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Document And Entity Information - USD ($)	12 Months Ended
Document And Entity Information - USD ($)	Dec. 31, 2011	Mar. 15, 2012	Jun. 30, 2011
Entity Registrant Name	MIMEDX GROUP, INC.
Entity Central Index Key	0001376339
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$ 74,383,364
Entity Common Stock, Shares Outstanding		75,037,425
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	FY
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2011

CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2011	Dec. 31, 2010
Current assets:
Cash and cash equivalents	$ 4,112,326	$ 1,340,922
Accounts receivable, net	1,891,919	162,376
Inventory, net	712,602	111,554
Prepaid expenses and other current assets	164,664	90,946
Total current assets	6,881,511	1,705,798
Property and equipment, net of accumulated depreciation of $1,814,473 and $1,392,704, respectively	869,411	756,956
Goodwill	4,040,443	857,597
Intangible assets, net of accumulated amortization of $3,468,515 and $2,132,606, respectively	15,090,485	3,929,394
Deposits and other long term assets	214,342	102,500
Total assets	27,096,192	7,352,245
Current liabilities:
Accounts payable and accrued expenses	2,300,638	848,285
Convertible notes, plus accrued interest of $3,432	0	403,432
Deferred rent current	6,620	0
Convertible line of credit with related party, net of unamortized discount of $46,746 plus accrued interest of $42,726	1,295,980	0
Convertible debt related to acquisition, net of unamortized discount of $170,509 plus accrued interest of $49,315	1,128,806	0
Current portion of earn-out liability payable In MiMedx common stock	3,185,223	0
Total current liabilities	7,917,267	1,251,717
Earn-out liability payable in MiMedx common stock, net of current portion	4,225,280	0
Convertible Senior Secured Promissory Notes, net of unamortized discount of $2,263,145 plus accrued interest of $7,732	2,744,587	0
Other liabilities	312,493	0
Total liabilities	15,199,627	1,251,717
Commitments and contingency (Note 15)
Stockholders' equity:
Preferred stock; $.001 par value; 5,000,000 shares authorized and 0 shares issued and outstanding	0	0
Common stock; $.001 par value; 100,000,000 shares authorized; 74,306,895 issued and 74,256,895 outstanding for 2011 and 64,381,910 issued and 64,331,910 outstanding for 2010	74,307	64,382
Additional paid-in capital	73,868,604	57,888,506
Treasury stock (50,000 shares at cost)	(25,000)	(25,000)
Accumulated deficit	(62,021,346)	(51,827,360)
Total stockholders' equity	11,896,565	6,100,528
Total liabilities and stockholders' equity	$ 27,096,192	$ 7,352,245

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Dec. 31, 2011	Dec. 31, 2010
ASSETS
Property and equipment, accumulated depreciation	$ 1,814,473	$ 1,392,704
Intangible assets, accumulated amortization	3,468,515	$ 2,132,606
Current liabilities:
Convertible notes, accrued interest	3,432
Convertible line of credit with related party, unamortized discount	46,746
Convertible line of credit with related party, accrued interest	42,726
Convertible debt, unamortized discount	170,509
Convertible debt, accrued interest	49,315
Convertible Senior Secured Promissory Notes, unamortized discount	2,263,145
Convertible Senior Secured Promissory Notes, accrued interest	$ 7,732
Stockholders' equity:
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	74,306,895	64,381,910
Common stock, shares outstanding (in shares)	74,256,895	64,331,910
Treasury stock, shares (in shares)	50,000	50,000

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	12 Months Ended
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	Dec. 31, 2011	Dec. 31, 2010
REVENUES:
Net sales	$ 7,760,446	$ 544,155
Grant revenue	0	244,719
Total revenue	7,760,446	788,874
OPERATING COSTS AND EXPENSES:
Cost of products sold	3,154,594	1,720,063
Research and development expenses	2,602,751	2,753,331
Selling, general and administrative expenses	11,764,117	6,848,135
LOSS FROM OPERATIONS	(9,761,016)	(10,532,655)
OTHER INCOME (EXPENSE), net
Financing expense associated with warrants issued in connection with convertible promissory note	0	(287,449)
Interest (expense) income, net	(432,970)	(599,649)
LOSS BEFORE INCOME TAXES	(10,193,986)	(11,419,753)
Income taxes	0	0
NET LOSS	$ (10,193,986)	$ (11,419,753)
Net loss per common share
Basic and diluted (in dollars per share)	$ (0.14)	$ (0.19)
Shares used in computing net loss per common share
Basic and diluted (in shares)	72,450,337	59,138,357

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)	Series A Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Accumulated Deficit [Member]	Total
Balance at Dec. 31, 2009	$ 0	$ 50,003	$ 46,454,482	$ (25,000)	$ (40,407,607)	$ 6,071,878
Balance (in shares) at Dec. 31, 2009	0	50,002,887
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Employee share-based compensation expense	$ 0	$ 0	996,307	0	0	996,307
Other share-based compensation expense	0	0	174,354	0	0	174,354
Beneficial conversion feature recognized on convertible debt	0	0	287,448	0	0	287,448
Sale of common stock and warrants	0	$ 3,713	3,118,307	0	0	3,122,020
Sale of common stock and warrants (in shares)		3,713,433
Exercise of stock options	0	$ 211	154,915	0	0	155,126
Exercise of stock options (in shares)		210,250
Exercise of warrants	0	$ 3,219	3,216,130	0	0	3,219,349
Exercise of warrants (in shares)		3,219,348
Shares issued in conjunction with conversion of convertible debt	0	$ 7,236	3,486,563	0	0	3,493,799
Shares issued in conjunction with conversion of convertible debt (in shares)		7,235,992
Net loss for the period	0	$ 0	0	0	(11,419,753)	(11,419,753)
Balance at Dec. 31, 2010	$ 0	$ 64,382	57,888,506	(25,000)	(51,827,360)	6,100,528
Balance (in shares) at Dec. 31, 2010	0	64,381,910
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Employee share-based compensation expense	$ 0	$ 0	1,307,869	0	0	1,307,869
Other share-based compensation expense	0	0	351,214	0	0	351,214
Beneficial conversion feature recognized on convertible debt	0	0	2,715,552	0	0	2,715,552
Warrants issued in conjunction with convertible promissory notes	0	0	14,885	0	0	14,885
Discount on benefical conversion feature recognized on line of credit with related party	0	0	80,000	0	0	80,000
Sale of common stock and warrants	0	$ 3,779	3,726,808	0	0	3,730,587
Sale of common stock and warrants (in shares)		3,778,321
Exercise of stock options	0	$ 490	295,263	0	0	295,753
Exercise of stock options (in shares)		490,000
Shares issued in conjunction with conversion of convertible debt	0	$ 406	406,257	0	0	406,663
Shares issued in conjunction with conversion of convertible debt (in shares)		406,664
Shares issued in conjunction with acquisition of Surgical Biologics, LLC	0	$ 5,250	7,082,250	0	0	7,087,500
Shares issued in conjunction with acquisition of Surgical Biologics, LLC (in shares)		5,250,000
Net loss for the period	0	$ 0	0	0	(10,193,986)	(10,193,986)
Balance at Dec. 31, 2011	$ 0	$ 74,307	$ 73,868,604	$ (25,000)	$ (62,021,346)	$ 11,896,565
Balance (in shares) at Dec. 31, 2011	0	74,306,895

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - USD ($)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY [Abstract]
Sale of common stock and warrants, offering costs	$ 47,733	$ 67,980

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	Dec. 31, 2011	Dec. 31, 2010
Cash flows from operating activities:
Net loss	$ (10,193,986)	$ (11,419,753)
Adjustments to reconcile net loss to net cash flows from operating activities:
Depreciation	446,502	444,259
Amortization of intangible assets	1,335,908	667,932
Amortization of debt discount and deferred financing costs	315,152	599,001
Employee share-based compensation expense	1,307,869	996,307
Other share-based compensation expense	351,214	174,354
Change in fair value of earn-out liability	5,803	0
Financing expense associated with warrants issued in connection with convertible promissory note	0	287,449
Increase (decrease) in cash resulting from changes in (net of effects of acquisition):
Accounts receivable	(1,208,456)	(162,376)
Inventory	(253,942)	(80,634)
Prepaid expenses and other current assets	(70,980)	30,331
Other assets	(80,375)	86,702
Accounts payable and accrued expenses	1,256,251	218,936
Accrued interest	107,886	0
Other liabilities	16,383	0
Net cash flows from operating activities	(6,664,771)	(8,157,493)
Cash flows from investing activities:
Purchases of equipment	(486,091)	(151,617)
Proceeds from REBA grant	250,000	0
Cash paid for acquisition, net of cash aquired of $33,583	(466,417)	0
Net cash flows from investing activities	(702,508)	(151,617)
Cash flows from financing activities:
Proceeds from Senior Secured Promissory Notes	5,000,000	0
Proceeds from Note Payable with related party	1,300,000	0
Proceeds from Bridge Loan	0	500,000
Repayment of Line of Credit	(99,000)	0
Repayment of Notes Payable	(88,657)	0
Proceeds from sale of common stock and warrants and common stock with registration rights, net	3,730,587	3,122,020
Proceeds from exercise of stock options	295,753	155,126
Proceeds from exercise of warrants	0	3,219,349
Net cash flows from financing activities	10,138,683	6,996,495
Net change in cash	2,771,404	(1,312,615)
Cash, beginning of period	1,340,922	2,653,537
Cash, end of period	4,112,326	1,340,922
Supplemental disclosure of cash flow information:
Cash paid for interest	15,456	8,330
Cash paid for income taxes	$ 0	$ 0

CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Cash flows from investing activities:
Acquisition, cash acquired	$ 33,583
Supplemental disclosure of non-cash financing activity:
Outstanding convertible debt and accrued interest (in shares)	406,664
Stock valued in conjunction with the acquisition of Surgical Biologics, LLC	$ 7,087,500
Shares issued in conjunction with the acquisition of Surgical Biologics, LLC (in shares)	5,250,000
Beneficial conversion feature value related to the convertible debt issued with regard to the acquisition of Surgical Biologics, LLC	$ 437,500
Beneficial conversion feature related to convertible line of credit	80,000
Beneficial conversion feature value related to convertible debt issued with regard to the Senior Secured Promissory Notes	2,278,052
Beneficial conversion feature related to warrants issued with regard to the Senior Secured Promissory Notes	$ 14,885
Warrants issued in conjunction with Hybrid Debt instruments		$ 141,974
Warrants issued in conjunction with Hybrid Debt instruments (in shares)		500,000
Beneficial conversion feature related to Hybrid Debt instruments		$ 145,474
Amortization of debt discount and deferred financing costs related to the conversion of convertible debt		$ 599,001

Formation and nature of business

12 Months Ended

Dec. 31, 2011

Nature Of Operations [Abstract]

Formation and nature of business

1.	Formation and nature of business

Nature of business

Prior to the fiscal year ended December 31, 2010, MiMedx Group, Inc. and Subsidiaries (“MiMedx”) was considered a Development Stage Enterprise.

