255
Accrued clinical trials	962		617
External commissions	1,233		1,397
Other	1,699		1,139
Total	$	31,842	$	15,768

Long-Term Debt	12 Months Ended
Long-Term Debt	Dec. 31, 2018
Debt Disclosure [Abstract]
Long-Term Debt	Long-Term Debt Credit Facility On October 12, 2015, the Company and its subsidiaries entered into a Credit Agreement (the “Credit Agreement”) with certain lenders and Bank of America, N.A., as administrative agent. The Credit Agreement established a senior secured revolving credit facility in favor of the Company with a maturity date of October 12, 2018 and an aggregate lender commitment of up to $50 million. In September 2017, the expiration date of the Credit Agreement was extended to October 12, 2019. The Credit Agreement also provided for an uncommitted incremental facility of up to $35 million, which could be exercised as one or more revolving commitment increases or new term loans, all subject to certain customary terms and conditions set forth in the Credit Agreement. The obligations of the Company under the Credit Agreement were guaranteed by the Company’s subsidiaries. The obligations of the loan parties under the Credit Agreement and the other credit documents were secured by liens on and security interests in substantially all of the assets of each of the loan parties and a pledge of the equity interests of each subsidiary owned by a loan party, subject to certain customary exclusions. Borrowings under the facility had an interest at LIBOR plus 1.5% to 2.25%. Fees paid in connection with the initiation of the credit facility totaled approximately $0.5 million. These deferred financing costs were being amortized to interest expense over the three-year life of the facility. The Credit Agreement contained customary representations, warranties, covenants, and events of default, including restrictions on certain payments of dividends by the Company. On August 31, 2018, the lending parties’ terminated their commitments to make loans and issue letters of credit under the Credit Agreement due to the Company’s failure to timely file its periodic reports with the SEC. Accordingly, since then, the Company has not had the ability to borrow under the Credit Agreement. There were no outstanding borrowings or letters of credit issued under the Credit Agreement at the time of termination, and the Company never drew down any amounts under the credit facility during the entire term of the Credit Agreement. No termination penalties were paid as a result of the termination.

Net (Loss) Income Per Share

12 Months Ended

Dec. 31, 2018

Earnings Per Share [Abstract]

Net(Loss) Income Per Share

Net (Loss) Income Per Share

Basic net (loss) income per common share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income per common share is computed using the weighted-average number of common and dilutive common equivalent shares from stock options, warrants and restricted stock using the treasury stock method.

The following table sets forth the computation of basic and diluted net income per share (in thousands except for share and per share data):



	Year Ended December 31,
	2018			2017		2016
Net (loss) income	$	(29,979	)	$	64,727	$	390
Denominator for basic earnings (loss) per share - weighted average shares	105,596,256			106,121,810		105,928,348
Effect of dilutive securities: Stock options, warrants, and restricted stock (a)	3,538,921			9,991,926		6,717,292
Denominator for diluted earnings (loss) per share - weighted average shares adjusted for dilutive securities	105,596,256			116,113,736		112,645,640
(Loss) income per common share - basic	$	(0.28	)	$	0.61	$	0.00
(Loss) income per common share - diluted	$	(0.28	)	$	0.56	$	0.00

(a)Securities that are included in the computation of the denominator above, utilizing the treasury stock method for the years ended December 31, 2018, 2017 and 2016 are as follows:



Effect of dilutive securities:	2018		2017		2016
Stock options	$	3,172,943	$	7,813,153	$	6,048,385
Restricted stock awards	365,978		2,178,773		668,907
	$	3,538,921	$	9,991,926	$	6,717,292

Equity

12 Months Ended

Dec. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Equity

Stock Incentive Plans

The Company has two share-based compensation plans which provide for the granting of equity awards, including qualified incentive and non-qualified stock options, stock appreciation awards and restricted common stock awards: the MiMedx Group, Inc. 2016 Equity and Cash Incentive Plan (the “2016 Plan”), which was approved by shareholders on May 18, 2016 and the MiMedx Group, Inc. Assumed 2006 Stock Incentive Plan (the “Prior Incentive Plan”). During the years ended December 31, 2018, 2017 and 2016 the Company used and intends to use only the 2016 Plan to make future grants.

The 2016 Plan permits the grant of equity awards to the Company’s employees, directors, consultants and advisors for up to 5,000,000 shares of the Company’s common stock plus (i) the number of shares of the Company’s common stock that remain available for issuance under the Prior Incentive Plan, and (ii) the number of shares that are represented by outstanding awards that later become available because of the expiration or forfeiture of the award without the issuance of the underlying shares. The awards are subject to a vesting schedule as set forth in each individual agreement. Option awards are generally granted with an exercise price equal to the market price of the Company’s stock at the date of grant, and those option awards generally vest based on three years of continuous service and have 10-year contractual terms. Restricted common stock awards generally vest over three years. Certain option and restricted stock awards provide for accelerated vesting if there is a change in control and upon death or disability.

A summary of stock option activity as of December 31, 2018, and changes during the year then ended are presented below:



	Number of Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding at January 1, 2018	9,953,575		$	3.28
Granted	—		—
Exercised	(786,708	)	4.52
Unvested options forfeited	—		—
Vested options expired	(5,469,720	)	2.22
Outstanding at December 31, 2018	3,697,147		4.59		3.57	$	595,684
Exercisable at December 31, 2018	3,697,147		$	4.59	3.57	$	595,684

The intrinsic values of the options exercised during the years ended December 31, 2018, 2017 and 2016 were $7.9 million, $18.5 million, and $6.5 million, respectively. Cash received from option exercise under all share-based payment arrangements for the years ended December 31, 2018, 2017, and 2016, was $3.6 million, $12.0 million, and $3.5 million, respectively. The actual tax benefit for the tax deductions from option exercise of the share-based payment arrangements totaled $5.9 million, $12.5 million, and $4.6 million, respectively, for the years ended December 31, 2018, 2017, and 2016. The Company has a policy of using its available repurchased treasury stock to satisfy option exercises.

The fair value of options vested during the years ended December 31, 2018, 2017 and 2016 were $0.1 million, $3.7 million, and $7.8 million, respectively. There were no options granted during the years ended December 31, 2018, 2017 and 2016 and no unrecognized compensation expense at December 31, 2018.

The fair value of the options granted in prior years was estimated on the date of grant using the Black-Scholes-Merton option-pricing model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. Expected volatilities were based on historical volatility of peer companies and other factors estimated over the expected term of the options. The term of employee options granted was derived using the “simplified method” which computes expected term as the midpoint between the weighted average time to vesting and the contractual maturity of ten years. The simplified method was used due to the Company’s lack of sufficient historical data to provide a reasonable basis upon which to estimate the expected term due to the limited period of time its equity shares had been publicly traded. The term for non-employee options was generally based upon the contractual term of the option. The risk-free rate was based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term or contractual term as described.

Restricted Stock Awards

Following is summary information for restricted stock awards for the year ended December 31, 2018. Shares vest over a one to three year period in equal annual increments and require continuous service. For the time-based awards with service vesting conditions, the Company recognizes stock-based compensation expense using the straight-line expense attribution method.

As of December 31, 2018, there was approximately $17.0 million of total unrecognized stock-based compensation related to non-vested restricted stock. That expense is expected to be recognized over a weighted-average period of 1.7 years, which approximates the remaining vesting period of these grants. All shares noted below as unvested are considered issued and outstanding at December 31, 2018.



	Number of Shares		Weighted-Average Grant Date Fair Value
Unvested at January 1, 2018	5,181,405		$	9.18
Granted	1,947,475		8.52
Vested	(2,268,431	)	9.26
Forfeited	(1,861,314	)	8.96
Unvested at December 31, 2018	2,999,135		$	8.83

The total fair value of restricted stock awards vested during the years ended December 31, 2018, 2017, and 2016, was $17.9 million, $17.3 million, and $9.5 million, respectively.

For the years ended December 31, 2018, 2017, and 2016 the Company recognized share-based compensation as follows (in thousands):



	Years Ended December 31,
	2018			2017			2016
							(Restated)
Cost of sales	$	705		$	539		$	439
Research and development	584			604			621
Selling, general and administrative	13,479			20,052			16,672
Total share-based compensation	$	14,768		$	21,195		$	17,732
Income tax benefit	(3,803		)	(5,345		)	(6,756		)
Total share-based compensation, net of tax benefit	$	10,965		$	15,850		$	10,976

Treasury Stock

On May 8, 2014, the Board authorized the repurchase of up to $10 million of shares of Company common stock from time to time through December 31, 2014. The Board increased the authorization during the year ended December 31, 2015 to $60 million, during the year ended December 31, 2016 to $66 million, and during the year ended December 31, 2017 to $130 million. In January 2018 the Board announced that it had increased the total authorization to $140 million. The share repurchase program subsequently expired during the year ended December 31, 2018.

For the years ended December 31, 2018, 2017 and 2016 the Company purchased 507,600, 5,635,077, and 1,338,616 shares of its common stock, respectively, for an aggregate purchase price of approximately $7.6 million, $68.3 million and $10.4 million, respectively, exclusive of commissions of approximately $0.0 million, $0.2 million and $0.0 million, respectively.

Repurchases of shares of Company common stock in connection with the satisfaction of employee tax withholding obligations upon vesting of restricted stock for the years ended December 31, 2018, 2017 and 2016 were 614,123, 419,928 and 141,658, respectively, for an aggregate purchase price of approximately $4.9 million, $4.1 million, and $1.2 million, respectively.

Income Taxes

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands):



		December 31,
		2018			2017
Deferred Tax Assets:
	Accrued expenses	$	3,572		$	2,404
	Deferred revenue	13,719			16,311
	Sales return and allowances	2,296			2,157
	Accrued settlement costs	2,689			—
	Research and development and other tax credits	2,326			1,216
	Net operating loss	3,118			1,025
	Share-based compensation	3,425			4,895
	Other	971			342
Deferred Tax Liabilities:
	Prepaid expenses	(1,823		)	(344		)
	Property and equipment	(2,519		)	(1,555		)
	Intangible assets	(443		)	(356		)
Net Deferred Tax Assets		27,331			26,095
	Less: Valuation allowance	(27,331		)	(554		)
Net Deferred Tax Assets after Valuation Allowance		$	—		$	25,541

In December 2017 the President signed into law what is commonly referred to as The Tax Cuts and Jobs Act (the “TCJA”). The TCJA changed existing United States tax law and included numerous provisions that affect the Company including a corporate rate reduction, changes to §162(m), changes to the deduction for meals and entertainment, and an increase in capital expensing. Specifically, the reduction of the U.S. federal tax rate from 35% to 21% effective on January 1, 2018 reduced the Company’s net deferred tax asset by $12.0 million with the benefit recognized in the 2018.

The reconciliation of the federal statutory income tax rate of 35% (21% for the tax year ended December 31, 2018) to the effective rate is as follows:



	December 31,
	2018		2017		2016
					(Restated)
Federal statutory rate	21.00	%	35.00	%	35.00	%
State taxes, net of federal benefit	3.52	%	0.40	%	116.85	%
Nondeductible compensation	(15.33	)%	0.66	%	1.45	%
Meals and entertainment	(24.16	)%	1.93	%	126.74	%
Keyman life insurance	(0.15	)%	0.02	%	1.52	%
Transaction costs	—	%	—	%	21.88	%
Inventory contribution deduction	0.48	%	(0.06	)%	(4.30	)%
Domestic production activities deduction	—	%	(1.54	)%	(150.74	)%
Fair value adjustment	—	%	(2.76	)%	(105.83	)%
Share-based compensation	10.82	%	(9.90	)%	179.74	%
Tax credits	19.75	%	(3.37	)%	(254.62	)%
Uncertain tax position	(2.35	)%	0.46	%	30.47	%
Write-off of net operating losses	(11.81	)%	—	%	37.11	%
Payable true-up	(2.69	)%	0.65	%	(2.38	)%
Sale of Stability	—	%	(8.86	)%	—	%
Fixed asset true-up	5.33	%	—	%	—	%
Federal provision to return	1.58	%	0.13	%	—	%
Impact of federal rate change	—	%	26.79	%	—	%
Other	(0.25	)%	(0.03	)%	(6.91	)%
Valuation allowance	(788.33	)%	(83.08	)%	2.48	%
	(782.59	)%	(43.56	)%	28.46	%

Meals and entertainment had a significant impact on the Company's effective tax rate as of December 31, 2018 due to the impact of the TCJA on the Company's method of calculating this permanent adjustment. Additionally, federal and state tax credits, mostly related to the Company's research and development activities, had a significant impact on the Company's effective rate.

Stock based compensation had a significant impact on the Company’s effective tax rate as of December 31, 2017 due to the Company’s adoption of ASU 2016-09. Additionally, on September 30, 2017, the Company completed the Stability Divestiture, which resulted in a significant reduction in the Company’s effective tax rate. See Note 5 for details regarding the transaction.

The domestic production activities deduction had a significant impact on the Company's effective tax rate as of December 31, 2016. As part of the TCJA previously mentioned, this deduction ceased to exist for tax years beginning on or after December 1, 2018. Additionally, federal and state tax credits, mostly related to the Company's research and development activities, had a significant impact on the Company's effective rate.

Current and deferred income tax expense (benefit) is as follows (in thousands):



	December 31,
	2018		2017			2016
Current:						(Restated)
Federal	$	614	$	5,868		$	4,338
State	427		1,163			1,195
Total current	1,041		7,031			5,533

Deferred:
Federal	19,452		(19,441		)	(4,980		)
State	6,089		(7,229		)	(398		)
Total deferred	25,541		(26,670		)	(5,378		)

Total expense (benefit)	$	26,582	$	(19,639	)	$	155

Certain items of income and expense are not reported in tax returns and financial statements in the same year. The tax effect of such temporary differences is reported as deferred income taxes. The measurement of deferred tax assets is reduced, if necessary, by the amount of any tax benefit that, based on available evidence, is not expected to be realized. The Company establishes a valuation allowance for deferred tax assets for which realization is not likely. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets.

A valuation allowance of $27.3 million and $0.6 million was recorded against our deferred tax asset balance as of December 31, 2018 and December 31, 2017, respectively. The decrease in the valuation allowance during 2017 is primarily related to the weight of available evidence which resulted in a determination to release the Company’s valuation allowance and recognize an income tax benefit as of December 31, 2017. The increase in valuation allowance during 2018 is primarily related to the weight of available evidence which resulted in the determination to increase the Company’s valuation allowance and recognize income tax expense as of December 31, 2018.

To the extent the Company determines that, based on the weight of available evidence, all or a portion of its valuation allowance is no longer necessary, the Company will recognize an income tax benefit in the period such determination is made for the reversal of the valuation allowance. If management determines that, based on the weight of available evidence, it is more-likely-than-not that all or a portion of the net deferred tax assets will not be realized, the Company may recognize income tax expense in the period such determination is made to increase the valuation allowance.

At December 31, 2018 and December 31, 2017 the Company had income tax net operating loss (“NOL”) carryforwards for federal and state purposes of $11.4 million and $15.6 million and $0.2 million and $21.9 million, respectively. A portion of the Company’s NOLs and tax credits are subject to annual limitations due to ownership change limitations provided by Internal Revenue Code Section 382. If not utilized, the federal and state tax NOL carryforwards will expire between 2028 and 2036. As of December 31, 2017, the Company has recorded a deferred tax asset for federal and state NOL carryforwards of $0.0 million and approximately $1.3 million, respectively. As of December 31, 2018, the Company has recorded a deferred tax asset for both federal and state NOL carryforwards of approximately $2.4 million and $0.9 million, respectively.

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in thousands) included in other liabilities in the consolidated balance sheets:



	2018		2017		2016
Unrecognized tax benefits - January 1	$	847	$	336	$	170

Gross increases - tax positions in current period	91		130		166

Gross increases - tax positions in prior period	—		381		—

Unrecognized tax benefits - December 31	$	938	$	847	$	336

Included in the balance of unrecognized tax benefits as of December 31, 2018, 2017 and, 2016, are $0.9 million, $0.8 million and $0.3 million, respectively, of tax benefits that, if recognized, would affect the effective tax rate.

The Company recognizes accrued interest related to unrecognized tax benefits and penalties as income tax expense. Related to the unrecognized tax benefits noted above, the Company accrued $0.1 million of interest during 2018, and, in total, as of December 31, 2018 has recognized $0.1 million of interest. The Company accrued $0.1 million of interest during 2017, and, in total, as of December 31, 2017 had recognized $0.1 million of interest. During 2016 the Company did not accrue any penalties or interest and, in total, as of December 31, 2016, had not recognized any liability for penalties or interest.

Certain positions included in the tabular reconciliation above will be reduced as a result of the expiration of the applicable statutes of limitations within the 12 months following the issuance of the consolidated financial statements. The reserve would be reduced by approximately $0.4 million.

