0001425450-24-000013 | 10-K | XBRL Viewer

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SIGNIFICANT ACCOUNTING POLICIES - Restricted Cash (Details) € in Thousands, $ in Thousands	Dec. 31, 2023 USD ($)	Dec. 31, 2023 EUR (€)	Dec. 31, 2022 USD ($)
Accounting Policies [Abstract]
Escrow deposit	$ 1,250		$ 1,250
Restricted cash	$ 1,972	€ 650	$ 1,471

BUSINESS SEGMENT - Narrative (Details)	12 Months Ended
BUSINESS SEGMENT - Narrative (Details)	Dec. 31, 2023 segment
Segment Reporting [Abstract]
Number of operating segments	1
Number of reportable segments	1

DEBT AND CREDIT ARRANGEMENTS - Narrative (Details)			12 Months Ended
DEBT AND CREDIT ARRANGEMENTS - Narrative (Details)	Dec. 29, 2023 USD ($) tranche	Jun. 13, 2022	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Debt Instrument
Mortgage balance			$ 11,063,000	$ 907,000
Current principal due			152,000	144,000
Interest expense related to debt			$ 42,000	525,000	$ 56,000
Mortgage payable to affiliate
Debt Instrument
Interest rate			5.00%
Monthly interest and principal installments			$ 16,000
Mortgage balance			763,000	907,000
Revolving Credit Facility \| Fourth Amended Loan Agreement
Debt Instrument
Revolving credit facility			50,000,000
Interest rate		10.00%
Unused commitment fee percentage		0.50%
Revolving Credit Facility \| Fourth Amended Loan Agreement \| SOFR
Debt Instrument
Debt instrument, basis spread on variable rate		8.69%
Revolving Credit Facility \| Fourth Amended Loan Agreement \| Three Month LIBOR
Debt Instrument
Debt instrument, basis spread on variable rate		8.61%
Revolving Credit Facility \| Credit, Security and Guaranty Agreement
Debt Instrument
Long term debt face amount	$ 80,000,000
Debt instrument, maximum distribution per tranche	$ 30,000,000
Debt instrument, number of tranches \| tranche	3
Revolving Credit Facility \| Revolving Loan
Debt Instrument
Debt instrument, maximum distribution per tranche	$ 50,000,000
Percentage of prepayment of facility	3.00%
Revolving Credit Facility \| Revolving Loan \| Option One
Debt Instrument
Interest rate	9.00%
Revolving Credit Facility \| Revolving Loan \| Option Two
Debt Instrument
Applicable debt rate (percent)	6.50%
Revolving Credit Facility \| Revolving Loan \| Option Three
Debt Instrument
Debt prepayment premium	3.00%
Revolving Credit Facility \| Revolving Loan \| Option Four
Debt Instrument
Debt prepayment premium	2.00%
Revolving Credit Facility \| Revolving Loan \| Option Five
Debt Instrument
Debt prepayment premium	1.00%
Revolving Credit Facility \| Revolving Loan \| SOFR \| Option One
Debt Instrument
Debt instrument, basis spread on variable rate	6.50%
Revolving Credit Facility \| Revolving Loan \| SOFR \| Option Two
Debt Instrument
Debt instrument, basis spread on variable rate	4.00%
Revolving Credit Facility \| Term Loan
Debt Instrument
Debt instrument, maximum distribution per tranche	$ 10,000,000
Proceeds from lines of credit	$ 10,000,000
Debt instrument, debt repayment trigger, as a basis of capital stock ownership (percent)	35.00%
Mortgage balance			$ 10,300,000	$ 0

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	12 Months Ended
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Income Statement [Abstract]
Net revenue	$ 148,732,000	$ 122,289,000	$ 98,049,000
Cost of revenue	37,479,000	31,629,000	24,646,000
Gross profit	111,253,000	90,660,000	73,403,000
Operating expenses:
Sales and marketing	51,402,000	45,053,000	39,673,000
General and administrative	75,421,000	59,383,000	46,061,000
Legal settlement expenses	0	0	150,000
Trademark impairment	985,000	3,609,000	0
Research and development	10,196,000	8,014,000	5,543,000
Total operating expenses	138,004,000	116,059,000	91,427,000
Operating loss	(26,751,000)	(25,399,000)	(18,024,000)
Other (income) expenses:
Interest (income) expense, net	(198,000)	2,424,000	2,247,000
Fair value adjustment of contingent consideration	(2,980,000)	(25,930,000)	(1,800,000)
Other (income) expense, net	(2,261,000)	1,796,000	(1,083,000)
Total other income	(5,439,000)	(21,710,000)	(636,000)
Loss before income taxes	(21,312,000)	(3,689,000)	(17,388,000)
Provision for income taxes (benefit)	(338,000)	(4,947,000)	(1,128,000)
Net (loss) income	$ (20,974,000)	$ 1,258,000	$ (16,260,000)
Weighted average shares outstanding
Basic (in shares)	22,675,477	20,704,556	19,268,255
Diluted (in shares)	22,675,477	20,947,727	19,268,255
Net (loss) income per share
Basic (in dollars per share)	$ (0.92)	$ 0.06	$ (0.84)
Diluted (in dollars per share)	$ (0.92)	$ 0.06	$ (0.84)

PROPERTY AND EQUIPMENT, NET

12 Months Ended

Dec. 31, 2023

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of the following:


	December 31,
	2023		2022
Land	$	1,725	$	1,725
Building and building improvements	5,870		5,729
Computer equipment and software	5,828		3,319
Office and other equipment	5,821		4,328
Instruments	53,093		43,596
Sample inventory	2,780		2,674
Construction in progress	5,519		3,719
	80,636		65,090
Less: accumulated depreciation	(39,588)		(30,804)
Total property and equipment, net	$	41,048	$	34,286

Depreciation expense is included in general and administrative expenses and was $10,236, $7,121 and $6,148 for the years ended December 31, 2023, 2022 and 2021, respectively.

NET (LOSS) EARNINGS PER SHARE - Antidilutive Securities (Details) - shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share
Antidilutive securities excluded from computation of earnings per share (in shares)	606,304	416,960	375,084
Restricted stock
Antidilutive Securities Excluded from Computation of Earnings Per Share
Antidilutive securities excluded from computation of earnings per share (in shares)	606,304	413,404	368,446
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share
Antidilutive securities excluded from computation of earnings per share (in shares)	0	3,556	6,638

COMMITMENTS AND CONTINGENCIES (Details) - USD ($)			1 Months Ended	12 Months Ended
COMMITMENTS AND CONTINGENCIES (Details) - USD ($)	Jul. 20, 2021	Dec. 31, 2019	Jun. 30, 2019	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Long-term Purchase Commitment
Operating lease liability				$ 1,000,000
Operating Lease right-of-use asset				$ 1,084,000
Operating Lease, Liability, Current, Statement of Financial Position				Other long-term liabilities	Other long-term liabilities
Operating Lease, Right-of-Use Asset, Statement of Financial Position				Assets, Noncurrent, Excluding Property, Plant And Equipment	Assets, Noncurrent, Excluding Property, Plant And Equipment
Payments on debt with affiliate				$ 0	$ 31,000,000	$ 0
Purchase commitment, remaining minimum amount committed						1,900,000
Purchase obligation, year one				1,820,000
Purchase obligation, year two				1,456,000
Cost of revenue				37,479,000	31,629,000	24,646,000
Minimum annual royalty payment				10,000
License agreements \| FIREFLY Technology
Long-term Purchase Commitment
Finite lived intangible asset useful life extension period	5 years
Cost of revenue				$ 2,000	$ 1,104,000	$ 512,000
Squadron \| Team Note B \| Affiliated Entity
Long-term Purchase Commitment
Payments on debt with affiliate		$ 25,000,000
Vilex and Orthex
Long-term Purchase Commitment
Consideration transferred			$ 60,000,000
Minimum
Long-term Purchase Commitment
Royalty agreement percentage				0.50%
Maximum
Long-term Purchase Commitment
Royalty agreement percentage				20.00%

STOCKHOLDERS' EQUITY - Warrants (Details) - Squadron shares in Thousands	Aug. 15, 2022 $ / shares shares
Class of Warrant or Right
Warrants and rights outstanding (shares) \| shares	1,525
Warrants exercise price (in dollars per share) \| $ / shares	$ 0.00025

DEBT AND CREDIT ARRANGEMENTS (Tables)

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Schedule of Long-Term Debt

Long-term debt consisted of the following:


	December 31,
	2023		2022
Term loan and Final Payment	$	10,300	$	—

Mortgage payable to affiliate	763		907
Total debt	11,063		907
Less: debt discount and issuance costs	1,003		—
Less: current maturities	152		144
Long-term debt, net of current maturities	$	9,908	$	763

Schedule of Aggregate Future Principal Payments

At December 31, 2023, the aggregate future principal payments on our debt arrangements, including the Final Payment, are as follows:


2024	$	152
2025	160
2026	168
2027	176
2028	10,407
Thereafter	—
	$	11,063

- Definition

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

+ References

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+ Details

SUBSEQUENT EVENTS (Details) $ / shares in Units, $ in Millions		1 Months Ended	12 Months Ended
	Jan. 05, 2024 USD ($) individual $ / shares shares	Apr. 30, 2018	Dec. 31, 2023 shares	Dec. 31, 2022 shares	Dec. 31, 2021 shares
Subsequent Event [Line Items]
Vesting period (in years)			3 years
Subsequent Event
Subsequent Event [Line Items]
Payments to securities \| $	$ 22.0
Restricted stock
Subsequent Event [Line Items]
Vesting period (in years)		6 years
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in period \| shares			311,689	216,881	114,256
Restricted stock \| Subsequent Event
Subsequent Event [Line Items]
Vesting period (in years)	3 years
Share-based payment arrangement,number of individuals received restricted stock awards \| individual	170
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in period \| shares	83,000
Share-based payment arrangement, after forfeiture \| $	$ 2.5
Average share price \| $ / shares	$ 30.12

GOODWILL AND INTANGIBLE ASSETS - Narrative (Details)						12 Months Ended
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details)	Sep. 03, 2021 USD ($)	Jul. 20, 2021 USD ($)	Mar. 19, 2021 USD ($)	Apr. 01, 2020 USD ($)	Mar. 09, 2020 USD ($)	Dec. 31, 2023 USD ($) reporting_unit	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Indefinite-lived Intangible Assets
Number of reporting units \| reporting_unit						2
Amortization of expense						$ 7,149,000	$ 5,977,000	$ 4,531,000
Payments to acquire intangible assets						2,106,000	0	7,908,000
Net Intangible Assets						15,287,000	14,921,000
Impairment of indefinitely-lived assets						985,000	3,609,000	$ 0
License agreements
Indefinite-lived Intangible Assets
Payments to acquire intangible assets			$ 2,858,000
7D Surgical FLASH \| License agreements
Indefinite-lived Intangible Assets
License agreement term (years)	5 years
Payments to acquire intangible assets	$ 750,000
Intangible asset, useful life (in years)	3 years
FIREFLY Technology \| License agreements
Indefinite-lived Intangible Assets
Payments to acquire intangible assets		$ 4,300,000
Finite lived intangible asset useful life extension period		5 years
Pega Medical
Indefinite-lived Intangible Assets
Amortization of expense						133,000
Trademarks
Indefinite-lived Intangible Assets
Net Intangible Assets						15,287,000	14,921,000
Trademarks \| Telos
Indefinite-lived Intangible Assets
Indefinite-lived intangible assets acquired					$ 210,000
Trademarks \| ApiFix
Indefinite-lived Intangible Assets
Indefinite-lived intangible assets acquired				$ 8,640,000
Impairment of indefinitely-lived assets						985,000	3,609,000
Trademarks \| MD Orthopaedics
Indefinite-lived Intangible Assets
Indefinite-lived intangible assets acquired							2,410,000
Trademarks \| Pega Medical
Indefinite-lived Intangible Assets
Indefinite-lived intangible assets acquired							$ 3,878,000
Trademarks \| Medtech
Indefinite-lived Intangible Assets
Indefinite-lived intangible assets acquired						520,000
Trademarks \| Rhino
Indefinite-lived Intangible Assets
Indefinite-lived intangible assets acquired						$ 140,000

SIGNIFICANT ACCOUNTING POLICIES - Investments in Privately Held Companies (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Accounting Policies [Abstract]
Debt securities	$ 1,855

BUSINESS COMBINATIONS AND ASSET ACQUISITIONS -Narrative (Details) - USD ($)						12 Months Ended
	Jul. 01, 2023	May 01, 2023	Jul. 01, 2022	Apr. 01, 2022	Oct. 20, 2021	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Business Acquisition
Common stock, par value (in dollars per share)						$ 0.00025	$ 0.00025
Cash paid to acquire						$ 0	$ 8,360,000	$ 0
Payments to acquire intangible assets						2,106,000	0	7,908,000
Payments for asset acquisition						$ 0	0	650,000
Share price					$ 64.83
Vesting period (in years)						3 years
Amortization of expense						$ 7,149,000	5,977,000	$ 4,531,000
Rhino Pediatric Orthopedic Designs, Inc.
Business Acquisition
Asset acquisition, total compensation	$ 1,024,000
Cash consideration	546,000
Transaction costs	46,000
Issuance of common stock	$ 478,000
Medtech Concepts LLC
Business Acquisition
Asset acquisition, total compensation		$ 15,274,000
Cash consideration		3,000,000
Transaction costs		97,000
Issuance of common stock		$ 2,274,000
Business combination, consideration paid In cash (as a percent)		50.00%
Stock based compensation capitalized		$ 4,500,000
Stock based compensation service period		4 years
Total consideration transferred		$ 10,871,000
Medtech Concepts LLC \| Intellectual Property
Business Acquisition
Finite-lived intangible assets acquired		$ 9,523,000
Intangible asset, useful life (in years)		10 years
Medtech Concepts LLC \| Trademarks
Business Acquisition
Indefinite-lived intangible assets acquired		$ 520,000
Medtech Concepts LLC \| Present Value
Business Acquisition
Cash consideration		3,000,000
Transaction costs		97,000
Issuance of common stock		2,274,000
Total consideration transferred		$ 10,043,000
Devise Ortho
Business Acquisition
Shares issued as compensation (shares)					4,599
Issuance of common stock					$ 298,000
Total consideration transferred					948,000
Payments to acquire inventory					108,000
Payments for asset acquisition					$ 650,000
Devise Ortho \| Patents
Business Acquisition
Intangible asset, useful life (in years)					16 years
Payments to acquire intangible assets					$ 840,000
Common Stock \| Rhino Pediatric Orthopedic Designs, Inc.
Business Acquisition
Shares issued as compensation (shares)	11,133
Common stock, par value (in dollars per share)	$ 0.00025
Asset acquisition, share price (per share)	$ 42.91
Common Stock \| Medtech Concepts LLC
Business Acquisition
Shares issued as compensation (shares)		43,751,000
Common stock, par value (in dollars per share)		$ 0.00025
Asset acquisition, share price (per share)		$ 51.98
Aggregate value of equity consideration		$ 2,500,000
Business combination, consideration of unregistered common stock (as a percent)		50.00%
Pega Medical
Business Acquisition
Stock based compensation service period			3 years
Consideration transferred			$ 32,042,000
Cash paid to acquire			32,042,000
Contingent consideration			$ 1,052,000
Contingent consideration liability term			18 months
Contingent repurchase price, per share (in dollars per share)			$ 0.1
Acquisition related costs							382,000
Amortization of expense						$ 133,000
Pega Medical \| Patents
Business Acquisition
Finite-lived intangible assets acquired			$ 3,545,000
Pega Medical \| Trademarks and Trade Names
Business Acquisition
Indefinite-lived intangible assets acquired			3,878,000
Pega Medical \| Trademarks
Business Acquisition
Indefinite-lived intangible assets acquired							3,878,000
Pega Medical \| Restricted Stock Units
Business Acquisition
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned			$ 499,000
Vesting period (in years)			3 years
Pega Medical \| Common Stock
Business Acquisition
Common stock, par value (in dollars per share)			$ 0.00025
Consideration for acquisition (in shares)			34,899,000
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned			$ 1,497,000
Common stock (in dollars per share)			$ 42.9
Business acquisition, shares subject to repurchase feature (shares)						13,851
MD Orthopaedics
Business Acquisition
Common stock, par value (in dollars per share)				$ 0.00025
Consideration transferred				$ 18,487,000
Cash paid to acquire				$ 8,781,000
Consideration for acquisition (in shares)				173,241
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned				$ 9,707,000
Common stock (in dollars per share)				$ 56.03
Acquisition related costs				$ 381,000
MD Orthopaedics \| Patents
Business Acquisition
Finite-lived intangible assets acquired				2,660,000
MD Orthopaedics \| Trademarks and Trade Names
Business Acquisition
Indefinite-lived intangible assets acquired				$ 2,410,000
MD Orthopaedics \| Trademarks
Business Acquisition
Indefinite-lived intangible assets acquired							$ 2,410,000

RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Affiliated Entity \| Structure Medical, LLC \| Supplier
Related Party Transaction
Payments to related party	$ 1,060	$ 956	$ 750

BUSINESS COMBINATIONS AND ASSET ACQUISITIONS - Pro forma information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Business Combination and Asset Acquisition [Abstract]
Net revenue	$ 128,648	$ 113,899
Net income (loss)	$ 2,110	$ (12,810)

DEBT AND CREDIT ARRANGEMENTS - Future Principal Payments (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Maturities of Long-term Debt
2024	$ 152
2025	160
2026	168
2027	176
2028	10,407
Thereafter	0
Total debt	$ 11,063	$ 907

- Definition

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

+ References + Details

SIGNIFICANT ACCOUNTING POLICIES - Basis of Presentation (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Accounting Policies [Abstract]
Accumulated deficit	$ 197,742	$ 176,768

- Definition

Amount of accumulated undistributed earnings (deficit).

