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Cover Page - USD ($) $ in Millions	12 Months Ended
Cover Page - USD ($) $ in Millions	Dec. 31, 2019	Jun. 25, 2020	Jun. 28, 2019
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Document Transition Report	false
Document Period End Date	Dec. 31, 2019
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		110,328,875
Entity Central Index Key	0001376339
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Amendment Flag	false

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 69,069	$ 45,118
Accounts receivable	32,327	0
Inventory, net	9,104	15,986
Prepaid expenses	6,669	6,673
Income tax receivable	18	454
Other current assets	6,058	5,818
Total current assets	123,245	74,049
Property and equipment, net	12,328	17,424
Right of use asset	3,397
Goodwill	19,976	19,976
Intangible assets, net	7,777	9,608
Other assets	443	1,787
Total assets	167,166	122,844
Current liabilities:
Accounts payable	8,710	14,864
Accrued compensation	21,302	23,024
Accrued expenses	32,161	31,842
Current portion of long term debt	3,750	0
Other current liabilities	1,399	1,817
Total current liabilities	67,322	71,547
Long term debt, net	61,906	0
Other liabilities	3,540	1,642
Total liabilities	132,768	73,189
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 110,818,649 outstanding at December 31, 2019 and 112,703,926 issued and 109,098,663 outstanding at December 31, 2018	113	113
Additional paid-in capital	147,231	164,744
Treasury stock at cost: 1,885,277 shares at December 31, 2019 and 3,605,263 shares at December 31, 2018	(10,806)	(38,642)
Accumulated deficit	(102,140)	(76,560)
Total stockholders’ equity	34,398	49,655
Total liabilities and stockholders’ equity	$ 167,166	$ 122,844

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2019	Dec. 31, 2018
Stockholders' equity:
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	150,000,000	150,000,000
Common stock, shares issued (in shares)	112,703,926	112,703,926
Common stock, shares outstanding (in shares)	110,818,649	109,098,663
Treasury stock, shares (in shares)	1,885,277	3,605,263

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Statement [Abstract]
Net sales	$ 299,255	$ 359,111	$ 321,139
Cost of sales	43,081	36,386	35,219
Gross profit	256,174	322,725	285,920
Operating expenses:
Selling, general and administrative	198,205	258,528	220,119
Investigation, restatement and related	66,504	51,322	0
Research and development	11,140	15,765	17,900
Amortization of intangible assets	1,039	1,034	1,678
Impairment of intangible assets	446	0	0
Operating (loss) income	(21,160)	(3,924)	46,223
Other income (expense)
Loss on divestiture of Stability	0	0	(1,048)
Interest (expense) income, net	(4,708)	527	(87)
Other income, net	283	0	0
(Loss) income before income tax provision	(25,585)	(3,397)	45,088
Income tax provision benefit (expense)	5	(26,582)	19,639
Net (loss) income	$ (25,580)	$ (29,979)	$ 64,727
Net (loss) income per common share - basic (in dollars per share)	$ (0.24)	$ (0.28)	$ 0.61
Net (loss) income per common share - diluted (in dollars per share)	$ (0.24)	$ (0.28)	$ 0.56
Weighted average shares outstanding - basic (in shares)	106,946,384	105,596,256	106,121,810
Weighted average shares outstanding - diluted (in shares)	106,946,384	105,596,256	116,113,736

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, 2016		110,212,547		349,760
Balance, beginning 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 expense	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 cancellation/forfeited (in shares)				320,117
Restricted stock cancellation / forfeited	0		3,205	$ (3,205)
Shares issued for services performed (in shares)				(17,539)
Shares issued for services performed	$ 166		41	$ 125
Shares repurchased (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 (loss) income	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 expense	14,768		14,768
Exercise of stock options (in shares)				(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 cancellation/forfeited (in shares)				1,861,314
Restricted stock cancellation / forfeited	0		19,194	$ (19,194)
Shares issued for services performed	$ 0
Shares repurchased (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 (loss) income	(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)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation expense	$ 11,689		11,689
Exercise of stock options (in shares)	150,000			(150,000)
Exercise of stock options	$ 108		(1,343)	$ 1,451
Issuance of restricted stock (in shares)				(3,084,875)
Issuance of restricted stock	0		(37,798)	$ 37,798
Restricted stock cancellation/forfeited (in shares)				1,084,971
Restricted stock cancellation / forfeited	0		9,939	$ (9,939)
Shares issued for services performed	0
Shares repurchased for tax withholding on vesting of restricted stock units (in shares)				429,918
Shares repurchased for tax withholding on vesting of restricted stock units	(1,474)			$ (1,474)
Net (loss) income	(25,580)				(25,580)
Balance, end of period (in shares) at Dec. 31, 2019		112,703,926		1,885,277
Balance, end of period at Dec. 31, 2019	$ 34,398	$ 113	$ 147,231	$ (10,806)	$ (102,140)

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash flows from operating activities:
Net (loss) income	$ (25,580)	$ (29,979)	$ 64,727
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Effect of change in revenue recognition	(17,382)	0	0
Share-based compensation	12,064	14,768	21,195
Depreciation	6,546	5,882	4,087
Amortization of intangible assets	1,039	1,034	1,678
Amortization of inventory fair value step-up	0	0	203
Amortization of deferred financing costs and debt discount	1,431	137	176
Amortization of discount on notes receivable	0	(190)	(12)
Non cash lease expenses	947	0	0
Change in fair value of earn-out consideration	0	0	(3,560)
Loss on fixed asset disposal	318	0	0
Intangible asset impairment	1,258	0	590
Change in deferred income taxes	0	25,541	(26,670)
Loss on divestiture of Stability	0	0	1,048
Increase (decrease) in cash, net of effects of divestiture, resulting from changes in:
Accounts receivable	(10,938)	0	(479)
Inventory	6,882	(6,519)	2,747
Prepaid expenses	4	(4,548)	(305)
Income tax receivable	436	202	(656)
Other assets	(5,770)	3,562	225
Accounts payable	(6,171)	6,585	(1,324)
Accrued compensation	(1,722)	2,083	8,397
Accrued expenses	(57)	16,074	(3,534)
Income taxes	0	0	(5,611)
Other liabilities	(2,717)	1,164	17
Net cash flows (used in) provided by operating activities	(39,412)	35,796	62,939
Cash flows from investing activities:
Purchases of property and equipment	(1,752)	(9,419)	(5,126)
Proceeds from property and equipment sale	0	30	0
Principal payments from note receivable	2,722	778	0
Patent application costs	(466)	(609)	(271)
Net cash flows provided by (used in) investing activities	504	(9,220)	(5,397)
Cash flows from financing activities:
Proceeds from term loan	72,750	0	0
Repayment of term loan	(1,875)	0	0
Deferred financing costs	(6,650)	0	0
Shares repurchased for tax withholdings on vesting of restricted stock	(1,474)	(4,914)	(4,082)
Proceeds from exercise of stock options	108	3,555	11,987
Shares repurchased under repurchase plan	0	(7,572)	(68,263)
Payments under capital lease obligations		(3)	(29)
Net cash flows provided by (used in) financing activities	62,859	(8,934)	(60,387)
Net change in cash	23,951	17,642	(2,845)
Cash and cash equivalents, beginning of year	45,118	27,476	30,321
Cash and cash equivalents, end of year	$ 69,069	$ 45,118	$ 27,476

Nature of Business	12 Months Ended
Nature of Business	Dec. 31, 2019
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, burn, surgical, sports medicine, ophthalmic and dental sectors of healthcare. 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 the Company is exploring potential future international expansion opportunities.

Liquidity and Capital Resources

12 Months Ended

Dec. 31, 2019

Liquidity and Capital Resources [Abstract]

Liquidity and Capital Resources

Net Working Capital

As of December 31, 2019, the Company had $69.1 million of cash and cash equivalents. The Company reported total current assets of $123.2 million and current liabilities of $67.3 million and had net working capital of $55.9 million as of December 31, 2019.

Overall Liquidity and Capital Resources

The Company’s largest cash requirement for the twelve months ended December 31, 2019 was cash for general working capital needs; investigation, restatement, and related expenses; and other cash requirements included capital expenditures. The Company funded its cash requirements for 2019 through its existing cash reserves, the Term Loan (as defined below) received in 2019 and its operating activities during the period. The Company believes that its anticipated cash from operating and financing activities and existing cash and cash equivalents 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,” of the consolidated financial statements, the Company anticipates additional cash requirements related to the following items within one year from the date of filing this Form 10-K:


•	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; and


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

As discussed further in Note 21, “Subsequent Events,” the Company consummated the Preferred Stock Transaction (as defined below), entered into a new loan facility with Hayfin Services, LLP, repaid the BT Term Loan (as defined below), and terminated the BT Loan Agreement.

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 Hayfin Loan Agreement (as defined below) 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 on hand, it is probable that the Company will be able to meet all obligations as they become due while remaining in compliance with the financial covenants set forth by the Hayfin Loan Agreement. Therefore, the Company concluded that there is no substantial doubt surrounding its ability to continue as a going concern.

Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Significant Accounting Policies

Use of Estimates

The 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, goodwill and intangible assets, estimate for contingent liabilities, estimate of allowance for doubtful accounts, 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 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 4, Stability Biologics, LLC (“Stability”) 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 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, 2019 and 2018, the Company had cash and cash equivalents of approximately $68.4 million and $44.0 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.

Accounts Receivable

Accounts receivable represent amounts due from customers for which revenue has been recognized. Generally, the Company does not require collateral or any other security to support its receivables.

Bad debt expense and the allowance for doubtful accounts are based on historical trends. The Company’s policy to reserve for potential bad debts is based on the aging of the individual receivables. The Company manages credit risk by not selling to customers who are delinquent, generally after sixty days of delinquency. The individual receivables are written-off after all reasonable efforts to collect the funds have been made. Actual write-offs may differ from the amounts reserved.

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 as part of the divestiture discussed in Note 4 which was repaid in full in the third quarter of 2019. The Company’s notes receivable are included in other current and long-term assets in the 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 “Lease Obligations” below and Note 7 “Leases,” 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.

When testing for goodwill impairment, the Company first assesses qualitative factors to determine whether the existence of events or circumstances lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company concludes it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative fair value test is performed. At present, the Company has only one reporting unit.

Under the quantitative test, 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. 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 indefinite live 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 2019, 2018, or 2017. The Company recorded impairment losses of $0.8 million, $0, and $0.6 million related to the abandonment of patents in process during 2019, 2018, and 2017, 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.

The Company recorded an impairment loss of $0.5 million during 2019. There were no impairment losses recognized with respect to intangible assets with finite lives in 2018 or 2017.

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 $0.5 million, $0.6 million, and $0.3 million of patent costs for the years ended December 31, 2019, 2018, and 2017, respectively.

Lease Obligations

Effective January 1, 2019, the Company accounts for its leases under ASC 842, “Leases”. The Company determines if an arrangement is, or contains, a lease at inception. Right-of-use assets and the related liabilities resulting from operating leases were included in Right of use asset, Other current liabilities and Other liabilities, respectively, in the consolidated balance sheet as of December 31, 2019.

Operating lease assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. Since most of the Company’s leases do not have a readily determinable implicit discount rate, the Company uses its incremental borrowing rate to calculate the present value of lease payments determined using the rate of interest that the Company would have to pay on collaterialized or secured borrowing over a similar term. Variable components of the lease payments such as fair market value adjustments, utilities, and maintenance costs are expensed as incurred and not included in determining the present value of lease liabilities, which will include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. As an accounting policy election, the Company excludes short-term leases having initial terms of 12 months or fewer. Lease expense is recognized on a straight-line basis over the lease term. The Company continues to account for leases in the prior period financial statements under ASC 840. See Note 7, “Leases” for further information regarding lease obligations.

Lease expense for operating lease payments is recognized on a straight-line basis over the term of the lease. Operating lease assets and liabilities are recognized based on the present value of lease payments over the lease term. Since most of the Company’s leases do not have a readily determinable implicit discount rate, the Company uses its incremental borrowing rate to calculate the present value of lease payments determined using the rate of interest that the Company would have to pay on collaterialized or secured borrowing over a similar term. As a practical expedient, the Company has made an accounting policy election not to separate lease components from non-lease components in the event that the agreement contains both. The Company includes both the lease and non-lease components for purposes of calculating the right-of-use asset and related lease liability.

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 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 only 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”). In 2017, 2018, and into part of 2019, the Company’s control environment was such that it created uncertainty surrounding all of its customer arrangements, which required consideration related to the proper revenue recognition under the applicable literature. The control environment allowed for the existence of extra-contractual or undocumented terms or arrangements initiated by or agreed to by the Company and former members of Company management at the outset of the transactions (side agreements). Concessions were also agreed to subsequent to the initial sale (e.g. sales above established customer credit limits extended and unusually long payment terms, return or exchange rights, and contingent payment obligations) that called into question the ability to recognize revenue at the time that product was shipped to a customer. The applicable revenue recognition guidance also changed beginning January 1, 2018, which further impacted the Company’s revenue recognition methodology.

As a result, the Company’s application of the applicable revenue recognition guidance varies for of the years ended December 31, 2019, 2018 and 2017. Additionally, the Company changed its pattern of revenue recognition effective October 1, 2019. The application of the relevant revenue recognition guidance and the pattern of revenue recognition are further discussed below for each period presented.

Fiscal Year Ended December 31, 2017

For the year ended December 31, 2017, the Company applied the revenue recognition guidance in ASC Topic 605, Revenue Recognition (“ASC 605”). 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 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 precluded 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 precluded the price of the Company’s sales transactions from being fixed or determinable upon shipment of product:


•	Offering customers an unconditional right of return,


•	Offering extended payment terms to customers, and


•	A history of exceeding established credit limits for customers.

Collectibility is reasonably assured - At the time of transfer of physical possession to the customer, collectibility of the sales was questionable. The Company determined that 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 processes in place to establish credit limits, evidence indicated that those credit limits were overridden by certain sales personnel and members of management. The Company recovered the majority of its billings made in 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 collectibility 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 collectibility 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 they 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 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.

An exception to the above revenue recognition under ASC 605 during the year ended December 31, 2017 related to the sales generated by the Company’s wholly owned subsidiary, Stability. 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 for the year ended December 31, 2017. Stability was divested on September 30, 2017.

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.

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 collectibility 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.

The Company offset 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. The amount shipped and billed but not recorded as revenue was $64.8 million for the year ended December 31, 2017.

Fiscal Year Ended December 31, 2018

The Company adopted ASC Topic 606, Revenue from Contracts with Customers (“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 assessed the impact of the ASC 606 guidance by reviewing 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.

ASC 606 establishes a five-step model for revenue recognition. The first of these steps requires the identification of the contract as described in ASC 606-10-25-1. The specific criteria (the “Step 1 Criteria”) to this determination are as follows:


•	The parties to the contract have approved the contract (in writing, orally, or in accordance with other customary business practices) and are committed to perform their respective obligations;


•	The entity can identify each party’s rights regarding the goods or services to be transferred; and


•	The entity can identify the payment terms for the goods or services to be transferred.


•	The contract has commercial substance.


•	It is probable that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.