The Company is subject to taxation in the U.S. and various state jurisdictions. As of December 31, 2018 the Company’s tax returns for 2017, 2016 and 2015 were subject to full examination by the tax authorities. The 2013, 2011, 2010, 2009, and 2008 federal tax returns were open to the extent of the NOL carryovers generated. As of December 31, 2018, the Company was generally no longer subject to state or local examinations by tax authorities for years before 2015, except to the extent of NOLs generated in prior years claimed on a tax return.

Supplemental Disclosure of Cash Flow and Non-Cash Investing and Financing Activities

12 Months Ended

Dec. 31, 2018

Supplemental Cash Flow Elements [Abstract]

Supplemental Disclosure of Cash Flow and Non-Cash Investing and Financing Activities

Selected cash payments, receipts, and noncash activities are as follows (in thousands):



	Years Ended December 31,
	2018		2017		2016
Cash paid for interest	$	197	$	127	$	162
Income taxes paid	859		12,755		642
Purchases of equipment financed through accounts payable	1,168		1,343		831
Deferred financing costs	—		30		10
Additional paid-in capital related tax adjustments	—		—		(423		)
Stock issuance of 441,009 shares in connection with acquisition of Stability	—		—		3,347
Stock issuance of 17,539 and 43,344 shares in exchange for services performed in 2017 and 2016, respectively	—		166		346

401(k) Plan	12 Months Ended
401(k) Plan	Dec. 31, 2018
Retirement Benefits [Abstract]
401(k) Plan	401(k) Plan The Company has a 401(k) plan (the “401(k) Plan”) covering all employees who have completed one month of service. Under the 401(k) Plan, participants could defer up to 90% of their eligible wages to a maximum of $18,500 per year (annual limit for 2018). Employees age 50 or over in 2018 could make additional pre-tax contributions up to $6,000. Annually, the Company could elect to match employee contributions up to 5% of the employee’s eligible compensation. Additionally, the Company could elect to make a discretionary contribution to the 401(k) Plan. The Company did not provide matching contributions for the years ended December 31, 2017, and 2016. The matching contribution for the year ended December 31, 2018 was $1.9 million.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Contractual Commitments

In addition to the capital leases noted under Note 7 “Property and Equipment,” the Company has entered into operating lease agreements for facility space and equipment. These leases expire over 4 to 4.5 years following December 31, 2018, and generally contain renewal options. The Company anticipates that most of these leases will be renewed or replaced upon expiration. The Company also has commitments for meeting space.

The estimated annual lease payment and meeting space commitments are as follows (in thousands):



Years Ended December 31,
2019	$	2,605
2020	2,370
2021	1,625
2022	1,673
2023	205
Thereafter	—
	$	8,478

Rent expense for the years ended December 31, 2018, 2017 and 2016, was approximately $1.5 million, $1.6 million and $1.8 million, respectively, and is allocated among cost of sales, research and development, and selling, general and administrative expenses.

Letters of Credit

Previously, as a condition of the leases for the Company’s facilities, we were obligated under standby letters of credit in the amount of approximately $0.1 million. The Company amended its lease during 2018 to eliminate this obligation.

Legal Proceedings

Shareholder Derivative Suits

On December 6, 2018, the United States District Court for the Northern District of Georgia entered an order consolidating three shareholder derivative actions (Evans v. Petit, et al. filed September 25, 2018, Georgalas v. Petit, et al. filed September 27, 2018, and Roloson v. Petit, et al., filed October 22, 2018) that had been filed in the Northern District of Georgia. On January 22, 2019, plaintiffs filed a Verified Consolidated Shareholder Derivative Complaint. The consolidated action sets forth claims of breach of fiduciary duty, corporate waste and unjust enrichment against certain current and former directors and officers of the Company: Parker H. Petit, William C. Taylor, Michael J. Senken, John E. Cranston, Alexandra O. Haden, Joseph G. Bleser, J. Terry Dewberry, Charles R. Evans, Larry W. Papasan, Luis A. Aguilar, Bruce L. Hack, Charles E. Koob, Neil S. Yeston and Christopher M. Cashman. The allegations generally involve claims that the defendants breached their fiduciary duties by causing or allowing the Company to misrepresent its financial statements as a result of improper revenue recognition. The Company filed a motion to stay on February 18, 2019, pending the completion of the investigation by the Company’s Special Litigation Committee. The Special Litigation Committee completed its investigation relating to this action and filed an executive summary of its findings with the Court on July 1, 2019. The parties held a mediation on February 11, 2020 and discussions continue.

On October 29, 2018, the City of Hialeah Employees Retirement System (“Hialeah”) filed a shareholder derivative complaint in the Circuit Court for the Second Judicial Circuit in and for Leon County, Florida (the “Florida Court”). The complaint alleges claims for breaches of fiduciary duty and unjust enrichment against certain current and former directors and officers of the Company: Parker H. Petit, William C. Taylor, Michael J. Senken, John E. Cranston, Alexandra O. Haden, Joseph G. Bleser, J. Terry Dewberry, Charles R. Evans, Bruce L. Hack, Charles E. Koob, Larry W. Papasan, and Neil S. Yeston. The allegations generally involve claims that the defendants breached their fiduciary duties by causing or allowing the Company to misrepresent its financial statements as a result of improper revenue recognition. The Company moved to stay the action on February 7, 2019, to allow the prior-filed consolidated derivative action in the Northern District of Georgia to be resolved first and to allow the Company’s Special Litigation Committee time to complete its investigation. The Company also filed a motion to dismiss on April 8, 2019. No hearing has been scheduled on the Company’s motion to stay or motion to dismiss. The plaintiff participated in the mediation that took place in connection with the prior-filed consolidated derivative action in the Northern District of Georgia.

On May 15, 2019, two individuals purporting to be shareholders of the Company filed a shareholder derivative complaint in the Superior Court for Cobb County, Georgia. (Nix and Demaio v. Evans, et al.) The complaint alleges claims for breaches of fiduciary duty, corporate waste and unjust enrichment against certain current and former directors and officers of the Company: Parker H. Petit, William C. Taylor, Michael J. Senken, John E. Cranston, Alexandra O. Haden, Chris Cashman, Lou Roselli, Mark Diaz, Charles R. Evans, Luis A. Aguilar, Joseph G. Bleser, J. Terry Dewberry, Bruce L. Hack, Charles E. Koob, Larry W. Papasan and Neil S. Yeston. The allegations generally involve claims that the defendants breached their fiduciary duties by causing or allowing the Company to misrepresent its financial statements as a result of improper revenue recognition. The Court has ordered this matter stayed pending the resolution of the consolidated derivative suit pending in the Northern District of Georgia. The plaintiff participated in the mediation that took place in connection with the prior-filed consolidated derivative action in the Northern District of Georgia.

On August 12, 2019, John Murphy filed a shareholder derivative complaint in the United States District Court for the Southern District of Florida (Murphy v. Petit, et al.). The complaint alleged claims for breaches of fiduciary duty and unjust enrichment against certain current and former directors and officers of the Company: Parker H. Petit, William C. Taylor, Michael J. Senken, John E. Cranston, Alexandra O. Haden, Charles R. Evans, Luis A. Aguilar, Joseph G. Bleser, J. Terry Dewberry, Bruce L. Hack, Charles E. Koob, Larry W. Papasan and Neil S. Yeston. The allegations generally involve claims that the defendants breached their fiduciary duties by causing or allowing the Company to misrepresent its financial statements as a result of improper revenue recognition. The Company filed a motion to transfer this action to the Northern District of Georgia. Prior to resolution of that motion, the plaintiff voluntarily dismissed this action without prejudice. The plaintiff participated in the mediation that took place in connection with the prior-filed consolidated derivative action in the Northern District of Georgia.

On February 10, 2020, Charles Pike filed a shareholder derivative complaint in the United States District Court for the Southern District of Florida (Pike v. Petit, et al.). The complaint alleges claims for breaches of fiduciary duty against certain current and former directors and officers of the Company: Parker H. Petit, William C. Taylor, Michael J. Senken, John E. Cranston, Charles R. Evans, Luis A. Aguilar, Joseph G. Bleser, J. Terry Dewberry, Bruce L. Hack, Charles E. Koob, Larry W. Papasan and Neil S. Yeston. Similar to the prior-filed actions discussed above, the allegations generally involve claims that the defendants breached their fiduciary duties by causing or allowing the Company to misrepresent its financial statements as a result of improper revenue recognition.

On February 18, 2020, Bruce Cassamajor filed a shareholder derivative complaint in the United States District Court for the Northern District of Florida (Cassamajor v. Petit, et al.). The complaint alleges claims for breaches of fiduciary duty against certain current and former directors and officers of the Company: Parker H. Petit, William C. Taylor, Michael J. Senken, John E. Cranston, Charles R. Evans, Luis A. Aguilar, Joseph G. Bleser, J. Terry Dewberry, Bruce L. Hack, Charles E. Koob, Larry W. Papasan and Neil S. Yeston. Similar to the prior-filed actions discussed above, the allegations generally involve claims that the defendants breached their fiduciary duties by causing or allowing the Company to misrepresent its financial statements as a result of improper revenue recognition. As of the date of the filing of this annual report on Form 10-K, MiMedx has not yet been served with the complaint.

Securities Class Action

On January 16, 2019, the United States District Court for the Northern District of Georgia entered an order consolidating two purported securities class actions (MacPhee v. MiMedx Group, Inc., et al. filed February 23, 2018 and Kline v. MiMedx Group, Inc., et al. filed February 26, 2018). The order also appointed Carpenters Pension Fund of Illinois as lead plaintiff. On May 1, 2019, the lead plaintiff filed a consolidated amended complaint, naming as defendants the Company, Michael J. Senken, Parker H. Petit, William C. Taylor, Christopher M. Cashman and Cherry Bekaert & Holland LLP. The amended complaint (the “Securities Class Action Complaint”) alleged violations of Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Rule 10b-5 promulgated thereunder and Section 20(a) of the Exchange Act. It asserted a class period of March 7, 2013 through June 29, 2018. Following the filing of motions to dismiss by the various defendants, the lead plaintiff was granted leave to file an amended complaint. The lead plaintiff has until March 30, 2020 to file its amended complaint.

Annual Meeting Matters

On December 12, 2018, Hialeah filed an action against the Company in the Florida Court seeking to compel the Company to hold a shareholder meeting. Hialeah requested that the court enter an order compelling two annual meetings (for 2018 and 2019) to be held on the same date, when six of the Company’s ten directors would be elected. The Company answered the complaint on January 1, 2019, and Hialeah moved for summary judgment on January 30, 2019. After a hearing held on April 3, 2019, the Florida Court ordered a meeting to take place on June 17, 2019, where a single class of directors would be elected, and memorialized that order in a final declaratory judgment on April 26, 2019. The annual meeting took place on June 17, 2019. The action was dismissed on November 6, 2019.

On April 18, 2019, Hialeah filed an action against the Company in the Florida Court asking the Florida Court to enter a final declaratory judgment for the election of Class III directors at either the June 17, 2019 meeting or within 30 days of the June 17, 2019 meeting. Hialeah filed a motion for summary judgment and declaratory judgment on May 13, 2019. The Company filed a motion to dismiss the action on May 23, 2019. On August 5, 2019, the parties entered into a stipulation under which, among other things, MiMedx agreed to work in good faith to complete its 2018 audited financial statements by December 16, 2019, hold an annual meeting for the election of Class III directors by January 15, 2020, and hold an annual meeting for the election of Class I directors by June 15, 2020. The parties settled this matter, and the action was dismissed on November 6, 2019.

Investigations

SEC Investigation

On April 4, 2017, the Company received a subpoena from the SEC requesting information related to, among other things, the Company’s recognition of revenue, practices with certain distributors and customers, its internal accounting controls and certain employment actions. The Company cooperated with the SEC in its investigation (the “SEC Investigation”). In November 2019, the SEC brought claims against the Company and the Company’s former officers Parker H. Petit, Michael J. Senken, and William C. Taylor. The SEC alleged that from 2013 to 2017, the Company prematurely recognized revenue from sales to its distributors and exaggerated its revenue growth. The SEC’s complaint also alleged that the Company improperly recognized revenue because its former CEO and COO entered into undisclosed side arrangements with certain distributors. These side arrangements allowed distributors to return product to the Company or conditioned distributors’ payment obligations on sales to end users. The SEC complaint further alleged that the Company’s former CEO, COO, and CFO allegedly covered up their scheme for years, including after the Company’s former controller raised concerns about the Company’s accounting for specific distributor transactions. The SEC also alleged that the Company’s former CEO, COO, and CFO all misled the Company’s outside auditors, members of the Company’s Audit Committee, and outside lawyers who inquired about these transactions. The SEC brought claims against the Company and its former CEO, COO, and CFO for violating the antifraud, reporting, books and records, and internal controls provisions of the federal securities laws. The SEC also brought claims against the Company’s former CEO, COO, and CFO for lying to the Company’s outside auditors.

Without admitting or denying the SEC’s allegations, the Company settled with the SEC by consenting to the entry of a final judgment that permanently restrains and enjoins the Company from violating certain provisions of the federal securities laws. As part of the resolution, the Company paid a civil penalty of $1.5 million. The settlement concluded, as to the Company, the matters alleged by the SEC in its complaint. The SEC’s litigation continues against the Company’s former officers.

United States Attorney’s Office for the Southern District of New York (“USAO-SDNY”) Investigation

The USAO-SDNY conducted an investigation into topics similar to those at issue in the SEC Investigation. The USAO-SDNY requested that the Company provide it with copies of all information the Company furnished to the SEC and made additional requests for information. The USAO-SDNY conducted interviews of various individuals, including employees and former employees of the Company. The USAO-SDNY issued indictments in November 2019 against former executives, Messrs. Petit and Taylor for securities fraud and conspiracy to commit securities fraud, to make false filings with the SEC, and improperly influence the conduct of audits relating to alleged misconduct that resulted in inflated revenue figures for fiscal 2015. The Company is cooperating with the USAO-SDNY.

Department of Veterans’ Affairs Office of Inspector General (“VA-OIG”) and Civil Division of the Department of Justice (“DOJ-Civil”) Subpoenas and/or Investigations

VA-OIG has issued subpoenas to the Company seeking, among other things, information concerning the Company’s financial relationships with VA clinicians. DOJ-Civil requested similar information. The Company has cooperated fully and produced responsive information to VA-OIG and DOJ-Civil. VA-OIG has periodically requested additional documents and information regarding payments to individual VA clinicians, The Company has continued to cooperate and responded to these requests.

As part of its cooperation, the Company provided documents in response to subpoenas concerning its relationship with three now former VA employees in South Carolina, who were ultimately indicted in May 2018. Among other things, the indictment referenced speaker fees paid by the Company to the former VA employees and other interactions between now former Company employees and the former VA employees. In January 2019, prosecution was deferred for 18 months to allow the three former VA employees to enter and complete a Pretrial Diversion Program, the completion of which would result in the dismissal of the indictment. Two of the former VA employees have completed the program early and the indictment has been dismissed with respect to them. To date, no actions have been taken against the Company with respect to this matter.

United States Attorney’s Office for the Southern District of Georgia (“USAO-SDGA”) Grand Jury Investigation

The USAO-SDGA is investigating the relationships of a Department of Defense physician with various vendors, including the Company. On August 20, 2018, a Company employee testified before the grand jury. The USAO-SDGA has not taken further action since this testimony was provided. We are not aware of the status of this matter.

Qui Tam Actions

On January 19, 2017, a former employee of the Company, filed a qui tam False Claims Act complaint in the United States District Court for the District of South Carolina (United States of America, ex rel. Jon Vitale v. MiMedx Group, Inc.) alleging that the Company’s donations to the patient assistance program, Patient Access Network Foundation, violated the Anti-Kickback Statute and resulted in submission of false claims to the government. The government declined to intervene and the complaint was unsealed on August 10, 2018. The Company filed a motion to dismiss on October 1, 2018. The Company’s motion to dismiss was granted in part and denied in part on May 15, 2019. The case is currently in discovery.

On January 20, 2017, two former employees of the Company, filed a qui tam False Claims Act complaint in the United States District Court for the District of Minnesota (Kruchoski et. al. v. MiMedx Group, Inc.). An amended complaint was filed on January 27, 2017. The operative complaint alleges that the Company failed to provide truthful, complete and accurate information about the pricing offered to commercial customers in connection with the Company’s FSS contract. On May 7, 2019, the DOJ declined to intervene, and the case was unsealed. At December 31, 2018 and 2017 the Company had accrued $6.9 million and $5.6 million in connection with expected pricing adjustments. The parties have reached a settlement in principle and are working to finalize the same.

Former Employee Litigation

On December 13, 2016, the Company filed a complaint in the Circuit Court for Palm Beach County, Florida (MiMedx Group, Inc. v. Academy Medical, LLC et. al.) alleging several claims against a former employee, primarily based on his alleged competitive activities while he was employed by the Company (breach of contract, breach of fiduciary duty and breach of duty of loyalty). The former employee countersued for monetary damages and injunctive relief, alleging whistleblower retaliation in violation of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), unlawful discharge and defamation. The Court dismissed the Dodd-Frank Act whistleblower counterclaim, and in response, the former employee filed an amended complaint on September 11, 2018, adding allegations of post-termination retaliation in violation of the Dodd-Frank Act. At December 31, 2018, the Company reserved $0.3 million for this case. The court dismissed the former employee’s retaliation counterclaim on January 24, 2019. After this dismissal, only the former employee’s claims of unlawful discharge and defamation remained pending. The parties resolved this matter and the case was dismissed on September 5, 2019.

