axgn-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to______________

Commission file number: 001-36046

Axogen, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Minnesota

(State or other jurisdiction of

incorporation or organization)

13631 Progress Blvd., Suite 400 Alachua, FL

(Address of principal executive offices)

41-1301878

(I.R.S. Employer

Identification No.)

32615

(Zip Code)

386-462-6800

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)


Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.01 par value	AXGN	The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 29, 2024, the registrant had 43,704,574 shares of common stock outstanding.

Table of Contents


Part I - Financial Information
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 (Unaudited)	3
	Condensed Consolidated Statements of Operations for the three months ended March 31, 202 4 and 202 3 (Unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the three months ended M arch 31, 202 4 and 202 3 (Unaudited)	5
	Condensed Consolidated Statements of Changes in Shareholders' Equity for the three months ended M arch 31 , 202 4 and 202 3 (Unaudited)	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24

Item 4.	Controls and Procedures	25

Part II - Other Information

Item 1.	Legal Proceedings	26

Item 1A.	Risk Factors	26

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26

Item 3.	Defaults Upon Senior Securities	26

Item 4.	Mine Safety Disclosures	26

Item 5.	Other Information	26

Item 6.	Exhibits	27

	Signatures	28

Forward-Looking Statements

From time to time, in reports filed with the U.S. Securities and Exchange Commission (the “SEC”) (including this Quarterly Report on Form 10-Q), in press releases, and in other communications to shareholders or the investment community, Axogen, Inc. (including Axogen, Inc.’s wholly owned subsidiaries, Axogen Corporation, Axogen Processing Corporation, Axogen Germany GmbH, and Axogen Europe GmbH, the “Company,” “Axogen,” “we,” “our,” or “us”) may provide forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, concerning possible or anticipated future results of operations or business developments. These statements are based on management's current expectations or predictions of future conditions, events, or results based on various assumptions and management's estimates of trends and economic factors in the markets in which the Company is active, as well as its business plans. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “projects,” “forecasts,” “continue,” “may,” “should,” “will,” “goals,” and variations of such words and similar expressions are intended to identify such forward-looking statements.

The forward-looking statements in this Form 10-Q include, but are not limited to the following:

•Our expectations regarding the timing of manufacturing of Avive+ Soft Tissue Matrix ™, our ability to market Avive+ and growth in the nerve protection category following the launch of Avive+ , and our expectations that Avive+ will, and will continue to, be regulated solely under Section 361 of the Public Health Service Act;

•Our expectation that we will fully launch Avive + in June 2024;

•Our expectation that the rolling BLA submission for Avance Nerve Graft will be completed in the third quarter of 2024;

•Our expectation that the BLA for Avance Nerve Graft will be approved in mid-2025; and

•Our belief that our existing cash and cash equivalents and investments, as well as cash provided by sales of our products will allow us to fund our operations through at least the next 12 months.

The forward-looking statements are and will be subject to risks and uncertainties, which may cause actual results to differ materially from those expressed or implied in such forward-looking statements. Forward-looking statements contained in this Quarterly Report on Form 10-Q should be evaluated together with the many risks and uncertainties that affect the Company’s business and its market, particularly those discussed in the risk factors and cautionary statements set forth in the Company’s filings with the SEC, including as described in “Risk Factors” included in Item 1A and "Risk Factor Summary" included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023. Forward-looking statements are not guarantees of future performance, and actual results may differ materially from those projected. The forward-looking statements are representative only as of the date they are made and, except as required by applicable law, the Company assumes no responsibility to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or otherwise.

PART 1 — FINANCIAL INFORMATION

ITEM 1 — FINANCIAL STATEMENTS

Axogen, Inc.

Condensed Consolidated Balance Sheets

(unaudited)

(In thousands, except share and per share amounts)


	March 31, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	15,713	$	31,024
Restricted cash	6,000		6,002
Investments	1,921		—
Accounts receivable, net of allowance for doubtful accounts of $603 and $337, respectively	24,212		25,147
Inventory	27,636		23,020
Prepaid expenses and other	3,181		2,811
Total current assets	78,663		88,004
Property and equipment, net	87,838		88,730
Operating lease right-of-use assets	15,247		15,562

Intangible assets, net	4,768		4,531

Total assets	$	186,516	$	196,827

Liabilities and shareholders’ equity
Current liabilities:
Accounts payable and accrued expenses	$	21,288	$	28,883
Current maturities of long-term lease obligations	1,644		1,547
Total current liabilities	22,932		30,430

Long-term debt, net of debt discount and financing fees	46,825		46,603
Long-term lease obligations	20,681		21,142
Debt derivative liabilities	2,922		2,987

Total liabilities	93,360		101,162

Commitments and contingencies - see Note 12

Shareholders’ equity:
Common stock, $0.01 par value per share; 100,000,000 shares authorized; 43,687,729 and 43,124,496 shares issued and outstanding	437		431
Additional paid-in capital	380,650		376,530
Accumulated deficit	(287,931)		(281,296)
Total shareholders’ equity	93,156		95,665
Total liabilities and shareholders’ equity	$	186,516	$	196,827

See notes to condensed consolidated financial statements.

Axogen, Inc.

Condensed Consolidated Statements of Operations

(unaudited)

(In thousands, except share and per share amounts)


	Three Months Ended
	March 31, 2024		March 31, 2023

Revenues	$	41,378	$	36,664
Cost of goods sold	8,758		8,172
Gross profit	32,620		28,492
Costs and expenses:
Sales and marketing	19,815		19,446
Research and development	7,409		6,326
General and administrative	9,956		10,061
Total costs and expenses	37,180		35,833
Loss from operations	(4,560)		(7,341)
Other income (expense):
Investment income	293		549
Interest expense	(2,326)		(16)
Change in fair value of derivatives	65		(185)
Other expense	(107)		(81)
Total other (expense) income, net	(2,075)		267
Net loss	$	(6,635)	$	(7,074)

Weighted average common shares outstanding — basic and diluted	43,233,149		42,571,021
Loss per common share — basic and diluted	$	(0.15)	$	(0.17)

See notes to condensed consolidated financial statements.