MiMedx acquired a license for the use, adoption and development of certain core technologies developed at the Shriners Hospital for Children and the University of South Florida Research Foundation. This technology focuses on biomaterials for soft tissue repair, such as tendons, ligaments and cartilage, as well as other biomaterial-based products for numerous other medical applications. The development of the licensed technologies requires continued research and development and, ultimately, the approval of the U.S. Food and Drug Administration (“FDA”) and/or foreign regulatory authorities in order for the Company to be able to generate revenue from the sale of its products. The Company received European regulatory approval in January of 2012 for the CollaFixTM surgical mesh product. The Company is continuing to work on obtaining approval in the U.S. and there can be no assurance that the Company will be successful in its efforts to commercialize the licensed technology.

On July 23, 2007, MiMedx acquired SpineMedica Corp. through its wholly-owned subsidiary, SpineMedica, LLC (“SpineMedica”). SpineMedica Corp. was incorporated in the State of Florida on June 9, 2005, and its successor SpineMedica, LLC was incorporated in the State of Florida on June 27, 2007. SpineMedica has licensed the right to use Salubria®, or similar poly-vinyl alcohol (“PVA”) -based biomaterials for certain applications within the body. SpineMedica also owns certain assets (equipment) for the production of products based on a PVA-based hydrogel, which is a water-based biomaterial that can be manufactured with a wide range of mechanical properties, including those that appear to closely mimic the mechanical and physical properties of natural, healthy human tissue.

On January 5, 2011, the Company acquired all of the outstanding equity interests in Surgical Biologics, LLC, for an aggregate of $500,000 in cash, $1,250,000 in notes payable, 5,250,000 shares of MiMedx Common Stock, $183,000 in assumed debt, and certain additional contingent considerations of approximately $7,405,000. Surgical Biologics, LLC (“SB”) develops allografts processed from human amniotic membrane that can be used for a wide range of surgical indications including ocular surface repair, gum repair, wound care, burns, and many other types of surgery that require the repair of a patient's integumental (native) tissue. SB operates as a wholly owned subsidiary of MiMedx.

The Company operates in one business segment, Regenerative Biomaterials, which includes the design, manufacture, and marketing of products and tissue processing services for the Wound Care, Orthopedics, Spine, Ophthalmic and Dental market categories.

Significant accounting policies

12 Months Ended

Dec. 31, 2011

Significant accounting policies [Abstract]

Significant accounting policies

2.	Significant accounting policies

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Principles of consolidation

The financial statements include the accounts of MiMedx Group, Inc. and its wholly-owned subsidiaries MiMedx, SpineMedica, and Surgical Biologics. All significant inter-company balances and transactions have been eliminated.

Segment Reporting

ASC 280, “Segment Reporting” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company's management organizes segments within the company for making operating decisions and assessing performance. The Company determined it has one operating segment. Disaggregation of the Company's operating results is impracticable, because the Company's research and development activities and its assets overlap, and management reviews its business as a single operating segment. Thus, discrete financial information is not available by more than one operating segment.

Market concentrations and credit risk

The Company places its cash and cash equivalents on deposit with financial institutions in the United States. In July 2010, the Federal Deposit Insurance Corporation (“FDIC”) increased coverage to $250,000 for substantially all depository accounts and temporarily provides unlimited coverage for certain qualifying and participating non-interest bearing transaction accounts. The temporary unlimited coverage is scheduled to expire on December 31, 2012, at which time it is anticipated amounts insured by the FDIC will return to $250,000. During the year, the Company from time to time may have had amounts on deposit in excess of the insured limits. As of December 31, 2011, the Company had cash and cash equivalents of approximately $2,821,000 in excess of these insured amounts.

The Company's principal market concentration of risk is related to its limited distribution channels. Two customers accounted for approximately 37% of revenues for the twelve months ended December 31, 2011, including one customer who represented 19% and another customer which represented 18% of total revenue. The Company's accounts receivable are derived from customers primarily located in the United States of America. Two customers accounted for 43% of total accounts receivable as of December 31, 2011, including one customer who represented 33% and another customer representing 10% of total accounts receivable.

Cash and cash equivalents

Cash and cash equivalents include all highly liquid investments with an original maturity of three months or less.

Accounts Receivable

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

The allowance for doubtful accounts is the Company's best estimate of the amount of probable credit losses in the Company's existing receivables. The Company determines the allowance based on factors such as historical collection experience, customer's current creditworthiness, customer concentration, age of accounts receivable balance and general economic conditions that may affect the customer's ability to pay. As of December 31, 2011, and 2010, the Company has $19,500 and $21,600, respectively, in the allowance for doubtful accounts. Actual customer collections could differ from estimates. The approximate provision during the year ended December 31, 2011 was $57,900, and the charge-offs during the same period were approximately $60,000.

Inventories

Inventories at December 31, 2011, are valued at the lower of actual cost or market, using the first-in, first-out (FIFO) method. Work in process is calculated by estimating the number of units that will be successfully converted to finished goods, based upon a build-up in the stage of completion using estimated labor inputs for each stage and historical yields reduced by estimated usage for quality control testing. Idle facility expense, excessive spoilage, extra freight, and handling costs are expensed, as necessary, in cost of sales and are not capitalized into inventories. Allocation of fixed production overheads is based on the normal capacity of production facilities.

Goodwill and intangible assets

Goodwill is tested at least annually for impairment, or more frequently if events or changes in circumstances indicate that the asset might be impaired. Intangible assets with finite useful lives are amortized into Selling, General and Administrative Expenses in the consolidated statement of Operations using the straight-line method over various periods depending upon the specific asset.

Property and equipment

Property and equipment are recorded at cost and depreciated on a straight-line basis over their estimated useful lives, principally five to seven years. Leasehold improvements are depreciated on a straight-line basis over the lesser of the estimated useful lives or the life of the lease.

Impairment of long-lived assets

The Company evaluates the recoverability of its long-lived assets (finite lived intangible assets and property and equipment) whenever adverse events or changes in business climate indicate that the expected undiscounted future cash flows from the related assets may be less than previously anticipated. If the net book value of the related assets exceeds the expected undiscounted future cash flows of the assets, the carrying amount would be reduced to the present value of their expected future cash flows and an impairment loss would be recognized. There has been no impairment losses in the periods presented.

Deferred Grant Income

The Company received a Regional Economic Business Assistance ("REBA") grant in the amount of $250,000 from the State of Georgia to help the Company defray certain expenses and capital expenditures related to the Company's expansion of manufacturing activities in the State. To retain the grant monies the Company must add a certain number of full time positions and spend a certain amount on capital and operations expenditures by December 31, 2014. The Company recorded the grant monies received as Deferred Grant Income which is included in the Other Liabilities section of the balance sheet per ASC 450-30 Gain Contingencies where an existing condition, situation, or set of circumstances involving uncertainty as to possible gain will ultimately be resolved when one or more future events occur or fail to occur. A contingency that might result in a gain should not be reflected in the financial statements because to do so might be to recognize the gain before its realization. As part of the transaction, the Company sold and is leasing back $250,000 of the assets from the State for $100 payable at the time the performance standards are achieved or at the termination date of the lease whichever is earlier. Once the Company has met the headcount and expenditure goals of the project the Company shall notify the State and pay the fixed rent amount of $100 at which time ownership of the equipment will transfer back to the Company. The Company also entered into a Performance & Accountability Agreement with the State of Georgia which defines the performance standard that if the Company fails to reach by no later than December 31, 2014, the Company shall repay a portion of the Grant amount.

Debt Instruments with Detachable Warrants and Beneficial Conversion Features

According to ASC-470 Debt Instruments with Detachable Warrants, proceeds from the sale of debt instruments with stock purchase warrants (detachable call options) shall be allocated to the two elements based upon the relative fair values of the debt instrument without the warrants and of the warrants themselves at the time of issuance. The portion of the proceeds so allocated to the warrants shall be accounted for as paid-in capital. The remainder of the proceeds shall be allocated to the debt instrument portion of the transaction. Also, the embedded beneficial conversion feature present in the convertible instrument shall be recognized separately at issuance by allocating a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital.