On December 29, 2016, the Company filed a complaint in the United States District Court for the Northern District of Illinois (MiMedx Group, Inc. v. Michael Fox) alleging several claims against a former employee of the Company, primarily based on his alleged competitive activities while he was employed by the Company (breach of contract, breach of fiduciary duty and breach of duty of loyalty). The former employee countersued the Company for monetary damages and injunctive relief, alleging improper wage rate adjustment, interference with the former employee’s job after his termination from the Company and retaliation. The parties resolved this matter and the case was dismissed on November 4, 2019.

On July 13, 2018, a former employee filed a complaint against the Company in the United States District Court for the Northern District of Texas (Jennifer R. Scott v. MiMedx Group, Inc.), alleging sex discrimination and retaliation. The parties resolved this matter, and the case was dismissed on November 6, 2019.

On November 19, 2018, the Company’s former Chief Financial Officer filed a complaint in the Superior Court for Cobb County, Georgia (Michael J. Senken v. MiMedx Group, Inc.) in which he claims that the Company has breached its obligations under the Company’s charter and bylaws to advance to him, and indemnify him for, his legal fees and costs that he incurred in connection with certain Company internal investigations and litigation. The Company filed its answer denying the plaintiff’s claims on April 19, 2019. To date, no deadlines have been established by the court.

On January 21, 2019, a former employee filed a complaint in the Fifth Judicial Circuit, Richland County, South Carolina, (Jon Michael Vitale v. MiMedx Group, Inc. et. al.) against the Company alleging retaliation, defamation and unjust enrichment and seeking monetary damages. The former employee claims he was retaliated against after raising concerns related to insurance fraud and later defamed by comments concerning the indictments of three South Carolina VA employees. On February 19, 2019, the case was removed to the U.S. District Court for the District of South Carolina. The Company filed a motion to dismiss on April 8, 2019 which was denied by the Court. This case is currently in discovery.

Defamation Claims

On June 4, 2018, Sparrow Fund Management, LP (“Sparrow”) filed a complaint against the Company and Mr. Petit, including claims for defamation and civil conspiracy in the United States District Court for the Southern District of New York (Sparrow Fund Management, L.P. v. MiMedx Group, Inc. et. al.). The complaint seeks monetary damages and injunctive relief and alleges the defendants commenced a campaign to publicly discredit Sparrow by falsely claiming it was a short seller who engaged in illegal and criminal behavior by spreading false information in an attempt to manipulate the price of the Company common stock. On March 31, 2019, a judge granted defendants’ motions to dismiss in full, but allowed Sparrow the ability to file an amended complaint. The Magistrate has recommended Sparrow’s motion for leave to amend be granted in part and denied in part. Both parties have filed objections to the Magistrate’s recommendation.

On June 17, 2019, the principals of Viceroy Research (“Viceroy”), filed suit in the Circuit Court for the Seventeenth Judicial Circuit in Broward County, Florida (Fraser John Perring et. al. v. MiMedx Group, Inc. et. al.) against the Company and Mr. Petit, alleging defamation and malicious prosecution based on the defendants’ alleged campaign to publicly discredit Viceroy and the lawsuit the Company previously filed against the plaintiffs, but which the Company subsequently dismissed without prejudice. On November 1, 2019, the Court granted Mr. Petit’s motion to dismiss on jurisdictional grounds, denied the Company’s motion to dismiss, and granted plaintiffs leave to file an amended complaint to address the deficiencies in its claims against Mr. Petit, which they did on November 21, 2019. The Company filed its answer on December 20, 2019.

Intellectual Property Litigation

The Bone Bank Action

On May 16, 2014, the Company filed a patent infringement lawsuit against Transplant Technology, Inc. d/b/a Bone Bank Allografts (“Bone Bank”) and Texas Human Biologics, Ltd. (“Biologics”) in the United States District Court for the Western District of Texas (MiMedx Group, Inc. v. Tissue Transplant Technology, LTD. d/b/a Bone Bank Allografts et. al.). The Company has asserted that Bone Bank and Biologics infringed certain of the Company’s patents through the manufacturing and sale of their placental-derived tissue graft products, and the Company is seeking permanent injunctive relief and unspecified damages. On July 10, 2014, Bone Bank and Biologics filed an answer to the complaint, denying the allegations in the complaint, and filed counterclaims seeking declaratory judgments of non-infringement and invalidity. The matter settled in 2019 prior to trial, and the case was dismissed on April 4, 2019.

The NuTech Action

On March 2, 2015, the Company filed a patent infringement lawsuit against NuTech Medical, Inc. (“NuTech”) and DCI Donor Services, Inc. (“DCI”) in the United States District Court for the Northern District of Alabama (MiMedx Group, Inc. v. NuTech Medical, Inc. et. al.). The Company has alleged that NuTech and DCI infringed and continue to infringe the Company’s patents through the manufacture, use, sale and/or offering of their tissue graft product. The Company has also asserted that NuTech knowingly and willfully made false and misleading representations about its products to customers and prospective customers. The Company is seeking permanent injunctive relief and unspecified damages. The case was stayed pending the restatement of the Company’s financial statements.

The Osiris Action

On February 20, 2019, Osiris Therapeutics, Inc. (“Osiris”) refiled its trade secret and breach of contract action against the Company (which had been dismissed in a different forum) in the United States District Court for the Northern District of Georgia (Osiris Therapeutics, Inc. v. MiMedx Group, Inc.). Osiris has alleged that the Company acquired Stability Biologics, LLC, a former distributor of Osiris, in order to illegally obtain trade secrets. On February 24, 2020, the Court issued an order granting in part and denying in party MiMedx’s motion to dismiss. The Court dismissed Osiris’s claims for tortious interference, conspiracy to breach contract, unfair competition, and conspiracy to commit unfair competition. The Court denied MiMedx’s motion to dismiss with respect to the claim for breach of the contract between Osiris and Stability Biologics, finding that there is a question as to whether Osiris can maintain such a claim by piercing the corporate veil between MiMedx and its former subsidiary. If Osiris cannot pierce the corporate veil, the claim against MiMedx fails; if Osiris can pierce the corporate veil, the breach of contract claim must be brought in an arbitration proceeding. MiMedx did not move to dismiss Osiris’s claims for misappropriation of trade secrets and conspiracy to misappropriate trade secrets. MiMedx plans to defend against all remaining claims.

Other Matters

Under the Florida Business Corporation Act and agreements with its current and former officers and directors, the Company is obligated to indemnify its current and former officers and directors who are made party to a proceeding, including a proceeding brought by or in the right of the corporation, with certain exceptions, and to advance expenses to defend such matters. The Company has already borne substantial costs to satisfy these indemnification and expense advance obligations and expects to continue to do so in the future.

In addition to the matters described above, the Company is a party to a variety of other legal matters that arise in the normal course of the Company’s business, none of which is deemed to be individually material at this time. Due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on the Company’s business, results of operations, financial position or liquidity.

Revenue Data by Customer Type

12 Months Ended

Dec. 31, 2018

Segment Reporting [Abstract]

Revenue Data by Customer Type

MiMedx has two primary distribution channels: (1) direct to customers (healthcare professionals and/or facilities) (“Direct Customers”); and (2) sales through distributors (“Distributors”). For purposes of the required disclosure under ASC 606-10-50-5, the Company groups its customers into these two groups. This grouping by customer types does not constitute a basis for resource allocation but is information intended to provide the reader with ability to better understand how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors applicable to each customer type. These groupings also do not meet the criteria under ASC 280-10-50-1 to qualify as separate operating segments. The Company did not have significant foreign operations or a single external customer from which 10% or more of revenues were derived during the years ended December 31, 2018, 2017 and 2016.

Below is a summary of net sales by each customer type (in thousands):



	Years Ended December 31,
	2018		2017		2016
					(Restated)
Direct Customers	$	343,464	$	286,742	$	176,485
Distributors	15,647		27,431		33,501
Other⁽¹⁾	—		6,966		11,726
Total	$	359,111	$	321,139	$	221,712

(1) The “Other” balances are comprised entirely of the Net Sales generated by Stability while it was a subsidiary of the Company. The Company did not find evidence that the pervasive business practices discussed herein which preclude the recognition of revenue upon shipment of product were practiced by Stability employees or management. As such, Stability’s Net Sales have not been restated.

Related Party Transactions	12 Months Ended
Related Party Transactions	Dec. 31, 2018
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions The Company employs Simon Ryan, the brother-in-law of Alexandra O. Haden, the Company’s former General Counsel and Secretary, as a sales representative. Ms. Haden resigned from her position as General Counsel and Secretary in August 2019. In 2017, the Company paid Mr. Ryan total compensation of $0.2 million, consisting of a salary of $0.1 million and sales commissions, equity and other compensation of $0.1 million. In 2018, the Company paid Mr. Ryan total compensation of $0.2 million, consisting of a salary of $0.1 million and sales commissions, equity and other compensation of $0.1 million. The Company has employed Thomas Koob as its Chief Scientific Officer (a non-executive officer) since 2006. Thomas Koob is the brother of a director, Charles Koob. Subsequent to the Company’s employment of Thomas Koob, Charles Koob was appointed as a director of the Company in March 2008. In 2017, the Company paid Thomas Koob a salary of $0.2 million and provided equity, incentive compensation and other compensation of $0.2 million. In 2018, the Company paid Thomas Koob a salary of $0.2 million and provided equity, incentive compensation and other compensation of $0.3 million. The Company recorded sales of $2.3 million, $3.5 million, and $2.7 million for the years ended December 31, 2018, 2017, and 2016, respectively, to a distributor in which the family of the former CEO, at that time, had a financial interest. Product pricing, payment terms, rights of return, and other conditions of sale to this distributor were similar to those available to distributors of the Company.

Restructuring

12 Months Ended

Dec. 31, 2018

Restructuring and Related Activities [Abstract]

Restructuring

Set forth below are disclosures relating to restructuring initiatives that resulted in material expenses or cash expenditures during the year ended December 31, 2018, and had material restructuring liabilities at December 31, 2018. Employee retention and certain other employee benefit-related costs related to the Company’s restructuring are expensed ratably over an agreed-upon service period. One-time employee separation and related employee benefit costs are generally expensed as incurred.

In December 2018, the Company announced a reduction of the Company’s workforce by approximately 240 full-time employees, or 24% of its total workforce, of which approximately half were sales personnel as part of the plans to implement a broad-based organizational realignment, cost reduction and efficiency program to better ensure the Company’s cost structure was appropriate given its revenue expectations.

As a result of the December 2018 broad-based organizational realignment, cost reduction and efficiency program, the Company incurred pre-tax charges of $6.1 million during the year ended December 31, 2018. The 2018 charges related to employee retention and other one-time employee separation benefit-related costs. These charges are included in the cost of sales, research and development, and selling, general and administrative expenses in the consolidated statements of operations.

The liability related to the December 2018 restructuring initiative is included in Accrued compensation in the consolidated balance sheets. Changes to this liability during the year ended December 31, 2018 were as follows (in thousands):



Liability balance as of January 1, 2018	$	—
Expenses	6,055
Cash distributions	(448		)
Liability balance as of December 31, 2018	$	5,607

All remaining cash payments were made at the end of 2019.

Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2018

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Data (Unaudited)

Quarterly Financial Data (Unaudited) (in thousands except per share data)

Restatement of the 2017 Unaudited Quarterly Financial Statements

As previously described in the Company’s Current Reports on Form 8-K filed on February 20, 2018 and on June 6, 2018, the Audit Committee, in consultation with outside advisors and management, concluded that the Company’s interim financial statements previously issued for the quarterly and year-to-date periods ended March 31, 2017, June 30, 2017 and September 30, 2017 should not be relied upon due to errors identified in such financial statements related to the timing of revenue recognition, gross vs. net presentation of administrative fees paid to GPOs, the related impacts on cost of goods sold and bad debt expense due to changes in revenue recognition practices, the timing of certain general and administrative expenses and cash collections, impacts of any losses associated with contingency exposures, share-based compensation expense and the related income tax impacts, as well disclosures and internal controls.

The corrections contained in the below restated unaudited quarterly financial statement information were prepared following the Audit Committee Investigation as described in the Note 4 “Restatement of the Consolidated Financial Statements,” and a review by management of other accounting matters not specifically addressed by the Audit Committee Investigation. The unaudited quarterly information for the quarter ended December 31, 2018 is presented below for the first time.

The following tables summarize the impacts of the restatement on our previously reported condensed consolidated statements of operations included in our Quarterly Reports on Form 10-Q for each respective period. Information for the first, second, and third quarters of 2017 are restated.



		First Quarter			Second Quarter			Third Quarter			Fourth Quarter
Net sales	2018	$	84,149		$	95,417		$	86,959		$	92,586
	2017	68,795			80,487			84,000			87,857

Gross profit	2018	$	74,791		$	86,147		$	79,604		$	82,183
	2017	60,766			72,002			74,697			78,455

Income tax (provision) benefit	2018	$	1,552		$	13		$	(650	)	$	(27,497	)
	2017	(280		)	(980		)	30,436			(9,537		)

Net income (loss)	2018	$	4,619		$	1,804		$	(178	)	$	(36,224	)
	2017	5,998			10,402			44,051			4,276

Net income (loss) per common share - basic	2018	$	0.04		$	0.02		$	—		$	(0.34	)
	2017	0.06			0.10			0.41			0.04

Net income (loss) per common share - diluted	2018	$	0.04		$	0.02		$	—		$	(0.34	)
	2017	0.05			0.09			0.37			0.04

The Company’s previously reported selected quarterly financial data for the First, Second, and Third Quarter of 2017 is as follows:



		First Quarter			Second Quarter		Third Quarter
Net sales	2017	$	72,607		$	76,412	$	84,573

Gross profit	2017	$	63,864		$	67,781	$	74,974

Income tax provision (benefit)	2017	$	(1,713	)	$	1,005	$	4,384

Net income	2017	$	4,327		$	8,069	$	17,457

Net income per share - basic	2017	$	0.04		$	0.08	$	0.16

Net income per share - diluted	2017	$	0.04		$	0.07	$	0.15

Subsequent Events

12 Months Ended

Dec. 31, 2018

Subsequent Events [Abstract]

Subsequent Events

Term Loan

On June 10, 2019, the Company entered into a Term Loan Agreement (the “Term Loan Agreement”) Blue Torch Finance LLC, as administrative agent and collateral agent, to borrow funds with a face value of $75.0 million (the “Term Loan”), of which the full amount has been borrowed and funded. The proceeds from the Term Loan have been and will continue to be used (i) for working capital and general corporate purposes and (ii) to pay transaction fees, costs and expenses incurred in connection with the Term Loan and the related transactions. The Term Loan matures on June 20, 2022 and is repayable in quarterly installments of $0.9 million; the balance is due on June 20, 2022. The Term Loan was issued net of the original issue discount of $2.3 million. The Company also incurred $6.7 million of deferred financing costs.

The interest rate applicable to any borrowings under the Term Loan accrues at a rate equal to LIBOR plus a margin of 8.00% per annum or (if LIBOR is not available) a prime rate plus a margin of 7.00% per annum. The Term Loan had an interest rate equal to 10.46% at the time the Loan Agreement was executed.

The Term Loan Agreement contains financial covenants requiring the Company, on a consolidated basis, to maintain the following:


•	Maximum Total Leverage Ratio, defined as funded debt divided by consolidated adjusted EBITDA, of not more than 3.0 to 1.0 as of the last day of the previous four consecutive fiscal quarters.

•

Minimum Liquidity, defined as unrestricted cash and cash equivalents, of less than $40.0 million as of the last business day of each fiscal month following the term loan closing date through and including the fiscal month ending May 31, 2020. For fiscal months beginning June 30, 2020, the Company is not permitted to have liquidity of less than $30.0 million. Beginning with the fiscal month ending December 31, 2020, if the total leverage ratio is less than 2.50 to 1.0 as of the last business day of any fiscal month, the Company’s liquidity shall not be less than $20.0 million.


•	During the period from June 10, 2019 through June 10, 2020, an amount equal to 3% of the principal amount of the Term Loan prepaid on such date; and


•	During the period from June 11, 2020 through June 10, 2021, an amount equal to 2% of the principal amount of the Term Loan prepaid on such date.

Principal prepayments after June 10, 2021 are not subject to a prepayment penalty.