The Company concluded that the first three of the above criteria were not met upon shipment of product to the customer, the fourth criteria had been met and the Company acknowledges that there is a degree of uncertainty as to whether last criteria above had been met. Although the parties to the contract may have approved the contract and purchase orders in writing, the Company concluded that upon shipment of products to the customer there is not sufficient evidence that its customers were committed to perform their obligations defined in the contract due to the existence of extra-contractual or undocumented terms or arrangements (e.g., regarding payment terms, right of return, etc.). The Company could not reliably identify each party’s rights regarding the products to be transferred upon shipment of those products to customers. The Company’s sales personnel continued to make side agreements with customers which directly conflicted with the explicitly stated terms of sale. These side agreements created significant ambiguity around the rights and obligations of both parties involved in the transaction. This practice continued to result in extended payment terms and returns occurring long after the original sale was made. The Company’s business practices created an implied right for the customer to demand future, unknown, performance by the Company. As a result, each party (and in particular the Company) could not at the time of product shipment adequately determine its rights regarding the good transferred as required by ASC 606-10-25-1. Upon shipment of product to the customer, the Company could not reliably identify the payment terms for the products it sold to customers. Although the written payment terms were known to both parties, the Company’s pervasive business practices (e.g., informal and undocumented side agreements) overrode the written payment terms and often resulted in extensions of the terms for payment. The Company’s contracts did appear to have commercial substance (i.e., the risk, timing, or amount of the Company’s future cash flows was expected to change as a result of the contract) upon fulfillment of a purchase order, as most fulfillments have eventually resulted in the Company receiving cash. Therefore, the Company concluded that this criterion appears to be met upon shipment of product to customers (i.e., fulfillment of the purchase order).

The probability that the Company would collect the consideration to which it was entitled in exchange for products shipped to the customer was questionable. In evaluating whether the collectibility of an amount of consideration was probable, the Company considered the customer’s ability and intention to pay that amount of consideration when it was due. Historically, the customers’ intention to pay amounts when due was uncertain in light of the conflicting messages customers received with respect to the payment terms and rights of return and lack of adherence to credit limits. The assessment in ASC 606 is based on whether the customer has the ability and intention to pay for the product being delivered by the Company. Assessment of a customer’s ability to pay is typically done through a credit check process and the establishment of a credit limit for each customer by the Company’s accounts receivable team. Although the Company did have a process in place to establish credit limits, the evidence previously mentioned indicates that those credit limits were routinely overridden by certain sales personnel and members of management. Despite these overrides, the Company recovered the majority of its billings made in 2018. Furthermore, the quantitative and qualitative evidence gathered by the Company raised considerable doubt as to the collectibility of its billings at the time of shipment, but this evidence was not persuasive enough for the Company to conclude that collectibility was not probable. As a result of the considerations outlined above, the Company determined that it did not meet the criteria necessary for its revenue arrangements to qualify as “contracts” under the requirements of ASC 606 (i.e., these arrangements did not pass the Step 1 Criteria of the revenue recognition model).

The Company’s inability to fulfill these criteria was due to uncertainties of contractual adjustments with customers created by a combination of an inappropriate tone at the top and extra-contractual arrangements. Consequently, as of the date of the Company’s adoption of ASC 606 effective January 1, 2018 and for the remainder of the year ended December 31, 2018, the Company concluded that it did not meet the Step 1 Criteria upon physical delivery of the product. Subsequent to the delivery of product, uncertainties surrounding contractual adjustment were not resolved until either: (1) the customer returned the product prior to payment; or (2) the Company received payment from the customer. At that point, the Company determined that an accounting contract existed and the performance obligations of the Company to deliver product and the customer to pay for the product were satisfied. The Company 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 the consolidated balance sheet.

The Company continued to defer the costs of sales consistent with the assessment noted above for the year ended December 31, 2017. The Company also continued to offset deferred revenue with the associated accounts receivable obligations in connection with the sales of products to its customers. The amount shipped and billed but not recorded as revenue was $51.0 million for the year ended December 31, 2018.

Fiscal Year Ended December 31, 2019

The Company continued to assess contracts, new and existing, throughout 2019 to determine if the Step 1 Criteria noted above for the determination of a contract under ASC 606 were met for new contracts at the outset of a sales transaction (i.e., upon shipment of product) or for existing contracts at some point within 2019 when all the terms of the arrangement would have been known. Until it was determined if the Step 1 Criteria had been met, revenue recognition continued to be deferred consistent with the assessment for the year ended December 31, 2018.

As further discussed above, the primary factors contributing to the determination in prior periods that the Step 1 Criteria had not been met were the inappropriate tone at the top and the existence of pervasive extra-contractual or undocumented terms or arrangements. These prior business practices and the lack of transparency surrounding them created a systemically implied right for customers to demand future, unknown, performance by the Company. Although some of the former executives were employed by the Company only through June 2018, the Company determined that based on the impact of the prior tone at the top, the continued internal sales force strategy and the existing customer base’s continued expectations (based on past practice), there would be flexibility with respect to arrangement terms even after delivery of the product so pervasive that all customer arrangements continued to be subject to uncertain modification of terms into 2019.

After identifying the primary factors contributing to the lack of knowledge regarding its customer contractual terms, the Company began implementing changes in mid-2018 to remediate the pervasive weaknesses in the control environment, followed by gradually implementing measures to empower its compliance, legal, and accounting departments, educating its sales force on appropriate business practices, and communicating its revised terms of sale to customers. The Company assessed its efforts throughout 2019 to determine when, if at any point, the factors contributing to the inability to satisfy the Step 1 Criteria were sufficiently addressed such that the Step 1 Criteria were met at the time of physical delivery to the customer. Determining when these conditions were effectively satisfied was a matter of judgment; however, the Company determined that adequate knowledge of the contractual arrangements with its customers did exist in 2019 for new and certain existing arrangements. Management did note that there is no single determinative change that overcame the pervasive challenges noted above, but rather an accumulation of efforts that

taken together, resulted in sufficient knowledge of contractual relationships both internally within the Company and externally with its customers.

To address the tone at the top issues, the Company noted that proper remediation involved not only the removal of members of management who were setting an inappropriate tone but also the establishment of new management throughout the organization who emphasized a commitment to integrity, ethical values and transparency and have that reinforcement for a sustained period of time. The changes made to management positions throughout the organization and the resulting organization behavior changes were assessed to have been sufficiently addressed by mid-2019.

To determine when the Company had either eliminated or had sufficient knowledge to identify any extra-contractual arrangements, the Company noted that a key factor contributing to its historical lack of visibility into the arrangements with its customers was the failure to adhere to credit limits, payment terms and return policies. The establishment of additional controls and the emphasis on adherence to the Company’s existing policies and controls was an iterative process that continued through the first two quarters of 2019. Additional factors contributing to the increased visibility into its contractual arrangements involved further education and training of the sales personnel regarding the Company’s terms and conditions as well as monitoring of the sales personnel and customers for compliance with the contractual arrangements. The Company implemented a disciplined approach to educating the sales personnel regarding the prior practices that were considered unacceptable, ensuring they were knowledgeable regarding current terms and conditions and implementing an open dialogue with the credit and collections department. Monitoring of the customer base was accomplished through a variety of measures including, but not limited to, analysis of payments made within the original terms, levels of returns post-shipment, and various continued communication with the customer account representatives by members of the Company’s credit and collections department. During the third quarter of 2019, management determined that these efforts with the sales personnel and the external customers had been in place for a sufficient period of time to provide the customers an understanding of the Company’s contractual arrangements with them.

Therefore, beginning October 1, 2019, for all new customer arrangements, the Company determined adequate measures were in place to understand the terms of its contracts with customers. As such, beginning October 1, 2019, the Company concluded that the Step 1 Criteria would be met prior to shipment of product to the customer or implantation of the products on consignment.

The Company also reassessed whether the Step 1 Criteria had been met for all shipments of products where payment had not been received as of September 30, 2019. While the measures summarized above provided significant evidence necessary to understand the terms of the Company’s contractual arrangements with its customers, certain of these customers continued to exhibit behaviors that resulted in extended periods until cash collection. Such delays in collection suggested that uncertainty regarding extracontractual arrangements may continue, particularly as it relates to payment terms. As a result, the Company concluded the following for any existing arrangements, which remained unpaid at September 30, 2019:


•	For customer arrangements where collection was considered probable within 90 days from the date of original shipment or implantation of the products, the Company concluded the Step 1 Criteria were met (the “Transition Adjustment”).

•

For the remaining customer arrangements (the “Remaining Contracts”), the Company concluded that due to the uncertainty that extracontractual arrangements may continue the Step 1 Criteria would not be satisfied until the Company receives payment from the customer. At that point, the Company determined that an accounting contract would exist and the performance obligations of the Company to deliver product and the customer to pay for the product would be satisfied. As of December 31, 2019, upon reassessment, the Company concluded that the Step 1 Criteria continued to not be met due to the same circumstances described above.

The Company continued to record the deferred costs of sales on the arrangements that failed the Step 1 Criteria where collectibility was reasonably assured and will recognize the costs when the related revenue is recognized. The Company also continued to offset deferred revenue with the associated accounts receivable obligations for these arrangements that continued to fail the Step 1 Criteria.

For all customer transactions concluded to meet the Step 1 Criteria, the Company then assessed the remaining criteria of ASC 606 to determine the proper timing of revenue recognition.

Under ASC 606, the Company recognizes revenue following the five-step model: (i) identify the contracts with a customer (the Step 1 Criteria); (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. As noted above, beginning October 1, 2019, the Company determined that they had met the Step 1 Criteria for new customer arrangements. The Company has determined that the performance obligation was met upon delivery of the product to the customer, or at the time the product is implanted for products on consignment, at which point the Company determined it will collect the consideration it is entitled to in exchange for the product transferred to the customer. As a result, the Company

recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied, generally upon shipment of the product to the customer. The nature of the Company’s contracts gives rise to certain types of variable consideration, including rebates and other discounts. The Company includes estimated amounts of variable consideration in the transaction price to the extent that it is probable there will not be a significant reversal of revenue. Estimates are based on historical or anticipated performance. The Company does have consignment agreements with several customers and distributors which allow the Company to better market its products by moving them closer to the end user. In these cases, the Company determined that it has fulfilled its performance obligation once control of the product has been delivered to the customer, which occurs simultaneously with the product being implanted.

The Company acts as the principal in all of its customer arrangements and therefore records revenue on a gross basis. Shipping is considered immaterial in the context of the overall customer arrangement, and damages or loss of goods in transit are rare. Therefore, shipping is not deemed a separately recognized performance obligation and the Company has elected to treat shipping costs as activities to fulfill the promise to transfer the product. The Company maintains a returns policy that allows its customers to return product that is consigned, damaged or non-conforming, ordered in error, or due to a recall. The estimate of the provision for returns is based upon historical experience with actual returns given consideration to any changes in historical periods presented. The Company’s payment terms for customers are typically 30 to 60 days from receipt of title of the goods.

Based on the assessment noted above, the Company concluded that through the first two quarters of 2019, the pattern of revenue recognition under ASC 606 remained the same as the application for the year ended December 31, 2018; that is, revenue was deferred until the product was paid for or returned. In order to account for the determination that the Step 1 Criteria had been met during the third quarter of 2019, for certain existing customer arrangements, the Company recorded the following (in thousands):



	Amounts Invoiced and Not Collected			Deferred Cost of Sales
Amounts as of September 30, 2019	$	48,883		$	6,415
Revenue recognized related to amounts invoiced and not collected at September 30, 2019:
Transition Adjustment during the three months ended September 30, 2019	(21,385		)	(2,565		)
Cash collected during the three months ended December 31, 2019 related to the Remaining Contracts	(8,219		)	(1,151		)
	(29,604		)	(3,716		)
Write-off of customer contracts where collection is no longer reasonably assured (a)	(10,273		)	(1,438		)
Amounts as of December 31, 2019	$	9,006		$	1,261
(a) The Company determined that for approximately $10.3 million of existing contracts where payment had not been received, collection was no longer reasonably assured. As a result, $1.4 million of deferred cost of sales relating to these customers was written off. Any future collections relating to these customer contracts will be recorded as revenue at the time payment is received.

GPO Fees

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.

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.

Prior to the Transition, the Company deferred the cost of sales resulted 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 are met, the revenue and associated cost of sales was recognized. These amounts were recorded within other current assets on the consolidated balance sheet in the amount of $4.3 million as of December 31, 2018.

Subsequent to the Transition, the Company continued to defer the cost of sales for certain arrangements for which all revenue recognition criteria have not been met. These amounts were recorded within other current assets on the consolidated balance sheet in the amount of $1.3 million as of December 31, 2019.

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 each of the years ended December 31, 2019, 2018 and 2017 amounted to $0.1 million.

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.

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. The Company recognizes deferred tax assets to the extent that it believes these assets are more likely than not to be realized. 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.

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 and incorporates 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 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 included within other liabilities on the consolidated balance sheets, 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 the deferred tax asset or 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 consolidated statements of operations. Accrued interest and penalties, if any, are included within the related deferred 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”) and non-employee consultants. Such awards are recognized as share-based payment expense over the requisite service or vesting period, to the extent such awards are expected to vest in accordance with FASB ASC Topic 718 “Compensation—Stock Compensation,” and under the issued guidance following FASB’s pronouncement, ASU 2018-07, “Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting”, which the Company adopted on January 1, 2019, the effective date of the new guidance. 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. The Company estimates volatility using a blend of its own historical stock price volatility as well as that of market comparable publicly traded peer companies, since historically, the Company did not have enough history to establish volatility based upon its own stock trading. 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 or vesting period. For awards with service and performance-based vesting conditions, the Company recognizes stock-based compensation expense using the graded vesting method over the requisite service period beginning in the period in which the awards are deemed probable to vest. Vesting probability for an award with performance vesting conditions is assessed based upon the Company’s expectations to become compliant with applicable securities law regulatory requirements and reporting obligations, as well as other performance vesting conditions specified in the restricted share unit award agreements. The Company recognizes the cumulative effect of changes in the probability outcomes in the period in which the changes occur.

The Company recognizes the fixed dollar amount known on a grant date with respect to the restricted stock unit awards that will be settled by issuing shares on the vesting date, with the number of shares to be determined based on the Company’s stock price on the settlement date over the vesting period, with an offsetting liability. Once the number of shares has been fixed and the shares are issued, the Company reclassifies the liability related to the restricted share unit awards to equity.

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 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 February 2016, FASB issued ASU No. 2016-02, Leases (Topic 842), (“ASU 2016-02”) which amended the guidance on accounting for leases. The FASB issued this update to increase transparency and comparability among organizations. This update requires the recognition of lease assets and lease liabilities on the balance sheet and the disclosure of key information about leasing arrangements. The Company adopted ASU 2016-02 effective January 1, 2019 using the additional (optional) approach, in accordance with ASU 2018-11 Leases (Topic 842): Targeted Improvements. The Company initially recorded a right of use asset and lease liability of $4.3 million, net of the $0.9 million rent credit, and $5.2 million, in Right of use asset, Other current liabilities and Other liabilities for the non-current portion, respectively. There was no effect on opening retained earnings, and the Company continues to account for leases in the prior period financial statements under ASC Topic 840.

In adopting the new lease standard, the Company elected the permitted package of practical expedients permitted, which allowed the Company to account for existing leases under their current classification, as well as omit any new costs classified as initial direct costs, under the new standard. See Note 7 for additional information on leases.