Revenue Recognition

The Company sells its products primarily through a combination of independent stocking distributors and representatives in the U.S. and independent distributors in international markets. The Company recognizes revenue when title to the goods and risk of loss transfers to customers, provided there are no material remaining performance obligations required of the Company or any matters of customer acceptance. In cases where the Company utilized distributors or ships product directly to the end user, it recognizes revenue upon shipment provided all revenue recognition criteria have been met. A portion of the Company's revenue is generated from inventory maintained at hospitals or with field representatives. For these products, revenue is recognized at the time the product has been used or implanted. The Company records estimated sales returns, discounts and allowances as a reduction of net sales in the same period revenue is recognized.

Research and development costs

Research and development costs consist of direct and indirect costs associated with the development of the Company's technologies. These costs are expensed as incurred.

Income taxes

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that included the enactment date. Valuation allowances are recorded for deferred tax assets when the recoverability of such assets is not deemed more likely than not.

Share-based compensation

The Company follows the provisions of ASC topic 718 “Compensation - Stock compensation” which requires the use of the fair-value based method to determine compensation for all arrangements under which employees and others receive shares of stock or equity instruments (options and warrants). All awards are amortized on a straight-line basis over their vesting terms into Selling, General and Administrative Expenses in the consolidated Statements of Operations.

Fair value of financial instruments

The carrying value of accounts payable and accrued expenses approximate their fair value due to the short-term nature of these liabilities. The fair value of our short term and long term convertible debt approximates $5,169,000 which represents the face value less the unamortized discount of any beneficial conversion feature plus accrued but unpaid interest at December 31, 2011. Included in other long term assets is the fair value of warrants issued in conjunction with placement fees on the convertible senior secured promissory notes of approximately $15,000 as of December 31, 2011.

Fair Value Measurements

The Company follows the authoritative guidance on fair value measurements and disclosures, with respect to assets and liabilities that are measured at fair value on both a recurring and nonrecurring basis. Under this guidance, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The authoritative guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The hierarchy is broken down into three levels. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement). Level 2 – Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. The lowest priority is Level 3, which are unobservable inputs. We analyze all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities From Equity” and ASC 815, “Derivatives and Hedging.”

Net loss per share

Basic net loss per common share is computed using the weighted-average number of common shares outstanding during the period.

For all periods presented, diluted net loss per share is the same as basic net loss per share, as the inclusion of equivalent shares from outstanding common stock options, warrants, and convertible debt would be anti-dilutive.

The following table sets forth the computation of basic and diluted net loss per share for the fiscal years ended December 31, 2011 and 2010:

	Year ended December 31,
	2011			2010
Net loss	$	(10,193,986	)	$	(11,419,753	)
Denominator for basic earnings per share - weighted average shares		72,450,337			59,138,357
Effect of dilutive securities: Stock options and warrants outstanding and convertible debt (a)		-			-

Denominator for diluted earnings per share - weighted average shares adjusted for dilutive securities		72,450,337			59,138,357

Loss per common share - basic and diluted	$	(0.14	)	$	(0.19	)

(a)	Securities outstanding that were excluded from the computation, prior to the use of the treasury stock method, because they would have been anti-dilutive are as follows:

	December 31, 2011		December 31, 2010
Outstanding Stock Options		10,333,583		8,257,650
Outstanding Warrants		9,388,817		6,003,924
Convertible Debt, promissory notes		5,007,732		403,432
Convertible Line of Credit with Related Party		1,342,726		-
Convertible Debt, Acquisition		1,299,315		-
		27,372,173		14,665,006

(*)	The table above excludes all securities with contingencies including the earnout liability and contingent warrants.

Recently adopted accounting pronouncements

In December 2010, the FASB issued Accounting Standards Update (ASU) 2010-28: Intangibles - Goodwill and Other: When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts (Topic 350). The amendments to the Codification in this update modify Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. Goodwill of a reporting unit is required to be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. This update is effective starting in the first quarter of 2011 with early adoption not permitted. Adoption of this update had no impact on our financial statements.

In December 2010, the FASB issued ASU 2010-29: Business Combinations: Disclosure of Supplementary Pro Forma Information for Business Combinations (Topic 805). The amendments to the Codification in this ASU apply to any public entity that enters into business combination that are material on an individual or aggregate basis and specify that the entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The update also expands the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The update is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning in January 2011 with early adoption permitted. We adopted this update for the acquisition completed in 2011.

Recently Issued Accounting Pronouncements Not Yet Adopted

In September 2011, the FASB issued ASU Update No. 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Goodwill for Impairment. The amendment simplifies how entities test goodwill for impairment. The amendments in the Update permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. Previous guidance under Topic 350 required an entity to test goodwill for impairment, on at least an annual basis, by comparing the fair value of a reporting unit with its carrying amount, including goodwill (step one). If the fair value of a reporting unit is less than its carrying amount, then the second step of the test must be performed to measure the amount of the impairment loss, if any. Under the amendments in this Update, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011, and early adoption is permitted. Its adoption is not expected to significantly impact the Company's consolidated financial statements.

In June 2011, the FASB issued ASU Update No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. The amendments to the Codification in this ASU will require companies to present the components of net income and other comprehensive income either as one continuous statement or as two consecutive statements. It eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders' equity. The standard does not change the items which must be reported in other comprehensive income, how such items are measured or when they must be reclassified to net income. This standard is effective for interim and annual periods beginning after December 15, 2011. Because this ASU impacts presentation only, it will have no effect on our financial condition, results of operations or cash flows.

In May 2011, the FASB issued ASU 2011-04, Fair Value Measurements (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (“IFRS”). The amendments to the Codification in this ASU will provide a consistent definition of fair value and ensure that the fair value measurement and disclosure requirements are similar between U.S. GAAP and IFRS. ASU 2011-04 changes certain fair value measurement principles and enhances the disclosure requirements particularly for Level 3 fair value measurements. This guidance is effective for the Company beginning on January 1, 2012. Its adoption is not expected to significantly impact the Company's consolidated financial statements.

Liquidity and management's plans

12 Months Ended

Dec. 31, 2011

Liquidity and management's plans [Abstract]

Liquidity and management's plans

3.	Liquidity and management's plans

The Company emerged from being a development stage company in 2010. Planned principal operations have commenced, but revenue has not been significant enough to fund ongoing operations. The Company's cash requirements for the twelve months ended December 31, 2011 arose out of general working capital needs and the acquisition of Surgical Biologics. The Company funded its cash requirements primarily through a combination of debt and equity financings. As of December 31, 2011, the Company had approximately $4,112,000 of cash and cash equivalents. The Company reported total current assets of approximately $6,882,000 and current liabilities payable in cash of approximately $4,732,000 after adjusting for the short term earn-out liability payable in MiMedx common stock in the second quarter of 2012. Also included in current liabilities is a convertible line of credit with a related party for approximately $1,296,000 which is due on December 31, 2012 which can be extended for an additional 12 months by paying a fee of five percent of the amount due or $65,000. The Company believes that its cash and cash equivalents and anticipated cash from operations will enable the Company to meet its operational liquidity needs, fund its planned investing activities and pay its debt when due for the next twelve months.

Acquisition of Surgical Biologics, LLC

12 Months Ended

Dec. 31, 2011

Acquisition of Surgical Biologics, LLC [Abstract]

Acquisition of Surgical Biologics, LLC

4.	Acquisition of Surgical Biologics, LLC

On December 21, 2010, we entered into an Agreement and Plan of Merger (“the Merger Agreement”) with Membrane Products Holdings, LLC and OnRamp Capital Investments, LLC, the owners of Surgical Biologics, LLC (“Surgical Biologics”), a privately held company headquartered in Kennesaw, Georgia. This transaction closed on January 5, 2011 and as a result we acquired all of the outstanding shares of Surgical Biologics in exchange for $500,000 cash, a total of $1,250,000 in 4% Convertible Secured Promissory Notes, and $7,087,500 in stock, represented by 5,250,000 shares of our common stock (525,000 of which were held in escrow for the purpose of securing the indemnification obligations outlined in the Merger Agreement). Contingent consideration may be payable in a formula determined by sales and certain expenses for the years 2011 and 2012. The contingent consideration was valued at $7,404,700 and is shown in the schedule below as fair value of earn-out. We completed the acquisition of Surgical Biologics in an effort to extend our biomaterials product lines. As of December 31, 2011, the Company evaluated the contingent liability based on operating results for the year, and adjusted the earn-out liability to $7,410,503. The adjustment of approximately $5,800 is included in Selling, General & Administrative expenses for the year ended December 31, 2011.

In total, the 4% Convertible Promissory Notes are convertible into up to 1,250,000 shares of the Company's common stock at $1.00 per share (a) at any time upon the election of the holder of the Convertible Notes; or (b) at the election of the Company, at any such time as the closing price per share of the Company's common stock (as reported by the OTCBB or on any national securities exchange on which the Company's shares may be listed, as the case may be) closes at no less than $1.75 per share for not less than 20 consecutive trading days in any period prior to the maturity date. If converted, the Common Stock will be available to be sold following satisfaction of the applicable conditions as set forth in Rule 144. The 4% Convertible Promissory Notes mature in eighteen (18) months and earn interest at 4% per annum on the outstanding principal amount payable in cash on the maturity date or convertible into shares of common stock of the Company as provided for above. The 4% Convertible Promissory Notes are secured by a security interest in the Intellectual Property, including the Patents and know-how and trade secrets related thereto, owned by, or exclusively licensed to, Surgical Biologics, LLC.

The Company has evaluated the 4% Convertible Promissory Notes for accounting purposes under GAAP and has determined that the conversion feature meets the conventional-convertible exemption and, accordingly, bifurcation and fair-value measurement of the conversion feature is not required. We are required to re-evaluate this conclusion upon each financial statement closing date while the 4% Convertible Promissory Notes are outstanding. Notwithstanding, the 4% Convertible Promissory Notes were issued with a beneficial conversion feature having an intrinsic value of $437,500. The intrinsic value of the beneficial conversion feature was determined by comparing the contracted conversion price to the fair value of the common on the date the respective 4% Convertible Promissory Notes were issued. A beneficial conversion feature only exists when the embedded conversion feature is “in-the-money” at the commitment date.