Separation and Transition Services Agreement of Edward J. Borkowski

On November 18, 2019, the Company entered into a Separation and Transition Services Agreement (“Separation Agreement”) with Edward J. Borkowski, under which Mr. Borkowski resigned as Executive Vice President and Interim Chief Financial Officer of the Company, as well as from any and all officer, director or other positions that he held with the Company and its affiliates, effective November 15, 2019. Pursuant to the Separation Agreement, Mr. Borkowski agreed to perform the duties of the Interim Chief Financial Officer with respect the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (the “2018 Form 10-K”) and assist with the transition of his duties as described in the Separation Agreement from November 15, 2019 through the earlier of the first business day following the Company’s filing of its 2018 Form 10-K with the SEC or December 31, 2019 (the “Transition Period”). Commencing on the date the Transition Period ends and until March 31, 2020, Mr. Borkowski agreed to provide services as may be requested by the Company with respect to matters related to the 2018 Form 10-K and the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2019.

The Separation Agreement provides that the Company will pay Mr. Borkowski a special payment in installments as follows: (i)$1.7 million to be paid within seven business days following November 15, 2019, (ii) $1.8 million to be paid within seven business days following the filing of the 2018 Form 10-K with the SEC; and (iii) after March 31, 2020, $0.5 million to be paid within seven business days following the execution and delivery of a supplemental release by Mr. Borkowski.

See Note 16 “Commitments and Contingencies” for discussion on legal proceedings.

Schedule II - Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2018

SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]

Schedule II - Valuation and Qualifying Accounts

Schedule II Valuation and Qualifying Accounts



MIMEDX GROUP, INC. AND SUBSIDIARIES SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS
Years ended December 31, 2018, 2017 and 2016 (in thousands)

	Balance at Beginning of Year	Additions charged to Expense or Revenue	Deductions and write-offs		Balance at End of Year

For the Year ended December 31, 2018
Allowance for product returns	7,362	1,148	—		8,510
Allowance for obsolescence	768	511	(690	)	589

For the Year ended December 31, 2017
Allowance for product returns	11,283	—	(3,921	)	7,362
Allowance for obsolescence	829	1,192	(1,253	)	768

For the Year ended December 31, 2016
Allowance for product returns (restated)	5,804	5,479	—		11,283
Allowance for obsolescence	397	2,281	(1,849	)	829

Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Use of Estimates

Principles of Consolidation

Segment Reporting

Market Concentrations and Credit Risk

Cash and Cash Equivalents

Cash and cash equivalents include cash and FDIC insured certificates of deposit held at various banks with an original maturity of three months or less.

Notes Receivable

Inventories

Goodwill and Purchased Intangible Assets

Goodwill and Indefinite-lived Intangible Assets

Impairment of Intangible Assets with Finite Lives

The Company uses estimates that are consistent with its business plans and a market participant view of the assets being evaluated. Actual results may differ from these estimates.

Property and Equipment

Patent Costs

Impairment of Long-lived Assets

Contingencies

Revenue Recognition

Cost of Sales

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.

Advertising Expense

Advertising expense

Advertising expense consists primarily of print media promotional materials. Advertising costs are expensed as incurred.

Income Taxes

Share-based Compensation

Basic and Diluted Net (Loss) Income Per Share

Basic and Diluted Net (Loss) Income per Share

Fair Value of Financial Instruments

Fair Value of Financial Instruments and Fair Value Measurements

Fair Value Measurements


•	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.


•	Level 3: Unobservable inputs or valuation techniques that are used when little or no market data is available.

Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Recently Issued Accounting Pronouncements Not Yet Adopted

Restatement of the Consolidated Financial Statements (Tables)

12 Months Ended

Dec. 31, 2018

Accounting Changes and Error Corrections [Abstract]

Schedule of Prior Period Adjustments and Restatements



	Year Ended December 31, 2016
	(in thousands, except share and per share data)
	Previously Reported			Adjustments			Restated
Net sales	$	245,015		$	(23,303	)	$	221,712
Cost of sales	32,407			(1,469		)	30,938
Gross profit	212,608			(21,834		)	190,774

Operating expenses:
Selling, general and administrative	179,997			(6,585		)	173,412
Research and development	12,038			2,303			14,341
Amortization of intangible assets	2,127			10			2,137
Operating income	18,446			(17,562		)	884

Other expense, net	(339		)	—			(339		)

Income before income tax provision	18,107			(17,562		)	545
Income tax provision (expense)	(6,133		)	5,978			(155		)

Net income (loss)	$	11,974		$	(11,584	)	$	390

Net income (loss) per common share - basic	$	0.11		$	—		$	—

Net income (loss) per common share - diluted	$	0.11		$	—		$	—

Weighted average shares outstanding - basic	105,928,348			—			105,928,348

Weighted average shares outstanding - diluted	112,441,709			—			112,645,640



	Year Ended December 31, 2016
	Adjustments by Category
(in thousands)	Previously			Cash						Revenue						Total
	Reported			Revenue			GPO Fees			Related			Other			Adjustments			Restated
Net sales	$	245,015		$	(14,725	)	$	(4,487	)	$	(4,091	)	$	—		$	(23,303	)	$	221,712
Cost of sales	32,407			—			—			(1,469		)	—			(1,469		)	30,938
Gross profit	212,608			(14,725		)	(4,487		)	(2,622		)	—			(21,834		)	190,774

Operating expenses:
Selling, general and administrative expenses	179,997			—			(4,487		)	(1,744		)	(354		)	(6,585		)	173,412
Research and development expenses	12,038			—			—			—			2,303			2,303			14,341
Amortization of intangible assets	2,127			—			—			—			10			10			2,137
Operating income	18,446			(14,725		)	—			(878		)	(1,959		)	(17,562		)	884

Other expense, net	(339		)	—			—			—			—			—			(339		)

Income before income tax provision	18,107			(14,725		)	—			(878		)	(1,959		)	(17,562		)	545
Income tax provision (expense) benefit	(6,133		)	—			—			—			5,978			5,978			(155		)

Net income (loss)	$	11,974		$	(14,725	)	$	—		$	(878	)	$	4,019		$	(11,584	)	$	390

The effects of the restatements on the Company’s consolidated statement of stockholders’ equity for the year ended December 31, 2016 are as follows:



	Year-ended December 31, 2016
	(in thousands)
				Adjustments by Category
	Previously Reported			Cash Revenue			Revenue Related			Other			Total Adjustments			Restated
Total stockholders' equity, December 31, 2015	$	107,988		$	(60,064	)	$	6,669		$	(19,869	)	$	(73,264	)	$	34,724
Share-based compensation	17,818			—			—			(86		)	(86		)	17,732
Tax benefit of share-based compensation	(424		)	—			—			1			1			(423		)
Exercise of stock options	3,494			—			—			—			—			3,494
Issuance of restricted stock	1			—			—			(1		)	(1		)	—
Shares issued for services performed	346			—			—			—			—			346
Shares repurchased	(10,378		)	—			—			—			—			(10,378		)
Shares repurchased for tax withholding	(1,165		)	—			—			—			—			(1,165		)
Shares issued in conjunction with acquisition of Stability	3,346			—			—			1			1			3,347
Net income (loss)	11,974			(14,725		)	(878		)	4,019			(11,584		)	390
Total stockholders' equity, December 31, 2016	$	133,000		$	(74,789	)	$	5,791		$	(15,935	)	$	(84,933	)	$	48,067

The effects of the restatements on the Company’s consolidated statement of stockholders’ equity as of December 31, 2016 are as follows:



	As of December 31, 2016
	(in thousands)
				Adjustments by Category
	Previously Reported			Cash Revenue			Revenue Related		Other			Total Adjustments			Restated
Common stock	$	110		$	—		$	—	$	—		$	—		$	110
Additional paid-in capital	161,261			—			—		220			220			161,481
Treasury stock	(2,216		)	—			—		—			—			(2,216		)
Accumulated deficit	(26,155		)	(74,789		)	5,791		(16,155		)	(85,153		)	(111,308		)
Total stockholders' equity	$	133,000		$	(74,789	)	$	5,791	$	(15,935	)	$	(84,933	)	$	48,067

The effects of the restatements on the Company’s consolidated balance sheet as of December 31, 2016 are as follows:



	Year Ended December 31, 2016
	(in thousands)
	Previously Reported			Adjustments			Restated
ASSETS
Current assets:
Cash and cash equivalents	$	34,391		$	(4,070	)	$	30,321
Accounts receivable, net	67,151			(65,224		)	1,927
Inventory, net	17,814			(1,942		)	15,872
Prepaid expenses	5,894			(4,056		)	1,838
Other current assets	1,288			8,228			9,516
Total current assets	126,538			(67,064		)	59,474

Property and equipment, net	13,786			199			13,985
Goodwill	20,203			—			20,203
Intangible assets, net	23,268			(10		)	23,258
Deferred tax asset, net	9,114			(9,114		)	—
Other assets	354			—			354
Total assets	$	193,263		$	(75,989	)	$	117,274
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	11,436		$	976		$	12,412
Accrued compensation	12,365			326			12,691
Accrued expenses	10,941			8,266			19,207
Current portion of earn out liability	8,740			(480		)	8,260
Deferred tax liability, net	—			1,129			1,129
Income taxes	5,768			(157		)	5,611
Other current liabilities	1,482			—			1,482
Total current liabilities	50,732			10,060			60,792

Earn out liability	8,710			(1,170		)	7,540
Other liabilities	821			54			875
Total liabilities	60,263			8,944			69,207

Stockholders' equity:
Preferred stock; $.001 par value; 5,000,000 shares authorized and 0 shares issued and outstanding	—			—			—
Common stock; $0.001 par value; 150,000,000 shares authorized; 110,212,547 issued and 109,862,787 outstanding at December 31, 2016	110			—			110
Additional paid-in capital	161,261			220			161,481
Treasury stock at cost: 349,760 shares at December 31, 2016	(2,216		)	—			(2,216		)
Accumulated deficit	(26,155		)	(85,153		)	(111,308		)
Total stockholders' equity	133,000			(84,933		)	48,067
Total liabilities and stockholders' equity	$	193,263		$	(75,989	)	$	117,274

The effects of the restatements on the Company’s consolidated statement of cash flows for the year ended December 31, 2016 are as follows:



	Year Ended December 31, 2016
	(in thousands)
	Previously Reported			Adjustments			Restated
Cash flows provided by operating activities:
Net (loss) income	$	11,974		$	(11,584	)	$	390
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation	3,333			—			3,333
Amortization of intangible assets	2,127			10			2,137
Amortization of inventory fair value step-up	1,485			—			1,485
Amortization of deferred financing costs	181			(30		)	151
Change in fair value of earn-out consideration	—			(1,650		)	(1,650		)
Share-based compensation	17,818			(86		)	17,732
Change in deferred income taxes	(594		)	(5,398		)	(5,992		)
Increase (decrease) in cash, net of effects of acquisition and divestiture, resulting from changes in:
Accounts receivable	(11,396		)	11,469			73
Inventory	(2,837		)	1,942			(895		)
Prepaid expenses	(2,400		)	1,607			(793		)
Other assets	(384		)	(1,183		)	(1,567		)
Accounts payable	(3,665		)	187			(3,478		)
Accrued compensation	(2,669		)	83			(2,586		)
Accrued expenses	6,297			3,233			9,530
Income taxes	5,835			(634		)	5,201
Other liabilities	723			55			778
Net cash flows provided by operating activities	25,828			(1,979		)	23,849

Cash flows used in investing activities:
Purchases of property and equipment	(6,269		)	64			(6,205		)
Stability acquisition	(7,631		)	—			(7,631		)
Fixed maturity securities redemption	3,000			—			3,000
Patent application costs	(842		)	—			(842		)
Net cash flows used in investing activities	(11,742		)	64			(11,678		)

Cash flows used in financing activities:
Proceeds from exercise of stock options	3,494			—			3,494
Shares repurchased under repurchase plan	(10,378		)	—			(10,378		)
Shares repurchased for tax withholdings on vesting of restricted stock	(1,165		)	—			(1,165		)
Deferred financing costs	(30		)	30			—
Payments under capital lease obligations	(102		)	—			(102		)
Net cash flows used in financing activities	(8,181		)	30			(8,151		)

Net change in cash	5,905			(1,885		)	4,020

Cash and cash equivalents, beginning of year	28,486			(2,185		)	26,301
Cash and cash equivalents, end of year	$	34,391		$	(4,070	)	$	30,321

Stability Biologics, LLC (Tables)

12 Months Ended

Dec. 31, 2018

Discontinued Operations and Disposal Groups [Abstract]

Fair Value of Stock Consideration for Acquisition

The fair value of stock consideration was determined as set forth below:



Common Share Price at Closing on 1/13/2016		$	8.43
Multiplied by: Number of Common Shares Transferred to the Sellers		441.009
Indicated Value of Equity Consideration (on a Freely Tradable Interest Basis)		$	3,718
Less: Marketability Discount @ 10%	[a]	(371		)
Fair Value of Equity Consideration Transferred		$	3,347
[a] Shares transferred to the Sellers were restricted securities pursuant to Rule 144. As such, the Sellers were prevented from selling the shares until July 13, 2016. In addition, they were subject to contractual lockups which restricted sales for up to twelve months following the closing of the transaction.

Purchase Price Allocation

The actual purchase price has been allocated as follows (in thousands):



Cash paid at closing	$	6,000
Working capital adjustment	(481		)
Common stock issued (441,009 shares)	3,347
Assumed debt	1,771
Fair value of earn-out	17,450
Total fair value of purchase price	$	28,087

Net assets acquired:
Debt-free working capital	$	2,456
Other long-term assets	199
Property, plant and equipment	1,375
Deferred tax liability	(5,896		)
Subtotal	(1,866		)
Intangible assets:
Customer relationships	5,330
Patents and know-how	6,790
Trade names and trademarks	450
Non compete agreements	830
Licenses and permits	390
Subtotal	13,790
Goodwill	16,163
Total assets purchased	$	28,087

Working capital and other assets were composed of the following (in thousands):
Working capital
Cash	$	140
Prepaid Expenses and other current assets	100
Accounts receivable	2,001
Federal and state taxes receivable	28
Inventory	9,002
Accounts payable and accrued expenses	(8,815		)
Debt-free working capital	$	2,456

Current portion of long-term debt	$	(194	)
Long-term debt	(560		)
Line of Credit	(932		)
Shareholder loan	(85		)
Assumed debt	$	(1,771	)

Net working capital	$	685

Useful Lives of Intangible Assets Acquired

The intangible assets were assigned the following lives for amortization purposes:



		Estimated useful life (in years)
Intangible asset:
Customer relationships		12
Patents and know-how		20
Trade name and trademarks		Indefinite
Non compete agreements		4
Licenses and permits		2

Unaudited Pro Forma Information

Unaudited pro forma information for the twelve months ended December 31, 2016 (in thousands) is as follows:



	Year Ended December 31,
	2016
Revenue	$	233,986

Net income	$	1,318

Income per share, fully diluted	$	0.01

Summary of Assets Transferred and Consideration Received

A summary of the assets divested and consideration received follows (in thousands):



	Year ended
	December 31, 2017

Assets divested
Trade receivables	$	2,406
Inventories	3,455
Prepaid expenses and other assets	955
Goodwill (a)	227
Intangible assets	11,857
Property and equipment, net	1,446
Total assets divested	20,346

Liabilities divested
Accounts payable and accrued liabilities	3,488
Total liabilities divested	3,488

Total net assets divested	$	16,858

Transaction costs	400

Consideration received
Non-trade receivable (b)	150
Note receivable (c)	3,190
Intangible assets (d)	630
Extinguishment of earn out liability (e)	12,240
Total consideration received	$	16,210

Loss on sale	$	(1,048	)

(b) non-trade receivable represents a cash payment due within 60 days of closing.

(c) a promissory note issued by Stability LLC in the principal amount of $3.5 million in favor of the Company recognized at a discounted value of $3.2 million.

(d) a fair value of $0.5 million for the distributor agreements with Stability LLC and a fair value of $0.1 million for the non-compete agreements with the former stockholders of Stability Inc.