Axogen, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

(In thousands)


	Three Months Ended
	March 31, 2024		March 31, 2023
Cash flows from operating activities:
Net loss	$	(6,635)	$	(7,074)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	1,520		709
Amortization of right-of-use assets	315		464
Amortization of intangible assets	62		71
Amortization of debt discount and deferred financing fees	222		219
Provision for (recovery of) bad debt	255		(267)
Provision for inventory write-down	367		581
Change in fair value of derivatives	(65)		185
Investment (gains) loss	(10)		(426)
Share-based compensation	3,919		2,954
Change in operating assets and liabilities:
Accounts receivable	681		175
Inventory	(4,983)		(1,525)
Prepaid expenses and other	(262)		(509)
Accounts payable and accrued expenses	(7,291)		(2,442)
Operating lease obligations	(360)		(537)
Cash paid for interest portion of finance leases	(1)		(1)

Net cash used in operating activities	(12,266)		(7,423)

Cash flows from investing activities:
Purchase of property and equipment	(924)		(4,304)

Purchase of investments	(1,910)		(10,203)
Proceeds from sale of investments	—		13,974
Cash payments for intangible assets	(417)		(253)
Net cash used in investing activities	(3,251)		(786)

Cash flows from financing activities:






Cash paid for debt portion of finance leases	(3)		(1)
Proceeds from exercise of stock options and ESPP stock purchases	207		634
Net cash provided by financing activities	204		633
Net decrease in cash, cash equivalents, and restricted cash	(15,313)		(7,576)
Cash, cash equivalents, and restricted cash, beginning of period	37,026		21,535
Cash, cash equivalents, and restricted cash, end of period	$	21,713	$	13,959

Supplemental disclosures of cash flow activity:
Cash paid for interest, net of capitalized interest	$	1,656	$	—
Supplemental disclosure of non-cash investing and financing activities:
Acquisition of fixed assets in accounts payable and accrued expenses	$	516	$	1,026



Acquisition of intangible assets in accounts payable and accrued expenses	$	290	$	326

See notes to condensed consolidated financial statements.

Axogen, Inc.

Condensed Consolidated Statements of Changes in Shareholders’ Equity

(unaudited)

(In thousands, except share amounts)


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Shareholders' Equity
	Shares	Amount
Three Months Ended March 31, 2024
Balance at December 31, 2023	43,124,496	$	431	$	376,530	$	(281,296)	$	95,665
Net loss	—	—		—		(6,635)		(6,635)
Stock-based compensation	—	—		3,919		—		3,919
Issuance of restricted and performance stock units	539,233	5		(5)		—		—
Exercise of stock options and employee stock purchase plan	24,000	1		206		—		207
Balance at March 31, 2024	43,687,729	$	437	$	380,650	$	(287,931)	$	93,156










Three Months Ended March 31, 2023
Balance at December 31, 2022	42,445,517	$	424	$	360,155	$	(259,580)	$	100,999
Net loss	—	—		—		(7,074)		(7,074)
Stock-based compensation	—	—		2,954		—		2,954
Issuance of restricted and performance stock units	238,719	3		(3)		—		—
Exercise of stock options and employee stock purchase plan	125,758	1		633		—		634
Balance at March 31, 2023	42,809,994	$	428	$	363,739	$	(266,654)	$	97,513

See notes to condensed consolidated financial statements.

Axogen, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

(In thousands, except share and per share amounts)

1.Nature of Business

Axogen, Inc. (together with its wholly-owned subsidiaries, the “Company”) was incorporated in Minnesota. Our business is focused on the science, development and commercialization of the technologies used for peripheral nerve regeneration and repair. The Company's products include Avance® Nerve Graft, Axoguard Nerve Connector®, Axoguard Nerve Protector®, Axoguard HA+ Nerve Protector™, Axoguard Nerve Cap® and Axotouch® Two-Point Discriminator. The Company is headquartered in Florida. The Company has processing, warehousing, and distribution facilities in Texas and Ohio.

The Company manages its operations as a single operating segment. Substantially all of the Company's assets are maintained in the United States. The Company derives substantially all of its revenues from sales to customers in the United States.

2.Summary of Significant Accounting Policies

Please see Note 2 to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission ("SEC") on March 5, 2024, for a description of all significant accounting policies.

Reclassifications

Certain reclassifications have been made to the prior period financial information to conform to the presentation used in the condensed consolidated statement of operations for the three months ended March 31, 2024.

Effective as of the first quarter of 2024, the Company voluntarily changed its accounting policy for shipping and handling costs. Under the new accounting policy, these costs are included in Costs of goods sold, whereas they were previously included in Sales and marketing expenses. Including these expenses in Costs of goods sold better aligns these costs with the related revenue in the gross profit calculation. Although the prior method of accounting continues to be an accepted alternative, the new accounting policy is more widely used in the industry and provides improved comparability of the Company's financial statements to its peers. This change in accounting policy has been applied retrospectively. The consolidated statement of operations for the three months ended March 31, 2023, has been reclassified to reflect this change in accounting policy. The impact of this reclassification was an increase of $1,465 to cost of goods sold for the three months ended March 31, 2023, and a corresponding decrease to Sales and marketing expenses in the same period.

