axgn_Ex99

Exhibit 99.1

AxoGen, Inc. Reports

2017 First Quarter Financial Results

Record Q1 Revenue of $12.2 million, representing 51% growth over prior year

ALACHUA, FL — May 4, 2017 — AxoGen, Inc. (NASDAQ: AXGN), a global leader in developing and marketing innovative surgical solutions for peripheral nerve injuries, today reported financial results and business highlights for the first quarter ended March 31, 2017.

First Quarter 2017 Financial Results and Recent Business Highlights

Revenue of $12.2 million, up 51% compared to $8.1 million in the first quarter of 2016

Gross margin of 84.4% compared to 82.7% in the first quarter of 2016

Net loss for the first quarter of 2017 is $3.8 million, or $0.11 per share, compared with a net loss of $3.7 million, or $0.12 per share, in the first quarter of 2016

Adjusted EBITDA loss of $2.2 million compared to Adjusted EBITDA loss of $2.3 million in Q1 2016

"We are pleased to complete another successful quarter, with record revenues of $12.2 million and growth of 51 percent,” stated Karen Zaderej, President and Chief Executive Officer. ”We are successfully executing against our strategic initiatives and driving awareness and growth in the emerging peripheral nerve repair market.”

Additional First Quarter and Recent Operational Highlights

Increased active accounts in the first quarter to 465, up 37% from 340 in Q1 2016

We ended the quarter with 49 direct sales reps and have 50 as of today’s call; we also have 20 independent distributors

Conducted three national education courses in the first quarter, and four year-to-date

Increased the number of peer reviewed clinical publications for our surgical portfolio by six to a total of 50 year to date

Conducted a second clinical advisory panel with leading reconstructive breast surgeons - the panel reviewed patient, surgeon, and health care stakeholder perspectives and needs, as well as how the AxoGen portfolio of products may help surgeons overcome current clinical challenges related to restoring breast sensation for women who choose autologous reconstruction following a mastectomy

Ended the quarter with $25.9 million in cash compared to $30 million at the end of 2016. Net cash burn in Q1 was $4.1 million and includes $1.2 million payment of the 2016 all-employee annual performance bonus

Ended the quarter with $25 million of total bank debt, compared to $25 million at the end of 2016

“We continue to focus on surgeon education and growing the body of clinical evidence for our nerve repair solutions,” added Zaderej. “As a result we are building awareness of peripheral

nerve repair and expanding usage of our products with innovator and early adopter surgeons, while also working to develop the middle adopter market.”

2017 Financial Guidance

Management reiterates 2017 annual revenue will grow at least 40% over 2016 revenue and gross margins will remain above 80%.

Upcoming Investor Events

Members of the AxoGen senior management team will participate at the following upcoming conferences and events:

Jefferies Global Healthcare Conference in New York City on June 6

JMP Securities Conference in New York City on June 21‑22

Conference Call

The Company will host a conference call and webcast for the investment community today at 4:30 p.m. ET. Investors interested in participating by phone are invited to call toll free at 1‑877‑407‑0993 or use the direct dial-in number 1‑201‑689‑8795. Those interested in listening to the conference call live via the Internet can do so by visiting the Investors page of the Company’s website at www.axogeninc.com and clicking on the webcast link on the Investors home page.

Following the conference call, a replay will be available on the Company’s website at www.axogeninc.com under Investors.

About AxoGen

AxoGen (AXGN) is a global leader in innovative surgical solutions for peripheral nerve injuries. AxoGen is the only company focused specifically on the science, development and commercialization of technologies for peripheral nerve regeneration and repair. We are passionate about restoring nerve function and quality of life to patients with peripheral nerve injuries by providing innovative, clinically proven and economically effective repair solutions for surgeons and health care providers. Peripheral nerves provide the pathways for both motor and sensory signals throughout the body. Every day, people suffer traumatic injuries or undergo surgical procedures that impact the function of their peripheral nerves. Damage to a peripheral nerve can result in the loss of muscle or organ function, the loss of sensory feeling, or the initiation of pain.