- Definition

Tabular disclosure of information related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

+ References

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+ Details

Inventories (Tables)

12 Months Ended

Dec. 31, 2018

Inventory Disclosure [Abstract]

Inventories

Inventories consisted of the following items as of (in thousands):



	December 31,
	2018			2017
Raw materials	$	516		$	644
Work in process	11,123			4,685
Finished goods	4,936			4,905
Inventory, gross	16,575			10,234
Reserve for obsolescence	(589		)	(767		)
Inventory, net	$	15,986		$	9,467

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment [Abstract]

Property and equipment

ssets recorded under capital leases were as follows (in thousands):



	December 31,
	2018			2017
Leasehold improvements	$	997		$	997
Less accumulated amortization	(768		)	(711		)
Net leasehold improvements	$	229		$	286

Obligations under capitalized leases	$	229		$	286

Property and equipment consist of the following (in thousands):



	December 31,
	2018			2017
Leasehold improvements	$	4,804		$	3,393
Laboratory and clean room equipment	13,787			9,982
Furniture and equipment	15,145			10,483
Construction in progress	1,507			2,200
Property and equipment, gross	35,243			26,058
Less accumulated depreciation and amortization	(17,819		)	(11,967		)
Property and equipment, net	$	17,424		$	14,091

Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets activity summary - finite lived

Intangible assets are summarized as follows (in thousands):



	December 31, 2018							December 31, 2017
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Amortized intangible assets
Licenses	$	1,414	$	(1,066	)	$	348	$	1,009	$	(1,009	)	$	—
Patents and know how	9,180		(4,475		)	4,705		8,732		(3,840		)	4,892
Customer and supplier relationships	4,271		(2,202		)	2,069		4,271		(1,891		)	2,380
Non-compete agreements	120		(38		)	82		120		(8		)	112
Total amortized intangible assets	$	14,985	$	(7,781	)	$	7,204	$	14,132	$	(6,748	)	$	7,384

Unamortized intangible assets
Trade names and trademarks	$	1,008				$	1,008	$	1,008				$	1,008
Patents in process	1,396					1,396		1,641					1,641
Total intangible assets	$	17,389				$	9,608	$	16,781				$	10,033

Intangible assets activity summary - indefinite lived

Intangible assets are summarized as follows (in thousands):



	December 31, 2018							December 31, 2017
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Amortized intangible assets
Licenses	$	1,414	$	(1,066	)	$	348	$	1,009	$	(1,009	)	$	—
Patents and know how	9,180		(4,475		)	4,705		8,732		(3,840		)	4,892
Customer and supplier relationships	4,271		(2,202		)	2,069		4,271		(1,891		)	2,380
Non-compete agreements	120		(38		)	82		120		(8		)	112
Total amortized intangible assets	$	14,985	$	(7,781	)	$	7,204	$	14,132	$	(6,748	)	$	7,384

Unamortized intangible assets
Trade names and trademarks	$	1,008				$	1,008	$	1,008				$	1,008
Patents in process	1,396					1,396		1,641					1,641
Total intangible assets	$	17,389				$	9,608	$	16,781				$	10,033

Estimated future amortization expense of intangible assets

Expected future amortization of intangible assets as of December 31, 2018, is as follows (in thousands):



	Estimated
	Amortization
Year ending December 31,	Expense
2019	$	976
2020	976
2021	969
2022	946
2023	946
Thereafter	2,391
	$	7,204

Changes in carrying amount of goodwill

The following represents the changes in the carrying amount of goodwill 2018 and 2017 (in thousands):



	Goodwill
Balance as of January 1, 2017	$	20,203
Divestment of Stability	(227		)
Balance as of December 31, 2017	19,976
Activity	—
Balance as of December 31, 2018	$	19,976

Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2018

Payables and Accruals [Abstract]

Accrued Expenses

Accrued expenses include the following at December 31, 2018 and December 31, 2017 (in thousands):



	December 31,
	2018		2017
Legal costs	$	10,056	$	3,760
Settlement costs	8,673		—
Pricing adjustment settlement with Veterans Affairs	6,894		5,600
Estimated returns	2,325		3,255
Accrued clinical trials	962		617
External commissions	1,233		1,397
Other	1,699		1,139
Total	$	31,842	$	15,768

Net (Loss) Income Per Share (Tables)

12 Months Ended

Dec. 31, 2018

Earnings Per Share [Abstract]

Computation of basic and diluted net loss per share

The following table sets forth the computation of basic and diluted net income per share (in thousands except for share and per share data):



	Year Ended December 31,
	2018			2017		2016
Net (loss) income	$	(29,979	)	$	64,727	$	390
Denominator for basic earnings (loss) per share - weighted average shares	105,596,256			106,121,810		105,928,348
Effect of dilutive securities: Stock options, warrants, and restricted stock (a)	3,538,921			9,991,926		6,717,292
Denominator for diluted earnings (loss) per share - weighted average shares adjusted for dilutive securities	105,596,256			116,113,736		112,645,640
(Loss) income per common share - basic	$	(0.28	)	$	0.61	$	0.00
(Loss) income per common share - diluted	$	(0.28	)	$	0.56	$	0.00

(a)Securities that are included in the computation of the denominator above, utilizing the treasury stock method for the years ended December 31, 2018, 2017 and 2016 are as follows:



Effect of dilutive securities:	2018		2017		2016
Stock options	$	3,172,943	$	7,813,153	$	6,048,385
Restricted stock awards	365,978		2,178,773		668,907
	$	3,538,921	$	9,991,926	$	6,717,292

Summary of antidilutive securities

Securities that are included in the computation of the denominator above, utilizing the treasury stock method for the years ended December 31, 2018, 2017 and 2016 are as follows:



Effect of dilutive securities:	2018		2017		2016
Stock options	$	3,172,943	$	7,813,153	$	6,048,385
Restricted stock awards	365,978		2,178,773		668,907
	$	3,538,921	$	9,991,926	$	6,717,292

Equity (Tables)

12 Months Ended

Dec. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock options activity

A summary of stock option activity as of December 31, 2018, and changes during the year then ended are presented below:



	Number of Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding at January 1, 2018	9,953,575		$	3.28
Granted	—		—
Exercised	(786,708	)	4.52
Unvested options forfeited	—		—
Vested options expired	(5,469,720	)	2.22
Outstanding at December 31, 2018	3,697,147		4.59		3.57	$	595,684
Exercisable at December 31, 2018	3,697,147		$	4.59	3.57	$	595,684

Restricted stock awards roll forward



	Number of Shares		Weighted-Average Grant Date Fair Value
Unvested at January 1, 2018	5,181,405		$	9.18
Granted	1,947,475		8.52
Vested	(2,268,431	)	9.26
Forfeited	(1,861,314	)	8.96
Unvested at December 31, 2018	2,999,135		$	8.83

Allocation of share-based compensation

For the years ended December 31, 2018, 2017, and 2016 the Company recognized share-based compensation as follows (in thousands):



	Years Ended December 31,
	2018			2017			2016
							(Restated)
Cost of sales	$	705		$	539		$	439
Research and development	584			604			621
Selling, general and administrative	13,479			20,052			16,672
Total share-based compensation	$	14,768		$	21,195		$	17,732
Income tax benefit	(3,803		)	(5,345		)	(6,756		)
Total share-based compensation, net of tax benefit	$	10,965		$	15,850		$	10,976

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Deferred tax assets and liabilities

Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands):



		December 31,
		2018			2017
Deferred Tax Assets:
	Accrued expenses	$	3,572		$	2,404
	Deferred revenue	13,719			16,311
	Sales return and allowances	2,296			2,157
	Accrued settlement costs	2,689			—
	Research and development and other tax credits	2,326			1,216
	Net operating loss	3,118			1,025
	Share-based compensation	3,425			4,895
	Other	971			342
Deferred Tax Liabilities:
	Prepaid expenses	(1,823		)	(344		)
	Property and equipment	(2,519		)	(1,555		)
	Intangible assets	(443		)	(356		)
Net Deferred Tax Assets		27,331			26,095
	Less: Valuation allowance	(27,331		)	(554		)
Net Deferred Tax Assets after Valuation Allowance		$	—		$	25,541

Reconciliation of the Federal statutory income tax

The reconciliation of the federal statutory income tax rate of 35% (21% for the tax year ended December 31, 2018) to the effective rate is as follows:



	December 31,
	2018		2017		2016
					(Restated)
Federal statutory rate	21.00	%	35.00	%	35.00	%
State taxes, net of federal benefit	3.52	%	0.40	%	116.85	%
Nondeductible compensation	(15.33	)%	0.66	%	1.45	%
Meals and entertainment	(24.16	)%	1.93	%	126.74	%
Keyman life insurance	(0.15	)%	0.02	%	1.52	%
Transaction costs	—	%	—	%	21.88	%
Inventory contribution deduction	0.48	%	(0.06	)%	(4.30	)%
Domestic production activities deduction	—	%	(1.54	)%	(150.74	)%
Fair value adjustment	—	%	(2.76	)%	(105.83	)%
Share-based compensation	10.82	%	(9.90	)%	179.74	%
Tax credits	19.75	%	(3.37	)%	(254.62	)%
Uncertain tax position	(2.35	)%	0.46	%	30.47	%
Write-off of net operating losses	(11.81	)%	—	%	37.11	%
Payable true-up	(2.69	)%	0.65	%	(2.38	)%
Sale of Stability	—	%	(8.86	)%	—	%
Fixed asset true-up	5.33	%	—	%	—	%
Federal provision to return	1.58	%	0.13	%	—	%
Impact of federal rate change	—	%	26.79	%	—	%
Other	(0.25	)%	(0.03	)%	(6.91	)%
Valuation allowance	(788.33	)%	(83.08	)%	2.48	%
	(782.59	)%	(43.56	)%	28.46	%

Schedule of current and deferred income tax expense (benefit)

Current and deferred income tax expense (benefit) is as follows (in thousands):



	December 31,
	2018		2017			2016
Current:						(Restated)
Federal	$	614	$	5,868		$	4,338
State	427		1,163			1,195
Total current	1,041		7,031			5,533

Deferred:
Federal	19,452		(19,441		)	(4,980		)
State	6,089		(7,229		)	(398		)
Total deferred	25,541		(26,670		)	(5,378		)

Total expense (benefit)	$	26,582	$	(19,639	)	$	155

Reconciliation of unrecognized tax benefits

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in thousands) included in other liabilities in the consolidated balance sheets:



	2018		2017		2016
Unrecognized tax benefits - January 1	$	847	$	336	$	170

Gross increases - tax positions in current period	91		130		166

Gross increases - tax positions in prior period	—		381		—

Unrecognized tax benefits - December 31	$	938	$	847	$	336

Supplemental Disclosure of Cash Flow and Non-Cash Investing and Financing Activities (Tables)

12 Months Ended

Dec. 31, 2018

Supplemental Cash Flow Elements [Abstract]

Supplemental disclosure of cash flow and non-cash investing and financing activities

Selected cash payments, receipts, and noncash activities are as follows (in thousands):



	Years Ended December 31,
	2018		2017		2016
Cash paid for interest	$	197	$	127	$	162
Income taxes paid	859		12,755		642
Purchases of equipment financed through accounts payable	1,168		1,343		831
Deferred financing costs	—		30		10
Additional paid-in capital related tax adjustments	—		—		(423		)
Stock issuance of 441,009 shares in connection with acquisition of Stability	—		—		3,347
Stock issuance of 17,539 and 43,344 shares in exchange for services performed in 2017 and 2016, respectively	—		166		346

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Estimated annual lease, royalty, and employment agreement expenses

The estimated annual lease payment and meeting space commitments are as follows (in thousands):



Years Ended December 31,
2019	$	2,605
2020	2,370
2021	1,625
2022	1,673
2023	205
Thereafter	—
	$	8,478

Revenue Data by Customer Type (Tables)

12 Months Ended

Dec. 31, 2018

Segment Reporting [Abstract]

Net Sales by Customer Types

(in thousands):



	Years Ended December 31,
	2018		2017		2016
					(Restated)
Direct Customers	$	343,464	$	286,742	$	176,485
Distributors	15,647		27,431		33,501
Other⁽¹⁾	—		6,966		11,726
Total	$	359,111	$	321,139	$	221,712

Restructuring (Tables)

12 Months Ended

Dec. 31, 2018

Restructuring and Related Activities [Abstract]

Changes in Restructuring Liability

Changes to this liability during the year ended December 31, 2018 were as follows (in thousands):



Liability balance as of January 1, 2018	$	—
Expenses	6,055
Cash distributions	(448		)
Liability balance as of December 31, 2018	$	5,607

Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2018

Quarterly Financial Information Disclosure [Abstract]

Schedule of quarterly financial information



		First Quarter			Second Quarter			Third Quarter			Fourth Quarter
Net sales	2018	$	84,149		$	95,417		$	86,959		$	92,586
	2017	68,795			80,487			84,000			87,857

Gross profit	2018	$	74,791		$	86,147		$	79,604		$	82,183
	2017	60,766			72,002			74,697			78,455

Income tax (provision) benefit	2018	$	1,552		$	13		$	(650	)	$	(27,497	)
	2017	(280		)	(980		)	30,436			(9,537		)

Net income (loss)	2018	$	4,619		$	1,804		$	(178	)	$	(36,224	)
	2017	5,998			10,402			44,051			4,276

Net income (loss) per common share - basic	2018	$	0.04		$	0.02		$	—		$	(0.34	)
	2017	0.06			0.10			0.41			0.04

Net income (loss) per common share - diluted	2018	$	0.04		$	0.02		$	—		$	(0.34	)
	2017	0.05			0.09			0.37			0.04

The Company’s previously reported selected quarterly financial data for the First, Second, and Third Quarter of 2017 is as follows:



		First Quarter			Second Quarter		Third Quarter
Net sales	2017	$	72,607		$	76,412	$	84,573

Gross profit	2017	$	63,864		$	67,781	$	74,974

Income tax provision (benefit)	2017	$	(1,713	)	$	1,005	$	4,384

Net income	2017	$	4,327		$	8,069	$	17,457

Net income per share - basic	2017	$	0.04		$	0.08	$	0.16

Net income per share - diluted	2017	$	0.04		$	0.07	$	0.15

Nature of Business (Details) - 12 months ended Dec. 31, 2018	Business_Segment	segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of business segments (segment)	1	1

Liquidity and Capital Resources (Details)		3 Months Ended								6 Months Ended	12 Months Ended						18 Months Ended
Liquidity and Capital Resources (Details)	Jun. 10, 2019 USD ($)	Dec. 31, 2018 USD ($)	Sep. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Dec. 30, 2020 USD ($)	Jun. 10, 2021	Jun. 10, 2020	May 31, 2020 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Jun. 20, 2022 USD ($)	Dec. 31, 2020	Dec. 31, 2015 USD ($)
Loss Contingencies [Line Items]
Cash and cash equivalents		$ 45,118,000				$ 27,476,000								$ 45,118,000	$ 27,476,000	$ 30,321,000			$ 26,301,000
Total current assets		74,049,000				48,747,000								74,049,000	48,747,000	59,474,000
Total current liabilities		71,547,000				45,810,000								71,547,000	45,810,000	60,792,000
Net working capital		2,500,000												2,500,000
Net cash flows from operating activities														35,796,000	62,939,000	23,849,000
Operating loss														(3,924,000)	46,223,000	884,000
Net income (loss)		(36,224,000)	$ (178,000)	$ 1,804,000	$ 4,619,000	4,276,000	$ 44,051,000	$ 10,402,000	$ 5,998,000					(29,979,000)	64,727,000	$ 390,000
Kruchoski et. al. v. Mimedx Group, Inc.
Loss Contingencies [Line Items]
Anticipated cash requirements for settlements		6,900,000				$ 5,600,000								6,900,000	$ 5,600,000
Litigation Involving Former Employees
Loss Contingencies [Line Items]
Anticipated cash requirements for settlements		$ 4,800,000												$ 4,800,000
Term Loan Agreement \| Term Loan \| Subsequent Event
Loss Contingencies [Line Items]
Face value of debt	$ 75,000,000.0
Quarterly installments	$ 900,000
Total leverage ratio	3.0
Term Loan Agreement \| Term Loan \| Forecast
Loss Contingencies [Line Items]
Total leverage ratio																		2.50
Minimum liquidity										$ 30,000,000.0			$ 40,000,000.0				$ 20,000,000.0
Prepayment penalty as percent of prepaid principal											2.00%	3.00%

Significant Accounting Policies (Details)		3 Months Ended								12 Months Ended
Significant Accounting Policies (Details)	Jan. 01, 2019 USD ($)	Dec. 31, 2018 USD ($)	Sep. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2018 USD ($) Business_Segment	Dec. 31, 2018 USD ($)	Dec. 31, 2018 USD ($) segment	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Market Concentrations and Credit Risk [Line Items]
Number of business segments (segment)											1		1
Cash and cash equivalents uninsured amount		$ 44,000,000.0				$ 26,200,000				$ 44,000,000.0	$ 44,000,000.0	$ 44,000,000.0	$ 44,000,000.0	$ 44,000,000.0	$ 26,200,000
Accounts receivable, net		51,000,000.0				64,800,000				51,000,000.0	51,000,000.0	51,000,000.0	51,000,000.0	51,000,000.0	64,800,000
Deferred cost of sales		4,300,000				5,900,000				$ 4,300,000	$ 4,300,000	$ 4,300,000	$ 4,300,000	4,300,000	5,900,000
Goodwill impairment														0	0	$ 0
impairment of indefinite useful lives intangible														0	590,000	0
Impairment of finite-lived intangible assets														0	0
Net sales		$ 92,586,000	$ 86,959,000	$ 95,417,000	$ 84,149,000	$ 87,857,000	$ 84,000,000	$ 80,487,000	$ 68,795,000					359,111,000	321,139,000	221,712,000
Revenue recognized from change in reserve														600,000
GPO administrative fees as percent of purchase volume												3.00%
Advertising expense														100,000	100,000	100,000
Effective income tax rate reconciliation, excess tax benefit														4,800,000
Patents
Market Concentrations and Credit Risk [Line Items]
Patent costs capitalized during the year														$ 600,000	300,000	800,000
Minimum
Market Concentrations and Credit Risk [Line Items]
Property and equipment estimated useful life										3 years
Maximum
Market Concentrations and Credit Risk [Line Items]
Property and equipment estimated useful life										7 years
Accounting Standards Update 2016-02 \| Forecast
Market Concentrations and Credit Risk [Line Items]
Right-of-use asset	$ 4,600,000
Lease liabilities	5,200,000
Subsequent Event \| Accounting Standards Update 2018-17
Market Concentrations and Credit Risk [Line Items]
Cumulative effect on retained earnings	$ 100,000
Stability Biologics, LLC
Market Concentrations and Credit Risk [Line Items]
Net sales															$ 7,000,000.0	$ 11,700,000