In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) (“ASU 2018-02”), to address certain income tax effects in Accumulated Other Comprehensive Income (“AOCI”) resulting from the tax reform enacted in 2017. The amended guidance provides an option to reclassify tax effects within AOCI to retained earnings in the period in which the effect of the tax reform is recorded. The amendments were effective for fiscal years beginning after December 15, 2018, including interim periods. The Company has adopted ASU 2018-02 as of January 1, 2019, which did not have any impact on the Company's results of operations or financial condition as there were no balances in AOCI that are tax effected.

In June 2018, the FASB issued ASU 2018-07, “Compensation-Stock Compensation (Topic 718): 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. Under the new guidance, the measurement of equity-classified nonemployee awards will be fixed at the grant date. ASU 2018-07 is effective for interim and annual reporting periods beginning after December 15, 2018 and early adoption was permitted. The Company adopted the new standard on January 1, 2019. The adoption of ASU 2018-07 did not have a material impact on the Company’s consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted

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. This ASU is effective for the Company and all public filers which do not qualify as smaller reporting companies for fiscal years beginning after December 15, 2019. The Company does not expect adoption to materially affect the consolidated financial statements.

All other ASUs issued and not yet effective for the twelve months ended December 31, 2019, 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 current or future financial position or results of operations.

Stability Biologics, LLC

12 Months Ended

Dec. 31, 2019

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, Inc. in exchange for $6.0 million cash, $3.3 million (or 441,009 shares) of the Company’s common stock, par value $0.001 per share (“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.

On September 30, 2017, the Company completed its divestiture of Stability pursuant to the Membership Interest Purchase Agreement by and among the Company, Stability, each person that, as of January 13, 2016, was a stockholder of Stability Inc., a Florida corporation and a predecessor-in-interest to Stability, and Brian Martin, as stockholder representative.

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 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 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 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 acquisition date of January 13, 2016 and remeasured at fair value each reporting period until the Stability was divested on September 30, 2017. A decrease in fair value of $3.6 million for the year ended December 31, 2017 was included in Selling, general and administration expenses on the consolidated statements of operations.

Inventory

12 Months Ended

Dec. 31, 2019

Inventory Disclosure [Abstract]

Inventory

Inventory consists of the following (in thousands):



	December 31,
	2019			2018
Raw materials	$	318		$	516
Work in process	4,299			11,123
Finished goods	5,206			4,936
Inventory, gross	9,823			16,575
Reserve for obsolescence	(719		)	(589		)
Inventory, net	$	9,104		$	15,986

Property and Equipment

12 Months Ended

Dec. 31, 2019

Property, Plant and Equipment [Abstract]

Property and Equipment

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



	December 31,
	2019			2018
Leasehold improvements	$	5,321		$	4,804
Laboratory and clean room equipment	14,894			13,787
Furniture and equipment	15,118			15,145
Construction in progress	972			1,507
Property and equipment, gross	36,305			35,243
Less accumulated depreciation and amortization	(23,977		)	(17,819		)
Property and equipment, net	$	12,328		$	17,424

Depreciation expense for each of the years ended December 31, 2019, 2018, and 2017 was recorded in certain captions of the consolidated statements of operations for those periods in the amounts shown in the table below (in thousands):



	For the year ended December 31,
	2019		2018		2017
Cost of sales	$	1,965	$	1,757	$	1,417
Selling, general and administrative expenses	4,223		3,760		2,354
Research and development expenses	358		365		316
Total	$	6,546	$	5,882	$	4,087

Leases

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Leases

As discussed in Note 3, on January 1, 2019, the Company adopted new guidance for the accounting and reporting of leases. The Company has operating leases primarily for corporate offices, vehicles, and certain equipment. Such leases do not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees. The Company determines if an arrangement is or contains a lease at inception.

Under ASC 842 transition guidance, the Company has not elected the hindsight practical expedient to determine the lease term for existing leases, which permits companies to consider available information prior to the effective date of the new guidance as to the actual or likely exercise of options to extend or terminate the lease. Certain of the Company’s leases include renewal options and escalation clauses; renewal options have not been included in the calculation of the lease liabilities and right of use assets as the Company is not reasonably certain to exercise the options.

The Company does not act as a lessor or have any leases classified as financing leases.

Operating lease cost was $1.5 million for the year ended December 31, 2019 and was recorded in Selling, general, and administrative expenses. Interest on lease obligations was $0.5 million for the year ended December 31, 2019 and was recorded in Selling, general, and administrative expenses. Cash paid for amounts included in the measurement of operating lease liabilities was $1.7 million at December 31, 2019. The amortization of leased assets for the year ended December 31, 2019 was $0.9 million.

Supplemental balance sheet information related to operating leases is as follows (amounts in thousands, except lease term and discount rate):



		December 31, 2019
Assets
	Right of use asset	$	3,397

Liabilities
	Short term lease liability	$	1,168
	Long term lease liability	$	2,919

Weighted-average remaining lease term (years)		3.1 years
Weighted-average discount rate		11.5		%

Maturities of operating leases liabilities are as follows (amounts in thousands):



Year ending December 31,	Maturities
2020	$	1,561
2021	1,528
2022	1,552
2023	196
2024	—
Thereafter	—
Total lease payments	4,837
Less: imputed interest	(750		)
	$	4,087

Future minimum lease payments under operating leases at December 31, 2018 and thereafter were as follows (amounts in thousands):



Year ending December 31,
2019	$	1,640
2020	1,579
2021	1,625
2022	1,673
2023	205
Thereafter	—
Total lease payments	$	6,722

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Intangible assets are summarized as follows (in thousands):



	December 31, 2019							December 31, 2018
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Amortized intangible assets
Licenses	$	1,414	$	(1,200	)	$	214	$	1,414	$	(1,066	)	$	348
Patents and know how	9,099		(5,070		)	4,029		9,180		(4,475		)	4,705
Customer and supplier relationships	3,761		(2,417		)	1,344		4,271		(2,202		)	2,069
Non-compete agreements	120		(68		)	52		120		(38		)	82
Total amortized intangible assets	$	14,394	$	(8,755	)	$	5,639	$	14,985	$	(7,781	)	$	7,204

Unamortized intangible assets
Trade names and trademarks	$	1,008				$	1,008	$	1,008				$	1,008
Patents in process	1,130					1,130		1,396					1,396
Total intangible assets	$	16,532				$	7,777	$	17,389				$	9,608

Amortization expense for the years ended December 31, 2019, 2018, and 2017, was $1.0 million. $1.0 million, and $1.7 million, respectively. Patents and patents in process related write-downs due to abandonment were $1.3 million, $0.0 million, and $0.6 million during the years ended December 31, 2019, 2018, and 2017, respectively and are recorded in Selling, general and administrative expenses.

Expected future amortization of intangible assets as of December 31, 2019, is as follows (in thousands):



	Estimated
	Amortization
Year ending December 31,	Expense
2020	$	985
2021	977
2022	955
2023	955
2024	955
Thereafter	812
	$	5,639

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 year ended December 31, 2019, the Company elected to perform a qualitative analysis to determine whether it was more likely than not that the fair value of its reporting unit was less than their carrying value. As a result of this assessment, the Company determined that it was not necessary to perform a quantitative impairment test and concluded that goodwill was not impaired at December 31, 2019. For the year ended December 31, 2018, 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 year ended December 31, 2018.

The following represents the changes in the carrying amount of goodwill for 2019 and 2018 (in thousands):



	Goodwill
Balance as of January 1, 2018	$	19,976
Activity	—
Balance as of December 31, 2018	19,976
Activity	—
Balance as of December 31, 2019	$	19,976

Accrued Expenses

12 Months Ended

Dec. 31, 2019

Payables and Accruals [Abstract]

Accrued Expenses

Accrued expenses consist of the following (in thousands):



	December 31,
	2019		2018
Legal costs	$	12,202	$	10,056
Settlement costs	5,931		8,673
Pricing adjustment settlement with Veterans Affairs	6,894		6,894
Estimated returns	2,581		2,325
External commissions	1,722		962
Accrued clinical trials	1,076		1,233
Other	1,755		1,699
Total	$	32,161	$	31,842

Long Term Debt

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

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.

BT Term Loan

On June 10, 2019, the Company entered into a loan agreement (the “BT Loan Agreement”) with Blue Torch Finance LLC (“Blue Torch”), as administrative agent and collateral agent, to borrow funds with a face value of $75.0 million (the “BT Term Loan”), of which the full amount was borrowed and funded. The proceeds from the BT Term Loan were used (i) for working capital and general corporate purposes and (ii) to pay transaction fees, costs and expenses incurred in connection with the BT Term Loan and the related transactions. The BT Loan Agreement provided that the BT Term Loan would mature on June 20, 2022 and was repayable in quarterly installments of $0.9 million, with the balance due on June 20, 2022. Blue Torch maintained a first-priority security interest in substantially all the Company’s assets. The BT 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 BT Term Loan was amended on April 22, 2020 and was repaid on July 2, 2020, each of which is addressed in Note 21, “Subsequent Events,” of the consolidated financial statements.

The interest rate applicable to any borrowings under the BT Term Loan accrued at a rate equal to LIBOR plus a margin of 8.00% per annum. The BT Term Loan had an interest rate equal to 10.46% at the time the BT Loan Agreement was executed. The interest as of December 31, 2019 was 10.11%.

The BT Loan Agreement originally contained 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 BT Term Loan closing date through and including the fiscal month ending May 31, 2020. For fiscal months beginning June 30, 2020, the Company was 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 was less than 2.50 to 1.0 as of the last business day of any fiscal month, the Company was not permitted to have liquidity of less than $20.0 million.

The BT Loan Agreement also provided that any prepayment of the loan, voluntary or mandatory, as defined in the BT Loan Agreement, would subject 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 BT 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 BT Term Loan prepaid on such date.

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

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

The balances of the BT Term Loan as of December 31, 2019 was as follows (amounts in thousands):



	December 31, 2019
	Current portion		Long-term
Liability component - principal	$	3,750	$	69,375
Original issue discount	—		(1,890		)
Deferred financing cost	—		(5,579		)
Liability component - net carrying value	$	3,750	$	61,906

Interest expense related to the BT Term Loan, included in Interest income (expense), net in the consolidated statements of operations, was as follows (amounts in thousands):



	For the Year Ended
	December 31, 2019
Interest expense - stated interest rate	$	4,331
Interest expense - amortization of original issue discount	360
Interest expense - amortization of deferred financing costs	1,071
Total term loan interest expense	$	5,762

The future principal payments for the Company’s BT Term Loan as of December 31, 2019 were as follows (in thousands):



Year ending December 31,	Principal
2020	$	3,750
2021	3,750
2022	65,625
2023	—
2024	—
Thereafter	—
Total Long Term Debt	$	73,125

As of December 31, 2019, the fair value of the Company’s BT Term Loan was $70.6 million. This valuation was calculated based on a series of Level 2 and Level 3 inputs by calculating a discount rate based on the credit risk spread of debt instruments of a similar risk character in reference to U.S. Treasury instruments with identical securities, with an incremental risk premium for Company-specific risk factors. The remaining cash flows associated with the BT Term Loan were discounted to December 31, 2019 with this calculated discount rate to derive the fair value as of that date.

As described below in Note 21, “Subsequent Events,” on July 2, 2020, a portion of the proceeds from the Preferred Stock Transaction (as defined below) and the Hayfin Loan Transaction (as defined below) was used to repay the outstanding balance of principal, accrued but unpaid interest, and prepayment premium under the BT Loan Agreement. In connection with the repayment of the BT Term Loan, the Company terminated the BT Loan Agreement.

Net (Loss) Income Per Share

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

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 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,
	2019			2018			2017
Net (loss) income	$	(25,580	)	$	(29,979	)	$	64,727
Denominator for basic earnings (loss) per share - weighted average shares	106,946,384			105,596,256			106,121,810
Effect of dilutive securities: Stock options and restricted stock (a)	2,135,806			3,538,921			9,991,926
Denominator for diluted (loss) earnings per share - weighted average shares adjusted for dilutive securities	106,946,384			105,596,256			116,113,736
(Loss) income per common share - basic	$	(0.24	)	$	(0.28	)	$	0.61
(Loss) income per common share - diluted	$	(0.24	)	$	(0.28	)	$	0.56

(a)Securities that are included in the computation of the denominator above, utilizing the treasury stock method for the years ended December 31, 2019, 2018 and 2017 are as follows:



Effect of dilutive securities:	2019	2018	2017
Stock options	978,243	3,172,943	7,813,153
Restricted stock awards	1,157,563	365,978	2,178,773
	2,135,806	3,538,921	9,991,926

Equity

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [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, 2019, 2018 and 2017 the Company used only the 2016 Plan to make 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, 2019, 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, 2019	3,697,147		$	4.59
Granted	—		—
Exercised	(150,000	)	0.72
Unvested options forfeited	—		—
Vested options expired	(661,813	)	6.21
Outstanding at December 31, 2019	2,885,334		4.42		2.73	$	9,191,697
Exercisable at December 31, 2019	2,885,334		$	4.42	2.73	$	9,191,697

The intrinsic values of the options exercised during the years ended December 31, 2019, 2018 and 2017 were $0.6 million, $7.9 million, and $18.5 million, respectively. Cash received from option exercise under all share-based payment arrangements for the years ended December 31, 2019, 2018, and 2017, was $0.1 million, $3.6 million, and $12.0 million, respectively. The actual tax benefit for the tax deductions from option exercise of the share-based payment arrangements totaled $0.2 million, $5.9 million, and $12.5 million, respectively, for the years ended December 31, 2019, 2018, and 2017. 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, 2019, 2018 and 2017 were $1.4 million, $0.1 million, and $3.7 million, respectively. There were no options granted during the years ended December 31, 2019, 2018 and 2017 and no unrecognized compensation expense at December 31, 2019.

During the year ended December 31, 2019, the Company extended the contractual life of 612,000 fully vested share options held by 7 members of the Board and 278,916 fully vested share options held by a former employee. As a result of that modification, the Company recognized incremental share-based compensation expense of $0.4 million for the year ended December 31, 2019.

The incremental fair value of the modified options in 2019 was estimated on the modification date 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 the blend of the Company’s historical stock price volatility as well as that of market comparable publicly traded peer companies and other factors estimated over the expected term of the options. The term of the modified options was the remaining time until the end of the contractual maturity of ten years. The risk-free rate was based on the U.S. Treasury yield curve in effect at the time of modification for the period of the expected term.



2019 Option Modification
Expected volatility	65% - 95%
Expected life (in years)	0.28 - 5.12
Expected dividend yield	—
Risk-free interest rate	1.56% - 2.02%

Restricted Stock Awards

Following is summary information for restricted stock awards for the year ended December 31, 2019. Shares vest over a one to three year period in equal annual increments and require continuous service.

As of December 31, 2019, there was approximately $11.4 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 1.8 years, which approximates the remaining vesting period of these grants. All shares noted below as unvested are considered issued and outstanding at December 31, 2019.



	Number of Shares		Weighted-Average Grant Date Fair Value
Unvested at January 1, 2019	2,999,135		$	8.83
Granted	3,084,875		3.35
Vested	(1,474,998	)	8.58
Forfeited	(1,084,971	)	5.31
Unvested at December 31, 2019	3,524,041		$	5.21

The total fair value of restricted stock awards vested during the years ended December 31, 2019, 2018, and 2017, was $5.2 million, $17.9 million, and $17.3 million, respectively.