+ References + Details

GOODWILL AND INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets
Gross Intangible Assets	$ 91,267	$ 79,823
Accumulated Amortization	(21,992)	(14,843)
Impairment	0	0
Net Intangible Assets	$ 69,275	$ 64,980
Patents
Finite-Lived Intangible Assets
Weighted-Average Amortization Period	11 years 2 months 12 days	12 years 2 months 12 days
Gross Intangible Assets	$ 45,646	$ 46,005
Accumulated Amortization	(11,008)	(7,953)
Impairment	0	0
Net Intangible Assets	$ 34,638	$ 38,052
Intellectual Property and Capitalized Software
Finite-Lived Intangible Assets
Weighted-Average Amortization Period	9 years 1 month 6 days
Gross Intangible Assets	$ 16,026
Accumulated Amortization	(2,524)
Impairment	0
Net Intangible Assets	$ 13,502
Intellectual Property
Finite-Lived Intangible Assets
Weighted-Average Amortization Period		9 years 9 months 18 days
Gross Intangible Assets		$ 5,859
Accumulated Amortization		(1,382)
Impairment		0
Net Intangible Assets		$ 4,477
Customer Relationships & Other
Finite-Lived Intangible Assets
Weighted-Average Amortization Period	12 years 4 months 24 days	13 years 4 months 24 days
Gross Intangible Assets	$ 18,862	$ 17,262
Accumulated Amortization	(3,270)	(1,805)
Impairment	0	0
Net Intangible Assets	$ 15,592	$ 15,457
License agreements
Finite-Lived Intangible Assets
Weighted-Average Amortization Period	3 years 9 months 18 days	4 years 6 months
Gross Intangible Assets	$ 10,733	$ 10,697
Accumulated Amortization	(5,190)	(3,703)
Impairment	0	0
Net Intangible Assets	$ 5,543	$ 6,994

BUSINESS COMBINATIONS AND ASSET ACQUISITIONS - ApiFix Narrative (Details) $ / shares in Units, $ in Thousands		12 Months Ended
	Apr. 01, 2020 USD ($) procedure $ / shares shares	Dec. 31, 2023 USD ($) $ / shares	Dec. 31, 2022 USD ($) $ / shares	Dec. 31, 2021 USD ($)
Business Acquisition
Common stock, par value (in dollars per share) \| $ / shares		$ 0.00025	$ 0.00025
Fair value adjustment of contingent consideration		$ (2,980)	$ (25,930)	$ (1,800)
Contingent consideration, accretion expense		1,372		2,155
ApiFix
Business Acquisition
Payments to Acquire Businesses, Gross	$ 2,000
Cash acquired	$ 344
Consideration for acquisition (in shares) \| shares	934,783
Common stock, par value (in dollars per share) \| $ / shares	$ 0.00025
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned	$ 35,176
Common stock (in dollars per share) \| $ / shares	$ 37.63
Anniversary payments	$ 30,000
Business combination, contingent consideration, system sales payment	$ 41,741
Number of clinical procedures (procedure) \| procedure	150
Revenue multiplier	2.25
Minimum percentage of contingent consideration payable in cash	25.00%
Percentage on contingent consideration that can be settled in shares	75.00%
Fair value adjustment of contingent consideration		(2,980)	(25,930)	(1,800)
Contingent consideration, accretion expense		$ 970	$ 2,307	$ 2,155
ApiFix \| Second Anniversary
Business Acquisition
Anniversary payments	$ 13
ApiFix \| Third Anniversary
Business Acquisition
Anniversary payments	8
ApiFix \| Fourth Anniversary
Business Acquisition
Anniversary payments	$ 9

BUSINESS COMBINATIONS AND ASSET ACQUISITIONS - Assets acquired and liabilities assumed (Details) - USD ($) $ in Thousands	Jul. 01, 2022	Apr. 01, 2022	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Liabilities
Goodwill			$ 83,699	$ 86,821	$ 72,349
Pega Medical
Business Acquisition
Fair value of estimated total acquisition consideration	$ 32,042
Assets
Cash	312
Accounts receivable - trade	2,100
Inventories	4,875
Prepaid expenses and other current assets	509
Property and equipment	600
Amortizable intangible assets	12,286
Other intangible assets	3,878
Total assets	24,560
Liabilities
Accounts payable-trade	1,682
Other current liabilities	1,393
Deferred tax liability	4,035
Total liabilities	7,110
Less: total net assets	17,450
Goodwill	$ 14,592
MD Orthopaedics
Business Acquisition
Fair value of estimated total acquisition consideration		$ 18,487
Assets
Cash		420
Accounts receivable - trade		1,062
Inventories		1,126
Prepaid expenses and other current assets		100
Property and equipment		2,444
Amortizable intangible assets		9,120
Other intangible assets		2,410
Total assets		16,682
Liabilities
Accounts payable and accrued liabilities		45
Other current liabilities		586
Deferred tax liability		3,014
Total liabilities		3,645
Less: total net assets		13,037
Goodwill		$ 5,450

ACCRUED COMPENSATION AND BENEFITS

12 Months Ended

Dec. 31, 2023

ACCRUED COMPENSATION AND BENEFITS

Accrued compensation and benefits consisted of the following:


	December 31,
	2023		2022
Accrued compensation and related costs	$	4,279	$	3,282
Accrued commissions	7,046		3,462
Total accrued compensation and benefits	$	11,325	$	6,744

SIGNIFICANT ACCOUNTING POLICIES - Goodwill and Intangible Assets (Details)	12 Months Ended
	Dec. 31, 2023 USD ($) reporting_unit	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Finite-Lived Intangible Assets
Impairment of finite lived intangible assets	$ 0	$ 0	$ 0
Goodwill impairment	$ 0
Number of reporting units \| reporting_unit	2
Impairment	$ 985,000	$ 3,609,000	$ 0
Minimum
Finite-Lived Intangible Assets
Intangible asset, useful life (in years)	3 years
Maximum
Finite-Lived Intangible Assets
Intangible asset, useful life (in years)	20 years

EMPLOYEE BENEFIT PLAN	12 Months Ended
EMPLOYEE BENEFIT PLAN	Dec. 31, 2023
Retirement Benefits [Abstract]
EMPLOYEE BENEFIT PLAN	EMPLOYEE BENEFIT PLANWe have a defined-contribution plan, OrthoPediatrics 401(k) Retirement Plan (the “401(k) Plan”), which includes a cash or deferral (Section 401(k)) arrangement. The 401(k) Plan covers those employees who meet certain eligibility requirements and elect to participate. Employee contributions are limited to the annual amounts permitted under the Internal Revenue Code. The 401(k) Plan allows us to make a discretionary matching contribution. Discretionary matching contributions are determined annually by management. OrthoPediatrics Corp. matches our employees' 401(k) contributions up to 4%. Employees of MD Ortho receive contribution matches up to 3% of their salary. For the years ended December 31, 2023, 2022 and 2021, the total 401(k) match resulted in expense of $900, $718 and $510, respectively.

- Definition

The entire disclosure for retirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 70
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480794/715-70-50-1

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 17
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480482/715-20-55-17

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)(iv)(03)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)(i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (q)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (l)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//715/tableOfContent

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)(iii)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (o)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (p)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (r)(1)
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-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (r)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480126/715-20-S99-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 60
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480266/715-60-50-3

+ Details

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
OPERATING ACTIVITIES
Net (loss) income	$ (20,974,000)	$ 1,258,000	$ (16,260,000)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Trademark impairment	985,000	3,609,000	0
Depreciation and amortization	17,385,000	13,099,000	10,680,000
Stock-based compensation	10,526,000	6,679,000	5,842,000
Fair value adjustment of contingent consideration	(2,980,000)	(25,930,000)	(1,800,000)
Accretion of acquisition installment payable	1,372,000	2,307,000	2,154,000
Deferred income taxes	(1,163,000)	(5,032,000)	(1,128,000)
Changes in certain current assets and liabilities:
Accounts receivable - trade	(9,724,000)	(3,983,000)	(466,000)
Inventories	(26,279,000)	(16,938,000)	(5,050,000)
Prepaid expenses and other current assets	94,000	(506,000)	(637,000)
Accounts payable - trade	1,491,000	(209,000)	(567,000)
Accrued legal settlements	0	0	(6,342,000)
Accrued expenses and other liabilities	6,852,000	3,344,000	1,095,000
Other	(4,631,000)	536,000	(584,000)
Net cash used in operating activities	(27,046,000)	(21,766,000)	(13,063,000)
INVESTING ACTIVITIES
Acquisition of MedTech, net of cash acquired	(3,097,000)	0	0
Acquisition of Rhino assets	(546,000)	0	0
Acquisition of MDO, net of cash acquired	0	(8,360,000)	0
Acquisition of Pega, net of cash acquired	0	(31,730,000)	0
Acquisition of Devise Ortho assets	0	0	(650,000)
Purchases of licenses	(2,106,000)	0	(7,908,000)
Sale of short-term marketable securities	112,904,000	46,872,000	9,250,000
Purchase of short-term marketable securities	(48,600,000)	(110,122,000)	0
Purchases of property and equipment	(16,878,000)	(10,031,000)	(8,103,000)
Net cash provided by (used in) investing activities	41,677,000	(113,371,000)	(7,411,000)
FINANCING ACTIVITIES
Payments on debt with affiliate	0	(31,000,000)	0
Proceeds from issuance of common stock, net of issuance costs	0	139,282,000	0
Proceeds from exercise of stock options	21,000	63,000	137,000
Installment payment for ApiFix	(2,000,000)	(3,234,000)	0
Payments on mortgage notes	(144,000)	(137,000)	(131,000)
Net cash provided by financing activities	7,301,000	135,974,000	6,000
Effect of exchange rate changes on cash	633,000	619,000	(658,000)
NET INCREASE (DECREASE) IN CASH AND RESTRICTED CASH	22,565,000	1,456,000	(21,126,000)
Cash and restricted cash, beginning of period	10,462,000	9,006,000	30,132,000
Cash and restricted cash, end of period	33,027,000	10,462,000	9,006,000
SUPPLEMENTAL DISCLOSURES
Cash paid for interest	42,000	700,000	56,000
Transfer of instruments between property and equipment and inventory	57,000	(234,000)	453,000
Right-of-use assets obtained in exchange for lease liabilities	706,000	213,000	0
Debt issuance costs not yet paid	127,000	0	0
Related Party
FINANCING ACTIVITIES
Proceeds from issuance of debt with affiliate	0	31,000,000	0
Nonrelated Party
FINANCING ACTIVITIES
Proceeds from issuance of debt with affiliate	9,424,000	0	0
ApiFix
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Fair value adjustment of contingent consideration	(2,980,000)	(25,930,000)	(1,800,000)
SUPPLEMENTAL DISCLOSURES
Issuance of common shares in acquisition	6,178,000	10,410,000	0
Medtech
SUPPLEMENTAL DISCLOSURES
Issuance of common shares in acquisition	2,274,000	0	0
Rhino
SUPPLEMENTAL DISCLOSURES
Issuance of common shares in acquisition	478,000	0	0
MDO
SUPPLEMENTAL DISCLOSURES
Issuance of common shares in acquisition	0	9,707,000	0
Devise Ortho
SUPPLEMENTAL DISCLOSURES
Issuance of common shares in acquisition	$ 0	$ 0	$ 298,000

BUSINESS COMBINATIONS AND ASSET ACQUISITIONS - Schedule of Discounting the Future Payments (Details) - Medtech Concepts LLC $ in Thousands	May 01, 2023 USD ($)
Business Acquisition
Cash consideration	$ 3,000
Issuance of common stock	2,274
Anniversary payments	5,500
Transaction costs	97
Total consideration transferred	10,871
Present Value
Business Acquisition
Cash consideration	3,000
Issuance of common stock	2,274
Anniversary payments	4,672
Transaction costs	97
Total consideration transferred	$ 10,043

STOCKHOLDERS' EQUITY (Tables)

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Stock Option Activity

Our stock option activity and related information are summarized as follows:


	Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Terms (in Years)
Outstanding at January 1, 2021	12,802	$	30.97	1.6
Forfeited or expired	(1,742)	$	30.97
Exercised	(4,422)	$	30.97
Outstanding at December 31, 2021	6,638	$	30.97	1.3
Forfeited or expired	(1,072)	$	30.97
Exercised	(2,010)	$	30.97
Outstanding at December 31, 2022	3,556	$	30.97	0.7
Forfeited or expired	(2,886)	$	30.97
Exercised	(670)	$	30.97
Outstanding at December 31, 2023	—	$	—	—

Schedule of Restricted Stock Activity

Our restricted stock activity and related information are summarized as follows:


	Restricted Stock Awards	Weighted-Average Remaining Contractual Terms (in Years)	Restricted Stock Units	Weighted-Average Remaining Contractual Terms (in Years)
Outstanding at January 1, 2021	436,730	1.1	—	—
Granted	114,256		—
Forfeited	(6,354)		—
Outstanding at Vested	(176,186)		—
Outstanding at December 31, 2021	368,446	1.1	—	—
Granted	216,881		11,634
Forfeited	(28,344)		(1,554)
Outstanding at Vested	(153,659)		—
Outstanding at December 31, 2022	403,324	1.4	10,080	2.5
Granted	311,689		4,005
Forfeited	(6,800)		(234)
Vested	(115,760)		—
Outstanding at December 31, 2023	592,453	1.6	13,851	1.7

INCOME TAXES - Income taxes from continuing and discontinued operations (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Income from continuing operations	$ (338)	$ (4,947)	$ (1,128)

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

BUSINESS	12 Months Ended
BUSINESS	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BUSINESS	BUSINESS OrthoPediatrics Corp., a Delaware corporation, is a medical device company committed to designing, developing and marketing anatomically appropriate implants, instruments and specialized braces for children with orthopedic conditions, giving pediatric orthopedic surgeons and caregivers the ability to treat children with technologies specifically designed to meet their needs, including PediLoc®, PediPlates®, Cannulated Screws, PediFlexTM nail, PediNailTM, PediLoc® Tibia, ACL Reconstruction System, Locking Cannulated Blade, Locking Proximal Femur, Spica Tables, RESPONSETM Spine, BandLocTM, Pediatric Nailing Platform \| Femur, Devise Rail, Orthex®, The Fassier-Duval Telescopic Intramedullary System®, SLIMTM Nail, The GAP NailTM, The Free Gliding SCFE Screw SystemTM, GIROTM Growth Modulation System, PNP Tibia System, ApiFix® Mid-C System and Mitchell Ponseti® specialized bracing products to various hospitals and medical facilities throughout the United States and various international markets. We currently use a contract manufacturing model for the manufacturing of implants and related surgical instrumentation while our clubfoot orthopedic products are manufactured in-house. We are the only global medical device company focused exclusively on providing a comprehensive trauma and deformity correction, scoliosis and sports medicine product offering to the pediatric orthopedic market in order to improve the lives of children with orthopedic conditions. We design, develop and commercialize innovative orthopedic implants, instruments and braces to meet the specialized needs of pediatric surgeons and their patients, who we believe have been largely neglected by the orthopedic industry. We currently serve three of the largest categories in this market.