Restatement of the Consolidated Financial Statements - Restatement of Statement of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net sales	$ 92,586	$ 86,959	$ 95,417	$ 84,149	$ 87,857	$ 84,000	$ 80,487	$ 68,795	$ 359,111	$ 321,139	$ 221,712
Cost of sales									36,386	35,219	30,938
Gross profit	82,183	79,604	86,147	74,791	78,455	74,697	72,002	60,766	322,725	285,920	190,774
Operating expenses:
Selling, general and administrative									258,528	220,119	173,412
Research and development expenses									15,765	17,900	14,341
Amortization of intangible assets									1,034	1,678	2,137
Operating (loss) income									(3,924)	46,223	884
Other expense, net											(339)
(Loss) income before income tax provision									(3,397)	45,088	545
Income tax provision (expense) benefit	(27,497)	(650)	13	1,552	(9,537)	30,436	(980)	(280)	(26,582)	19,639	(155)
Net (loss) income	$ (36,224)	$ (178)	$ 1,804	$ 4,619	$ 4,276	$ 44,051	$ 10,402	$ 5,998	$ (29,979)	$ 64,727	$ 390
Net income (loss) per common share - basic (in dollars per share)	$ (0.34)	$ 0	$ 0.02	$ 0.04	$ 0.04	$ 0.41	$ 0.10	$ 0.06	$ (0.28)	$ 0.61	$ 0.00
Net income (loss) per common share - diluted (in dollars per share)	$ (0.34)	$ 0	$ 0.02	$ 0.04	$ 0.04	$ 0.37	$ 0.09	$ 0.05	$ (0.28)	$ 0.56	$ 0.00
Weighted average shares outstanding - basic (in shares)									105,596,256	106,121,810	105,928,348
Weighted average shares outstanding - diluted (in shares)									105,596,256	116,113,736	112,645,640
Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net sales						$ 84,573	$ 76,412	$ 72,607			$ 245,015
Cost of sales											32,407
Gross profit						74,974	67,781	63,864			212,608
Operating expenses:
Selling, general and administrative											179,997
Research and development expenses											12,038
Amortization of intangible assets											2,127
Operating (loss) income											18,446
Other expense, net											(339)
(Loss) income before income tax provision											18,107
Income tax provision (expense) benefit						4,384	1,005	(1,713)			(6,133)
Net (loss) income						$ 17,457	$ 8,069	$ 4,327			$ 11,974
Net income (loss) per common share - basic (in dollars per share)						$ 0.16	$ 0.08	$ 0.04			$ 0.11
Net income (loss) per common share - diluted (in dollars per share)						$ 0.15	$ 0.07	$ 0.04			$ 0.11
Weighted average shares outstanding - basic (in shares)											105,928,348
Weighted average shares outstanding - diluted (in shares)											112,441,709
Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net sales											$ (23,303)
Cost of sales											(1,469)
Gross profit											(21,834)
Operating expenses:
Selling, general and administrative											(6,585)
Research and development expenses											2,303
Amortization of intangible assets											10
Operating (loss) income											(17,562)
Other expense, net											0
(Loss) income before income tax provision											(17,562)
Income tax provision (expense) benefit											5,978
Net (loss) income											(11,584)
Cash Revenue \| Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net sales											(14,725)
Cost of sales											0
Gross profit											(14,725)
Operating expenses:
Selling, general and administrative											0
Research and development expenses											0
Amortization of intangible assets											0
Operating (loss) income											(14,725)
Other expense, net											0
(Loss) income before income tax provision											(14,725)
Income tax provision (expense) benefit											0
Net (loss) income											(14,725)
GPO Fees \| Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net sales											(4,487)
Cost of sales											0
Gross profit											(4,487)
Operating expenses:
Selling, general and administrative											(4,487)
Research and development expenses											0
Amortization of intangible assets											0
Operating (loss) income											0
Other expense, net											0
(Loss) income before income tax provision											0
Income tax provision (expense) benefit											0
Net (loss) income											0
Revenue Related \| Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net sales											(4,091)
Cost of sales											(1,469)
Gross profit											(2,622)
Operating expenses:
Selling, general and administrative											(1,744)
Research and development expenses											0
Amortization of intangible assets											0
Operating (loss) income											(878)
Other expense, net											0
(Loss) income before income tax provision											(878)
Income tax provision (expense) benefit											0
Net (loss) income											(878)
Other \| Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net sales											0
Cost of sales											0
Gross profit											0
Operating expenses:
Selling, general and administrative											(354)
Research and development expenses											2,303
Amortization of intangible assets											10
Operating (loss) income											(1,959)
Other expense, net											0
(Loss) income before income tax provision											(1,959)
Income tax provision (expense) benefit											5,978
Net (loss) income											$ 4,019

Restatement of the Consolidated Financial Statements - Restatement of Stockholders' Equity (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Common stock	$ 113				$ 113				$ 113	$ 113	$ 110
Additional paid-in capital	164,744				164,649				164,744	164,649	161,481
Treasury stock	(38,642)				(44,384)				(38,642)	(44,384)	(2,216)
Accumulated deficit	(76,560)				(46,581)				(76,560)	(46,581)	(111,308)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning of period				$ 73,797				$ 48,067	73,797	48,067	34,724
Share-based compensation									14,768	21,195	17,732
Tax benefit of share-based compensation											(423)
Exercise of stock options									3,555	11,987	3,494
Issuance of restricted stock									0	0	0
Shares issued for services performed									0	166	346
Shares repurchased									(7,572)	(68,263)	(10,378)
Shares repurchased for tax withholding									(4,914)	(4,082)	(1,165)
Shares issued in conjunction with acquisition of Stability									0	0	3,347
Net (loss) income	(36,224)	$ (178)	$ 1,804	$ 4,619	4,276	$ 44,051	$ 10,402	5,998	(29,979)	64,727	390
Balance, end of period	$ 49,655				$ 73,797				$ 49,655	73,797	48,067
Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Common stock											110
Additional paid-in capital											161,261
Treasury stock											(2,216)
Accumulated deficit											(26,155)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning of period								133,000		133,000	107,988
Share-based compensation											17,818
Tax benefit of share-based compensation											(424)
Exercise of stock options											3,494
Issuance of restricted stock											1
Shares issued for services performed											346
Shares repurchased											(10,378)
Shares repurchased for tax withholding											(1,165)
Shares issued in conjunction with acquisition of Stability											3,346
Net (loss) income						$ 17,457	$ 8,069	4,327			11,974
Balance, end of period											133,000
Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Common stock											0
Additional paid-in capital											220
Treasury stock											0
Accumulated deficit											(85,153)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning of period								(84,933)		(84,933)	(73,264)
Share-based compensation											(86)
Tax benefit of share-based compensation											1
Exercise of stock options											0
Issuance of restricted stock											(1)
Shares issued for services performed											0
Shares repurchased											0
Shares repurchased for tax withholding											0
Shares issued in conjunction with acquisition of Stability											1
Net (loss) income											(11,584)
Balance, end of period											(84,933)
Cash Revenue \| Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Common stock											0
Additional paid-in capital											0
Treasury stock											0
Accumulated deficit											(74,789)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning of period								(74,789)		(74,789)	(60,064)
Share-based compensation											0
Tax benefit of share-based compensation											0
Exercise of stock options											0
Issuance of restricted stock											0
Shares issued for services performed											0
Shares repurchased											0
Shares repurchased for tax withholding											0
Shares issued in conjunction with acquisition of Stability											0
Net (loss) income											(14,725)
Balance, end of period											(74,789)
Revenue Related \| Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Common stock											0
Additional paid-in capital											0
Treasury stock											0
Accumulated deficit											5,791
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning of period								5,791		5,791	6,669
Share-based compensation											0
Tax benefit of share-based compensation											0
Exercise of stock options											0
Issuance of restricted stock											0
Shares issued for services performed											0
Shares repurchased											0
Shares repurchased for tax withholding											0
Shares issued in conjunction with acquisition of Stability											0
Net (loss) income											(878)
Balance, end of period											5,791
Other \| Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Common stock											0
Additional paid-in capital											220
Treasury stock											0
Accumulated deficit											(16,155)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning of period								$ (15,935)		$ (15,935)	(19,869)
Share-based compensation											(86)
Tax benefit of share-based compensation											1
Exercise of stock options											0
Issuance of restricted stock											(1)
Shares issued for services performed											0
Shares repurchased											0
Shares repurchased for tax withholding											0
Shares issued in conjunction with acquisition of Stability											1
Net (loss) income											4,019
Balance, end of period											$ (15,935)

Restatement of the Consolidated Financial Statements - Restatement of Balance Sheet (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2016	Jan. 13, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 45,118	$ 27,476		$ 30,321		$ 26,301
Accounts receivable, net				1,927
Inventory, net	15,986	9,467		15,872
Prepaid expenses	6,673	2,125		1,838
Other current assets	5,818	9,023		9,516
Total current assets	74,049	48,747		59,474
Property and equipment, net	17,424	14,091		13,985
Goodwill	19,976	19,976	$ 20,200	20,203	$ 16,163
Intangible assets, net	9,608	10,033		23,258
Deferred tax asset, net	0	25,541		0
Other assets	1,787	2,867		354
Total assets	122,844	121,255		117,274
Current liabilities:
Accounts payable	14,864	8,454		12,412
Accrued compensation	23,024	20,941		12,691
Accrued expenses	31,842	15,768		19,207
Current portion of earn out liability				8,260
Deferred tax liability, net				1,129
Income taxes				5,611
Other current liabilities	1,817	647		1,482
Total current liabilities	71,547	45,810		60,792
Earn out liability				7,540
Other liabilities	1,642	1,648		875
Total liabilities	73,189	47,458		69,207
Stockholders’ equity:
Preferred stock; $.001 par value; 5,000,000 shares authorized and 0 shares issued and outstanding	0	0		0
Common stock; $0.001 par value; 150,000,000 shares authorized; 110,212,547 issued and 109,862,787 outstanding at December 31, 2016	113	113		110
Additional paid-in capital	164,744	164,649		161,481
Treasury stock at cost: 349,760 shares at December 31, 2016	(38,642)	(44,384)		(2,216)
Accumulated deficit	(76,560)	(46,581)		(111,308)
Total stockholders’ equity	49,655	73,797		48,067		34,724
Total liabilities and stockholders’ equity	$ 122,844	$ 121,255		117,274
Previously Reported
Current assets:
Cash and cash equivalents				34,391		28,486
Accounts receivable, net				67,151
Inventory, net				17,814
Prepaid expenses				5,894
Other current assets				1,288
Total current assets				126,538
Property and equipment, net				13,786
Goodwill				20,203
Intangible assets, net				23,268
Deferred tax asset, net				9,114
Other assets				354
Total assets				193,263
Current liabilities:
Accounts payable				11,436
Accrued compensation				12,365
Accrued expenses				10,941
Current portion of earn out liability				8,740
Deferred tax liability, net				0
Income taxes				5,768
Other current liabilities				1,482
Total current liabilities				50,732
Earn out liability				8,710
Other liabilities				821
Total liabilities				60,263
Stockholders’ equity:
Preferred stock; $.001 par value; 5,000,000 shares authorized and 0 shares issued and outstanding				0
Common stock; $0.001 par value; 150,000,000 shares authorized; 110,212,547 issued and 109,862,787 outstanding at December 31, 2016				110
Additional paid-in capital				161,261
Treasury stock at cost: 349,760 shares at December 31, 2016				(2,216)
Accumulated deficit				(26,155)
Total stockholders’ equity				133,000		107,988
Total liabilities and stockholders’ equity				193,263
Adjustments
Current assets:
Cash and cash equivalents				(4,070)		(2,185)
Accounts receivable, net				(65,224)
Inventory, net				(1,942)
Prepaid expenses				(4,056)
Other current assets				8,228
Total current assets				(67,064)
Property and equipment, net				199
Goodwill				0
Intangible assets, net				(10)
Deferred tax asset, net				(9,114)
Other assets				0
Total assets				(75,989)
Current liabilities:
Accounts payable				976
Accrued compensation				326
Accrued expenses				8,266
Current portion of earn out liability				(480)
Deferred tax liability, net				1,129
Income taxes				(157)
Other current liabilities				0
Total current liabilities				10,060
Earn out liability				(1,170)
Other liabilities				54
Total liabilities				8,944
Stockholders’ equity:
Preferred stock; $.001 par value; 5,000,000 shares authorized and 0 shares issued and outstanding				0
Common stock; $0.001 par value; 150,000,000 shares authorized; 110,212,547 issued and 109,862,787 outstanding at December 31, 2016				0
Additional paid-in capital				220
Treasury stock at cost: 349,760 shares at December 31, 2016				0
Accumulated deficit				(85,153)
Total stockholders’ equity				(84,933)		$ (73,264)
Total liabilities and stockholders’ equity				$ (75,989)

Restatement of the Consolidated Financial Statements - Restatement of Balance Sheet (Parentheticals) (Details) - $ / shares	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Accounting Changes and Error Corrections [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0	0
Preferred stock, shares outstanding (in shares)	0	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	150,000,000	150,000,000	150,000,000
Common stock, shares issued (in shares)	112,703,926	112,703,926	110,212,547
Common stock, shares outstanding (in shares)	109,098,663	109,347,517	109,862,787
Treasury stock, shares (in shares)	3,605,263	3,356,409	349,760

Restatement of the Consolidated Financial Statements - Restatement of Statement of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash flows from operating activities:
Net income (loss)	$ (36,224)	$ (178)	$ 1,804	$ 4,619	$ 4,276	$ 44,051	$ 10,402	$ 5,998	$ (29,979)	$ 64,727	$ 390
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation									5,882	4,087	3,333
Amortization of intangible assets									1,034	1,678	2,137
Amortization of inventory fair value step-up									0	203	1,485
Amortization of deferred financing costs									137	176	151
Change in fair value of earn-out consideration									0	(3,560)	(1,650)
Share-based compensation									14,768	21,195	17,732
Change in deferred income taxes									25,541	(26,670)	(5,992)
Increase (decrease) in cash, net of effects of acquisition and divestiture, resulting from changes in:
Accounts receivable									0	(479)	73
Inventory									(6,519)	2,747	(895)
Prepaid expenses									(4,548)	(305)	(793)
Other assets									3,562	225	(1,567)
Accounts payable									6,585	(1,324)	(3,478)
Accrued compensation									2,083	8,397	(2,586)
Accrued expenses									16,074	(3,534)	9,530
Income taxes									0	(5,611)	5,201
Other liabilities									1,164	17	778
Net cash flows from operating activities									35,796	62,939	23,849
Cash flows from investing activities:
Purchases of property and equipment									(9,419)	(5,126)	(6,205)
Stability acquisition									0	0	(7,631)
Fixed maturity securities redemption									0	0	3,000
Patent application costs									(609)	(271)	(842)
Net cash flows used in investing activities									(9,220)	(5,397)	(11,678)
Cash flows from financing activities:
Proceeds from exercise of stock options									3,555	11,987	3,494
Shares repurchased under repurchase plan									(7,572)	(68,263)	(10,378)
Shares repurchased for tax withholdings on vesting of restricted stock									(4,914)	(4,082)	(1,165)
Deferred financing costs											0
Payments under capital lease obligations									(3)	(29)	(102)
Net cash flows used in financing activities									(8,934)	(60,387)	(8,151)
Net change in cash									17,642	(2,845)	4,020
Cash and cash equivalents, beginning of year				$ 27,476				30,321	27,476	30,321	26,301
Cash and cash equivalents, end of year	$ 45,118				$ 27,476				$ 45,118	27,476	30,321
Previously Reported
Cash flows from operating activities:
Net income (loss)						$ 17,457	$ 8,069	4,327			11,974
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation											3,333
Amortization of intangible assets											2,127
Amortization of inventory fair value step-up											1,485
Amortization of deferred financing costs											181
Change in fair value of earn-out consideration											0
Share-based compensation											17,818
Change in deferred income taxes											(594)
Increase (decrease) in cash, net of effects of acquisition and divestiture, resulting from changes in:
Accounts receivable											(11,396)
Inventory											(2,837)
Prepaid expenses											(2,400)
Other assets											(384)
Accounts payable											(3,665)
Accrued compensation											(2,669)
Accrued expenses											6,297
Income taxes											5,835
Other liabilities											723
Net cash flows from operating activities											25,828
Cash flows from investing activities:
Purchases of property and equipment											(6,269)
Stability acquisition											(7,631)
Fixed maturity securities redemption											3,000
Patent application costs											(842)
Net cash flows used in investing activities											(11,742)
Cash flows from financing activities:
Proceeds from exercise of stock options											3,494
Shares repurchased under repurchase plan											(10,378)
Shares repurchased for tax withholdings on vesting of restricted stock											(1,165)
Deferred financing costs											(30)
Payments under capital lease obligations											(102)
Net cash flows used in financing activities											(8,181)
Net change in cash											5,905
Cash and cash equivalents, beginning of year								34,391		34,391	28,486
Cash and cash equivalents, end of year											34,391
Adjustments
Cash flows from operating activities:
Net income (loss)											(11,584)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation											0
Amortization of intangible assets											10
Amortization of inventory fair value step-up											0
Amortization of deferred financing costs											(30)
Change in fair value of earn-out consideration											(1,650)
Share-based compensation											(86)
Change in deferred income taxes											(5,398)
Increase (decrease) in cash, net of effects of acquisition and divestiture, resulting from changes in:
Accounts receivable											11,469
Inventory											1,942
Prepaid expenses											1,607
Other assets											(1,183)
Accounts payable											187
Accrued compensation											83
Accrued expenses											3,233
Income taxes											(634)
Other liabilities											55
Net cash flows from operating activities											(1,979)
Cash flows from investing activities:
Purchases of property and equipment											64
Stability acquisition											0
Fixed maturity securities redemption											0
Patent application costs											0
Net cash flows used in investing activities											64
Cash flows from financing activities:
Proceeds from exercise of stock options											0
Shares repurchased under repurchase plan											0
Shares repurchased for tax withholdings on vesting of restricted stock											0
Deferred financing costs											30
Payments under capital lease obligations											0
Net cash flows used in financing activities											30
Net change in cash											(1,885)
Cash and cash equivalents, beginning of year								$ (4,070)		$ (4,070)	(2,185)
Cash and cash equivalents, end of year											$ (4,070)