Effective as of the first quarter of 2024, the Company also ceased allocating certain costs to and from certain departments. Previously such costs had been allocated based on the Company’s estimate of the proportionate share of total expense to Cost of goods sold, Sales and marketing, Research and development, and General and administrative. The Company determined that these changes would better reflect industry practice and would provide more meaningful information as well as increased transparency of its operations. To conform the 2023 presentation to the current quarter’s presentation, $1,062 was reclassified to General and administrative, of which $353 was previously included in Research and development, $707 was previously included in Sales and marketing, and $2 was previously included in Cost of goods sold for the three months ended March 31, 2023, in the condensed consolidated statement of operations.

These reclassifications had no impact on net revenue, loss from operations, net loss, or loss per common share for prior periods and do not represent a restatement of the Company's previously issued consolidated financial statements.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company as of March 31, 2024, and December 31, 2023, and for the three months ended March 31, 2024, and 2023. The Company’s condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X, and; therefore, do not include all information and footnotes necessary for a fair presentation of consolidated financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") and should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2023, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

The interim condensed consolidated financial statements are unaudited, and in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of results for the periods presented. The results of operations for the three months ended March 31, 2024, are not necessarily indicative of the results to be expected for the full year due primarily to the impact of the continued uncertainty of general economic conditions that may impact the Company's markets for the remainder of fiscal year 2024. All intercompany accounts and transactions have been eliminated in consolidation.

Cash and Cash Equivalents and Concentration

Cash and cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less from the date of acquisition. Certain of the Company's cash and cash equivalents balances exceed Federal Deposit Insurance Corporation ("FDIC") insured limits or are invested in money market accounts with investment banks that are not FDIC-insured. The Company places its cash and cash equivalents in what they believe to be credit-worthy financial institutions. As of March 31, 2024, $14,963 of the cash and cash equivalents balance was in excess of FDIC limits.

Restricted Cash

Amounts included in restricted cash represent those required to be set aside to meet contractual terms of a lease agreement held by the Company. See Note 8 - Long-Term Debt, Net of Debt Discount and Financing Fees, Other Credit Facilities.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported in the condensed consolidated balance sheets that sum to the total of the same amounts shown in the condensed consolidated statements of cash flows:


(In thousands)	March 31, 2024		December 31, 2023
Cash and cash equivalents	$	15,713	$	31,024
Restricted cash	6,000		6,002
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	21,713	$	37,026

Shipping and Handling

All shipping and handling costs, including facility and warehousing overhead, directly related to bringing the Company’s products to their final selling destination are included in cost of goods sold on the consolidated statements of operations. The Company has elected to account for shipping and handling costs for products shipped to customers as a fulfillment activity as the costs are incurred as part of the transfer of the goods to the customer in accordance with ASC 606. See Reclassifications above.

Recent Accounting Pronouncements

All other Accounting Standards Updates ("ASU's") issued and not yet effective as of December 31, 2023, and through the date of this report, were assessed and determined to be either not applicable or are expected to have minimal impact on the Company’s current or future financial position or results of operations except for the following:

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update 2023-09 — Income Taxes (Topic 740) — Improvements to Income Tax Disclosures ("ASU 2023-09"). The new guidance provides for disclosure on an annual basis of the following: (i) specific categories in the rate reconciliation, and (ii) additional information for reconciling items that meet a quantitative threshold of greater than 5% of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate. The amendment in ASU 2023-09 is effective for the annual periods beginning after December 15, 2025, early adoption is permitted. The Company expects to enhance annual income tax reporting disclosures based on the new requirements.

In November 2023, the FASB issued Accounting Standard Update 2023-07 — Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"). The new guidance requires disclosure on an annual and interim basis of the following: (i) significant segment expenses regularly provided to the chief operating decision maker ("CODM") and a measure of segment profit or loss; (ii) an amount for other segment items by reportable segment and a description of its composition; (iii) all annual disclosures about a reportable segment's profit and loss and assets as currently required by Topic 280; (iv) clarify if the CODM uses more than one measure of a segment's profit or loss in assessing segment performance and deciding how to allocate resources; and (v) disclose title and position of the CODM and how the CODM uses

the reported measures. Public entities with a single reportable segment are required to provide all the disclosures required by this amendment. The amendment in ASU 2023-07 is effective for the annual periods beginning after December 15, 2023, and for the quarters in the years after December 15, 2024, early adoption is permitted. The Company expects to enhance annual segment reporting disclosures based on the new requirements.

3. Inventory

Inventory consists of the following:


(in thousands)	March 31, 2024		December 31, 2023
Finished goods	$	19,901	$	13,545
Work in process	1,041		2,120
Raw materials	6,694		7,355
Inventory	$	27,636	$	23,020

The provision for inventory write-down is as follows:


	Three Months Ended March 31,
(in thousands)	2024		2023
Provision for inventory write-down	$	367	$	581

4. Property and Equipment, Net

Property and equipment, net consist of the following:


(in thousands)	March 31, 2024		December 31, 2023
Land	$	731	$	731
Building	60,679		60,679
Leasehold improvements	17,896		15,348
Processing equipment	13,445		13,116
Furniture and equipment	9,821		8,741
Projects in process	317		3,674
Finance lease right-of-use assets	138		138
Property and equipment, at cost	103,028		102,427
Less: accumulated depreciation and amortization	(15,190)		(13,697)
Property and equipment, net	$	87,838	$	88,730

Depreciation expense is as follows:


	Three Months Ended March 31,
(in thousands)	2024		2023
Depreciation expense	$	1,520	$	709

5. Intangible Assets, Net

Intangible assets consist of the following:


	March 31, 2024						December 31, 2023
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortizable intangible assets:
Patents	$	5,204	$	(881)	$	4,323	$	4,905	$	(820)	$	4,085
License agreements	1,101		(1,089)		12		1,101		(1,087)		14
Total amortizable intangible assets	6,305		(1,969)		4,335		6,006		(1,907)		4,099

Unamortized intangible assets:
Trademarks	433		—		433		432		—		432
Total intangible assets	$	6,737	$	(1,969)	$	4,768	$	6,438	$	(1,907)	$	4,531

Amortization expense is as follows:


	Three Months Ended March 31,
(in thousands)	2024		2023
Amortization expense	$	62	$	71

As of March 31, 2024, future amortization of patents and license agreements is as follows:


Year Ending December 31,	(in thousands)
2024 (excluding the three months ended March 31, 2024)	$	189
2025	252
2026	250
2027	247
2028	247
Thereafter	3,150
Total	$	4,335

License Agreements

The Company had various license agreements that require the payment of royalty fees.

Royalty fee expense included in sales and marketing expense is as follows:


	Three Months Ended March 31,
(in thousands)	2024		2023
Royalty fee expense (1)	$	—	$	831

(1) Royalty fees are no longer being paid due to the expiration of the patents in 2023.

6. Fair Value Measurement

The following tables present the Company's fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2024, and December 31, 2023:


	March 31, 2024
(in thousands)	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Money market funds	$	8,835	$	—	$	—	$	8,835
U.S. government securities	1,921		—		—		1,921

Total assets	$	10,756	$	—	$	—	$	10,756

Liabilities:

Debt derivative liabilities	$	—	$	—	$	2,922	$	2,922
Total liabilities	$	—	$	—	$	2,922	$	2,922


	December 31, 2023
(in thousands)	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Money market funds	$	24,977	$	—	$	—	$	24,977




Total assets	$	24,977	$	—	$	—	$	24,977

Liabilities:

Debt derivative liabilities	$	—	$	—	$	2,987	$	2,987
Total liabilities	$	—	$	—	$	2,987	$	2,987

The changes in Level 3 liabilities measured at fair value on a recurring basis for the three months ended March 31, 2024 were as follows (in thousands):


Three Months Ended March 31, 2024
Balance, December 31, 2023	$	2,987



Change in fair value included in net loss	(65)
Balance, March 31, 2024	$	2,922

The fair value of cash, restricted cash, accounts receivable, accounts payable and accrued expenses approximates the carrying values because of the short-term nature of these instruments. The carrying value and fair value of the Credit Facility were $46,825 and $52,049 at March 31, 2024, and $46,603 and $51,486 at December 31, 2023, respectively. See Note 8 - Long-Term Debt, Net of Debt Discount and Financing Fees.

The debt derivative liabilities are measured using a ‘with and without’ valuation model to compare the fair value of each tranche of the Credit Facility including the identified embedded derivative features and the fair value of a plain vanilla note with the same terms. The fair value of the Credit Facility including the identified embedded derivative features was determined using a probability-weighted expected return model based on four potential settlement scenarios, one of which ended December 31, 2023, for the financing agreement as disclosed in the table below. The estimated settlement value of each scenario, which would include any required make-whole payment, (see Note 8 - Long-Term Debt, Net of Debt Discount and Financing Fees), is then discounted to present value using a discount rate that is derived based on the initial terms of the financing agreement at issuance and corroborated utilizing a synthetic credit rating analysis.

The significant inputs that are included in the valuation of the debt derivative liability - first tranche include:


	March 31, 2024			December 31, 2023
Input
Remaining term (years)	3.25 years			3.5 years
Maturity date	June 30, 2027			June 30, 2027
Coupon rate	9.5% - 13.16%			9.5% - 13.2%
Revenue participation payments	Maximum each year			Maximum each year
Discount rate	12.24%		(1)	12.06%		(1)
Probability of mandatory prepayment 2024 or after	15.0	%	(1)	15.0	%	(1)
Estimated timing of mandatory prepayment event 2024 or after	March 31, 2026		(1)	March 31, 2026		(1)
Probability of optional prepayment event	5.0	%	(1)	5.0	%	(1)
Estimated timing of optional prepayment event	December 31, 2025		(1)	December 31, 2025		(1)
Probability of note held-to-maturity(2)	80.0%		(1)	80.0%		(1)

(1)Represents a significant unobservable input

(2) See Maturity date in table.

The significant inputs that are included in the valuation of the debt derivative liability - second tranche include:


	March 31, 2024			December 31, 2023
Input
Remaining term (years)	4.25 years			4.5 years
Maturity date	June 30, 2028			June 30, 2028
Coupon rate	9.5% - 13.16%			9.5% - 13.2%
Revenue participation payments	Maximum each year			Maximum each year
Discount rate	15.49	%	(1)	15.60	%	(1)
Probability of mandatory prepayment 2024 or after	15.0%		(1)	15.0%		(1)
Estimated timing of mandatory prepayment event 2024 or after	March 31, 2026		(1)	March 31, 2026		(1)
Probability of optional prepayment event	5.0%		(1)	5.0%		(1)
Estimated timing of optional prepayment event	December 31, 2025		(1)	December 31, 2025		(1)
Probability of held-to-maturity(2)	80.0%			80.0%

(1)Represents a significant unobservable input

(2)See Maturity date in table.

7. Leases

The Company leases administrative, processing, research and distribution facilities through operating leases. Several of the leases include fixed payments, including rent and non-lease components such as common area or other maintenance costs.