During the year ended December 31, 2019, the Company granted a fixed dollar value restricted share unit award to the members of its Board in the amount of $1.6 million. The restricted share unit awards vest upon the earlier of one year or the date of the 2019 Annual Meeting and will be settled in Common Stock with the number of shares of Common Stock to be determined based on the Company’s closing share price on the future settlement date. During the year ended December 31, 2019, the Company recognized $0.4 million of share-based compensation expense, with an offsetting liability recorded in Accrued compensation in the consolidated balance sheets.

For the years ended December 31, 2019, 2018, and 2017 the Company recognized share-based compensation as follows (in thousands):



	Years Ended December 31,
	2019			2018			2017

Cost of sales	$	477		$	705		$	539
Research and development	265			584			604
Selling, general and administrative	11,322			13,479			20,052
Total share-based compensation	$	12,064		$	14,768		$	21,195
Income tax benefit	(3,081		)	(3,803		)	(5,345		)
Total share-based compensation, net of tax benefit	$	8,983		$	10,965		$	15,850

Treasury Stock

On May 8, 2014, the Board authorized the repurchase of up to $10 million of shares of 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 and 2017, the Company purchased 507,600, and 5,635,077 shares of its Common Stock, respectively, for an aggregate purchase price of approximately $7.6 million, and $68.3 million, respectively, exclusive of commissions of approximately $0.0 million, and $0.2 million, respectively.

Repurchases of shares of Common Stock in connection with the satisfaction of employee tax withholding obligations upon vesting of restricted stock for the years ended December 31, 2019, 2018 and 2017 were 429,918, 614,123, and 419,928, respectively, for an aggregate purchase price of approximately $1.5 million, $4.9 million, and $4.1 million, respectively.

Income Taxes

12 Months Ended

Dec. 31, 2019

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,
		2019			2018
Deferred Tax Assets:
	Accrued expenses	$	3,759		$	3,572
	Deferred revenue	—			13,719
	Bad debts	4,859			—
	Sales return and allowances	659			2,296
	Accrued settlement costs	3,276			2,689
	Research and development and other tax credits	2,349			2,326
	Net operating loss	14,350			3,118
	Share-based compensation	3,439			3,425
	Lease obligation	1,044			—
	Other	2,124			971
Deferred Tax Liabilities:
	Prepaid expenses	(1,189		)	(1,823		)
	Right of use asset	(868		)	—
	Property and equipment	(1,582		)	(2,519		)
	Unearned insurance refund	(894		)	—
	Deferred costs of goods sold	(322		)	—
	Intangible assets	(389		)	(443		)
Net Deferred Tax Assets		30,615			27,331
	Less: Valuation allowance	(30,615		)	(27,331		)
Net Deferred Tax Assets after Valuation Allowance		$	—		$	—

The reconciliation of the federal statutory income tax rate of 21% for 2019 and 2018, and 35% for 2017 to the effective rate is as follows:



	December 31,
	2019		2018		2017

Federal statutory rate	21.00	%	21.00	%	35.00	%
State taxes, net of federal benefit	(1.36	)%	3.52	%	0.40	%
Nondeductible compensation	(1.49	)%	(15.33	)%	0.66	%
Meals and entertainment	(2.04	)%	(24.16	)%	1.93	%
Keyman life insurance	(0.02	)%	(0.15	)%	0.02	%
Inventory contribution deduction	0.06	%	0.48	%	(0.06	)%
Domestic production activities deduction	—	%	—	%	(1.54	)%
Fair value adjustment	—	%	—	%	(2.76	)%
Share-based compensation	(5.05	)%	10.82	%	(9.90	)%
Tax credits	0.45	%	19.75	%	(3.37	)%
Uncertain tax position	1.22	%	(2.35	)%	0.46	%
Write-off of net operating losses	—	%	(11.81	)%	—	%
Payable true-up	0.52	%	(2.69	)%	0.65	%
Sale of Stability	—	%	—	%	(8.86	)%
Fixed asset true-up	—	%	5.33	%	—	%
Federal provision to return	0.02	%	1.58	%	0.13	%
Impact of federal rate change	—	%	—	%	26.79	%
Other	(0.46	)%	(0.25	)%	(0.03	)%
Valuation allowance	(12.83	)%	(788.33	)%	(83.08	)%
	0.02	%	(782.59	)%	(43.56	)%

Share-based Compensation had a significant impact on the Company's effective tax rate as of December 31, 2019. Additionally, state taxes, Meals and Entertainment, and Nondeductible Compensation had a significant impact on the Company's effective tax rate.

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 Act 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 4 for details regarding the transaction.

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



	December 31,
	2019			2018		2017
Current:
Federal	$	(53	)	$	614	$	5,868
State	48			427		1,163
Total current	(5		)	1,041		7,031

Deferred:
Federal	—			19,452		(19,441		)
State	—			6,089		(7,229		)
Total deferred	—			25,541		(26,670		)

Total expense (benefit)	$	(5	)	$	26,582	$	(19,639	)

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 $30.6 million and $27.3 million was recorded against the deferred tax asset balance as of December 31, 2019 and December 31, 2018, respectively. 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, 2019 and 2018, the Company had income tax net operating loss (“NOL”) carryforwards for federal and state purposes of $56.8 million and $49.3 million and $11.4 million and $15.6 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 2027 and 2037. As of December 31, 2019, the Company has recorded a deferred tax asset for both federal and state NOL carryforwards of approximately $11.9 million and $3.1 million, respectively. As of December 31, 2018, the Company has recorded a deferred tax asset for federal and state NOL carryforwards of $2.4 million and approximately $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:



	2019			2018		2017
Unrecognized tax benefits - January 1	$	938		$	847	$	336

Gross increases - tax positions in current period	56			91		130

Gross increases - tax positions in prior period	—			—		381

Gross decreases - lapse of statute of limitations	(367		)	—		—

Unrecognized tax benefits - December 31	$	627		$	938	$	847

Included in the balance of unrecognized tax benefits as of December 31, 2019 and December 31, 2018, are $0.6 million and $0.9 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 2019, and, in total, as of December 31, 2019 has recognized $0.1 million of interest. The Company accrued $0.1 million of interest during 2018, and, in total, as of December 31, 2018 had 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.

Certain positions included in the tabular reconciliation above will be reduced as a result of the expiration of statutes of limitations within the next 12 months. The reserve would be reduced by approximately $0.2 million.

The Company is subject to taxation in the U.S. and various state jurisdictions. As of December 31, 2019, the Company’s tax returns for 2018, 2017 and 2016 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, 2019, the Company was generally no longer subject to state or local examinations by tax authorities for years before 2016, 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, 2019

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,
	2019		2018		2017
Cash paid for interest	$	4,331	$	197	$	127
Income taxes paid	308		859		12,755
Non-cash activities:
Purchases of equipment included in accounts payable	1,184		1,168		1,343
Deferred financing costs	6,650		—		30
Stock issuance in exchange for services performed	—		—		166

401(k) Plan	12 Months Ended
401(k) Plan	Dec. 31, 2019
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 $19,000 per year (annual limit for 2019). 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 year ended December 31, 2017. The matching contribution for the year ended December 31, 2019 and 2018 was $1.5 million and $1.9 million, respectively.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Contractual Commitments

In addition to the leases noted under Note 7 “Leases,” the Company has commitments for meeting space. These leases expire over 3 to 3.5 years following December 31, 2019, and generally contain renewal options. The Company anticipates that most of these leases will be renewed or replaced upon expiration.

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



Years Ended December 31,
2020	$	2,263
2021	2,259
2022	2,344
2023	205
2024	—
Thereafter	—
	$	7,071

Rent expense for the years ended December 31, 2019, 2018 and 2017, was approximately $1.4 million, $1.5 million, and $1.6 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, the Company was 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.

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 to the Company’s 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”). From the end of the Transition Period 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 year ended December 31, 2019. The Company has paid Mr. Borkowski the full amount of $4.0 million as of the date of the issuance of these consolidated financial statements payable under the Separation Agreement.

Litigation and Regulatory Matters

In the ordinary course of business, the Company and its subsidiaries are parties to numerous civil claims and lawsuits and subject to regulatory examinations, investigations, and requests for information. Some of these matters involve claims for substantial amounts. The Company’s experience has shown that the damages alleged by plaintiffs or claimants are often overstated, based on unsubstantiated legal theories, unsupported by facts, and/or bear no relation to the ultimate award that a court might grant. Additionally, the outcome of litigation and regulatory matters and the timing of ultimate resolution are inherently difficult to predict. These factors make it difficult for the Company to provide a meaningful estimate of the range of reasonably possible outcomes of claims in the aggregate or by individual claim. However, on a case-by-case basis, reserves are established for those legal claims in which it is probable that a loss will be incurred and the amount of such loss can be reasonably estimated. The Company's financial statements at December 31, 2019 reflect the Company's current best estimate of probable losses associated with these matters, including costs to comply with various settlement agreements, where applicable. The actual costs of resolving these claims may be substantially higher or lower than the amounts reserved.

The following is a description of certain litigation and regulatory matters:

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 former officers, and certain current and former directors, 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 (together with parties from the Hialeah derivative lawsuit, the Nix and Demaio derivative lawsuit, and the Murphy derivative lawsuit, each described below) held a mediation on February 11, 2020. Following continued discussions, on May 1, 2020, the parties notified the Court that plaintiffs and the Company had reached an agreement in principle to settle this consolidated derivative action, which settlement also encompasses all claims asserted in the Hialeah derivative lawsuit, the Nix and Demaio derivative lawsuit, and the Murphy derivative lawsuit. As of the date of the filing of this Form 10-K, the parties are drafting, and intend to file, a stipulation of settlement and motion seeking preliminary approval of the settlement.

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 former officers, and certain current and former directors, 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. As discussed above, the plaintiff participated in the mediation that took place in connection with the prior-filed consolidated derivative action in the Northern District of Georgia and is a party to the agreement in principle to settle that consolidated derivative action. The agreement in principle provides that the plaintiff in this action will file a notice of dismissal to dismiss its action with prejudice within seven calendar days after the date that the judgment entered by the Northern District of Georgia becomes final.

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 ordered this matter stayed pending the resolution of the consolidated derivative suit pending in the Northern District of Georgia. As discussed above, the plaintiff participated in the mediation that took place in connection with the prior-filed consolidated derivative action in the Northern District of Georgia and is a party to the agreement in principle to settle that consolidated derivative action. The agreement in principle provides that the plaintiffs in this action will file a notice of dismissal to dismiss their action with prejudice within seven calendar days after the date that the judgment entered by the Northern District of Georgia becomes final.

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 former officers, and certain current and former directors, 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. As discussed above, the plaintiff participated in the mediation that took place in connection with the prior-filed consolidated derivative action in the Northern District of Georgia and is a party to the agreement in principle to settle that consolidated derivative action. Under the agreement in principle, the plaintiff has agreed that this action shall not be reinstated and, after the judgment entered by the Northern District of Georgia becomes final, this action shall be deemed dismissed with prejudice.

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 former officers, and certain current and former directors, 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 May 12, 2020, prior to the Company’s time to respond to the complaint, the plaintiff filed a notice of voluntary dismissal of this action without prejudice.

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 former officers, and certain current and former directors, 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 May 22, 2020, prior to service of the complaint, the plaintiff filed a notice of voluntary dismissal of this action without prejudice. On May 26, 2020, the court ordered this case to be dismissed for failure to serve process.

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 filed its amended complaint against the Company, Michael Senken, Pete Petit, William Taylor, and Cherry Bekaert & Holland (Christopher Cashman was dropped as a defendant) on March 30, 2020; defendants filed motions to dismiss on May 29, 2020.

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. In November 2019, 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 has requested similar information. The Company has cooperated fully and produced responsive information to VA-OIG and DOJ-Civil. Periodically, VA-OIG has requested additional documents and information regarding payments to individual VA clinicians. Most recently, on June 3, 2020, the Company received a subpoena from the VA-OIG requesting information regarding the Company’s financial relationships and interactions with two healthcare providers at the VA Long Beach Healthcare System. The Company has continued to cooperate and respond 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. As far as the Company is aware, 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 Middle District of North Carolina (“USAO-MDNC”) Investigation

On January 9, 2020, the USAO-MDNC informed the Company that it is investigating the Company’s financial relationships with two former clinicians at the Durham VA Medical Center. The Company is cooperating with the investigation.

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 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 Department of Justice (“DOJ”) declined to intervene, and the case was unsealed. In April 2020, without admitting the allegations, the Company agreed to pay $6.5 million to the DOJ to resolve this matter.

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. 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 in discovery.

In December 2019, MiMedx received notice of a complaint filed in July 2018 with the Occupational Safety and Health Administration (“OSHA”) section of the Department of Labor (“DOL”) by Thomas Tierney, a former Regional Sales Director, against MiMedx and the referenced individuals, Tierney v. MiMedx Group, Inc., Parker Petit, William Taylor, Christopher Cashman, Thornton Kuntz, Jr. and Alexandra Haden, DOL No. 4-5070-18-243. Mr. Tierney alleged that he was terminated from MiMedx in retaliation for reporting concerns about revenue recognition practices, compliance issues, and the corporate culture, in violation of the anti-retaliation provisions of the Sarbanes-Oxley Act. The parties settled this matter and OSHA dismissed the complaint on May 20, 2020.

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 our 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 and the Judge adopted the Magistrate’s recommendation. Sparrow filed its amended complaint against MiMedx (Mr. Petit has been dropped from the lawsuit) on April 3, 2020 and the Company filed its answer. This case is in discovery.

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. Since the Company has completed its restatement, the case has resumed and discovery has recommenced.

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, 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, 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.

As of December 31, 2019, the Company has accrued approximately $12.8 million related to the legal proceedings discussed above. The Company has paid approximately $9.2 million to settle certain cases noted above.

As of December 31, 2018, the Company accrued $15.6 million related to legal proceedings and other matters of litigation.

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 ordinary 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, 2019

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, 2019, 2018 and 2017.

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



	Years Ended December 31,
	2019		2018		2017

Direct Customers	$	288,800	$	343,464	$	286,742
Distributors	10,455		15,647		27,431
Other⁽¹⁾	—		—		6,966
Total	$	299,255	$	359,111	$	321,139

(1) The “Other” balances are comprised entirely of the Net Sales generated by Stability while it was a subsidiary of the Company.

Related Party Transactions	12 Months Ended
Related Party Transactions	Dec. 31, 2019
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions The Company employs Simon Ryan, the brother-in-law of the Company’s former General Counsel, Alexandra O. Haden (who resigned from the Company effective August 12, 2019), as a sales representative. 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. In 2019, 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 2018, the Company paid Thomas Koob a salary of $0.2 million and provided equity, incentive compensation and other compensation of $0.3 million. In 2019, the Company paid Thomas Koob an annual salary of $0.2 million and provided equity, incentive compensation and other compensation of $0.2 million.