Restatement of the Consolidated Financial Statements - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Accounting Changes and Error Corrections [Abstract]
Effective income tax rate	(782.59%)	(43.56%)	28.46%
GPO administrative fees as percent of purchase volume	3.00%
Change in fair value of earn-out consideration	$ 0	$ (3,560)	$ (1,650)

Stability Biologics, LLC - Narrative (Details)				3 Months Ended								12 Months Ended
Stability Biologics, LLC - Narrative (Details)	Sep. 30, 2017 USD ($)	Jan. 13, 2016 USD ($) shares	Jan. 01, 2015 shares	Dec. 31, 2018 USD ($)	Sep. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash payment for acquisition		$ 6,000,000
Equity issued for acquisition		3,347,000
Debt assumed for acquisition		560,000
Contingent consideration		17,450,000
Loss on divestiture of Stability												$ 0	$ (1,048,000)	$ 0
Income tax provision (expense) benefit				$ (27,497,000)	$ (650,000)	$ 13,000	$ 1,552,000	$ (9,537,000)	$ 30,436,000	$ (980,000)	$ (280,000)	(26,582,000)	19,639,000	(155,000)
Change in fair value of earn-out consideration												$ 0	$ 3,560,000	$ 1,650,000
Multiple of gross profit margin for earn-out payment													1	1
Net sales threshold for adjustment to earn-out payment													$ 12,000,000	$ 12,000,000
Multiple of gross profit margin for earn-out payment of net sales are less than $12 million													0.5	0.5
Stability Biologics, LLC \| Disposal Group, Disposed of by Sale, Not Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Note receivable	$ 3,190,000
Intangible assets	630,000
Total gain on disposition	(500,000)
Loss on divestiture of Stability	(1,048,000)
Income tax provision (expense) benefit	500,000
Change in fair value of earn-out consideration	(12,240,000)
Distributor Agreements \| Stability Biologics, LLC \| Disposal Group, Disposed of by Sale, Not Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Intangible assets	500,000
Non-compete agreements \| Stability Biologics, LLC \| Disposal Group, Disposed of by Sale, Not Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Intangible assets	$ 100,000
Stability Biologics, LLC
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash payment for acquisition		6,000,000.0
Equity issued for acquisition		$ 3,347,000
Equity issued for acquisition (shares) \| shares		441,009	441,009
Debt assumed for acquisition		$ 1,800,000
Contingent consideration		17,500,000
Selling, general and administrative
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Change in fair value of earn-out consideration													$ 3,600,000	$ 1,700,000
Selling, general and administrative \| Stability Biologics, LLC
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
One time costs incurred for acquisition		$ 1,100,000

Stability Biologics, LLC - Fair Value of Stock Consideration for Acquisition (Details) - USD ($)	Jan. 13, 2016	Jan. 01, 2015
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Marketability discount (percent)	10.00%
Fair Value of Equity Consideration Transferred	$ 3,347,000
Stability Biologics, LLC
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Common Share Price at Closing on 1/13/2016 ($ per share)	$ 8.43
Multiplied by: Number of Common Shares Transferred to the Sellers	441,009	441,009
Indicated Value of Equity Consideration (on a Freely Tradable Interest Basis)	$ 3,718,000
Less: Marketability Discount @ 10%	(371,000)
Fair Value of Equity Consideration Transferred	$ 3,347,000

Stability Biologics, LLC - Summary of Assets Transferred and Consideration Received (Details) - USD ($) $ in Thousands		12 Months Ended
	Sep. 30, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Jan. 13, 2016
Consideration received
Extinguishment of earn out liability		$ 0	$ (3,560)	$ (1,650)
Loss on sale		0	(1,048)	0
Goodwill	$ 20,200	$ 19,976	$ 19,976	$ 20,203	$ 16,163
Stability Biologics, LLC \| Disposal Group, Disposed of by Sale, Not Discontinued Operations
Assets divested
Trade receivables	2,406
Inventories	3,455
Prepaid expenses and other assets	955
Goodwill	227
Intangible assets	11,857
Property and equipment, net	1,446
Total assets divested	20,346
Liabilities divested
Accounts payable and accrued liabilities	3,488
Total liabilities divested	3,488
Total net assets divested	16,858
Transaction costs	400
Consideration received
Non-trade receivable	150
Note receivable	3,190
Intangible assets	630
Extinguishment of earn out liability	12,240
Total consideration received	16,210
Consideration received	16,200
Loss on sale	(1,048)
Note Receivable \| Stability Biologics, LLC \| Disposal Group, Disposed of by Sale, Not Discontinued Operations
Consideration received
Consideration received	3,500
Distributor Agreements \| Stability Biologics, LLC \| Disposal Group, Disposed of by Sale, Not Discontinued Operations
Consideration received
Intangible assets	500
Non-compete Agreements \| Stability Biologics, LLC \| Disposal Group, Disposed of by Sale, Not Discontinued Operations
Consideration received
Intangible assets	$ 100

Stability Biologics, LLC - Purchase Price Allocation (Details) - USD ($)	Jan. 13, 2016	Jan. 01, 2015	Dec. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2016
Business Acquisition [Line Items]
Cash paid at closing	$ 6,000,000
Working capital adjustment	(481,000)
Common stock issued (441,009 shares)	3,347,000
Fair value of earn-out	17,450,000
Total fair value of purchase price	28,087,000
Net assets acquired:
Other long-term assets	199,000
Property, plant and equipment	1,375,000
Deferred tax liability	(5,896,000)
Subtotal	(1,866,000)
Intangible assets	13,790,000
Goodwill	16,163,000		$ 19,976,000	$ 19,976,000	$ 20,200,000	$ 20,203,000
Total assets purchased	28,087,000
Working capital and other assets were composed of the following (in thousands):
Cash	140,000
Prepaid Expenses and other current assets	100,000
Accounts receivable	2,001,000
Federal and state taxes receivable	28,000
Inventory	9,002,000
Accounts payable and accrued expenses	(8,815,000)
Debt-free working capital	2,456,000
Current portion of long-term debt	(194,000)
Long-term debt	(560,000)
Line of Credit	(932,000)
Shareholder loan	(85,000)
Assumed debt	(1,771,000)
Net working capital	685,000
Stability Biologics, LLC
Business Acquisition [Line Items]
Cash paid at closing	6,000,000.0
Common stock issued (441,009 shares)	$ 3,347,000
Equity issued for acquisition (shares)	441,009	441,009
Fair value of earn-out	$ 17,500,000
Working capital and other assets were composed of the following (in thousands):
Long-term debt	(1,800,000)
Customer relationships
Net assets acquired:
Intangible assets	5,330,000
Patents and know how
Net assets acquired:
Intangible assets	6,790,000
Trade names and trademarks
Net assets acquired:
Intangible assets	450,000
Non-compete agreements
Net assets acquired:
Intangible assets	830,000
Licenses and permits
Net assets acquired:
Intangible assets	$ 390,000

Stability Biologics, LLC - Useful Lives of Intangible Assets Acquired (Details)	Jan. 13, 2016
Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated useful life (in years)	12 years
Patents and know how
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated useful life (in years)	20 years
Non-compete agreements
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated useful life (in years)	4 years
Licenses and permits
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated useful life (in years)	2 years

Stability Biologics, LLC - Unaudited Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands			12 Months Ended
	Jan. 13, 2016	Jan. 01, 2015	Dec. 31, 2016
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items]
Revenue			$ 233,986
Net income			$ 1,318
Income per share, fully diluted (in $ per share)			$ 0.01
Acquisition-related costs excluded from earnings			$ 1,100
Stability Biologics, LLC
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items]
Equity issued for acquisition (shares)	441,009	441,009

Inventories (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Inventory Disclosure [Abstract]
Raw materials	$ 516	$ 644
Work in process	11,123	4,685
Finished goods	4,936	4,905
Inventory, gross	16,575	10,234
Reserve for obsolescence	(589)	(767)
Inventory, net	$ 15,986	$ 9,467	$ 15,872

Property and Equipment - Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Property and equipment [Line Items]
Property and equipment, gross	$ 35,243	$ 26,058
Less accumulated depreciation and amortization	(17,819)	(11,967)
Property and equipment, net	17,424	14,091	$ 13,985
Leasehold improvements
Property and equipment [Line Items]
Property and equipment, gross	4,804	3,393
Laboratory and clean room equipment
Property and equipment [Line Items]
Property and equipment, gross	13,787	9,982
Furniture and equipment
Property and equipment [Line Items]
Property and equipment, gross	15,145	10,483
Construction in progress
Property and equipment [Line Items]
Property and equipment, gross	$ 1,507	$ 2,200

Property and Equipment - Assets Under Capital Lease (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Obligations under capitalized leases	$ 229	$ 286
Leasehold improvements
Property, Plant and Equipment [Line Items]
Leasehold improvements	997	997
Less accumulated amortization	(768)	(711)
Net leasehold improvements	$ 229	$ 286

Property and Equipment - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Property and equipment, net	$ 17,424	$ 14,091	$ 13,985
Depreciation expense	5,882	$ 4,087	$ 3,333
Leasehold improvements paid for by landlord
Property, Plant and Equipment [Line Items]
Property and equipment, net	$ 1,000

Goodwill and Intangible Assets - Intangible Assets Activity Summary (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount, amortized intangible assets	$ 14,985	$ 14,132
Accumulated amortization, amortized intangible assets	(7,781)	(6,748)
Net carrying amount, amortized intangible assets	7,204	7,384
Intangible assets, gross carrying value	17,389	16,781
Net	9,608	10,033	$ 23,258
Trade names and trademarks
Indefinite-lived Intangible Assets [Line Items]
Gross carrying value, indefinite lived	1,008	1,008
Patents in process
Indefinite-lived Intangible Assets [Line Items]
Gross carrying value, indefinite lived	1,396	1,641
Licenses
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount, amortized intangible assets	1,414	1,009
Accumulated amortization, amortized intangible assets	(1,066)	(1,009)
Net carrying amount, amortized intangible assets	348	0
Patents and know how
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount, amortized intangible assets	9,180	8,732
Accumulated amortization, amortized intangible assets	(4,475)	(3,840)
Net carrying amount, amortized intangible assets	4,705	4,892
Customer and supplier relationships
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount, amortized intangible assets	4,271	4,271
Accumulated amortization, amortized intangible assets	(2,202)	(1,891)
Net carrying amount, amortized intangible assets	2,069	2,380
Non-compete agreements
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount, amortized intangible assets	120	120
Accumulated amortization, amortized intangible assets	(38)	(8)
Net carrying amount, amortized intangible assets	$ 82	$ 112

Goodwill and Intangible Assets - Narrative (Details)	12 Months Ended
Goodwill and Intangible Assets - Narrative (Details)	Dec. 31, 2018 USD ($) reporting_unit	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Number of reporting units \| reporting_unit	1
Amortization of intangible assets	$ 1,034,000	$ 1,678,000	$ 2,137,000
Intangible asset impairment	0	0
Goodwill impairment	$ 0	$ 0	$ 0

Goodwill and Intangible Assets - Expected Future Amortization of Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
2019	$ 976
2020	976
2021	969
2022	946
2023	946
Thereafter	2,391
Net carrying amount, amortized intangible assets	$ 7,204	$ 7,384

Goodwill and Intangible Assets - Changes in Carrying Amount of Goodwill (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($)
Goodwill [Roll Forward]
Goodwill, beginning	$ 20,203
Divestment of Stability	(227)
Goodwill, ending	$ 19,976

Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Payables and Accruals [Abstract]
Legal costs	$ 10,056	$ 3,760
Settlement costs	8,673	0
Pricing adjustment settlement with Veterans Affairs	6,894	5,600
Estimated returns	2,325	3,255
Accrued clinical trials	962	617
External commissions	1,233	1,397
Other	1,699	1,139
Total	$ 31,842	$ 15,768	$ 19,207

Long-Term Debt (Details) - Credit Agreement - Revolving Credit Facility	Oct. 12, 2015 USD ($)
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 50,000,000
Uncommitted incremental facility	35,000,000
Debt issuance costs	$ 500,000
Debt term	3 years
London Interbank Offered Rate (LIBOR) \| Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	1.50%
London Interbank Offered Rate (LIBOR) \| Maximum
Debt Instrument [Line Items]
Basis spread on variable rate	2.25%

Net (Loss) Income Per Share - Computation of Basic and Dilutive Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Earnings Per Share [Abstract]
Net (loss) income	$ (36,224)	$ (178)	$ 1,804	$ 4,619	$ 4,276	$ 44,051	$ 10,402	$ 5,998	$ (29,979)	$ 64,727	$ 390
Denominator for basic earnings (loss) per share - weighted average shares (in shares)									105,596,256	106,121,810	105,928,348
Effect of dilutive securities: Stock options, warrants, and restricted stock (in shares)									3,538,921	9,991,926	6,717,292
Denominator for diluted earnings (loss) per share - weighted average shares adjusted for dilutive securities (in shares)									105,596,256	116,113,736	112,645,640
(Loss) income per common share - basic (in dollars per share)	$ (0.34)	$ 0	$ 0.02	$ 0.04	$ 0.04	$ 0.41	$ 0.10	$ 0.06	$ (0.28)	$ 0.61	$ 0.00
(Loss) income per common share - diluted (in dollars per share)	$ (0.34)	$ 0	$ 0.02	$ 0.04	$ 0.04	$ 0.37	$ 0.09	$ 0.05	$ (0.28)	$ 0.56	$ 0.00

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

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+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

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+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Net (Loss) Income Per Share - Summary of Antidilutive Securities (Details) - shares	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	3,538,921	9,991,926	6,717,292
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	3,172,943	7,813,153	6,048,385
Restricted stock awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	365,978	2,178,773	668,907

Equity - Narrative (Details)	12 Months Ended
Equity - Narrative (Details)	Dec. 31, 2018 USD ($) plan shares	Dec. 31, 2017 USD ($) shares	Dec. 31, 2016 USD ($) shares	Jan. 31, 2018 USD ($)	Dec. 31, 2015 USD ($)	May 08, 2014 USD ($)
Class of Stock [Line Items]
Number of share-based compensation plans \| plan	2
Intrinsic value of options exercised	$ 7,900,000	$ 18,500,000	$ 6,500,000
Proceeds from exercise of stock options	3,555,000	11,987,000	3,494,000
Tax benefit from exercise of stock options	5,900,000	12,500,000	4,600,000
Fair value of options vested	$ 100,000	$ 3,700,000	$ 7,800,000
Granted (in shares) \| shares	0	0	0
Total unrecognized compensation expense	$ 0
Authorized share amount for repurchase		$ 130,000,000	$ 66,000,000	$ 140,000,000	$ 60,000,000	$ 10,000,000
Stock repurchase (in shares) \| shares	507,600	5,635,077	1,338,616
Shares repurchased, value	$ 7,600,000	$ 68,300,000	$ 10,400,000
Commissions	0.0	200,000	0.0
Adjustments related to tax withholding for share-based compensation	$ 4,914,000	4,082,000	1,165,000
Stock options
Class of Stock [Line Items]
Contractual term of equity grant	10 years
Restricted Stock
Class of Stock [Line Items]
Total unrecognized stock-based compensation related to time-based, nonvested restricted stock	$ 17,000,000.0
Expenses expected to be recognized over a weighted-average period	1 year 8 months 12 days
Fair value of restricted stock awards vested	$ 17,900,000	$ 17,300,000	$ 9,500,000
Shares repurchased for tax withholding (in shares) \| shares	614,123	419,928	141,658
Adjustments related to tax withholding for share-based compensation	$ 4,900,000	$ 4,100,000	$ 1,200,000
Restricted Stock \| Minimum
Class of Stock [Line Items]
Vesting period	1 year
Restricted Stock \| Maximum
Class of Stock [Line Items]
Vesting period	3 years
2016 Plan
Class of Stock [Line Items]
Shares authorized for grant under the plan \| shares	5,000,000
2016 Plan \| Stock options
Class of Stock [Line Items]
Vesting period	3 years
Contractual term of equity grant	10 years
2016 Plan \| Restricted Stock
Class of Stock [Line Items]
Vesting period	3 years