BUSINESS COMBINATIONS AND ASSET ACQUISITIONS

12 Months Ended

Dec. 31, 2023

Business Combination and Asset Acquisition [Abstract]

BUSINESS COMBINATION AND ASSET ACQUISITIONS

BUSINESS COMBINATIONS AND ASSET ACQUISITIONS

Rhino Pediatric Orthopedic Designs, Inc.

On July 1, 2023, the Company completed an acquisition of assets, including inventory and certain intangible assets, of Rhino Pediatric Orthopedic Designs, Inc. ("Rhino"). Rhino's product portfolio included several pediatric orthopedic products in the bracing and soft goods space, including the CruiserTM, KickerTM, and Rhino StomperTM. The Company paid $1,024 in total consideration for the assets which was comprised of $546 of cash, including $46 of transactions costs, and 11,133 shares of the Company’s common stock, par value $0.00025 per share, representing approximately $478 (based on closing price of $42.91 on July 1, 2023).

Medtech Concepts LLC

On May 1, 2023, the Company purchased all of the issued and outstanding membership interest of Medtech Concepts LLC, a Delaware limited liability company (“MedTech”). MedTech has developed an early-stage, pre-commercial enabling technology platform designed to increase efficiency in the perioperative environment. The solution combines hardware, software, and data analytics to help streamline operative care and support better decision making in the operating room. In the future, the Company believes this enabling technology platform will provide valuable intraoperative resources for surgeons that will improve decision making, drive operating room efficiency, and ultimately improve healthcare for children. The Company also expects that the acquisition will further support future market share gains for its implant systems, similar to what the Company has experienced with the FIREFLY® Technology and the 7D Surgical FLASHTM Navigation platform. No revenue was recorded from this platform in 2023.

The sellers of MedTech are being paid a purchase price of approximately $15,274 in the following manner: (i) cash in the aggregate amount of $3,000 was paid on May 1, 2023, the transaction closing date (the “Closing Date”); (ii) 43,751 unregistered shares of the Company’s common stock, par value $0.00025 per share, representing approximately $2,274 (based on a closing share price of $51.98 on May 1, 2023), were issued on the Closing Date; and (iii) an aggregate of $2,500 payable 50% in cash and 50% in shares of unregistered common stock, will be paid on each of the first four anniversaries of the Closing Date, all subject to the conditions set forth in the Membership Interest Purchase Agreement (as amended, the "Purchase Agreement") relating to the transaction.

The Company concluded that the business acquired did not comprise an integrated set of activities that meet the definition of a business and therefore did not result in the acquisition of a business. Instead, the Company accounted for the transaction as an asset acquisition for accounting purposes.

Under the Purchase Agreement, a number of future payments in the form of common stock are contingent on continued service through each applicable payment anniversary date. As such, these amounts have been excluded from measuring the cost of the acquisition. The result is $4,500 of stock compensation which will be recognized on a straight-line basis over the four-year service period. Future cash payments and stock issuances that are not contingent on continuous service are included in the calculation of consideration. The total consideration is $10,043 after discounting the future guaranteed fixed payments to their present value. Additionally, since this was treated as an asset acquisition, the Company included $97 of transaction costs in the total consideration. The table below reconciles the payments and issuances to total consideration transferred after discounting the future payments to present value.


	Consideration		Present Value
Cash consideration	$	3,000	$	3,000
Issuance of common stock	2,274		2,274
Anniversary payments	5,500		4,672
Transaction costs	97		97
Total consideration transferred	$	10,871	$	10,043

As result of this asset acquisition, the Company recorded a trademark asset in the amount of $520 with an indefinite useful life and an intellectual property asset relating to software acquired of $9,523 which will be amortized over a useful life of ten years.

Kevin Unger, a member of the Company’s Board of Directors (the “Board”) through April 28, 2023, was one of the sellers in the transaction. As a result, the Board formed a special committee comprised of independent and disinterested directors (the “Special Committee”) with the exclusive authority to review, evaluate, and negotiate, or reject, the potential MedTech acquisition. The Purchase Agreement and the transactions contemplated thereby were approved by both the Special Committee and the full Board (with Mr. Unger abstaining).

Pega Medical

On July 1, 2022, the Company purchased all of the issued and outstanding share capital of Pega Medical Inc., a corporation incorporated under the Canada Business Corporations Act (“Pega Medical”). Pega Medical has developed and sells a portfolio of trauma and deformity correction devices for children, including the Fassier-Duval Telescopic Intramedullary System, a well-recognized, innovative implant designed to treat bone deformities in children with osteogenesis imperfecta without disrupting their normal growth. Pega's product portfolio increases our total systems and increases the percentage of total trauma and deformity cases we can treat.

The Company acquired Pega Medical for approximately $32,042 in cash. Approximately $1,052 of the cash consideration was deposited into escrow and will be held for a period of up to eighteen (18) months to cover certain indemnification obligations of the selling shareholders of Pega Medical. Additionally, 34,899 shares of unregistered common stock, $0.00025 par value per share, of the Company, representing approximately $1,497 (based on the July 1, 2022 closing share price of $42.90) were issued to the selling shareholders. The common stock issued to the selling shareholders is not considered part of the purchase consideration and is subject to a repurchase right. The Company will recognize expense over the three-year service period at which point the right to repurchase will expire. In the event the repurchase right is triggered, the Company will have the right to repurchase the shares of common stock issued to such selling shareholder at a price of $0.10 per share. As of December 31, 2023, 13,851 of these shares were still subject to the repurchase feature. Pursuant to the terms of the transaction, the Company also issued $499 in restricted stock units to employees of Pega Medical, which are subject to an approximate three-year vesting schedule. The restricted stock units are not considered part of the purchase consideration. The Company incurred approximately $382 of acquisition-related costs that are included in general and administrative expenses on the consolidated statement of operations for the year ended December 31, 2022.

The following table summarizes the total consideration paid for Pega Medical and the final allocation of purchase price to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date:


Fair value of estimated total acquisition consideration	$	32,042
Assets
Cash	312
Accounts receivable - trade	2,100
Inventories	4,875
Prepaid expenses and other current assets	509
Property and equipment	600
Amortizable intangible assets	12,286
Other intangible assets	3,878
Total assets	24,560
Liabilities
Accounts payable-trade	1,682
Other current liabilities	1,393
Deferred tax liability	4,035
Total liabilities	7,110
Less: total net assets	17,450
Goodwill	$	14,592

The fair value of identifiable intangible assets was based on valuations using a combination of the income and cost approach, inputs which would be considered Level 3 under the fair value hierarchy. The estimated fair value and useful life of identifiable intangible assets are as follows:


	Amount		Remaining Economic Useful Life
Trademarks / Names	$	3,878	Indefinite
Patents	3,545		10 years

Customer Relationships & Other	8,741		15 years
	$	16,164

The fair value estimates and purchase price allocation included above are considered final. For the year ended December 31, 2023, the Company recorded measurement period adjustments. The adjustments were primarily the result of updated valuations of the intangible assets and updated estimates of certain liabilities and assets. The adjustment to the intangible assets also resulted in an adjustment to the deferred tax liability. Additionally, the increase in the value of intangible assets resulted in additional amortization expense of approximately $133 for the year ended December 31, 2023. Goodwill declined as a net result of these adjustments.

MD Orthopaedics

On April 1, 2022, OrthoPediatrics Iowa Holdco, Inc., a newly-formed, wholly-owned subsidiary of the Company, merged with and into MD Orthopaedics, Inc., an Iowa corporation (“MD Ortho”). MD Ortho has developed and manufactures a portfolio of orthopedic clubfoot products. The acquisition expands our total addressable market, serving as a specialty bracing platform company within our Trauma and Deformity business.

Under the terms of the related merger agreement, the Company paid to the indirect, sole shareholder of MD Ortho consideration of (a) $8,781 in cash, after adjusting for closing net working capital, and (b) 173,241 shares of unregistered common stock, $0.00025 par value per share, of the Company, representing approximately $9,707 (based on the April 1, 2022 closing share price of $56.03). The Company incurred approximately $381 of acquisition-related costs, that are included in general and administrative expenses on the consolidated statement of operations for the year ended December 31, 2022.

The following table summarizes the total consideration paid for MD Ortho and the final allocation of purchase price to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date:


Fair value of estimated total acquisition consideration	$	18,487
Assets
Cash	420
Accounts receivable - trade	1,062
Inventories	1,126
Prepaid expenses and other current assets	100
Property and equipment	2,444
Amortizable intangible assets	9,120
Other intangible assets	2,410
Total assets	16,682
Liabilities
Accounts payable and accrued liabilities	45
Other current liabilities	586
Deferred tax liability	3,014
Total liabilities	3,645
Less: total net assets	13,037
Goodwill	$	5,450

The fair value of identifiable intangible assets was based on final valuations using a combination of the income and cost approach, inputs which would be considered Level 3 under the fair value hierarchy. The estimated fair value and useful life of identifiable intangible assets are as follows:


	Amount		Remaining Economic Useful Life
Trademarks / Names	$	2,410	Indefinite
Patents	2,660		10 years
Customer Relationships	6,460		15 years
	$	11,530

The following table represents the pro forma net revenue and net income (loss) assuming the acquisitions of MD Ortho and Pega Medical occurred on January 1, 2021.


	December 31,
	2022		2021
Net revenue	$	128,648	$	113,899
Net income (loss)	$	2,110	$	(12,810)

Devise Ortho

On October 20, 2021, we purchased certain intellectual property assets from Devise Ortho, Inc. related to its Drive Rail external fixation system. We recorded $840 which will be amortized over the life of the patents, or approximately 16 years. In addition to the intellectual property, the Company purchased $108 of inventory from Devise Ortho, Inc. The total consideration of $948 was paid using $650 in cash and 4,599 shares of the Company's common stock, representing approximately $298 (based on the closing share price of $64.83 on October 20, 2021).

ApiFix

On April 1, 2020, the Company purchased all the issued and outstanding membership interest of ApiFix for $2,000 in cash, including $344 of cash acquired, 934,783 shares of the Company's common stock, $0.00025 par value per share, representing approximately $35,176 (based on a closing share price of $37.63 on April 1, 2020), approximately $30,000 in anniversary payments, and approximately $41,741 in a contingent system sales payment. ApiFix, a corporation organized under the laws of Israel, has developed a minimally invasive deformity correction system for patients with Adolescent Idiopathic Scoliosis ("ApiFix System").

The Company is obligated to make anniversary payments of: (i) approximately $13,000 on the second anniversary of the closing date, provided that such payment will be paid earlier if 150 clinical procedures using the ApiFix System are completed in the United States before such anniversary date, (ii) $8,000 on the third anniversary of the closing date; and (iii) $9,000 on the fourth anniversary of the closing date, subject to adjustments. The Company anticipates making the fourth anniversary payment of $9,000 on the anniversary date. In addition, to the extent that the product of our revenues from the ApiFix System for the twelve months ended March 31, 2024 multiplied by 2.25 exceeds the anniversary payments actually made for the third and fourth years, we have agreed to pay the selling shareholders a system sales payment in the amount of such excess. The anniversary payments and system sales payment may each be made in cash or cash and common stock, subject to certain limitations; provided that the Company makes the determination with respect to anniversary payments and a representative of the former ApiFix shareholders may make the determination with respect to the system sales payment, if any. Pursuant to the acquisition agreement, both the anniversary installments and the system sales payment require a minimum cash payment of 25 percent of the total amount due. The remaining 75 percent may be paid with common stock.

The fair value of the contingent consideration payment is considered a Level 3 fair value measurement and was determined with the assistance of an independent valuation specialist at the original issuance date using an option pricing model and a Monte Carlo simulation based on forecasted annual revenue, expected volatility and discount rates. The fair value of the payment will continue to be adjusted as additional information becomes available regarding the progress toward achievement of the revenue forecast. The adjustments in the fair value of the contingent consideration payment were recognized as income of $2,980, $25,930 and $1,800 for the years ended December 31, 2023, 2022 and 2021, respectively, within other (income) expenses on the consolidated statements of operations. An additional $970, $2,307 and $2,155 was recognized as interest expense for the

years ended December 31, 2023, 2022 and 2021, respectively, on the consolidated statements of operations for the accretion of the acquisition installment payable.

Presented below is a summary of the present value of the anniversary payments and fair value of the system sales payment related to the ApiFix acquisition:


	December 31, 2023		December 31, 2022
Anniversary Payments:

Third Year Payment	$	—	$	7,815
Fourth Year Payment	8,804		8,019
Total acquisition installment payable	8,804		15,834
Less: current portion of acquisition installment payable	8,804		7,815
Acquisition installment payable, net of current portion	—		8,019
System sales payment	—		2,980
ApiFix future consideration, net of current portion	$	—	$	10,999

Pre-acquisition revenues and earnings for ApiFix were not material to the consolidated operations.

SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Schedule of Activity in Allowance for Doubtful Accounts

The following table summarizes activity in our reserves recorded against accounts receivable:


	December 31,
	2023		2022		2021
Balance at beginning of year	$	1,056	$	347	$	433
Adjustments charged to expense (income)	499		723		(5)
Write-offs & other adjustments	182		174		81
Carrying amount as a result of acquisitions	—		160		—
Balance at end of year	$	1,373	$	1,056	$	347

Schedule of Property and Equipment, Depreciable Lives

Sample inventory is carried at cost less accumulated depreciation.

Depreciable lives are generally as follows:


Building and building improvements			25 to 30 years
Furniture and fixtures			5 to 7 years
Computer equipment			3 to 5 years
Business software			3 years
Office and other equipment			5 to 7 years
Instruments			5 years
Sample inventory			2 years

Property and equipment, net consisted of the following:


	December 31,
	2023		2022
Land	$	1,725	$	1,725
Building and building improvements	5,870		5,729
Computer equipment and software	5,828		3,319
Office and other equipment	5,821		4,328
Instruments	53,093		43,596
Sample inventory	2,780		2,674
Construction in progress	5,519		3,719
	80,636		65,090
Less: accumulated depreciation	(39,588)		(30,804)
Total property and equipment, net	$	41,048	$	34,286

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Benefit

Total income tax benefit for the years ended December 31, 2023, 2022 and 2021 was allocated as follows:


	2023		2022		2021


Total tax expense (benefit)	$	(338)	$	(4,947)	$	(1,128)

The components of income tax benefit for the years ended December 31, 2023, 2022 and 2021 are as follows:


	2023		2022		2021
Current:
Federal	$	—	$	—	$	—
State	85		68		—
Foreign	740		17		—
	825		85		—

Deferred:
Federal	$	—	$	—	$	—
State	—		—		—
Foreign	(1,163)		(2,018)		(1,128)


Decrease in valuation allowance	—		(3,014)		—
Total income tax expense (benefit)	$	(338)	$	(4,947)	$	(1,128)

Schedule of Income before Income Tax, Domestic and Foreign

For the years ended December 31, 2023, 2022 and 2021 loss before taxes of the Company consists of the following:


	2023		2022		2021
Domestic	$	(12,582)	$	6,451	$	(9,232)
Foreign	(8,730)		(10,140)		(8,156)
Total	$	(21,312)	$	(3,689)	$	(17,388)

Schedule of Reconciliation Between the Effective Tax Rate and the Statutory Tax Rate

The reconciliation between the effective tax rate and the statutory tax rate is as follows:


	December 31,
	2023		2022		2021
Federal statutory rate	21.0	%	21.0	%	21.0	%
State statutory rate, net of federal benefit	1.2	%	(6.3)	%	2.0	%
Effect of foreign rates different from statutory	0.2	%	6.4	%	(0.1)	%
Change in state rate	(0.3)	%	0.9	%	(1.3)	%
Excess tax benefits from stock plans	(0.2)	%	9.6	%	7.5	%
Nondeductible/nontaxable or other items	(3.3)	%	(22.1)	%	11.9	%
Unborn foreign tax deduction	(0.5)	%	6.8	%	(1.5)	%
US benefit of foreign branches	8.6	%	64.4	%	—	%
Nondeductible executive compensation	(1.0)	%	(4.4)	%	—	%
Change in valuation allowance	(24.1)	%	57.8	%	(33.1)	%
Income tax (expense) benefit	1.6	%	134.1	%	6.3	%

Schedule of Deferred Tax Assets and Liabilities

The deferred tax assets and liabilities consisted of the following at December 31, 2023 and 2022:


	2023		2022
Deferred tax assets:
Inventories, net	$	5,979	$	5,804
Stock based compensation	3,158		2,534
Loss carryforwards	42,199		38,443
Credit carryforwards	176		176
Interest carryforward	134		520

Other	1,122		787
Total deferred tax assets	52,768		48,264
Valuation allowance	(41,927)		(36,778)
Net deferred tax assets	10,841		11,486
Deferred tax liabilities:
Intangibles	(14,426)		(15,737)
Property, plant and equipment	(1,898)		(1,703)
Total deferred tax liabilities	(16,324)		(17,440)
Foreign currency translation impact	—		—
Deferred tax liabilities, net	$	(5,483)	$	(5,954)

INCOME TAXES - Deferred tax assets and liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Deferred tax assets:
Inventories, net	$ 5,979	$ 5,804
Stock based compensation	3,158	2,534
Loss carryforwards	42,199	38,443
Credit carryforwards	176	176
Interest carryforward	134	520
Other	1,122	787
Total deferred tax assets	52,768	48,264
Valuation allowance	(41,927)	(36,778)
Net deferred tax assets	10,841	11,486
Deferred tax liabilities:
Intangibles	(14,426)	(15,737)
Property, plant and equipment	(1,898)	(1,703)
Total deferred tax liabilities	(16,324)	(17,440)
Foreign currency translation impact	0	0
Deferred tax liabilities, net	$ (5,483)	$ (5,954)

SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment, net (Details)	Dec. 31, 2023
Building and building improvements \| Minimum
Property, Plant and Equipment
Depreciable lives (in years)	25 years
Building and building improvements \| Maximum
Property, Plant and Equipment
Depreciable lives (in years)	30 years
Furniture and fixtures \| Minimum
Property, Plant and Equipment
Depreciable lives (in years)	5 years
Furniture and fixtures \| Maximum
Property, Plant and Equipment
Depreciable lives (in years)	7 years
Computer equipment \| Minimum
Property, Plant and Equipment
Depreciable lives (in years)	3 years
Computer equipment \| Maximum
Property, Plant and Equipment
Depreciable lives (in years)	5 years
Business software
Property, Plant and Equipment
Depreciable lives (in years)	3 years
Office and other equipment \| Minimum
Property, Plant and Equipment
Depreciable lives (in years)	5 years
Office and other equipment \| Maximum
Property, Plant and Equipment
Depreciable lives (in years)	7 years
Instruments
Property, Plant and Equipment
Depreciable lives (in years)	5 years
Sample inventory
Property, Plant and Equipment
Depreciable lives (in years)	2 years

INCOME TAXES

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

Total income tax benefit for the years ended December 31, 2023, 2022 and 2021 was allocated as follows:


	2023		2022		2021


Total tax expense (benefit)	$	(338)	$	(4,947)	$	(1,128)

For the years ended December 31, 2023, 2022 and 2021 loss before taxes of the Company consists of the following:


	2023		2022		2021
Domestic	$	(12,582)	$	6,451	$	(9,232)
Foreign	(8,730)		(10,140)		(8,156)
Total	$	(21,312)	$	(3,689)	$	(17,388)

The components of income tax benefit for the years ended December 31, 2023, 2022 and 2021 are as follows:


	2023		2022		2021
Current:
Federal	$	—	$	—	$	—
State	85		68		—
Foreign	740		17		—
	825		85		—

Deferred:
Federal	$	—	$	—	$	—
State	—		—		—
Foreign	(1,163)		(2,018)		(1,128)


Decrease in valuation allowance	—		(3,014)		—
Total income tax expense (benefit)	$	(338)	$	(4,947)	$	(1,128)

The reconciliation between the effective tax rate and the statutory tax rate is as follows:


	December 31,
	2023		2022		2021
Federal statutory rate	21.0	%	21.0	%	21.0	%
State statutory rate, net of federal benefit	1.2	%	(6.3)	%	2.0	%
Effect of foreign rates different from statutory	0.2	%	6.4	%	(0.1)	%
Change in state rate	(0.3)	%	0.9	%	(1.3)	%
Excess tax benefits from stock plans	(0.2)	%	9.6	%	7.5	%
Nondeductible/nontaxable or other items	(3.3)	%	(22.1)	%	11.9	%
Unborn foreign tax deduction	(0.5)	%	6.8	%	(1.5)	%
US benefit of foreign branches	8.6	%	64.4	%	—	%
Nondeductible executive compensation	(1.0)	%	(4.4)	%	—	%
Change in valuation allowance	(24.1)	%	57.8	%	(33.1)	%
Income tax (expense) benefit	1.6	%	134.1	%	6.3	%

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. The primary temporary differences that give rise to the deferred tax assets and liabilities are certain inventory adjustments, depreciation and amortization, interest expense, stock based compensation and net operating loss carryforwards.

The deferred tax assets and liabilities consisted of the following at December 31, 2023 and 2022:


	2023		2022
Deferred tax assets:
Inventories, net	$	5,979	$	5,804
Stock based compensation	3,158		2,534
Loss carryforwards	42,199		38,443
Credit carryforwards	176		176
Interest carryforward	134		520

Other	1,122		787
Total deferred tax assets	52,768		48,264
Valuation allowance	(41,927)		(36,778)
Net deferred tax assets	10,841		11,486
Deferred tax liabilities:
Intangibles	(14,426)		(15,737)
Property, plant and equipment	(1,898)		(1,703)
Total deferred tax liabilities	(16,324)		(17,440)
Foreign currency translation impact	—		—
Deferred tax liabilities, net	$	(5,483)	$	(5,954)

The deferred tax assets were fully offset by a valuation allowance at December 31, 2023 and 2022, with the exception of certain deferred tax liabilities in Canada and Israel. The Company has recorded a tax benefit during the years ended December 31, 2023 and 2022, for losses generated in certain foreign jurisdictions.

As of December 31, 2023, we had available federal, state and foreign tax loss carryforwards of $118,930, $76,944 and $26,260, respectively. We had available federal tax credits of $176. Net operating losses ("NOLs") generated prior to December 31, 2017 will begin to expire in 2028. Federal net operating losses generated after January 1, 2018 will have an indefinite carryforward period. An ownership change under Section 382 of the Internal Revenue Code was deemed to occur on May 30, 2014. Given the limitation calculation, we anticipate approximately $23,920 in losses generated prior to the ownership change date will be subject to potential limitation. The estimated annual limitation is $1,062. A second ownership change under Section 382 was deemed to occur on December 11, 2018. The estimated annual limitation is $9,736, which is increased by $22,430 over the first five years as a result of an unrealized built in gain. NOLs sustained prior to May 30, 2014 will still be constricted by the lower limitation.

Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2023. Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth. As a result, a full valuation continues to be recorded against the Company's net deferred tax assets, with the exception of Canada and Israel.

We are subject to taxation in the United States, Indiana and various other state and international jurisdictions. As of December 31, 2023, all tax years from 2008 remain open to examination by the major taxing jurisdictions to which we are subject due to our net operating loss and credit carryforwards from those years. We believe that the income tax filing positions will be sustained on audit and do not anticipate any adjustments that will result in a material change. Therefore, no reserve for uncertain income tax positions has been recorded. Interest and penalties, if any, associated with income tax examinations will be recorded as a component of income taxes.

At December 31, 2023, our foreign operations held cash totaling $3,230. We have not provided for foreign withholding tax on the undistributed earnings from our non-U.S. subsidiaries that are considered to be indefinitely reinvested. If such earnings were to be distributed, any foreign withholding tax would not be significant.

- 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.

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+ Details

BUSINESS SEGMENT - Schedule of Revenue by Geographical Location (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Revenues from External Customers and Long-Lived Assets
Total	$ 148,732	$ 122,289	$ 98,049
U.S.
Revenues from External Customers and Long-Lived Assets
Total	111,010	92,419	77,781
International
Revenues from External Customers and Long-Lived Assets
Total	$ 37,722	$ 29,870	$ 20,268

- Definition

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

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+ Details

SIGNIFICANT ACCOUNTING POLICIES - Costs Related to Common Stock Offerings (Details) - Public Offering - Squadron - Common Stock shares in Thousands, $ in Thousands	Aug. 15, 2022 USD ($) shares
Class of Stock
Warrants and rights outstanding (shares) \| shares	1,525
Initial public offering costs, capitalized \| $	$ 293

- Definition

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

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-Paragraph 1
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+ Details

GOODWILL AND INTANGIBLE ASSETS - Schedule of Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Goodwill
Goodwill, beginning balance	$ 86,821	$ 72,349
Pega Medical measurement period adjustment	(1,936)	5,450
Pega acquisition		16,528
Foreign currency translation impact	(1,186)	(7,506)
Goodwill, ending balance	$ 83,699	$ 86,821

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

INCOME TAXES - Components of income from continuing operations before taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Domestic	$ (12,582)	$ 6,451	$ (9,232)
Foreign	(8,730)	(10,140)	(8,156)
Loss before income taxes	$ (21,312)	$ (3,689)	$ (17,388)

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

+ References

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+ Details

Audit Information	12 Months Ended
Audit Information	Dec. 31, 2023
Audit Information [Abstract]
Auditor Name	Deloitte & Touche LLP
Auditor Location	Indianapolis, Indiana
Auditor Firm ID	34

STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

STOCKHOLDERS' EQUITY

STOCKHOLDERS’ EQUITY

Prior to our IPO, we maintained the 2007 Plan that provides for grants of options and restricted stock to employees, directors and associated third-party representatives of our company as determined by the Board of Directors. The 2007 Plan had authorized 1,585,000 shares for award.

Immediately prior to our IPO, we adopted the 2017 Plan which replaced the 2007 Plan. The 2017 Plan provides for grants of options and restricted stock to officers, employees, consultants or directors of our Company. The 2017 Plan has authorized 1,832,460 shares for award. As of December 31, 2023, the 2017 Plan had 186,909 shares available for issuance.

Stock Options

The fair value for options granted at the time of issuance were estimated at the date of grant using a Black-Scholes options pricing model. Significant assumptions included in the option value model include the fair value of our common stock at the grant date, weighted average volatility, risk-free interest rate, dividend yield and the forfeiture rate. There were no stock options granted in any of the periods presented.

Our stock option activity and related information are summarized as follows:


	Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Terms (in Years)
Outstanding at January 1, 2021	12,802	$	30.97	1.6
Forfeited or expired	(1,742)	$	30.97
Exercised	(4,422)	$	30.97
Outstanding at December 31, 2021	6,638	$	30.97	1.3
Forfeited or expired	(1,072)	$	30.97
Exercised	(2,010)	$	30.97
Outstanding at December 31, 2022	3,556	$	30.97	0.7
Forfeited or expired	(2,886)	$	30.97
Exercised	(670)	$	30.97
Outstanding at December 31, 2023	—	$	—	—

Options generally include a time-based vesting schedule permitting the options to vest ratably over three years. At December 31, 2023 and 2022, all options were fully vested.

There was no stock-based compensation expense on stock options for all periods presented.

Restricted Stock

Our restricted stock activity and related information are summarized as follows:


	Restricted Stock Awards	Weighted-Average Remaining Contractual Terms (in Years)	Restricted Stock Units	Weighted-Average Remaining Contractual Terms (in Years)
Outstanding at January 1, 2021	436,730	1.1	—	—
Granted	114,256		—
Forfeited	(6,354)		—
Outstanding at Vested	(176,186)		—
Outstanding at December 31, 2021	368,446	1.1	—	—
Granted	216,881		11,634
Forfeited	(28,344)		(1,554)
Outstanding at Vested	(153,659)		—
Outstanding at December 31, 2022	403,324	1.4	10,080	2.5
Granted	311,689		4,005
Forfeited	(6,800)		(234)
Vested	(115,760)		—
Outstanding at December 31, 2023	592,453	1.6	13,851	1.7

At December 31, 2023, there was $14,150 of unrecognized compensation expense remaining related to our service-based restricted stock awards. The unrecognized compensation cost is expected to be recognized over a weighted average period of 1.6 years.

Stock-based compensation expense on restricted stock amounted to $10,526, $6,679 and $5,842 for the years ended December 31, 2023, 2022 and 2021, respectively, all of which is recorded within general and administrative expenses in the consolidated statements of operations.

Warrants

On August 15, 2022, the Company completed a public offering of securities that included the issuance and sale to Squadron of pre-funded warrants to purchase up to 1,525,000 shares of the Company’s common stock. The price per warrant was equal to the price per share at which common shares were concurrently sold to the public, minus $0.00025, which nominal amount was the exercise price of each warrant. The warrants issued to Squadron were exercised on September 20, 2022, following the expiration of all waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), that were applicable to Squadron as a result of

it beneficially owning shares of the Company’s common stock with a value in excess of the HSR Act notification threshold.

STOCKHOLDERS' EQUITY (Details)	Dec. 31, 2023 shares
2007 Plan
Share-based Compensation Arrangement by Share-based Payment Award
Shares available for award (in shares)	1,585,000
2017 Plan
Share-based Compensation Arrangement by Share-based Payment Award
Shares available for award (in shares)	1,832,460
Shares available for grant (in shares)	186,909

- Definition

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

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+ Details

FAIR VALUE OF FINANCIAL INSTRUMENTS - Fair Value Measurements of Contingent Consideration (Details) - Fair Value, Recurring - Level 3 - Discounted cash flow, Monte Carlo	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Expected Years	4 months 24 days	1 year 4 months 24 days	2 years 4 months 24 days
Present Value Discount Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Contingent consideration, measurement input	0.00%	16.60%	18.40%
Volatility factor
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Contingent consideration, measurement input	0.00%	48.00%	50.30%

BUSINESS SEGMENT - Schedule of Revenue by Category (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Segment Reporting Information
Total	$ 148,732	$ 122,289	$ 98,049
Trauma and deformity
Segment Reporting Information
Total	106,781	85,055	65,829
Scoliosis
Segment Reporting Information
Total	37,933	33,428	28,046
Sports medicine/other
Segment Reporting Information
Total	$ 4,018	$ 3,806	$ 4,174

- Definition

+ References

+ Details

SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Basis of Presentation

The accompanying consolidated financial statements include the accounts of OrthoPediatrics Corp. and its wholly-owned subsidiaries (collectively, the “Company,” “we,” “our” or “us”). All intercompany balances and transactions have been eliminated.

Use of Estimates

Preparation of our consolidated financial statements requires the use of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as of the date of the consolidated financial statements. By their nature, these judgments are subject to an inherent degree of uncertainty. We use historical experience and other assumptions as the basis for our judgments and estimates. Because future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Any changes in these estimates will be reflected in our consolidated financial statements.

Foreign Currency Transactions

We currently bill our international stocking distributors in U.S. dollars, resulting in minimal foreign exchange transaction expense.

Beginning in early 2017 and continuing through 2023, we expanded operations and established legal entities outside the United States, permitting us to sell under an agency model direct to local hospitals internationally. The countries we serve under the agency model include the United Kingdom, Ireland, Australia, New Zealand, Canada, Belgium, the Netherlands, Poland, Italy, Israel, Germany, Switzerland, and Austria. In order to further

enhance our operations in Europe, we established operating companies in the Netherlands and Germany in March 2019 and April 2022, respectively. In 2023, we hired operating and sales representatives in Germany to better serve our customers. The financial statements of our foreign subsidiaries are accounted for in local functional currencies and have been translated into U.S. dollars using end-of-period exchange rates for assets and liabilities and average exchange rates during each reporting period for results of operations. Foreign currency translation adjustments have been recorded as a separate component of the consolidated statements of comprehensive loss.

Fair Value of Financial Instruments

The accounting standards related to fair value measurements define fair value and provide a consistent framework for measuring fair value under the authoritative literature. Valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect market assumptions. This guidance only applies when other standards require or permit the fair value measurement of assets and liabilities. The guidance does not expand the use of fair value measurements. A fair value hierarchy was established, which prioritizes the inputs used in measuring fair value into three broad levels.

Level 1 – Quoted prices in active markets for identical assets or liabilities;

Level 2 – Observable market-based inputs or unobservable inputs that are corroborated by market data; and

Level 3 – Significant unobservable inputs that are not corroborated by market data. Generally, these fair value measures are model-based valuation techniques such as discounted cash flows, and are based on the best information available, including our own data.

