þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
Florida
|
|
26-2792552
|
(State or other jurisdiction of incorporation)
|
|
(I.R.S. Employer Identification Number)
|
|
|
|
1775 West Oak Commons Court, NE Marietta, GA
|
|
30062
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
þ
|
Accelerated filer
o
|
Non-accelerated filer
o
|
Smaller reporting Company
o
|
|
(Do not check if a smaller reporting company)
|
Part I
|
||
Item
|
Description
|
Page
|
Item 1.
|
Business
|
|
Item 1A.
|
Risk Factors
|
|
Item 2.
|
Properties
|
|
Item 3.
|
Legal Proceedings
|
|
Item 4.
|
Mine Safety Disclosures
|
|
|
|
|
Part II
|
||
Item 5.
|
Market for Registrants' Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
|
|
Item 6.
|
Selected Financial Data
|
|
Item 7.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
Item 9.
|
Changes in Disagreements with Accountants on Accounting and Financial Disclosure
|
|
Item 9A.
|
Controls and Procedures
|
|
Item 9B.
|
Other Information
|
|
|
|
|
Part III
|
||
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
|
Item 11.
|
Executive Compensation
|
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
|
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
|
Item 14.
|
Principal Accounting Fees and Services
|
|
|
|
|
Part IV
|
||
Item 15.
|
Exhibits, Financial Statement Schedules
|
|
Item 16.
|
Form 10-K Summary
|
|
Signatures
|
|
•
|
the advantages of our products;
|
•
|
the regulatory pathway for our products;
|
•
|
our belief regarding the growth of our direct sales force resulting in increased revenues;
|
•
|
expectations regarding Government and other third-party reimbursement for our products;
|
•
|
our beliefs regarding our relationships with significant distributors;
|
•
|
expectations regarding future revenue growth;
|
•
|
our ability to procure sufficient supplies of human tissue to manufacture and process our products;
|
•
|
market opportunities for our products and future products;
|
•
|
prospects for obtaining additional patents covering our proprietary technology as well as successfully defending our existing patents and prohibiting infringement thereof by third-parties;
|
•
|
the outcome of pending litigation and investigations; and
|
•
|
our ability to compete effectively.
|
•
|
Structural proteins; including:
|
◦
|
Collagen types I, III, IV, V, and VII
|
◦
|
Elastin
|
•
|
Specialized extracellular matrix proteins; including:
|
◦
|
Fibrillin
|
◦
|
Fibronectin
|
◦
|
Laminins
|
•
|
TIMPs 1,2,4, Tissue Inhibitor of Metalloproteinase 1, 2, 4
|
•
|
At least 226 Growth Factors; including but not limited to:
|
◦
|
Epidermal Growth Factor (EGF)
|
◦
|
Transforming Growth Factor Beta (TGF-B)
|
◦
|
Fibroblast Growth Factor (FGF)
|
◦
|
Platelet Derived Growth Factors AA & BB (PDGF AA&BB)
|
•
|
AmnioFix is provided in a sheet form. It is used to modulate inflammation, enhance healing and to minimize scar tissue formation. It has been used in spine, urology and general surgeries.
|
•
|
AmnioFix Wrap also is supplied in a sheet form and is configured for the same purposes as AmnioFix, but is optimized for use as a “wrap” for nerves, tendons or ligaments.
|
•
|
AmnioFix Injectable is supplied in micronized powder form used to reduce inflammation while enhancing healing. AmnioFix Injectable has been used to treat conditions such as tendonitis, including plantar fasciitis, lateral epicondylitis, and medial epicondylitis, bursitis, strains and sprains.
|
1.
|
BioMedGPS SmartTRAK Business Intelligence
|
2.
|
iData 2012, U.S. Market for Spinal Implants
|
3.
|
Stabenfeldt, SE, Garcia, AJ, LaPlaca, MC. Thermoreversible laminin-functionalized hydrogel for neural tissue engineering. J of Bio Materials Research. Part A, 2006. 77: p. 718-725
|
4.
|
Millenium 2013, clinical articles and management internal estimates
|
5.
|
Sheehan P., Jones P., Caselli A., Giurini JM., Veves A. Percent change in wound area of diabetic foot ulcers over a 4-week period is a robust predictor of complete healing in a 12-week prospective trial. Diabetes Care 2003;26:1879-1882 [PubMed]
|
•
|
It must be minimally manipulated;
|
•
|
It must be intended for homologous use;
|
•
|
Its manufacture must not involve combination with another article, except for water, crystalloids or a sterilizing, preserving or storage agent; and
|
•
|
It must not have a systemic effect and must not be dependent upon the metabolic activity of living cells for its primary function.
|
•
|
Completion of preclinical laboratory tests, animal studies and formulations studies under the FDA’s good laboratory practices regulations;
|
•
|
Submission to the FDA of an Investigational New Drug Application (IND) for human clinical testing, which must become effective before human clinical trials may begin and which must include independent Institutional Review Board (IRB) approval at each clinical site before the trials may be initiated;
|
•
|
Performance of adequate and well-controlled clinical trials in accordance with Good Clinical Practices to establish the safety and efficacy of the product for each indication;
|
•
|
Submission to the FDA of a BLA for marketing the product, which includes, among other things, reports of the outcomes and full data sets of the clinical trials, and proposed labeling and packaging for the product;
|
•
|
Satisfactory review of the contents of the BLA by the FDA, including the satisfactory resolution of any questions raised during the review;
|
•
|
Satisfactory completion of an FDA Advisory Committee review, if applicable;
|
•
|
Satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with Current Good Manufacturing Practices (cGMP) regulations, to assure that the facilities, methods and controls are adequate to ensure the product’s identity, strength, quality and purity; and
|
•
|
FDA approval of the BLA, including agreement on post-marketing commitments, if applicable.
|
•
|
The announcement or introduction of new products by our competitors;
|
•
|
Failure of Government and private health plans to adequately and timely reimburse the users of our products;
|
•
|
Removal of our products from the Federal Supply Schedule or change in the prices that Government accounts will pay for our products;
|
•
|
Our ability to upgrade and develop our systems and infrastructure to accommodate growth;
|
•
|
Our ability to attract and retain key personnel in a timely and cost effective manner;
|
•
|
The amount and timing of operating costs and capital expenditures relating to the expansion of our business, operations and infrastructure;
|
•
|
Regulation by federal, state or local Governments; and
|
•
|
General economic conditions as well as economic conditions specific to the healthcare industry.
|
•
|
properly identify and anticipate physician and patient needs;
|
•
|
develop and introduce new products or product enhancements in a timely manner;
|
•
|
adequately protect our intellectual property and avoid infringing upon the intellectual property rights of third parties;
|
•
|
demonstrate the safety and efficacy of new products; and
|
•
|
obtain the necessary regulatory clearances or approvals for new products or product enhancements.
|
·
|
Their lack of experience with prior procedures in the field using our products;
|
·
|
Lack of evidence supporting additional patient benefits and our products over conventional methods;
|
·
|
Perceived liability risks generally associated with the use of new products and procedures;
|
·
|
Limited availability of reimbursement from third party payers; and
|
·
|
The time that must be dedicated to training.
|
·
|
We may not be able to obtain regulatory clearance or approvals for such products, or the approved indication may be narrower than we seek;
|
·
|
Such products may not prove to be safe and effective in preclinical or clinical trials;
|
·
|
Physicians or hospitals may not receive any reimbursement from third party payers, or the level of reimbursement may be insufficient to support widespread adoption of such products;
|
·
|
We may experience delays in our development programs;
|
·
|
Any products that are approved may not be accepted in the marketplace by physicians or patients;
|
·
|
We may not be able to manufacture any such products in commercial quantities or at an acceptable cost; and
|
·
|
Rapid technological change may make such products obsolete.
|
•
|
Issue additional equity securities that would dilute our stockholders’ value;
|
•
|
Use cash that we may need in the future to operate our business;
|
•
|
Incur debt that could have terms unfavorable to us or that we might be unable to repay;
|
•
|
Structure the transaction in a manner that has unfavorable tax consequences, such as a stock purchase that does not permit a step-up in the tax basis for the assets acquired;
|
•
|
Be unable to realize the anticipated benefits, such as increased revenues, cost savings, or synergies from additional sales;
|
•
|
Be unable to secure the services of key employees related to the acquisition; and
|
•
|
Be unable to succeed in the marketplace with the acquisition.
|
•
|
lack of familiarity with and unexpected changes in foreign regulatory requirements;
|
•
|
lack of stringent protection of intellectual property;
|
•
|
obstacles to obtaining domestic and foreign export, import and other governmental approvals, permits and licenses and compliance with foreign laws;
|
•
|
potentially adverse tax consequences and the complexities of foreign value-added tax systems;
|
•
|
adverse changes in tariffs and trade restrictions;
|
•
|
differing multiple payer reimbursement regimes, government payers or patient self-pay system;
|
•
|
longer accounts receivable payment cycles and difficulties in collecting accounts receivable;
|
•
|
difficulties in managing and staffing international operations;
|
•
|
fluctuations in currency exchange rates;
|
•
|
the burdens of complying with a wide variety of foreign laws and legal standards;
|
•
|
availability of government subsidies or other incentives that benefit competitors in their local markets that are not available to us;
|
•
|
increased financial reporting burdens and complexities; and
|
•
|
political, social, and economic instability abroad.
|
•
|
the revenues generated by sales of our products;
|
•
|
the costs associated with expanding our sales and marketing efforts;
|
•
|
the expenses we incur in manufacturing and selling our products;
|
•
|
the costs of developing and commercializing new products or technologies;
|
•
|
the cost of obtaining and maintaining regulatory approval or clearance of certain products and products in development;
|
•
|
the number and timing of acquisitions and other strategic transactions;
|
•
|
the costs associated with our planned international expansion;
|
•
|
the costs associated with capital expenditures; and
|
•
|
unanticipated general and administrative expenses.
|
•
|
Untitled letters, warning letters, fines, injunctions, and civil penalties;
|
•
|
Recall or seizure of our products;
|
•
|
Operating restrictions, partial suspension or total shutdown of production;
|
•
|
Refusing our requests for clearance or approval of new products;
|
•
|
Withdrawing or suspending current applications for approval or approvals already granted;
|
•
|
Refusal to grant export approval for our products; and
|
•
|
Criminal prosecution.