Operating lease expense is as follows:


	Three Months Ended March 31,
(in thousands)	2024		2023
Operating lease expense	$	1,206	$	1,298

Supplemental balance sheet information related to the operating and financing leases is as follows:


(In thousands, except lease term and discount rate)	March 31, 2024		December 31, 2023
Operating Leases
Right-of-use operating assets	$	15,247	$	15,562
Current maturities of long-term lease obligations	$	1,639	$	1,541
Long-term lease obligations	$	20,663	$	21,123
Financing Leases
Right-of-use financing leases (1)	$	24	$	28
Current maturities of long-term lease obligations	$	5	$	6
Long-term lease obligations	$	18	$	19

Weighted average operating lease term (in years):	9.4		9.6
Weighted average financing lease term (in years):	3.8		6.5

Weighted average discount rate operating leases	10.98%		10.99%
Weighted average discount rate financing leases	13.99%		13.22%

(1) Financing leases are included in property and equipment, net on the condensed consolidated balance sheets.

Future minimum lease payments under operating and financing leases at March 31, 2024, are as follows:


(In thousands)
2024 (excluding three months ended March 31, 2024)	$	2,951
2025	4,134
2026	4,269
2027	3,106
2028	3,104
Thereafter	18,565
Total	36,129
Less: Imputed interest	(13,804)
Total lease liability	22,325
Less: Current lease liability	(1,644)
Long-term lease liability	$	20,681

8. Long-Term Debt, Net of Debt Discount and Financing Fees

Long-term debt, net of debt discount and financing fees consists of the following:


(in thousands)	March 31, 2024		December 31, 2023
Credit Facility - first tranche	$	35,000	$	35,000
Credit Facility - second tranche	15,000		15,000
Less - unamortized debt discount and deferred financing fees	(3,175)		(3,397)
Long-term debt, net of debt discount and financing fees	$	46,825	$	46,603

Credit Facility

On June 29, 2023, the Company amended its Credit Facility with Oberland Capital and its affiliates TPC Investments II LP and Argo LLC (collectively, the "Lender"). The term loan agreement for the Credit Facility was amended to transition the base interest rate from three month LIBOR to Adjusted SOFR. The Company obtained the first tranche of $35,000 at closing on June 30, 2020. On June 30, 2021, the second tranche of $15,000 was drawn down by the Company.

Each tranche under the Credit Facility requires quarterly interest payments for seven years. Interest is calculated as 7.5% plus the greater of Adjusted SOFR or 2.0% (12.93% at March 31, 2024), provided that the interest rate shall never be less than 9.5%. Each tranche of the Credit Facility has a term of seven years from the date of issuance (with the first tranche issued on June 30, 2020, maturing on June 30, 2027, and the second tranche issued on June 30, 2021, maturing on June 30, 2028). In connection with the Credit Facility, the Company entered into a revenue participation agreement (the “Revenue Participation Agreement”) with the Lender, which provided that, among other things, a quarterly royalty payment as a percentage of the Company’s net revenues, up to $70 million in any given year, after April 1, 2021, ending on the date upon which all amounts owed under the Credit Facility have been paid in full. This structure results in approximately 1.5% per year of additional interest payments on the outstanding loan amount. The Company recorded $447 and $396 as interest expense for this Revenue Participation Agreement for the three months ended March 31, 2024, and 2023, respectively. The Company pays the quarterly debt interest on the last day of the quarter and for the three months ended March 31, 2024, and 2023, paid $1,634 and $1,532, respectively, to the Lender. The Company capitalized interest of $0 and $2,147 for the three months ended March 31, 2024, and 2023, respectively, towards the costs to construct and retrofit the Axogen Processing Center ("APC Facility") in Vandalia, Ohio which was completed during 2023. As of March 31, 2024, the Company was in compliance with all financial covenants.

Embedded Derivatives

The fair values of the debt derivative liabilities were $2,922 and $2,987 at March 31, 2024, and December 31, 2023, respectively. See Note 6 - Fair Value Measurement.

Unamortized Debt Discount and Financing Fees

The unamortized debt discount consists of the remaining initial fair values of the embedded derivatives related to the Credit Facility.

The financing fees for the Credit Facility were $642 and were recorded as a contra liability to long-term debt on the consolidated balance sheet.

Amortization of debt discount and deferred financing fees for the three months ended March 31, 2024, and 2023 was $222 and $219, respectively.

Other Credit Facilities

The Company had restricted cash of $6,000 and $6,002 at March 31, 2024, and December 31, 2023, respectively for an irrevocable standby letter of credit.

9. Stock-Based Compensation

The Company's stock-based compensation plans are described in Note 11. Stock-Based Compensation to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

During the fiscal year 2024, the following stock compensation was awarded to officers and employees. All awards were granted under the 2019 Amended and Restated Long-Term Incentive Plan ("2019 Plan"), with the exception of the inducement shares awarded as inducements material to new employees entering into employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4).


Type of Award	Quarter Awarded	Target Shares or Units	Weighted Average Grant Date Fair Value
Stock Options (1)	1st Quarter	—	$	—



Restricted Stock Units (2)	1st Quarter	787,688	$	9.05



Performance Stock Units (3)(4)	1st Quarter	911,400	$	8.92

Inducement Shares (5)
Stock Options	1st Quarter	18,700	$	6.04
Restricted Stock Units	1st Quarter	310,000	$	7.00

(1) Options awarded to officers and employees during the first quarter vest over a four-year period.

(2) Restricted Stock Units (RSUs) awarded to certain officers and employees during the first quarter vest over a four-year period. Upon vesting, the outstanding number of RSUs vested are converted into common stock.

