0001193125-20-289119 | 10-Q | XBRL Viewer | Organogenesis Holdings INC

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2020

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

Summary of Unvested Restricted Stock Units

The activity of restricted stock units is

set forth below:


				Weighted Average
	Number			Grant Date Fair
	of Shares			Value
Unvested at December 31, 2019		—		$	—
Granted		873,595			3.81
Vested		—			—
Canceled/Forfeited		(54,347	)		3.69

Unvested at September 30, 2020		819,248		$	3.82

Schedule of Fair Value of Stock Options Granted to Employees and Directors

The assumptions that the Company used to determine the grant-date fair value of stock options granted during these periods were as follows, presented on a weighted-average basis:


	September 30,			September 30,
	2020			2019
Risk-free interest rate		0.46	%		2.24	%
Expected term (in years)		6.22			6.50
Expected volatility		37.42	%		42.7	%
Expected dividend yield		0.0	%		0.0	%
Exercise price	$	4.04		$	7.08
Underlying stock price	$	3.37		$	7.08

Summary of Stock Option Activity

The following table summarizes the Company’s stock option activity since December 31, 2019:


						Weighted
						Average
				Weighted		Remaining
				Average		Contractual		Aggregate
	Number of			Exercise		Term		Intrinsic
	Shares			Price		(in years)		Value
Outstanding as of December 31, 2019		7,179,636		$	1.98		5.06	$	20,799
Granted		1,553,723			4.04
Exercised		(638,315	)		2.02				1,623
Canceled / forfeited		(630,399	)		3.64

Outstanding as of September 30, 2020		7,464,645			2.27		5.53		12,855

Options exercisable as of September 30, 2020		5,512,393			1.60		4.20		12,701

Options vested or expected to vest as of September 30, 2020		7,062,928		$	2.16		5.30	$	12,835

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Current assets:
Cash	$ 36,512	$ 60,174
Restricted cash	374	196
Accounts receivable, net	56,915	39,359
Inventory	29,882	22,918
Prepaid expenses and other current assets	5,327	2,953
Total current assets	129,010	125,600
Property and equipment, net	55,937	47,184
Notes receivable from related parties	0	556
Intangible assets, net	31,849	20,797
Goodwill	28,916	25,539
Deferred tax asset, net	16	127
Other assets	700	884
Total assets	246,428	220,687
Current liabilities:
Deferred acquisition consideration	966	5,000
Current portion of term loan	11,667
Current portion of capital lease obligations	3,473	3,057
Accounts payable	24,007	28,387
Accrued expenses and other current liabilities	26,132	23,450
Total current liabilities	66,245	59,894
Line of credit	39,353	33,484
Term loan, net of current portion	47,999	49,634
Deferred acquisition consideration, net of current portion	1,436
Earnout liability	3,782
Deferred rent	1,098	1,012
Capital lease obligations, net of current portion	12,239	14,431
Other liabilities	8,802	6,649
Total liabilities	180,954	165,104
Commitments and contingencies (Note 13)
Stockholders' equity:
Common stock, $0.0001 par value; 400,000,000 shares authorized; 108,185,702 and 105,599,434 shares issued; 107,457,154 and 104,870,886 shares outstanding at September 30, 2020 and December 31, 2019, respectively.	11	10
Additional paid-in capital	237,015	226,580
Accumulated deficit	(171,552)	(171,007)
Total stockholders' equity	65,474	55,583
Total liabilities and stockholders' equity	$ 246,428	$ 220,687

CONSOLIDATED STATEMENTS OF REDEEMABLE COMMON STOCK AND STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Revision of Prior Period, Accounting Standards Update, Adjustment [Member]	Redeemable Common Stock	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Deficit Revision of Prior Period, Accounting Standards Update, Adjustment [Member]
Balance at Dec. 31, 2018	$ 47,041			$ 9	$ 177,272	$ (130,240)
Balance (in shares) at Dec. 31, 2018			728,548	91,261,413
Exercise of common stock warrants	628				628
Exercise of common stock warrants (in shares)				74,052
Exercise of stock options	163				163
Exercise of stock options (in shares)				91,045
Common stock issued in warrant exchange					645	(645)
Common stock issued in warrant exchange (in Shares)				3,315,232
Stock-based compensation expense	700				700
Redemption of redeemable common stock placed into treasury ( in shares)			(728,548)
Net loss (income)	(36,056)					(36,056)
Balance at Sep. 30, 2019	12,808			$ 9	179,408	(166,609)
Balance (in shares) at Sep. 30, 2019				94,741,742
Balance at Jun. 30, 2019	23,198			$ 9	178,412	(155,223)
Balance (in shares) at Jun. 30, 2019				91,342,722
Exercise of common stock warrants (in shares)				19,426
Exercise of stock options	109				109
Exercise of stock options (in shares)				64,362
Common stock issued in warrant exchange					645	(645)
Common stock issued in warrant exchange (in Shares)				3,315,232
Stock-based compensation expense	242				242
Net loss (income)	(10,741)					(10,741)
Balance at Sep. 30, 2019	12,808			$ 9	179,408	(166,609)
Balance (in shares) at Sep. 30, 2019				94,741,742
Balance at Dec. 31, 2019	$ 55,583	$ 332		$ 10	226,580	(171,007)	$ 332
Balance (in shares) at Dec. 31, 2019	104,870,886			104,870,886
Exercise of stock options	$ 1,286			$ 1	1,285
Exercise of stock options (in shares)	638,315			638,315
Stock-based compensation expense	$ 1,164				1,164
Issuance of common stock associated with business acquisition	7,986				7,986
Issuance of common stock associated with business acquisition (in shares)				1,947,953
Net loss (income)	(545)					(545)
Balance at Sep. 30, 2020	$ 65,474			$ 11	237,015	(171,552)
Balance (in shares) at Sep. 30, 2020	107,457,154			107,457,154
Balance at Jun. 30, 2020	$ 35,750			$ 11	228,225	(192,486)
Balance (in shares) at Jun. 30, 2020				105,417,168
Exercise of stock options	318				318
Exercise of stock options (in shares)				92,033
Stock-based compensation expense	486				486
Issuance of common stock associated with business acquisition	7,986				7,986
Issuance of common stock associated with business acquisition (in shares)				1,947,953
Net loss (income)	20,934					20,934
Balance at Sep. 30, 2020	$ 65,474			$ 11	$ 237,015	$ (171,552)
Balance (in shares) at Sep. 30, 2020	107,457,154			107,457,154

Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands		1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 17, 2020	Apr. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Goodwill Acquired	$ 3,377				$ 28,916		$ 25,539
Amortization of Intangible Assets			$ 885	$ 1,529	2,518	$ 4,526
Intangible asset purchase, value	$ 13,570
Intangible asset purchase, cash paid						250
Intangible asset purchase, remaining payables						$ 500
Developed Technology Rights [Member]
Intangible asset purchase, value		$ 750
Intangible asset purchase, cash paid		$ 250
Intangible asset purchase, remaining payables					$ 250

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Unaudited Interim Financial Information

The accompanying unaudited consolidated financial statements have been prepared by management in accordance with GAAP and in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. While we believe that the disclosures presented are adequate in order to make the information not misleading, these unaudited quarterly financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form

10-K

for the fiscal year ended December 31, 2019 (the “Annual Report”).

The unaudited consolidated financial statements include the accounts and results of operations of Organogenesis Holdings Inc. and its wholly-owned or controlled subsidiaries of Organogenesis Inc., including Organogenesis GmbH (a Switzerland corporation) and Prime Merger Sub, LLC. All intercompany balances and transactions have been eliminated in consolidation. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. In the opinion of management, the unaudited consolidated financial statements reflect all adjustments of a normal recurring nature necessary for a fair presentation of the Company’s financial position, results of operations and cash flows at the dates and for the periods indicated. The results for the nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020, any other interim periods, or any future years or periods.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosure as of the date of the consolidated financial statements and the reported results of operations during the reporting period. Actual results could differ from those estimates.

Summary of Significant Accounting Policies

The Company’s significant accounting policies are described in Note “2. Significant Accounting Policies” to the Consolidated Financial Statements included in the Annual Report. There have been no material changes to the significant accounting policies previously disclosed in the Annual Report.

Recently Issued Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB

issued ASU 2016-02, Leases

(Topic

842) (“ASU 2016-02”), which

applies to all leases and will require lessees to record most leases on the balance sheet but recognize expenses in a manner similar to the current standard. In July 2018, the FASB issued

ASU 2018-10, Codification

Improvements to Topic 842, Leases, which provides narrow amendments to clarify how to apply certain aspects of

ASU 2016-02, and

ASU 2018-11, Leases

(Topic 842): Targeted Improvements, which provides adopters an additional transition method by allowing entities to initially apply

ASU 2016-02, and

subsequent related standards, at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Additionally, in March 2019, the FASB issued

ASU 2019-01, Leases

(Topic 842): Codification Improvements, which clarifies the transition guidance related to interim disclosures provided in the year of adoption.

ASU 2016-02 and

related amendments and improvements are effective for fiscal years beginning after December 15, 2018 for public business entities and interim periods within those years and for all other entities for years beginning after December 15, 2020. Entities are required to use a modified retrospective approach of adoption for leases that exist or are entered into after the beginning of the transition date. A full retrospective application is prohibited. The Company is a public entity but took advantage of the relief provided for emerging growth companies to allow them to follow the private company adoption timelines and the Company will adopt this standard and the related improvements on January 1, 2021 by recognizing a cumulative-effect adjustment for any impact. The Company continues to evaluate the impact of adopting this standard on its accounting policies, financial statements, business processes, systems and internal controls. Additionally, the Company has established a project management and implementation team consisting of internal resources and external advisors. These evaluation and implementation processes are expected to continue through 2020. The Company expects to recognize all of its leases with terms over twelve months on the balance sheet by recording

a right-of-use asset

and a corresponding lease liability.

In June 2016, the FASB issued

ASU 2016-13

, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments

(“ASU 2016-13”). Subsequent

to the issuance of

ASU 2016-13, the

FASB has issued the following updates:

ASU 2018-19,

Codification Improvements to Topic 326, Financial Instruments- Credit Losses

ASU 2019-04,

Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments

ASU 2019-05,

Financial Instruments—Credit Losses (Topic 326)—Targeted Transition Relief

and

ASU 2019-11,

Codification Improvements to Topic 326, Financial Instruments—Credit Losses

. The objective of

ASU 2016-13 and

all the related updates is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendments in this ASU replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

ASU 2016-13 and

the related updates are effective for fiscal years, and interim periods within those years, beginning after December 15, 2019 for public business entities excluding entities eligible to be smaller reporting companies and for fiscal years, and interim periods within those years, beginning after December 15, 2022 for all other entities. Early adoption is permitted. The Company is a smaller reporting company and follows the private company adoption timelines and the Company will adopt this standard and the related improvements on January 1, 2023 by recognizing a cumulative-effect adjustment to retained earnings for any impact. The adoption of

ASU 2016-13 and

related improvements is not expected to have a material impact on the Company’s consolidated financial statements.