|
·
|
Fluctuations in stock market prices and trading volumes of similar companies or of the markets generally;
|
·
|
Our ability to successfully launch, market and earn significant revenue from our products;
|
·
|
Our ability to obtain additional financing to support our continuing operations;
|
·
|
Disclosure of the details and results of regulatory applications and proceedings;
|
·
|
Changes in Government regulations or our failure to comply with any such regulations;
|
·
|
Additions or departures of key personnel;
|
·
|
Our investments in research and development or other corporate resources;
|
·
|
Announcements of technological innovations or new commercial products by us or our competitors;
|
·
|
Developments in the patents or other proprietary rights owned or licensed by us or our competitors;
|
·
|
The timing of new product introductions;
|
·
|
Actual or anticipated fluctuations in our operating results, including any restatements of previously reported results;
|
·
|
Our ability to effectively and consistently manufacture our products and avoid costs associated with the recall of defective or potentially defective products;
|
·
|
Our ability and the ability of our distribution partners to market and sell our products;
|
·
|
Changes in reimbursement for our products or the price for our products to our customers;
|
·
|
Removal of our products from the Federal Supply Schedule, or changes in how Government accounts purchase products such as ours or in the price for our products to Government accounts;
|
·
|
Material amounts of short-selling of our common stock; and
|
.
|
The other risks detailed in this Item 1A.
|
•
|
We will incur additional amortization expense over the estimated useful lives of certain of the intangible assets acquired in connection with acquisitions during such estimated useful lives.
|
•
|
We will incur additional depreciation expense as a result of recording purchased tangible assets.
|
•
|
To the extent the value of goodwill or intangible assets becomes impaired, we may be required to incur material charges relating to the impairment of those assets.
|
•
|
Cost of sales may increase temporarily following an acquisition as a result of acquired inventory being recorded at its fair market value.
|
•
|
Earnings may be affected by changes in estimates of future contingent consideration to be paid when an earn-out is part of the consideration.
|
•
|
Earnings may be affected by transaction and implementation costs, which are expensed immediately.
|
·
|
Authorizing the issuance of preferred stock that can be created and issued by the Board of Directors without prior common stock shareholder approval, with rights senior to those of the common stock;
|
·
|
Restricting persons who may call shareholder meetings;
|
·
|
Electing directors on a staggered basis; and
|
.
|
Allowing the Board to fill vacancies and to fix the number of directors.
|
Year Ended December 31, 2016
|
High
|
|
Low
|
||||
First Quarter
|
$
|
9.25
|
|
|
$
|
7.31
|
|
Second Quarter
|
9.19
|
|
|
6.66
|
|
||
Third Quarter
|
9.34
|
|
|
7.06
|
|
||
Fourth Quarter
|
9.99
|
|
|
7.85
|
|
||
|
|
|
|
||||
Year Ended December 31, 2015
|
High
|
|
Low
|
||||
First Quarter
|
$
|
11.33
|
|
|
$
|
7.92
|
|
Second Quarter
|
11.93
|
|
|
8.97
|
|
||
Third Quarter
|
13.20
|
|
|
8.52
|
|
||
Fourth Quarter
|
10.14
|
|
|
6.71
|
|
|
Total Number of
Shares Purchased (a) |
Average Price Paid
per Share |
Total number of shares purchased under publicly announced plan (b)
|
Total Amount Spent Under the Plan During Each Period
|
Remaining Amount
to be Spent Under the Plan |
|||||||||
Total amount remaining October 1, 2016
|
|
|
|
|
$
|
3,935,789
|
|
|||||||
|
|
|
|
|
|
|||||||||
October 1, 2016 - October 31, 2016
|
18,202
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
3,935,789
|
|
|
|
|
|
|
|
|||||||||
November 1, 2016 - November 30, 2016
|
11,542
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
3,935,789
|
|
|
|
|
|
|
|
|||||||||
December 2016 increased spending authorization
|
|
|
|
|
6,000,000
|
|
||||||||
|
|
|
|
|
|
|||||||||
December 1, 2016 - December 31, 2016
|
2,520
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
9,935,789
|
|
|
|
|
|
|
|
|||||||||
Total for the quarter
|
32,264
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
As of December 31, in thousands
|
|||||||||||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
|
$
|
245,015
|
|
|
$
|
187,296
|
|
|
$
|
118,223
|
|
|
$
|
59,181
|
|
|
27,054
|
|
|
Gross margin
|
|
|
212,608
|
|
|
167,094
|
|
|
105,558
|
|
|
49,853
|
|
|
21,865
|
|
|||||
Operating income (loss)
|
|
|
18,446
|
|
|
24,364
|
|
|
7,100
|
|
|
(2,639
|
)
|
|
(5,355
|
)
|
|||||
Net income (loss)
|
|
|
11,974
|
|
|
29,446
|
|
|
6,220
|
|
|
(4,112
|
)
|
|
(7,662
|
)
|
|||||
Net income (loss) per common share - basic
|
|
|
0.11
|
|
|
0.28
|
|
|
0.06
|
|
|
(0.04
|
)
|
|
(0.09
|
)
|
|||||
Net income (loss) per common share - diluted
|
|
|
$
|
0.11
|
|
|
$
|
0.26
|
|
|
$
|
0.05
|
|
|
$
|
(0.04
|
)
|
|
$
|
(0.09
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
As of December 31, in thousands
|
|
|||||||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
|
|
$
|
193,263
|
|
|
$
|
135,913
|
|
|
$
|
109,259
|
|
|
$
|
84,694
|
|
|
$
|
35,183
|
|
Working capital
|
|
|
75,806
|
|
|
69,533
|
|
|
67,272
|
|
|
55,781
|
|
|
13,072
|
|
|||||
Long term liabilities
|
|
|
9,531
|
|
|
1,148
|
|
|
1,526
|
|
|
1,518
|
|
|
10,158
|
|
|||||
Stockholders' equity
|
|
|
$
|
133,000
|
|
|
$
|
107,988
|
|
|
$
|
89,329
|
|
|
$
|
73,568
|
|
|
$
|
20,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities;
|
•
|
Level 2: Quoted prices in active markets for similar assets or liabilities or observable prices that are based on inputs not quoted on active markets, but corroborated by market data; and
|
•
|
Level 3: Unobservable inputs or valuation techniques that are used when little or no market data is available.
|
|
|
|
Less than
|
|
|
|
|
|
|
||||||||||
Contractual Obligations
|
TOTAL
|
|
1 year
|
|
1-3 years
|
|
3-5 years
|
|
Thereafter
|
||||||||||
Capital lease obligations
|
$
|
31
|
|
|
$
|
29
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
|
|
|
Operating lease obligations
|
6,988
|
|
|
2,089
|
|
|
3,894
|
|
|
631
|
|
|
374
|
|
|||||
Software License
|
284
|
|
|
95
|
|
|
189
|
|
|
—
|
|
|
|
|
|||||
Meeting space commitments
|
1,662
|
|
|
643
|
|
|
1,019
|
|
|
—
|
|
|
|
|
|||||
|
$
|
8,965
|
|
|
$
|
2,856
|
|
|
$
|
5,104
|
|
|
$
|
631
|
|
|
$
|
374
|
|
|
Years Ended December 31
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net Income (Per GAAP)
|
$
|
11,974
|
|
|
$
|
29,446
|
|
|
$
|
6,220
|
|
|
|
|
|
|
|
||||||
Add back (deduct):
|
|
|
|
|
|
|
|||||
Income taxes
|
6,133
|
|
|
(5,168
|
)
|
|
832
|
|
|||
One time costs incurred in connection with acquisition
|
1,088
|
|
|
—
|
|
|
—
|
|
|||
One time inventory costs incurred in connection with acquisition
|
1,593
|
|
|
—
|
|
|
—
|
|
|||
Other interest expense, net
|
339
|
|
|
86
|
|
|
48
|
|
|||
Depreciation expense
|
3,333
|
|
|
1,799
|
|
|
1,197
|
|
|||
Amortization of intangible assets
|
2,127
|
|
|
933
|
|
|
928
|
|
|||
Share-based compensation
|
17,818
|
|
|
16,896
|
|
|
11,453
|
|
|||
Adjusted EBITDA
|
$
|
44,405
|
|
|
$
|
43,992
|
|
|
$
|
20,678
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Gross Margin (Per GAAP)
|
$
|
212,608
|
|
|
$
|
167,094
|
|
|
$
|
105,558
|
|
|
|
|
|
|
|
||||||
Non-GAAP Adjustments:
|
|
|
|
|
|
||||||
One time inventory costs incurred in connection with acquisition
|
1,593
|
|
|
—
|
|
|
—
|
|
|||
Gross Margin before Amortization of inventory fair value step-up
|
$
|
214,201
|
|
|
$
|
167,094
|
|
|
$
|
105,558
|
|
Adjusted Gross Margin
|
87.4
|
%
|
|
89.2
|
%
|
|
89.3
|
%
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net Income (Per GAAP)
|
$
|
11,974
|
|
|
$
|
29,446
|
|
|
$
|
6,220
|
|
|
|
|
|
|
|
||||||
Non-GAAP Adjustments:
|
|
|
|
|
|
||||||
Tax rate normalization*
|
(898
|
)
|
|
(15,374
|
)
|
|
(4,069
|
)
|
|||
One time costs incurred in connection with acquisition
|
1,088
|
|
|
—
|
|
|
—
|
|
|||
One time inventory costs incurred in connection with acquisition
|
1,593
|
|
|
—
|
|
|
—
|
|
|||
Amortization of intangible assets
|
2,127
|
|
|
933
|
|
|
928
|
|
|||
Share - based compensation
|
17,818
|
|
|
16,896
|
|
|
11,453
|
|
|||
Estimated income tax impact from adjustments
|
(9,335
|
)
|
|
(7,495
|
)
|
|
(8,605
|
)
|
|||
Adjusted Net Income
|
$
|
24,367
|
|
|
$
|
24,406
|
|
|
$
|
5,927
|
|
Adjusted diluted net income per share
|
$
|
0.22
|
|
|
$
|
0.21
|
|
|
$
|
0.05
