0001558370-24-015050 | 10-Q | XBRL Viewer

Subsequent Event	9 Months Ended
Sep. 30, 2024
Subsequent Event.
Subsequent Event	(9) Subsequent Event On October 24, 2024, the Company completed an underwritten public offering of 14,670,000 shares of its common stock, including the exercise in full of the underwriters’ option to purchase additional shares of common stock, at a price to the public of $2.25 per share and, in lieu of common stock to investors who so chose, pre-funded warrants to purchase 5,800,000 shares of common stock at a public offering price of $2.2499 per pre-funded warrant, which represents the per share public offering price for the shares of common stock less the $0.0001 per share exercise price for each pre-funded warrant. The offering resulted in gross proceeds of $46.0 million, before deducting underwriting discounts and commissions and other estimated offering expenses and assuming no subsequent exercise of the pre-funded warrants. The exercise of the pre-funded warrants, if any, is not expected to provide significant additional funding to the Company.

Subsequent Event

9 Months Ended

Sep. 30, 2024

(9) Subsequent Event

On October 24, 2024, the Company completed an underwritten public offering of 14,670,000 shares of its common stock, including the exercise in full of the underwriters’ option to purchase additional shares of common stock, at a price to the public of $2.25 per share and, in lieu of common stock to investors who so chose, pre-funded warrants to purchase 5,800,000 shares of common stock at a public offering price of $2.2499 per pre-funded warrant, which represents the per share public offering price for the shares of common stock less the $0.0001 per share exercise price for each pre-funded warrant. The offering resulted in gross proceeds of $46.0 million, before deducting underwriting discounts and commissions and other estimated offering expenses and assuming no subsequent exercise of the pre-funded warrants. The exercise of the pre-funded warrants, if any, is not expected to provide significant additional funding to the Company.

Risks and Liquidity (Details) - USD ($) $ in Thousands	9 Months Ended
Risks and Liquidity (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Unusual Risk or Uncertainty [Line Items]
Accumulated deficit	$ (349,522)		$ (320,889)
Proceeds from the sale of product line	5,366
Received net proceeds of after deducting underwriting discounts, commissions and other offering expenses		$ 46,341
MiMedx Group, Inc.
Unusual Risk or Uncertainty [Line Items]
Proceeds from the sale of product line	$ 5,000
Period of net sales considered for calculating additional future payment receivable	2 years
MiMedx Group, Inc. \| Maximum [Member]
Unusual Risk or Uncertainty [Line Items]
Revenue sharing payments	$ 7,000
MiMedx Group, Inc. \| Minimum [Member]
Unusual Risk or Uncertainty [Line Items]
Revenue sharing payments	$ 3,000

- Definition

Amount of accumulated undistributed earnings (deficit).

+ References + Details

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Cash flows from operating activities:
Net loss	$ (28,633)	$ (33,774)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense	461	362
Noncash interest expense	455	447
Amortization of intangible assets	285	285
Net changes in operating lease ROU assets and liabilities	(73)	(33)
Inventory excess and obsolescence charge	1,563	992
Stock-based compensation expense	3,273	3,791
Gain on sale of product line	(7,580)
Change in operating assets and liabilities:
Accounts receivable, net	(1,745)	(1,456)
Inventory	(2,356)	(3,503)
Prepaid expenses and other current assets	524	361
Accounts payable	636	1,535
Accrued expenses and other current and long-term liabilities	(967)	1,373
Foreign currency transaction gain (loss)	93	(186)
Net cash used in operating activities	(34,064)	(29,806)
Cash flows from investing activities:
Purchase of property and equipment	(725)	(406)
Proceeds from the sale of product line	5,366
Net cash provided by (used in) investing activities	4,641	(406)
Cash flows from financing activities:
Proceeds from sale of common stock, net		46,341
Proceeds from exercise of stock options	226	101
Payment of withholding taxes related to stock-based compensation to employees	(358)	(285)
Proceeds from issuance of common stock under the employee stock purchase plan	281	88
Net cash provided by financing activities	149	46,245
Effect of exchange rate on cash and cash equivalents	(154)	150
Net (decrease) increase in cash and cash equivalents and restricted cash	(29,428)	16,183
Cash and cash equivalents and restricted cash, beginning of period	46,994	42,019
Cash and cash equivalents and restricted cash, end of period	17,566	58,202
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	3,552	3,431
Supplemental disclosures of noncash investing and financing activities:
Property and equipment in accounts payable and accrued expenses and other current liabilities	$ 175	$ 23

Long-term Debt (Tables)

9 Months Ended

Sep. 30, 2024

Debt

Schedule of long term debt

Long-term debt consisted of the following (in thousands):


	September 30,		December 31,
	2024		2023
MidCap term loan	$	40,000	$	40,000
End of term charge		2,000		2,000
Unamortized end of term charge and issuance costs		(1,030)		(1,485)
Long-term debt	$	40,970	$	40,515

Stock-Based Compensation - Narratives (Details)	9 Months Ended
Stock-Based Compensation - Narratives (Details)	Sep. 30, 2024 USD ($) item $ / shares shares
Stock-Based Compensation
Number of equity incentive plans \| item	2
Employee Stock Option
Stock-Based Compensation
Inducement grants \| shares	319,684
Weighted average grant date fair value, Options (per share) \| $ / shares	$ 4.67
Aggregate intrinsic value of exercised options \| $	$ 41,000
Unrecognized compensation expense \| $	$ 2,800,000
Weighted average period for recognition of unrecognized expenses	2 years 2 months 12 days
Restricted Stock Units (RSUs) [Member]
Stock-Based Compensation
Inducement grants \| shares	115,210
Unrecognized compensation expense \| $	$ 4,600,000
Weighted average period for recognition of unrecognized expenses	2 years 7 months 6 days
Weighted average grant date fair value, Equity Instruments (per share) \| $ / shares	$ 6.63
Aggregate intrinsic value \| $	$ 2,500,000
Performance based restricted stock units \| Minimum [Member]
Stock-Based Compensation
Vest Range	0.00%
Performance based restricted stock units \| Maximum [Member]
Stock-Based Compensation
Vest Range	110.00%
Service based restricted stock unit
Stock-Based Compensation
Vesting period	4 years
2019 Equity Incentive Plan
Stock-Based Compensation
Shares available for future issuance \| shares	907,293
Common Stock Capital Shares Reserved For Future Annual Issuance \| shares	432,442
Potential common shares outstanding on the last day of the immediately preceding fiscal year	4.00%
2019 Equity Incentive Plan \| Employee Stock Option
Stock-Based Compensation
Vesting period	4 years
Contractual term	10 years