Restructuring

12 Months Ended

Dec. 31, 2019

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, 2019, and resulted in material restructuring liabilities at December 31, 2019. 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 $8.5 million and $6.1 million during the years ended December 31, 2019 and 2018, respectively. The 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 restructuring activities during 2019 are included in accrued compensation in the consolidated balance sheets. Changes to this liability during the year ended December 31, 2019 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
Expenses	8,543
Cash distributions	(10,589		)
Liability balance as of December 31, 2019	$	3,561

Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2019

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Data (Unaudited)

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

The following table sets forth selected quarterly financial data for 2019 and 2018:



		First Quarter			Second Quarter			Third Quarter (1)			Fourth Quarter
Net sales	2019	$	66,555		$	67,437		$	88,863		$	76,400
	2018	84,149			$	95,417		86,959			92,586

Gross profit	2019	$	59,137		$	57,688		$	75,658		$	63,691
	2018	74,791			$	86,147		$	79,604		82,183

Income tax (provision) benefit	2019	$	(42	)	$	(42	)	$	309		$	(220	)
	2018	1,552			13			(650		)	(27,497		)

Net income (loss)	2019	$	(13,273	)	$	(17,210	)	$	12,379		$	(7,476	)
	2018	4,619			1,804			(178		)	(36,224		)

Net income (loss) per common share - basic	2019	$	(0.12	)	$	(0.16	)	$	0.12		$	(0.07	)
	2018	0.04			0.02			0.00			(0.34		)

Net income (loss) per common share - diluted	2019	$	(0.12	)	$	(0.16	)	$	0.11		$	(0.07	)
	2018	0.04			0.02			0.00			(0.34		)

(1) - Third quarter amounts include the transition adjustment discussed in Note 3.

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2019
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events Coronavirus Aid, Relief and Economic Security (CARES) Act On March 27, 2020, the “Coronavirus Aid, Relief and Economic Security (CARES) Act” was signed into law. The Act includes provisions relating to refundable payroll tax credits, deferment of the employer portion of certain payroll taxes, loans and grants to certain business, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. The Company applied for and received a $10.0 million loan under the Paycheck Protection Program. On May 11, 2020 the Company repaid the PPP loan. In addition, modifications to the tax rules for carryback of net operating losses are expected to result in an estimated federal tax refund of $11.3 million and a resulting income tax benefit. The COVID-19 pandemic and governmental and societal responses thereto have affected the Company’s business, results of operations and financial condition. The continuation or a second-wave outbreak of COVID-19 or the outbreak of other health epidemics could harm the Company’s operations and increase the Company’s costs and expenses in numerous ways. The ultimate impact of the COVID-19 pandemic is highly uncertain and subject to change. The Company does not yet know the full extent of delays or impacts on the business, clinical trials, healthcare systems or the global economy as a whole, or how long such effects will endure. The effects of the COVID-19 pandemic or other health epidemics could have an adverse impact on the Company’s business, results of operations and financial condition. Sublease On April 1, 2020 the Company successfully subleased its industrial warehouse space that expires on May 31, 2023. The Company performed an asset recovery test comparing the sum of estimated undiscounted future cash flows attributable to the sublease to its carrying amount. The total undiscounted cash flows for the remaining lease term exceed the carrying amount of the asset, therefore there is no impairment. BT Term Loan Amendment On April 22, 2020, the Company amended its BT Loan Agreement with Blue Torch. The amendment provided for an increase in the maximum Total Leverage Ratio (as defined in the BT Loan Agreement), which was a quarterly test, for the remainder of 2020, and also provided for a reduction in the minimum Liquidity (as defined in the BT Loan Agreement) requirement from April 2020 through and including November 2020. Specifically, the maximum Total Leverage Ratio increased from 3.0 to 1.0 to 5.0 to 1.0 through December 31, 2020. The minimum Liquidity requirement was reduced from $40.0 million to $20.0 million for April and May 2020, and from $30.0 million to $20.0 million for June through November 2020. In connection with the amendment, the Company agreed to pay a one-time fee of approximately $0.7 million, added to the principal balance, and a 1 percentage point increase in the interest rate to LIBOR plus 9%. Repayment and Termination of BT Loan Agreement On July 2, 2020, the Company terminated the BT Loan Agreement and repaid the $72.0 million outstanding balance of principal and accrued but unpaid interest under the BT Loan Agreement. As a result of the early repayment of the loans under the BT Loan Agreement, the Company also paid a prepayment premium in the amount of $1.4 million. The Company paid the outstanding balance, accrued but unpaid interest, and prepayment premium using a portion of the proceeds from the Preferred Stock Transaction and the Hayfin Loan Transaction. Issuance of $100 Million of Series B Convertible Preferred Stock On July 2, 2020, the Company issued $100 million of the Company’s Series B Convertible Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”) to an affiliate of EW Healthcare Partners and certain funds managed by Hayfin Capital Management LLP pursuant to a Securities Purchase Agreement with Falcon Fund 2 Holding Company, L.P., an affiliate of EW Healthcare Partners, and certain funds managed by Hayfin Capital Management LLP, dated as of June 30, 2020, for an aggregate purchase price of $100,000,000 (the “Preferred Stock Transaction”). See Item 9B, “Other Information.” $75 Million Loan Facility with Hayfin On June 30, 2020, the Company entered into a Loan Agreement with, among others, Hayfin Services, LLP, an affiliate of Hayfin Capital Management LLP (the “Hayfin Loan Agreement”), which was funded on July 2, 2020 (the “Hayfin Loan Transaction”) and provided the Company with a senior secured term loan in an aggregate amount of $50 million (the “Term Loan”) and an additional $25 million delayed draw term loan (the “DD TL”) in the form of a committed but undrawn facility. The Term Loan and the DD TL mature on July 2, 2025 (the “Maturity Date”). The Term Loan and the DD TL have no fixed amortization (i.e. interest only through the Maturity Date). Borrowings under the Hayfin Loan Agreement bear interest at a rate equal to LIBOR (subject to a floor of 1.5%) plus a margin of 6.75%. The margin will be eligible to step down to 6.5% or 6.0% based on future Total Net Leverage levels, as defined in the Hayfin Loan Agreement. The Company paid an upfront commitment fee of 2% of the aggregate of the Hayfin Term Loan and the DD TL. The DD TL is subject to an additional commitment fee of 1% of the amount undrawn. The Hayfin Loan Agreement contains certain affirmative covenants that impose certain reporting and/or performance obligations on the Company and its subsidiaries, including (i) Maximum Total Net Leverage of 5.0x through December 31, 2020, stepping down to 4.5x through June 30, 2021, and to 4.0x thereafter until the Maturity Date; (ii) Cap on Cash Netting for the purposes of calculation Total Net Leverage set at $10,000,000; (iii) DD TL Incurrence Covenant of 3.5x Total Net leverage, tested prior to any drawings under the DD TL; and (iv) Minimum Liquidity of $10M, an at-all-times covenant tested monthly.

Schedule II - Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2019

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, 2019, 2018 and 2017 (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, 2019
Allowance for product returns	8,510		—		(4,395		)	4,115
Allowance for obsolescence	589		1,204		(1,074		)	719

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

Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

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.

Accounts Receivable and Notes Receivable

Accounts Receivable

Accounts receivable represent amounts due from customers for which revenue has been recognized. Generally, the Company does not require collateral or any other security to support its receivables.

Notes Receivable

Inventories

Property and Equipment

Impairment of Long-lived Assets

Goodwill and Purchased Intangible Assets

Goodwill and Indefinite-lived Intangible Assets

Impairment of Intangible Assets with Finite Lives

Fiscal Year Ended December 31, 2017

for additional discussion of the Company’s rationale for concluding that delivery had not yet occurred upon shipment to the customer.


•	Offering customers an unconditional right of return,


•	Offering extended payment terms to customers, and


•	A history of exceeding established credit limits for customers.

Fiscal Year Ended December 31, 2018


•	The parties to the contract have approved the contract (in writing, orally, or in accordance with other customary business practices) and are committed to perform their respective obligations;


•	The entity can identify each party’s rights regarding the goods or services to be transferred; and


•	The entity can identify the payment terms for the goods or services to be transferred.


•	The contract has commercial substance.


•	It is probable that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.

Fiscal Year Ended December 31, 2019

taken together, resulted in sufficient knowledge of contractual relationships both internally within the Company and externally with its customers.


•	For customer arrangements where collection was considered probable within 90 days from the date of original shipment or implantation of the products, the Company concluded the Step 1 Criteria were met (the “Transition Adjustment”).

•

For all customer transactions concluded to meet the Step 1 Criteria, the Company then assessed the remaining criteria of ASC 606 to determine the proper timing of revenue recognition.



	Amounts Invoiced and Not Collected			Deferred Cost of Sales
Amounts as of September 30, 2019	$	48,883		$	6,415
Revenue recognized related to amounts invoiced and not collected at September 30, 2019:
Transition Adjustment during the three months ended September 30, 2019	(21,385		)	(2,565		)
Cash collected during the three months ended December 31, 2019 related to the Remaining Contracts	(8,219		)	(1,151		)
	(29,604		)	(3,716		)
Write-off of customer contracts where collection is no longer reasonably assured (a)	(10,273		)	(1,438		)
Amounts as of December 31, 2019	$	9,006		$	1,261
(a) The Company determined that for approximately $10.3 million of existing contracts where payment had not been received, collection was no longer reasonably assured. As a result, $1.4 million of deferred cost of sales relating to these customers was written off. Any future collections relating to these customer contracts will be recorded as revenue at the time payment is received.

GPO Fees

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

Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Assessment of Revenue under ASC 606

In order to account for the determination that the Step 1 Criteria had been met during the third quarter of 2019, for certain existing customer arrangements, the Company recorded the following (in thousands):



	Amounts Invoiced and Not Collected			Deferred Cost of Sales
Amounts as of September 30, 2019	$	48,883		$	6,415
Revenue recognized related to amounts invoiced and not collected at September 30, 2019:
Transition Adjustment during the three months ended September 30, 2019	(21,385		)	(2,565		)
Cash collected during the three months ended December 31, 2019 related to the Remaining Contracts	(8,219		)	(1,151		)
	(29,604		)	(3,716		)
Write-off of customer contracts where collection is no longer reasonably assured (a)	(10,273		)	(1,438		)
Amounts as of December 31, 2019	$	9,006		$	1,261
(a) The Company determined that for approximately $10.3 million of existing contracts where payment had not been received, collection was no longer reasonably assured. As a result, $1.4 million of deferred cost of sales relating to these customers was written off. Any future collections relating to these customer contracts will be recorded as revenue at the time payment is received.

Stability Biologics, LLC (Tables)

12 Months Ended

Dec. 31, 2019

Discontinued Operations and Disposal Groups [Abstract]

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 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 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.

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-Paragraph 5A
-URI http://asc.fasb.org/extlink&oid=109222650&loc=SL51721671-107760

Reference 12: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 5B
-URI http://asc.fasb.org/extlink&oid=109222650&loc=SL51721673-107760

Reference 13: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 4A
-URI http://asc.fasb.org/extlink&oid=109222650&loc=SL51721663-107760

+ Details

Inventory (Tables)

12 Months Ended

Dec. 31, 2019

Inventory Disclosure [Abstract]

Inventory

Inventory consists of the following (in thousands):



	December 31,
	2019			2018
Raw materials	$	318		$	516
Work in process	4,299			11,123
Finished goods	5,206			4,936
Inventory, gross	9,823			16,575
Reserve for obsolescence	(719		)	(589		)
Inventory, net	$	9,104		$	15,986

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2019

Property, Plant and Equipment [Abstract]

Property and equipment

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



	December 31,
	2019			2018
Leasehold improvements	$	5,321		$	4,804
Laboratory and clean room equipment	14,894			13,787
Furniture and equipment	15,118			15,145
Construction in progress	972			1,507
Property and equipment, gross	36,305			35,243
Less accumulated depreciation and amortization	(23,977		)	(17,819		)
Property and equipment, net	$	12,328		$	17,424

Schedule of Depreciation



	For the year ended December 31,
	2019		2018		2017
Cost of sales	$	1,965	$	1,757	$	1,417
Selling, general and administrative expenses	4,223		3,760		2,354
Research and development expenses	358		365		316
Total	$	6,546	$	5,882	$	4,087

Leases (Tables)

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Supplemental Balance Sheet Information Related to Leases

Supplemental balance sheet information related to operating leases is as follows (amounts in thousands, except lease term and discount rate):



		December 31, 2019
Assets
	Right of use asset	$	3,397

Liabilities
	Short term lease liability	$	1,168
	Long term lease liability	$	2,919

Weighted-average remaining lease term (years)		3.1 years
Weighted-average discount rate		11.5		%

Maturities of Operating Lease Liabilities

Maturities of operating leases liabilities are as follows (amounts in thousands):



Year ending December 31,	Maturities
2020	$	1,561
2021	1,528
2022	1,552
2023	196
2024	—
Thereafter	—
Total lease payments	4,837
Less: imputed interest	(750		)
	$	4,087

Future Minimum Lease Payments Under Operating Leases

Future minimum lease payments under operating leases at December 31, 2018 and thereafter were as follows (amounts in thousands):



Year ending December 31,
2019	$	1,640
2020	1,579
2021	1,625
2022	1,673
2023	205
Thereafter	—
Total lease payments	$	6,722

Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets activity summary - finite lived

Intangible assets are summarized as follows (in thousands):



	December 31, 2019							December 31, 2018
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Amortized intangible assets
Licenses	$	1,414	$	(1,200	)	$	214	$	1,414	$	(1,066	)	$	348
Patents and know how	9,099		(5,070		)	4,029		9,180		(4,475		)	4,705
Customer and supplier relationships	3,761		(2,417		)	1,344		4,271		(2,202		)	2,069
Non-compete agreements	120		(68		)	52		120		(38		)	82
Total amortized intangible assets	$	14,394	$	(8,755	)	$	5,639	$	14,985	$	(7,781	)	$	7,204

Unamortized intangible assets
Trade names and trademarks	$	1,008				$	1,008	$	1,008				$	1,008
Patents in process	1,130					1,130		1,396					1,396
Total intangible assets	$	16,532				$	7,777	$	17,389				$	9,608

Intangible assets activity summary - indefinite lived

Intangible assets are summarized as follows (in thousands):



	December 31, 2019							December 31, 2018
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Amortized intangible assets
Licenses	$	1,414	$	(1,200	)	$	214	$	1,414	$	(1,066	)	$	348
Patents and know how	9,099		(5,070		)	4,029		9,180		(4,475		)	4,705
Customer and supplier relationships	3,761		(2,417		)	1,344		4,271		(2,202		)	2,069
Non-compete agreements	120		(68		)	52		120		(38		)	82
Total amortized intangible assets	$	14,394	$	(8,755	)	$	5,639	$	14,985	$	(7,781	)	$	7,204

Unamortized intangible assets
Trade names and trademarks	$	1,008				$	1,008	$	1,008				$	1,008
Patents in process	1,130					1,130		1,396					1,396
Total intangible assets	$	16,532				$	7,777	$	17,389				$	9,608

Estimated future amortization expense of intangible assets

Expected future amortization of intangible assets as of December 31, 2019, is as follows (in thousands):



	Estimated
	Amortization
Year ending December 31,	Expense
2020	$	985
2021	977
2022	955
2023	955
2024	955
Thereafter	812
	$	5,639

Changes in carrying amount of goodwill

The following represents the changes in the carrying amount of goodwill for 2019 and 2018 (in thousands):