Commitments and Contingencies - Additional Information (Detail) ft² in Thousands, $ in Thousands	1 Months Ended	3 Months Ended			9 Months Ended		12 Months Ended
	Feb. 14, 2020 USD ($)	Sep. 30, 2020 USD ($) ft²	Mar. 31, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($) ft²	Sep. 30, 2019 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2019 USD ($)
Business combination deferred consideration payment							$ 2,500
Business Combination Deferred Consideration								$ 5,000
Accrued Legal Expenses		$ 158			$ 158			542
Operating Lease, Expense		$ 1,620		$ 1,766	$ 4,971	$ 4,993
Land Subject to Ground Leases \| ft²		43,850			43,850
Litigation settlement amount					$ 4,000
Payments for Legal Settlements					2,000
Remaining litigation settlement amount payable		$ 2,000			2,000
Remaining litigation settlement amount payable per quarter		500			500
Gain on litigation settlement		951	$ 1,295
License agreement with a university
Accrued Royalties		1,187			1,187			1,187
Royalty Expense		0		0	0	0
License agreement with a third party through October 2026
Royalty Expense		1,201		$ 991	3,020	$ 2,695
CAM Portion of Accrued Rent
Accrued but unpaid capital lease obligations		511			511			503
Dan Road Associates
Capital Leases, Future Minimum Payments, Next Rolling Twelve Months		$ 4,308			$ 4,308
Capital Leases Aggregate Annual Lease Payments Rent Percentage		10.00%			10.00%
Accrued but unpaid capital lease obligations		$ 10,336			$ 10,336			10,336
Accrued Interest		1,434			1,434			717
Dan Road Associates \| Interest
Accrued but unpaid capital lease obligations		3,042			3,042			3,512
Dan Road Associates \| Principal
Accrued but unpaid capital lease obligations		6,783			6,783			$ 6,321
Norwood Lease
Annual lease payments during the first year		1,052			1,052
Annual lease payments ten year lease term		44			44
Annual lease payments five year lease term		33			33
Security Deposit		526			526
Increase (Decrease) in Security Deposits					263
NuTech Medical
Business Combination Deferred Consideration		$ 7,500			7,500
Under the lease, the Company is required to make monthly rent payments of approximately					$ 21
Consulting service and royalty payment term					15 years
Agreement cancellation charges paid	$ 1,950				$ 1,950

Property and Equipment, Net (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Property, Plant and Equipment, Gross	$ 86,967	$ 82,774
Accumulated depreciation and amortization	(68,559)	(65,812)
Property, Plant and Equipment, Net	55,937	47,184
Leasehold improvements
Property, Plant and Equipment, Gross	39,169	36,344
Furniture, computers and equipment
Property, Plant and Equipment, Gross	47,798	46,430
Construction in progress
Property, Plant and Equipment, Gross	$ 37,529	$ 30,222

Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

9. Goodwill and Intangible Assets

On September 17, 2020, the Company acquired certain assets and assumed certain liabilities of CPN. This transaction was accounted for as a business combination in accordance with ASC Topic 805

Business Combinations.

The Company recorded $3,377 of goodwill and $13,570 of intangible assets associated with this acquisition. Refer to Note “3. Acquisition” for detail.

Goodwill was $28,916 as of September 30, 2020 and $25,539 as of December 31, 2019. There were no impairments recorded against goodwill during the three and nine months ended September 30, 2020 and 2019.

In April 2019, the Company purchased $750 of intangibles related to patent and

know-how

which were recorded within the developed technology category. The Company paid $250 at the time of the transaction with the remaining purchase price being paid over two years after the transaction closed. As of September 30, 2020, $250 was remaining and was recorded in accrued expenses and other current liabilities on the consolidated balance sheets.

Identifiable intangible assets consisted of the following as of September 30, 2020:


	Original		Accumulated			Net Book
	Cost		Amortization			Value
Developed technology	$	32,620	$	(13,503	)	$	19,117
Trade names and trademarks		2,080		(828	)		1,252
Customer relationships		10,690		(45	)		10,645
Non-compete agreements		1,010		(175	)		835

Total	$	46,400	$	(14,551	)	$	31,849

Identifiable intangible assets consisted of the following as of December 31, 2019:


	Original		Accumulated			Net Book
	Cost		Amortization			Value
Developed technology	$	30,570	$	(11,266	)	$	19,304
Trade names and trademarks		2,000		(650	)		1,350
Non-compete agreements		260		(117	)		143

Total	$	32,830	$	(12,033	)	$	20,797

Amortization of intangible assets, calculated on a straight-line basis or using an accelerated method, was $885 and $1,529 for the three months ended September 30, 2020 and 2019, respectively, and $2,518 and $4,526 for the nine months ended September 30, 2020 and 2019, respectively.

Commitments and Contingencies (Schedule of leases payments) (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
2020 (remaining 3 months)	$ 1,198
2021	4,786
2022	4,945
2024	9,825
Total	20,754
Less amount representing interest	(5,042)
Present value of minimum lease payments	15,712
Less current maturities	(3,473)	$ (3,057)
Long-term portion	$ 12,239	$ 14,431

Accrued Expenses and Other Current Liabilities (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Payables and Accruals [Abstract]
Accrued personnel costs	$ 21,158	$ 17,640
Other	4,974	5,810
Total Accrued Expenses and Other Current Liabilities	$ 26,132	$ 23,450

Subsequent Events - Additional Information (Detail) - Subsequent Event $ in Millions	Oct. 21, 2020 USD ($) employees
Number of employees \| employees	75
Maximum
Restructuring charges \| $	$ 5.5

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Unaudited Interim Financial Information

10-K

for the fiscal year ended December 31, 2019 (the “Annual Report”).

Use of Estimates

Summary of Significant Accounting Policies

Recently Issued Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB

issued ASU 2016-02, Leases

(Topic

842) (“ASU 2016-02”), which

applies to all leases and will require lessees to record most leases on the balance sheet but recognize expenses in a manner similar to the current standard. In July 2018, the FASB issued

ASU 2018-10, Codification

Improvements to Topic 842, Leases, which provides narrow amendments to clarify how to apply certain aspects of

ASU 2016-02, and

ASU 2018-11, Leases

(Topic 842): Targeted Improvements, which provides adopters an additional transition method by allowing entities to initially apply

ASU 2016-02, and

ASU 2019-01, Leases

(Topic 842): Codification Improvements, which clarifies the transition guidance related to interim disclosures provided in the year of adoption.

ASU 2016-02 and

a right-of-use asset

and a corresponding lease liability.

In June 2016, the FASB issued

ASU 2016-13

, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments

(“ASU 2016-13”). Subsequent

to the issuance of

ASU 2016-13, the

FASB has issued the following updates:

ASU 2018-19,

Codification Improvements to Topic 326, Financial Instruments- Credit Losses

ASU 2019-04,

Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments

ASU 2019-05,

Financial Instruments—Credit Losses (Topic 326)—Targeted Transition Relief

and

ASU 2019-11,

Codification Improvements to Topic 326, Financial Instruments—Credit Losses

. The objective of

ASU 2016-13 and

related improvements is not expected to have a material impact on the Company’s consolidated financial statements.

Accounts receivable, net (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Receivables [Abstract]
Accounts receivable	$ 62,040	$ 42,408
Less — allowance for sales returns and doubtful accounts	(5,125)	(3,049)
Accounts receivable	$ 56,915	$ 39,359

Commitments and Contingencies (Schedule Of Operating Leased Assets) (Detail) $ in Thousands	Sep. 30, 2020 USD ($)
2020 (remaining 3 months)	$ 1,250
2021	5,974
2022	3,471
2023	2,804
2024	1,224
Thereafter	6,899
Total	$ 21,622

Subsequent Events

9 Months Ended

Sep. 30, 2020

Subsequent Events [Abstract]

Subsequent Events

17. Subsequent Events

The Company has evaluated subsequent events through November 9, 2020, the date on which these consolidated financial statements were issued.

On October 21, 2020, the Company committed to a plan to restructure the workforce and consolidate La Jolla facilities as part of the Company’s long-term plan to consolidate manufacturing operations in Massachusetts in order to reduce the Company’s cost structure. The restructuring is expected to result in a charge of

approximat

ely

$5.5 million, which is primarily attributable to the retention benefits associated with approximately 75 employees.

Property and Equipment, Net - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Depreciation expense	$ 956	$ 792	$ 2,749	$ 2,553
Leasehold improvements
Capital leases recorded within leasehold improvements	21,689		21,689		$ 21,689
Capital lease accumulated depreciation	$ 14,675		$ 14,675		$ 13,777

Long-Term Debt Obligations - Future payments of term loan (Detail) $ in Thousands	Sep. 30, 2020 USD ($)
2021	$ 16,667
2022	20,000
2023	20,000
2024	42,686
Total	$ 99,353

Long-Term Debt Obligations - Additional Information (Detail) - USD ($) $ in Thousands		9 Months Ended
	Mar. 14, 2019	Sep. 30, 2020	Sep. 30, 2019	Mar. 31, 2020	Dec. 31, 2019	Apr. 30, 2018	Apr. 28, 2017	Mar. 21, 2017
Loss on the extinguishment of loan			$ (1,862)
ML Agreement
Loss on the extinguishment of loan			(1,862)
Repayment under Master Lease Agreement	$ 17,649
2017 Credit Agreement
Letter of credit sub facility	26,541
Maximum borrowing capacity						$ 35,000
2019 Credit Agreement
Financial covenants		Minimum Liquidity equal to the greater of (i) 6 months Monthly Burn and (ii) $10,000.
Maximum borrowing capacity	$ 100,000
ML Agreement
Maximum borrowing capacity							$ 20,000
Percentage of final payment fee							6.50%
ML Agreement \| Repaid Before Two Years
Prepayment fees							3.00%
ML Agreement \| Repaid After Two Years
Prepayment fees							2.00%
Term Loan \| 2017 Credit Agreement
Secured debt						$ 5,000
Term Loan \| 2019 Credit Agreement
Debt Instrument final payment		$ 3,900
Debt Issuance Costs, Net		$ 554
Debt Instrument, Basis Spread on Variable Rate	3.75%
Debt Instrument Interest Rate		9.25%
Debt Instrument, Description of Variable Rate Basis	annum interest rate equal to the greater of 3.75% above the Wall Street Journal Prime Rate and 9.25%
Additional payment in aggregate of the principal amount percentage	6.50%
Secured debt		$ 60,000
Interest payable non current		1,541			$ 681
Term Loan \| 2019 Credit Agreement \| Repaid After One year Before Two Years
Prepayment premium percentage	2.50%
Term Loan \| 2019 Credit Agreement \| Repaid After Two year Before Three Years [Member]
Prepayment premium percentage	1.50%
Term Loan \| 2019 Credit Agreement \| Repaid After Three Years [Member]
Prepayment premium percentage	0.50%
Term Loan \| 2019 Credit Agreement \| Tranche One [Member]
Secured debt	$ 40,000
Term Loan \| 2019 Credit Agreement \| Tranche Two [Member]
Secured debt			$ 10,000
Term Loan \| 2019 Credit Agreement \| Tranche Three [Member]
Secured debt				$ 10,000
Revolving Credit Facility \| 2017 Credit Agreement
Letter of credit sub facility								$ 30,000
Revolving Credit Facility \| 2019 Credit Agreement
Letter of credit sub facility	$ 40,000	39,353
Future revolving borrowings		0
Debt Issuance Costs, Net		$ 370
Debt Instrument Interest Rate		5.50%
Advance outstanding amount revolving facility	25.00%
Unused Line Fee	0.25%
Revolving Credit Facility \| 2019 Credit Agreement \| Repaid After One year Before Two Years
Termination fee percentage	3.00%
Revolving Credit Facility \| 2019 Credit Agreement \| Repaid After Two year Before Three Years [Member]
Termination fee percentage	2.00%
Revolving Credit Facility \| 2019 Credit Agreement \| Repaid After Three Years [Member]
Termination fee amount	$ 0

Inventories (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Raw materials	$ 9,676	$ 9,178
Work in process	1,499	781
Finished goods	18,707	12,959
Inventory	$ 29,882	$ 22,918