As a result of the beneficial conversion feature, the 4% Convertible Promissory Notes were recorded net of a discount of $437,500 related to the beneficial conversion feature, the offset of which is recorded in paid-in capital, and the discount will be amortized through periodic charges to interest expense over the tem of the 4% Convertible Notes using the effective interest method.

The contingent consideration which was valued at $7,404,700 was classified as a liability. The Company has evaluated the contingent consideration for accounting purposes under GAAP and has determined that the contingent consideration is within the scope of ASC 480 Distinguishing Liabilities from Equity whereby a financial instrument other than an outstanding share, that embodies a conditional obligation that the issuer may settle by issuing a variable number of its equity shares, shall be classified as a liability if, at inception, the monetary value of the obligation is based solely or predominantly on variations in something other than the fair value of the issuer's equity shares.

The actual purchase price was based on cash paid, the fair value of our stock on the date of the Surgical Biologics acquisition, and direct costs associated with the combination. The actual purchase price was allocated as follows:


Value of 5,250,000 shares issued at $1.35 per share	$	7,087,500
Cash paid at closing		350,000
Cash retained for working capital		150,000
Assumed Debt		182,777
Convertible Secured Promissory Note		1,250,000
Fair value of earn-out		7,404,700
Total fair value of purchase price	$	16,424,977

Assets purchased:
Tangible assets:
Debt-free working capital	$	671,880
Other assets, net		385
Property, plant and equipment		72,866
		745,131
Intangible assets:
Customer relationships		3,520,000
Supplier relationships		241,000
Patents and know-how		5,530,000
Trade names and trademarks		1,008,000
In-process research and development – liquid		2,160,000
In-process research and development – other		25,000
Licenses and permits		13,000
		12,497,000

Goodwill		3,182,846
Total Assets Purchased	$	16,424,977

Working capital and other assets were composed of the following:

Working capital:
Cash	$	33,583
Prepaid Expenses		2,738
Accounts Receivable		181,087
License Receivable		340,000
Inventory		347,106
Accounts payable and accrued expenses		(196,101	)
Deferred rent and customer deposits		(36,533	)
Debt-free working capital		671,880

Current portion of debt		(62,590	)
Long-term debt		(21,187	)
Line of credit		(99,000	)
Net working capital	$	489,103


Deposits	$	16,582
Deferred rent (non-current)		(16,197	)
	$	385

The combination was accounted for as a purchase business combination as defined by FASB Topic 805 – Business Combinations. The allocation of the purchase price to the assets acquired and liabilities assumed was based on an independent valuation report obtained by us.

The values assigned to intangible assets are subject to amortization. The intangible assets were assigned the following lives for amortization purposes:

	Estimated useful
Intangible asset:	life (in years)
Customer relationships	14
Supplier relationships	14
Patents and know-how	14
Trade names and trademarks	indefinite
In-process research and development – liquid	indefinite
In-process research and development – other	indefinite
Licenses and permits	3

Goodwill consists of the excess of the purchase price paid over the identifiable net assets and liabilities acquired at fair value. Goodwill was determined using the residual method based on an independent appraisal of the assets and liabilities acquired in the transaction. Goodwill is tested for impairment as defined by FASB Topic 350 – Intangibles – Goodwill and Other.

Pro Forma Financial Information – Unaudited

The following unaudited Pro Forma summary financial information presents the consolidated results of operations as if the acquisition of Surgical Biologics had occurred on January 1, 2010. The Pro Forma results are shown for illustrative purposes only and do not purport to be indicative of the results that would have been reported if the acquisition had occurred on the date indicated or indicative of the results that may occur in the future.

Pro Forma information for the year ended December 31, 2011 and 2010 are as follows:

	Year ended December 31,
	2011			2010
Revenues	$	7,760,446		$	2,996,087

Net income (loss)	$	(9,958,271	)	$	(12,408,448	)

(Loss) per share	$	(0.14	)	$	(0.19	)

The 2011 supplemental pro forma earnings for the year ended December 31, 2011, were adjusted to exclude approximately $236,000 of acquisition-related legal, audit and accounting costs. The supplemental pro forma earnings for the year ended December 31, 2010 were adjusted to include approximately $267,000 of amortization of deferred financing costs related to the $1,250,000 note payable, approximately $668,000 of amortization costs related to $9,304,000 in recorded intangible assets with defined useful lives, and approximately $236,000 of acquisition related legal, audit and accounting costs which was included in the reported Net Income for the quarter ended March 31, 2011, as a result of the acquisition. The shares outstanding used in calculating the loss per share for the 2010 periods were adjusted to include 5,250,000 shares issued as part of the purchase price and assumed issued on January 1, 2010.

Inventories

12 Months Ended

Dec. 31, 2011

Inventories [Abstract]

Inventories

5.	Inventories

Inventories consisted of the following items as of December 31, 2011 and 2010:

	December 31,
		2011			2010
Raw materials		$	95,288		$	61,332
Work in process			308,763			42,241
Finished goods			361,007			36,488
		$	765,058		$	140,061
Reserve for obsolescence			(52,456	)		(28,507	)
Inventory, net		$	712,602		$	111,554

Property and equipment

12 Months Ended

Dec. 31, 2011

Property and equipment [Abstract]

Property and equipment

6.	Property and equipment

Property and equipment consist of the following as of December 31, 2011 and 2010:

	December 31,
	2011			2010
Leasehold improvements	$	925,086		$	793,900
Lab and clean room equipment		931,432			506,917
Furniture and equipment		827,366			848,843
		2,683,884			2,149,660
Less accumulated depreciation		(1,814,473	)		(1,392,704	)
	$	869,411		$	756,956

(*)	The table above includes adjustments for asset retirements during the year ended December 31, 2011, of fully depreciated equipment of approximately $25,000.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References + Details

Intangible assets and royalty agreement

12 Months Ended

Dec. 31, 2011

Intangible assets and royalty agreement [Abstract]

Intangible assets and royalty agreement

7.	Intangible assets and royalty agreement

Intangible assets activity is summarized as follows:

		December 31, 2011							December 31, 2010
	Weighted Average Amortization Lives	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Intangible assets subject to amortization:
License-Shriners Hsp for Children & USF Research (a)	10 years	$	996,000	$	(488,033	)	$	507,967	$	996,000	$	(388,433	)	$	607,567
License - SaluMedica LLC Spine Repair (b)	10 years		2,399,000		(1,313,573	)		1,085,427		2,399,000		(1,017,557	)		1,381,443
License - Polyvinyl Alcohol Cryogel (c)	10 years		2,667,000		(998,932	)		1,668,068		2,667,000		(726,616	)		1,940,384
Customer Relationships (d)	14 years		3,520,000		(251,429	)		3,268,571		-		-			-
Supplier Relationships (d)	14 years		241,000		(17,215	)		223,785		-		-			-
Patents & Know-How (d)	14 years		5,530,000		(395,000	)		5,135,000		-		-			-
Licenses/Permits (d)	3 years		13,000		(4,333	)		8,667		-		-			-
			15,366,000		(3,468,515	)		11,897,485		6,062,000		(2,132,606	)		3,929,394

Trade Names/Trademarks (d)	indefinite		1,008,000		-			1,008,000		-		-			-
In-process Research & Development-Liquid (d)	indefinite		2,160,000		-			2,160,000		-		-			-
In-process Research & Development-Other (d)	indefinite		25,000		-			25,000		-		-			-
		$	18,559,000	$	(3,468,515	)	$	15,090,485	$	6,062,000	$	(2,132,606	)	$	3,929,394

(a)

On January 29, 2007, the Company acquired a license from Shriner's Hospitals for Children and University of South Florida Research Foundation, Inc. which is further discussed in Note 1. The acquisition price of this license was a one-time fee of $100,000 and 1,120,000 shares of common stock valued at $896,000 (based upon the estimated fair value of the common stock on the transaction date). Within thirty days after the receipt by the Company of approval by the FDA allowing the sale of the first licensed product, the Company is required to pay an additional $200,000 to the licensor. This amount is not recorded as a liability as of December 31, 2009 or 2010, based on its contingent nature. The Company will also be required to pay a royalty of 3% on all commercial sales revenue of the licensed products.

(b)	License from SaluMedica, LLC (SaluMedica) for the use of certain developed technologies related to spine repair. This license was acquired through the acquisition of SpineMedica Corp.

(c)

On March 31, 2008, the Company entered into a license agreement for the use of certain developed technologies related to surgical sheets made of polyvinyl alcohol cryogel. The acquisition price of the asset was 400,000 shares of common stock valued at $2,596,000 (based upon the closing price of the common stock on the transaction date). The agreement also provides for the issuance of an additional 600,000 shares upon the Company meeting certain milestones related to future sales. On December 31, 2009 the Company completed the sale of its first commercial product and met its first milestone under this agreement. As a result the Company issued 100,000 shares of common stock to the licensor valued at $71,000. At December 31, 2011 or 2010, there are no additional amounts accrued for this obligation due to its contingent nature.

(d)

On January 5, 2011, the Company acquired the equity interests of Surgical Biologics, LLC which is further discussed in Notes 1 and 4. An appraisal of the fair value of certain identified intangible assets of Surgical Biologics acquired by the Company was performed in accordance with ASC 805 as of the date of acquisition.