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2024

Summary of Significant Accounting Policies

Interim Financial Statements

The accompanying unaudited interim consolidated financial statements have been prepared from the books and records of the Company in accordance with GAAP for interim financial information and Rule 10-01 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”), which permits reduced disclosures for interim

periods. All adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the accompanying consolidated balance sheets and statements of operations and comprehensive loss, stockholders’ equity and cash flows have been made. Although these interim consolidated financial statements do not include all of the information and footnotes required for complete annual consolidated financial statements, management believes the disclosures are adequate to make the information presented not misleading. The unaudited interim results of operations and cash flows are not necessarily indicative of the results that may be expected for the full year. The unaudited interim consolidated financial statements and footnotes should be read in conjunction with the consolidated financial statements and footnotes included in the Annual Report on Form 10-K for the year ended December 31, 2023.

Use of Estimates

The preparation of consolidated financial statements in 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 contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The most significant judgments are employed in estimates used to determine the recoverability of the carrying value of the Company’s inventory. As future events and their effects cannot be determined with precision, actual results may differ significantly from these estimates.

Revenue Recognition

Under ASC Topic 606, Revenue from Contracts with Customers, (“ASC 606”), an entity recognizes revenue when its customer obtains control of the promised good, in an amount that reflects the consideration that the entity expects to be entitled in exchange for those goods. The Company performs the following five steps to recognize revenue under ASC 606: (i) identify the contract(s) with a customer, (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. The Company only recognizes revenue when it is probable that it will collect the consideration to which it is entitled in exchange for the goods or services that will be transferred to the customer.

A significant portion of the Company’s revenue is generated from product shipped to a customer or from consigned inventory maintained at hospitals or other surgical facilities. Revenue from the sale of consigned products is recognized when control is transferred to the customer, which occurs at the time the product is used in a surgical procedure. For product that is not held on consignment, the Company recognizes revenue when control transfers to the customer which occurs at the time the product is shipped or delivered. For all of the Company’s customer contracts, the only identified performance obligation is providing the product to the customer.

Revenue is recognized at the estimated net sales price, which includes estimates of variable consideration. The Company enters into contracts with certain third-party payors for the payment of rebates with respect to the utilization of its products. These rebates are based on contractual percentages. The Company estimates and records these rebates in the same period the related revenue is recognized, resulting in a reduction of product revenue.

Payment terms with customers do not exceed one year and, therefore, the Company does not account for a financing component in these arrangements. There are no incremental costs of obtaining a contract that would rise to or enhance an asset other than product costs, which are a component of inventory. The Company expenses incremental costs of obtaining a contract with a customer (e.g., sales commissions) when incurred as the period of benefit is less than one year. Fees charged to customers for shipping are recognized as revenue.

The following table presents revenue disaggregated by the Company’s portfolio of products (in thousands):


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
OviTex	$	12,463	$	10,159	$	34,122	$	28,240
OviTex PRS		6,313		4,812		17,054		13,063
Other		181		81		475		152
Total revenue	$	18,957	$	15,052	$	51,651	$	41,455

Sales outside of the U.S. were $2.8 million and $1.7 million, respectively, for the three months ended September 30, 2024 and 2023 and $7.5 million and $4.2 million, respectively, for the nine months ended September 30, 2024 and 2023.

Fair Value of Financial Instruments

Fair value is the price that could be received to sell an asset or paid to transfer a liability in an orderly transaction among market participants. Fair value determination in accordance with applicable accounting guidance requires that a number of significant judgments are made. Additionally, fair value is used on a nonrecurring basis to evaluate assets for impairment or as required for disclosure purposes by applicable accounting guidance on disclosures about fair value of financial instruments. Depending on the nature of the assets and liabilities, various valuation techniques and assumptions are used when estimating fair value. The carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, other assets, and accounts payable are shown at cost, which approximates fair value due to the short-term nature of these instruments. The carrying amounts of the Company’s Credit and Security Agreement approximates fair value due to its variable interest rate.

The Company follows the provisions of ASC Topic 820, Fair Value Measurement, for financial assets and liabilities measured on a recurring basis. The guidance requires fair value measurements be classified and disclosed in one of the following three categories:

●

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

●

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liabilities.

●

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

The following fair value hierarchy table presents information about each major category of the Company’s financial assets and liabilities measured at fair value on a recurring basis (in thousands):


	Fair value measurement at reporting date using
	Quoted prices in
	active markets		Significant other		Significant
	for identical		observable		unobservable
	assets		inputs		inputs
	(Level 1)		(Level 2)		(Level 3)
September 30, 2024:
Cash equivalents – money market fund	$	13,786	$	—	$	—

December 31, 2023:
Cash equivalents – money market fund	$	41,561	$	—	$	—

Net Loss per Common Share

Basic and diluted net loss per common share is determined by dividing net loss by the weighted-average shares of common stock outstanding during the reporting period. In periods in which the Company reports a net loss, diluted net loss per share is the same as basic net loss per share since dilutive shares are not assumed to have been issued if their effect is antidilutive. Therefore, the weighted-average shares used to calculate both basic and diluted net loss per share are the same.

The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares outstanding for the periods presented, as they would be antidilutive.


	Nine months ended September 30,
	2024	2023
Stock options	2,128,862	2,202,264
Unvested restricted stock units	971,439	864,427
Common stock warrants	88,556	88,556
Total	3,188,857	3,155,247

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

In August 2020, the FASB issued ASU No. 2020-06, Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity (“ASU 2020-06”). ASU 2020-06 eliminates the beneficial conversion and cash conversion accounting models for convertible instruments. It also amends the accounting for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions. The new guidance also modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted EPS computation. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those annual periods. The adoption of this guidance did not have a significant impact on the consolidated financial statements and related disclosures.