Stock-Based Compensation - Summary of Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Number of Shares Outstanding	7,179,636
Number of Shares Granted	1,553,723	100,000
Number of Shares Exercised	(638,315)
Number of Shares Canceled / forfeited	(630,399)
Number of Shares Outstanding	7,464,645		7,179,636
Number of Shares Options Exercisable	5,512,393
Number of Shares Options vested or expected to vest	7,062,928
Weighted Average Exercise Price Outstanding	$ 1.98
Weighted Average Exercise Price Granted	4.04
Weighted Average Exercise Price Exercised	2.02
Weighted Average Exercise Price Cancelled / forfeited	3.64
Weighted Average Exercise Price Outstanding	2.27		$ 1.98
Weighted Average Exercise Price Options Exercisable	1.60
Weighted Average Exercise Price Options Vested or Expected to Vest	$ 2.16
Weighted Average Remaining Contractual Term (in years) Outstanding	5 years 6 months 10 days		5 years 21 days
Weighted Average Remaining Contractual Term (in years) Options Exercisable	4 years 2 months 12 days
Weighted Average Remaining Contractual Term (in years) Options Vested or Expected to Vest	5 years 3 months 18 days
Aggregate Intrinsic Value Outstanding	$ 20,799
Aggregate Intrinsic Value Options Exercised	1,623
Aggregate Intrinsic Value Outstanding	12,855		$ 20,799
Aggregate Intrinsic Value Options Exercisable	12,701
Aggregate Intrinsic Value Options Vested or Expected to Vest	$ 12,835

Stockholders' Equity

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Stockholders' Equity

12. Stockholders’ Equity

Common Stock

As of September 30, 2020, the Company was authorized to issue 400,000,000 shares of $0.0001 par value Class A common stock and 1,000,000 shares of $0.0001 par value preferred stock. 108,185,702 shares of Class A common stock were issued as of September 30, 2020, which included 728,548 shares of treasury stock. These treasury shares were initially issued in connection with the acquisition of Nutech Medical, Inc. (“NuTech Medical”) in 2017 and included a put right. The holders of the shares exercised the right to put the shares back to the Company at an agreed-upon exercise price of $9.28 per share on March 24, 2019.

As of September 30, 2020 and December 31, 2019, the Company reserved the following shares of Class A common stock for future issuance:


	September 30,		December 31,
	2020		2019
Shares reserved for issuance for outstanding options		6,788,655		6,503,646
Shares reserved for issuance for outstanding restricted stock units		819,248		—
Shares reserved for issuance for future grants		6,819,449		9,008,996

Total shares of authorized common stock reserved for future issuance		14,427,352		15,512,642

Warrant Exchange and Warrant Exercise

In the third quarter of 2019, the Company executed a series of transactions related to its then outstanding 30,890,748 public warrants and 4,100,000 private placement warrants. The Company issued an aggregate of 2,845,280 shares of Class A common stock for 29,950,150 public warrants at an exchange rate of 0.095. The Company issued an aggregate of 80,451 shares of Class A common stock for the remaining public warrants at an exchange rate of 0.0855. The Company issued an aggregate of 389,501 shares of Class A common stock for the private placement warrants at an exchange rate of 0.095.

On August 13, 2019, Massachusetts Capital Resource Company and Life Insurance Community Investment Initiative, LLC net exercised outstanding warrants to purchase an aggregate of 182,700 shares of the Company’s Class A common stock at an exercise price of $3.95 per share. The Company issued an aggregate of 19,426 shares of common stock in connection with this transaction.

As a result of these transactions, the Company issued an aggregate of 3,334,658 shares of common stock, representing approximately 3% of the total Class A common stock outstanding after such issuances. No warrants were outstanding after these transactions.

As the fair value of the warrants exchanged in the warrant exchange transactions immediately prior to the exchanges was less than the fair value of the common stock issued, the Company recorded

a non-cash deemed

dividend of $0.6 million for the incremental fair value provided to the warrant holders in the three months ended September 30, 2019.

Inventories - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Inventory reserve and obsolescence charged to cost of goods	$ 315	$ 286	$ 2,024	$ 809

Inventories

9 Months Ended

Sep. 30, 2020

Inventory Disclosure [Abstract]

Inventories

7. Inventories

Inventories, net of related reserves for excess and obsolescence, consisted of the following:


	September 30,		December 31,
	2020		2019
Raw materials	$	9,676	$	9,178
Work in process		1,499		781
Finished goods		18,707		12,959

	$	29,882	$	22,918

Raw materials include various components used in the Company’s manufacturing process. The Company’s excess and obsolete inventory review process includes analysis of sales forecasts and historical sales as compared to inventory level, and working with operations to maximize recovery of excess inventory. During the three months ended September 30, 2020 and 2019, the Company charged $315 and $286, respectively, for inventory excess and obsolescence to cost of goods sold within the consolidated statements of operations. During the nine months ended September 30, 2020 and 2019, the Company charged $2,024 and $809, respectively, for inventory excess and obsolescence to cost of goods sold within the consolidated statements of operations.

Commitments and Contingencies

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure

15. Commitments and Contingencies

Capitalized Leases

On January 1, 2013, the Company entered into capital lease arrangements with 65 Dan Road SPE, LLC, 85 Dan Road Associates, LLC, Dan Road Equity I, LLC and 275 Dan Road SPE, LLC for office and laboratory space in Canton, Massachusetts. 65 Dan Road SPE, LLC, 85 Dan Road Associates, LLC, Dan Road Equity I, LLC and 275 Dan Road SPE, LLC are related parties as the owners of these entities are also stockholders of the Company. The leases terminate on December 31, 2022 and each contains a renewal option for a five-year period with the rental rate at the greater of (i) rent for the last year of the prior term, or (ii) the then fair market value. Notice of the exercise of this renewal option is due one year prior to the expiration of the initial term. Aggregate annual lease payments are approximately $4,308 with future rent increases of 10% effective January 1, 2022.

The Company records the capital lease asset within property and equipment and the liability is recorded within the capital lease obligations on the consolidated balance sheets.

As of September 30, 2020 and December 31, 2019, the Company owed an aggregate of $10,336 of accrued but unpaid lease obligations, which are subordinated to the 2019 Credit Agreement and will not be paid until the debt under the 2019 Credit Agreement is paid off in 2024 even though the capital leases expire in December 2022. The accrued but unpaid lease obligations include rent in arrears and unpaid operating and common area maintenance costs under the aforementioned leases. The principal portion of rent in arrears on the capital leases totaled $6,783 and $6,321 as of September 30, 2020 and December 31, 2019, respectively, and is included in the long-term portion of capital lease obligations. The interest portion of rent in arrears totaled $3,042 and $3,512 as of September 30, 2020 and December 31, 2019, respectively, and is included in other liabilities on the consolidated balance sheets. The unpaid operating and common area maintenance costs totaled $511 and $503 as of September 30, 2020 and December 31, 2019, respectively, and are included in other liabilities on the consolidated balance sheets.

Effective April 1, 2019, the Company agreed to accrue interest on the accrued but unpaid lease obligations at an interest rate equal to the rate charged in the 2019 Credit Agreement (see Note “11. Long-Term Debt Obligations”). The accrued interest is also subordinated to the 2019 Credit Agreement and, as such, is included in other liabilities on the consolidated balance sheet. Interest accrual as of September 30, 2020 and December 31, 2019 totaled $1,434 and $717, respectively.

In addition to the capital leases with affiliates discussed above, the Company also has certain insignificant capital leases

with non-affiliates. Future

obligations under capital leases in the aggregate and for the next five years are as follows:


2020 (remaining 3 months)	$	1,198
2021		4,786
2022		4,945
2023		—
2024		9,825

		20,754
Less amount representing interest		(5,042	)

Present value of minimum lease payments		15,712
Less current maturities		(3,473	)

Long-term portion	$	12,239

Operating Leases

The Company leases vehicles for certain employees and has fleet services agreements for service on these vehicles. The minimum lease term for each newly leased vehicle is one year with three consecutive

one-year

renewal terms.

In March 2014, in conjunction with the acquisition of Dermagraft from Shire plc, the Company entered into a rental sublease agreement for certain operating and office space in California. The sublease agreements called for escalating monthly rental payments and expires in December 2021.

In conjunction with the acquisition of NuTech Medical in March 2017, the Company entered into an operating lease with Oxmoor Holdings, LLC, an entity that is affiliated with the former sole shareholder of NuTech Medical, related to the facility at NuTech Medical’s headquarters in Birmingham, Alabama. Under the lease, the Company is required to make monthly rent payments of approximately $21 through the lease termination date on December 31, 2021.

In March 2019, the Company entered into an agreement to lease approximately 43,850 square feet of office and laboratory space in Norwood, Massachusetts. Pursuant to the lease agreement, the rent commencement date was February 1, 2020. The initial lease term is ten years from the rent commencement date and includes an option for an early extension term of five years which is exercisable during the first two years after the rent commencement date. In addition to the early extension term, the lease provides the Company with an option to extend the lease term for a period of ten years, if exercised, at rental rates equal to the then fair market value. Annual lease payments during the first year are $1,052 with increases of $44 each year during the initial

ten-year

lease term, an increase of $44 during the first year of the early extension term and $33 during year two through five of the early extension term. Upon execution of the agreement, the Company delivered a security deposit in the form of a letter of credit of $526 to the landlord. Following 36 months from the rent commencement date, the security deposit may be reduced by $263.

Operating lease expenses were $1,620 and $1,766 for the three months ended September 30, 2020 and 2019, respectively, and were $4,971 and $4,993 for the nine months ended September 30, 2020 and 2019, respectively.

Future minimum lease payments due under noncancelable operating lease agreements as of September 30, 2020 are as follows:


2020 (remaining 3 months)	$	1,250
2021		5,974
2022		3,471
2023		2,804
2024		1,224
Thereafter		6,899

	$	21,622

Royalty Commitments

The Company entered into a license agreement with a university for certain patent rights related to the development, use, and production of one of its advanced wound care products. Under this agreement, the Company incurred a royalty based on a percentage of net product sales, for the use of these patents until the patents expired, which was in November 2006. Accrued royalties totaled $1,187 as of September 30, 2020 and December 31, 2019, respectively, and are classified as part of accrued expenses on the Company’s consolidated balance sheets. There was no royalty expense incurred during the three and nine months ended September 30, 2020 or 2019 related to this agreement.

In October 2017, the Company entered into a license agreement with a third party. Under the license agreement, the Company is required to pay royalties based on a percentage of net sales of the licensed product that occur, after December 31, 2017, through the expiration of the underlying patent in October 2026, subject to minimum royalty payment provisions. The Company recorded royalty expense of $1,201 and $991 during the three months ended September 30, 2020 and 2019, respectively, and $3,020 and $2,695 during the nine months ended September 30, 2020 and 2019, respectively, within selling, general and

administrative expenses

on the consolidated statement of operations.

As part of the NuTech Medical acquisition, the Company inherited certain product development and consulting agreements for ongoing consulting services and royalty payments based on a percentage of net sales on certain products over a period of 15 years from the execution of the agreements. These product development and consulting agreements were cancelled in January 2020 for total consideration of $1,950 that was paid on February 14, 2020. The $1,950 cancellation fee was recorded within selling, general and

administrative expenses

on the consolidated statement of operations for the nine months ended September 30, 2020.

Ransomware Attack

In August 2020, the Company’s information technology (“IT”) systems were exposed to a ransomware attack, which partially impaired certain IT systems for a short period of time. The Company is investigating the incident, together with legal counsel and other incident response professionals. The Company does not believe it has experienced a material loss related to the ransomware attack, and substantially all costs incurred to date are expected to be reimbursed by insurance.