Expected future amortization of intangible assets is as follows:

	Estimated
	Amortization
Year ending December 31,	Expense
2012	$	1,335,909
2013		1,335,909
2014		1,331,575
2015		1,225,337
2016		1,024,843
Thereafter		5,643,912
	$	11,897,485

Contingent Consideration

12 Months Ended

Dec. 31, 2011

Contingent Consideration Disclosure [Abstract]

Contingent Consideration

8.	Contingent Consideration

The Agreement and Plan of Merger between the Company and the former owners of Surgical Biologics (“the Merger”) dated January 5, 2011 involves the potential for the payment of future contingent consideration in MiMedx common stock. Payment of the additional consideration is contingent on the acquired company reaching sixty percent (60%) of the excess of the amniotic tissue based gross revenues in calendar year 2011 over gross revenues in calendar year 2010 minus any FDA approval costs. The payment shall be made as the aggregate number of shares of MiMedx Common Stock per a specified formula in the Agreement and Plan of Merger. In addition the Company shall deliver to the former owners of Surgical Biologics an aggregate number of shares of the Company equal to thirty percent (30%) of the Gross Revenues in calendar year 2012 over the Gross Revenues in calendar year 2011 minus any FDA approval costs. The Company shall deliver the contingent consideration no later than 30 days after the Company files its Form 10-K. The contingent consideration was originally recorded at the estimated fair value of the contingent milestone payment on the acquisition date. The fair value of the contingent milestone consideration was remeasured at the estimated fair value as of December 31, 2011 with the change in fair value recognized as income or expense within Other Income (Expense) in the condensed consolidated statements of earnings. The Company measured the initial liability and remeasured the liability as of December 31, 2011, using Level 1 inputs as defined under authoritative guidance for fair value measurements. See Note 9 for further information regarding fair value measurements.

At December 31, 2011, the fair value of the contingent consideration tied to 2011 revenue was calculated to be approximately $3,185,000 and the liability adjusted and recorded as a current liability in the consolidated balance sheet and is due to be paid in MiMedx common stock not more than 30 days following the filing of our Form 10-K. The estimated maximum potential amount of undiscounted future contingent consideration tied to revenue for calendar year 2012 was approximately $4,225,000 and was recorded in the non-current liability section of the consolidated balance sheet.

Debt

12 Months Ended

Dec. 31, 2011

Debt [Abstract]

Debt

3% Convertible Senior Secured Promissory Notes:

In April 2009, the Company commenced a private placement to sell 3% Convertible Senior Secured Promissory Notes (the “Senior Notes”) with a 3-year maturity to accredited investors. The Company completed the offering on June 17, 2009, and received aggregate proceeds of $3,472,000, representing the face value of the Senior Notes. The aggregate proceeds include $250,000 of Senior Notes sold to the Chairman of the Board, President and CEO, and $150,000 of Senior Notes sold to one other director.

In total, the Senior Notes were convertible into up to 6,944,000 shares of the Company's common stock at $.50 per share (a) at any time upon the election of the holder of the Senior Notes; (b) automatically immediately prior to the closing of the sale of all or substantially all of the assets or more than 50% of the equity securities of the Company by way of a merger transaction or otherwise which would yield a price per share of not less than $.50; or (c) at the election of the Company, at such time as the closing price per share of the Company's common stock (as reported by the OTCBB or on any national securities exchange on which the Company's shares may be listed) is not less than $1.50 for at least 20 consecutive trading days in any period prior to the maturity date. If converted, the common stock would be available to be sold following satisfaction of the applicable conditions set forth in Rule 144. The Senior Notes were secured by a first priority lien on all of the assets, including intellectual property, of MiMedx, Inc., excluding, however, the membership interests in SpineMedica, LLC. The Senior Notes were junior in payment and lien priority to any bank debt of the Company in an amount not to exceed $5,000,000 subsequently incurred by the Company.

On March 31, 2010, the Company elected to exercise its right to convert the outstanding Note Payable amount, including accrued interest of $3,582,799, into common stock of the Company at a conversion price of $0.50 per share, resulting in the issuance of 7,165,599 shares of common stock. This decision was made based upon the “Trading Value Conversion” event per the terms of the Note whereby as of March 30, 2010, the trading price of the Common Stock closed at not less than $1.50 per share for not less than 20 consecutive trading days prior to the Maturity Date. Prior to this event, certain individuals had voluntarily elected to convert their Notes, valued at $35,000 with accrued interest of $196, into Common Stock resulting in the issuance of 70,393 shares of common stock. As a result of the Company's election to convert the remaining Notes, the Company was required to immediately recognize the remaining unamortized discount of $499,610 related to the beneficial conversion feature as interest expense in the statement of operations for the year ended December 31, 2010. Additionally, the $174,739 in unamortized deferred financing costs were charged against additional paid in capital.

Hybrid Debt Instrument

In October 2010, the Company and its Chairman of the Board and CEO as well as two other company directors entered into a Subscription Agreement for a 5% Convertible Promissory Note (“Subscription Agreement”) and, in connection therewith, issued a 5% Convertible Promissory Note (“Note”) and a Warrant to Purchase Common Stock (“Warrant”), which expires in three years.

Under the terms of the Subscription Agreement, the Chairman & CEO had agreed to advance the Company $400,000, comprised of a $150,000 Note dated October 20, 2010 and a $250,000 Note dated November 4, 2010, and the two company directors had agreed to advance $50,000 each to fund its working capital needs. Such indebtedness was evidenced by the Note, which bears interest at the rate of 5% per annum, is due and payable in full on December 31, 2010, and, at the option of the holder, is convertible into the number of shares of common stock of the Company equal to the quotient of (a) the outstanding principal amount and accrued interest of the Note as of the date of such election, divided by (b) the selling price per share, if any, of the Company's common stock pursuant to a private placement approved by the Corporation's Board of Directors on September 10, 2010, or, if there are no such sales, $1.00 per share (the “Conversion Price”). In connection with the Subscription Agreement and the Note, the Company issued one Warrant for the number of shares of common stock of the Company by dividing the aggregate amount of the advances by the Conversion Price resulting in 500,000 warrants being issued. The exercise price of the Warrant is the Conversion Price.

The issuance of the aforementioned securities was not registered in reliance on Section 4(2) of the Securities Act of 1933, as amended.

According to GAAP, proceeds from the sale of debt instruments with stock purchase warrants (detachable call options) shall be allocated to the two elements based upon the relative fair values of the debt instrument without the warrants and of the warrants themselves at the time of issuance. The portion of the proceeds so allocated to the warrants shall be accounted for as paid-in capital. The remainder of the proceeds shall be allocated to the debt instrument portion of the transaction. Also, the embedded beneficial conversion feature present in the convertible instrument shall be recognized separately at issuance by allocating a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. The amount of the warrants and beneficial conversion feature totaled $287,449 which has been recorded as a debt discount that will be charged to interest expense over the life of the convertible note.

The fair value of the Warrant was determined based upon the Black-Scholes-Merton pricing model using the following underlying assumptions:

	October 20		October 21		November 4
Term	3 Years		3 Years		3 Years
Volatility		58.75%		58.77%		58.31%
Interest Rate		1.11%		1.15%		1.04%

As of December 31, 2010, the holders of the two notes with an initial face value of $50,000 each exercised the conversion option. The holder of the other two notes totaling $400,000 agreed to extend the term of the notes until February 28, 2011, at which time the holder exercised the conversion option.

Revolving Secured Line of Credit Agreement with related party

On March 31, 2011, the Company and its Chairman of the Board and CEO (“the Lender”) entered into a Subscription Agreement for a 5% Convertible Senior Secured Promissory Note (“Subscription Agreement”) and, in connection therewith, agreed to issue a 5% Convertible Senior Secured Promissory Note (“Note”) in the amount borrowed by the Company, and a First Contingent Warrant (“First Contingent Warrant”) and a Second Contingent Warrant (“Second Contingent Warrant”) to Purchase Common Stock per the terms described below. The First and Second Contingent Warrants each expire in five years; however, each is subject to automatic terminations as defined in the First Contingent Warrant and Second Contingent Warrant terms.

Under the terms of the Subscription Agreement, the Chairman & CEO agreed to issue a Revolving Secured Line of Credit Agreement (“Credit Agreement”) to the Company of up to $3,600,000 to fund its working capital needs. The first borrowing in the amount of $800,000 was on March 31, 2011, resulting in the issuance of 400,000 contingent warrants at an exercise price of $0.01 per warrant. Additional borrowings in the amount of $500,000 were drawn during the three months ended June 30, 2011, resulting in the issuance of 250,000 contingent warrants at an exercise price of $0.01 per warrant.

Per the agreement, the amount available on the Credit Agreement was reduced by the amount of funds raised through other financing activities beginning on April 1, 2011. Since April 1, 2011, the Company raised approximately $2,545,000 through a private placement. Based upon the amount borrowed under the Credit Agreement and the amount raised through the private placement, there is no additional credit available under the Credit Agreement. The Company may repay and reborrow as needed, provided there is no event of default. The initial termination date of the Credit Agreement is December 31, 2012, and the Company may elect to extend the termination date until December 31, 2013, upon payment of an extension fee. Each borrowing bears interest on the outstanding principal at a rate per annum equal to 5%. Collateral for the Credit Agreement includes (i) all of the Company's intellectual property with the exception of intellectual property owned by Surgical Biologics, LLC, and (ii) all accessions to, substitutions for and replacements, products and proceeds thereof, as more particularly set forth in the Security and Intercreditor Agreement.

At the option of the holder, the Note is convertible into the number of shares of common stock of the Company equal to the quotient of the outstanding principal amount and accrued interest of the Note as of the date of such election divided by $1.00 per share.