|
|
Denominator for diluted earnings per share - weighted average shares adjusted for dilutive securities
|
112,441,709
|
|
|
113,628,482
|
|
|
113,295,504
|
|
Index to Financial Statements
|
|
|
|
Consolidated Balance Sheets – As of
December 31, 2016 and December 31, 2015
|
|
Schedule II - Valuation and Qualifying Accounts
|
/s/ Cherry Bekaert LLP
|
|
|
|
Atlanta, Georgia
|
|
|
|
March 1, 2017
|
|
/s/ Cherry Bekaert LLP
|
|
|
|
Atlanta, Georgia
|
|
|
|
March 1, 2017
|
|
MIMEDX GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
|
|||||||||||
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
||||||
Net sales
|
$
|
245,015
|
|
|
$
|
187,296
|
|
|
$
|
118,223
|
|
Cost of sales
|
32,407
|
|
|
20,202
|
|
|
12,665
|
|
|||
Gross margin
|
212,608
|
|
|
167,094
|
|
|
105,558
|
|
|||
|
|
|
|
|
|
||||||
Operating expenses:
|
|
|
|
|
|
|
|
||||
Research and development expenses
|
12,038
|
|
|
8,413
|
|
|
7,050
|
|
|||
Selling, general and administrative expenses
|
179,997
|
|
|
133,384
|
|
|
90,480
|
|
|||
Amortization of intangible assets
|
2,127
|
|
|
933
|
|
|
928
|
|
|||
Operating income
|
18,446
|
|
|
24,364
|
|
|
7,100
|
|
|||
|
|
|
|
|
|
||||||
Other expense, net
|
|
|
|
|
|
|
|
||||
Interest expense, net
|
(339
|
)
|
|
(86
|
)
|
|
(48
|
)
|
|||
|
|
|
|
|
|
||||||
Income before income tax provision
|
18,107
|
|
|
24,278
|
|
|
7,052
|
|
|||
Income tax provision (expense) benefit
|
(6,133
|
)
|
|
5,168
|
|
|
(832
|
)
|
|||
|
|
|
|
|
|
||||||
Net income
|
$
|
11,974
|
|
|
$
|
29,446
|
|
|
$
|
6,220
|
|
|
|
|
|
|
|
||||||
Net income per common share - basic
|
$
|
0.11
|
|
|
$
|
0.28
|
|
|
$
|
0.06
|
|
|
|
|
|
|
|
||||||
Net income per common share - diluted
|
$
|
0.11
|
|
|
$
|
0.26
|
|
|
$
|
0.05
|
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding - basic
|
105,928,348
|
|
|
105,929,205
|
|
|
105,793,008
|
|
|||
|
|
|
|
|
|
||||||
Weighted average shares outstanding - diluted
|
112,441,709
|
|
|
113,628,482
|
|
|
113,295,504
|
|
MIMEDX GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands, except share data)
|
|||||||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-in |
|
Treasury Stock
|
|
Accumulated
|
|
|
||||||||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Shares
|
|
Amount
|
|
Deficit
|
|
Total
|
||||||||||||
Balances, December 31, 2013
|
104,425,614
|
|
|
$
|
104
|
|
|
$
|
147,284
|
|
|
50,000
|
|
|
$
|
(25
|
)
|
|
$
|
(73,795
|
)
|
|
$
|
73,568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
11,453
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,453
|
|
|||||
Exercise of stock options
|
1,653,690
|
|
|
2
|
|
|
2,468
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,470
|
|
|||||
Exercise of warrants
|
1,242,416
|
|
|
1
|
|
|
1,112
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,113
|
|
|||||
Issuance of restricted stock
|
1,438,569
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Shares issued for services performed
|
15,958
|
|
|
—
|
|
|
117
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
117
|
|
|||||
Stock repurchase
|
—
|
|
|
—
|
|
|
—
|
|
|
936,636
|
|
|
(5,612
|
)
|
|
—
|
|
|
(5,612
|
)
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,220
|
|
|
6,220
|
|
|||||
Balances, December 31, 2014
|
108,776,247
|
|
|
$
|
108
|
|
|
$
|
162,433
|
|
|
986,636
|
|
|
$
|
(5,637
|
)
|
|
$
|
(67,575
|
)
|
|
$
|
89,329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
16,896
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,896
|
|
|||||
Tax benefit of share-based compensation expense
|
—
|
|
|
—
|
|
|
7,757
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,757
|
|
|||||
Exercise of stock options
|
647,656
|
|
|
1
|
|
|
(9,792
|
)
|
|
(1,573,225
|
)
|
|
14,420
|
|
|
—
|
|
|
4,629
|
|
|||||
Exercise of warrants
|
—
|
|
|
—
|
|
|
(379
|
)
|
|
(42,400
|
)
|
|
425
|
|
|
—
|
|
|
46
|
|
|||||
Issuance of restricted stock
|
34,250
|
|
|
—
|
|
|
(14,547
|
)
|
|
(1,940,009
|
)
|
|
14,547
|
|
|
—
|
|
|
—
|
|
|||||
Shares Canceled / Forfeited
|
(2,058
|
)
|
|
—
|
|
|
652
|
|
|
69,949
|
|
|
(652
|
)
|
|
—
|
|
|
—
|
|
|||||
Shares issued for services performed
|
11,321
|
|
|
—
|
|
|
113
|
|
|
(5,172
|
)
|
|
51
|
|
|
—
|
|
|
164
|
|
|||||
Stock repurchase
|
—
|
|
|
—
|
|
|
—
|
|
|
4,610,166
|
|
|
(40,279
|
)
|
|
—
|
|
|
(40,279
|
)
|
|||||
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,446
|
|
|
29,446
|
|
|||||
Balances, December 31, 2015
|
109,467,416
|
|
|
$
|
109
|
|
|
$
|
163,133
|
|
|
2,105,945
|
|
|
$
|
(17,125
|
)
|
|
$
|
(38,129
|
)
|
|
$
|
107,988
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Share-based compensation expense
|
|
|
|
|
|
|
17,818
|
|
|
|
|
|
|
|
|
|
|
|
17,818
|
|
|||||
Tax benefit of share-based compensation expense
|
|
|
|
|
|
|
(424
|
)
|
|
|
|
|
|
|
|
|
|
|
(424
|
)
|
|||||
Exercise of stock options
|
243,928
|
|
|
—
|
|
|
(3,767
|
)
|
|
(918,544
|
)
|
|
7,261
|
|
|
|
|
|
3,494
|
|
|||||
Issuance of restricted stock
|
501,203
|
|
|
1
|
|
|
(17,546
|
)
|
|
(2,210,879
|
)
|
|
17,546
|
|
|
|
|
|
1
|
|
|||||
Restricted stock shares canceled/forfeited
|
|
|
|
|
|
|
2,503
|
|
|
377,317
|
|
|
(2,503
|
)
|
|
|
|
|
—
|
|
|||||
Shares issued for services performed
|
|
|
|
|
|
|
6
|
|
|
(43,344
|
)
|
|
340
|
|
|
|
|
|
346
|
|
|||||
Stock repurchase
|
|
|
|
|
|
|
|
|
|
1,338,616
|
|
|
(10,378
|
)
|
|
|
|
|
(10,378
|
)
|
|||||
Shares repurchased for tax withholding
|
|
|
|
|
|
|
141,658
|
|
|
(1,165
|
)
|
|
|
|
(1,165
|
)
|
|||||||||
Shares issued in conjunction with acquisition
|
|
|
|
|
(462
|
)
|
|
(441,009
|
)
|
|
3,808
|
|
|
|
|
3,346
|
|
||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,974
|
|
|
11,974
|
|
|||||
Balances, December 31, 2016
|
110,212,547
|
|
|
$
|
110
|
|
|
$
|
161,261
|
|
|
349,760
|
|
|
$
|
(2,216
|
)
|
|
$
|
(26,155
|
)
|
|
$
|
133,000
|
|
MIMEDX GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
|
|||||||||||
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
11,974
|
|
|
$
|
29,446
|
|
|
$
|
6,220
|
|
Adjustments to reconcile net income to net cash from operating activities:
|
|
|
|
|
|
|
|
||||
Depreciation
|
3,333
|
|
|
1,799
|
|
|
1,197
|
|
|||
Amortization of intangible assets
|
2,127
|
|
|
933
|
|
|
928
|
|
|||
Amortization of inventory fair value step-up
|
1,485
|
|
|
—
|
|
|
—
|
|
|||
Amortization of deferred financing costs
|
181
|
|
|
42
|
|
|
—
|
|
|||
Share-based compensation
|
17,818
|
|
|
16,896
|
|
|
11,453
|
|
|||
Change in deferred income taxes
|
(594
|
)
|
|
(7,081
|
)
|
|
—
|
|
|||
Increase (decrease) in cash, net of effects of acquisition, resulting from changes in:
|
|
|
|
|
|
|
|
||||
Accounts receivable
|
(11,396
|
)
|
|
(27,083
|
)
|
|
(10,579
|
)
|
|||
Inventory
|
(2,837
|
)
|
|
(2,327
|
)
|
|
(1,252
|
)
|
|||
Prepaid expenses
|
(2,400
|
)
|
|
(1,854
|
)
|
|
(203
|
)
|
|||
Other current assets
|
(384
|
)
|
|
(240
|
)
|
|
—
|
|
|||
Accounts payable
|
(3,665
|
)
|
|
3,136
|
|
|
1,287
|
|
|||
Accrued compensation
|
(2,669
|
)
|
|
3,511
|
|
|
5,935
|
|
|||
Accrued expenses
|
6,297
|
|
|
2,140
|
|
|
1,098
|
|
|||
Income taxes
|
5,835
|
|
|
(519
|
)
|
|
452
|
|
|||
Other liabilities
|
723
|
|
|
8
|
|
|
266
|
|
|||
Net cash flows from operating activities
|
25,828
|
|
|
18,807
|
|
|
16,802
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||
Purchases of equipment
|
(6,269
|
)
|
|
(5,827
|
)
|
|
(2,558
|
)
|
|||
Purchase of Stability Inc., net of cash acquired
|
(7,631
|
)
|
|
—
|
|
|
—
|
|
|||
Fixed maturity securities redemption
|
3,000
|
|
|
6,000
|
|
|
(9,000
|
)
|
|||
Patent application costs
|
(842
|
)
|
|
(851
|
)
|
|
(594
|
)
|
|||
Net cash flows from investing activities
|
(11,742
|
)
|
|
(678
|
)
|
|
(12,152
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||
Proceeds from exercise of stock options
|
3,494
|
|
|
4,629
|
|
|
2,470
|
|
|||
Proceeds from exercise of warrants
|
—
|
|
|
46
|
|
|
1,113
|
|
|||
Stock repurchase under repurchase plan
|
(10,378
|
)
|
|
(40,279
|
)
|
|
(5,612
|
)
|
|||
Stock repurchase for tax withholdings on vesting of restricted stock
|
(1,165
|
)
|
|
—
|
|
|
—
|
|
|||
Deferred financing costs
|
(30
|
)
|
|
(504
|
)
|
|
—
|
|
|||
Payments under capital lease obligations
|
(102
|
)
|
|
(117
|
)
|
|
(117
|
)
|
|||
Net cash flows from financing activities
|
(8,181
|
)
|
|
(36,225
|
)
|
|
(2,146
|
)
|
|||
|
|
|
|
|
|
||||||
Net change in cash
|
5,905
|
|
|
(18,096
|
)
|
|
2,504
|
|
|||
|
|
|
|
|
|
||||||
Cash and cash equivalents, beginning of period
|
28,486
|
|
|
46,582
|
|
|
44,078
|
|
|||
Cash and cash equivalents, end of period
|
$
|
34,391
|
|
|
$
|
28,486
|
|
|
$
|
46,582
|
|
1.