Legal Proceedings

In conducting its activities, the Company, from time to time, is subject to various claims and also has claims against others. In management’s opinion, the ultimate resolution of such claims would not have a material effect on the financial position, operating results or cash flows of the Company. The Company accrues for these claims when amounts due are probable and estimable.

The Company accrued $158 and $542 as of September 30, 2020 and December 31, 2019, respectively, in relation to certain pending lawsuits.

The purchase price for NuTech Medical acquired in 2017 included $7,500 deferred acquisition consideration of which the Company paid $2,500 in 2017. The remaining $5,000 of deferred acquisition consideration plus accrued interest owed to the sellers of NuTech Medical was previously in dispute. The Company asserted certain claims for indemnification that would offset in whole or in part its payment obligation and the sellers of NuTech Medical filed a lawsuit alleging breach of contract and seeking specific performance of the alleged payment obligation and attorneys’ fees. In February 2020, the Company entered into a settlement agreement with the sellers of NuTech Medical and settled the dispute for $4,000, of which, $2,000 was paid immediately on February 24, 2020 (the “Settlement Date”) and the remaining $2,000 is being paid in four quarterly installments of $500 each with the first quarterly payment due and payable on the date that is 90 days from the Settlement

Date

. In addition, the Company assumed from the sellers of NuTech Medical the payment responsibilities related to a legacy lawsuit existing at the acquisition date of NuTech Medical. In connection with the settlement of this dispute, the Company recorded a gain of $1,295 for the three months ended March 31, 2020. The assumed legacy lawsuit was settled in October 2020 and the Company recorded a gain of $951 from the decrease in legal accrual for the three months ended September 30, 2020. Both of the gains were included as a component of other expense, net, on the consolidated statement of operations.

Property and Equipment, Net

9 Months Ended

Sep. 30, 2020

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

8. Property and Equipment, Net

Property and equipment consisted of the following:


	September 30,			December 31,
	2020			2019
Leasehold improvements	$	39,169		$	36,344
Furniture, computers and equipment		47,798			46,430

		86,967			82,774
Accumulated depreciation and amortization		(68,559	)		(65,812	)
Construction in progress		37,529			30,222

	$	55,937		$	47,184

Depreciation expense was $956 and $792 for the three months ended September 30, 2020 and 2019. Depreciation expense was $2,749 and $2,553 for the nine months ended September 30, 2020 and 2019. As of September 30, 2020 and December 31, 2019, the Company had $21,689 of buildings under capital leases recorded within leasehold improvements. As of September 30, 2020 and December 31, 2019, the Company had $14,675 and $13,777 recorded within accumulated depreciation and amortization related to buildings under capital leases, respectively. Construction in progress primarily represents unfinished construction work on a building under a capital lease and, more recently, improvements at the Company’s leased facilities in Canton and Norwood, Massachusetts.

Long-Term Debt Obligations (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Less current maturities	$ (11,667)
Term loan, net of debt discount, debt issuance cost and current maturities	47,999	$ 49,634
2019 Credit Facility [Member]
Line of credit	39,353	33,484
Term loan	60,000	50,000
Less debt discount and debt issuance cost	(334)	(366)
Less current maturities	(11,667)
Term loan, net of debt discount, debt issuance cost and current maturities	$ 47,999	$ 49,634

- Definition

The carrying value as of the balance sheet date of the current and noncurrent portions of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

+ References + Details

Acquisition -Additional Information (Detail) - USD ($) $ in Thousands		3 Months Ended	9 Months Ended
	Sep. 17, 2020	Sep. 30, 2020	Sep. 30, 2020	Dec. 31, 2019
Cash Payments To Acquire Businesses			$ 5,820
Business Acquisitions, Contingent Consideration Liability Noncurrent	$ 3,782	$ 3,782	3,782
Goodwill		$ 28,916	$ 28,916	$ 25,539
CPN Biosciences, LLC
Business Acquisitions, Aggregate Consideration	19,024
Cash Payments To Acquire Businesses	$ 5,820
Issuance of common stock associated with business acquisition	1,947,953
Business Acquisitions, Contingent Consideration Liability Noncurrent	$ 3,782
Business Acquisitions, LiabilitiesIncurred	1,436
Identifiable intangible assets	$ 13,570
Earnout calculation	70.00%
Goodwill	$ 3,377
CPN Biosciences, LLC \| Total Consideration Including Holdback [Member]
Cash Payments To Acquire Businesses	$ 6,427
Common Stock [Member]
Issuance of common stock associated with business acquisition		1,947,953	1,947,953
Common Stock [Member] \| CPN Biosciences, LLC \| Total Consideration Including Holdback [Member]
Business Acquisitions, Number Of Shares Issued	2,151,438
Business Acquisitions, Equity Interests Issued And Issuable	$ 8,815
Customer Relationships [Member] \| CPN Biosciences, LLC
Identifiable intangible assets	$ 10,690
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	10 years
Developed technology \| CPN Biosciences, LLC
Identifiable intangible assets	$ 2,050
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	6 years
Non-compete agreements \| CPN Biosciences, LLC
Identifiable intangible assets	$ 750
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	5 years
Trademarks [Member] \| CPN Biosciences, LLC
Identifiable intangible assets	$ 80
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	1 year

Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Schedule Of Common Stock Shares Reserved For Future Issuance

As of September 30, 2020 and December 31, 2019, the Company reserved the following shares of Class A common stock for future issuance:


	September 30,		December 31,
	2020		2019
Shares reserved for issuance for outstanding options		6,788,655		6,503,646
Shares reserved for issuance for outstanding restricted stock units		819,248		—
Shares reserved for issuance for future grants		6,819,449		9,008,996

Total shares of authorized common stock reserved for future issuance		14,427,352		15,512,642

Product and Geographic Sales - Schedule of Revenue by Product Category (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Total revenue	$ 100,799	$ 64,265	$ 231,491	$ 186,336
Advanced Wound Care
Total revenue	89,990	54,310	201,009	157,365
Surgical and Sports Medicine
Total revenue	$ 10,809	$ 9,955	$ 30,482	$ 28,971

- Definition

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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+ Details

Cover Page - shares	9 Months Ended
Cover Page - shares	Sep. 30, 2020	Nov. 01, 2020
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Document Quarterly Report	true
Document Transition Report	false
Entity Registrant Name	Organogenesis Holdings Inc.
Entity Central Index Key	0001661181
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Trading Symbol	ORGO
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Address, State or Province	MA
Title of 12(b) Security	Class A Common Stock, $0.0001 par value
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding		107,785,526

Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets

Identifiable intangible assets consisted of the following as of September 30, 2020:


	Original		Accumulated			Net Book
	Cost		Amortization			Value
Developed technology	$	32,620	$	(13,503	)	$	19,117
Trade names and trademarks		2,080		(828	)		1,252
Customer relationships		10,690		(45	)		10,645
Non-compete agreements		1,010		(175	)		835

Total	$	46,400	$	(14,551	)	$	31,849

Identifiable intangible assets consisted of the following as of December 31, 2019:


	Original		Accumulated			Net Book
	Cost		Amortization			Value
Developed technology	$	30,570	$	(11,266	)	$	19,304
Trade names and trademarks		2,000		(650	)		1,350
Non-compete agreements		260		(117	)		143

Total	$	32,830	$	(12,033	)	$	20,797

Net Income (Loss) per Share (EPS)

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Net Income (Loss) per Share (EPS)

14. Net Income (Loss) per Share (EPS)

Basic EPS is calculated by dividing net income (loss) by the weighted-average number of shares outstanding during the period. Diluted EPS is calculated by dividing net income (loss) by the weighted-average number of shares outstanding plus the dilutive effect, if any, of outstanding RSUs and options using the treasury stock method. The calculation of the dilutive effect of outstanding equity awards under the treasury stock method includes consideration of unrecognized compensation expenses as additional proceeds.

A reconciliation of the numerator and denominator used in the calculation of the basic and diluted net income (loss) attributable to the common stockholders of Organogenesis Holdings Inc. is as follows.


	Three Months Ended September 30,					Nine Months Ended September 30,
Calculation of Basic and Diluted EPS	2020		2019			2020			2019
Weighted-average common shares outstanding—basic		105,040,035		92,276,858			104,748,297			91,182,233
Dilutive effect of restricted stock units		134,759		—			—			—
Dilutive effect of options		3,314,974		—			—			—

Weighted-average common shares outstanding—diluted		108,489,768		92,276,858			104,748,297			91,182,233
Earnings (loss) per share—basic	$	0.20	$	(0.12	)	$	(0.01	)	$	(0.40	)
Earnings (loss) per share—diluted	$	0.19	$	(0.12	)	$	(0.01	)	$	(0.40	)

For the three months ended September 30, 2020, outstanding stock-based awards of

2,009,245

wer

excluded from the diluted EPS calculation. The Company had a net loss in the other periods presented. As such, the potentially dilutive securities have been excluded from the computation of diluted net loss per share as these securities have anti-dilutive effect and including them would reduce the net loss per share. Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same for these periods. For the three months ended September 30, 2019, the Company excluded 7,263,990 potential shares of Class A common stock, presented based on amount outstanding at this period end, from the computation of diluted net loss per share attributable to the common stockholders for this period. For the nine months ended September 30, 2020 and 2019, the Company excluded 8,283,893 and 7,263,990 potential shares of Class A common stock, respectively, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to the common stockholders for these periods.

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2020	Dec. 31, 2019
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	400,000,000	400,000,000
Common stock, shares issued	108,185,702	105,599,434
Common stock, shares outstanding	107,457,154	104,870,886

Nature of the Business and Basis of Presentation

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of the Business and Basis of Presentation

1. Nature of the Business and Basis of Presentation

Organogenesis Holdings Inc. (formerly Avista Healthcare Public Acquisition Corp.) (“ORGO” or the “Company”) is a leading regenerative medicine company focused on the development, manufacture, and commercialization of solutions for the Advanced Wound Care and Surgical & Sports Medicine markets. Many of the existing and pipeline products in the Company’s portfolio have Premarket Application approval, Business License Applicant approval or Premarket Notification 510(k) clearance from the United States Food and Drug Administration (“FDA”). The Company’s customers include hospitals, wound care centers, government facilities, ambulatory service centers (“ASCs”) and physician offices. The Company has one operating and reportable segment.

COVID-19

pandemic

The emergence of the coronavirus

(COVID-19)

around the world, and particularly in the United States, continues to present significant risks to the Company. While the

COVID-19

pandemic has not materially adversely affected the Company’s financial results and business operations through the third quarter ended September 30, 2020, the Company is unable to predict the impact that

COVID-19

will have on its financial position and operating results because of the numerous uncertainties created by the unprecedented nature of the pandemic. The public health actions being undertaken to reduce the spread of the virus, and that may have to be undertaken again in the event of a resurgence of the virus, may create significant disruptions to the Company with respect to: (i) the demand for its products, (ii) the ability of its sales representatives to reach healthcare customers, (iii) its ability to maintain staffing levels to support its operations, (iv) its ability to continue to manufacture certain of its products, (v) the reliability of its supply chain and (vi) its ability to achieve the financial covenants required under the 2019 Credit Agreement (see Note “11. Long-Term Debt Obligations”). The extent to which the

COVID-19

pandemic may impact the Company’s business will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the duration of the outbreak, travel restrictions and social distancing in the U.S. and other countries, business closures or business disruptions and the effectiveness of actions taken in the U.S. and other countries to contain and treat the disease.

The Company is closely monitoring the evolving impact of the pandemic on all aspects of its business. The Company has implemented a number of measures designed to protect the health and safety of its employees, support its customers and promote business continuity. The Company is also actively reviewing and implementing cost-saving measures including discontinuing or delaying all

non-essential

services and programs and instituting controls on travel, events, marketing and clinical studies to adapt the business plan for the evolving

COVID-19

challenges.