	Goodwill
Balance as of January 1, 2018	$	19,976
Activity	—
Balance as of December 31, 2018	19,976
Activity	—
Balance as of December 31, 2019	$	19,976

Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2019

Payables and Accruals [Abstract]

Accrued Expenses

Accrued expenses consist of the following (in thousands):



	December 31,
	2019		2018
Legal costs	$	12,202	$	10,056
Settlement costs	5,931		8,673
Pricing adjustment settlement with Veterans Affairs	6,894		6,894
Estimated returns	2,581		2,325
External commissions	1,722		962
Accrued clinical trials	1,076		1,233
Other	1,755		1,699
Total	$	32,161	$	31,842

Long Term Debt (Tables)

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Schedule of Debt

The balances of the BT Term Loan as of December 31, 2019 was as follows (amounts in thousands):



	December 31, 2019
	Current portion		Long-term
Liability component - principal	$	3,750	$	69,375
Original issue discount	—		(1,890		)
Deferred financing cost	—		(5,579		)
Liability component - net carrying value	$	3,750	$	61,906

Schedule of Interest Expense

Interest expense related to the BT Term Loan, included in Interest income (expense), net in the consolidated statements of operations, was as follows (amounts in thousands):



	For the Year Ended
	December 31, 2019
Interest expense - stated interest rate	$	4,331
Interest expense - amortization of original issue discount	360
Interest expense - amortization of deferred financing costs	1,071
Total term loan interest expense	$	5,762

Future Principal Payments for the Term Loan

The future principal payments for the Company’s BT Term Loan as of December 31, 2019 were as follows (in thousands):



Year ending December 31,	Principal
2020	$	3,750
2021	3,750
2022	65,625
2023	—
2024	—
Thereafter	—
Total Long Term Debt	$	73,125

Net (Loss) Income Per Share (Tables)

12 Months Ended

Dec. 31, 2019

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,
	2019			2018			2017
Net (loss) income	$	(25,580	)	$	(29,979	)	$	64,727
Denominator for basic earnings (loss) per share - weighted average shares	106,946,384			105,596,256			106,121,810
Effect of dilutive securities: Stock options and restricted stock (a)	2,135,806			3,538,921			9,991,926
Denominator for diluted (loss) earnings per share - weighted average shares adjusted for dilutive securities	106,946,384			105,596,256			116,113,736
(Loss) income per common share - basic	$	(0.24	)	$	(0.28	)	$	0.61
(Loss) income per common share - diluted	$	(0.24	)	$	(0.28	)	$	0.56

(a)Securities that are included in the computation of the denominator above, utilizing the treasury stock method for the years ended December 31, 2019, 2018 and 2017 are as follows:



Effect of dilutive securities:	2019	2018	2017
Stock options	978,243	3,172,943	7,813,153
Restricted stock awards	1,157,563	365,978	2,178,773
	2,135,806	3,538,921	9,991,926

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, 2019, 2018 and 2017 are as follows:



Effect of dilutive securities:	2019	2018	2017
Stock options	978,243	3,172,943	7,813,153
Restricted stock awards	1,157,563	365,978	2,178,773
	2,135,806	3,538,921	9,991,926

Equity (Tables)

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Stock options activity

A summary of stock option activity as of December 31, 2019, 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, 2019	3,697,147		$	4.59
Granted	—		—
Exercised	(150,000	)	0.72
Unvested options forfeited	—		—
Vested options expired	(661,813	)	6.21
Outstanding at December 31, 2019	2,885,334		4.42		2.73	$	9,191,697
Exercisable at December 31, 2019	2,885,334		$	4.42	2.73	$	9,191,697

Option Modification Assumptions



2019 Option Modification
Expected volatility	65% - 95%
Expected life (in years)	0.28 - 5.12
Expected dividend yield	—
Risk-free interest rate	1.56% - 2.02%

Restricted stock awards roll forward



	Number of Shares		Weighted-Average Grant Date Fair Value
Unvested at January 1, 2019	2,999,135		$	8.83
Granted	3,084,875		3.35
Vested	(1,474,998	)	8.58
Forfeited	(1,084,971	)	5.31
Unvested at December 31, 2019	3,524,041		$	5.21

Allocation of share-based compensation

For the years ended December 31, 2019, 2018, and 2017 the Company recognized share-based compensation as follows (in thousands):



	Years Ended December 31,
	2019			2018			2017

Cost of sales	$	477		$	705		$	539
Research and development	265			584			604
Selling, general and administrative	11,322			13,479			20,052
Total share-based compensation	$	12,064		$	14,768		$	21,195
Income tax benefit	(3,081		)	(3,803		)	(5,345		)
Total share-based compensation, net of tax benefit	$	8,983		$	10,965		$	15,850

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

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,
		2019			2018
Deferred Tax Assets:
	Accrued expenses	$	3,759		$	3,572
	Deferred revenue	—			13,719
	Bad debts	4,859			—
	Sales return and allowances	659			2,296
	Accrued settlement costs	3,276			2,689
	Research and development and other tax credits	2,349			2,326
	Net operating loss	14,350			3,118
	Share-based compensation	3,439			3,425
	Lease obligation	1,044			—
	Other	2,124			971
Deferred Tax Liabilities:
	Prepaid expenses	(1,189		)	(1,823		)
	Right of use asset	(868		)	—
	Property and equipment	(1,582		)	(2,519		)
	Unearned insurance refund	(894		)	—
	Deferred costs of goods sold	(322		)	—
	Intangible assets	(389		)	(443		)
Net Deferred Tax Assets		30,615			27,331
	Less: Valuation allowance	(30,615		)	(27,331		)
Net Deferred Tax Assets after Valuation Allowance		$	—		$	—

Reconciliation of the Federal statutory income tax

The reconciliation of the federal statutory income tax rate of 21% for 2019 and 2018, and 35% for 2017 to the effective rate is as follows:



	December 31,
	2019		2018		2017

Federal statutory rate	21.00	%	21.00	%	35.00	%
State taxes, net of federal benefit	(1.36	)%	3.52	%	0.40	%
Nondeductible compensation	(1.49	)%	(15.33	)%	0.66	%
Meals and entertainment	(2.04	)%	(24.16	)%	1.93	%
Keyman life insurance	(0.02	)%	(0.15	)%	0.02	%
Inventory contribution deduction	0.06	%	0.48	%	(0.06	)%
Domestic production activities deduction	—	%	—	%	(1.54	)%
Fair value adjustment	—	%	—	%	(2.76	)%
Share-based compensation	(5.05	)%	10.82	%	(9.90	)%
Tax credits	0.45	%	19.75	%	(3.37	)%
Uncertain tax position	1.22	%	(2.35	)%	0.46	%
Write-off of net operating losses	—	%	(11.81	)%	—	%
Payable true-up	0.52	%	(2.69	)%	0.65	%
Sale of Stability	—	%	—	%	(8.86	)%
Fixed asset true-up	—	%	5.33	%	—	%
Federal provision to return	0.02	%	1.58	%	0.13	%
Impact of federal rate change	—	%	—	%	26.79	%
Other	(0.46	)%	(0.25	)%	(0.03	)%
Valuation allowance	(12.83	)%	(788.33	)%	(83.08	)%
	0.02	%	(782.59	)%	(43.56	)%

Schedule of current and deferred income tax expense (benefit)

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



	December 31,
	2019			2018		2017
Current:
Federal	$	(53	)	$	614	$	5,868
State	48			427		1,163
Total current	(5		)	1,041		7,031

Deferred:
Federal	—			19,452		(19,441		)
State	—			6,089		(7,229		)
Total deferred	—			25,541		(26,670		)

Total expense (benefit)	$	(5	)	$	26,582	$	(19,639	)

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:



	2019			2018		2017
Unrecognized tax benefits - January 1	$	938		$	847	$	336

Gross increases - tax positions in current period	56			91		130

Gross increases - tax positions in prior period	—			—		381

Gross decreases - lapse of statute of limitations	(367		)	—		—

Unrecognized tax benefits - December 31	$	627		$	938	$	847

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

12 Months Ended

Dec. 31, 2019

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,
	2019		2018		2017
Cash paid for interest	$	4,331	$	197	$	127
Income taxes paid	308		859		12,755
Non-cash activities:
Purchases of equipment included in accounts payable	1,184		1,168		1,343
Deferred financing costs	6,650		—		30
Stock issuance in exchange for services performed	—		—		166

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2019

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,
2020	$	2,263
2021	2,259
2022	2,344
2023	205
2024	—
Thereafter	—
	$	7,071

Revenue Data by Customer Type (Tables)

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

Net Sales by Customer Types

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



	Years Ended December 31,
	2019		2018		2017

Direct Customers	$	288,800	$	343,464	$	286,742
Distributors	10,455		15,647		27,431
Other⁽¹⁾	—		—		6,966
Total	$	299,255	$	359,111	$	321,139

(1) The “Other” balances are comprised entirely of the Net Sales generated by Stability while it was a subsidiary of the Company.

Restructuring (Tables)

12 Months Ended

Dec. 31, 2019

Restructuring and Related Activities [Abstract]

Changes in Restructuring Liability

Changes to this liability during the year ended December 31, 2019 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
Expenses	8,543
Cash distributions	(10,589		)
Liability balance as of December 31, 2019	$	3,561

Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2019

Quarterly Financial Information Disclosure [Abstract]

Schedule of quarterly financial information

The following table sets forth selected quarterly financial data for 2019 and 2018:



		First Quarter			Second Quarter			Third Quarter (1)			Fourth Quarter
Net sales	2019	$	66,555		$	67,437		$	88,863		$	76,400
	2018	84,149			$	95,417		86,959			92,586

Gross profit	2019	$	59,137		$	57,688		$	75,658		$	63,691
	2018	74,791			$	86,147		$	79,604		82,183

Income tax (provision) benefit	2019	$	(42	)	$	(42	)	$	309		$	(220	)
	2018	1,552			13			(650		)	(27,497		)

Net income (loss)	2019	$	(13,273	)	$	(17,210	)	$	12,379		$	(7,476	)
	2018	4,619			1,804			(178		)	(36,224		)

Net income (loss) per common share - basic	2019	$	(0.12	)	$	(0.16	)	$	0.12		$	(0.07	)
	2018	0.04			0.02			0.00			(0.34		)

Net income (loss) per common share - diluted	2019	$	(0.12	)	$	(0.16	)	$	0.11		$	(0.07	)
	2018	0.04			0.02			0.00			(0.34		)

(1) - Third quarter amounts include the transition adjustment discussed in Note 3.

Nature of Business (Details) - 12 months ended Dec. 31, 2019	Business_Segment	segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of business segments (segment)	1	1

Liquidity and Capital Resources (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Liquidity and Capital Resources [Abstract]
Cash and cash equivalents	$ 69,069	$ 45,118
Total current assets	123,245	74,049
Total current liabilities	67,322	$ 71,547
Net working capital	$ 55,900

Significant Accounting Policies (Details)		3 Months Ended								9 Months Ended	12 Months Ended
Significant Accounting Policies (Details)	Jan. 01, 2019 USD ($)	Dec. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Sep. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Sep. 30, 2019	Dec. 31, 2019 USD ($)	Dec. 31, 2019 USD ($) Business_Segment	Dec. 31, 2019 USD ($) reporting_unit	Dec. 31, 2019 USD ($)	Dec. 31, 2019 USD ($) segment	Dec. 31, 2019 USD ($)	Dec. 31, 2019 USD ($) depository_institution	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Market Concentrations and Credit Risk [Line Items]
Number of business segments (segment)												1			1
Cash and cash equivalents uninsured amount		$ 68,400,000				$ 44,000,000.0					$ 68,400,000	$ 68,400,000	$ 68,400,000	$ 68,400,000	$ 68,400,000	$ 68,400,000	$ 68,400,000	$ 44,000,000.0
Number of depository institutions \| depository_institution																	4
Number of reporting units \| reporting_unit													1
Goodwill impairment																0		0	$ 0
impairment of indefinite useful lives intangible																1,300,000		0.0	600,000
Impairment of finite-lived intangible assets																500,000		0	0
Net sales		76,400,000	$ 88,863,000	$ 67,437,000	$ 66,555,000	92,586,000	$ 86,959,000	$ 95,417,000	$ 84,149,000							299,255,000		359,111,000	321,139,000
Accounts receivable, net						51,000,000.0												51,000,000.0	64,800,000
GPO administrative fees as percent of purchase volume														3.00%
Deferred cost of sales		1,300,000				$ 4,300,000					1,300,000	1,300,000	$ 1,300,000	$ 1,300,000	1,300,000	1,300,000	$ 1,300,000	4,300,000
Advertising expense																100,000		100,000	100,000
Right-of-use asset		$ 3,397,000									$ 3,397,000	$ 3,397,000	$ 3,397,000	$ 3,397,000	$ 3,397,000	3,397,000	$ 3,397,000
Patents
Market Concentrations and Credit Risk [Line Items]
impairment of indefinite useful lives intangible																800,000		0	600,000
Patent costs capitalized during the year																$ 500,000		$ 600,000	300,000
Minimum
Market Concentrations and Credit Risk [Line Items]
Property and equipment estimated useful life											3 years
Typical payment period for customers										30 days
Maximum
Market Concentrations and Credit Risk [Line Items]
Property and equipment estimated useful life											7 years
Typical payment period for customers										60 days
Accounting Standards Update 2016-02
Market Concentrations and Credit Risk [Line Items]
Right-of-use asset	$ 4,300,000
Rent credit	900,000
Lease liabilities	5,200,000
Cumulative effect on retained earnings	$ 0
Stability Biologics, LLC
Market Concentrations and Credit Risk [Line Items]
Net sales																			$ 7,000,000.0

Significant Accounting Policies - Assessment of Revenue under ASC 606 (Details) - USD ($) $ in Thousands	3 Months Ended		7 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Dec. 31, 2019
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Contracts where payment had not been received, collection is no longer reasonably assured		$ 10,300
Write-off of deferred cost of sales		1,400
Accounting Standards Update 2014-09
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Amounts Invoiced and Not Collected, Prior to Transition Adjustment		48,883
Amounts Invoiced and Not Collected, Transition Adjustment		(21,385)
Amounts Invoiced and Not Collected, Cash collected during the three months ended December 31, 2019 related to the Remaining Contracts	$ (8,219)
Amounts Invoiced and Not Collected, Net Adjustments			$ (29,604)
Amounts Invoiced and Not Collected, Write-off of Customer Contracts where Collection is no Longer Reasonable Assured		(10,273)
Amounts Invoiced and Not Collected, After Transition Adjustment	9,006		9,006
Deferred Cost of Sales, Prior to Transition Adjustment		6,415
Deferred Cost of Sales, Transition Adjustment		(2,565)
Deferred Cost of Sales, Cash Collected During the Three Months Ended December 31, 2019 related to the Remaining Contracts	(1,151)
Deferred Cost of Sales, Net Adjustments			(3,716)
Deferred Cost of Sales, Write-off of Customer Contracts Where Collection is No Longer Reasonably Assured		$ (1,438)
Deferred Cost of Sales, After Transition Adjustment	$ 1,261		$ 1,261