|
Nature of Business
|
2.
|
Significant Accounting Policies
|
•
|
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.
|
3.
|
Liquidity and Capital Resources
|
Cash paid at closing
|
|
$
|
6,000
|
|
Working capital adjustment
|
|
(480
|
)
|
|
Common stock issued (441,009 shares)
|
|
3,346
|
|
|
Assumed debt
|
|
1,771
|
|
|
Fair value of earn-out
|
|
17,450
|
|
|
Total fair value of purchase price
|
|
$
|
28,087
|
|
|
|
|
||
Net assets acquired:
|
|
|
||
Debt-free working capital
|
|
$
|
2,456
|
|
Other long-term assets
|
|
199
|
|
|
Property, plant and equipment
|
|
1,375
|
|
|
Deferred tax liability
|
|
(5,896
|
)
|
|
Subtotal
|
|
(1,866
|
)
|
|
Intangible assets:
|
|
|
||
Customer relationships
|
|
5,330
|
|
|
Patents and know-how
|
|
6,790
|
|
|
Trade names and trademarks
|
|
450
|
|
|
Non compete agreements
|
|
830
|
|
|
Licenses and permits
|
|
390
|
|
|
Subtotal
|
|
13,790
|
|
|
Goodwill
|
|
16,163
|
|
|
Total Assets Purchased
|
|
$
|
28,087
|
|
|
|
|
||
Working capital and other assets were composed of the following (in thousands):
|
|
|
||
Working capital
|
|
|
||
Cash
|
|
$
|
140
|
|
Prepaid Expenses and other current assets
|
|
100
|
|
|
Accounts receivable
|
|
2,001
|
|
|
Federal and state taxes receivable
|
|
28
|
|
|
Inventory
|
|
9,002
|
|
|
Accounts payable and accrued expenses
|
|
(8,815
|
)
|
|
Debt-free working capital
|
|
$
|
2,456
|
|
|
|
|
||
Current portion of long term debt
|
|
$
|
(194
|
)
|
Long-term debt
|
|
(560
|
)
|
|
Line of Credit
|
|
(932
|
)
|
|
Shareholder loan
|
|
(85
|
)
|
|
Assumed debt
|
|
$
|
(1,771
|
)
|
|
|
|
||
Net working capital
|
|
$
|
685
|
|
|
|
|
|
|
Estimated useful life (in years)
|
Intangible asset:
|
|
|
Customer relationships
|
|
12
|
Patents and know-how
|
|
20
|
Trade name and Trademarks
|
|
Indefinite
|
Non compete agreements
|
|
4
|
Licenses and permits
|
|
2
|
|
|
Provisional Per
|
|
Measurement Period
|
|
|
||||||
|
|
3/31/2016 Form 10Q
|
|
Adjustments 2016
|
|
Final
|
||||||
|
|
|
|
|
|
|
||||||
Cash paid at closing
|
|
$
|
6,000
|
|
|
$
|
—
|
|
|
$
|
6,000
|
|
Working capital adjustment
|
|
(480
|
)
|
|
—
|
|
|
(480
|
)
|
|||
Common stock issued
|
|
3,346
|
|
|
—
|
|
|
3,346
|
|
|||
Assumed debt
|
|
1,771
|
|
|
—
|
|
|
1,771
|
|
|||
Fair value of earn-out
|
|
25,620
|
|
|
(8,170
|
)
|
|
17,450
|
|
|||
Total fair value of purchase price
|
|
$
|
36,257
|
|
|
$
|
(8,170
|
)
|
|
$
|
28,087
|
|
|
|
|
|
|
|
|
||||||
Net assets acquired:
|
|
|
|
|
|
|
||||||
Debt-free working capital
|
|
$
|
2,179
|
|
|
$
|
277
|
|
|
$
|
2,456
|
|
Other assets, net
|
|
199
|
|
|
—
|
|
|
199
|
|
|||
Property, plant and equipment
|
|
1,375
|
|
|
—
|
|
|
1,375
|
|
|||
Deferred tax liability
|
|
(8,268
|
)
|
|
2,372
|
|
|
(5,896
|
)
|
|||
Subtotal
|
|
$
|
(4,515
|
)
|
|
$
|
2,649
|
|
|
$
|
(1,866
|
)
|
Intangible assets:
|
|
|
|
|
|
|
||||||
Customer relationships
|
|
$
|
6,090
|
|
|
$
|
(760
|
)
|
|
$
|
5,330
|
|
Patents and know-how
|
|
9,170
|
|
|
(2,380
|
)
|
|
6,790
|
|
|||
Trade names and trademarks
|
|
830
|
|
|
(380
|
)
|
|
450
|
|
|||
Non compete agreements
|
|
1,080
|
|
|
(250
|
)
|
|
830
|
|
|||
Licenses and permits
|
|
690
|
|
|
(300
|
)
|
|
390
|
|
|||
Subtotal
|
|
17,860
|
|
|
(4,070
|
)
|
|
13,790
|
|
|||
Goodwill
|
|
22,912
|
|
|
(6,749
|
)
|
|
16,163
|
|
|||
Total Assets Purchased
|
|
$
|
36,257
|
|
|
$
|
(8,170
|
)
|
|
$
|
28,087
|
|
|
|
Years Ended December 31,
|
|
|
|
2016
|
2015
|
Revenue
|
|
$245,563
|
$204,481
|
|
|
|
|
Net income
|
|
$12,611
|
$24,960
|
|
|
|
|
Income per share, fully diluted
|
|
$0.11
|
$0.22
|
5.
|
Cash Equivalents and Short Term Investments
|
6.
|
Inventories
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Raw materials
|
$
|
1,148
|
|
|
$
|
602
|
|
Work in process
|
6,677
|
|
|
3,850
|
|
||
Finished goods
|
10,817
|
|
|
3,405
|
|
||
Inventory, gross
|
18,642
|
|
|
7,857
|
|
||
Reserve for obsolescence
|
(828
|
)
|
|
(397
|
)
|
||
Inventory, net
|
$
|
17,814
|
|
|
$
|
7,460
|
|
7.
|
Property and Equipment
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Leasehold improvements
|
$
|
3,274
|
|
|
$
|
2,684
|
|
Lab and clean room equipment
|
8,666
|
|
|
4,564
|
|
||
Furniture and equipment
|
7,051
|
|
|
4,577
|
|
||
Construction in Progress
|
3,300
|
|
|
2,629
|
|
||
Property and equipment, gross
|
22,291
|
|
|
14,454
|
|
||
Less accumulated depreciation
|
(8,505
|
)
|
|
(4,979
|
)
|
||
Property and equipment, net
|
$
|
13,786
|
|
|
$
|
9,475
|
|
8.
|
Intangible Assets and Royalty Agreement
|
|
|
|
|
December 31,
|
||||||
|
|
|
|
2016
|
|
2015
|
||||
|
|
Weighted
Average Amortization Lives |
|
Cost
|
|
Cost
|
||||
Licenses (a) (b) (c) (d)
|
|
7 years
|
|
$
|
1,399
|
|
|
$
|
1,009
|
|
Patents & Know How (b) (d)
|
|
19 years
|
|
14,839
|
|
|
8,001
|
|
||
Customer & Supplier Relationships (b) (d)
|
|
13 years
|
|
9,091
|
|
|
3,761
|
|
||
Tradenames & Trademarks (d)
|
|
indefinite
|
|
1,458
|
|
|
1,008
|
|
||
Non-Compete Agreements
|
|
4 years
|
|
830
|
|
|
—
|
|
||
In Process Research & Development (b)
|
|
various
|
|
25
|
|
|
25
|
|
||
Patents in Process (c)
|
|
various
|
|
2,618
|
|
|
1,823
|
|
||
Total
|
|
|
|
30,260
|
|
|
15,627
|
|
||
Less Accumulated amortization and impairment charges
|
|
|
|
(6,992
|
)
|
|
(4,864
|
)
|
||
Net
|
|
|
|
$
|
23,268
|
|
|
$
|
10,763
|
|
(a)
|
On January 29, 2007, the Company acquired a license from Shriners Hospitals for Children and University of South Florida Research Foundation, Inc. in the amount of
$996,000
. Within
30 days
after the receipt by the Company of approval by the FDA allowing the sale of the first licensed product, the Company is required to pay an additional
$200,000
to the licensor. Due to its contingent nature, this amount is not recorded as a liability. The Company will also be required to pay a royalty of
3%
on all commercial sales revenue from the licensed products. The Company is also obligated to pay a
$50,000
minimum annual royalty payment over the life of the license. As of December 31, 2016 the license had a remaining net book value of approximately
$10,000
.