The Company's financial instruments include cash, restricted cash, cash equivalents, short-term investments, accounts receivable, accounts payable, acquisition installment payables, contingent consideration and long-term debt. The carrying amounts of accounts receivable, accounts payable, acquisition installment payables and long-term debt approximate the fair value due to the short-term nature or market rates of these instruments. The company bases the fair value of short-term investments on quoted market prices for identical or comparable assets except for investments classified as asset backed securities or certificates of deposit which we identify as Level 2. These securities are predominately priced by third parties, either a pricing vendor or dealer. When a quoted price in an active market for an identical security is not available these third parties will utilize an alternative market approach, such as a recent trade or matrix pricing, or an income approach, such as a discounted cash flow pricing model that calculates values from observable inputs such as quoted interest rates, yield curves and other observable market information. Contingent consideration represents the system sales payment the Company is obligated to make. The fair value of the contingent consideration payment is considered a level 3 fair value measurement and was determined with the assistance of an independent valuation specialist at the original issuance date and as of the balance sheet date.

Revenue from Contracts with Customers

In accordance with ASC 606, "Revenue from Contracts with Customers," revenue is recognized when our performance obligations under the terms of a contract with our customer are satisfied. This typically occurs when we transfer control of our products to the customers, generally upon implantation or when title passes upon shipment. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods or services, and excludes any sales incentives or taxes collected from a customer which are subsequently remitted to government authorities.

Revenue Recognition – United States

Revenue in the United States is generated primarily from the sale of our implants, specialized braces and, to a much lesser extent, from the sale of our instruments. Sales of our implants and instruments in the United States are primarily to hospital accounts through independent sales agencies. Sales of our braces are primarily direct to hospital, orthotist or end customers. We recognize revenue when our performance obligations under the terms of a contract with our customer are satisfied. The implants and instruments are generally consigned to our independent sales agencies, and revenue is recognized when the products are used by or shipped to the hospital

for surgeries on a case by case basis. On rare occasions, hospitals purchase product for their own inventory, and revenue is recognized when the products are shipped and the title and risk of loss passes to the customer. Generally, we consider our performance obligation related to the sale of our braces to be settled upon shipment, and revenue is therefore recognized at that time.

Revenue Recognition – International

Outside of the United States, we sell our products, including our specialized braces, directly to hospitals through independent sales agencies or to independent stocking distributors. Generally, the distributors are allowed to return products, and some are thinly capitalized. Based on a history of reliable collections, we have concluded that a contract exists and revenue should be recognized when we transfer control of our products to the customer, generally when title passes upon shipment. Additionally, based on our history of immaterial returns from international customers, we have historically estimated no reserve for returns.

Beginning in early 2017 and continuing through 2023, we expanded operations and established legal entities outside the United States, permitting us to sell under an agency model direct to local hospitals internationally. The products are generally consigned to our independent sales agencies, and revenue is recognized when the products are used by or shipped to the hospital for surgeries on a case by case basis. On rare occasions, hospitals purchase products for their own inventory, and revenue is recognized when title passes upon shipment.

Cash, Cash Equivalents and Short Term Investments

We maintain cash in bank deposit accounts which, at times, may exceed federally insured limits. To date, we have not experienced any loss in such accounts. We consider all highly liquid investments with original maturity of three months or less at inception to be cash equivalents. The carrying amounts reported in the balance sheets for cash are valued at cost, which approximates fair value.

The Company invests in both certificate of deposits and available-for-sale short term investments. The Company has the ability, if necessary, to liquidate without penalty any of its short term investments to meet its liquidity needs in the next twelve months. As such, those investments with contractual maturities greater than one year from the date of purchase are classified as short-term on the accompanying Consolidated Balance Sheets. The Company includes unrealized gains or losses, as a component of other comprehensive income in stockholders' equity. If the adjustment to fair value reflects a decline in the value of the investment, the Company evaluates whether any impairment is a result of a credit loss or other factors. This evaluation includes, but is not limited to, significant quantitative and qualitative assessments and estimates regarding credit ratings, significance of a security's loss position, adverse conditions specifically related to the security, and the payment structure of the security. There were no such losses recognized in the accompanying Consolidated Statements of Operations. Additionally, the Company recognizes any previously unrealized gain or loss at the time the Company liquidates any of its investments based on the value at the time of liquidation. In 2023 and 2022, the Company recognized gains of $1,437 and $1,550, respectively, that were previously unrealized. No such gains or losses were recognized for the year ended December 31, 2021.

Restricted Cash

In conjunction with the sale of Vilex, $1,250 was placed into a separate escrow account. This cash is reported as restricted cash on the December 31, 2023 and 2022 Consolidated Balance Sheets. These funds were to remain restricted until August 31, 2021 at which time, they were to be released to the Company subject to no claims related to the purchase; however, due to the pending IMED Surgical litigation, the cash remains reported as restricted until the conclusion of the legal matter. See Note 15 - Commitments and Contingencies for further detail. The Company also maintains restricted cash of 650 Euro at its Netherlands entity for potential Italian tenders.

Accounts Receivable

Accounts receivable are uncollateralized customer obligations due under normal trade terms, generally requiring payment within 30 days from the invoice date in the United States and within 90 days internationally. Account balances with invoices over 30 or 90 days past due for domestic and international accounts, respectively, are considered delinquent. No interest is charged on past due accounts. Payments of accounts receivable are applied to the specific invoices identified on the customer's remittance advice or, if unspecified, to the customer's account as an unapplied credit.

The carrying amount of accounts receivable is reduced by an allowance that reflects management's best estimate of the amounts that will not be collected, determined principally on the basis of historical experience, management's assessment of the collectability of specific customer accounts and the aging of the accounts receivable. All accounts or portions thereof deemed to be uncollectible or to require an excessive collection cost are written off against the established reserve.

Inventories, net

Inventories are stated at the lower of cost or net realizable value, with cost determined using the first-in-first-out method. Inventories, which consist of implants and instruments held in our warehouse, with third-party independent sales agencies or distributors, or consigned directly with hospitals, are considered finished goods and are purchased from third parties.

We evaluate the carrying value of our inventories in relation to the estimated forecast of product demand, which takes into consideration the life cycle of the product. A significant decrease in demand could result in an increase in the amount of excess inventory on hand, which could lead to additional charges for excess and obsolete inventory.

The need to maintain substantial levels of inventory impacts our estimates for excess and obsolete inventory. Each of our implant systems are designed to include implantable products that come in different sizes and shapes to accommodate the surgeon’s needs. Typically, a small number of the set components are used in each surgical procedure. Certain components within each set may become obsolete before other components based on the usage patterns. We adjust inventory values, as needed, to reflect these usage patterns and life cycle.

In addition, we continue to introduce new products, which may require us to take additional charges for excess and obsolete inventory in the future.

Property and Equipment, net

Property and equipment are carried at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful life of the assets. When assets are retired or otherwise disposed of, costs and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in operations for the period. Maintenance and repairs that prolong or extend the useful life are capitalized, whereas standard maintenance, replacements, and repair costs are expensed as incurred.

Instruments are hand-held devices, specifically designed for use with our implants and are used by surgeons during surgery. Instruments deployed in the field are carried at cost less accumulated depreciation and are recorded in property and equipment, net on the consolidated balance sheets.

Sample inventory consists of our implants and instruments, and is maintained to market and promote our products. Sample inventory is carried at cost less accumulated depreciation.

Depreciable lives are generally as follows:


Building and building improvements			25 to 30 years
Furniture and fixtures			5 to 7 years
Computer equipment			3 to 5 years
Business software			3 years
Office and other equipment			5 to 7 years
Instruments			5 years
Sample inventory			2 years

Amortizable Intangible Assets, net

Amortizable intangible assets include fees necessary to secure various patents and licenses, including Band-Lok, the value of internally developed software, customer relationships, and non-competition agreements related to the acquisition of Orthex, and customer relationships and non-competition agreements related to the acquisitions of Telos, ApiFix, MD Ortho, Pega Medical, MedTech Concepts and Rhino. Amortization is calculated on a straight-line basis over the estimated useful life of the asset. Amortization for patents and licenses commences at the time of patent approval, and for licenses upon market launch, respectively. Amortization for assets acquired commences upon acquisition. Intangible assets are amortized over a 3 to 20 year period.

Amortizable intangible assets are assessed for impairment upon triggering events that indicate that the carrying value of an asset may not be recoverable. Recoverability is measured by a comparison of the carrying amount to future net undiscounted cash flows expected to be generated by the associated asset. If such assets are determined to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount exceeds the fair market value of the intangible assets.

Goodwill and Other Intangible Assets

Our goodwill represents the excess of the cost over the fair value of net assets acquired. The determination of the value of goodwill and intangible assets arising from acquisitions requires extensive use of accounting estimates and judgments to allocate the purchase price to the fair value of net tangible and intangible assets acquired. Goodwill is not amortized and is assessed for impairment using fair value measurement techniques on an annual basis or more frequently if facts and circumstances warrant such a review. Goodwill is tested at the reporting unit level as defined in the Glossary to ASC 350. Per this definition, a reporting unit is an operating segment or one level below an operating segment. The Company has determined the reporting units to be our legacy surgical implants unit and the bracing reporting unit established with the acquisition of MD Ortho. The goodwill is considered to be impaired if we determine that the carrying value of either of our reporting units exceeds its respective fair value. No impairment charges were recorded in any of the years presented.

The Company tests goodwill for impairment annually in the fourth quarter by either performing a qualitative evaluation or a quantitative test. The quantitative assessment for goodwill requires us to estimate the fair value of our two reporting units using either an income or market approach or a combination thereof.

We have indefinite lived trademark assets that are reviewed for impairment by performing a quantitative analysis, which occurs annually in the fourth quarter, utilizing balances as of October 1, or whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability is measured by a comparison of the carrying amount to future net discounted cash flows expected to be generated by the associated asset. If such assets are determined to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount exceeds the fair market value of the assets. The calculation of the fair value of the trademark assets involves Level 3 fair value measurements. To estimate the fair value of the trademark asset and associated impairment, we utilized the relief-from-royalty method, which is a form of the income approach. This approach requires us to make significant estimates and assumptions including preparation

of forecasted revenue, selection of a royalty rate and discount rate and estimate of the terminal year revenue growth rate.

Investments in Privately Held Companies

The Company determines whether its investments in privately held companies are debt or equity based on their characteristics. The Company also evaluates the investee to determine if the entity is a variable interest entity (“VIE”) and, if so, whether the Company is the primary beneficiary of the VIE, in order to determine whether consolidation of the VIE is required. If consolidation is not required and the Company does not have voting control of the entity, the investment is evaluated to determine if the equity method of accounting should be applied. The equity method applies to investments in common stock or in substance common stock where the Company exercises significant influence over the investee.

Investments in privately held companies determined to be equity securities are accounted for as non-marketable securities. The Company adjusts the carrying value of its non-marketable equity securities for changes from observable transactions for identical or similar investments of the same issuer, less impairment. All gains and losses on non-marketable equity securities, realized and unrealized, are recognized as a component of other (income) expenses in the consolidated statements of operations.

Investments in privately held companies determined to be debt securities are accounted for as available-for-sale or held-to-maturity securities unless the fair value option is elected.

Acquisition Payable and Contingent Consideration

Shipping and Handling Costs

Shipping and handling costs that are billed to the customer are included in net revenue and were $1,244, $1,027 and $803, for the years ended December 31, 2023, 2022 and 2021, respectively. Shipping and handling costs that are not billed to the customer are included in sales and marketing expenses and were $5,655, $4,270 and $2,899, for the years ended December 31, 2023, 2022 and 2021, respectively.

Cost of Revenue

Cost of revenue consists primarily of products purchased from third-party suppliers, excess and obsolete inventory adjustments, inbound freight, and royalties. Our implants and instruments are manufactured to our specifications by third-party suppliers who meet our manufacturer qualifications standards. Our third-party manufacturers are required to meet Food and Drug Administration (the “FDA”), International Organization for

Standardization and other country-specific quality standards. The majority of our implants and instruments are produced in the United States.

Sales and Marketing Expenses

Sales and marketing expenses primarily consist of commissions to our domestic and select international independent sales agencies and consignment distributors, as well as compensation, commissions, benefits and other related costs for personnel we employ. Commissions and bonuses are generally based on a percentage of sales. Our international independent stocking distributors purchase instrument sets and replenishment stock for resale, and we do not pay commissions or any other sales related costs for international sales to distributors.

Advertising Costs

Research and Development Costs

Research and development costs are expensed as incurred. Our research and development expenses primarily consist of costs associated with engineering, product development, consulting services, outside prototyping services, outside research activities, materials, development and protection of our intellectual property portfolio, as well as other costs associated with development of our products. Research and development costs also include related personnel and consultants’ compensation expense.

Stock-Based Compensation

Prior to our IPO, we maintained an Amended and Restated 2007 Equity Incentive Plan (the “2007 Plan”) that provides for grants of options and restricted stock to employees, directors and associated third-party representatives of our company as determined by the Board of Directors. The 2007 Plan had authorized 1,585,000 shares for award.

Immediately prior to our IPO, we adopted our 2017 Incentive Award Plan (the “2017 Plan”) which replaced the 2007 Plan. The 2017 Plan provides for grants of options and restricted stock to officers, employees, consultants or directors of our Company. The 2017 Plan has authorized 1,832,460 shares for award.

Options holders, upon vesting, may purchase common stock at the exercise price, which is the estimated fair value of our common stock on the date of grant. Option grants generally vest immediately or over a three-year period. No stock options were granted in any of the periods presented.

Restricted stock may not be transferred prior to the expiration of the restricted period. The restricted stock that has been granted under the 2007 Plan has restriction periods that generally last until the earlier of six years from the date of grant, or an initial public offering or change in control, as defined in the 2007 Plan. All restricted stock granted prior to May 2014 vested upon our IPO and the remaining grants under the 2007 Plan vested in April 2018. Generally under the 2017 plan, restricted stock vests at the end of a three-year period. We have elected to recognize the reversal of stock compensation expense when a restricted stock forfeiture occurs as opposed to estimating future forfeitures.

We record the fair value of restricted stock at the grant date. Stock-based compensation is recognized ratably over the requisite service period, which is generally the restriction period for restricted stock.

Comprehensive Loss

Comprehensive loss is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. Comprehensive loss includes foreign currency translation adjustments and unrealized gains (losses) on marketable securities.

Income Taxes

We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, we determine deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

We recognize deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the valuation allowance.

We record uncertain tax positions on the bases of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the positions and (2) for those tax positions that do not meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority.

Litigation and Contingencies

Accruals for litigation and contingencies are reflected in the consolidated financial statements based on

management’s assessment, including advice of legal counsel, of the expected outcome of litigation or other dispute resolution proceedings and/or the expected resolution of contingencies. Liabilities for estimated losses are accrued if the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated. Significant judgment is required in both the determination of probability of loss and the determination as to whether the amount is reasonably estimable. Accruals are based only on information available at the time of the assessment due to the uncertain nature of such matters. As additional information becomes available, management reassesses potential liabilities related to pending claims and litigation and may revise its previous estimates, which could materially affect the Company’s results of operations in a given period.

Debt Issuance Costs

Debt issuance costs are deferred and presented as a reduction to long-term debt. Debt issuance costs are amortized using the effective interest rate method over the term of the loan. Amortization of deferred debt issuance costs are included within interest (income) expense, net in the consolidated statements of operations.

Leases

At the inception of a contractual arrangement, the Company determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. If both criteria are met, the Company calculates the associated lease liability and corresponding right-of-use asset upon lease commencement using a discount rate based on a borrowing rate commensurate with the term of the lease.

The Company records lease liabilities within current liabilities or long-term liabilities based upon the length of time associated with the lease payments. The Company records its operating lease right-of-use assets within other non-current assets.

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13 "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments". The ASU is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The ASU requires the measurement of all expected credit losses for financials assets including trade receivables held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. The Company adopted ASU 2016-16 effective January 1, 2023. The adoption is on a prospective basis and did not have a significant impact on the Company's consolidated financial statements and related disclosures.

In October 2021, the FASB issued ASU No. 2021-08 "Business Combinations (Topic 805)-Accounting for Contract Assets and Contract Liabilities from Contracts with Customers". The amendments in this Update address diversity and inconsistency related to the recognition and measurement of contract assets and contract liabilities acquired in a business combination. The amendments in this Update require that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The amendments in this Update should be applied prospectively to business combinations occurring on or after the effective date of the amendments. Early adoption of the amendments is permitted, including adoption in an interim period. An entity that early adopts in an interim period should apply the amendments (1) retrospectively to all business combinations for which the acquisition date occurs on or after the beginning of the fiscal year that includes the interim period of early application and (2) prospectively to all business combinations that occur on or after the date of initial application. The Company adopted ASU 2021-08 effective January 1, 2023. The adoption will be applied prospectively to business combinations that occur after January 1, 2023, resulting in no material impacts to the consolidated financial statements.