(3) Performance Stock Units (PSUs) awarded to certain officers and employees related to their work on the BLA ("2024 BLA PSUs") totaled 487,400 shares during the first quarter of 2024. Participants with 2024 BLA PSUs will earn from 0% to 100% upon achievement of certain milestones related to the BLA submission and FDA approval. The number of shares available for grant is linked to certain milestones related to the BLA submission to and approval by the FDA. These awards will vest provided the participants remain in continuous service to the Company through the achievement of the applicable performance goal and the one-year anniversary of the grant date.

(4) PSUs awarded to certain officers and employees with a target of 424,400 shares with performance metrics tied to the achievement of stock price goals between February 2024 through February 2027 ("TSR PSU") during the first quarter of 2024. Participants with TSR PSUs will earn from 0% to 200% upon achievement of specific stock price goals. Absent the shareholder approval of an increase to the number of authorized shares under the Amended and Restated 2019 Plan at the 2024 Shareholder Meeting, the settlement of the TSR PSUs awards are limited to 100%. The maximum number of shares that can be issued under this award is 848,800. Vesting occurs at the end of the three-year performance period upon Compensation Committee certification of the results at the end of the performance period.

(5) Inducement shares were issued to officers during the first quarter of 2024, to new employees entering into employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4). Vesting for both the stock options and restricted stock units are over both a three-and four-year period.

Total stock-based compensation expense is as follows:


	Three Months Ended March 31,
(in thousands)	2024		2023
Stock-based compensation expense	$	3,919	$	2,954

10. Net Loss Per Common Share

The following reflects the net loss attributable to common shareholders and share data used in the basic and diluted earnings per share computations using the two-class method:


	Three Months Ended March 31,
(In thousands, except per share amounts)		2024		2023
Numerator:
Net loss		$	(6,635)	$	(7,074)
Denominator:
Weighted-average common shares outstanding (Basic)		43,233,149		42,571,021
Weighted-average common shares outstanding (Diluted)		43,233,149		42,571,021
Net loss per common share (Basic and Diluted)		$	(0.15)	$	(0.17)

Anti-dilutive shares excluded from the calculation of diluted earnings per share (1)
Stock options		3,086,555		3,305,342
Restricted stock units		323,346		436,653

(1) These common equivalent shares are not included in the diluted per share calculations as they would be anti-dilutive if the Company was in a net income position.

11. Income Taxes

The Company has no recorded income tax expense or income tax benefit for the three months ended March 31, 2024, and 2023 due to the generation of net operating losses, the benefits of which have been fully reserved.

The Company has not recorded current income tax expense due to the generation of net operating losses. Deferred income taxes are accounted for using the balance sheet approach, which requires recognition of deferred tax assets and liabilities for the expected future consequences of temporary differences between the financial reporting basis and the tax basis of assets and liabilities. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized. A full valuation allowance has been established on the deferred tax asset as it is more likely than not that a future tax benefit will not be realized. In addition, future utilization of the available net operating loss carryforward may be limited under Internal Revenue Code Section 382 as a result of changes in ownership.

The Company identifies and evaluates uncertain tax positions, if any, and recognizes the impact of uncertain tax positions for which there is a less than more likely than not probability of the position being upheld when reviewed by the relevant tax authority. Such positions are deemed to be unrecognized tax benefits and a corresponding liability is established on the condensed consolidated balance sheet. The Company has not recognized a liability for uncertain tax positions. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company’s remaining open tax years subject to examination by federal tax authorities include the years ended December 31, 2019, through 2023 , and we have received notice of examination from federal tax authorities for tax year 2021. For tax years 2005 through 2018, federal taxing authorities may examine and adjust loss carryforwards in the years in which those loss carryforwards are ultimately utilized.

12. Commitments and Contingencies

Service Agreements

The Company pays Community Blood Center, (d/b/a Community Tissue Service) ("CTS") a facility fee for the use of clean rooms/manufacturing, storage, and office space and for services in support of its tissue processing including for routine sterilization of daily supplies, providing disposable supplies and microbial services, and office support. Pursuant to the CTS Agreement, the Company recorded expenses of $108 and $541 for the three months ended March 31, 2024 and 2023, respectively, and is included in cost of goods sold. The CTS Agreement was amended on December 31, 2023, extending the term through December 31, 2026. The CTS Agreement may be terminated by either party by providing an eighteen-month written notice. The Company reduced its utilization of CTS in 2023 for Avance, however, is continuing its use of CTS for Avive +.

In December 2011, the Company entered into a Master Services Agreement for Clinical Research and Related Services. The Company was required to pay $151 upon execution of this agreement and the remainder monthly based on activities associated with the execution of the Company's phase 3 pivotal clinical trial to support the biologics license application ("BLA") for Avance Nerve Graft. Payments made under this agreement were $0 and $112 for the three months ended March 31, 2024, and 2023, respectively.

Distribution and Supply Agreements

In August 2008, the Company entered into an exclusive distribution agreement with Cook Biotech Incorporated ("Cook Biotech") to distribute the Axoguard Nerve Connector and Axoguard Nerve Protector products worldwide and the parties subsequently amended the agreement on August 4, 2023. The distribution agreement expires on December 31, 2030. The Cook Biotech agreement establishes a formula for the transfer cost of the Axoguard products and requires certain minimum purchases by the Company, although, through mutual agreement, the parties have not established such minimums; and, to date, have not enforced such provision. Under the Cook Biotech agreement, the Company provides purchase orders to Cook Biotech, and Cook Biotech fulfills the purchase orders. The agreement allows for termination provisions for both parties. The loss of the ability to sell the Axoguard products could have a material adverse effect on the Company's business until other replacement products would be available.