|
(b)
|
On January 5, 2011, the Company acquired Surgical Biologics, LLC. As a result, the Company recorded intangible assets for Customer & Supplier Relationships of
$3,761,000
, Patents & Know-How of
$7,690,000
, Licenses of
$13,000
, Tradenames & Trademarks of
$1,008,000
and In-Process Research & Development of
$25,000
. For the twelve months ended
December 31, 2016
, approximately
$48,000
of costs associated with patents granted during the period were capitalized and included in Patents & Know-How subject to amortization over the life of the patents.
|
(c)
|
Patents in Process consist of capitalized external legal and other registration costs in connection with internally developed tissue-based patents that are pending. Once issued, the costs associated with a given patent will be included in Patents & Know-How under intangible assets subject to amortization.
|
(d)
|
On January 13, 2016, the Company acquired Stability. As a result, the Company recorded intangible assets for Patents & Know - How of
$6,790,000
, Customer Relationships of
$5,330,000
, Non - compete agreements of
$830,000
, Tradenames & Trademarks of
$450,000
and Licenses of
$390,000
.
|
|
Estimated
|
||
|
Amortization
|
||
Year ending December 31,
|
Expense
|
||
2017
|
$
|
2,034
|
|
2018
|
1,829
|
|
|
2019
|
1,829
|
|
|
2020
|
1,622
|
|
|
2021
|
1,622
|
|
|
Thereafter
|
12,874
|
|
|
|
$
|
21,810
|
|
9.
|
Long-Term Debt
|
10.
|
Net Income Per Share
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net income
|
$
|
11,974
|
|
|
$
|
29,446
|
|
|
$
|
6,220
|
|
Denominator for basic earnings per share - weighted average shares
|
105,928,348
|
|
|
105,929,205
|
|
|
105,793,008
|
|
|||
Effect of dilutive securities: Stock options, warrants, and restricted stock (a)
|
6,513,361
|
|
|
7,699,277
|
|
|
7,502,496
|
|
|||
Denominator for diluted earnings per share - weighted average shares adjusted for dilutive securities
|
112,441,709
|
|
|
113,628,482
|
|
|
113,295,504
|
|
|||
Income per common share - basic
|
$
|
0.11
|
|
|
$
|
0.28
|
|
|
$
|
0.06
|
|
Income per common share - diluted
|
$
|
0.11
|
|
|
$
|
0.26
|
|
|
$
|
0.05
|
|
Effect of dilutive securities:
|
2016
|
|
2015
|
|
2014
|
|||
Stock Options
|
5,845,377
|
|
|
7,121,774
|
|
|
7,035,728
|
|
Warrants
|
—
|
|
|
33,676
|
|
|
226,926
|
|
Restricted Stock Awards
|
667,984
|
|
|
543,827
|
|
|
239,842
|
|
|
6,513,361
|
|
|
7,699,277
|
|
|
7,502,496
|
|
11.
|
Equity
|
|
Number of
Shares
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Term
(in years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding at January 1, 2016
|
14,019,629
|
|
|
$
|
3.62
|
|
|
|
|
|
|
|
Granted
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Exercised
|
(1,164,138
|
)
|
|
$
|
3.02
|
|
|
|
|
|
|
|
Unvested options forfeited
|
(154,200
|
)
|
|
$
|
6.77
|
|
|
|
|
|
|
|
Vested options expired
|
(148,683
|
)
|
|
$
|
6.16
|
|
|
|
|
|
|
|
Outstanding at December 31, 2016
|
12,552,608
|
|
|
$
|
3.61
|
|
|
5.4
|
|
$
|
66,137,378
|
|
Vested at December 31, 2016
|
11,680,455
|
|
|
$
|
3.33
|
|
|
5.3
|
|
$
|
64,733,964
|
|
Vested or expected to vest at December 31, 2016 (a)
|
12,539,865
|
|
|
$
|
3.60
|
|
|
5.4
|
|
$
|
66,119,285
|
|
(a)
|
Includes forfeiture adjusted unvested shares.
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||
Range of Exercise Prices
|
Number outstanding
|
|
Weighted-
Average
Remaining
Contractual
Term
(in years)
|
|
Weighted-
Average
Exercise
Price
|
|
Number Exercisable
|
|
Weighted-
Average
Exercise Price
|
||||||
$0.50 - $0.76
|
441,429
|
|
|
2.4
|
|
$
|
0.72
|
|
|
441,429
|
|
|
$
|
0.72
|
|
$0.87 - $1.35
|
4,385,570
|
|
|
4.7
|
|
1.19
|
|
|
4,385,570
|
|
|
1.19
|
|
||
$1.40 - $2.45
|
1,362,424
|
|
|
4.1
|
|
1.92
|
|
|
1,362,424
|
|
|
1.92
|
|
||
$2.66 - $3.99
|
878,680
|
|
|
5.8
|
|
3.06
|
|
|
878,680
|
|
|
3.06
|
|
||
$4.19 - $6.38
|
3,056,069
|
|
|
6.2
|
|
5.36
|
|
|
2,937,038
|
|
|
5.34
|
|
||
$6.45- $9.78
|
2,324,103
|
|
|
7.0
|
|
7.30
|
|
|
1,610,485
|
|
|
7.25
|
|
||
$9.90 - $10.99
|
104,333
|
|
|
7.7
|
|
10.42
|
|
|
64,829
|
|
|
10.46
|
|
||
|
12,552,608
|
|
|
5.4
|
|
$
|
3.61
|
|
|
11,680,455
|
|
|
$
|
3.33
|
|
Unvested Stock Options
|
Number of
Shares |
|
Weighted-
Average Grant Date Fair Value |
|||
Unvested at January 1, 2016
|
3,067,935
|
|
|
$
|
3.81
|
|
Granted
|
—
|
|
|
$
|
—
|
|
Cancelled
|
(154,200
|
)
|
|
$
|
6.77
|
|
Vested
|
(2,041,582
|
)
|
|
$
|
3.61
|
|
Unvested at December 31, 2016
|
872,153
|
|
|
$
|
4.28
|
|
|
Year ended December 31,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
Expected volatility
|
—
|
%
|
|
54.35 - 58.14%
|
|
|
58.14 - 64.50%
|
|
Expected life (in years)
|
0
|
|
|
6
|
|
|
6
|
|
Expected dividend yield
|
—
|
|
|
—
|
|
|
—
|
|
Risk-free interest rate
|
0
|
|
|
1.51 - 1.68%
|
|
|
1.64 - 1.96%
|
|
|
|
Number of
Shares |
|
Weighted-Average Grant Date
Fair Value |
|||
Unvested at January 1, 2016
|
|
2,613,267
|
|
|
$
|
9.14
|
|
Granted
|
|
2,755,426
|
|
|
$
|
8.05
|
|
Vested
|
|
(1,162,931
|
)
|
|
$
|
8.68
|
|
Forfeited
|
|
(377,317
|
)
|
|
$
|
8.71
|
|
Unvested at December 31, 2016
|
|
3,828,445
|
|
|
$
|
8.53
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Cost of sales
|
$
|
426
|
|
|
$
|
352
|
|
|
$
|
322
|
|
Research and development
|
647
|
|
|
790
|
|
|
660
|
|
|||
Selling, general and administrative
|
16,745
|
|
|
15,754
|
|
|
10,471
|
|
|||
|
$
|
17,818
|
|
|
$
|
16,896
|
|
|
$
|
11,453
|
|
12.
|
Income Taxes
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Deferred tax assets and liabilities:
|
|
|
|
||||
Accruals and prepaids
|
$
|
4,992
|
|
|
$
|
4,606
|
|
Intangible assets
|
(5,130
|
)
|
|
146
|
|
||
Property and equipment
|
(1,338
|
)
|
|
(1,396
|
)
|
||
R&D and other tax credits
|
1,219
|
|
|
3,293
|
|
||
Stock Compensation
|
7,417
|
|
|
7,063
|
|
||
Net operating loss
|
2,395
|
|
|
1,763
|
|
||
Other
|
113
|
|
|
145
|
|
||
Net deferred tax assets
|
$
|
9,668
|
|
|
$
|
15,620
|
|
|
|
|
|
||||
Valuation allowance
|
(554
|
)
|
|
(782
|
)
|
||
|
$
|
9,114
|
|
|
$
|
14,838
|
|
|
December 31,
|
||||
|
2016
|
|
2015
|
||
Federal statutory rate
|
35.00
|
%
|
|
34.00
|
%
|
State taxes, net of federal benefit
|
4.78
|
%
|
|
3.33
|
%
|
Non deductible compensation
|
0.04
|
%
|
|
0.63
|
%
|
Meals & entertainment
|
3.82
|
%
|
|
2.27
|
%
|
Equity Compensation
|
5.51
|
%
|
|
6.39
|
%
|
Domestic Production Activities Deduction
|
(4.71
|
)%
|
|
—
|
%
|
Tax Credits
|
(8.79
|
)%
|
|
(2.84
|
)%
|
Prior Period Adjustments
|
(3.79
|
)%
|
|
—
|
%
|
Other
|
3.27
|
%
|
|
(1.74
|
)%
|
Valuation allowance
|
(1.26
|
)%
|
|
(63.33
|
)%
|
|
33.87
|
%
|
|
(21.29
|
)%
|
|
December 31, 2016
|
|
December 31, 2015
|
|
||
Current:
|
|
|
||||
Federal
|
$
|
4,700
|
|
$
|
8,452
|
|
State
|
1,423
|
|
1,218
|
|
||
Total current
|
6,123
|
|
9,670
|
|
||
|
|
|
||||
Deferred:
|
|
|
||||
Federal
|
26
|
|
(13,070
|
)
|
||
State
|
(16
|
)
|
(1,768
|
)
|
||
Total deferred
|
10
|
|
(14,838
|
)
|
||
|
|
|
||||
Total expense
|
$
|
6,133
|
|
$
|
(5,168
|
)
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Unrecognized tax benefits - January 1
|
$
|
170
|
|
|
$
|
—
|
|
|
|
|
|
||||
Gross increases - tax positions in current period
|
111
|
|
|
170
|
|
||
|
|
|
|
||||
Unrecognized tax benefits - December 31
|
$
|
281
|
|
|
$
|
170
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Cash paid for interest
|
$
|
162
|
|
|
$
|
86
|
|
|
$
|
48
|
|
Income taxes paid
|
642
|
|
|
2,293
|
|
|
384
|
|
|||
Retirement of fixed assets
|
—
|
|
|
319
|
|
|
—
|
|
|||
Deferred financing costs
|
10
|
|
|
504
|
|
|
—
|
|
|||
APIC related tax adjustments
|
(424
|
)
|
|
7,757
|
|
|
—
|
|
|||
Stock issuance of 441,009 shares in connection with acquisition of Stability
|
3,346
|
|
|
—
|
|
|
—
|
|
|||
Stock issuance of 43,344, 16,493 and 15,958 shares in exchange for services performed in 2016, 2015 and 2014, respectively
|
346
|
|
|
164
|
|
|
117
|
|
14.