Equity - Activity of Stock Options (Details) - USD ($)	12 Months Ended
Equity - Activity of Stock Options (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Number of Shares
Outstanding, beginning of period (in shares)	9,953,575
Granted (in shares)	0	0	0
Exercised (in shares)	(786,708)
Unvested options forfeited (in shares)	0
Vested options expired (in shares)	(5,469,720)
Outstanding, end of period (in shares)	3,697,147	9,953,575
Exercisable, end of period (in shares)	3,697,147
Weighted- Average Exercise Price
Outstanding, weighted average exercise price, beginning of period (in dollars per share)	$ 3.28
Granted, weighted average exercise price (in dollars per share)	0
Exercised, weighted average exercise price (in dollars per share)	4.52
Unvested options forfeited, weighted-average exercise price (in dollars per share)	0
Vested options expired, weighted-average exercise price (in dollars per share)	2.22
Outstanding, weighted average exercise price, end of period (in dollars per share)	4.59	$ 3.28
Exercisable, weighted average exercise price (in dollars per share)	$ 4.59
Stock options, additional disclosures
Outstanding options, weighted average remaining contractual term	3 years 6 months 25 days
Exercisable, weighted average remaining contractual term	3 years 6 months 25 days
Outstanding, aggregate intrinsic value	$ 595,684
Exercisable, aggregate intrinsic value	$ 595,684

Equity - Summary of Restricted Stock Awards (Details) - Restricted Stock	12 Months Ended
	Dec. 31, 2018 $ / shares shares
Number of Shares
Unvested, beginning of period (in shares) \| shares	5,181,405
Granted (in shares) \| shares	1,947,475
Vested (in shares) \| shares	(2,268,431)
Forfeited (in shares) \| shares	(1,861,314)
Unvested, end of period (in shares) \| shares	2,999,135
Weighted- Average Grant Date Fair Value
Unvested, beginning of period (in dollars per share) \| $ / shares	$ 9.18
Granted (in dollars per share) \| $ / shares	8.52
Vested (in dollars per share) \| $ / shares	9.26
Forfeited (in dollars per share) \| $ / shares	8.96
Unvested, end of period (in dollars per share) \| $ / shares	$ 8.83

Equity - Recognized Stock-Based Compensation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Share-based Compensation [Abstract]
Stock-based compensation expense	$ 14,768	$ 21,195	$ 17,732
Income tax benefit	(3,803)	(5,345)	(6,756)
Total share-based compensation, net of tax benefit	10,965	15,850	10,976
Cost of sales
Share-based Compensation [Abstract]
Stock-based compensation expense	705	539	439
Research and development
Share-based Compensation [Abstract]
Stock-based compensation expense	584	604	621
Selling, general and administrative
Share-based Compensation [Abstract]
Stock-based compensation expense	$ 13,479	$ 20,052	$ 16,672

Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Deferred Tax Assets:
Accrued expenses	$ 3,572	$ 2,404
Deferred revenue	13,719	16,311
Sales return and allowances	2,296	2,157
Accrued settlement costs	2,689	0
Research and development and other tax credits	2,326	1,216
Net operating loss	3,118	1,025
Share-based compensation	3,425	4,895
Other	971	342
Deferred Tax Liabilities:
Prepaid expenses	(1,823)	(344)
Property and equipment	(2,519)	(1,555)
Intangible assets	(443)	(356)
Net Deferred Tax Assets
Net Deferred Tax Assets	27,331	26,095
Less: Valuation allowance	(27,331)	(554)	$ (554)
Net Deferred Tax Assets after Valuation Allowance	$ 0	$ 25,541

Income Taxes - Narrative (Details) - USD ($)	12 Months Ended
Income Taxes - Narrative (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Operating Loss Carryforwards [Line Items]
Benefit from reduction in net deferred tax liability	$ 12,000,000.0
Federal statutory rate	21.00%	35.00%	35.00%
Valuation allowance	$ 27,331,000	$ 554,000	$ 554,000
Deferred tax assets, operating loss carryforwards, federal	2,400,000	0.0
Deferred tax assets, operating loss carryforwards, state	900,000	1,300,000
Unrecognized tax benefits that would affect effective tax rate	900,000	800,000	$ 300,000
Accrued interest related to unrecognized tax benefits	100,000	100,000
Interest expense related to unrecognized tax benefits	100,000	100,000
Accrued interest and penalties related to unrecognized tax benefits		0
Interest and penalties expense related to unrecognized tax benefits		0
Decrease in unrecognized tax benefits in next 12 months	400,000
Federal
Operating Loss Carryforwards [Line Items]
Income tax net operating loss carryforwards	11,400,000	200,000
State
Operating Loss Carryforwards [Line Items]
Income tax net operating loss carryforwards	$ 15,600,000	$ 21,900,000

Income Taxes - Reconciliation of the Federal Statutory Income Tax (Details)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Tax Disclosure [Abstract]
Federal statutory rate	21.00%	35.00%	35.00%
State taxes, net of federal benefit	3.52%	0.40%	116.85%
Nondeductible compensation	(15.33%)	0.66%	1.45%
Meals & entertainment	(24.16%)	1.93%	126.74%
Keyman life insurance	(0.15%)	0.02%	1.52%
Transaction costs	0.00%	0.00%	21.88%
Inventory contribution deduction	0.48%	(0.06%)	(4.30%)
Domestic production activities deduction	0.00%	(1.54%)	(150.74%)
Fair value adjustment	0.00%	(2.76%)	(105.83%)
Equity Compensation	10.82%	(9.90%)	179.74%
Tax Credits	19.75%	(3.37%)	(254.62%)
Uncertain tax position	(2.35%)	0.46%	30.47%
Write-off of net operating losses	(11.81%)	0.00%	37.11%
Payable true-up	(2.69%)	0.65%	(2.38%)
Sale of Stability	0.00%	(8.86%)	0.00%
Fixed asset true-up	5.33%	0.00%	0.00%
Federal provision to return	1.58%	0.13%	0.00%
Impact of federal rate change	0.00%	26.79%	0.00%
Other	(0.25%)	(0.03%)	(6.91%)
Valuation allowance	(788.33%)	(83.08%)	2.48%
Effective income tax rate	(782.59%)	(43.56%)	28.46%

Income Taxes - Schedule of current and deferred income tax expense (benefit) (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Current:
Federal									$ 614	$ 5,868	$ 4,338
State									427	1,163	1,195
Total current									1,041	7,031	5,533
Deferred:
Federal									19,452	(19,441)	(4,980)
State									6,089	(7,229)	(398)
Total deferred									25,541	(26,670)	(5,378)
Total expense (benefit)	$ 27,497	$ 650	$ (13)	$ (1,552)	$ 9,537	$ (30,436)	$ 980	$ 280	$ 26,582	$ (19,639)	$ 155

Income Taxes - Reconciliation of unrecognized tax benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Unrecognized tax benefits, beginning of period	$ 847	$ 336	$ 170
Gross increases - tax positions in current period	91	130	166
Gross increases - tax positions in prior period	0	381	0
Unrecognized tax benefits, end of period	$ 938	$ 847	$ 336

Supplemental Disclosure of Cash Flow and Non-Cash Investing and Financing Activities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Supplemental Cash Flow Elements [Abstract]
Cash paid for interest	$ 197	$ 127	$ 162
Income taxes paid	859	12,755	642
Purchases of equipment financed through accounts payable	1,168	1,343	831
Deferred financing costs	0	30	10
Additional paid-in capital related tax adjustments	0	0	(423)
Stock issuance of 441,009 shares in connection with acquisition of Stability	0	0	$ 3,347
Shares issued in conjunction with acquisition (in shares)			441,009
Stock issuance of 17,539 and 43,344 shares in exchange for services performed in 2017 and 2016, respectively	$ 0	$ 166	$ 346
Shares issued for services performed (in shares)		17,539	43,344

401(k) Plan (Details) - USD ($)	12 Months Ended
401(k) Plan (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Retirement Benefits [Abstract]
Minimum service period required to qualify for 401(k) plan	1 month
Maximum wages deferred, percent	90.00%
Maximum eligible wages deferred by participants per year	$ 18,500
Minimum age for additional contribution beyond normal plan	50 years
Defined benefit plan, contributions by plan participants	$ 6,000
Employer matching contribution, percent	5.00%
Employer matching contribution	$ 1,900,000	$ 0	$ 0

Commitments and Contingencies - Narrative (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 06, 2018 shareholder_derivative_action
Loss Contingencies [Line Items]
Rent and operating leases expense	$ 1,500	$ 1,600	$ 1,800
Number of shareholder derivative actions consolidated \| shareholder_derivative_action				3
Pricing adjustment settlement with Veterans Affairs	6,894	5,600
Letters of Credit
Loss Contingencies [Line Items]
Standby letters of credit	$ 100
Minimum
Loss Contingencies [Line Items]
Lessee expiration period	4 years
Maximum
Loss Contingencies [Line Items]
Lessee expiration period	4 years 6 months
SEC Investigation
Loss Contingencies [Line Items]
Estimated litigation liability, civil penalty	$ 1,500
Kruchoski et. al. v. Mimedx Group, Inc.
Loss Contingencies [Line Items]
Estimated litigation liability, civil penalty	6,900	$ 5,600
Litigation Involving Former Employees
Loss Contingencies [Line Items]
Estimated litigation liability, civil penalty	4,800
Pricing adjustment settlement with Veterans Affairs	$ 300

Commitments and Contingencies - Estimated Annual Lease, Royalty, and Employment Agreement Expenses (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2019	$ 2,605
2020	2,370
2021	1,625
2022	1,673
2023	205
Thereafter	0
Total Contractual commitments	$ 8,478

Revenue Data by Customer Type (Details) $ in Thousands	3 Months Ended								12 Months Ended
Revenue Data by Customer Type (Details) $ in Thousands	Dec. 31, 2018 USD ($) distribution_channel	Sep. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2018 USD ($) distribution_channel	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Revenue, Major Customer [Line Items]
Number of primary distribution channels \| distribution_channel	2								2
Net sales	$ 92,586	$ 86,959	$ 95,417	$ 84,149	$ 87,857	$ 84,000	$ 80,487	$ 68,795	$ 359,111	$ 321,139	$ 221,712
Direct Customers
Revenue, Major Customer [Line Items]
Net sales									343,464	286,742	176,485
Distributors
Revenue, Major Customer [Line Items]
Net sales									15,647	27,431	33,501
Other
Revenue, Major Customer [Line Items]
Net sales									$ 0	$ 6,966	$ 11,726

Related Party Transactions (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Brother-in-law of former General Counsel and Secretary \| Related Party - Total Compensation
Related Party Transaction [Line Items]
Related party expenses	$ 0.2	$ 0.2
Brother-in-law of former General Counsel and Secretary \| Related Party - Salary
Related Party Transaction [Line Items]
Related party expenses	0.1	0.1
Brother-in-law of former General Counsel and Secretary \| Related Party - Sales Commissions, Equity, Incentive, and Other Compensation
Related Party Transaction [Line Items]
Related party expenses	0.1	0.1
Chief Scientific Officer \| Related Party - Salary
Related Party Transaction [Line Items]
Related party expenses	0.2	0.2
Chief Scientific Officer \| Related Party - Sales Commissions, Equity, Incentive, and Other Compensation
Related Party Transaction [Line Items]
Related party expenses	0.3	0.2
Distributor in which Family of CEO had Financial Interest
Related Party Transaction [Line Items]
Related party revenue	$ 2.3	$ 3.5	$ 2.7

Restructuring - Narrative (Details) $ in Thousands	1 Months Ended	12 Months Ended
Restructuring - Narrative (Details) $ in Thousands	Dec. 31, 2018 position	Dec. 31, 2018 USD ($)
Restructuring Cost and Reserve [Line Items]
Number of positions eliminated \| position	240
Number of positions eliminated, percentage	24.00%
Restructuring expenses \| $		$ 6,055

Restructuring - Restructuring Reserve Liability (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2018 USD ($)
Restructuring Reserve [Roll Forward]
Liability balance as of January 1, 2018	$ 0
Expenses	6,055
Cash distributions	(448)
Liability balance as of December 31, 2018	$ 5,607

Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net sales	$ 92,586	$ 86,959	$ 95,417	$ 84,149	$ 87,857	$ 84,000	$ 80,487	$ 68,795	$ 359,111	$ 321,139	$ 221,712
Gross profit	82,183	79,604	86,147	74,791	78,455	74,697	72,002	60,766	322,725	285,920	190,774
Income tax provision (expense) benefit	(27,497)	(650)	13	1,552	(9,537)	30,436	(980)	(280)	(26,582)	19,639	(155)
Net income (loss)	$ (36,224)	$ (178)	$ 1,804	$ 4,619	$ 4,276	$ 44,051	$ 10,402	$ 5,998	$ (29,979)	$ 64,727	$ 390
Net income (loss) per common share - basic (in dollars per share)	$ (0.34)	$ 0	$ 0.02	$ 0.04	$ 0.04	$ 0.41	$ 0.10	$ 0.06	$ (0.28)	$ 0.61	$ 0.00
Net income (loss) per common share - diluted (in dollars per share)	$ (0.34)	$ 0	$ 0.02	$ 0.04	$ 0.04	$ 0.37	$ 0.09	$ 0.05	$ (0.28)	$ 0.56	$ 0.00
Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net sales						$ 84,573	$ 76,412	$ 72,607			$ 245,015
Gross profit						74,974	67,781	63,864			212,608
Income tax provision (expense) benefit						4,384	1,005	(1,713)			(6,133)
Net income (loss)						$ 17,457	$ 8,069	$ 4,327			$ 11,974
Net income (loss) per common share - basic (in dollars per share)						$ 0.16	$ 0.08	$ 0.04			$ 0.11
Net income (loss) per common share - diluted (in dollars per share)						$ 0.15	$ 0.07	$ 0.04			$ 0.11

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Subsequent Events (Details)			6 Months Ended	12 Months Ended			18 Months Ended
Subsequent Events (Details)	Nov. 18, 2019 USD ($)	Jun. 10, 2019 USD ($)	Dec. 30, 2020 USD ($)	Jun. 10, 2021	Jun. 10, 2020	May 31, 2020 USD ($)	Jun. 20, 2022 USD ($)	Dec. 31, 2020
Term Loan Agreement \| Term Loan \| Subsequent Event
Subsequent Event [Line Items]
Face value of debt		$ 75,000,000.0
Quarterly installments		900,000
Original issue discount		2,300,000
Deferred financing costs		$ 6,700,000
Interest rate at time of Loan Agreement		10.46%
Total leverage ratio		3.0
London Interbank Offered Rate (LIBOR) \| Term Loan Agreement \| Term Loan \| Subsequent Event
Subsequent Event [Line Items]
Basis spread on variable rate		8.00%
Prime Rate \| Term Loan Agreement \| Term Loan \| Subsequent Event
Subsequent Event [Line Items]
Basis spread on variable rate		7.00%
Forecast \| Term Loan Agreement \| Term Loan
Subsequent Event [Line Items]
Total leverage ratio								2.50
Minimum liquidity			$ 30,000,000.0			$ 40,000,000.0	$ 20,000,000.0
Prepayment penalty as percent of prepaid principal				2.00%	3.00%
Former Interim Chief Financial Officer \| Subsequent Event
Subsequent Event [Line Items]
Severance costs	$ 1,700,000
Former Interim Chief Financial Officer \| Forecast
Subsequent Event [Line Items]
Accrued severance costs, current	1,800,000
Accrued severance costs, noncurrent	$ 500,000

Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Allowance for product returns
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at Beginning of Year	$ 7,362	$ 11,283	$ 5,804
Additions charged to Expense or Revenue	1,148	0	5,479
Deductions and write-offs	0	(3,921)	0
Balance at End of Year	8,510	7,362	11,283
Allowance for obsolescence
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at Beginning of Year	768	829	397
Additions charged to Expense or Revenue	511	1,192	2,281
Deductions and write-offs	(690)	(1,253)	(1,849)
Balance at End of Year	$ 589	$ 768	$ 829