Merger with Avista Healthcare Public Acquisition Corp

On December 10, 2018, Avista Healthcare Public Acquisition Corp., our predecessor company (“AHPAC”), consummated the previously announced merger (the “Avista Merger”) pursuant to an Agreement and Plan of Merger, dated as of August 17, 2018 (as amended, the “Avista Merger Agreement”), by and among AHPAC, Avista Healthcare Merger Sub, Inc., a Delaware corporation and a direct wholly-owned subsidiary of AHPAC (“Avista Merger Sub”) and Organogenesis Inc., a Delaware corporation (“Organogenesis Inc.”). As a result of the Avista Merger and the other transactions contemplated by the Avista Merger Agreement, Avista Merger Sub merged with and into Organogenesis Inc., with Organogenesis Inc. surviving the Avista Merger and becoming a wholly-owned subsidiary of AHPAC. AHPAC changed its name to Organogenesis Holdings Inc. (ORGO).

The Avista Merger was accounted for as a reverse merger in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Under this method of accounting, AHPAC was treated as the “acquired” company for accounting purposes. This determination was primarily based on Organogenesis Inc.’s equity holders having a majority of the voting power of the combined company, Organogenesis Inc. comprising the ongoing operations of the combined entity, Organogenesis Inc. comprising a majority of the governing body of the combined company, and Organogenesis Inc.’s senior management comprising the senior management of the combined company. Accordingly, for accounting purposes, the Avista Merger was treated as the equivalent of Organogenesis Inc. issuing stock for the net assets of AHPAC, accompanied by a recapitalization. The net assets of AHPAC were recorded at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Avista Merger are those of Organogenesis Inc.

Liquidity and Financial Conditions

In accordance with ASC

205-40,

Going Concern

(“ASC

205-40”),

the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued. While the Company has reported net income for the three months ended September 30, 2020, the Company has recurring losses from operations since its inception and has funded its operations primarily with cash flow from product sales and proceeds from loans from affiliates and entities controlled by its affiliates, sales of its common stock and third-party debt. As of September 30, 2020, the Company had an accumulated deficit of $171,552 and working capital of $62,765. During the nine months ended September 30, 2020, the Company incurred a net loss of $545 and used $19,475 of cash in operations. The Company may continue to incur negative cash flows from operations and operating losses in the future as the Company expends resources to grow the organization to support the planned expansion of the business. The Company expects that its cash of $36,512 and working capital of $62,765 as of September 30, 2020, plus net cash flows from product sales, will be sufficient to fund its operating expenses, capital expenditure requirements and debt service payments for at least 12 months beyond the filing date of this quarterly report. The Company is closely monitoring ongoing developments in connection with the

COVID-19

pandemic, which may negatively impact its commercial prospects, projected cash position and access to capital in the future. The Company will continue to assess its cash position and, if circumstances warrant, make appropriate adjustments to its operating plan.

The Company expects to continue investing in product development, sales and marketing, and customer support for its products. The Company may seek to raise additional funding through public and/or private equity financings, debt financings, or other strategic transactions. There can be no assurance that the Company will be able to obtain additional debt or equity financing on terms acceptable to the Company, on a timely basis or at all, particularly in light of the adverse impacts of the

COVID-19

pandemic on the capital markets. The failure of the Company to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on the Company’s business, results of operations, and financial condition. The Company’s current borrowings under the 2019 Credit Agreement are subject to compliance with certain financial covenants that include maintaining Minimum Trailing Twelve Month Consolidated Revenue and

Non-PuraPly

Revenue. If the Company is not able to comply with these covenants, due to the impacts of

COVID-19

or otherwise, the borrowings under the 2019 Credit Agreement may become due and payable immediately unless the Company obtains an amendment or waiver from its lenders. There can be no assurance that the Company’s lenders would agree to any such amendment or waiver on acceptable terms, or at all.

Nature of the Business and Basis of Presentation - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Organization and Financing
Working capital	$ 62,765		$ 62,765
Cash	36,512		36,512		$ 60,174
Accumulated deficit	171,552		171,552		$ 171,007
Net loss	$ 20,934	$ (10,741)	(545)	$ (36,056)
Cash used in operation			$ (19,475)	$ (27,127)

- Definition

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

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+ Details

Acquisition (Tables)

9 Months Ended

Sep. 30, 2020

CPN Biosciences, LLC

Business Acquisition [Line Items]

Summary of purchase price allocation

Based upon a preliminary valuation, the total purchase price allocation was as follows:


Assets acquired:
Accounts receivable	$	1,048
Inventory		1,230
Prepaid expenses and other current assets		1
Property and equipment		85
Intangible assets		13,570
Other assets		4

Total assets acquired		15,938
Liabilities assumed:
Accounts payable		51
Accrued expenses and other current liabilities		240

Total liabilities assumed		291
Total identifiable assets acquired, net		15,647
Total purchase price		19,024

Goodwill	$	3,377

Long-Term Debt Obligations (Tables)

9 Months Ended

Sep. 30, 2020

Long-term Debt, Unclassified [Abstract]

Schedule of long-term debt obligations

Long-term debt obligations consisted of the following:


	September 30, 2020			December 31, 2019
Line of credit	$	39,353		$	33,484

Term loan		60,000			50,000
Less debt discount and debt issuance cost		(334	)		(366	)
Less current maturities		(11,667	)		—

Term loan, net of debt discount, debt issuance cost and current maturities	$	47,999		$	49,634

Schudle of future payments of term loan facility

Future payments of the 2019 Credit Agreement, as of September 30, 2020, are as follows for the calendar years ending December 31:


2020	$	—
2021		16,667
2022		20,000
2023		20,000
2024		42,686

Total	$	99,353

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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+ Details

Long-Term Debt Obligations

9 Months Ended

Sep. 30, 2020

Long-term Debt, Unclassified [Abstract]

Long-Term Debt Obligations

11. Long-Term Debt Obligations

Long-term debt obligations consisted of the following:


	September 30, 2020			December 31, 2019
Line of credit	$	39,353		$	33,484

Term loan		60,000			50,000
Less debt discount and debt issuance cost		(334	)		(366	)
Less current maturities		(11,667	)		—

Term loan, net of debt discount, debt issuance cost and current maturities	$	47,999		$	49,634

2019 Credit Agreement

In March 2019, the Company, its subsidiaries and Silicon Valley Bank (“SVB”), and the several other lenders thereto (collectively, the “Lenders”) entered into a credit agreement, as amended (the “2019 Credit Agreement”), providing for a term loan (the “Term Loan Facility”) and a revolving credit facility (the “Revolving Facility”) in an aggregate principal amount of $100,000. Capitalized terms used herein and not otherwise defined are defined as set forth in the 2019 Credit Agreement.

The Term Loan Facility is structured in three tranches, as follows: (i) the first tranche of $40,000 was made available to the Company and fully funded on March 14, 2019; (ii) the second tranche of $10,000 was made available to the Company and fully funded in September 2019 upon achievement of certain financial metrics; and (iii) the third tranche of $10,000 was made available to the Company and fully funded in March 2020 upon achievement of a certain financial metric. The interest rate for the Term Loan Facility is a floating per annum interest rate equal to the greater of 3.75% above the Wall Street Journal Prime Rate and 9.25%. The interest rate as of September 30, 2020 was 9.25%. The 2019 Credit Agreement requires the Company to make monthly interest-only payments on outstanding balances under the Term Loan Facility through February 2021. Thereafter, each term loan advance will be repaid in

thirty-six

equal monthly installments of principal, plus accrued interest, with the Term Loan Facility maturing on March 1, 2024 (the “Term Loan Maturity Date”).

The Company’s final payment on the Term Loan Facility, due on the Term Loan Maturity Date, will include all outstanding principal and accrued and unpaid interest under the Term Loan Facility, plus a final payment (the “Final Payment”) equal to the original aggregate principal amount of the Term Loan Facility multiplied by 6.5%. The Company may prepay the Term Loan Facility, subject to paying the Prepayment Premium (described below) and the Final Payment. The Prepayment Premium is equal to 2.50% of the outstanding principal amount of the Term Loan Facility if the prepayment occurs after the one year anniversary and prior to the second anniversary of the closing, and 1.50% of the outstanding principal amount of the Term Loan Facility if the prepayment occurs after the two year anniversary but prior to the three year anniversary of the closing, and 0.50% thereafter. Once repaid, amounts borrowed under the Term Loan Facility may not be

re-borrowed.

The Revolving Facility is equal to the lesser of $40,000 and the amount determined by the Borrowing Base, which is defined as a percentage of the Company’s book value of qualifying finished goods inventory and eligible accounts receivable. The interest rate for advances under the Revolving Facility is a floating per annum interest rate equal to the greater of the Wall Street Journal Prime Rate and 5.50%. The interest rate as of September 30, 2020 was 5.50%. If the actual outstanding advances are less than 25% of the then-available Revolving Commitments, the Company must pay monthly interest equal to the interest that would have accrued if the average outstanding advances had been 25% of the then-available Revolving Commitments. The Company is also required to pay an unused line fee equal to 0.25% per annum, calculated based on the difference of $40,000

minus

the greater of (i) the average balance outstanding under the Revolving Facility for such period and (ii) 25% of the then-available Revolving Commitments. The maturity date for advances made under the Revolving Facility is March 1, 2024.

The Company may elect to reduce or terminate the Revolving Facility in its entirety at any time by repaying all outstanding principal, unpaid accrued interest and a reduction or termination fee equal to 3.00% of the aggregate Revolving Commitments so reduced or terminated if the reduction or termination occurs after the one year anniversary and prior to the second anniversary of the closing, and 2.00% of the aggregate Revolving Commitments so reduced or terminated if the reduction or termination occurs after the two year anniversary but prior to the three year anniversary of the closing, and $0 thereafter.

The Company is required to achieve certain financial covenants under the 2019 Credit Agreement, including Minimum Trailing Twelve Month Consolidated Revenue and

Non-PuraPly

Revenue, tested quarterly. The Minimum Trailing Twelve Month Consolidated Revenue thresholds for the year ending December 31, 2020 were agreed to and the covenant requiring Trailing Twelve Month

Non-PuraPly

Revenue beginning with the quarter ending September 30, 2020 was added in connection with the third amendment to the 2019 Credit Agreement entered into on March 26, 2020. In addition, the Company is required to maintain Minimum Liquidity equal to the greater of (i) 6 months Monthly Burn and (ii) $10,000.

As of September 30, 2020, the Company was in compliance with the financial covenants under the 2019 Credit Agreement.

As of September 30, 2020, the Company had outstanding borrowings of $60,000 under the Term Loan Facility and $39,353 under the Revolving Facility with $0 available for future revolving borrowings. The Company accrues for the Final Payment of $3,900 over the term of the Term Loan Facility through a charge to the interest expense. The related liability of $1,541 and $681 as of September 30, 2020 and December 31, 2019, respectively, was included in other liabilities on the consolidated balance sheets. The Company incurred costs of $554 in connection with the Term Loan Facility, which are recorded as a reduction of the carrying value of the term loan on the Company’s consolidated balance sheets. In connection with the Revolving Facility, the Company incurred costs of $370, which are recorded as other assets. Both of these costs are being amortized to interest expense through March 1, 2024.