|
401k Plan
|
15.
|
Related Party Transactions
|
16.
|
Commitments and Contingencies
|
Year ended December 31,
|
|
||
2017
|
$
|
2,827
|
|
2018
|
3,079
|
|
|
2019
|
2,023
|
|
|
2020
|
490
|
|
|
2021
|
141
|
|
|
Thereafter
|
374
|
|
|
|
$
|
8,934
|
|
17.
|
Quarterly Financial Data (Unaudited) (in thousands except per share data)
|
|
|
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
NET SALES
|
|
2016
|
|
$
|
53,367
|
|
|
$
|
57,342
|
|
|
$
|
64,429
|
|
|
$
|
69,877
|
|
|
|
2015
|
|
40,767
|
|
|
45,679
|
|
|
49,015
|
|
|
51,835
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
GROSS MARGIN
|
|
2016
|
|
$
|
45,421
|
|
|
$
|
49,948
|
|
|
$
|
56,432
|
|
|
$
|
60,807
|
|
|
|
2015
|
|
35,619
|
|
|
40,590
|
|
|
44,036
|
|
|
46,849
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
NET INCOME
|
|
2016
|
|
$
|
1,197
|
|
|
$
|
1,975
|
|
|
$
|
3,321
|
|
|
$
|
5,481
|
|
|
|
2015
|
|
4,087
|
|
|
5,430
|
|
|
6,551
|
|
|
13,378
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
NET INCOME
PER COMMON SHARE - BASIC |
|
2016
|
|
$
|
0.01
|
|
|
$
|
0.02
|
|
|
$
|
0.03
|
|
|
$
|
0.05
|
|
|
|
2015
|
|
0.04
|
|
|
0.05
|
|
|
0.06
|
|
|
0.13
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
NET INCOME
PER COMMON SHARE - DILUTED |
|
2016
|
|
$
|
0.01
|
|
|
$
|
0.02
|
|
|
$
|
0.03
|
|
|
$
|
0.05
|
|
|
|
2015
|
|
0.04
|
|
|
0.05
|
|
|
0.06
|
|
|
0.11
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Wound Care
|
|
$
|
183,984
|
|
|
$
|
141,096
|
|
|
$
|
93,623
|
|
Surgical, Sports Medicine & Orthopedics (SSO)
|
|
61,031
|
|
|
46,200
|
|
|
24,600
|
|
|||
Total
|
|
$
|
245,015
|
|
|
$
|
187,296
|
|
|
$
|
118,223
|
|
MIMEDX GROUP, INC. AND SUBSIDIARIES
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS
|
||||||||||||||||
Years ended December 31, 2016, 2015 and 2014 (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, 2016
|
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
|
$
|
3,270
|
|
|
$
|
2,127
|
|
|
$
|
(555
|
)
|
|
$
|
4,842
|
|
Allowance for product returns
|
|
1,262
|
|
|
8,319
|
|
|
(4,687
|
)
|
|
4,894
|
|
||||
Allowance for obsolescence
|
|
397
|
|
|
2,280
|
|
|
(1,849
|
)
|
|
828
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
For the Year ended December 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
|
$
|
1,750
|
|
|
$
|
1,698
|
|
|
$
|
(178
|
)
|
|
$
|
3,270
|
|
Allowance for product returns
|
|
841
|
|
|
3,257
|
|
|
(2,836
|
)
|
|
1,262
|
|
||||
Allowance for obsolescence
|
|
527
|
|
|
540
|
|
|
(670
|
)
|
|
397
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
For the Year ended December 31, 2014
|
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
|
$
|
407
|
|
|
$
|
1,357
|
|
|
$
|
(14
|
)
|
|
$
|
1,750
|
|
Allowance for product returns
|
|
215
|
|
|
2,215
|
|
|
(1,589
|
)
|
|
841
|
|
||||
Allowance for obsolescence
|
|
322
|
|
|
405
|
|
|
(200
|
)
|
|
527
|
|
•
|
Implementing specific review procedures, including the increased involvement of our CFO and Controller as well as the hiring of an internal tax specialist to oversee the work performed by the third - party tax specialists.
|
•
|
Strengthening our income tax control with improved documentation standards, technical oversight, and training.
|
(a)
|
Documents filed as part of this report:
|
(1)
|
Financial Statements
|
(2)
|
Financial Statement Schedule:
|
(3)
|
Exhibits
|
(b)
|
Exhibits
|
Exhibit
Number
|
|
Description
|
2.1##
|
|
Agreement and Plan of Merger dated December 22, 2010 by and among MiMedx Group, Inc., MP Holdings Acquisition Sub, LLC, ORCI Acquisition Sub, LLC, Membrane Products Holdings, LLC, Onramp Capital Investments, LLC, each of the OnRamp Members (as defined therein); John R. Daniel, in his capacity as the representative of the Members and Surgical Biologics, LLC (Incorporated by reference to Exhibit 2.2 filed with Registrant's Form 10-K filed on March 31, 2011)
|
2.2##
|
|
Agreement and Plan of Merger dated January 10, 2016, by and among MiMedx Group, Inc., Titan Acquisition Sub I, Inc., Titan Acquisition Sub II, LLC, Stability Inc., certain stockholders of Stability Inc. and Brian Martin as representative of the Stability stockholders (Incorporated by reference to Exhibit 2.1 filed with Registrant's Form 8-K filed on January 13, 2016)
|
3.1#
|
|
Articles of Incorporation of MiMedx Group, Inc., as amended by Articles of Amendment to Articles of Incorporation filed on May 14, 2010, Articles of Amendment to Articles of Incorporation filed on August 8, 2012, Articles of Amendment to Articles of Incorporation filed on November 8, 2012, and Articles of Amendment to Articles of Incorporation filed on May 15, 2015
|
3.2#
|
|
Bylaws of MiMedx Group, Inc., as amended as of December 14, 2016
|
10.1*
|
|
MiMedx Group, Inc. 2006 Assumed Stock Incentive Plan, as amended and restated effective February 25, 2014 (Incorporated by reference to Exhibit 10.2 of the Registrant's Form 8-K filed on March 3, 2014)
|
10.2*
|
|
Form of Restricted Stock Agreement for Non-Employee Directors under the MiMedx Group, Inc. 2006 Assumed Stock Incentive Plan (Incorporated by reference to Exhibit 10.66 to the Registrant's Form 10-Q filed on August 8, 2013)
|
10.3*
|
|
Form of Restricted Stock Agreement under the MiMedx Group, Inc. 2006 Assumed Stock Incentive Plan (Incorporated by reference to Exhibit 10.3 to the Registrant's Form 10-K filed on March 4, 2014)
|
10.4*
|
|
Form of Incentive Stock Option Agreement under the MiMedx Group, Inc. 2006 Assumed Stock Incentive Plan (Incorporated by reference to Exhibit 10.4 to the Registrant's Form 10-K filed on March 4, 2014)
|
10.5*
|
|
Form of Nonqualified Stock Option Agreement under the MiMedx Group, Inc. 2006 Assumed Stock Incentive Plan (Incorporated by reference to Exhibit 10.5 to the Registrant's Form 10-K filed on March 4, 2014)
|
10.6*
|
|
MiMedx, Inc. 2005 Assumed Stock Plan, formerly the SpineMedica Corp. 2005 Employee, Director and Consultant Stock Plan (Incorporated by reference to Exhibit 10.5 filed with the Registrant's Form 8-K filed February 8, 2008)
|
10.7*
|
|
Declaration of Amendment to the MiMedx, Inc. 2005 Assumed Stock Plan (formerly the SpineMedica Corp. 2005 Employee, Director and Consultant Stock Plan) (Incorporated by reference to Exhibit 10.6 filed with the Registrant's Form 8-K filed February 8, 2008)
|
10.8*
|
|
Form of Incentive Stock Option Award Agreement under the MiMedx, Inc. Assumed 2005 Stock Plan (formerly the SpineMedica Corp. 2005 Employee, Director and Consultant Stock Plan), including a list of officers and directors receiving options thereunder (Incorporated by reference to Exhibit 10.7 filed with the Registrant's Form 8-K filed February 8, 2008)
|
10.9*
|
|
Form of Nonqualified Stock Option Award Agreement under the MiMedx, Inc. Assumed 2005 Stock Plan (formerly the SpineMedica Corp. 2005 Employee, Director and Consultant Stock Plan) (Incorporated by reference to Exhibit 10.8 filed with the Registrant's Form 8-K filed February 8, 2008)
|
10.10*
|
|
MiMedx, Inc. Assumed 2007 Stock Plan (formerly the SpineMedica Corp. 2007 Stock Incentive Plan) (Incorporated by reference to Exhibit 10.9 filed with the Registrant's Form 8-K filed February 8, 2008)
|
10.11*
|
|
Declaration of Amendment to the MiMedx, Inc. Assumed 2007 Stock Plan (formerly the SpineMedica Corp. 2007 Stock Incentive Plan) (Incorporated by reference to Exhibit 10.10 filed with the Registrant's Form 8-K filed February 8, 2008)
|
10.12*
|
|
Form of Incentive Stock Option Award Agreement under the MiMedx, Inc. Assumed 2007 Stock Plan (formerly the SpineMedica Corp. 2007 Stock Incentive Plan) (Incorporated by reference to Exhibit 10.11 filed with the Registrant's Form 8-K filed February 8, 2008)
|
10.13*
|
|
Form of Nonqualified Stock Option Award Agreement under the MiMedx, Inc. Assumed 2007 Stock Plan (formerly the SpineMedica Corp. 2007 Stock Incentive Plan) (Incorporated by reference to Exhibit 10.12 filed with the Registrant's Form 8-K filed February 8, 2008)