AxoGen’s portfolio of products includes Avance® Nerve Graft, an off-the-shelf processed human nerve allograft for bridging severed nerves without the comorbidities associated with a second surgical site, AxoGuard® Nerve Connector, a porcine submucosa extracellular matrix (ECM) coaptation aid for tensionless repair of severed nerves, AxoGuard® Nerve Protector, a porcine submucosa ECM product used to wrap and protect injured peripheral nerves and reinforce the nerve reconstruction while preventing soft tissue attachments, and Avive® Soft Tissue Membrane, a minimally processed human umbilical cord membrane that may be used as a resorbable soft tissue covering to separate tissue layers and modulate inflammation in the surgical bed. Along with these core surgical products, AxoGen also offers AcroVal™ Neurosensory & Motor Testing System and AxoTouch™ Two-Point Discriminator. These evaluation and measurement tools assist health care professionals in detecting changes in sensation, assessing return of sensory, grip, and pinch function, evaluating effective treatment interventions, and providing feedback to patients on nerve function. The AxoGen portfolio of

products is available in the United States, Canada, the United Kingdom, and several other European and international countries.

Cautionary Statements Concerning Forward-Looking Statements

This Press Release contains "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations or predictions of future conditions, events, or results based on various assumptions and management’s estimates of trends and economic factors in the markets in which we are active, as well as our business plans. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "projects," "forecasts," "continue," "may," "should," "will," and variations of such words and similar expressions are intended to identify such forward-looking statements. The forward-looking statements may include, without limitation, statements regarding our assessment on our internal control over financial reporting, our growth, our 2017 guidance, product development, product potential, financial performance, sales growth, product adoption, market awareness of our products, data validation, our visibility at and sponsorship of conferences and educational events. The forward-looking statements are subject to risks and uncertainties, which may cause results to differ materially from those set forth in the statements. Forward-looking statements in this release should be evaluated together with the many uncertainties that affect AxoGen’s business and its market, particularly those discussed in the risk factors and cautionary statements in AxoGen’s filings with the Securities and Exchange Commission. Forward-looking statements are not guarantees of future performance, and actual results may differ materially from those projected. The forward-looking statements are representative only as of the date they are made and, except as required by law, AxoGen assumes no responsibility to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

Contacts:

AxoGen, Inc.

Peter J. Mariani, Chief Financial Officer

InvestorRelations@AxoGenInc.com

The Trout Group — Investor Relations

Brian Korb

646.378.2923

bkorb@troutgroup.com

AXOGEN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


	March 31,		December 31,
	2017 (unaudited)		2016

Assets
Current assets:
Cash and cash equivalents	$	25,913,765	$	30,014,405
Accounts receivable, net		8,383,925		8,052,203
Inventory		5,850,730		5,458,840
Prepaid expenses and other		749,437		511,804
Total current assets		40,897,857		44,037,252
Property and equipment, net		1,484,279		1,494,247
Intangible assets		890,688		828,979
	$	43,272,824	$	46,360,478
Liabilities and Shareholders’ Equity (Deficit)
Current liabilities:
Borrowings under revolving loan agreement	$	3,976,320	$	4,025,023
Accounts payable and accrued expenses		6,660,267		7,002,165
Current maturities of long term obligations		22,913		20,899
Deferred revenue, current		35,250		33,282
Total current liabilities		10,694,750		11,081,369
Long Term Obligations, net of current maturities and deferred financing fees		20,276,634		20,265,745
Deferred lease		89,888		—
Deferred revenue		86,818		92,215
Total liabilities		31,148,090		31,439,329
Shareholders’ equity (deficit):
Common stock, $.01 par value; 50,000,000 shares authorized; 33,063,960 and 33,008,865 shares issued and outstanding		330,639		330,088

Additional paid-in capital		133,439,943		132,474,884
Accumulated deficit		(121,645,848)		(117,883,823)
Total shareholders’ equity		12,124,734		14,921,149
	$	43,272,824	$	46,360,478

AXOGEN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)












	Three Months ended March 31,
	2017		2016
Revenues	$	12,241,073	$	8,111,759
Cost of goods sold		1,915,648		1,405,591
Gross profit		10,325,425		6,706,168
Costs and expenses:
Sales and marketing		8,610,482		6,205,875
Research and development		1,411,136		978,340
General and administrative		3,504,039		2,144,757
Total costs and expenses		13,525,657		9,328,972
Loss from operations		(3,200,232)		(2,622,804)
Other expense:
Interest expense		(507,549)		(1,003,027)
Interest expense — deferred financing costs		(44,491)		(30,810)
Other expense		(9,753)		(19,450)
Total other expense		(561,793)		(1,053,287)
Net loss	$	(3,762,025)	$	(3,676,091)
Weighted Average Common Shares outstanding — basic and diluted		33,026,433		29,994,066
Loss Per Common share — basic and diluted	$	(0.11)	$	(0.12)

AXOGEN, INC.

RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES

(unaudited)




	Three Months ended March 31,
	2017		2016
Net loss	$	(3,762,025)	$	(3,676,091)
Depreciation and amortization expense		108,359		78,856
Amortization expense of intangible assets		23,189		16,016
Income Taxes		9,801		21,427
Interest expense		507,549		1,003,027
Interest expense — deferred financing costs		44,491		30,810
EBITDA — non GAAP	$	(3,068,636)	$	(2,525,955)

Non Cash Stock Compensation Expense		848,589		182,955
Adjusted EBITDA — non GAAP	$	(2,220,047)	$	(2,343,000)

AXOGEN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	Three Months ended March 31,
	2017		2016
Cash flows from operating activities:
Net loss	$	(3,762,025)	$	(3,676,091)
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation		108,359		78,856
Amortization of intangible assets		23,189		16,016
Amortization of deferred financing costs		44,491		30,810
Provision for bad debt		34,747		80,651
Share-based compensation		848,589		182,955
Interest added to note payable		—		71,950
Change in assets and liabilities:
Accounts receivable		(366,469)		(588,243)
Inventory		(391,890)		(581,980)
Prepaid expenses and other		(237,633)		(274,114)
Accounts payable and accrued expenses		(341,899)		55,479
Deferred revenue		86,459		(5,396)
Net cash used for operating activities		(3,954,082)		(4,609,107)

Cash flows from investing activities:
Purchase of property and equipment		(98,391)		(402,927)
Acquisition of intangible assets		(84,898)		(85,416)
Net cash used for investing activities		(183,289)		(488,343)

Cash flows from financing activities:
Borrowing on revolving loan		11,247,114		—
Payments on revolving loan		(11,295,817)		—
Repayments of long term debt		(5,158)		—
Debt issuance costs		(26,429)		—
Proceeds from exercise of stock options		117,021		136,702
Net cash provided by financing activities		36,731		136,702

Net increase (decrease) in cash and cash equivalents		(4,100,640)		(4,960,748)
Cash and cash equivalents, beginning of year		30,014,405		25,909,500
Cash and cash equivalents, end of period	$	25,913,765	$	20,948,752

Supplemental disclosures of cash flow activity:
Cash paid for interest	$	505,020	$	900,410

AXOGEN, INC.

RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES

(unaudited)


	Quarter Ended		Quarter Ended		Quarter Ended		Quarter Ended		Year Ended		Quarter Ended
	March 31,		June 30,		September 30,		December 31,		December 31,		March 31,
	2016		2016		2016		2016		2016		2017
Net loss	$	(3,676,091)	$	(2,802,696)	$	(2,305,373)	$	(5,626,984)	$	(14,411,144)	$	(3,762,025)
Depreciation and amortization expense		78,856		88,734		95,543		98,484		361,617		108,359
Amortization expense of intangible assets		16,016		16,017		16,017		26,821		74,871		23,189
Income Taxes		21,427		—		—		—		—		9,801
Interest expense		1,003,027		1,163,413		1,089,134		2,130,694		5,386,268		507,549
Interest expense — deferred financing costs		30,810		32,696		31,748		780,135		875,389		44,491
EBITDA — non GAAP	$	(2,525,955)	$	(1,501,836)	$	(1,072,931)	$	(2,590,850)	$	(7,712,999)	$	(3,068,636)

Non Cash Stock Compensation Expense		182,955		569,834		293,575		343,913		1,390,277		848,589
Adjusted EBITDA — non GAAP	$	(2,343,000)	$	(932,002)	$	(779,356)	$	(2,246,937)	$	(6,322,722)	$	(2,220,047)