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures, which expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. This guidance is effective for annual periods beginning after December 15, 2023, and interim periods within annual periods beginning after December 15, 2024, with early adoption permitted, including adoption in any interim period. The Company is currently evaluating the expected impact that the standard could have on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, requiring entities to provide additional information in the income tax rate reconciliation and additional disclosures about income taxes paid. The new accounting guidance requires entities to disclose in their rate reconciliation table additional categories of information about federal, state and foreign income taxes and to provide more details about the reconciling items in

some categories if the items meet a quantitative threshold. This guidance is effective for annual periods beginning after December 15, 2024, and should be applied prospectively, but entities have the option to apply it retrospectively for each period presented. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the expected impact that the standard could have on its consolidated financial statements and related disclosures.

Stock-Based Compensation

9 Months Ended

Sep. 30, 2024

Stock-Based Compensation

Stock-Based Compensation

(8) Stock-Based Compensation

The Company has two equity incentive plans: the 2012 Stock Incentive Plan and the Amended and Restated 2019 Equity Incentive Plan. New awards can only be granted under the Amended and Restated 2019 Equity Incentive Plan (the “Plan”). At September 30, 2024, 907,293 shares of common stock were available for future issuances under the Plan. The Plan is subject to an annual increase, subject to prior approval by the Company’s board of directors, equal to the lesser of (i) 432,442 shares, (ii) 4% of the shares outstanding on the last day of the immediately preceding fiscal year and (iii) such smaller number of shares as determined by the board of directors. The Plan provides for the grant of incentive stock options, nonqualified stock options, restricted stock awards, restricted stock units and/or stock appreciation rights to employees, directors, and other persons, as determined by the Company’s board of directors. The Company estimates forfeitures that it expects will occur and adjusts expense for actual forfeitures in the periods they occur.

The Company measures employee and nonemployee stock-based awards at grant-date fair value and records compensation expense ratably over the vesting period of the award. The Company recorded stock-based compensation expense in the following expense categories of the accompanying consolidated statements of operations and comprehensive loss (in thousands):


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Sales and marketing	$	318	$	507	$	993	$	1,375
General and administrative		607		670		1,804		1,861
Research and development		156		192		476		555
Total stock‑based compensation	$	1,081	$	1,369	$	3,273	$	3,791

Stock Options

The Company’s stock options vest based on the terms in each award agreement and generally vest over four years and have a term of 10 years.

The following table summarizes stock option activity:


				Weighted
				average
		Weighted		remaining
	Number of	average exercise		contractual term
	shares	price per share		(years)
Outstanding at January 1, 2024	2,162,453	$	11.48
Granted	259,900		6.86
Exercised	(38,431)		5.88
Canceled/forfeited	(255,060)		12.35
Outstanding at September 30, 2024	2,128,862	$	10.91	6.12
Vested and expected to vest at September 30, 2024	2,099,563	$	10.94	6.08
Exercisable at September 30, 2024	1,612,281	$	11.45	5.35

Included in outstanding options at September 30, 2024 were 319,684 stock options granted outside of the Plan. These grants were made pursuant to the Nasdaq inducement grant exception in accordance with Nasdaq listing rule 5635(c)(4). At September 30, 2024, the aggregate intrinsic value of both outstanding options and exercisable options was immaterial.

The weighted average grant-date fair value per share of options granted was $4.67 during the nine months ended September 30, 2024. The aggregate intrinsic value of options exercised was immaterial and $41,000 for the three and nine months ended September 30, 2024, respectively. At September 30, 2024, the total unrecognized compensation expense related to unvested employee and nonemployee stock option awards was $2.8 million, which is expected to be recognized in expense over a weighted-average period of approximately 2.2 years.

The fair value of each option was estimated on the date of grant using the Black-Scholes option pricing model and the weighted average assumptions in the table below:


	Nine months ended
	September 30, 2024
Expected dividend yield	—
Expected volatility	73.2	%
Risk‑free interest rate	4.29	%
Expected term (in years)	6.14

Restricted Stock Units

The Company has issued service-based and performance-based restricted stock units (“RSUs”). Vesting of the service-based RSUs is based on the terms in each award agreement and is generally over four years. Vesting of the performance-based RSUs is subject to continued service through 2026 and the achievement of certain performance milestones for fiscal year 2026. The amount of performance-based RSUs that will vest can range from 0% to 110% of the original number of RSUs granted. Expense for the performance-based RSUs is not recognized until the performance conditions are deemed probable of achievement. The Company has not recorded any expense related to the performance-based RSUs.

The following table summarizes the service-based RSUs for the Plan:


		Number of
		shares
Outstanding at January 1, 2024		657,054
Granted		411,825
Vested		(178,836)
Canceled/forfeited		(135,104)
Outstanding at September 30, 2024		754,939

The following table summarizes the performance-based RSUs for the Plan:


		Number of
		shares
Outstanding at January 1, 2024		250,149
Granted		—
Vested		—
Canceled/forfeited		(33,649)
Outstanding at September 30, 2024		216,500

Included in outstanding RSUs at September 30, 2024 were 115,210 RSUs granted outside of the Plan. These grants were made pursuant to the Nasdaq inducement grant exception in accordance with Nasdaq listing rule 5635(c)(4). The weighted average grant-date fair value per RSU granted was $6.63 during the nine months ended September 30, 2024. The aggregate intrinsic value of RSUs outstanding was $2.5 million at September 30, 2024. The total unrecognized compensation expense at September 30, 2024 related to RSUs was $4.6 million, which is expected to be recognized in expense over a weighted-average period of approximately 2.6 years.

Long-term Debt - MidCap Term Loan (Details) - MidCap term loan - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023	May 26, 2022
Long term Debt
Debt amount	$ 40,000		$ 40,000		$ 40,000	$ 40,000
Interest due to unpaid obligation			2.00%
Interest Rate (as a percent)	6.25%		6.25%
Variable Interest Rate (as a percent)			1.00%
Debt Instrument, Variable Interest Rate, Type [Extensible Enumeration]			us-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember
Interest-Only Period			36 months
Exit fee (as a percent)			5.00%
Interest expenses	$ 1,300	$ 1,300	$ 4,000	$ 3,900
Amortization of debt issuance costs	$ 200	$ 200	$ 500	$ 400
Maximum [Member]
Long term Debt
Extension for interest only payment period			48 months
Minimum [Member]
Long term Debt
Extension for interest only payment period			12 months
First year
Long term Debt
Percentage of prepayment penalty on prepaid principal amount			3.00%
Second year
Long term Debt
Percentage of prepayment penalty on prepaid principal amount			2.00%
Third year
Long term Debt
Percentage of prepayment penalty on prepaid principal amount			1.00%