The Contingent Warrants provide for the following:

First Contingent Warrant – upon borrowing under the Note, the Company shall issue to the Lender a warrant to purchase 25% of the shares of Common Stock that would be issuable upon conversion of the outstanding principal balance of the Note immediately after borrowing, less the aggregate number of shares of Common Stock subject to all First Contingent Warrants previously issued to Lender, at an exercise price of $0.01 per share. Provided that such First Contingent Warrant shall only be exercisable if the Company's Gross Revenues as reported in the Company's Audited Financial Statements for the year ended December 31, 2011, do not equal or exceed $11,500,000, and further provided that such First Warrant shall be null and void in the event that, prior to the date of issuance of such Audited Financial Statements (the “First Measurement Date”), the closing trading price of the Stock is at least $1.50 per share for ten or more consecutive trading days;

Second Contingent Warrant – upon borrowing under the Note, the Company shall issue to the Lender an additional warrant to purchase 25% of the shares of Common Stock that would be issuable upon conversion of the outstanding principal balance of the Note immediately after borrowing, less the aggregate number of shares of Common Stock subject to all Second Contingent Warrants previously issued to Lender, at an exercise price of $0.01 per share, provided that such Second Contingent Warrant shall only be exercisable if the Company's Gross Revenues as reported in the Company's Audited Financial Statements for the year ended December 31, 2012, do not equal or exceed $31,150,000, and further provided that such Second Contingent Warrant shall be null and void in the event that, between the First Measurement Date and the date of issuance of such Audited Financial Statements for the year ended December 31, 2012, (the “Second Measurement Date”), the closing trading price of the Stock is at least $1.75 for ten or more consecutive trading days. The First Contingent Warrant and the Second Contingent Warrant are hereinafter referred to, collectively, as the “Contingent Warrants”.

As of December 31, 2011, the Company has issued 650,000 warrants under the Secured Line of Credit Agreement, based on the borrowing of $1,300,000 under the agreement. The issuance of the aforementioned securities was not registered in reliance on Section 4(2) of the Securities Act of 1933, as amended.

The contingent warrants have not been included in our earnings per share calculation per the guidance in ASC 260-10-45-13 Earnings per share: Treatment of Contingently Issuable Shares in Weighted-Average Shares Outstanding which states that shares issuable for little or no cash consideration upon the satisfaction of certain conditions (contingently issuable shares) shall be considered outstanding common shares and included in the computation of basic EPS as of the date that all necessary conditions have been satisfied (in essence, when issuance of the shares is no longer contingent).

Senior Secured Promissory Notes

From December 27 to December 31, 2011, the Company sold 5% Convertible Senior Secured Promissory Notes (the “Notes”) to individual accredited investors for aggregate proceeds of $5,000,000. The aggregate proceeds included $500,000 of Notes sold to the Company's Chairman of the Board and CEO, who, as reported on Form 8-K filed with the Commission on October 31, 2011, had committed to lend the Company up to $1,500,000, to the extent other lenders did not subscribe to the Company's debt offering. The terms of those advances were subject to amendment as authorized by the Company's Board of Directors to be consistent with the final terms of the Company's debt offering.

In total, the principal of the Notes is convertible into up to 5,000,000 shares of common stock of the Company (“Common Stock”) at $1.00 per share at any time upon the election of the holder of the note. The Notes mature on December 31, 2013, and bear interest at 5% per annum on the outstanding principal amount payable in cash on a quarterly basis, with all unpaid interest being due and payable on maturity. Unless the Company has repaid the applicable lender's Notes in full prior to December 31, 2012, the Company must pay to each lender an additional interest payment in the amount of five percent (5%) of the aggregate outstanding principal amount of such lender's Notes as of December 31, 2012. At the election of the holder, unpaid interest is convertible into shares of Common Stock at $1.00 per share. Common Stock issued upon conversion of the Notes is available to be sold following satisfaction of the applicable conditions set forth in Rule 144.

The Notes are secured by a first priority lien in all of the patents and other intellectual property owned by the Company and its subsidiaries, provided that until the Convertible Secured Promissory Notes in the principal sum of $1,250,000 issued January 5, 2011, in connection with the acquisition of Surgical Biologics, LLC, are paid in full, (i) the patents and other intellectual property owned by Surgical Biologics, LLC, and (ii) all accessions to, substitutions for and replacements, products and proceeds thereof, are excluded from the collateral. The maturity of the Notes may be accelerated upon the occurrence of certain Events of Default as set forth in the Notes. The lien is at an equal rate for all note holders in payment and lien priority with the notes outstanding under the Company's Revolving Line of Credit Agreement dated March 31, 2011, (the “Prior Notes”), all of which are held by the Company's Chairman & CEO. In order to effectuate that, to conform the description of the collateral and Events of Default in the Prior Notes to the description of the collateral and Events of Default in the Notes, and to clarify certain adjustments that would be applicable in the event of a stock split, stock dividend or similar event, the Amended and Restated Security and Intercreditor Agreement executed by the Company's Chairman & CEO in connection with the Notes on December 27, 2011, superseded the Security and Intercreditor Agreement that was originally executed in connection with the Prior Notes and, on January 3, 2012, the parties also executed an amendment to certain of the other documents executed in connection with the Prior Notes.

Under the terms of the offering, each lender received a warrant (the “Conversion Warrant”) to purchase that number of shares of Common Stock equal to the number of shares of Common Stock that would be issuable upon conversion of the principal of such lender's Note, at an exercise price of $1.00 per share, provided that such Conversion Warrant shall only be exercisable for the number of shares of Common Stock that would have been issued upon conversion of any portion of the principal of the lender's Note that is, in fact, prepaid prior to maturity of the Notes. The maximum number of shares of Common Stock issuable upon exercise of the Conversion Warrants is 5,000,000 shares. The Conversion Warrant expires on December 31, 2013. The shares of Common Stock issuable upon exercise of the Conversion Warrant do not carry registration rights. The Conversion Warrant must be exercised for cash.

Additionally, the Company issued to each lender a warrant (the “First Contingent Warrant”) to purchase that number of shares of Common Stock equal to 25% of the shares of Common Stock that would be issuable upon conversion of the principal of such lender's Note, at an exercise price of $0.01 per share, provided that such First Contingent Warrant shall only be exercisable if the Company's gross revenues, as reported in the Company's audited financial statements for the year ended December 31, 2011, do not equal or exceed $11,500,000. The First Contingent Warrants are considered vested as of December 31, 2011, as the Company's gross revenues did not equal or exceed $11,500,000. The Company also issued to each lender an additional warrant (the “Second Contingent Warrant”) to purchase that number of shares of Common Stock equal to 25% of the shares of Common Stock that would be issuable upon conversion of the principal of such lender's Note at an exercise price of $0.01 per share, provided that such Second Contingent Warrant shall only be exercisable if the Company's gross revenues, as reported in the Company's audited financial statements for the year ended December 31, 2012, do not equal or exceed $31,150,000, and further provided that such Second Contingent Warrant shall be null and void in the event that, between the date of issuance of the Company's audited financial statements for the year ended December 31, 2011, (the “First Measurement Date”) and the date of issuance of such audited financial statements for the year ended December 31, 2012, (the “Second Measurement Date”), the closing trading price of the Common Stock is at least $1.75 for ten or more consecutive trading days. The First Contingent Warrant and the Second Contingent Warrant are hereinafter referred to, collectively, as the “Contingent Warrants”. The maximum number of shares of Common Stock issuable upon exercise of the Contingent Warrants is 2,500,000 shares. The total number of exercisable warrants is 1,250,000 shares. The Contingent Warrants have a term of five years from the date of issuance. The shares of Common Stock issuable upon exercise of the Contingent Warrants do not carry registration rights. The Contingent Warrants may be exercised on a “cashless” basis.

In the event of a change in control transaction on or prior to the First Measurement Date, then the Contingent Warrants shall be exercisable immediately prior to the closing of such change in control transaction.

In the event (i) of a change in control transaction after the First Measurement Date and on or prior to the Second Measurement Date and (ii) the per share value of the consideration received by the holders of Common Stock in such change in control transaction is at least $1.75, the Second Contingent Warrant shall be null and void. If the value of the per share consideration received by the holders of Common Stock in such transaction is less than $1.75, the Second Contingent Warrant shall be exercisable immediately prior to the closing of such change in control transaction.

According to GAAP, proceeds from the sale of debt instruments with stock purchase warrants (detachable call options) shall be allocated to the two elements based upon the relative fair values of the debt instrument without the warrants and of the warrants themselves at the time of issuance. The portion of the proceeds so allocated to the warrants shall be accounted for as paid-in capital. The remainder of the proceeds shall be allocated to the debt instrument portion of the transaction. Also, the embedded beneficial conversion feature present in the convertible instrument shall be recognized separately at issuance by allocating a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. The amount of the warrants (i.e. the exercisable First Contingent Warrants) and beneficial conversion feature totaled $2,278,052 which has been recorded as a debt discount that will be charged to interest expense using the effective interest rate over the life of the convertible note.

The First Contingent Warrants that have vested are included in Note 2 Significant accounting policies – Net Loss Per Share footnote (a) table Outstanding Warrants as of December 31, 2011. The Second Contingent Warrants have not been included in our earnings per share calculation per the guidance in ASC 260-10-45-13 Earnings per share: Treatment of Contingently Issuable Shares in Weighted-Average Shares Outstanding which states that shares issuable for little or no cash consideration upon the satisfaction of certain conditions (contingently issuable shares) shall be considered outstanding common shares and included in the computation of basic EPS as of the date that all necessary conditions have been satisfied (in essence, when issuance of the shares is no longer contingent).