|
10.14*
|
|
Form of Indemnification Agreement (Incorporated by reference to Exhibit 10.65 filed with the Registrant's Form 8-K filed July 15, 2008)
|
10.15*
|
|
MiMedx Group, Inc. Amended and Restated Assumed 2005 Stock Plan (Incorporated by reference to Exhibit 10.4 filed with the Registrant's Form S-8 filed August 29, 2008)
|
10.16*
|
|
Form of Incentive Stock Option Award Agreement under MiMedx Group, Inc. Amended and Restated Assumed 2005 Stock Plan (Incorporated by reference to Exhibit 10.68 filed with the Registrant's Form 8 -K filed September 4, 2008)
|
10.17*
|
|
Form of Nonqualified Stock Option Award Agreement under MiMedx Group, Inc. Amended and Restated Assumed 2005 Stock Plan (Incorporated by reference to Exhibit 10.69 filed with the Registrant's Form 8 -K filed September 4, 2008)
|
10.18
|
|
Form of MiMedx, Inc. Employee Proprietary Information and Inventions Assignment Agreement (Incorporated by reference to Exhibit 10.13 filed with the Registrant's Form 8-K filed February 8, 2008)
|
10.19
|
|
Technology License Agreement between MiMedx, Inc., Shriners Hospitals for Children, and University of South Florida Research Foundation dated January 29, 2007 (Incorporated by reference to Exhibit 10.32 filed with the Registrant's Form 8-K filed February 8, 2008)
|
10.20
|
|
Form of Amended and Restated Security and Intercreditor Agreement (Incorporated by reference to Exhibit 10.6 filed with Registrant’s Form 8-K filed January 3, 2012)
|
10.21*
|
|
Change of Control Agreement Severance Compensation and Restrictive Covenant Agreement dated November 11, 2011, between MiMedx Group, Inc. and Parker H. Petit (Incorporated by reference to Exhibit 10.91 filed with Registrant’s Form 10-Q filed on November 14, 2011)
|
10.22*
|
|
Change of Control Agreement Severance Compensation and Restrictive Covenant Agreement dated November 11, 2011, between MiMedx Group, Inc. and with William C. Taylor (Incorporated by reference to Exhibit 10.92 filed with Registrant’s Form 10-Q filed on November 14, 2011)
|
10.23*
|
|
First Amendment to Change in Control Severance Compensation and Restrictive Covenant Agreement dated May 9, 2013 by and between MiMedx Group, Inc., and William C. Taylor (Incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K filed on May 15, 2013)
|
10.24*
|
|
Change of Control Agreement Severance Compensation and Restrictive Covenant Agreement dated November 11, 2011, between MiMedx Group, Inc., and Michael J. Senken (Incorporated by reference to Exhibit 10.93 filed with Registrant’s Form 10-Q filed on November 14, 2011)
|
10.25*
|
|
First Amendment to Change in Control Severance Compensation and Restrictive Covenant Agreement dated May 9, 2013 by and between MiMedx Group, Inc., and Michael J. Senken (Incorporated by reference to Exhibit 10.2 to the Registrant's Form 8-K filed on May 15, 2013)
|
10.26*
|
|
Change in Control Severance Compensation and Restrictive Covenant Agreement dated May 20, 2016 by and between MiMedx Group, Inc., and Alexandra O. Haden (Incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K filed on May 25, 2016)
|
10.27*
|
|
2013 Management Incentive Plan and 2013 Operating Incentive Plan (Incorporated by reference to Exhibit 10.1 filed with Registrant’s Form 8-K filed March 12, 2013)
|
10.28*
|
|
2014 Management Incentive Plan and 2014 Operating Incentive Plan (Incorporated by reference to Exhibit 10.1 filed with Registrant's Form 8-K filed March 3, 2014)
|
10.29*
|
|
2015 Management Incentive Plan (Incorporated by reference to Exhibit 10.1 to the Registrant's Form 10-Q filed on May 1, 2015)
|
10.30*
|
|
2016 Management Incentive Plan
|
10.31**
|
|
Product Distribution Agreement by and between AvKARE, Inc. and MiMedx Group, Inc. dated April 19, 2012 (Incorporated by reference to Exhibit 10.56 to the Registrant’s Form 10-K filed March 15, 2013)
|
10.32
|
|
First Amendment to Product Distribution Agreement amending that certain Product Distribution Agreement that was effective April 19, 2012 (Incorporated by reference to Exhibit 10.56 filed with the Registrant’s Form 10-Q filed on November 8, 2013)
|
10.33**
|
|
Second Amendment to Product Distribution between MiMedx Group, Inc. and AvKARE, Inc. (Incorporated by reference to Exhibit 10.58 filed with the Registrant’s Form 10-Q filed on November 8, 2013)
|
10.34**
|
|
Third Amendment to Product Distribution Agreement dated April 17, 2015 between MiMedx Group, Inc. and AvKARE, Inc. (Incorporated by reference to Exhibit 10.2 to the Company's 10-Q filed on August 7, 2015)
|
10.35**
|
|
Fourth Amendment to Product Distribution Agreement dated January 1, 2016 between MiMedx Group, Inc. and AvKARE, Inc. (Incorporated by reference to Exhibit 10.2 to the Company's 10-Q filed on May 10, 2016)
|
10.36
|
|
Lease by and between Hub Properties of GA, LLC and MiMedx Group, Inc., effective May 1, 2013 (Incorporated by reference to Exhibit 10.1 to the Registrant's Form 10-Q filed May 10, 2013)
|
10.37
|
|
Credit Agreement dated October 12, 2015, among MiMedx Group, Inc., the Guarantors identified therein, Bank of America, N.A., and the other Lenders party thereto (Incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K filed on October 13, 2015)
|
10.38
|
|
First Amendment to the Credit Agreement dated October 12, 2015, by and among MiMedx Group, Inc., the Guarantors identified therein, Bank of America, N.A. and the other Lenders party thereto (Incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K filed on January 13, 2016
|
10.39
|
|
Security and Pledge Agreement dated October 12, 2015, among MiMedx Group, Inc., the Guarantors identified therein and Bank of America, N.A., as administrative agent (Incorporated by reference to Exhibit 10.2 to the Registrant's Form 8-K filed on October 13, 2015)
|
10.40*
|
|
2016 Equity and Cash Incentive Plan (Incorporated herein by reference to Appendix A to the Registrant’s Definitive Proxy Statement on Schedule 14A filed on April 12, 2016
|
10.41*
|
|
Form of Incentive Stock Option Agreement under the MiMedx Group, Inc. 2016 Equity and Cash Incentive Plan (Incorporated by reference to Exhibit 10.2 to the Registrant’s Form 10-Q filed August 2, 2016)
|
10.42*
|
|
Form of Restricted Stock Agreement under the MiMedx Group, Inc. 2016 Equity and Cash Incentive Plan (Incorporated by reference to Exhibit 10.3 to the Registrant’s Form 10-Q filed August 2, 2016)
|
10.43*
|
|
Form of Nonqualified Stock Option Agreement under the MiMedx Group, Inc. 2016 Equity and Cash Incentive Plan (Incorporated by reference to Exhibit 10.4 to the Registrant’s Form 10-Q filed August 2, 2016)
|
21.1#
|
|
Subsidiaries of MiMedx Group, Inc.
|
23.1#
|
|
Consent of Independent Registered Public Accounting Firm
|
31.1#
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Acts of 2002
|
31.2#
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Acts of 2002
|
32.1#
|
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2#
|
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101.INS#
|
|
XBRL Instance Document
|
101.SCH#
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
#
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF#
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB#
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE#
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Indicates a management contract or compensatory plan or arrangement
|
#
|
Filed herewith
|
**
|
Certain confidential material appearing in this document, marked by [*****], has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment under rule 24b-2 promulgated under the Securities Exchange Act of 1934, as amended.
|
##
|
Certain exhibits and schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K, but a copy will be furnished supplementally to the Securities and Exchange Commission upon request.
|
March 1, 2017
|
MIMEDX GROUP, INC.