Summary of Significant Accounting Policies - Net Loss per Common Share (Potentially dilutive securities) (Details) - shares	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Potentially dilutive securities
Potentially dilutive securities excluded from computation of diluted weighted average shares	3,188,857	3,155,247
Employee Stock Option
Potentially dilutive securities
Potentially dilutive securities excluded from computation of diluted weighted average shares	2,128,862	2,202,264
Unvested restricted stock units
Potentially dilutive securities
Potentially dilutive securities excluded from computation of diluted weighted average shares	971,439	864,427
Common Stock Warrants
Potentially dilutive securities
Potentially dilutive securities excluded from computation of diluted weighted average shares	88,556	88,556

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2024

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

(3) Summary of Significant Accounting Policies

The Company’s complete summary of significant accounting policies can be found in “Note 3, Summary of Significant Accounting Policies” in the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Any reference in these notes to applicable guidance is meant to refer to generally accepted accounting principles (“GAAP”) in the U.S. as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) promulgated by the Financial Accounting Standards Board (“FASB”).

Interim Financial Statements

Use of Estimates

Revenue Recognition

The following table presents revenue disaggregated by the Company’s portfolio of products (in thousands):


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
OviTex	$	12,463	$	10,159	$	34,122	$	28,240
OviTex PRS		6,313		4,812		17,054		13,063
Other		181		81		475		152
Total revenue	$	18,957	$	15,052	$	51,651	$	41,455

Fair Value of Financial Instruments

●

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

●

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liabilities.

●

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

The following fair value hierarchy table presents information about each major category of the Company’s financial assets and liabilities measured at fair value on a recurring basis (in thousands):


	Fair value measurement at reporting date using
	Quoted prices in
	active markets		Significant other		Significant
	for identical		observable		unobservable
	assets		inputs		inputs
	(Level 1)		(Level 2)		(Level 3)
September 30, 2024:
Cash equivalents – money market fund	$	13,786	$	—	$	—

December 31, 2023:
Cash equivalents – money market fund	$	41,561	$	—	$	—

Net Loss per Common Share

The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares outstanding for the periods presented, as they would be antidilutive.


	Nine months ended September 30,
	2024	2023
Stock options	2,128,862	2,202,264
Unvested restricted stock units	971,439	864,427
Common stock warrants	88,556	88,556
Total	3,188,857	3,155,247

Recently Issued Accounting Pronouncements

Stock-Based Compensation - Expenses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Stock-Based Compensation
Total stock-based compensation	$ 1,081	$ 1,369	$ 3,273	$ 3,791
Selling and Marketing Expense [Member]
Stock-Based Compensation
Total stock-based compensation	318	507	993	1,375
General and Administrative Expense [Member]
Stock-Based Compensation
Total stock-based compensation	607	670	1,804	1,861
Research and Development Expense [Member]
Stock-Based Compensation
Total stock-based compensation	$ 156	$ 192	$ 476	$ 555

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Accrued Expenses and Other Current Liabilities
Compensation and related benefits	$ 7,854	$ 9,216
Third-party and professional fees	2,828	2,828
Amounts due to contract manufacturer	2,314	2,024
Current portion of operating lease liabilities	$ 559	$ 565
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Total accrued expenses and other current liabilities	Total accrued expenses and other current liabilities
Research and development expenses	$ 16	$ 140
Other	808	527
Total accrued expenses and other current liabilities	$ 14,379	$ 15,300

Stockholders' Equity

9 Months Ended

Sep. 30, 2024

Stockholders' Equity

Stockholders' Equity

(6) Stockholders’ Equity

In November 2023, the Company entered into an Equity Distribution Agreement (the “2023 Equity Agreement”) with Piper Sandler & Co, (“Piper”) in connection with the establishment of an at-the-market offering program under which the Company may sell shares of its common stock, from time to time through Piper as sales agent, in an initial amount of up to $50.0 million. The 2023 Equity Agreement superseded and replaced the Company’s previous Equity Distribution Agreement with Piper dated December 18, 2020 (the “2020 Equity Agreement”), which is no longer effective. No sales were made under the 2023 Equity Agreement or the 2020 Equity Agreement during the nine months ended September 30, 2024 or 2023.

Warrants

The Company had the following warrants outstanding to purchase common stock at September 30, 2024:


			Exercise	Expiration
	Outstanding		price	dates
Common stock warrants	8,379	$	28.65	2028
Common stock warrants	80,177		28.65	2027
	88,556

There have been no grants, exercises or cancellations of warrants during the nine months ended September 30, 2024.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
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+ Details

Stockholders' Equity - Public Stock Offerings (Details) - USD ($) $ in Thousands	9 Months Ended		21 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Nov. 30, 2023
Stockholders' Equity
Number of warrants granted	0
Number of share exercised	0
Number of share cancelled	0
Received net proceeds of after deducting underwriting discounts, commissions and other offering expenses		$ 46,341
Equity Distribution Agreement
Stockholders' Equity
Common Stock Available Under ATM				$ 50,000
Value Of Shares Sold Under Equity Distribution Agreement			$ 0

Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2024

Stockholders' Equity

Schedule of warrants outstanding to purchase common stock


			Exercise	Expiration
	Outstanding		price	dates
Common stock warrants	8,379	$	28.65	2028
Common stock warrants	80,177		28.65	2027
	88,556

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Consolidated Balance Sheets
Accounts receivable, Allowance	$ 230	$ 416
Preferred stock, Par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
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)	200,000,000	200,000,000
Common stock, shares issued (in shares)	24,717,193	24,494,675
Common stock, shares outstanding (in shares)	24,717,193	24,494,675

Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Consolidated Statements of Operations and Comprehensive Loss
Revenue	$ 18,957	$ 15,052	$ 51,651	$ 41,455
Cost of revenue (excluding amortization of intangible assets)	6,004	4,568	16,099	12,682
Amortization of intangible assets	95	95	285	285
Gross profit	12,858	10,389	35,267	28,488
Operating expenses:
Sales and marketing	16,472	14,474	50,691	42,517
General and administrative	3,683	3,728	11,133	10,834
Research and development	2,068	2,368	6,784	6,934
Total operating expenses	22,223	20,570	68,608	60,285
Other operating income:
Gain on sale of product line			(7,580)
Loss from operations	(9,365)	(10,181)	(25,761)	(31,797)
Other expense:
Interest expense	(1,344)	(1,334)	(4,007)	(3,878)
Other income	337	558	1,135	1,901
Total other expense, net	(1,007)	(776)	(2,872)	(1,977)
Net loss	$ (10,372)	$ (10,957)	$ (28,633)	$ (33,774)
Net loss per common share, basic	$ (0.42)	$ (0.45)	$ (1.16)	$ (1.51)
Net loss per common share, diluted	$ (0.42)	$ (0.45)	$ (1.16)	$ (1.51)
Weighted average common shares outstanding, basic	24,703,578	24,483,664	24,648,933	22,322,256
Weighted average common shares outstanding, diluted	24,703,578	24,483,664	24,648,933	22,322,256
Comprehensive loss:
Net loss	$ (10,372)	$ (10,957)	$ (28,633)	$ (33,774)
Foreign currency translation adjustment	51	51	58	(15)
Comprehensive loss	$ (10,321)	$ (10,906)	$ (28,575)	$ (33,789)

Stockholders' Equity - Warrants outstanding (Details)	9 Months Ended
Stockholders' Equity - Warrants outstanding (Details)	Sep. 30, 2024 $ / shares shares
Stockholders' Equity
Warrants outstanding	88,556
Common stock warrants expiring in 2028
Stockholders' Equity
Warrants outstanding	8,379
Warrants exercise price \| $ / shares	$ 28.65
Expiration dates	2028
Common stock warrants expiring in 2027
Stockholders' Equity
Warrants outstanding	80,177
Warrants exercise price \| $ / shares	$ 28.65
Expiration dates	2027

Stock-Based Compensation - Weighted average assumptions (Details)	9 Months Ended
	Sep. 30, 2024
Stock-Based Compensation
Expected volatility	73.20%
Risk-free interest rate	4.29%
Expected term (in years)	6 years 1 month 20 days

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2024	Nov. 01, 2024
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
Securities Act File Number	001-39130
Entity Registrant Name	TELA Bio, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	45-5320061
Entity Address, Address Line One	1 Great Valley Parkway, Suite 24
Entity Address, City or Town	Malvern
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19355
City Area Code	484
Local Phone Number	320-2930
Title of 12(b) Security	Common Stock, $0.001 par value per share
Trading Symbol	TELA
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		39,388,443
Entity Central Index Key	0001561921
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Amendment Flag	false

Accrued Expenses and Other Current Liabilities (Tables)

9 Months Ended

Sep. 30, 2024

Accrued Expenses and Other Current Liabilities

Schedule of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):


	September 30,		December 31,
	2024		2023
Compensation and related benefits	$	7,854	$	9,216
Third-party and professional fees		2,828		2,828
Amounts due to contract manufacturer		2,314		2,024
Current portion of operating lease liabilities		559		565
Research and development expenses		16		140
Other		808		527
Total accrued expenses and other current liabilities	$	14,379	$	15,300

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ (10,372)	$ (10,957)	$ (28,633)	$ (33,774)

- Definition

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

+ References

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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2024

Stock-Based Compensation

Schedule of stock based compensation expense categories in statement of operations


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Sales and marketing	$	318	$	507	$	993	$	1,375
General and administrative		607		670		1,804		1,861
Research and development		156		192		476		555
Total stock‑based compensation	$	1,081	$	1,369	$	3,273	$	3,791

Schedule of stock option activity


				Weighted
				average
		Weighted		remaining
	Number of	average exercise		contractual term
	shares	price per share		(years)
Outstanding at January 1, 2024	2,162,453	$	11.48
Granted	259,900		6.86
Exercised	(38,431)		5.88
Canceled/forfeited	(255,060)		12.35
Outstanding at September 30, 2024	2,128,862	$	10.91	6.12
Vested and expected to vest at September 30, 2024	2,099,563	$	10.94	6.08
Exercisable at September 30, 2024	1,612,281	$	11.45	5.35

Schedule of weighted average assumptions


	Nine months ended
	September 30, 2024
Expected dividend yield	—
Expected volatility	73.2	%
Risk‑free interest rate	4.29	%
Expected term (in years)	6.14

Schedule of restricted stock units (RSUs)


		Number of
		shares
Outstanding at January 1, 2024		657,054
Granted		411,825
Vested		(178,836)
Canceled/forfeited		(135,104)
Outstanding at September 30, 2024		754,939

Schedule of performance-based (RSUs)


		Number of
		shares
Outstanding at January 1, 2024		250,149
Granted		—
Vested		—
Canceled/forfeited		(33,649)
Outstanding at September 30, 2024		216,500

Background

9 Months Ended

Sep. 30, 2024

Background

Background

(1) Background

TELA Bio, Inc. (the “Company”) was incorporated in the state of Delaware on April 17, 2012 and wholly owns TELA Bio Limited, a company incorporated in the United Kingdom and TELA Bio GmbH, a company incorporated in Germany. The Company is a commercial-stage medical technology company focused on providing innovative soft-tissue reconstruction solutions that optimize clinical outcomes by prioritizing the preservation and restoration of the patient’s own anatomy. OviTex Reinforced Tissue Matrix (“OviTex”), the Company’s first portfolio of products, addresses unmet needs in hernia repair and abdominal wall reconstruction by combining the benefits of biologic matrices and polymer materials while minimizing their shortcomings, at a cost-effective price. OviTex PRS Reinforced Tissue Matrix (“OviTex PRS”), the Company’s second portfolio of products, addresses unmet needs in plastic and reconstructive surgery. The Company’s principal corporate office and research facility is located in Malvern, Pennsylvania.