Future payments of the 2019 Credit Agreement, as of September 30, 2020, are as follows for the calendar years ending December 31:


2020	$	—
2021		16,667
2022		20,000
2023		20,000
2024		42,686

Total	$	99,353

2017 Credit Agreement

On March 21, 2017, the Company entered into a credit agreement (the “2017 Credit Agreement”) with SVB whereby SVB agreed to extend to the Company a revolving credit facility in an aggregate amount not to exceed $30,000 with a letter of credit

sub-facility

and a swing line

sub-facility

as a sublimit of the revolving loan facility. In April 2018, the Company further amended its 2017 Credit Agreement in order to receive additional funding of $5,000 through a term loan. The amendment increased the commitment under the 2017 Credit Agreement to an aggregate amount not to exceed $35,000, consisting of a term loan not to exceed $5,000 and a revolving loan not to exceed $30,000. In December 2018, the Company fully repaid and canceled the term loan including the outstanding principal and accrued and unpaid interest.

On March 14, 2019, $26,541, representing all outstanding unpaid principal and accrued interest relating to the revolving borrowing due under the 2017 Credit Agreement, was rolled into the 2019 Credit Agreement.

Master Lease Agreement

On April 28, 2017, the Company entered into the Master Lease Agreement (the “ML Agreement”) with Eastward Fund Management LLC that allowed the Company to borrow up to $20,000 on or prior to June 30, 2018. If the Company elected to prepay the loan or terminated the loan early within the first 24 months, the Company was required to pay an additional 3% of the outstanding principal and any accrued and unpaid interest and fees. This prepayment fee decreased to 2% after the first 24 months. A final payment fee of 6.5% multiplied by the principal amount of the borrowings under the ML Agreement was due upon the earlier to occur of the first day of the final payment term month or prepayment of all outstanding principal. In March 2019, upon entering into the 2019 Credit Agreement, the Company paid an aggregate amount of $17,649 due under the ML Agreement, including unpaid principal, accrued interest, final payment, and early termination penalty, with proceeds from the 2019 Credit Agreement, and the ML Agreement was terminated. Upon termination of the ML Agreement, the Company recognized $1,862 as loss on the extinguishment of the loan.

Product and Geographic Sales (Tables)

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Schedule of Revenue by Product Category

The following tables set forth revenue by product category:


	Three Months Ended September 30,
	2020		2019
Advanced Wound Care	$	89,990	$	54,310
Surgical & Sports Medicine		10,809		9,955

Total net revenue	$	100,799	$	64,265


	Nine Months Ended September 30,
	2020		2019
Advanced Wound Care	$	201,009	$	157,365
Surgical & Sports Medicine		30,482		28,971

Total net revenue	$	231,491	$	186,336

Accrued Expenses and Other Current Liabilities

9 Months Ended

Sep. 30, 2020

Payables and Accruals [Abstract]

Accrued Expenses and Other Current Liabilities

10. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:


	September 30, 2020		December 31, 2019
Accrued personnel costs	$	21,158	$	17,640
Other		4,974		5,810

	$	26,132	$	23,450

Related Party Transactions

9 Months Ended

Sep. 30, 2020

Related Party Transactions

16. Related Party Transactions

Capital lease obligations to affiliates, including unpaid lease obligations, and an operating lease with affiliates are further described in Note “15. Commitments and Contingencies”.

During 2010, the Company’s Board of Directors approved a loan program that permitted the Company to make loans to three executives of the Company (the “Employer Loans”) to (i) provide them with liquidity (“Liquidity Loans”) and (ii) fund the exercise of vested stock options (“Option Loans”). The Employer Loans mature with all principal and accrued interest due on the tenth anniversary of the issuance date of each subject loan. The borrower may prepay all or any portion of his Employer Loan at any time without premium or penalty. Interest on the Employer Loans accrues at various rates ranging from 2.30%—3.86% per annum, compounded annually. The Employer Loans are secured by shares of Company’s Class A common stock. With respect to the Liquidity Loans, the Company has no personal recourse against the borrowers beyond the pledged shares.

As of September 30, 2020, Liquidity Loans and Option Loans to one former executive were outstanding with an aggregate principal balance of $297 and $635, respectively As of December 31, 2019, Liquidity Loans to two former executives were outstanding with an aggregate principal balance of $2,350 and Option Loans to one former executive were outstanding with an aggregate principal balance of $635. The principal and part of the interest receivable under the Employer Loans were fully reserved with net interest receivable of $0 and $556 as of September 30, 2020 and December 31, 2019, respectively, included in the notes receivable from related parties balance in the consolidated balance sheets. In the three months ended September 30, 2020, one of the former executives paid $1,000 of the outstanding principal balance of his liquidity loans and the related interest receivable. The Company forgave $1,000 of the remaining outstanding principal balance of his liquidity loans. The other former executive paid $53 of the outstanding principal balance of his liquidity loans and $58 of the related accrued interest. As a result, the Company recorded $1,111 as a recovery of the previously reserved related party receivables within selling, general and administrative expenses on the consolidated statement of operations for the three months ended September 30, 2020.

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Statement [Abstract]
Net revenue	$ 100,799	$ 64,265	$ 231,491	$ 186,336
Cost of goods sold	22,964	19,131	61,799	55,557
Gross profit	77,835	45,134	169,692	130,779
Operating expenses:
Selling, general and administrative	51,146	49,475	150,261	147,325
Research and development	3,709	3,924	13,787	11,159
Total operating expenses	54,855	53,399	164,048	158,484
Income (loss) from operations	22,980	(8,265)	5,644	(27,705)
Other expense, net:
Interest expense, net	(2,969)	(2,427)	(8,391)	(6,392)
Loss on the extinguishment of debt				(1,862)
Gain on settlement of deferred acquisition consideration	951		2,246
Other income (expense), net	44	(1)	90	11
Total other expense, net	(1,974)	(2,428)	(6,055)	(8,243)
Net income (loss) before income taxes	21,006	(10,693)	(411)	(35,948)
Income tax expense	(72)	(48)	(134)	(108)
Net income (loss)	20,934	(10,741)	(545)	(36,056)
Non-cash deemed dividend to warrant holders		(645)		(645)
Net income (loss) attributed to common shareholders	$ 20,934	$ (11,386)	$ (545)	$ (36,701)
Net income (loss) attributed to common shareholders, per share:
Basic	$ 0.20	$ (0.12)	$ (0.01)	$ (0.40)
Diluted	$ 0.19	$ (0.12)	$ (0.01)	$ (0.40)
Weighted-average common shares outstanding—basic and diluted
Basic	105,040,035	92,276,858	104,748,297	91,182,233
Diluted	108,489,768	92,276,858	104,748,297	91,182,233

Stockholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Sep. 30, 2020	Dec. 31, 2019	Aug. 13, 2019	Jul. 22, 2019	Mar. 24, 2019
Common stock, shares authorized			400,000,000	400,000,000
Common stock, par value			$ 0.0001	$ 0.0001
Common stock, shares issued			108,185,702	105,599,434
Class of warrant or right, outstanding			0			30,890,748
Treasury stock			728,548
Non-cash deemed dividend related to warrant exchange	$ (645)	$ (645)
Put Option
Warrant exercise price							$ 9.28
IPO
Class of warrant or right, outstanding	29,950,150	29,950,150
Common stock issuable upon warrant exercise	2,845,280	2,845,280
Number of securities called by each warrant	0.095	0.095
Private Placement [Member]
Class of warrant or right, outstanding						4,100,000
Common stock issuable upon warrant exercise	389,501	389,501
Number of securities called by each warrant	0.095	0.095
Amendment To The Warrant Agreement [Member]
Common stock issuable upon warrant exercise	80,451	80,451
Number of securities called by each warrant	0.0855	0.0855
Massachusetts Capital Resource Company Life Insurance Community Investment Initiative LLC [Member]
Warrant exercise price					$ 3.95
Common stock issuable upon warrant exercise					19,426
Common Class A
Common stock, shares authorized			400,000,000
Common stock, par value			$ 0.0001
Common stock, shares issued			108,185,702
Percentage of common stock outstanding as a result of warrant conversion	3.00%
Common stock issuable upon warrant exercise	3,334,658	3,334,658
Common Class A \| Massachusetts Capital Resource Company Life Insurance Community Investment Initiative LLC [Member]
Common stock issuable upon warrant exercise					182,700
Preferred Stock
Preferred shares, shares authorized			1,000,000
Preferred shares, par value (in dollar per share)			$ 0.0001

Stock-Based Compensation

9 Months Ended

Sep. 30, 2020

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

Stock-Based Compensation

13. Stock-Based Compensation

Stock Incentive

Plans-the

2018 Plan

On November 28, 2018, the Board of Directors of the Company adopted, and on December 10, 2018 the Company’s stockholders approved, the Organogenesis 2018 Equity and Incentive Plan (the “2018 Plan”). The purposes of the 2018 Plan are to provide long-term incentives and rewards to the Company’s employees, officers, directors and other key persons (including consultants), to attract and retain persons with the requisite experience and ability, and to more closely align the interests of such employees, officers, directors and other key persons with the interests of the Company’s stockholders.

The 2018 Plan authorizes the Company’s Board of Directors or a committee of not less than two independent directors (in either case, the “Administrator”) to grant the following types of awards:

non-statutory

stock options; incentive stock options; restricted stock awards; restricted stock units; stock appreciation rights; unrestricted stock awards; performance share awards; and dividend equivalent rights. The 2018 Plan is administered by the Company’s Board of Directors.

As of September 30, 2020, a total of 9,198,996 shares of Class A common stock have been authorized to be issued under the 2018 Plan (subject to adjustment in the case of any stock dividend, stock split, reverse stock split, or similar change in capitalization of the Company).

Stock Incentive

Plans-the

2003 Plan

The Organogenesis 2003 Stock Incentive Plan (the “2003 Plan”), provides for the Company to issue restricted stock awards, or to grant incentive stock options or

non-statutory

stock options. Incentive stock options may be granted only to the Company’s employees. Restricted stock awards and

non-statutory

stock options may be granted to employees, members of the Board of Directors, outside advisors and consultants of the Company.

Effective as of the closing of the Avista Merger on December 10, 2018, no additional awards may be made under the 2003 Plan and as a result (i) any shares in respect of stock options that are expired or terminated under the 2003 Plan without having been fully exercised will not be available for future awards; (ii) any shares in respect of restricted stock that are forfeited to, or otherwise repurchased by the Company, will not be available for future awards; and (iii) any shares of common stock that are tendered to the Company by a participant to exercise an award will not be available for future awards.

Following the closing of the Avista Merger, the 2003 Plan is administered by the Company’s Board of Directors.

Stock-Based Compensation Expense

Stock options awarded under the stock incentive plans expire 10 years after the grant date and typically vest over four or five years. Restricted stock units awarded typically vest over four years.

Stock-based compensation expense was $486 and $242 for the three months ended September 30, 2020 and 2019, respectively, and was $1,164 and $700 for the nine months ended September 30, 2020 and 2019, respectively. The total amount of stock-based compensation expense was included within selling, general and administrative

expenses

on the consolidated statements of operations.

Restricted Stock Units (RSUs)

In the nine months ended September 30, 2020, the Company granted 873,595 time-based restricted stock units to its employees, executives and the Board of Directors. Each restricted stock unit represents the contingent right to receive one share of the Company’s common stock. A majority of the restricted stock units will vest in four equal annual installments in 2021, 2022, 2023 and 2024. The fair value of the restricted stock units was based on the fair market value of the Company’s stock on the date of grant.

The activity of restricted stock units is set forth below:


				Weighted Average
	Number			Grant Date Fair
	of Shares			Value
Unvested at December 31, 2019		—		$	—
Granted		873,595			3.81
Vested		—			—
Canceled/Forfeited		(54,347	)		3.69

Unvested at September 30, 2020		819,248		$	3.82

As of September 30, 2020, the total unrecognized compensation cost related to unvested restricted stock units expected to vest was $1,977 and the weighted average remaining recognition period for unvested awards was 3.21 years.