|
|
|
|
|
|
By:
|
/s/ Michael J. Senken
|
|
|
Michael J. Senken
|
|
|
Chief Financial Officer
|
|
|
|
Signature / Name
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/: Parker H. Petit
|
|
Chief Executive Officer and Chairman
|
|
March 1, 2017
|
Parker H. Petit
|
|
(principal executive officer)
|
|
|
|
|
|
|
|
/s/: Michael J. Senken
|
|
Chief Financial Officer
|
|
March 1, 2017
|
Michael J. Senken
|
|
(principal financial and accounting officer)
|
|
|
|
|
|
|
|
/s/: Joseph G. Bleser
|
|
Director
|
|
March 1, 2017
|
Joseph G. Bleser
|
|
|
|
|
|
|
|
|
|
/s/: J. Terry Dewberry
|
|
Director
|
|
March 1, 2017
|
J. Terry Dewberry
|
|
|
|
|
|
|
|
|
|
/s/: Charles Evans
|
|
Director
|
|
March 1, 2017
|
Charles Evans
|
|
|
|
|
|
|
|
|
|
/s/: Bruce Hack
|
|
Director
|
|
March 1, 2017
|
Bruce Hack
|
|
|
|
|
|
|
|
|
|
/s/: Charles E. Koob
|
|
Director
|
|
March 1, 2017
|
Charles E. Koob
|
|
|
|
|
|
|
|
|
|
/s/: Larry W. Papasan
|
|
Director
|
|
March 1, 2017
|
Larry W. Papasan
|
|
|
|
|
|
|
|
|
|
/s/: William C. Taylor
|
|
Director
|
|
March 1, 2017
|
William C. Taylor
|
|
|
|
|
|
|
|
|
|
/s/: Neil Yeston
|
|
Director
|
|
March 1, 2017
|
Neil Yeston
|
|
|
|
|
|
|
(a)
|
the annual dividend rate, if any, on shares of such series, the times of payment and the date from which dividends shall be accumulated, if dividends are to be cumulative;
|
|
|
(b)
|
whether the shares of such series shall be redeemable and, if so, the redemption price and the terms and conditions of such redemption;
|
|
|
(c)
|
the obligation, if any, of the Corporation to redeem shares of such series pursuant to a sinking fund;
|
|
|
(d)
|
whether shares of such series shall be convertible into, or exchangeable for, shares of stock of any other class or classes and, if so, the terms and conditions of such conversion or exchange, including the price or prices or the rate or rates of conversion or exchange and the terms of adjustment, if any;
|
|
|
(e)
|
whether the shares of such series shall have voting rights, in addition to the voting rights provided by law, and, if so, the extent of such voting rights;
|
|
|
(f)
|
the rights of the shares of stock series in the event of voluntary or involuntary liquidation, dissolution or winding-up of the Corporation; and
|
|
|
(g)
|
any other relative rights, powers, preferences, qualifications, limitations or restrictions thereof relating to such series.
|
|
|
(a)
|
dividends may be declared and paid or set apart for payment upon the Common Stock out of any assets or funds of the Corporation legally available for the payment of dividends;
|
|
|
(b)
|
the holders of Common Stock shall have the right to vote for the election of Directors and on all other matters requiring shareholder action, each share being entitled to one vote; and
|
|
|
(c)
|
upon the voluntary or involuntary liquidation, dissolution or winding-up of the Corporation, the net assets of the Corporation available for distribution shall be distributed pro rata to the holders of the Common Stock in accordance with their respective rights and interests.
|
|
|||
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Steve Gorlin
|
|
Name:
|
|
Steve Gorlin
|
|
Title:
|
|
Incorporator
|
|
|
1.
|
The name of the corporation is MiMedx Group, Inc. (the “Corporation”).
|
|
|
2.
|
Pursuant to Section 607.1003 of the Florida Business Corporation Act (the “Act”), these Articles of Amendment (“Articles of Amendment”) amend the Articles of Incorporation of the Corporation filed in the Office of the Department of State of the State of Florida on February 28, 2008, as amended by the Articles of Merger filed in the Office of the Department of State of the State of Florida on March 31, 2008 (as amended, the “Amended Articles”).
|
|
|
3.
|
These Articles of Amendment were duly adopted by the Board of Directors of the Corporation in accordance with the provisions of Section 607.1003 of the Act March 31, 2010.
|
|
|
4.
|
These Articles of Amendment were duly approved by holders of a majority of the outstanding shares of the Common Stock of the Corporation in accordance with the provisions of Section 607.1003 of the Act and the Amended Articles on May 11, 2010.
|
|
|
5.
|
The Amended Articles are hereby amended by deleting Article 10 in its entirety, and inserting the following text in lieu thereof:
|
|
|
(a)
|
The number of directors shall consist of not less than three members, the exact number of which shall be fixed from time to time by resolution adopted by the Board of Directors; provided, that no decrease in the number of directors shall have the effect of shortening the term of any incumbent director. Directors shall be natural persons 18 years of age or older, but need not be residents of the State of Florida or shareholders of the Corporation.
|
|
|
(b)
|
The members of the Board of Directors elected at the 2010 annual meeting of Shareholders shall be divided into three classes, designated as Class I, Class II, and Class III as specified in the resolution adopted by Shareholders at such meeting. Each Class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board of Directors. The Class I directors elected at the 2010 annual meeting of Shareholders shall be deemed elected for a three-year term, Class II directors for a two-year term, and Class III directors for a one-year term. Each director shall hold office until the next annual meeting of Shareholders upon which his/her term expires and until his/her successor is elected and qualified, or until his/her earlier death, resignation or removal. At each succeeding annual meeting of Shareholders, successor directors to the Class of directors whose term expires at that annual meeting of Shareholders shall be elected for a three-year term. If the number of directors has changed, any increase or decrease shall be apportioned among the Classes so as to maintain the number of directors in each Class as nearly equal as possible.
|
|
|
(c)
|
Any vacancies occurring on the Board of Directors, including a vacancy resulting from an increase in the number of directors, may be filled only by the affirmative vote of a majority of the remaining members of the Board of Directors, even if less than a quorum, at any meeting of the Board of Directors. Notwithstanding the immediately preceding sentence, the Board of Directors may by resolution determine that any such vacancies shall be filled by the Shareholders of the Corporation. A director elected to fill a vacancy occurring on the Board of Directors, including a vacancy resulting from an increase in the number of directors, shall hold office until the next annual meeting of Shareholders upon which his/her term expires and until his/her successor is elected and qualified, or until his/her earlier death, resignation or removal.
|
|
|
(d)
|
A director may be removed from office only for cause as hereinafter defined and at a meeting of Shareholders called expressly for that purpose by a vote of the holders of 66-2/3% of the shares cast that are entitled to vote at an election of directors. For purposes of this provision, “cause" shall mean (i) a conviction of a felony regardless of whether it relates to the Corporation or its securities; (ii) declaration of incompetency or unsound mind by court order; or (iii) commission of an action that constitutes intentional misconduct or a knowing violation of law that, in either case, results in a material injury to the Corporation.”
|
|
|||
|
|
|
|
|
|
|
|
|
MIMEDX GROUP, INC.
|
||
|
|
|
|
|
By:
|
|
/s/ Parker H. Petit
|
|
Name:
|
|
Parket H. Petit
|
|
Its:
|
|
Chairman & CEO
|
|
|
1.
|
The name of the corporation is MiMedx Group, Inc. (the “Corporation”).
|
|
|
2.
|
Pursuant to Section 607.1003 of the Florida Business Corporation Act (the “Act”), these Articles of Amendment (“Articles of Amendment”) amend the Articles of Incorporation of the Corporation filed in the Office of the Department of State of the State of Florida on February 28, 2008, as amended by the Articles of Merger filed in the Office of the Department of State of the State of Florida on March 31, 2008, and the Articles of Amendment filed in the Office of the Department of State of the State of Florida on May 14, 2010, (as amended, the “Amended Articles”).
|
|
|
3.
|
These Articles of Amendment were duly adopted by the Board of Directors of the Corporation on November 14, 2011, in accordance with the provisions of Section 607.1003 of the Act.
|
|
|
4.
|
These Articles of Amendment were duly approved by holders of a majority of the outstanding shares of the Common Stock of the Corporation in accordance with the provisions of Section 607.1003 of the Act and the Amended Articles on December 14, 2011.
|
|
|
5.
|
The Amended Articles are hereby amended by deleting the first paragraph of Article 3 in its entirety, and inserting the following text in lieu thereof:
|
|
|||
|
|
|
|
|
|
|
|
|
MIMEDX GROUP, INC.
|
||
|
|
|
|
|
By:
|
|
/s/ Michael J. Senken
|
|
Name:
|
|
Michael J. Senken
|
|
Its:
|
|
Chief Financial Officer
|
|
|
1.
|
The name of the corporation is MiMedx Group, Inc. (the “Corporation”).
|
|
|
2.
|
Pursuant to Section 607.1003 of the Florida Business Corporation Act (the “Act”), these Articles of Amendment (“Articles of Amendment”) amend the Articles of Incorporation of the Corporation filed in the Office of the Department of State of the State of Florida on February 28, 2008, as amended by the Articles of Merger filed in the Office of the Department of State of the State of Florida on March 31, 2008, the Articles of Amendment filed in the Office of the Department of State of the State of Florida on May 14, 2010, and the Articles of Amendment filed in the Office of the Department of State of the State of Florida on August 8, 2012 (as amended, the “Amended Articles”).
|
|
|
3.
|
These Articles of Amendment were duly adopted by the Board of Directors of the Corporation in accordance with the provisions of Section 607.1003 of the Act on August 2, 2012.
|
|
|
4.
|
These Articles of Amendment were duly approved by holders of a majority of the outstanding shares of the Common Stock of the Corporation in accordance with the provisions of Section 607.1003 of the Act and the Amended Articles on October 31, 2012.
|
|
|
5.
|
The Amended Articles are hereby amended by deleting the first paragraph of Article 3 in its entirety, and inserting the following text in lieu thereof:
|
|
|||
|
|
|
|
|
|
|
|
|
MIMEDX GROUP, INC.
|
||
|
|
|
|
|
By:
|
|
/s/ Roberta L. McCaw
|
|
Name:
|
|
Roberta l. McCaw
|
|
Its:
|
|
Secretary
|
Company
|
Jurisdiction of Organization
|
MiMedx, Inc.
|
Florida
|
MiMedx Processing Services, LLC
|
Florida
|
MiMedx Tissue Services, LLC
|
Georgia
|
Stability Biologics, LLC
|
Georgia
|
1.
|
I have reviewed this annual report on Form 10-K of MiMedx Group, Inc.;
|
2.
|
Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared,
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles,
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation, and
|
(d)
|
disclosed in this annual report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/: Parker H. Petit
|
|
|
Parker H. Petit
|
|
|
Chief Executive Officer
|
|
|
(principal executive officer)
|
|
1.
|
I have reviewed this annual report on Form 10-K of MiMedx Group, Inc.;
|
2.
|
Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared,
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles,
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation, and
|
(d)
|
disclosed in this annual report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/: Michael J. Senken
|
|
|
Michael J. Senken
|
|
|
Chief Financial Officer
|
|
|
(principal financial officer)
|
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/: Parker H. Petit
|
|
|
Parker H. Petit
|
|
|
Chief Executive Officer
|
|
|
(principal executive officer)
|
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/: Michael J. Senken
|
|
|
Michael J. Senken
|
|
|
Chief Financial Officer
|
|
|
(principal financial officer)
|
|