In October 2023, the FASB issued ASU No. 2023-06 "Disclosure Improvements - Codification Amendments in Response to SEC's Disclosure Update and Simplification Initiative." This amendment modifies the disclosure or presentation requirements of a variety of Topics in the Codification. Certain of the amendments represent clarifications to or technical corrections of the current requirements. For entities subject to the SEC's existing disclosure requirements and entities required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be the date on which the SEC's removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. For all other entities, the amendments will be effective two years later. Amendments in this Update should be applied prospectively. The Company continues to analyze this ASU. The update is specific to disclosures and, therefore, is not expected to have a material impact to the consolidated financial statements.

In November 2023, the FASB issued ASU No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." The standard requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM") and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items to reconcile to segment profit or loss, and the title and position of the entity's CODM. The amendments in this update also expand the interim segment disclosure requirements. This authoritative guidance will be effective for us in fiscal 2025 for annual periods and in the first quarter of fiscal 2026 for interim periods, with early adoption permitted. We are currently evaluating the effect of this new guidance on our consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" (ASU 2023-09), which enhances the transparency and decision usefulness of income tax disclosures. The ASU is effective for public companies for fiscal years beginning on or after December 15, 2024, with early adoption permitted. The amendments in ASU 2023-09 should be applied on a prospective basis. Retrospective application is permitted. We are currently evaluating the effect of this new guidance on our consolidated financial statements and disclosures.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Statement of Comprehensive Income [Abstract]
Net (loss) income	$ (20,974)	$ 1,258	$ (16,260)
Other comprehensive (loss) income:
Foreign currency translation adjustment	(1,631)	(14,570)	1,157
Unrealized gain (loss) on short-term investments	68	(871)	(573)
Adjustment for realized gain on securities	1,437	1,550	0
Other comprehensive (loss) income, net of tax	(126)	(13,891)	584
Comprehensive loss	$ (21,100)	$ (12,633)	$ (15,676)

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 29: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
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Reference 30: http://www.xbrl.org/2003/role/disclosureRef
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Reference 31: http://www.xbrl.org/2003/role/disclosureRef
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Reference 34: http://www.xbrl.org/2003/role/disclosureRef
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Reference 36: http://www.xbrl.org/2003/role/disclosureRef
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Reference 37: http://www.xbrl.org/2003/role/disclosureRef
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Reference 38: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 39: http://fasb.org/us-gaap/role/ref/legacyRef
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+ Details

PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment
Property and equipment, gross	$ 80,636	$ 65,090
Less: accumulated depreciation	(39,588)	(30,804)
Total property and equipment, net	41,048	34,286
Land
Property, Plant and Equipment
Property and equipment, gross	1,725	1,725
Building and building improvements
Property, Plant and Equipment
Property and equipment, gross	5,870	5,729
Computer equipment and software
Property, Plant and Equipment
Property and equipment, gross	5,828	3,319
Office and other equipment
Property, Plant and Equipment
Property and equipment, gross	5,821	4,328
Instruments
Property, Plant and Equipment
Property and equipment, gross	53,093	43,596
Sample inventory
Property, Plant and Equipment
Property and equipment, gross	2,780	2,674
Construction in progress
Property, Plant and Equipment
Property and equipment, gross	$ 5,519	$ 3,719

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 1,373	$ 1,056
Common stock, par value (in dollars per share)	$ 0.00025	$ 0.00025
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	23,378,408	22,877,962
Common stock, shares outstanding (in shares)	23,378,408	22,877,962

NET (LOSS) EARNINGS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Schedule of Reconciliation of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders

The following is a reconciliation of basic and diluted net (loss) earnings per share attributable to common stockholders:


	Year Ended December 31,
	2023		2022		2021
Net (loss) income	$	(20,974)	$	1,258	$	(16,260)
Less: Earnings allocated to participating securities	—		23		—
Net (loss) income available to common shareholders	$	(20,974)	$	1,235	$	(16,260)

Denominator for basic and diluted net (loss) income per share
Weighted average shares outstanding for basic	22,675,477		20,704,556		19,268,255
Weighted average shares outstanding for diluted	22,675,477		20,947,727		19,268,255

(Loss) earnings per share:
Basic	$	(0.92)	$	0.06	$	(0.84)
Diluted	$	(0.92)	$	0.06	$	(0.84)

Schedule of Antidilutive Shares Excluded from the Calculation of Diluted Net Loss Per Share

The following table shows the contingently issuable and convertible equity shares that were excluded from the calculation of diluted net earnings (loss) per share because their effect would have been anti-dilutive:


	Year Ended December 31,
	2023	2022	2021


Restricted stock	606,304	413,404	368,446
Stock options	—	3,556	6,638

	606,304	416,960	375,084

RELATED PARTY TRANSACTIONS	12 Months Ended
RELATED PARTY TRANSACTIONS	Dec. 31, 2023
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	RELATED PARTY TRANSACTIONSIn addition to the expired debt and credit agreements and mortgage with Squadron and its affiliate (refer to Note 8), we currently use Structure Medical, LLC (“Structure Medical”) as one of our suppliers. Structure Medical is affiliated with Squadron and a supplier with which we maintain certain long-term agreements. Our aggregate payments to Structure Medical for inventory purchases were $1,060, $956 and $750 for the years ended December 31, 2023, 2022 and 2021, respectively.

- Definition

The entire disclosure for related party transactions. 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/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Name Accounting Standards Codification
-Section 50
-Paragraph 5
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-URI https://asc.fasb.org//1943274/2147480990/946-20-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Section 50
-Paragraph 6
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-URI https://asc.fasb.org//1943274/2147480990/946-20-50-6

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Section 50
-Paragraph 2
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(g)(3))
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Name Accounting Standards Codification
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-Paragraph 1
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(e))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
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-Publisher FASB
-URI https://asc.fasb.org//850/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
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-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-6

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
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-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

+ Details

PROPERTY AND EQUIPMENT, NET - Deprecation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 10,236	$ 7,121	$ 6,148

SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

We have prepared the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements have been prepared assuming our Company will continue as a going concern. We have experienced recurring losses from operations since our inception and had an accumulated deficit of $197,742 and $176,768 as of December 31, 2023 and 2022, respectively.

Use of Estimates

Foreign Currency Transactions

We currently bill our international stocking distributors in U.S. dollars, resulting in minimal foreign exchange transaction expense.

Fair Value of Financial Instruments

Level 1 – Quoted prices in active markets for identical assets or liabilities;

Level 2 – Observable market-based inputs or unobservable inputs that are corroborated by market data; and

Revenue from Contracts with Customers

Revenue Recognition – United States

Revenue Recognition – International

Beginning in early 2017 and continuing through 2023, we expanded operations and established legal entities outside the United States, permitting us to sell under an agency model direct to local hospitals internationally. The products are generally consigned to our independent sales agencies, and revenue is recognized when the products are used by or shipped to the hospital for surgeries on a case by case basis. On rare occasions, hospitals purchase products for their own inventory, and revenue is recognized when title passes upon shipment.

Cash, Cash Equivalents and Short Term Investments

Restricted Cash

Accounts Receivable

The following table summarizes activity in our reserves recorded against accounts receivable:


	December 31,
	2023		2022		2021
Balance at beginning of year	$	1,056	$	347	$	433
Adjustments charged to expense (income)	499		723		(5)
Write-offs & other adjustments	182		174		81
Carrying amount as a result of acquisitions	—		160		—
Balance at end of year	$	1,373	$	1,056	$	347

Inventories, net

In addition, we continue to introduce new products, which may require us to take additional charges for excess and obsolete inventory in the future.

Charges for excess and obsolete inventory are included in cost of revenue and were $995, $1,011 and $1,100 for the years ended December 31, 2023, 2022 and 2021, respectively.

Costs Related to Common Stock Offerings

On August 15, 2022, we completed a public offering of our common stock and pre-funded warrants exercisable for an aggregate of up to 1,525,000 shares of common stock to Squadron Capital LLC (“Squadron”), our largest investor. Offering expenses of $293, primarily consisting of legal, accounting and other direct fees and costs related to the offering were recorded in stockholders' equity at the conclusion of our offering.

Property and Equipment, net

Sample inventory consists of our implants and instruments, and is maintained to market and promote our products. Sample inventory is carried at cost less accumulated depreciation.

Depreciable lives are generally as follows:


Building and building improvements			25 to 30 years
Furniture and fixtures			5 to 7 years
Computer equipment			3 to 5 years
Business software			3 years
Office and other equipment			5 to 7 years
Instruments			5 years
Sample inventory			2 years

Amortizable Intangible Assets, net

Goodwill and Other Intangible Assets

of forecasted revenue, selection of a royalty rate and discount rate and estimate of the terminal year revenue growth rate.

During 2023 and 2022, management determined that a triggering event occurred, indicating that it was more likely than not the fair value of the ApiFix trademark asset was less than the carrying value. As such, the company completed a quantitative analysis whereby we determined the fair value of the ApiFix trademark asset associated was below the carrying value. The primary reason for the impairment is the lower forecasted revenue of our ApiFix product than previously expected. We recorded a $985 and $3,609 impairment charge for the years ended December 31, 2023 and 2022, respectively, to reduce the carrying amount of the intangible asset to its estimated fair value. No impairment charges were recorded in any of the other periods presented or for any other indefinite lived trademark assets.

Investments in Privately Held Companies

Investments in privately held companies determined to be debt securities are accounted for as available-for-sale or held-to-maturity securities unless the fair value option is elected. The Company has investments of $1,855 as of December 31, 2023 which are recorded within other non-current assets on its consolidated balance sheet.

Acquisition Payable and Contingent Consideration

Upon the completion of an acquisition the Company may record an acquisition installment payable, contingent consideration or both. Both are recorded at their fair values as determined by management with the assistance of an independent valuation specialist at the original issuance date and are adjusted on a recurring basis. Accretion of interest expense attributable to the acquisition installment payable are recorded as a component of interest (income) expense, net. Changes in the fair value of the contingent consideration are included in fair value adjustments of contingent consideration. Both are included as a component of other (income) expenses on the consolidated statement of operations. The amount of expense recorded was $1,372, $2,307 and $2,155 for the years ended December 31, 2023, 2022 and 2021, respectively. Adjustments in the fair value of the contingent consideration payment were recognized as income of $2,980, $25,930 and $1,800 for the years ended December 31, 2023, 2022 and 2021, respectively.

Shipping and Handling Costs

Cost of Revenue

Standardization and other country-specific quality standards. The majority of our implants and instruments are produced in the United States.

Sales and Marketing Expenses

Advertising Costs

Advertising costs consist primarily of print advertising, trade shows, and other related expenses. Advertising costs are expensed as incurred and are recorded as a component of sales and marketing expense. Advertising costs were $2,409, $1,906 and $898 for the years ended December 31, 2023, 2022 and 2021, respectively.

Research and Development Costs

Stock-Based Compensation

Foundation for Advancing Pediatric Orthopedics

The Company may periodically make contributions to the Foundation for Advancing Pediatric Orthopedics (the "Foundation"). The Foundation was incorporated in 2018 exclusively for pediatric orthopedic research and education and qualifies under IRC 501(c)(3) as an exempt private foundation. The mission of the Foundation is to enhance the knowledge and experience, through education and research, of surgical trainees or practicing surgeons who are involved in helping children with orthopaedic disorders and injuries. The Foundation is a separate legal entity and is not a subsidiary of the Company; therefore, its results are not included in these

consolidated financial statements. The Company contributed $286, $524 and $88 to the Foundation during the years ended December 31, 2023, 2022 and 2021, respectively. These contributions were recorded in general and administrative expenses.

Comprehensive Loss

Income Taxes

Litigation and Contingencies

Accruals for litigation and contingencies are reflected in the consolidated financial statements based on

Debt Issuance Costs

Leases

Recent Accounting Pronouncements

STOCKHOLDERS' EQUITY - Stock Options (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award
Options, granted (in shares)	0	0	0
Options
Exercised (in shares)	(670)	(2,010)	(4,422)
Weighted-Average Remaining Contractual Terms (in Years)
Vesting period (in years)	3 years
Stock options
Share-based Compensation Arrangement by Share-based Payment Award
Options, granted (in shares)	0	0	0
Options
Outstanding at period start (in shares)	3,556	6,638	12,802
Forfeited or expired (in shares)	(2,886)	(1,072)	(1,742)
Outstanding at period end (in shares)	0	3,556	6,638	12,802
Weighted-Average Exercise Price
Outstanding at period start, weighted-average exercise price (in dollars per share)	$ 30.97	$ 30.97	$ 30.97
Forfeited or expired, weighted-average exercise price (in dollars per share)	30.97	30.97	30.97
Exercised (in dollars per share)	30.97	30.97	30.97
Outstanding at period end, weighted-average exercise price (in dollars per share)	$ 0	$ 30.97	$ 30.97	$ 30.97
Weighted-Average Remaining Contractual Terms (in Years)
Weighted-average remaining contractual terms (in years)		8 months 12 days	1 year 3 months 18 days	1 year 7 months 6 days
Vesting period (in years)	3 years	3 years
Stock-based compensation expense	$ 0	$ 0	$ 0

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Fair Value Disclosures [Abstract]
Fair value adjustment of contingent consideration	$ (2,980)	$ (25,930)	$ (1,800)

NET (LOSS) EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

NET (LOSS) EARNINGS PER SHARE

The following is a reconciliation of basic and diluted net (loss) earnings per share attributable to common stockholders:


	Year Ended December 31,
	2023		2022		2021
Net (loss) income	$	(20,974)	$	1,258	$	(16,260)
Less: Earnings allocated to participating securities	—		23		—
Net (loss) income available to common shareholders	$	(20,974)	$	1,235	$	(16,260)

Denominator for basic and diluted net (loss) income per share
Weighted average shares outstanding for basic	22,675,477		20,704,556		19,268,255
Weighted average shares outstanding for diluted	22,675,477		20,947,727		19,268,255

(Loss) earnings per share:
Basic	$	(0.92)	$	0.06	$	(0.84)
Diluted	$	(0.92)	$	0.06	$	(0.84)

Our basic and diluted net income (loss) per share is computed using the two-class method. The two-class method is an earnings allocation that determines net income per share for each class of common stock and participating securities according to their participation rights in dividends and undistributed earnings or losses. Non-vested restricted stock that includes non-forfeitable rights to dividends are considered participating securities.

For the periods presented with a net loss the weighted average shares outstanding remains consistent between basic and diluted as the effect would have been anti-dilutive.


	Year Ended December 31,
	2023	2022	2021


Restricted stock	606,304	413,404	368,446
Stock options	—	3,556	6,638

	606,304	416,960	375,084

The contingently issuable shares in the table above do not include shares of our common stock associated with our obligation to issue a variable number of our common shares as a result of our recent acquisitions of Pega Medical, ApiFix or MedTech. See Note 3 for additional information regarding our commitment to issue future equity under each of these acquisitions.

SUBSEQUENT EVENTS	12 Months Ended
SUBSEQUENT EVENTS	Dec. 31, 2023
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTS On January 5, 2024, the Company entered into a stock purchase agreement with Boston Brace International, Inc., a Massachusetts corporation, the shareholders of Boston Brace (collectively, the “Sellers”), and the Sellers’ representative named therein, pursuant to which the Company acquired all of the issued and outstanding shares of capital stock of Boston Brace from the Sellers. Boston Brace has developed and manufactures pediatric orthotic and prosthetic devices, including non-surgical scoliosis treatment options, and provides related clinical services. Under the terms of the Purchase Agreement, the Company paid to the Sellers consideration of $22 million in cash, subject to customary adjustments related to net working capital, transaction expenses, and funded indebtedness. Certain employees and executives of Boston Brace also received awards of restricted stock of the Company which will vest in three years. The Restricted Stock Award Agreements were to approximately 170 individuals for an aggregate of approximately 83,000 shares representing approximately $2.5 million (based on a share price of $30.12, which was the average closing price during the four-month period ending on January 4, 2024) and were granted pursuant to the Company’s 2017 Plan.