In conjunction with the offering, the Company incurred a placement fee of $32,800 and issued 42,400 common stock warrants to the placement agents at an exercise price of $1.09 per share. The warrants expire in five years. The fair value of the warrants was determined to be approximately $15,000 using the Black-Scholes-Merton valuation technique. The total direct costs of approximately $47,800 are recorded as deferred financing costs and are being amortized over the term of the Senior Notes using the effective interest method. Further, the placement agent warrants are classified in stockholders' equity because they achieved all of the requisite conditions for equity classification in accordance with GAAP.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References + Details

Common Stock Placements

12 Months Ended

Dec. 31, 2011

Common Stock Placements [Abstract]

Common Stock Placements

10.	Common Stock Placements

October 2009 Private Placement

In October 2009, the Company commenced a private placement to sell common stock and warrants. From October 30, 2009, through December 31, 2009, the Company sold 7,697,865 shares of common stock at a price of $.60 per share and received proceeds of $4,618,720. Under the terms of the offering, for every two shares of common stock purchased, the investor received a 5-year warrant to purchase one share of common stock for $1.50 (a “Warrant”). Through December 31, 2009, the Company issued a total of 3,848,933 warrants. The warrants met all the requirements for equity classification under GAAP and are recorded in stockholders' equity.

From January 1, 2010, through January 21, 2010, the Company sold an additional 1,308,332 shares of common stock and issued an additional 654,163 warrants and received proceeds of $785,000.

The Company closed the offering on January 21, 2010.

In connection with the October 2009 Private Placement, the Company entered into a registration rights agreement that provides “Piggy-Back” registration rights to each investor.

October 2010 Private Placement

In October 2010, the Company commenced a private placement to sell common stock and warrants. From October 30, 2010, through December 31, 2010, the Company sold 2,405,000 shares of common stock at a price of $1.00 per share issued a total of 1,202,500 warrants and received net proceeds of $2,337,020. The warrants met all the requirements for equity classification under GAAP and are recorded in stockholders' equity.

From January 1, 2011 through December 31, 2011, the Company sold an additional 3,778,321 shares of Common Stock and issued an additional 1,889,161 warrants and received net cash proceeds of approximately $3,731,000. The warrants met all the requirements for equity classification under GAAP and are recorded in stockholders' equity. The Company's Chairman and CEO invested $600,000 in the October 2010 Private Placement, receiving 300,000 warrants with an exercise price of $1.50, 150,000 First Contingent Warrants at an exercise price of $0.01 and 150,000 Second Contingent Warrants at an exercise price of $0.01 as per the aforementioned terms of the offering.

In connection with the October 2010 Private Placement, the Company entered into a registration rights agreement that provides “Piggy-Back” registration rights to each investor.

Under the terms of the offering, for each share purchased, the investor received one 5-year warrant to purchase the common stock of the Company at an exercise price of $1.50 per share. The terms of the warrant, (the “Callable Warrant”) are that for every two shares of common stock purchased, the holder is issued a 5-year warrant to purchase one share of the Company's Common Stock at an exercise price of $1.50 per share. The Callable Warrant does not carry registration rights and is callable by the Company at any time after the issuance if the closing sale price of the Stock exceeds $1.75 for 15 or more consecutive trading days. Upon written notice, the Company may redeem the Callable Warrant at a price of $0.01 per share.

Additionally, the Company issued to each lender a warrant (the “First Contingent Warrant”) to purchase that number of shares of Common Stock equal to 25% of the shares of Common Stock that would be issuable upon conversion of the principal of such lender's Note, at an exercise price of $0.01 per share, provided that such First Contingent Warrant shall only be exercisable if the Company's gross revenues, as reported in the Company's audited financial statements for the year ended December 31, 2011, do not equal or exceed $11,500,000 and further provided that such Warrant shall be null and void in the event that prior to issuance of such Audited Financial Statements (the “First Measurement Date”) the closing trading price of the Stock is at least $1.50 per share for ten or more consecutive trading days. The Company also issued to each lender an additional warrant (the “Second Contingent Warrant”) to purchase that number of shares of Common Stock equal to 25% of the shares of Common Stock that would be issuable upon conversion of the principal of such lender's Note at an exercise price of $0.01 per share, provided that such Second Contingent Warrant shall only be exercisable if the Company's gross revenues, as reported in the Company's audited financial statements for the year ended December 31, 2012, do not equal or exceed $31,150,000, and further provided that such Second Contingent Warrant shall be null and void in the event that, between the date of issuance of the Company's audited financial statements for the year ended December 31, 2011, (the “First Measurement Date”) and the date of issuance of such audited financial statements for the year ended December 31, 2012, (the “Second Measurement Date”), the closing trading price of the Common Stock is at least $1.75 for ten or more consecutive trading days. The First Contingent Warrant and the Second Contingent Warrant are hereinafter referred to, collectively, as the “Contingent Warrants”. The Contingent Warrants have a term of five years from the date of issuance. The shares of Common Stock issuable upon exercise of the Contingent Warrants do not carry registration rights. The Contingent Warrants may be exercised on a “cashless” basis. The contingent warrants have not been included in our earnings per share calculation per the guidance in ASC 260-10-45-13 Earnings per share: Treatment of Contingently Issuable Shares in Weighted-Average Shares Outstanding which states that shares issuable for little or no cash consideration upon the satisfaction of certain conditions (contingently issuable shares) shall be considered outstanding common shares and included in the computation of basic EPS as of the date that all necessary conditions have been satisfied (in essence, when issuance of the shares is no longer contingent). The maximum number of shares of Common Stock to be issued upon exercise of the Contingent Warrants is 3,091,661 shares.

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 12
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
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-Name Regulation S-X (SX)
-Number 210
-Section 04
-Article 3

Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Section 08
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Research Bulletin (ARB)
-Number 43
-Chapter 1
-Section B
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
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-Article 4

Reference 7: http://www.xbrl.org/2003/role/presentationRef
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-Paragraph 29, 30, 31
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
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-Section E

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-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section C

Reference 11: http://www.xbrl.org/2003/role/presentationRef
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-Paragraph 1
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+ Details

Stockholders' equity

12 Months Ended

Dec. 31, 2011

Stockholders' equity [Abstract]

Stockholders' equity

11.	Stockholders' equity

Stock incentive plan

The Company has three share-based compensation plans, the MiMedx Group, Inc. Assumed 2006 Stock Incentive Plan (the “2006 Plan”), the MiMedx Inc. 2007 Assumed Stock Plan (the “Assumed 2007 Plan”) and the MiMedx Group Inc. Amended and Restated Assumed 2005 Stock Plan (the “Assumed 2005 Plan”) which provide for the granting of qualified incentive and non-qualified stock options, stock appreciation awards and restricted stock awards to employees, directors, consultants and advisors. The awards are subject to a vesting schedule as set forth in each individual agreement. The Company intends to use only the 2006 Plan to make future grants. The number of assumed options under the Assumed 2005 Plan and Assumed 2007 Plan outstanding at December 31, 2011, totaled 375,000 and the maximum number of shares of common stock which can be issued under the 2006 Plan is 12,500,000 at December 31, 2011.

Activity with respect to the stock options is summarized as follows:

	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at January 1, 2010		6,182,500		$	1.10
Granted		2,385,400		$	1.40
Exercised		(210,250	)	$	0.74
Forfeited or cancelled		(100,000	)	$	0.88
Outstanding at December 31, 2010		8,257,650		$	1.20		6.3	$	2,833,198

Vested or expected to vest at December 31, 2010		5,577,863		$	1.22		5.3	$	2,015,963

Outstanding at January 1, 2011		8,257,650		$	1.20
Granted		3,918,500		$	1.17
Exercised		(490,000	)	$	0.60
Forfeited or cancelled/expired		(1,352,567	)	$	1.55
Outstanding at December 31, 2011		10,333,583		$	1.17		7.1	$	1,457,218

Vested or expected to vest at December 31, 2011		6,000,497		$	1.16		5.7	$	1,257,772

The intrinsic value of options exercised during the year ended December 31, 2011, was approximately $258,000.

Following is a summary of stock options outstanding and exercisable at December 31, 2011:

		Options Outstanding						Options Exercisable
Range of Exercise Prices		Number outstanding		Weighted- Average Remaining Contractual Term (in years)		Weighted- Average Exercise Price		Number Exercisable		Weighted- Average Exercise Price
$	0.50		587,250		2.9	$	0.50		513,268	$	0.50
$	0.65 - $1.00		2,967,500		5.7	$	0.79		2,730,224	$	0.79
$	1.04 - $1.80		6,228,833		8.8	$	1.30		2,207,005	$	1.45
$	2.40		550,000		0.7	$	2.40		550,000	$	2.40
			10,333,583		7.1	$	1.17		6,000,497	$	1.16

A summary of the status of the Company's unvested stock options as of December 31, 2011, and changes during the year ended December 31, 2011, is presented below:

Unvested Stock Options	Number of Shares			Weighted- Average Grant Date Fair Value
Unvested at January 1, 2011		2,679,787		$	0.87
Granted		3,918,500		$	0.63
Cancelled/expired		(1,352,567	)	$	0.59
Vested		(912,634	)	$	0.81
Unvested at December 31, 2011		4,333,086		$	0.72

Total unrecognized compensation expense at December 31, 2011, was approximately $3,214,000 and will be charged to expense through July 2015.

The fair value of the options granted was estimated on the date of grant using the Black-Scholes-Merton option-pricing model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. Expected volatilities are based on historical volatility of peer companies and other factors estimated over the expected term of the options. The term of employee options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus the contract term. The simplified method was used due to the Company's lack of sufficient historical data to provide a reasonable basis upon which to estimate the expected term due to the limited period of time its equity shares have been publically traded. The term for non-employee options is generally based upon the contractual term of the option. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term or contractual term as described.

The assumptions used in calculating the fair value of options using the Black-Scholes-Merton option-pricing model are set forth in the following table:

	Year ended December 31,
	2011			2010
Expected volatility		57.3-58.1	%		57.9-60.2	%
Expected life (in years)		6			6
Expected dividend yield		-			-
Risk-free interest rate		0.86% - 2.24	%		1.15% - 2.75	%

The weighted-average grant date fair value for options granted during the year ended December 31, 2011, was approximately $0.63.