In June 2017, the Company entered into the Nerve End Cap Supply Agreement (the "Supply Agreement") with Cook Biotech whereby Cook Biotech is the exclusive contract manufacturer of the Axoguard Nerve Cap, and the parties subsequently amended the agreement on August 4, 2023. The Supply Agreement expires on December 31, 2030. The Supply Agreement establishes the terms and conditions in which Cook Biotech will manufacture the product for the Company under the Supply Agreement the Company provides purchase orders to Cook Biotech and Cook Biotech fulfills the purchase orders. The Supply Agreement allows for termination provisions for both parties. The loss of the ability to sell the Axoguard Nerve Cap products could have a material adverse effect on the Company's business until other replacement products would be available.

In May 2023, the Company entered into a Supply and Manufacturing Agreement ("HA+ Supply Agreement") with Cook Biotech whereby Cook Biotech is the exclusive contract manufacturer of the Axoguard HA + Nerve Protector. The HA+ Supply Agreement expires on July 1, 2030. The HA + Supply Agreement establishes the terms and condition in which Cook Biotech will manufacture, package, label and deliver the product to the Company. Under the HA+ Supply Agreement, the Company provides purchase orders to Cook Biotech, and Cook Biotech fulfills the purchase orders. The HA+ Supply Agreement allows for termination provisions for both parties. The loss of the ability to sell the Axoguard products could have a material adverse effect on the Company's business until other replacement products would be available. On January 31, 2024, RTI Surgical, Inc. announced the acquisition of Cook Biotech. We do not expect the acquisition of Cook Biotech to have a material impact on our relationship with Cook Biotech or our operations.

Insurance Finance Agreement

We finance certain of our commercial insurance policies ("Insurance Financing Agreement"). Outstanding payments owed under the Insurance Financing Agreement are recorded as "prepaid expenses and other" in our condensed consolidated balance sheets. The amounts owed under the Insurance Financing Agreement included in prepaid expenses and other were $1,520 and $0 as of March 31, 2024, and December 31, 2023, respectively.

Processing Facilities

The Company is highly dependent on the continued availability of its processing facilities at CTS and APC in Dayton, Ohio and could be harmed if the physical infrastructure of these facilities is unavailable for any prolonged period of time.

Certain Economic Development Grants

The Company obtained certain economic development grants from state and local authorities totaling up to $2,685 including $1,250 of cash grants to offset costs to acquire and develop the APC Facility. The economic development grants are subject to certain job creation milestones through December 31, 2023, and have clawback clauses if the Company does not meet the job creation milestones The Company requested an extension from the grant authorities to extend the job creation milestones and received approval to extend the evaluation date to December 31, 2024, and the expiration date to December 31, 2026. As of March 31, 2024, the Company had received $1,188 from the cash grants.

Fair Value of the Debt Derivative Liabilities

The fair value of the debt derivative liabilities is $2,922 as of March 31, 2024. The fair value of the debt derivative liabilities was determined using a probability-weighted expected return model based upon the four potential settlement scenarios for the Credit Facility. The estimated settlement value of each scenario, which includes any required make-whole payment, is then discounted to present value using a discount rate that is derived based upon the initial terms of the Credit Facility at issuance and corroborated utilizing a synthetic rating analysis. The calculated fair values under the four scenarios are then compared to the fair value of a plain vanilla note, with the difference reflecting the fair value of the debt derivative liabilities. The Company estimated the make-whole payments required under each scenario according to the terms of the Credit

Facility to generate an internal rate of return equal to 11.5% through the scheduled maturity dates, less the total of all quarterly interest and royalty payments previously paid to the Lender. The calculation utilized the XIRR function in Microsoft Excel as required by the Credit Facility. If the debt is not prepaid but instead is held to its scheduled maturities, the Company’s estimate of the make-whole payment for the first tranche and second tranche of the Credit Facility due on June 30, 2027, and June 30, 2028, respectively, are approximately zero. The Company has consistently applied this approach since the inception of the debt agreement on June 30, 2020.

The Company is aware that the Lender may have an alternative interpretation of the calculation of the make-whole payments that the Company believes does not properly utilize the same methodology utilized by the XIRR function in Microsoft Excel as described in the Credit Facility. The Company estimates the top end of the range of the make-whole payments if the debt is held to scheduled maturity under an alternative interpretation to be approximately $8,000 for the first tranche of the Credit Facility due on June 30, 2027, and approximately $4,000 for the second tranche of the Credit Facility due on June 30, 2028. Further, if the debt is prepaid prior to the scheduled maturity dates and subject to the alternative interpretation, the make-whole payment would be larger than the amounts herein.

Legal Proceedings

The Company is and may be subject to various claims, lawsuits, and proceedings in the ordinary course of the Company's business. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. While there can be no assurances as to the ultimate outcome of any legal proceeding or other loss contingency involving the Company, in the opinion of management, such claims are either adequately covered by insurance or otherwise indemnified, or are not expected individually or in the aggregate, to result in a material, adverse effect on the Company's financial condition, results of operations or cash flows. However, it is possible that the Company's results of operations, financial position and cash flows in a particular period could be materially affected by these contingencies.

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the related notes thereto appearing elsewhere in this report and our consolidated financial statements for the year ended December 31, 2023 , included in our Annual Report on Form 10-K. All dollar amounts in the discussion and analysis, unless noted otherwise, are presented in thousands.

Financial information for prior periods has been reclassified to reflect the retrospective application of voluntary changes in the Company’s accounting policy for shipping and handling costs, as discussed under “Note 2 – Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements in this Form 10-Q.

Unless the context otherwise requires, all references in this report to “Axogen,” the “Company,” “we,” “us” and “our” refer to Axogen, Inc., and its wholly owned subsidiaries Axogen Corporation (“AC”), Axogen Processing Corporation, Axogen Europe GmbH and Axogen Germany GmbH.