SIGNIFICANT ACCOUNTING POLICIES - Acquisition Payable and Contingent Consideration (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Accounting Policies [Abstract]
Contingent consideration, accretion expense	$ 1,372		$ 2,155
Fair value adjustment of contingent consideration	$ (2,980)	$ (25,930)	$ (1,800)

GOODWILL AND INTANGIBLE ASSETS - Future Amortization Expense (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Year Ending December 31:
2024	$ 7,577
2025	7,379
2026	7,339
2027	6,908
2028	6,281
Thereafter	33,791
Net Intangible Assets	$ 69,275	$ 64,980

DEBT AND CREDIT ARRANGEMENTS

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

DEBT AND CREDIT ARRANGEMENTS

Long-term debt consisted of the following:


	December 31,
	2023		2022
Term loan and Final Payment	$	10,300	$	—

Mortgage payable to affiliate	763		907
Total debt	11,063		907
Less: debt discount and issuance costs	1,003		—
Less: current maturities	152		144
Long-term debt, net of current maturities	$	9,908	$	763

On December 29, 2023, the Company entered into a $80 million Credit, Security and Guaranty Agreement (the “Credit Agreement”) by and among (i) the Company and other borrowers party to the Credit Agreement (collectively, the “Borrowers”), (ii) MidCap Funding IV Trust, as Agent (“Agent”), (iii) MidCap Financial Trust, as Term Loan Servicer (“Servicer”), and (iv) the financial institutions or other entities from time to time party thereto as Lenders (collectively, “Lenders”). Under the terms of the Credit Agreement, the Lenders have provided to Borrowers a term loan in an aggregate principal amount that will not exceed $30 million available in three tranches of $10 million each subject to certain draw conditions (the “Term Loan”) and a revolving loan in an aggregate principal amount that will not exceed $50 million (the “Revolving Loan”). Borrowings are available subject to certain levels of working capital for the Revolving Loan. The second tranche of the Term Loan is eligible to be drawn between July 1, 2024 through June 30, 2025. The third tranche of the Term Loan is eligible to be drawn between January 1, 2025 through June 30, 2025. The Company must meet certain cash usage requirements at the time of each draw to be eligible to access these term loans. Interest on the Term Loan will accrue at the greater of (a) One Month Term SOFR plus 6.50% or (b) 9.0% and interest on the Revolving Loan will accrue at the greater of (a) One Month Term SOFR plus 4.0% or (b) 6.50% (the “Applicable Rate”) and will be payable monthly by the Borrowers. The Term Loans may be prepaid in full through December 29, 2024 with payment of a 3.00% prepayment premium, after which they may be prepaid in full through December 29, 2025 with payment of a 2.00% prepayment premium, after which they may be prepaid in full through December 29, 2026 with payment of a 1.00% prepayment premium, after which they may be prepaid in full with no prepayment premium. An additional final payment of 3.00% ("Final Payment") of the amount of the Terms Loans advanced by the Lenders will be due upon prepayment or repayment of the Terms Loans in full, and is accounted for as debt discount. The first tranche of $10 million was issued under the Term Loan upon execution. Payments of principal and all accrued but unpaid interest will be due and payable upon the earlier of: (i) December 1, 2028; (ii) the occurrence of any transaction or series of transactions pursuant to which any person or entity in the aggregate acquire(s) 35% or more of the voting capital stock of the Company; (iii) a change in the majority of the Company’s Board of Directors over a 12-month period; (iv) the Company ceases to own directly or indirectly, 100% of the capital stock of any of its subsidiaries (with the exception of any subsidiaries permitted to be dissolved, merged or otherwise disposed of by the Credit Agreement), or (v) the occurrence of a change in control, fundamental change, deemed liquidation event or terms of similar import under any document or instrument governing or relating to debt of or equity interests of Company. The loans under the Credit Agreement are secured by a security interest in the Company’s and other Borrowers' assets. The Credit Agreement provides for customary events of default. If an event of default is not cured within the time periods specified (if any), the Lenders and Agent have the right to accelerate the Company’s payment of principal and interest in addition to other rights and remedies.

The Credit Agreement includes certain customary non-financial covenants, and also include certain financial covenants related to the Company achieving minimum revenue targets over a trailing twelve month period. The Company was in compliance with all covenants under the Credit Agreement as of December 31, 2023.

The debt facilities available under the Credit Agreement replace the Fourth Amended and Restated Loan and Security Agreement with Squadron (as amended, the “Squadron Loan Agreement”), which provided the Company with a $50 million revolving credit facility. During the year ended December 31, 2023 and as of December 31, 2022, there was no indebtedness outstanding under the Squadron Loan Agreement and it was terminated in connection with the Credit Agreement.

Borrowings under the Squadron Loan Agreement accrued interest at an annual rate equal to the greater of (a) six month SOFR plus 8.69% and (b) 10.0%, and the Company was permitted to make interest only payments on

amounts outstanding. Prior to December 31, 2021, the interest rate on the facility had been equal to the greater of (a) three month LIBOR plus 8.61% and (b) 10.0%. The Company paid Squadron an unused commitment fee in an amount equal to the per annum rate of 0.50% (computed on the basis of a year of 360 days and the actual number of days elapsed) times the daily unused portion of the revolving credit commitment. The unused commitment fee was payable quarterly in arrears.

Borrowings under the Squadron Loan Agreement were made under a Second Amended and Restated Revolving Note, dated June 13, 2022 (the “Amended Revolving Note”), payable, jointly and severally, by the Company and each of its subsidiaries party thereto. The Amended Revolving Note matured at the earlier of: (i) the date on which any person or persons acquire (x) capital stock of the Company possessing the voting power to elect a majority of the Company’s Board of Directors (whether by merger, consolidation, reorganization, combination, sale or transfer), or (y) all or substantially all of the Company’s assets, determined on a consolidated basis; and (ii) January 1, 2024.

Borrowings under the Squadron Loan Agreement were secured by substantially all of the Company's assets and were unconditionally guaranteed by each of its subsidiaries with the exception of Vilex. There were no traditional financial covenants associated with the Squadron Loan Agreement. However, there were negative covenants that prohibited us from, among other things, transferring any of our material assets, merging with or acquiring another entity, entering into a transaction that would result in a change of control, incurring additional indebtedness, creating any lien on our property, making investments in third parties and redeeming stock or paying dividends, in each case subject to certain exceptions.

In connection with the purchase of our office and warehouse space in Warsaw, Indiana in August 2013, we entered into a mortgage note payable to Tawani Enterprises Inc., an affiliate of Squadron. Pursuant to the terms of the mortgage note, we pay Tawani Enterprises Inc. monthly principal and interest installments of $16 with interest compounded at 5% until maturity in 2028, at which time a final payment of remaining principal and interest is due. The mortgage is secured by the related real estate and building. As of December 31, 2023 and 2022, the mortgage balance was $763 and $907, respectively, of which current principal due of $152 and $144, respectively, was included in current portion of long-term debt.

At December 31, 2023, the aggregate future principal payments on our debt arrangements, including the Final Payment, are as follows:


2024	$	152
2025	160
2026	168
2027	176
2028	10,407
Thereafter	—
	$	11,063

Interest expense relating to notes payable to Squadron and mortgage note payable with Tawani was $42, $525 and $56 for the years ended December 31, 2023, 2022 and 2021, respectively.

- 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

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

INCOME TAXES - Reconciliation between the effective tax rate and the statutory tax rate (Details)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Federal statutory rate	21.00%	21.00%	21.00%
State statutory rate, net of federal benefit	1.20%	(6.30%)	2.00%
Effect of foreign rates different from statutory	0.20%	6.40%	(0.10%)
Change in state rate	(0.30%)	0.90%	(1.30%)
Excess tax benefits from stock plans	(0.20%)	9.60%	7.50%
Nondeductible/nontaxable or other items	(3.30%)	(22.10%)	11.90%
Unborn foreign tax deduction	(0.50%)	6.80%	(1.50%)
US benefit of foreign branches	8.60%	64.40%	0.00%
Nondeductible executive compensation	(1.00%)	(4.40%)	0.00%
Change in valuation allowance	(24.10%)	57.80%	(33.10%)
Income tax (expense) benefit	1.60%	134.10%	6.30%

BUSINESS COMBINATIONS AND ASSET ACQUISITIONS - Summary of the Present Value of Payments (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Business Acquisition
Less: current portion of acquisition installment payable	$ 10,149	$ 7,815
Acquisition installment payable, net of current portion	3,551	8,019
ApiFix future consideration, net of current portion	0	2,980
ApiFix
Business Acquisition
Anniversary payments	8,804	15,834
Less: current portion of acquisition installment payable	8,804	7,815
Acquisition installment payable, net of current portion	0	8,019
System sales payment	0	2,980
ApiFix future consideration, net of current portion	0	10,999
ApiFix \| Third Anniversary
Business Acquisition
Anniversary payments	0	7,815
ApiFix \| Fourth Anniversary
Business Acquisition
Anniversary payments	$ 8,804	$ 8,019

ACCRUED COMPENSATION AND BENEFITS (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Compensation Related Costs [Abstract]
Accrued compensation and related costs	$ 4,279	$ 3,282
Accrued commissions	7,046	3,462
Total accrued compensation and benefits	$ 11,325	$ 6,744

INCOME TAXES - Narrative (Details) - USD ($)	Dec. 31, 2023	Dec. 11, 2018	May 30, 2014
Income Tax Disclosure [Abstract]
Loss carryforwards, federal	$ 118,930,000
Loss carryforwards, state	76,944,000
Loss carryforwards, foreign	26,260,000
Tax credit carryforward	176,000
Estimated limitation on losses generated prior to ownership change date			$ 23,920,000
Estimated annual limitation of losses		$ 9,736,000	$ 1,062,000
Increase of estimated annual limitation of first five years		$ 22,430,000
Reserve for uncertain income tax positions	0
Cash held by foreign operations	$ 3,230,000

BUSINESS SEGMENT (Tables)

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Schedule of Product Sales by Geographic Location

Disaggregated revenue - product sales by source were as follows:


	Year Ended December 31,
Product sales by geographic location:	2023		2022		2021
U.S.	$	111,010	$	92,419	$	77,781
International	37,722		29,870		20,268
Total	$	148,732	$	122,289	$	98,049

Schedule of Product Sales by Category


	Year Ended December 31,
Product sales by category:	2023		2022		2021
Trauma and deformity	$	106,781	$	85,055	$	65,829
Scoliosis	37,933		33,428		28,046
Sports medicine/other	4,018		3,806		4,174
Total	$	148,732	$	122,289	$	98,049

BUSINESS COMBINATIONS AND ASSET ACQUISITIONS - Estimated fair value and useful life of identifiable intangible assets (Details) - USD ($) $ in Thousands	Jul. 01, 2022	Apr. 01, 2022
Pega Medical
Business Acquisition
Fair value of identifiable intangible assets	$ 16,164
Pega Medical \| Patents
Business Acquisition
Finite-lived intangible assets acquired	$ 3,545
Remaining economic useful life (in years)	10 years
Pega Medical \| Customer Relationships & Other
Business Acquisition
Finite-lived intangible assets acquired	$ 8,741
Remaining economic useful life (in years)	15 years
Pega Medical \| Trademarks and Trade Names
Business Acquisition
Indefinite-lived intangible assets acquired	$ 3,878
MD Orthopaedics
Business Acquisition
Fair value of identifiable intangible assets		$ 11,530
MD Orthopaedics \| Patents
Business Acquisition
Finite-lived intangible assets acquired		$ 2,660
Remaining economic useful life (in years)		10 years
MD Orthopaedics \| Customer Relationships & Other
Business Acquisition
Finite-lived intangible assets acquired		$ 6,460
Remaining economic useful life (in years)		15 years
MD Orthopaedics \| Trademarks and Trade Names
Business Acquisition
Indefinite-lived intangible assets acquired		$ 2,410

COMMITMENTS AND CONTINGENCIES	12 Months Ended
COMMITMENTS AND CONTINGENCIES	Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES Leases As of December 31, 2023, the Company has recorded a lease liability of $1,000 and corresponding right-of-use asset of $1,084 on its consolidated balance sheet. Legal Proceedings From time to time, we are involved in various legal proceedings arising in the ordinary course of our business. IMED Surgical - Software Ownership Dispute On October 16, 2020, the Company, its wholly-owned subsidiary, Orthex, LLC (“Orthex”), the Company’s largest investor, Squadron, and certain other defendants, were named in a lawsuit filed by IMED Surgical, LLC, a New Jersey company (the “Plaintiff”), in Broward County, Florida Circuit Court. In the lawsuit, the Plaintiff claims, among other things, that it is the rightful owner of certain patented point-and-click planning software being used by the Company, Orthex and Squadron (specifically, U.S. Patent No. 10,258,377 (titled “Point and click alignment method for orthopedic surgeons, and surgical and clinical accessories and devices,” issued on April 16, 2019) (hereinafter, the “‘377 Patent”). In June 2019, the Company purchased all the issued and outstanding units of membership interests in Orthex, and all the issued and outstanding shares of stock of Vilex in Tennessee, Inc. for $60,000 in total consideration. Vilex and Orthex are primarily manufacturers of foot and ankle surgical implants, including cannulated screws, fusion devices, surgical staples and bone plates, as well as the Orthex Hexapod technology, a system of rings, struts, implants, hardware accessories, and the Point & Click Software used to treat congenital deformities and limb length discrepancies. On December 31, 2019, the Company divested substantially all of the assets relating to Vilex's adult product offerings to a wholly-owned subsidiary of Squadron, in exchange for a $25,000 reduction in a term note owed to Squadron in connection with the initial acquisition. As part of the sale, the Company also executed an exclusive license arrangement with Squadron providing for perpetual access to certain intellectual property, including the ‘377 Patent. According to the lawsuit, the other defendants, who are unrelated to the Company, assigned the ‘377 Patent to Orthex in violation of certain agreements with the Plaintiff. The Plaintiff, among other things, requests that the defendants be ordered to convey and assign to Plaintiff all of their rights, title and interests in and to the ‘377 Patent and seeks certain compensatory, consequential and unjust enrichment damages from Orthex and the unrelated defendants. On May 13, 2021, the Court ordered the lawsuit stayed pending arbitration. To the extent the Plaintiff desires to further pursue the matter, it must first do so through a separate arbitration proceeding. In mid-November 2021, the Plaintiff initiated an arbitration proceeding; however, the Plaintiff failed to pay the fees it was required to pay for the arbitration to continue, resulting in the arbitration panel terminating the arbitration proceedings in mid-October 2022. In connection with the stay order, the Court also ordered the Company, Orthex and Squadron to give notice to the Plaintiff before any attempt to dispose, assign, sell or otherwise encumber the ‘377 Patent. The Company, Orthex and Squadron filed an appeal of this component of the order, but the appellate court affirmed the lower court’s decision. The Company, Orthex and Squadron have not sought to further pursue an appeal of the subject order. On February 3, 2023, the Court partially lifted the stay in this case for the sole purpose of, as clarified by the Court's order on March 7, 2023, "permitting any party to argue any motion challenging the events that occurred which led to the arbitration panel's termination order." No filing was made in response to that order. No further filings were made in this case until October 30, 2023, when defendants filed a motion to dismiss. On December 12, 2023, the Court ordered the Plaintiff has until March 13, 2024, to appear before the Court and show cause why this case should not be dismissed for failure to pursue arbitration consistent with the Court’s orders. If Plaintiff has not resumed arbitration by the March 13 hearing, the parties should brief the issue of whether, if the case is dismissed, it should be dismissed with or without prejudice and set the matter for a hearing. Although we believe the Company has strong defenses to the IMED lawsuit and we intend to vigorously defend the claims asserted against us, arbitration and litigation can involve complex factual and legal questions, and an adverse resolution of such proceedings could have a material adverse effect on our business, operating results and financial condition. Wishbone Medical, Inc. – Patent Infringement Litigation On October 30, 2020, OrthoPediatrics, along with its wholly-owned subsidiary, Orthex, LLC, filed a lawsuit in federal district court (N.D. Indiana, South Bend Division, Case No. 3:20-cv-00929) against Wishbone Medical, Inc. and Nick A. Deeter (collectively “Wishbone”), claiming infringement of ’377 Patent, unfair competition, false advertising, breach of contract, defamation per se, tortious interference with contractual relationships, and tortious interference with prospective contractual relationships. In early January 2021, OrthoPediatrics amended its lawsuit by adding a declaratory judgment claim of infringement of the ‘377 Patent against Wishbone. Thereafter, in January 2021, Wishbone filed a motion to dismiss all OrthoPediatrics’ causes of action. In late August 2021, the Court denied Wishbone's motion to dismiss with respect to OrthoPediatrics’ infringement and breach of contract claims and dismissed OrthoPediatrics' remaining causes of action. In late September 2021, Wishbone filed its answer and counterclaims, in part, seeking declaratory judgment of non-infringement and invalidity of the ‘377 Patent, and alleging OrthoPediatrics patent infringement claim(s) against Wishbone was made in bad faith. In mid-October 2021, OrthoPediatrics filed its answer to Wishbone’s counterclaims, denying all of them. In late January 2023, Wishbone amended its counterclaims to add a breach of contract claim against OrthoPediatrics. In early February 2023, OrthoPediatrics filed its answer to Wishbone's amended counterclaims, denying all of them. Additionally, in late March 2023, Wishbone filed a motion for judgment on the pleadings regarding the patent eligibility of the '377 patent. In mid-April 2023, OrthoPediatrics filed its response to Wishbone's late March 2023 motion. In mid-June 2023, the Court denied Wishbone's motion for judgment on the pleadings. In September 2023, the Company and Wishbone Medical, Inc. reached a settlement of all claims against one another, resulting in a payment to the Company that was not material. In December 2023, the Company and Mr. Deeter reached a settlement of all remaining claims against one another. Subsequently, the Court dismissed the lawsuit with prejudice concerning all parties. Boston Brace Litigation This lawsuit arises from the alleged wrongful death of a patient following his January 2016, tracheal and laryngeal resection procedure at Boston Children’s Hospital, which was performed by two physicians named as defendants in the suit. The Plaintiffs allege that as a result of the patient’s post-operative care, which included placing his neck in a position of flexion in a modified brace provided by Boston Brace International, Inc. (“Boston Brace”), the patient was paralyzed, and years later, he died due to complications caused by his paralysis. The Company acquired all of the outstanding shares of Boston Brace on January 5, 2024 as described more fully under Note 16 – Subsequent Events. The lawsuit commenced in December 2018, in Suffolk Superior Court in Boston, Massachusetts. The Plaintiffs assert counts of negligence against each individual defendant, lack of informed consent against the physician defendants, failure to warn, breach of warranty and alleged improper use against Boston Brace, and loss of consortium against all defendants. Trial is currently scheduled to begin in December 2025. Although we believe Boston Brace has strong defenses to this lawsuit and we intend to vigorously defend the claims asserted against us, litigation can involve complex factual and legal questions, and an adverse resolution of such proceedings could have a material adverse effect on our business, operating results and financial condition. We are not presently a party to any other legal proceedings the outcome of which, if determined adversely to us, would individually or in the aggregate materially affect our financial position or results of operations or cash flows. Purchase Obligations and Performance Requirements As a result of entering into a license agreement for the exclusive distribution of the 7D Surgical FLASHTM Navigation platform during 2021, the Company agreed to a minimum purchase commitment for the first twelve months of that agreement. As of December 31, 2021 the remaining balance of the commitment was $1,900. During the year ended December 31, 2022 and 2023, the Company met the minimum purchase commitment as required for the first twelve months of the agreement. Additionally, the contract requires future purchase commitments based upon a percentage of historical purchases. As a result and as of December 31, 2023, the Company has a minimum purchase commitment for approximately $1,820 and $1,456 for the years ending December 31, 2024 and 2025, respectively. On July 20, 2021, we entered into an amended license agreement, resulting in a five-year extension of our exclusive distribution rights of the FIREFLY Technology. As a component of the agreement the Company is required to meet minimum performance metrics, measured by the number of spine procedures in the fiscal year which used the FIREFLY products against the annual requirement in the agreement. This includes any scheduled surgeries whereby the Company has committed to payment of the product. The number of required surgeries varies each year of the agreement. During the years ended December 31, 2023, 2022 and 2021, the Company did not reach the minimum performance metrics. As such, the Company recorded $2,000, $1,104 and $512 as a component of cost of revenue for the shortfall which occurred during 2023, 2022 and 2021, respectively. Royalties As of December 31, 2023, we are contracted to pay royalties to individuals and entities that provide research and development services, which range from 0.5% to 20% of sales. Additionally, we have minimum royalty commitments of $10 annually through 2026. We have products in development that have royalty commitments. In any development project, there are significant variables that will affect the amount and timing of these payments and as of December 31, 2023, we have not been able to determine the amount and timing of payments. We do not anticipate these future payments will have a material impact on our financial results.