Stability Biologics, LLC - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands			3 Months Ended								12 Months Ended
	Sep. 30, 2017	Jan. 13, 2016	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Common stock, par value (in dollars per share)			$ 0.001				$ 0.001				$ 0.001	$ 0.001
Loss on divestiture of Stability											$ 0	$ 0	$ (1,048)
Income tax provision benefit (expense)			$ (220)	$ 309	$ (42)	$ (42)	$ (27,497)	$ (650)	$ 13	$ 1,552	5	(26,582)	19,639
Change in fair value of earn-out consideration											$ 0	0	$ 3,560
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]
Total gain on disposition	$ (500)
Loss on divestiture of Stability	(1,048)
Income tax provision benefit (expense)	500
Change in fair value of earn-out consideration	$ (12,240)
Stability Biologics, LLC
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash payment for acquisition		$ 6,000
Equity issued for acquisition		$ 3,300
Equity issued for acquisition (shares)		441,009
Common stock, par value (in dollars per share)		$ 0.001
Debt assumed in acquisition		$ 1,800
Contingent consideration		17,500
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
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

Stability Biologics, LLC - Summary of Assets Transferred and Consideration Received (Details) - USD ($) $ in Thousands		12 Months Ended
	Sep. 30, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Consideration received
Extinguishment of earn out liability		$ 0	$ 0	$ (3,560)
Loss on sale		0	0	(1,048)
Goodwill	$ 20,200	$ 19,976	$ 19,976	$ 19,976
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
Loss on sale	(1,048)
Consideration received	16,200
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

Inventory (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Inventory Disclosure [Abstract]
Raw materials	$ 318	$ 516
Work in process	4,299	11,123
Finished goods	5,206	4,936
Inventory, gross	9,823	16,575
Reserve for obsolescence	(719)	(589)
Inventory, net	$ 9,104	$ 15,986

Property and Equipment - Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Property and equipment [Line Items]
Property and equipment, gross	$ 36,305	$ 35,243
Less accumulated depreciation and amortization	(23,977)	(17,819)
Property and equipment, net	12,328	17,424
Leasehold improvements
Property and equipment [Line Items]
Property and equipment, gross	5,321	4,804
Laboratory and clean room equipment
Property and equipment [Line Items]
Property and equipment, gross	14,894	13,787
Furniture and equipment
Property and equipment [Line Items]
Property and equipment, gross	15,118	15,145
Construction in progress
Property and equipment [Line Items]
Property and equipment, gross	$ 972	$ 1,507

Property and Equipment - Depreciation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Depreciation expense	$ 6,546	$ 5,882	$ 4,087
Cost of sales
Property, Plant and Equipment [Line Items]
Depreciation expense	1,965	1,757	1,417
Selling, general and administrative
Property, Plant and Equipment [Line Items]
Depreciation expense	4,223	3,760	2,354
Research and development
Property, Plant and Equipment [Line Items]
Depreciation expense	$ 358	$ 365	$ 316

Leases (Details) - USD ($) $ in Thousands	12 Months Ended
Leases (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Leases [Abstract]
Operating lease cost	$ 1,500
Interest on leased obligations	500
Cash paid for amounts included in the measurement of operating lease liabilities	1,700
Non cash lease expenses	$ 947	$ 0	$ 0

Leases - Supplemental Balance Sheet Information (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Lessee, Lease, Description [Line Items]
Right of use asset	$ 3,397
Weighted-average remaining lease term (years)	3 years 1 month 6 days
Weighted-average discount rate	11.50%
Other Current Liabilities
Lessee, Lease, Description [Line Items]
Short term lease liability	$ 1,168
Other Liabilities
Lessee, Lease, Description [Line Items]
Long term lease liability	$ 2,919

Leases - Maturities of Operating Lease Liabilities (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Lessee, Lease, Description [Line Items]
2020	$ 1,561
2021	1,528
2022	1,552
2023	196
2024	0
Thereafter	0
Total lease payments	4,837
Less: imputed interest	(750)
Liability
Lessee, Lease, Description [Line Items]
Lease liabilities	$ 4,087

Leases - Future Minimum Operating Lease Payments (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Leases [Abstract]
2019	$ 1,640
2020	1,579
2021	1,625
2022	1,673
2023	205
Thereafter	0
Total lease payments	$ 6,722

Goodwill and Intangible Assets - Intangible Assets Activity Summary (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount, amortized intangible assets	$ 14,394	$ 14,985
Accumulated amortization, amortized intangible assets	(8,755)	(7,781)
Net carrying amount, amortized intangible assets	5,639	7,204
Intangible assets, gross carrying value	16,532	17,389
Net	7,777	9,608
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	1,130	1,396
Licenses
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount, amortized intangible assets	1,414	1,414
Accumulated amortization, amortized intangible assets	(1,200)	(1,066)
Net carrying amount, amortized intangible assets	214	348
Patents and know how
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount, amortized intangible assets	9,099	9,180
Accumulated amortization, amortized intangible assets	(5,070)	(4,475)
Net carrying amount, amortized intangible assets	4,029	4,705
Customer and supplier relationships
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount, amortized intangible assets	3,761	4,271
Accumulated amortization, amortized intangible assets	(2,417)	(2,202)
Net carrying amount, amortized intangible assets	1,344	2,069
Non-compete agreements
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount, amortized intangible assets	120	120
Accumulated amortization, amortized intangible assets	(68)	(38)
Net carrying amount, amortized intangible assets	$ 52	$ 82

Goodwill and Intangible Assets - Narrative (Details)	12 Months Ended
Goodwill and Intangible Assets - Narrative (Details)	Dec. 31, 2019 USD ($) reporting_unit	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of intangible assets	$ 1,039,000	$ 1,034,000	$ 1,678,000
impairment of indefinite useful lives intangible	$ 1,300,000	0.0	600,000
Number of reporting units \| reporting_unit	1
Goodwill impairment	$ 0	$ 0	$ 0

Goodwill and Intangible Assets - Expected Future Amortization of Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
2020	$ 985
2021	977
2022	955
2023	955
2024	955
Thereafter	812
Net carrying amount, amortized intangible assets	$ 5,639	$ 7,204

Goodwill and Intangible Assets - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Goodwill [Roll Forward]
Goodwill, beginning	$ 19,976	$ 19,976
Activity	0	0
Goodwill, ending	$ 19,976	$ 19,976

Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Payables and Accruals [Abstract]
Legal costs	$ 12,202	$ 10,056
Settlement costs	5,931	8,673
Pricing adjustment settlement with Veterans Affairs	6,894	6,894
Estimated returns	2,581	2,325
External commissions	1,722	962
Accrued clinical trials	1,076	1,233
Other	1,755	1,699
Total	$ 32,161	$ 31,842

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%

Long Term Debt - Term Loan (Details) - Term Loan - BT Loan Agreement		2 Months Ended	6 Months Ended	7 Months Ended	12 Months Ended			18 Months Ended
	Jun. 10, 2019 USD ($)	May 31, 2020 USD ($)	Nov. 30, 2020 USD ($)	Dec. 30, 2020 USD ($)	Jun. 10, 2021	Jun. 10, 2020	May 31, 2020 USD ($)	Jun. 20, 2022 USD ($)	Dec. 31, 2020	Dec. 31, 2019 USD ($)
Debt Instrument [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%									10.11%
Total leverage ratio	3.0
Fair value of term loan										$ 70,600,000
Forecast
Debt Instrument [Line Items]
Total leverage ratio									2.50
Minimum liquidity		$ 40,000,000.0	$ 30,000,000.0	$ 30,000,000.0			$ 40,000,000.0	$ 20,000,000.0
Prepayment penalty as percent of prepaid principal					2.00%	3.00%

Long Term Debt - Term Loan Balances (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Current portion
Liability component - principal	$ 3,750
Original issue discount	0
Deferred financing cost	0
Liability component - net carrying value	3,750	$ 0
Long-term
Liability component - principal	69,375
Original issue discount	(1,890)
Deferred financing cost	(5,579)
Liability component - net carrying value	$ 61,906	$ 0

Long Term Debt - Term Loan Interest Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Interest expense - amortization of deferred financing costs	$ 6,650	$ 0	$ 30
Term Loan \| BT Loan Agreement
Debt Instrument [Line Items]
Interest expense - stated interest rate	4,331
Interest expense - amortization of original issue discount	360
Interest expense - amortization of deferred financing costs	1,071
Total term loan interest expense	$ 5,762

Long Term Debt - Term Loan Maturity (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Debt Disclosure [Abstract]
2020	$ 3,750
2021	3,750
2022	65,625
2023	0
2024	0
Thereafter	0
Total Long Term Debt	$ 73,125

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, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Earnings Per Share [Abstract]
Net (loss) income	$ (7,476)	$ 12,379	$ (17,210)	$ (13,273)	$ (36,224)	$ (178)	$ 1,804	$ 4,619	$ (25,580)	$ (29,979)	$ 64,727
Denominator for basic earnings (loss) per share - weighted average shares (in shares)									106,946,384	105,596,256	106,121,810
Effect of dilutive securities: Stock options and restricted stock (in shares)									2,135,806	3,538,921	9,991,926
Denominator for diluted (loss) earnings per share - weighted average shares adjusted for dilutive securities (in shares)									106,946,384	105,596,256	116,113,736
(Loss) income per common share - basic (in dollars per share)	$ (0.07)	$ 0.12	$ (0.16)	$ (0.12)	$ (0.34)	$ 0.00	$ 0.02	$ 0.04	$ (0.24)	$ (0.28)	$ 0.61
(Loss) income per common share - diluted (in dollars per share)	$ (0.07)	$ 0.11	$ (0.16)	$ (0.12)	$ (0.34)	$ 0.00	$ 0.02	$ 0.04	$ (0.24)	$ (0.28)	$ 0.56

- 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, 2019	Dec. 31, 2018	Dec. 31, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	2,135,806	3,538,921	9,991,926
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	978,243	3,172,943	7,813,153
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)	1,157,563	365,978	2,178,773

Equity - Narrative (Details)	12 Months Ended
Equity - Narrative (Details)	Dec. 31, 2019 USD ($) director plan shares	Dec. 31, 2018 USD ($) shares	Dec. 31, 2017 USD ($) shares	Jan. 31, 2018 USD ($)	Dec. 31, 2016 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	$ 600,000	$ 7,900,000	$ 18,500,000
Proceeds from exercise of stock options	108,000	3,555,000	11,987,000
Tax benefit from exercise of stock options	200,000	5,900,000	12,500,000
Fair value of options vested	$ 1,400,000	$ 100,000	$ 3,700,000
Granted (in shares) \| shares	0	0	0
Total unrecognized compensation expense	$ 0
Share-based compensation expense	12,064,000	$ 14,768,000	$ 21,195,000
Authorized share amount for repurchase			$ 130,000,000	$ 140,000,000	$ 66,000,000	$ 60,000,000	$ 10,000,000
Stock repurchase (in shares) \| shares		507,600	5,635,077
Shares repurchased, value		$ 7,600,000	$ 68,300,000
Commissions		0.0	200,000
Adjustments related to tax withholding for share-based compensation	1,474,000	4,914,000	4,082,000
Restricted Stock
Class of Stock [Line Items]
Total unrecognized stock-based compensation related to time-based, nonvested restricted stock	$ 11,400,000
Expenses expected to be recognized over a weighted-average period	1 year 9 months 18 days
Fair value of restricted stock awards vested	$ 5,200,000	$ 17,900,000	$ 17,300,000
Shares repurchased for tax withholding (in shares) \| shares	429,918	614,123	419,928
Adjustments related to tax withholding for share-based compensation	$ 1,500,000	$ 4,900,000	$ 4,100,000
Restricted Stock \| Minimum
Class of Stock [Line Items]
Vesting period	1 year
Restricted Stock \| Maximum
Class of Stock [Line Items]
Vesting period	3 years
Fixed Dollar Value Restricted Stock Units
Class of Stock [Line Items]
Vesting period	1 year
Share-based compensation expense	$ 400,000
Restricted share unit awards granted, fair value	$ 1,600,000
Modified Stock Option
Class of Stock [Line Items]
Contractual term of equity grant	10 years
Share-based compensation expense	$ 400,000
2016 Plan
Class of Stock [Line Items]
Shares authorized for grant under the plan (in shares) \| 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
Members of the Board \| Modified Stock Option
Class of Stock [Line Items]
Fully vested options (in shares) \| shares	612,000
Number of Board Members with Modified Option Grants \| director	7
Former Employee \| Modified Stock Option
Class of Stock [Line Items]
Fully vested options (in shares) \| shares	278,916

Equity - Activity of Stock Options (Details) - USD ($)	12 Months Ended
Equity - Activity of Stock Options (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Number of Shares
Outstanding, beginning of period (in shares)	3,697,147
Granted (in shares)	0	0	0
Exercised (in shares)	(150,000)
Unvested options forfeited (in shares)	0
Vested options expired (in shares)	(661,813)
Outstanding, end of period (in shares)	2,885,334	3,697,147
Exercisable, end of period (in shares)	2,885,334
Weighted- Average Exercise Price
Outstanding, weighted average exercise price, beginning of period (in dollars per share)	$ 4.59
Granted, weighted average exercise price (in dollars per share)	0
Exercised, weighted average exercise price (in dollars per share)	0.72
Unvested options forfeited, weighted-average exercise price (in dollars per share)	0
Vested options expired, weighted-average exercise price (in dollars per share)	6.21
Outstanding, weighted average exercise price, end of period (in dollars per share)	4.42	$ 4.59
Exercisable, weighted average exercise price (in dollars per share)	$ 4.42
Stock options, additional disclosures
Outstanding options, weighted average remaining contractual term	2 years 8 months 23 days
Exercisable, weighted average remaining contractual term	2 years 8 months 23 days
Outstanding, aggregate intrinsic value	$ 9,191,697
Exercisable, aggregate intrinsic value	$ 9,191,697

Equity - 2019 Stock Option Modification (Details) - Modified Stock Option	12 Months Ended
	Dec. 31, 2019
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Expected dividend yield	0.00%
Minimum
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Expected volatility	65.00%
Expected life (in years)	3 months 11 days
Risk-free interest rate	1.56%
Maximum
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Expected volatility	95.00%
Expected life (in years)	5 years 1 month 13 days
Risk-free interest rate	2.02%

Equity - Summary of Restricted Stock Awards (Details) - Restricted Stock	12 Months Ended
	Dec. 31, 2019 $ / shares shares
Number of Shares
Unvested, beginning of period (in shares) \| shares	2,999,135
Granted (in shares) \| shares	3,084,875
Vested (in shares) \| shares	(1,474,998)
Forfeited (in shares) \| shares	(1,084,971)
Unvested, end of period (in shares) \| shares	3,524,041
Weighted- Average Grant Date Fair Value
Unvested, beginning of period (in dollars per share) \| $ / shares	$ 8.83
Granted (in dollars per share) \| $ / shares	3.35
Vested (in dollars per share) \| $ / shares	8.58
Forfeited (in dollars per share) \| $ / shares	5.31
Unvested, end of period (in dollars per share) \| $ / shares	$ 5.21

Equity - Recognized Stock-Based Compensation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Share-based Payment Arrangement, Noncash Expense [Abstract]
Share-based compensation expense	$ 12,064	$ 14,768	$ 21,195
Income tax benefit	(3,081)	(3,803)	(5,345)
Total share-based compensation, net of tax benefit	8,983	10,965	15,850
Cost of sales
Share-based Payment Arrangement, Noncash Expense [Abstract]
Share-based compensation expense	477	705	539
Research and development
Share-based Payment Arrangement, Noncash Expense [Abstract]
Share-based compensation expense	265	584	604
Selling, general and administrative
Share-based Payment Arrangement, Noncash Expense [Abstract]
Share-based compensation expense	$ 11,322	$ 13,479	$ 20,052

Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Deferred Tax Assets:
Accrued expenses	$ 3,759	$ 3,572
Deferred revenue	0	13,719
Bad debts	4,859	0
Sales return and allowances	659	2,296
Accrued settlement costs	3,276	2,689
Research and development and other tax credits	2,349	2,326
Net operating loss	14,350	3,118
Share-based compensation	3,439	3,425
Lease obligation	1,044	0
Other	2,124	971
Deferred Tax Liabilities:
Prepaid expenses	(1,189)	(1,823)
Right of use asset	(868)	0
Property and equipment	(1,582)	(2,519)
Unearned insurance refund	(894)	0
Deferred costs of goods sold	(322)	0
Intangible assets	(389)	(443)
Net Deferred Tax Assets
Net Deferred Tax Assets	30,615	27,331
Less: Valuation allowance	(30,615)	(27,331)
Net Deferred Tax Assets after Valuation Allowance	$ 0	$ 0

Income Taxes - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
Income Taxes - Narrative (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Operating Loss Carryforwards [Line Items]
Federal statutory rate	21.00%	21.00%	35.00%
Valuation allowance	$ 30,615	$ 27,331
Deferred tax assets, operating loss carryforwards, federal	11,900	2,400
Deferred tax assets, operating loss carryforwards, state	3,100	900
Accrued interest related to unrecognized tax benefits	100	100	$ 100
Interest expense related to unrecognized tax benefits	100	100	$ 100
Reserve would be reduced due to expiration of statute of limitations within the next 12 months	200
Federal
Operating Loss Carryforwards [Line Items]
Income tax net operating loss carryforwards	56,800	49,300
State
Operating Loss Carryforwards [Line Items]
Income tax net operating loss carryforwards	$ 11,400	$ 15,600

Income Taxes - Reconciliation of the Federal Statutory Income Tax (Details)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Federal statutory rate	21.00%	21.00%	35.00%
State taxes, net of federal benefit	(1.36%)	3.52%	0.40%
Nondeductible compensation	(1.49%)	(15.33%)	0.66%
Meals & entertainment	(2.04%)	(24.16%)	1.93%
Keyman life insurance	(0.02%)	(0.15%)	0.02%
Inventory contribution deduction	0.06%	0.48%	(0.06%)
Domestic production activities deduction	0.00%	0.00%	(1.54%)
Fair value adjustment	0.00%	0.00%	(2.76%)
Equity Compensation	(5.05%)	10.82%	(9.90%)
Tax Credits	0.45%	19.75%	(3.37%)
Uncertain tax position	1.22%	(2.35%)	0.46%
Write-off of net operating losses	0.00%	(11.81%)	0.00%
Payable true-up	0.52%	(2.69%)	0.65%
Sale of Stability	0.00%	0.00%	(8.86%)
Fixed asset true-up	0.00%	5.33%	0.00%
Federal provision to return	0.02%	1.58%	0.13%
Impact of federal rate change	0.00%	0.00%	26.79%
Other	(0.46%)	(0.25%)	(0.03%)
Valuation allowance	(12.83%)	(788.33%)	(83.08%)
Effective income tax rate	0.02%	(782.59%)	(43.56%)

Income Taxes - Schedule of current and deferred income tax expense (benefit) (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Current:
Federal									$ (53)	$ 614	$ 5,868
State									48	427	1,163
Total current									(5)	1,041	7,031
Deferred:
Federal									0	19,452	(19,441)
State									0	6,089	(7,229)
Total deferred									0	25,541	(26,670)
Total expense (benefit)	$ 220	$ (309)	$ 42	$ 42	$ 27,497	$ 650	$ (13)	$ (1,552)	$ (5)	$ 26,582	$ (19,639)

Income Taxes - Reconciliation of unrecognized tax benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Unrecognized tax benefits, beginning of period	$ 938	$ 847	$ 336
Gross increases - tax positions in current period	56	91	130
Gross increases - tax positions in prior period	0	0	381
Gross decreases - lapse of statute of limitations	(367)	0	0
Unrecognized tax benefits, end of period	627	938	$ 847
Unrecognized tax benefits that, if recognized, would impact effective tax rate	$ 600	$ 900

Supplemental Disclosure of Cash Flow and Non-Cash Investing and Financing Activities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Supplemental Cash Flow Elements [Abstract]
Cash paid for interest	$ 4,331	$ 197	$ 127
Income taxes paid	308	859	12,755
Non-cash activities:
Purchases of equipment included in accounts payable	1,184	1,168	1,343
Deferred financing costs	6,650	0	30
Stock issuance in exchange for services performed	$ 0	$ 0	$ 166

401(k) Plan (Details) - USD ($)	12 Months Ended
401(k) Plan (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
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	$ 19,000
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	$ 1,500,000	$ 1,900,000	$ 0

Commitments and Contingencies - Narrative (Details) $ in Millions					1 Months Ended			6 Months Ended	12 Months Ended
	May 15, 2019 employee	May 07, 2019 USD ($)	Jan. 16, 2019 lawsuit	Jan. 20, 2017 former_employee	Dec. 31, 2019 USD ($)	Jan. 31, 2019 former_employee	May 31, 2018 former_employee	Jun. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 06, 2018 lawsuit
Loss Contingencies [Line Items]
Lease cost									$ 1.4
Rent and operating leases expense										$ 1.5	$ 1.6
Estimated litigation liability					$ 12.8				12.8	$ 15.6
Payments for legal settlements									$ 9.2
Letters of Credit
Loss Contingencies [Line Items]
Standby letters of credit											$ 0.1
Minimum
Loss Contingencies [Line Items]
Lessee expiration period					3 years				3 years
Maximum
Loss Contingencies [Line Items]
Lessee expiration period					3 years 6 months				3 years 6 months
Shareholder Derivative Suits
Loss Contingencies [Line Items]
Number of shareholder derivative actions consolidated \| lawsuit												3
Nix and Damiano v. Evans, et al.
Loss Contingencies [Line Items]
Loss Contingency, Number of Plaintiffs \| employee	2
Securities Class Action
Loss Contingencies [Line Items]
Number of class actions \| lawsuit			2
SEC Investigation
Loss Contingencies [Line Items]
Payments for legal settlements					$ 1.5
Department of Veterans' Affairs Office of the Inspector General's Investigation
Loss Contingencies [Line Items]
Prosecution deferral period						18 months
Number of former VA employees \| former_employee							3
Number of former VA employees who completed Pretrial Diversion Program \| former_employee						2
Kruchoski et. al. v. Mimedx Group, Inc.
Loss Contingencies [Line Items]
Number of former employees \| former_employee				2
Litigation settlement		$ 6.5
Subsequent Event \| Former Interim Chief Financial Officer
Loss Contingencies [Line Items]
Severance costs								$ 4.0

Commitments and Contingencies - Estimated Annual Lease, Royalty, and Employment Agreement Expenses (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2020	$ 2,263
2021	2,259
2022	2,344
2023	205
2024	0
Thereafter	0
Total Contractual commitments	$ 7,071

Revenue Data by Customer Type (Details) $ in Thousands	3 Months Ended								12 Months Ended
Revenue Data by Customer Type (Details) $ in Thousands	Dec. 31, 2019 USD ($) distribution_channel	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Sep. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2019 USD ($) distribution_channel	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Revenue, Major Customer [Line Items]
Number of primary distribution channels \| distribution_channel	2								2
Net sales	$ 76,400	$ 88,863	$ 67,437	$ 66,555	$ 92,586	$ 86,959	$ 95,417	$ 84,149	$ 299,255	$ 359,111	$ 321,139
Direct Customers
Revenue, Major Customer [Line Items]
Net sales									288,800	343,464	286,742
Distributors
Revenue, Major Customer [Line Items]
Net sales									10,455	15,647	27,431
Other
Revenue, Major Customer [Line Items]
Net sales									$ 0	$ 0	$ 6,966

Related Party Transactions (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
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	$ 0.2	$ 0.3

Restructuring - Narrative (Details) $ in Thousands	1 Months Ended	12 Months Ended
Restructuring - Narrative (Details) $ in Thousands	Dec. 31, 2018 position	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Restructuring and Related Activities [Abstract]
Number of positions eliminated \| position	240
Number of positions eliminated, percentage	24.00%
Restructuring expenses \| $		$ 8,543	$ 6,055

Restructuring - Restructuring Reserve Liability (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Restructuring Reserve [Roll Forward]
Liability balance, beginning	$ 5,607	$ 0
Expenses	8,543	6,055
Cash distributions	(10,589)	(448)
Liability balance, ending	$ 3,561	$ 5,607

Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Quarterly Financial Information Disclosure [Abstract]
Net sales	$ 76,400	$ 88,863	$ 67,437	$ 66,555	$ 92,586	$ 86,959	$ 95,417	$ 84,149	$ 299,255	$ 359,111	$ 321,139
Gross profit	63,691	75,658	57,688	59,137	82,183	79,604	86,147	74,791	256,174	322,725	285,920
Income tax provision benefit (expense)	(220)	309	(42)	(42)	(27,497)	(650)	13	1,552	5	(26,582)	19,639
Net income (loss)	$ (7,476)	$ 12,379	$ (17,210)	$ (13,273)	$ (36,224)	$ (178)	$ 1,804	$ 4,619	$ (25,580)	$ (29,979)	$ 64,727
Net income (loss) per common share - basic (in dollars per share)	$ (0.07)	$ 0.12	$ (0.16)	$ (0.12)	$ (0.34)	$ 0.00	$ 0.02	$ 0.04	$ (0.24)	$ (0.28)	$ 0.61
Net income (loss) per common share - diluted (in dollars per share)	$ (0.07)	$ 0.11	$ (0.16)	$ (0.12)	$ (0.34)	$ 0.00	$ 0.02	$ 0.04	$ (0.24)	$ (0.28)	$ 0.56

- 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)						2 Months Ended	6 Months Ended			7 Months Ended	12 Months Ended	18 Months Ended	48 Months Ended
Subsequent Events (Details)	Jul. 02, 2020 USD ($) $ / shares	Jun. 30, 2020	Apr. 22, 2020 USD ($)	Apr. 01, 2020 USD ($)	Jun. 10, 2019 USD ($)	May 31, 2020 USD ($)	Jun. 30, 2021	Dec. 31, 2020	Nov. 30, 2020 USD ($)	Dec. 30, 2020 USD ($)	May 31, 2020 USD ($)	Jun. 20, 2022 USD ($)	Jun. 29, 2025	Apr. 30, 2020 USD ($)	Mar. 27, 2020 USD ($)	Dec. 31, 2019 $ / shares	Dec. 31, 2018 $ / shares
Subsequent Event [Line Items]
Preferred stock, par value (in dollars per share) \| $ / shares																$ 0.001	$ 0.001
Subsequent Event
Subsequent Event [Line Items]
Income taxes receivable															$ 11,300,000
Impairment of operating lease				$ 0
Paycheck Protection Program Loan \| Subsequent Event
Subsequent Event [Line Items]
Face value of debt														$ 10,000,000.0
BT Loan Agreement \| Subsequent Event
Subsequent Event [Line Items]
Total leverage ratio			3.0
BT Loan Agreement \| Term Loan
Subsequent Event [Line Items]
Face value of debt					$ 75,000,000.0
Total leverage ratio					3.0
Deferred financing costs					$ 6,700,000
BT Loan Agreement \| Term Loan \| Subsequent Event
Subsequent Event [Line Items]
Repayment of principal	$ 72,000,000.0
Prepayment premium paid	1,400,000
Amended Term Loan Agreement \| Subsequent Event
Subsequent Event [Line Items]
Total leverage ratio			5.0
Amended Term Loan Agreement \| Term Loan \| Subsequent Event
Subsequent Event [Line Items]
Deferred financing costs			$ 700,000
Hayfin Loan Agreement Term Loan \| Senior secured term loan \| Subsequent Event
Subsequent Event [Line Items]
Face value of debt	50,000,000
Hayfin Loan Agreement Delayed Draw Term Loan \| Term Loan \| Subsequent Event
Subsequent Event [Line Items]
Face value of debt	$ 25,000,000
Commitment fee on undrawn amounts (percent)	1.00%
Total net leverage ratio		3.5
Hayfin Loan Agreement \| Senior secured term loan \| Subsequent Event
Subsequent Event [Line Items]
Minimum liquidity	$ 10,000,000
Upfront commitment fee (percent)	2.00%
Cap on cash netting for calculation of Total Net Leverage	$ 10,000,000
London Interbank Offered Rate (LIBOR) \| BT Loan Agreement \| Term Loan
Subsequent Event [Line Items]
Basis spread on variable rate					8.00%
London Interbank Offered Rate (LIBOR) \| Amended Term Loan Agreement \| Term Loan \| Subsequent Event
Subsequent Event [Line Items]
Increase in interest rate (percent)			1.00%
Basis spread on variable rate			9.00%
London Interbank Offered Rate (LIBOR) \| Hayfin Loan Agreement \| Senior secured term loan \| Subsequent Event
Subsequent Event [Line Items]
Basis spread on variable rate	6.75%
Floor interest rate (percent)	1.50%
Forecast \| BT Loan Agreement \| Term Loan
Subsequent Event [Line Items]
Total leverage ratio								2.50
Minimum liquidity						$ 40,000,000.0			$ 30,000,000.0	$ 30,000,000.0	$ 40,000,000.0	$ 20,000,000.0
Forecast \| Amended Term Loan Agreement \| Term Loan
Subsequent Event [Line Items]
Minimum liquidity						$ 20,000,000.0			$ 20,000,000.0
Forecast \| Hayfin Loan Agreement \| Senior secured term loan
Subsequent Event [Line Items]
Total net leverage ratio							4.5	5.0					4.0
Series B Convertible Preferred Stock \| Subsequent Event
Subsequent Event [Line Items]
Stock issued during period	$ 100,000,000
Preferred stock, par value (in dollars per share) \| $ / shares	$ 0.001
Proceeds from issuance of convertible preferred stock	$ 100,000,000
Minimum \| London Interbank Offered Rate (LIBOR) \| Hayfin Loan Agreement \| Senior secured term loan \| Subsequent Event
Subsequent Event [Line Items]
Basis spread on variable rate, based on total net leverage levels (percent)	6.50%
Maximum \| London Interbank Offered Rate (LIBOR) \| Hayfin Loan Agreement \| Senior secured term loan \| Subsequent Event
Subsequent Event [Line Items]
Basis spread on variable rate, based on total net leverage levels (percent)	6.00%

Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Allowance for product returns
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at Beginning of Year	$ 8,510	$ 7,362	$ 11,283
Additions charged to Expense or Revenue	0	1,148	0
Deductions and write-offs	(4,395)	0	(3,921)
Balance at End of Year	4,115	8,510	7,362
Allowance for obsolescence
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at Beginning of Year	589	768	829
Additions charged to Expense or Revenue	1,204	511	1,192
Deductions and write-offs	(1,074)	(690)	(1,253)
Balance at End of Year	$ 719	$ 589	$ 768