OVERVIEW

We are the leading company focused specifically on the science, development, and commercialization of technologies for peripheral nerve regeneration and repair. We are passionate about providing the opportunity to restore nerve function and quality of life for patients with peripheral nerve injuries. We provide innovative, clinically proven, and economically effective repair solutions for surgeons and healthcare providers. Peripheral nerves provide the pathways for both motor and sensory signals throughout the body. Every day, people suffer traumatic injuries or undergo surgical procedures that impact the function of their peripheral nerves. Physical damage to a peripheral nerve or the inability to properly reconnect peripheral nerves can result in the loss of muscle or organ function, the loss of sensory feeling, or the initiation of pain.

Product Portfolio

•Avance® Nerve Graft, a biologically active off-the-shelf processed human nerve allograft for bridging severed peripheral nerves without the comorbidities associated with a second surgical site.

•Axoguard Nerve Connector®, a porcine (pig) submucosa extracellular matrix ("ECM") coaptation aid for tensionless repair of severed peripheral nerves.

•Axoguard Nerve Protector®, a porcine submucosa ECM product used to wrap and protect damaged peripheral nerves and reinforce the nerve reconstruction while preventing soft tissue attachments.

•Axoguard HA+ Nerve Protector™, is comprised of a processed porcine submucosa ECM base layer with a hyaluronate-alginate gel coating designed to provide short- and long-term protection for peripheral nerve injuries. The gel layer facilitates enhanced nerve gliding to aid in minimizing soft tissue attachments, while the base layer is remodeled into a long-term protective tissue layer.

•Axoguard Nerve Cap®, a porcine submucosa ECM product used to protect a peripheral nerve end and separate the nerve from the surrounding environment to reduce the development of symptomatic or painful neuroma.

•Avive+ Soft Tissue Matrix™, a multi-layer amniotic membrane allograft used to protect and separate tissues in the surgical bed during the critical phase of tissue repair.

•Axotouch® Two-Point Discriminator, used to measure the innervation density of any surface area of the skin.

Our portfolio of products is currently available in the United States ("U.S."), Canada, Germany, United Kingdom, Spain and several other European, Asian and Latin American countries.

Revenue from the distribution of our nerve repair products, Avance® Nerve Graft, Axoguard Nerve Connector®, Axoguard Nerve Protector®, Axoguard HA+ Nerve Protector™, and Axoguard Nerve Cap®, in the United States ("U.S.") is the main contributor to our total reported sales and have been the key component of our growth to date.

In the first quarter, we initiated a limited market release of Avive + Soft Tissue Matrix. We believe Avive + will not require a BLA and will fall under the criteria set forth in 21 CFR 1271.10(a) for regulation solely under Section 361 of the Public Health Service Act and the regulations in 21 CFR Part 1271. We seek to fully launch Avive+ in June 2024. Products regulated solely under Section 361 of the Public Health Service Act are a product category under close scrutiny by the FDA for compliance with the regulatory requirements and potentially subject to regulatory change in the future. Failure to comply with

applicable regulatory requirements could expose us to potential compliance actions by the FDA or state regulators and could risk the commercial availability of the product.

We have observed that surgeons are initially cautious adopters of nerve repair products. Surgeons typically start with a few cases and then wait and review the results of these initial cases. Active accounts are usually past this wait period and have developed some level of product reorder. These active accounts have typically gone through the Value Analysis Committee approval process, have at least one surgeon who has converted a portion of his or her treatment algorithms of peripheral nerve repair to our portfolio and have ordered our products at least six times in the last twelve months. As of March 31, 2024, we had 1012 active accounts, an increase of 1.8% from 994 as of March 31, 2023, and an increase of 0.6% from 1,006 compared to December 31, 2023. Active accounts account for approximately 85% of our revenue. The top 10% of these active accounts continue to represent approximately 40% of our revenue.

Core accounts are defined as accounts that have purchased at least $100,000 in the past twelve months. As of March 31, 2024, we had 400 core accounts, an increase of 14.3% from 350 as of March 31, 2023, and an increase of 6.4% from 376 compared to December 31, 2023. These core accounts represented approximately 65% of our revenue in the quarter.

Summary of Operational and Business Highlights

•Revenues were $41,378 for the quarter ended March 31, 2024, an increase of $4,714 or 12.9% compared to the quarter ended March 31, 2023.

•Gross profit was $32,620 for the quarter ended March 31, 2024, an increase of $4,128 or 14.5% compared to the quarter ended March 31, 2023.

•We had 115 and 116 direct sales representatives as of March 31, 2024, and December 31, 2023.

•In February 2024, we completed a productive pre-BLA meeting with FDA where we gained alignment on the content on the modules for submission. We received approval of our rolling submission proposal and anticipate the BLA filing to be completed in the third quarter of 2024. We believe the submission timeline will allow for a potential approval in the middle of 2025.

•We are pleased with the adoption of Axoguard HA+ Nerve Protector™ across multiple applications. In the first quarter we initiated a limited market release of Avive+ Soft Tissue Matrix and have completed the first implant. We expect to drive continued growth within the nerve protection category following the full launch of Avive+ Soft Tissue Matrix in June of 2024.

•We continue to see strong interest in and adoption of the Resensation® neurotization techniques for autologous and implant-based breast reconstructions driven by expanding surgeon education and patient activation.

Results of Operations

Comparison of the Three Months Ended March 31, 2024, and 2023

The following table sets forth, for the periods indicated, our results of operations expressed as dollar amounts and percentage of total revenue:


	Three Months Ended March 31,
	2024				2023
	Amount		% of Revenue		Amount	% of Revenue
	(dollars in thousands)
Revenues	$	41,378	100.0	%	$

SEC Form 10-Q filed by Axogen Inc.