Stock Option Valuation

The stock options granted during the nine months ended September 30, 2020 and 2019 were 1,553,723 and 100,000 respectively. The assumptions that the Company used to determine the grant-date fair value of stock options granted during these periods were as follows, presented on a weighted-average basis:


	September 30,			September 30,
	2020			2019
Risk-free interest rate		0.46	%		2.24	%
Expected term (in years)		6.22			6.50
Expected volatility		37.42	%		42.7	%
Expected dividend yield		0.0	%		0.0	%
Exercise price	$	4.04		$	7.08
Underlying stock price	$	3.37		$	7.08

These assumptions resulted in an estimated weighted-average grant-date fair value per share of stock options granted during the nine months ended September

30, 2020 and 2019 of $1.05 and $3.24, respectively.

Stock Option Activity

The following table summarizes the Company’s stock option activity since December 31, 2019:


						Weighted
						Average
				Weighted		Remaining
				Average		Contractual		Aggregate
	Number of			Exercise		Term		Intrinsic
	Shares			Price		(in years)		Value
Outstanding as of December 31, 2019		7,179,636		$	1.98		5.06	$	20,799
Granted		1,553,723			4.04
Exercised		(638,315	)		2.02				1,623
Canceled / forfeited		(630,399	)		3.64

Outstanding as of September 30, 2020		7,464,645			2.27		5.53		12,855

Options exercisable as of September 30, 2020		5,512,393			1.60		4.20		12,701

Options vested or expected to vest as of September 30, 2020		7,062,928		$	2.16		5.30	$	12,835

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s Class A common stock for those stock options that have exercise prices lower than the fair value of the Company’s Class A common stock.

The total fair value of options vested during the nine months ended September 30, 2020 and 2019 was $387 and $538, respectively.

As of September 30, 2020, the total unrecognized stock compensation expense related to unvested stock options expected to vest was $1,598 and was expected to be recognized over a weighted-average period of 2.90 years.

As of September 30, 2020, partial recourse notes were outstanding totaling $635. These notes were taken by a former executive to exercise his stock options between 2011 and 2013 and the notes were initially secured with the 675,990 shares held by the former executive. As the partial recourse notes are still outstanding, the options are not considered exercised and are included within the options outstanding. Accordingly, the 675,990 shares are not considered outstanding for accounting purposes and the additional

paid-in

capital associated with these shares were deducted from equity in prior periods. In the three months ended September 30, 2020, the former executive sold 25,096 of the 675,990 shares to pay back a portion of his nonrecourse notes. see Note “16. Related Parties Transactions”.

Stock-Based Compensation - Summary of Unvested Restricted Stock Units (Detail)	9 Months Ended
	Sep. 30, 2020 $ / shares shares
Schedule Of Nonvested Restricted Stock Units Activity [Line Items]
Number of Shares \| shares	0
Number of Shares, Granted \| shares	873,595
Number of Shares, Canceled/Forfeited \| shares	(54,347)
Number of Shares \| shares	819,248
Weighted Average Grant Date Fair Value \| $ / shares	$ 0
Weighted Average Grant Date Fair Value, Granted \| $ / shares	3.81
Weighted Average Grant Date Fair Value, Canceled/Forfeited \| $ / shares	3.69
Weighted Average Grant Date Fair Value \| $ / shares	$ 3.82

Accounts receivable, net (Tables)

9 Months Ended

Sep. 30, 2020

Receivables [Abstract]

Schedule of accounts receivable

Accounts receivable consisted of the following:


	September 30,			December 31,
	2020			2019
Accounts receivable	$	62,040		$	42,408
Less — allowance for sales returns and doubtful accounts		(5,125	)		(3,049	)

	$	56,915		$	39,359

Schedule of allowance for sales returns and doubtful accounts

The Company’s allowance for sales returns and doubtful accounts was comprised of the following:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Balance at beginning of period	$	3,928		$	3,021		$	3,049		$	3,420
Additions (reductions)		1,589			(56	)		2,559			(29	)
Write-offs		(392	)		(30	)		(483	)		(456	)

Balance at end of period	$	5,125		$	2,935		$	5,125		$	2,935

Acquisition

9 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

Acquisition

3. Acquisition

On September 17, 2020 (the “Acquisition Date”), the Company acquired certain assets and assumed certain liabilities of CPN Biosciences, LLC (“CPN”) pursuant to an asset purchase agreement dated July 24, 2020. CPN offered a physician office management solution and advanced wound care products.

The aggregate consideration amounted to $19,024 as of the Acquisition Date, subject to post-closing adjustments for working capital. Total consideration consisted of $6,427 in cash, 2,151,438 shares of the Company’s Class A common stock with a fair value of $8,815, and contingent consideration (the “Earnout” or “Earnout Liability”) with a fair value of $3,782. On the Acquisition Date, the Company paid $5,820 in cash and issued 1,947,953 shares of the Company’s class A common stock. The remaining consideration of $1,436 was held back (the “Holdback”) and will be paid or issued, as applicable, eighteen months after the Acquisition Date, subject to any offsetting indemnification claims against CPN.

The Company is obligated to pay an Earnout to CPN’s former shareholders if CPN’s legacy product revenue in a twelve-month period, starting on January 1, 2021 (the “Earnout Period”), exceeds CPN’s 2019 revenue. The amount of the Earnout, if any, will be equal to

70%

of the excess and will be payable in March 2022. The Company recorded

non-current

liability of $3,782, for the fair value of the contingent consideration related to the expected Earnout. The Earnout Liability is classified as a Level 3 measurement for which fair value is derived from inputs that are unobservable and significant to the overall fair value measurement. The fair value of such Earnout Liability is estimated using a Monte Carlo simulation model that utilizes key assumptions including forecasted revenues and volatilities of the underlying financial metrics during the Earnout period.

This transaction was accounted for as a business combination using the acquisition method of accounting in accordance with ASC Topic 805,

Business Combinations

. Assets acquired and liabilities assumed have been recorded at their estimated fair values as of the Acquisition Date. The fair values of intangible assets were based on valuations using various income approaches and methods, such as the multiperiod excess earnings method, relief from royalty method, etc., which require the use of significant estimates and assumptions, including estimating future cash flows and developing appropriate discount rates. The excess of the purchase price over the tangible assets, identifiable intangible assets and assumed liabilities was recorded as goodwill.

Based upon a preliminary valuation, the total purchase price allocation was as follows:


Assets acquired:
Accounts receivable	$	1,048
Inventory		1,230
Prepaid expenses and other current assets		1
Property and equipment		85
Intangible assets		13,570
Other assets		4

Total assets acquired		15,938
Liabilities assumed:
Accounts payable		51
Accrued expenses and other current liabilities		240

Total liabilities assumed		291
Total identifiable assets acquired, net		15,647
Total purchase price		19,024

Goodwill	$	3,377

The preliminary fair values recorded were based on a preliminary valuation and the estimates and assumptions used in such valuation are subject to change, which could be significant, within the measurement period (up to one year from the acquisition date). The Company is continuing to obtain information to determine the acquired assets and liabilities, including tax assets, liabilities and other attributes.

The preliminary purchase price allocation resulted in goodwill of $3,377, which will be deductible for income tax purposes. The resulting amount of goodwill is primarily attributed to expected synergies from cross-sale opportunities and future growth. Intangible assets of $13,570 include customer relationships of $10,690, developed technologies of $2,050,

non-competition

agreements of $750, and trademarks of $80, which are being amortized on a straight-line basis, over weighted-average useful lives of 10 years, 6 years, 5 years and 1 year, respectively.

At the time of the acquisition, CPN had approximately 30 employees. The results of operations of CPN have been included in the Company’s consolidated financial statements beginning on the Acquisition Date. Revenue and expenses of CPN since the Acquisition Date were not material. The acquisition of CPN does not result in any changes to the Company’s operating or reportable segment structure.

Fair Value of Financial Assets and Liabilities

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value of Financial Assets and Liabilities

5. Fair Value of Financial Assets and Liabilities

The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values as of September 30, 2020. There was no such assets or liabilities as of December 31, 2019.


	Fair Value Measurements
	as of September 30, 2020 Using:
	Level 1		Level 2		Level 3		Total
Liabilities:
Earnout Liability	$	—	$	—	$	3,782	$	3,782

	$	—	$	—	$	3,782	$	3,782

Earnout Liability

In connection with accounting for the CPN acquisition on September 17, 2020, the Company recorded the Earnout Liability representing the fair value of contingent consideration payable upon the achievement of a certain revenue target. The Earnout Liability was valued using the Monte Carlo simulation model based on inputs that are not observable in the market, which represents a level 3 measurement within the fair value hierarchy. Changes in the fair value of the Earnout Liability will be reflected in selling, general and administrative expenses until the liability is fully settled. For more information about the Earnout Liability, refer to Note “3. Acquisition”.

The Company did not have any financial assets and liabilities measured at fair value on a

non-recurring

basis as of September 30, 2020 and December 31, 2019.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Stock option expiration period			10 years
Number of shares granted			1,553,723	100,000
Share-based compensation expense	$ 486	$ 242	$ 1,164	$ 700
Fair value of option vested			$ 387	$ 538
Weighted average grant-date fair value			$ 1.05	$ 3.24
Restricted Stock Units (RSUs) [Member]
Unrecognized stock compensation expense	1,977		$ 1,977
Share-based compensation expected to be recognized over a weighted-average period			3 years 2 months 15 days
Restricted stock units issued to employees			873,595
Option Loans
Related Parties Notes Receivable	$ 635		$ 635		$ 635
Number of shares issued as collateral for the option loans	675,990		675,990
Number of collateral shares sold			25,096
Option
Unrecognized stock compensation expense	$ 1,598		$ 1,598
Share-based compensation expected to be recognized over a weighted-average period			2 years 10 months 24 days
Minimum
Stock option granted vesting period			4 years
Maximum
Stock option granted vesting period			5 years
Common Class A \| 2018 Stock Incentive Plan
Common stock options authorized	9,198,996		9,198,996

Accounts receivable, net - Sales Returns and Doubtful Accounts (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Balance	$ 3,928	$ 3,021	$ 3,049	$ 3,420
Additions (reductions)	1,589	(56)	2,559	(29)
Write-offs	(392)	(30)	(483)	(456)
Balance	$ 5,125	$ 2,935	$ 5,125	$ 2,935

Inventories (Tables)

9 Months Ended

Sep. 30, 2020

Inventory Disclosure [Abstract]

Schedule of Inventory, Current

Inventories, net of related reserves for excess and obsolescence, consisted of the following:


	September 30,		December 31,
	2020		2019
Raw materials	$	9,676	$	9,178
Work in process		1,499		781
Finished goods		18,707		12,959

	$	29,882	$	22,918

Stockholders' Equity (Detail) - shares	Sep. 30, 2020	Dec. 31, 2019
Equity [Abstract]
Shares reserved for issuance for outstanding options	6,788,655	6,503,646
Shares reserved for issuance for outstanding restricted stock units	819,248
Shares reserved for issuance for future grants	6,819,449	9,008,996
Common Stock, Capital Shares Reserved for Future Issuance	14,427,352	15,512,642

Fair Value of Financial Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]


	Fair Value Measurements
	as of September 30, 2020 Using:
	Level 1		Level 2		Level 3		Total
Liabilities:
Earnout Liability	$	—	$	—	$	3,782	$	3,782