Warrants

The Company grants common stock warrants in connection with equity share purchases by investors as an additional incentive for providing long term equity capital to the Company and as additional compensation to consultants and advisors. The warrants are granted at negotiated prices in connection with the equity share purchases and at the market price of the common stock in other instances. The warrants have been issued for terms of five years.

Common Stock warrants issued, redeemed and outstanding during the years ended December 31, 2011 and 2010, are as follows:

	Number of Warrants			Weighted- Average Exercise Price per Warrant		Number of Contingent Warrants		Weighted- Average Exercise Price per ContingentWarrant
Warrants outstanding at January 1, 2010		6,991,371		$	1.17		-	$	-
Issued in connection with private placement of common stock		1,856,662		$	1.50		1,202,500	$	0.01
Issued in connection with convertible promissory notes		550,490		$	1.05		50,490	$	0.01
Issued in connection with line of credit with related party		-		$	-		-	$	-
Expired warrants		(175,251	)	$	1.80		-	$	-
Exercised in connection with private placement of common stock		(3,219,348	)	$	1.00		-	$	-
Warrants outstanding at December 31, 2010		6,003,924		$	1.21		1,252,990	$	0.01

Issued in connection with private placement of common stock		1,889,161		$	1.50		1,889,162	$	0.01
Issued in connection with convertible promissory notes		203,332		$	1.50		203,332	$	0.01
Issued in connection with line of credit with related party		-		$	-		650,000	$	0.01
Issued in connection with Senior Secured Promissory Notes		1,250,000		$	0.01		1,250,000	$	0.01
Placement agent		42,400		$	1.09		-	$	-
Warrants outstanding at December 31, 2011		9,388,817		$	1.00		5,245,484	$	0.01

Warrants may be exercised in whole or in part by:

•	notice given by the holder accompanied by payment of an amount equal to the warrant exercise price multiplied by the number of warrant shares being purchased ; or

•

election by the holder to exchange the warrant (or portion thereof) for that number of shares equal to the product of (a) the number of shares issuable upon exercise of the warrant (or portion) and (b) a fraction, (x) the numerator of which is the market price of the shares at the time of exercise minus the warrant exercise price per share at the time of exercise and (y) the denominator of which is the market price per share at the time of exercise.

These warrants are not mandatorily redeemable, do not obligate the Company to repurchase its equity shares by transferring assets or issue a variable number of shares.

The warrants require that the Company deliver shares as part of a physical settlement or a net-share settlement, at the option of the holder, and do not provide for a net-cash settlement.

All of our warrants are classified as equity as of December 31, 2011 and 2010.

In April 2010, the Company offered investors in the October 2009 Private Placement a discount to their existing $1.50 warrant exercise price to $1.00 if they exercised their warrants to purchase common stock for cash by May 1, 2010. As a result of this offer, the Company received proceeds of approximately $3,200,000, net of placement agent fees, and issued 3,200,000 shares of common stock as of May 1, 2010. The aggregate proceeds include $833,000 in common stock issued to the Chairman and CEO, $20,850 to the President and Chief Operating Officer and $20,833 to one other company director. As a result of this activity, the number of warrants outstanding as of December 31, 2010, was 6,003,924.

Income taxes

12 Months Ended

Dec. 31, 2011

Income taxes [Abstract]

Income taxes

12.	Income taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities are as follows:

	December 31,
	2011			2010
Deferred tax assets and liabilities:
Accrued liabilities	$	131,000		$	1,000
Beneficial conversion feature on convertible financial instruments		(927,000	)		-
Intangible assets		249,000			269,000
Property and equipment		(18,000	)		-
R&D tax credit carryforwards		494,000			424,000
Net operating loss carryforwards		15,524,000			11,901,000
Net deferred tax assets	$	15,453,000		$	12,595,000

Valuation allowance		(15,453,000	)		(12,595,000	)

	$	-		$	-

The reconciliation of the Federal statutory income tax rate of 34% to the effective rate is as follows:

	December 31,
	2011			2010
Federal statutory rate		34.00	%		34.00	%
State taxes, net of federal benefit		5.34	%		3.96	%
Permanent difference & other		(11.30	%)		(7.50	%)
Valuation allowance		(28.04	%)		(30.46	%)
		-	%		-	%

Income taxes are based on estimates of the annual effective tax rate and evaluations of possible future events and transactions and may be subject to subsequent refinement or revision.

The Company has incurred net losses since its inception and, therefore, no current income tax liabilities have been incurred for the periods presented. The amount of federal operating loss carryforwards, included in the table above, was approximately $41,400,000 at December 31, 2011, and $39,083,000 at December 31, 2010. The loss carryforwards will expire at various dates beginning in 2026 through 2031 if not utilized. The amount of state net operating loss carryforwards was approximately $61,800,000 at December 31, 2011. The state loss carryforwards will expire at various dates beginning in 2016 through 2031 if not utilized. Additionally, the Company has various tax credit carryforwards of approximately $1,300,000 as of December 31, 2011. The tax credit carryforwards will expire at various dates beginning in 2025 through 2031 if not utilized. Due to the Company's losses, management has established a valuation allowance equal to the amount of net deferred tax assets since management cannot determine that realization of these benefits is more likely than not.

The Company's net operating losses and credits could be subject to annual limitations due to ownership change limitations provided by Internal Revenue Code Section 382. An annual limitation could result in the expiration of net operating losses and tax credit carryforwards before utilization. At this time the Company does not believe its carryforwards or credits will be materially impacted by such limitations.

The Company files income tax returns in the U.S. federal jurisdiction and various states. With few exceptions, the Company is subject to U.S. federal, state and local income tax examinations for the years 2008 through 2011.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
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+ Details

Related party transactions

12 Months Ended

Dec. 31, 2011

Related party transactions

13.	Related party transactions

The Company has related party expense as described in the following table:

	December 31,
	2011		2010
Office space lease (a)	$	41,000	$	64,238
Administrative expenses (b)		-		5,200
Aircraft use (c)		1,100		5,100
Hybrid debt instrument (d)		3,232		4,311
Line of credit (e)		42,726		-
Convertible senior secured promissory notes (f)		4,507		-
	$	92,565	$	78,849

(a)	Payments related to the lease of office space from an entity owned by the Chairman of the Board and CEO

(b)	Payments related to administrative expenses provided by an entity owned by the Chairman of the Board and CEO

(c)	Payments related to aircraft use from an entity owned by the former Chairman of the Board and current member of the Board of Directors

(d)	Interest of $3,232 and $4,311 for 2011 and 2010, respectively, related to convertible promissory notes issued in October 2010 to the Chairman of the Board and CEO and two other members of the Board of Directors

(e)	Interest of $42,726 related to a revolving secured line of credit with the Chairman of the Board and CEO dated March 31, 2011

(f)	Interest of $4,507 related to the convertible senior secured promissory notes with the Chairman of the Board and CEO during the fourth quarter of 2011

All the above related party expenses were included in general and administrative expenses or interest expense in the accompanying consolidated statements of operations.

- Definition

The entire disclosure for related party transactions, including the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 4
-Section 08
-Paragraph k

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 3A
-Section 04
-Paragraph b

Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
-Number 57
-Paragraph 1-4
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+ Details

401k Plan	12 Months Ended
401k Plan	Dec. 31, 2011
401k Plan [Abstract]
401k Plan	14. 401k Plan The Company has a 401(k) plan (the “Plan”) covering employees who have attained 21 years of age and have completed three months of service. Under the Plan, participants may defer up to 100% of their eligible wages to a maximum of $16,500 per year (annual limit for 2011). Employees age 50 or over in 2011 may make additional pre-tax contributions up to $5,500 above and beyond normal plan and legal limits. Annually, the Company may elect to match employee contributions up to 3% of the employee's compensation. Additionally, the Company may elect to make a discretionary contribution to the Plan. The Company did not provide matching contributions for the years ended December 31, 2011 and 2010.

- Definition

The entire disclosure for pension and other postretirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 5
-Subparagraph a
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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Reference 11: http://www.xbrl.org/2003/role/presentationRef
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Reference 12: http://www.xbrl.org/2003/role/presentationRef
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Reference 13: http://www.xbrl.org/2003/role/presentationRef
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-Number FAS88
-Paragraph 63
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-URI http://asc.fasb.org/topic&trid=2235017

+ Details

Commitments

12 Months Ended

Dec. 31, 2011

Contractual Commitments [Abstract]

Commitments

15. Commitments

Contractual Arrangements

The Company has entered into operating lease agreements for facility space and equipment, and employment agreements with our Vice President of Sales for Europe, Middle East and Africa and for some key employees acquired with Surgical Biologics. In addition, the Company has minimum royalty payments due in conjunction with one of its licenses.

The estimated annual lease, royalty, and employment agreement expenses are as follows:

12-month period ended December 31,
2012	$	1,009,178
2013		383,802
2014		132,190
2015		-
2016		-
	$	1,525,170

Rent expense on all operating leases for the years ended December 31, 2011 and 2010, respectively, was approximately $533,000 and $288,000.

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 14
-Paragraph 3
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+ Details

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2011
Subsequent Events [Abstract]
Subsequent Events	16. Subsequent Events As of the filing date of this report a total of approximately 1,673,000 First Contingent Warrants related to the October 2010 Private Placement and 325,000 First Contingent Warrants related to the Revolving Secured Line of Credit with related party at an exercise price of $0.01 were vested based upon the fact that the MiMedx common stock closing trading price was not at least $1.50 for ten consecutive trading days prior to the issuance of the audited financial statements.