Stock-Based Compensation - Stock Option Activity (Details)	9 Months Ended
	Sep. 30, 2024 $ / shares shares
Number of shares
Balance at beginning of period \| shares	2,162,453
Granted \| shares	259,900
Exercised \| shares	(38,431)
Canceled/forfeited \| shares	(255,060)
Balance at end of period \| shares	2,128,862
Vested and expected to vest at end of period \| shares	2,099,563
Exercisable at end of period \| shares	1,612,281
Weighted average exercise price per share
Balance at beginning of period (in dollars per share) \| $ / shares	$ 11.48
Granted ( in dollars per share) \| $ / shares	6.86
Exercised (in dollars per share) \| $ / shares	5.88
Canceled/forfeited (in dollars per share) \| $ / shares	12.35
Balance at end of period (in dollars per share) \| $ / shares	10.91
Vested and expected to vest at end of period (in dollars per share) \| $ / shares	10.94
Exercisable at end of period (in dollars per share) \| $ / shares	$ 11.45
Weighted average remaining contractual term (years)
Weighted average remaining contractual term, outstanding	6 years 1 month 13 days
Weighted average remaining contractual term, Vested and expected to vest	6 years 29 days
Weighted average remaining contractual term, Exercisable	5 years 4 months 6 days

Sale of Product Line - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended
Sale of Product Line - Narrative (Details) - USD ($)	Sep. 30, 2024	Mar. 31, 2024	Sep. 30, 2024
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from the sale of product line			$ 5,366,000
Gain on sale of product line			7,580,000
MiMedx Group, Inc.
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from the sale of product line			5,000,000.0
Minimum [Member] \| MiMedx Group, Inc.
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenue sharing payments	$ 3,000,000.0		3,000,000.0
Maximum [Member] \| MiMedx Group, Inc.
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenue sharing payments	7,000,000.0		7,000,000.0
Transaction \| MiMedx Group, Inc.
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Amount minimum revenue share payments receivable	3,000,000.0		3,000,000.0
Amount minimum revenue share payments receivable current	400,000		400,000
Amount minimum revenue share payments receivable non-current	2,600,000		2,600,000
Variable Consideration	0		0
Transaction \| Minimum [Member] \| MiMedx Group, Inc.
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenue sharing payments	3,000,000.0		3,000,000.0
Variable consideration	3,000,000.0		3,000,000.0
Transaction \| Maximum [Member] \| MiMedx Group, Inc.
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenue sharing payments	7,000,000.0		7,000,000.0
Variable consideration	7,000,000.0		7,000,000.0
Transaction \| Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] \| MiMedx Group, Inc.
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net carrying value	800,000		800,000
Carrying value	0		0
Proceeds from the sale of product line			5,000,000.0
Consideration determined	$ 8,400,000		$ 8,400,000
Gain on sale of product line		$ 7,600,000

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 17,301	$ 46,729
Accounts receivable, net of allowances of $230 and $416	11,222	9,737
Inventory	13,600	13,162
Prepaid expenses and other current assets	2,009	2,098
Total current assets	44,132	71,726
Property and equipment, net	2,423	1,984
Intangible assets, net	1,834	2,119
Right-of-use assets	1,796	1,954
Other long-term assets	2,566
Restricted cash	265	265
Total assets	53,016	78,048
Current liabilities:
Accounts payable	2,479	1,667
Accrued expenses and other current liabilities	14,379	15,300
Total current liabilities	16,858	16,967
Long-term debt	40,970	40,515
Other long-term liabilities	1,460	1,685
Total liabilities	59,288	59,167
Stockholders' (deficit) equity:
Preferred stock; $0.001 par value: 10,000,000 shares authorized; no shares issued and outstanding
Common stock; $0.001 par value: 200,000,000 shares authorized; 24,717,193 and 24,494,675 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively	25	24
Additional paid-in capital	343,076	339,655
Accumulated other comprehensive income	149	91
Accumulated deficit	(349,522)	(320,889)
Total stockholders' (deficit) equity	(6,272)	18,881
Total liabilities and stockholders' (deficit) equity	$ 53,016	$ 78,048

Stock-Based Compensation - Restricted Stock Units (Details)	9 Months Ended
	Sep. 30, 2024 shares
Service Based Restricted Stock Units [Member]
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Outstanding at beginning of period	657,054
Granted	411,825
Vested	(178,836)
Canceled/forfeited	(135,104)
Outstanding at end of period	754,939
Performance Based Restricted Stock Units [Member]
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Outstanding at beginning of period	250,149
Canceled/forfeited	(33,649)
Outstanding at end of period	216,500

Sale of Product Line

9 Months Ended

Sep. 30, 2024

Sale of Product Line

Sale of Product Line

(7) Sale of Product Line

In March 2024, the Company entered into an Asset Purchase Agreement (“APA”) with MiMedx Group, Inc. (“MDXG”) to sell certain assets (the “Transaction”) related to NIVIS Fibrillar Collagen Pack Device (“NIVIS”). These assets mainly

included the Company’s existing inventory of NIVIS, with a net carrying value of $0.8 million, and certain intellectual property rights to sell NIVIS, with no carrying value. MDXG assumed the Company’s existing supply agreements, including the minimum obligations for NIVIS that the Company entered into in 2022 ahead of the initial sales of NIVIS. In exchange for entering into the Transaction, the Company received an initial $5.0 million upfront payment and is entitled to receive future revenue-sharing payments based on the net sales of NIVIS during the first two years following its launch by MDXG, which revenue-sharing payments would range from a minimum of $3.0 million to a maximum of $7.0 million in the aggregate. Any consideration in excess of $3.0 million up to $7.0 million is considered variable consideration that is fully constrained.

The Company accounted for the Transaction as a sale of a nonfinancial asset group in accordance with ASC 610-20 and followed the principals of ASC 606 to determine the consideration of $8.4 million related to the Transaction. The Company transferred control of the nonfinancial asset group in March 2024 and recognized a gain of $7.6 million on the consolidated statement of operations and comprehensive loss during the three months ended March 31, 2024. Additionally, the Company recorded the minimum revenue-share payment of $3.0 million as a receivable at September 30, 2024, with $0.4 million representing the current portion in prepaid expenses and other assets in the consolidated balance sheet and $2.6 million representing the long-term portion in other long-term assets in the consolidated balance sheet. At each reporting date, the Company assesses the constraint of variable consideration and records increases in the transaction price in the period that the estimate of variable consideration changes. For the three and nine months ended September 30, 2024, no changes were made to the variable consideration.

Summary of Significant Accounting Policies - Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Fair Value, Recurring [Member] \| Fair Value, Inputs, Level 1 [Member] \| Money Market Funds [Member]
Fair Value of Financial Instruments
Cash equivalents	$ 13,786	$ 41,561

Subsequent Event (Details) - USD ($) $ / shares in Units, $ in Thousands		9 Months Ended
	Oct. 24, 2024	Sep. 30, 2023
Subsequent Event
Gross proceeds		$ 46,341
Subsequent Event [Member]
Subsequent Event
Gross proceeds	$ 46,000
Subsequent Event [Member] \| Common stock
Subsequent Event
Shares issued and sold	14,670,000
Offering price (in dollar per share)	$ 2.25
Subsequent Event [Member] \| Warrant [Member]
Subsequent Event
Shares issued and sold	5,800,000
Offering price (in dollar per share)	$ 2.2499
Exercise Price	$ 0.0001

- Definition

Equity impact of the value of new stock issued during the period. Includes shares issued in an initial public offering or a secondary public offering.