	$	—	$	—	$	3,782	$	3,782

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities:
Net loss	$ (545)	$ (36,056)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	2,749	2,553
Amortization of intangible assets	2,518	4,526
Non-cash interest expense	160	196
Deferred interest expense	1,577	974
Deferred rent expense	33	606
Gain on settlement of deferred acquisition consideration	(2,246)
Recovery of certain notes receivable from related parties	(1,111)
Provision (benefit) recorded for sales returns and doubtful accounts	2,559	(29)
Loss on disposal of property and equipment	201
Adjustment for excess and obsolete inventories	2,024	809
Stock-based compensation	1,164	700
Loss on extinguishment of debt		1,862
Changes in operating assets and liabilities:
Accounts receivable	(19,160)	553
Inventory	(7,757)	(7,840)
Prepaid expenses and other current assets	(2,262)	(699)
Accounts payable	(3,778)	5,348
Accrued expenses and other current liabilities	3,521	85
Other liabilities	878	(715)
Net cash used in operating activities	(19,475)	(27,127)
Cash flows from investing activities:
Purchases of property and equipment	(12,260)	(2,526)
Proceeds from the repayment of notes receivable from related parties	1,726
Cash paid for business acquisition	(5,820)
Acquisition of intangible asset		(250)
Net cash used in investing activities	(16,354)	(2,776)
Cash flows from financing activities:
Line of credit borrowings	5,869	7,000
Proceeds from term loan	10,000	50,000
Repayment of notes payable		(17,585)
Proceeds from the exercise of stock options	1,286	163
Proceeds from the exercise of common stock warrants		628
Redemption of redeemable common stock placed into treasury		(6,762)
Principal repayments of capital lease obligations	(1,776)	(863)
Payment of deferred acquisition consideration	(3,034)
Payment of debt issuance costs		(924)
Net cash provided by financing activities	12,345	31,657
Change in cash and restricted cash	(23,484)	1,754
Cash and restricted cash, beginning of period	60,370	21,405
Cash and restricted cash, end of period	36,886	23,159
Supplemental disclosure of cash flow information:
Cash paid for interest	7,130	5,922
Cash paid for income taxes		110
Supplemental disclosure of non-cash investing and financing activities:
Fair value of shares issued for business acquisition	7,986
Deferred acquisition consideration and earnout liability recorded for business acquisition	5,218
Debt issuance costs included in accounts payable		91
Purchases of property and equipment included in accounts payable and accrued expenses	$ 2,628	3,698
Amounts due related to acquisition of intangible assets included in accrued expenses and other liabilities		500
Non-cash deemed dividend to warrant Exchange		645
Equipment acquired under capital lease		$ 973

Acquisition -Summary Of Purchase Price Allocation (Detail) - USD ($) $ in Thousands	Sep. 17, 2020	Sep. 30, 2020	Dec. 31, 2019
Liabilities assumed:
Goodwill		$ 28,916	$ 25,539
CPN Biosciences, LLC
Assets acquired:
Accounts receivable	$ 1,048
Inventory	1,230
Prepaid expenses and other current assets	1
Property and equipment	85
Intangible assets	13,570
Other assets	4
Total assets acquired	15,938
Liabilities assumed:
Accounts payable	51
Accrued expenses and other current liabilities	240
Total liabilities assumed	291
Total identifiable assets acquired, net	15,647
Total purchase price	19,024
Goodwill	$ 3,377

Accrued Expenses and Other Current Liabilities (Tables)

9 Months Ended

Sep. 30, 2020

Payables and Accruals [Abstract]

Schedule of Accounts Payable and Accrued Liabilities

Accrued expenses and other current liabilities consisted of the following:


	September 30, 2020		December 31, 2019
Accrued personnel costs	$	21,158	$	17,640
Other		4,974		5,810

	$	26,132	$	23,450

Product and Geographic Sales - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Significant Accounting Policies [Line Items]
Revenue	$ 100,799	$ 64,265	$ 231,491	$ 186,336
GPO Fees	1,013	880	$ 2,810	1,991
Sales Revenue
Significant Accounting Policies [Line Items]
Concentration Risk, Percentage			1.00%
PuraPly
Significant Accounting Policies [Line Items]
Revenue	$ 40,945	$ 31,755	$ 101,969	$ 86,893

- Definition

+ References

+ Details

Net Income (Loss) per Share (EPS) - Additional Information (Detail) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Earnings Per Share [Abstract]
Anti-dilutive shares excluded from the diluted EPS	2,009,245	7,263,990	8,283,893	7,263,990

Net Income (Loss) per Share (EPS) (Tables)

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Schedule of Earnings Per Share Basic and Diluted


	Three Months Ended September 30,					Nine Months Ended September 30,
Calculation of Basic and Diluted EPS	2020		2019			2020			2019
Weighted-average common shares outstanding—basic		105,040,035		92,276,858			104,748,297			91,182,233
Dilutive effect of restricted stock units		134,759		—			—			—
Dilutive effect of options		3,314,974		—			—			—

Weighted-average common shares outstanding—diluted		108,489,768		92,276,858			104,748,297			91,182,233
Earnings (loss) per share—basic	$	0.20	$	(0.12	)	$	(0.01	)	$	(0.40	)
Earnings (loss) per share—diluted	$	0.19	$	(0.12	)	$	(0.01	)	$	(0.40	)

Goodwill and Intangible Assets - Identifiable intangible assets (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Original Cost	$ 46,400	$ 32,830
Accumulated Amortization	(14,551)	(12,033)
Net Book Value	31,849	20,797
Developed technology
Original Cost	32,620	30,570
Accumulated Amortization	(13,503)	(11,266)
Net Book Value	19,117	19,304
Trade names and trademarks
Original Cost	2,080	2,000
Accumulated Amortization	(828)	(650)
Net Book Value	1,252	1,350
Customer Relationships [Member]
Original Cost	10,690
Accumulated Amortization	(45)
Net Book Value	10,645
Non-compete agreements
Original Cost	1,010	260
Accumulated Amortization	(175)	(117)
Net Book Value	$ 835	$ 143

Stock-Based Compensation - Schedule of Fair Value of Stock Options Granted to Employees and Directors (Detail) - $ / shares	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Risk-free interest rate	0.46%	2.24%
Expected term (in years)	6 years 2 months 19 days	6 years 6 months
Expected volatility	37.42%	42.70%
Expected dividend yield	0.00%	0.00%
Exercise price	$ 4.04	$ 7.08
Underlying stock price	$ 3.37	$ 7.08

Product and Geographic Sales

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Product and Geographic Sales

4. Product and Geographic Sales

The Company generates revenue through the sale of Advanced Wound Care and Surgical & Sports Medicine products. There is a single performance obligation in all of the Company’s contracts, which is the Company’s promise to transfer the Company’s products to customers based on specific payment and shipping terms in the arrangement. The entire transaction price reflects a single performance obligation. Product revenue is recognized when a customer obtains control of the Company’s products which occurs at a point in time and may be upon shipment, procedure date, or delivery, based on the terms of the contract. Revenue is recorded net of a reserve for returns, discounts and Group Purchasing Organization (“GPO”) rebates, which represent a direct reduction to the revenue recognized. These reductions are accrued at the time revenue is recognized, based upon historical experience and specific circumstances. For the three months ended September 30, 2020 and 2019, the Company recorded GPO fees of $1,013 and $880, respectively, as a direct reduction of revenue. For the nine months ended September 30, 2020 and 2019, the Company recorded GPO fees of $2,810 and $1,991, respectively, as a direct reduction of revenue.

The following tables set forth revenue by product category:


	Three Months Ended September 30,
	2020		2019
Advanced Wound Care	$	89,990	$	54,310
Surgical & Sports Medicine		10,809		9,955

Total net revenue	$	100,799	$	64,265


	Nine Months Ended September 30,
	2020		2019
Advanced Wound Care	$	201,009	$	157,365
Surgical & Sports Medicine		30,482		28,971

Total net revenue	$	231,491	$	186,336

For the three months ended September 30, 2020 and 2019, net PuraPly revenue totaled $40,945 and $31,755, respectively. For the nine months ended September 30, 2020 and 2019, net PuraPly revenue totaled $101,969 and $86,893, respectively. For all periods presented, net revenue generated outside the United States represented less than 1% of total net revenue.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details

Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Future Lease Payments


2020 (remaining 3 months)	$	1,198
2021		4,786
2022		4,945
2023		—
2024		9,825

		20,754
Less amount representing interest		(5,042	)

Present value of minimum lease payments		15,712
Less current maturities		(3,473	)

Long-term portion	$	12,239

Schedule Of Operating Leased Assets


2020 (remaining 3 months)	$	1,250
2021		5,974
2022		3,471
2023		2,804
2024		1,224
Thereafter		6,899

	$	21,622

Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
Net principal and interest receivable	$ 0	$ 556
Option Loans
Related Parties Notes Receivable	635	635
Liquidity Loan to One Former Employee
Proceeds from Collection of Long-term Loans to Related Parties	1,000
Liquidity Loan to One Former Employee \| Principal
Loans advanced written off	1,000
Liquidity Loan [Member]
Related Parties Notes Receivable	297	$ 2,350
Liquidity Loan [Member] \| Selling, General and Administrative Expenses
Related Party Transaction, Amounts of Transaction	1,111
Liquidity Loan [Member] \| Principal
Proceeds from Collection of Long-term Loans to Related Parties	53
Liquidity Loan [Member] \| Interest
Proceeds from Collection of Long-term Loans to Related Parties	$ 58
Maximum \| Liquidity Loan and Option Loans
Interest Rate	3.86%
Minimum \| Liquidity Loan and Option Loans
Interest Rate	2.30%

Net Income (Loss) per Share (EPS) - Schedule of Earnings Per Share Basic and Diluted (Detail) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Weighted-average common shares outstanding—basic	105,040,035	92,276,858	104,748,297	91,182,233
Weighted-average common shares outstanding—diluted	108,489,768	92,276,858	104,748,297	91,182,233
Earnings (loss) per share—basic	$ 0.20	$ (0.12)	$ (0.01)	$ (0.40)
Earnings (loss) per share—diluted	$ 0.19	$ (0.12)	$ (0.01)	$ (0.40)
Restricted Stock Units
Dilutive effect of awards	134,759
Employee Stock Option
Dilutive effect of awards	3,314,974

- Definition

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

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- Definition

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

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+ Details

Property and Equipment, Net (Tables)

9 Months Ended

Sep. 30, 2020

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

Property and equipment consisted of the following:


	September 30,			December 31,
	2020			2019
Leasehold improvements	$	39,169		$	36,344
Furniture, computers and equipment		47,798			46,430

		86,967			82,774
Accumulated depreciation and amortization		(68,559	)		(65,812	)
Construction in progress		37,529			30,222

	$	55,937		$	47,184

Accounts receivable, net

9 Months Ended

Sep. 30, 2020

Receivables [Abstract]

Accounts receivable, net

6. Accounts Receivable, Net

Accounts receivable consisted of the following:


	September 30,			December 31,
	2020			2019
Accounts receivable	$	62,040		$	42,408
Less — allowance for sales returns and doubtful accounts		(5,125	)		(3,049	)

	$	56,915		$	39,359

The Company’s allowance for sales returns and doubtful accounts was comprised of the following:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Balance at beginning of period	$	3,928		$	3,021		$	3,049		$	3,420
Additions (reductions)		1,589			(56	)		2,559			(29	)
Write-offs		(392	)		(30	)		(483	)		(456	)

Balance at end of period	$	5,125		$	2,935		$	5,125		$	2,935

Fair Value of Financial Assets and Liabilities - Schedule Of Fair Value Assets And Liabilities Measured On Recurring Basis (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 17, 2020
Liabilities	$ 3,782	$ 3,782
Fair Value, Measurements, Recurring
Liabilities	3,782
Fair Value, Measurements, Recurring \| Earnout Liability
Liabilities	3,782
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 3
Liabilities	3,782
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 3 \| Earnout Liability
Liabilities	$ 3,782