+ References + Details

Risks and Liquidity

9 Months Ended

Sep. 30, 2024

Risks and Liquidity

Risks and Liquidity

(2) Risks and Liquidity

The Company’s operations to date have focused on commercializing products, developing and acquiring technology and assets, business planning, raising capital and organization and staffing. The Company has incurred recurring losses and negative cash flows from operations since inception and has an accumulated deficit of $349.5 million as of September 30, 2024. The Company anticipates incurring additional losses until such time, if ever, it can generate sufficient revenue from its products to cover its expenses.

In March 2024, the Company sold its distribution rights for NIVIS Fibrillar Collagen Pack to MiMedx Group, Inc. in exchange for an initial $5.0 million payment and additional future payments aggregating between a minimum of $3.0 million and a maximum of $7.0 million based on net sales of NIVIS during the first two years following its launch by MiMedx Group, Inc.

Subsequent to September 30, 2024, the Company completed an underwritten public offering which is described in Note 9, Subsequent Event.

The operations of the Company are subject to certain risks and uncertainties including, among others, the uncertainty of product development, the impact of macroeconomic conditions, including any lingering effects of the COVID-19 pandemic or other public health crises, general economic uncertainty, including as a result of inflationary pressures and the measures undertaken by various governments to address them, banking instability, monetary policy changes, geopolitical factors such as the ongoing Russia-Ukraine conflict, the current conflicts in the Middle East (including any escalation or expansion) and increasing tensions between China and Taiwan, cybersecurity events affecting or disrupting normal hospital operations, constraints on the supply of critical surgical and hospital supplies necessary to facilitate the surgical procedures in which our products are utilized, technological uncertainty, commercial acceptance of any developed products, alternative competing technologies, dependence on collaborative partners, uncertainty regarding patents and proprietary rights, comprehensive government regulations, and dependence on key personnel.

Summary of Significant Accounting Policies - Revenue Disaggregated (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Disaggregation of Revenue [Line Items]
Revenue	$ 18,957	$ 15,052	$ 51,651	$ 41,455
Incremental costs of obtaining a contract			0
Non-US [Member]
Disaggregation of Revenue [Line Items]
Revenue	2,800	1,700	7,500	4,200
OviTex
Disaggregation of Revenue [Line Items]
Revenue	12,463	10,159	34,122	28,240
OviTex PRS
Disaggregation of Revenue [Line Items]
Revenue	6,313	4,812	17,054	13,063
Other
Disaggregation of Revenue [Line Items]
Revenue	$ 181	$ 81	$ 475	$ 152

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

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+ Details

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2024

Summary of Significant Accounting Policies

Disaggregation of Revenue

The following table presents revenue disaggregated by the Company’s portfolio of products (in thousands):


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
OviTex	$	12,463	$	10,159	$	34,122	$	28,240
OviTex PRS		6,313		4,812		17,054		13,063
Other		181		81		475		152
Total revenue	$	18,957	$	15,052	$	51,651	$	41,455

Schedule of fair value of assets and liabilities measured on recurring basis

The following fair value hierarchy table presents information about each major category of the Company’s financial assets and liabilities measured at fair value on a recurring basis (in thousands):


	Fair value measurement at reporting date using
	Quoted prices in
	active markets		Significant other		Significant
	for identical		observable		unobservable
	assets		inputs		inputs
	(Level 1)		(Level 2)		(Level 3)
September 30, 2024:
Cash equivalents – money market fund	$	13,786	$	—	$	—

December 31, 2023:
Cash equivalents – money market fund	$	41,561	$	—	$	—

Schedule of dilutive securities excluded


	Nine months ended September 30,
	2024	2023
Stock options	2,128,862	2,202,264
Unvested restricted stock units	971,439	864,427
Common stock warrants	88,556	88,556
Total	3,188,857	3,155,247

Long-term Debt - Schedule of long term debt (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023	May 26, 2022
Long term Debt
End of term charge	$ 2,000	$ 2,000
Unamortized end of term charge and issuance costs	(1,030)	(1,485)
Long-term debt	40,970	40,515
MidCap term loan
Long term Debt
MidCap term loan	$ 40,000	$ 40,000	$ 40,000

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

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-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1I

Reference 26: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 835
-SubTopic 30
-Name Accounting Standards Codification
-Section 45
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482925/835-30-45-2

Reference 27: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 835
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482900/835-30-50-1

+ Details

- Definition

Amount of unamortized debt discount (premium) and debt issuance costs.

+ References + Details

- Definition

Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated other comprehensive income	Accumulated deficit	Total
Balance at Beginning of period at Dec. 31, 2022	$ 19	$ 288,361	$ 150	$ (274,225)	$ 14,305
Balance at Beginning of period (in shares) at Dec. 31, 2022	19,165,027
Vesting of restricted stock units and exercise of stock options		101			101
Vesting of restricted stock units and exercise of stock options (in shares)	119,240
Issuance of common stock under the employee stock purchase plan		88			88
Issuance of common stock under the employee stock purchase plan (in shares)	10,602
Shares withheld for employee taxes		(285)			(285)
Shares withheld for employee taxes (in shares)	(26,481)
Foreign currency translation adjustment			(15)		(15)
Stock-based compensation expense		3,791			3,791
Sale of common stock, net of underwriting discounts, commissions and offering costs	$ 5	46,336			46,341
Sale of common stock, net of underwriting discounts, commissions and offering costs (in shares)	5,219,190
Net loss				(33,774)	(33,774)
Balance at Ending period at Sep. 30, 2023	$ 24	338,392	135	(307,999)	30,552
Balance at Ending period (in shares) at Sep. 30, 2023	24,487,578
Balance at Beginning of period at Jun. 30, 2023	$ 24	336,939	84	(297,042)	40,005
Balance at Beginning of period (in shares) at Jun. 30, 2023	24,475,504
Vesting of restricted stock units and exercise of stock options		1			1
Vesting of restricted stock units and exercise of stock options (in shares)	2,002
Issuance of common stock under the employee stock purchase plan		88			88
Issuance of common stock under the employee stock purchase plan (in shares)	10,602
Shares withheld for employee taxes		(5)			(5)
Shares withheld for employee taxes (in shares)	(530)
Foreign currency translation adjustment			51		51
Stock-based compensation expense		1,369			1,369
Net loss				(10,957)	(10,957)
Balance at Ending period at Sep. 30, 2023	$ 24	338,392	135	(307,999)	30,552
Balance at Ending period (in shares) at Sep. 30, 2023	24,487,578
Balance at Beginning of period at Dec. 31, 2023	$ 24	339,655	91	(320,889)	18,881
Balance at Beginning of period (in shares) at Dec. 31, 2023	24,494,675
Vesting of restricted stock units and exercise of stock options	$ 1	225			226
Vesting of restricted stock units and exercise of stock options (in shares)	217,267
Issuance of common stock under the employee stock purchase plan		281			281
Issuance of common stock under the employee stock purchase plan (in shares)	58,994
Shares withheld for employee taxes		(358)			(358)
Shares withheld for employee taxes (in shares)	(53,743)
Foreign currency translation adjustment			58		58
Stock-based compensation expense		3,273			3,273
Net loss				(28,633)	(28,633)
Balance at Ending period at Sep. 30, 2024	$ 25	343,076	149	(349,522)	(6,272)
Balance at Ending period (in shares) at Sep. 30, 2024	24,717,193
Balance at Beginning of period at Jun. 30, 2024	$ 25	341,897	98	(339,150)	2,870
Balance at Beginning of period (in shares) at Jun. 30, 2024	24,675,832
Vesting of restricted stock units and exercise of stock options (in shares)	14,702
Issuance of common stock under the employee stock purchase plan		117			117
Issuance of common stock under the employee stock purchase plan (in shares)	31,025
Shares withheld for employee taxes		(19)			(19)
Shares withheld for employee taxes (in shares)	(4,366)
Foreign currency translation adjustment			51		51
Stock-based compensation expense		1,081			1,081
Net loss				(10,372)	(10,372)
Balance at Ending period at Sep. 30, 2024	$ 25	$ 343,076	$ 149	$ (349,522)	$ (6,272)
Balance at Ending period (in shares) at Sep. 30, 2024	24,717,193

Accrued Expenses and Other Current Liabilities

9 Months Ended

Sep. 30, 2024

Accrued Expenses and Other Current Liabilities

Accrued Expenses and Other Current Liabilities

(4) Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):


	September 30,		December 31,
	2024		2023
Compensation and related benefits	$	7,854	$	9,216
Third-party and professional fees		2,828		2,828
Amounts due to contract manufacturer		2,314		2,024
Current portion of operating lease liabilities		559		565
Research and development expenses		16		140
Other		808		527
Total accrued expenses and other current liabilities	$	14,379	$	15,300

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Long-term Debt

9 Months Ended

Sep. 30, 2024

Debt

Debt

(5) Long-term Debt

Long-term debt consisted of the following (in thousands):


	September 30,		December 31,
	2024		2023
MidCap term loan	$	40,000	$	40,000
End of term charge		2,000		2,000
Unamortized end of term charge and issuance costs		(1,030)		(1,485)
Long-term debt	$	40,970	$	40,515

MidCap Term Loan

On May 26, 2022, the Company entered into the Credit and Security Agreement (the “MidCap Credit Agreement”) with MidCap Financial Trust, as agent, and certain lender parties thereto. The MidCap Credit Agreement consists of $40.0 million in a term loan. Upon closing, the Company used a portion of the proceeds to repay borrowings under a previous credit facility and intends to use the remaining proceeds to fund operations and other general corporate purposes.

Pursuant to the MidCap Credit Agreement, the Company provided a first priority security interest in all existing and future acquired assets, including intellectual property, owned by the Company. The MidCap Credit Agreement contains certain covenants that limit the Company’s ability to engage in certain transactions that may be in the Company’s long-term best interests, including the incurrence of additional indebtedness, effecting certain corporate changes, making certain investments, acquisitions or dispositions and paying dividends.

The MidCap Credit Agreement also contains customary indemnification obligations and customary events of default, including, among other things, (i) non-payment, (ii) breach of warranty, (iii) non-performance of covenants and obligations, (iv) default on other indebtedness, (v) judgments, (vi) change of control, (vii) bankruptcy and insolvency, (viii) impairment of security, (ix) key permit events, (x) termination of a pension plan, (xi) regulatory matters, (xii) material adverse effect and (xiii) breach of material contracts.

In addition, the Company must maintain minimum net revenue levels tested quarterly. In the event of default under the MidCap Credit Agreement, the Company would be required to pay interest on principal and all other due and unpaid obligations at the current rate in effect plus 2%.

The MidCap term loan matures on May 1, 2027 and bears interest at a rate equal to 6.25% plus the greater of one-month Term SOFR (as defined in the MidCap Credit Agreement) or 1.0%. The Company is required to make 36 monthly interest payments beginning on June 1, 2022 (the “Interest-Only Period”). If the Company is in covenant compliance at the end of the Interest-Only Period, the Company will have the option to extend the Interest-Only Period by 12 months to 48 monthly interest payments, followed by 12 months of straight-line amortization, with the entire principal payment due at maturity. If the Company is not in covenant compliance at the end of the Interest-Only Period, the Company is required to make 24 months of straight-line amortization payments, with the entire principal amount due at maturity.

Subject to certain limitations, the MidCap term loan has a prepayment fee equal to 3.0% of the prepaid principal amount for the first year following the closing date of the MidCap term loan, 2.0% of the prepaid principal amount for the second year following the closing date and 1.0% of the prepaid principal amount for the third year following the closing date and thereafter. The Company is also required to pay an exit fee at the time of maturity or prepayment event equal to 5% of all principal borrowings (the “End of Term Charge”) (or in the event of a prepayment event, the amount of principal being prepaid).

Interest expense associated with the MidCap Credit Facility recorded for the three and nine months ended September 30, 2024 was $1.3 million and $4.0 million, respectively, of which $0.2 million and $0.5 million, respectively, was related to the amortization of debt issuance costs. Interest expense associated with the MidCap Credit Facility recorded for the three and nine months ended September 30, 2023 was $1.3 million and $3.9 million, respectively, of which $0.2 million and $0.4 million, respectively, was related to the amortization of debt issuance costs.