EMPLOYEE BENEFIT PLAN (Details) - USD ($) $ in Thousands	12 Months Ended
EMPLOYEE BENEFIT PLAN (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Business Acquisition
Percentage of employees' contribution match (up to)	4.00%	4.00%	4.00%
Employee contributions matched	$ 900	$ 718	$ 510
MD Orthopaedics
Business Acquisition
Percentage of employees' contribution match (up to)	3.00%

CONSOLIDATED BALANCE SHEETS € in Thousands, $ in Thousands	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Current assets:
Cash and cash equivalents	$ 31,055	$ 8,991
Restricted cash	1,972	1,471
Short term investments	49,251	109,299
Accounts receivable - trade, net of allowances of $1,373 and $1,056, respectively	34,617	24,800
Inventories, net	105,851	78,192
Prepaid expenses and other current assets	3,750	3,966
Total current assets	226,496	226,719
Property and equipment, net	41,048	34,286
Other assets:
Amortizable intangible assets, net	69,275	64,980
Goodwill	83,699	86,821
Other intangible assets	15,287	14,921
Other non-current assets	2,940	0
Total other assets	171,201	166,722
Total assets	438,745	427,727
Current liabilities:
Accounts payable - trade	12,649	11,150
Accrued compensation and benefits	11,325	6,744
Current portion of long-term debt with affiliate	152	144
Current portion of acquisition installment payable	10,149	7,815
Other current liabilities	7,391	5,018
Total current liabilities	41,666	30,871
Long-term liabilities:
Acquisition installment payable, net of current portion	3,551	8,019
Contingent consideration	0	2,980
Deferred income taxes	5,483	5,954
Other long-term liabilities	1,112	492
Total long-term liabilities	20,054	18,208
Total liabilities	61,720	49,079
Commitments and contingencies (Note 15)
Stockholders' equity:
Common stock, $0.00025 par value; 50,000,000 shares authorized; 23,378,408 shares and 22,877,962 shares issued and outstanding as of December 31, 2023 and December 31, 2022	6	6
Additional paid-in capital	580,287	560,810
Accumulated deficit	(197,742)	(176,768)
Accumulated other comprehensive loss	(5,526)	(5,400)
Total stockholders' equity	377,025	378,648
Total liabilities and stockholders' equity	438,745	427,727
Nonrelated Party
Long-term liabilities:
Long-term debt, net of current portion	9,297	0
Long-term debt with affiliate, net of current portion	9,297	0
Related Party
Long-term liabilities:
Long-term debt, net of current portion	611	763
Long-term debt with affiliate, net of current portion	$ 611	$ 763

Cover - USD ($) $ in Millions	12 Months Ended
Cover - USD ($) $ in Millions	Dec. 31, 2023	Mar. 01, 2024	Jun. 30, 2023
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2023
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	001-38242
Entity Registrant Name	ORTHOPEDIATRICS CORP
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	26-1761833
Entity Address, Address Line One	2850 Frontier Drive
Entity Address, City or Town	Warsaw
Entity Address, State or Province	IN
Entity Address, Postal Zip Code	46582
City Area Code	574
Local Phone Number	268-6379
Title of 12(b) Security	Common Stock, $0.00025 par value per share
Trading Symbol	KIDS
Security Exchange Name	NASDAQ
Entity Well Known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Document Financial Statement Error Correction [Flag]	false
Entity Shell Company	false
Entity Public Float			$ 445.1
Entity Common Stock, Shares Outstanding		23,549,496
Documents Incorporated by Reference	DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s definitive proxy statement for its 2024 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K.
Document Fiscal Period Focus	FY
Amendment Flag	false
Document Fiscal Year Focus	2023
Entity Central Index Key	0001425450

SIGNIFICANT ACCOUNTING POLICIES - Cash, Cash Equivalents and Short Term Investments (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Accounting Policies [Abstract]
Realized loss on investment	$ 1,437,000	$ 1,550,000	$ 0

NET (LOSS) EARNINGS PER SHARE - Reconciliation of basic and diluted net loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Earnings Per Share [Abstract]
Net (loss) income	$ (20,974)	$ 1,258	$ (16,260)
Less: Earnings allocated to participating securities - Basic		23
Less: Earnings allocated to participating securities- Diluted	0	23	0
Net (loss) income available to common shareholders	(20,974)	1,235	(16,260)
Net (loss) income	$ (20,974)	$ 1,235	$ (16,260)
Denominator for basic and diluted net (loss) income per share
Weighted average shares outstanding for basic (in shares)	22,675,477	20,704,556	19,268,255
Weighted average shares outstanding for diluted (in shares)	22,675,477	20,947,727	19,268,255
(Loss) earnings per share:
Loss (earnings) per share - basic (in dollars per share)	$ (0.92)	$ 0.06	$ (0.84)
Loss (earnings) per share- Diluted (in dollars per share)	$ (0.92)	$ 0.06	$ (0.84)

FAIR VALUE OF FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company measures certain financial assets and liabilities at fair value. The accounting standards related to fair value measurements define fair value and provide a consistent framework for measuring fair value under the authoritative literature.

The following tables summarize the assets and liabilities measured at fair value on a recurring basis as of December 31, 2023 and 2022, respectively.


	December 31, 2023
	Level 1		Level 2		Level 3		Total
Financial Assets

Short term investments
Certificates of Deposit	$	—	$	25,792	$	—	$	25,792
Exchange Trade Mutual Funds	$	5,015	$	—	$	—	$	5,015
Treasury Bonds	$	18,235	$	—	$	—	$	18,235

Other	$	207	$	—	$	—	$	207


	December 31, 2022
	Level 1		Level 2		Level 3		Total
Financial Assets

Short term investments
Certificates of Deposit	$	—	$	25,148	$	—	$	25,148
Corporate Bonds	$	18,939	$	—	$	—	$	18,939
Treasury Bonds	$	65,040	$	—	$	—	$	65,040

Other	$	172	$	—	$	—	$	172
Financial Liabilities
Contingent Consideration	$	—	$	—	$	2,980	$	2,980

The Company's level 1 assets consist of short-term, liquid investments with original maturity of three months or less at inception and other short term investments which are comprised of exchange traded mutual funds and marketable securities with a maturity date greater than 3 months.

The Company's level 2 assets pertain to certificates of deposit. These securities are predominately priced by third parties, either by a pricing vendor or dealer with significant inputs observable in active markets.

The Company's Level 3 instruments consist of contingent consideration. The fair value of the contingent consideration liability assumed in business combinations is recorded as part of the purchase price consideration of the acquisition and is determined using a discounted cash flow model or probability simulation model. The significant inputs of such models are not always observable in the market, such as forecasted annual revenues, expected volatility and discount rates. The adjustments in the fair value of the contingent consideration payments resulted in income of $2,980, $25,930 and $1,800 for the years ended December 31, 2023, 2022 and 2021, respectively.

The following table summarizes the change in fair value of the Level 3 instrument:


	Total

Balance at December 31, 2021	$	28,910
Change in fair value of contingent consideration	(25,930)
Balance at December 31, 2022	2,980
Change in fair value of contingent consideration	(2,980)
Balance at December 31, 2023	$	—

The recurring Level 3 fair value measurements of the contingent consideration liability associated with the ApiFix system sales milestone include the following significant unobservable inputs as of December 31, 2023, 2022 and 2021, respectively:


	December 31, 2023		December 31, 2022		December 31, 2021
Valuation techniques	Discounted cash flow, Monte Carlo
Present value discount rate(1)	—	%	16.6	%	18.4	%
Volatility factor	—	%	48.0	%	50.3	%
Expected Years	0.4 years		1.4 years		2.4 years

(1) The present value discount rate includes estimated risk premium.

- Definition

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

+ References + Details

BUSINESS COMBINATIONS AND ASSET ACQUISITIONS - Schedule of Discounting the Future Payments (Details) - Medtech Concepts LLC $ in Thousands	May 01, 2023 USD ($)
Business Acquisition
Cash consideration	$ 3,000
Issuance of common stock	2,274
Anniversary payments	5,500
Transaction costs	97
Total consideration transferred	10,871
Present Value
Business Acquisition
Cash consideration	3,000
Issuance of common stock	2,274
Anniversary payments	4,672
Transaction costs	97
Total consideration transferred	$ 10,043

GOODWILL AND INTANGIBLE ASSETS (Tables)

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

Changes in the carrying amount of goodwill were as follows:


	Total
Goodwill at January 1, 2022	$	72,349
Pega Medical measurement period adjustment	5,450
Pega acquisition	16,528

Foreign currency translation impact	(7,506)
Goodwill at December 31, 2022	$	86,821
Pega Medical measurement period adjustment	(1,936)


Foreign currency translation impact	(1,186)
Goodwill at December 31, 2023	$	83,699

Schedule of the Balances of Amortizable Intangible Assets

As of December 31, 2023, the balances of amortizable intangible assets were as follows:


	Weighted-Average Amortization Period	Gross Intangible Assets		Accumulated Amortization		Impairment		Net Intangible Assets
Patents	11.2 years	$	45,646	$	(11,008)	$	—	$	34,638
Intellectual Property and Capitalized Software	9.1 years	16,026		(2,524)		—		13,502
Customer Relationships & Other	12.4 years	18,862		(3,270)		—		15,592
License agreements	3.8 years	10,733		(5,190)		—		5,543
Total amortizable assets		$	91,267	$	(21,992)	$	—	$	69,275

As of December 31, 2022, the balances of amortizable intangible assets were as follows:


	Weighted-Average Amortization Period	Gross Intangible Assets		Accumulated Amortization		Impairment		Net Intangible Assets
Patents	12.2 years	$	46,005	$	(7,953)	$	—	$	38,052
Intellectual Property	9.8 years	5,859		(1,382)		—		4,477
Customer Relationships & Other	13.4 years	17,262		(1,805)		—		15,457
License agreements	4.5 years	10,697		(3,703)		—		6,994
Total amortizable assets		$	79,823	$	(14,843)	$	—	$	64,980

Schedule of Amortization Expense of Amortizable Intangible Assets

Future amortization expenses are expected as follows:


Year Ending December 31:
2024	$	7,577
2025	7,379
2026	7,339
2027	6,908
2028	6,281
Thereafter	33,791
	$	69,275

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 24
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482548/350-20-55-24

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
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-Paragraph 1
-Subparagraph (a)
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-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
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-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
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-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
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-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 11: http://www.xbrl.org/2009/role/commonPracticeRef
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-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1A

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-URI https://asc.fasb.org//1943274/2147482573/350-20-50-2

+ Details

STOCKHOLDERS' EQUITY - Restricted Stock (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Restricted stock
Restricted Stock Awards
Outstanding at period start (in shares)	403,324	368,446	436,730
Granted (in shares)	311,689	216,881	114,256
Forfeited (in shares)	(6,800)	(28,344)	(6,354)
Vested (in shares)	(115,760)	(153,659)	(176,186)
Outstanding at period end (in shares)	592,453	403,324	368,446	436,730
Weighted-Average Remaining Contractual Terms (in Years)
Weighted-average remaining contractual terms (in years)	1 year 7 months 6 days	1 year 4 months 24 days	1 year 1 month 6 days	1 year 1 month 6 days
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized
Unrecognized compensation expense	$ 14,150
Unrecognized compensation expense, weighted average period of recognition	1 year 7 months 6 days
Stock-based compensation expense	$ 10,526	$ 6,679	$ 5,842
Restricted Stock Units
Restricted Stock Awards
Outstanding at period start (in shares)	10,080
Granted (in shares)	4,005	11,634
Forfeited (in shares)	(234)	(1,554)
Outstanding at period end (in shares)	13,851	10,080
Weighted-Average Remaining Contractual Terms (in Years)
Weighted-average remaining contractual terms (in years)	1 year 8 months 12 days	2 years 6 months

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	M D Ortho	ApiFix	Common Stock	Common Stock M D Ortho	Common Stock ApiFix	Additional Paid-in Capital	Additional Paid-in Capital M D Ortho	Additional Paid-in Capital ApiFix	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)
Balance at Dec. 31, 2020	$ 234,768			$ 5			$ 388,622			$ (161,766)	$ 7,907
Balance (in shares) at Dec. 31, 2020				19,560,291
Increase (Decrease) in Stockholders' Equity
Net (loss) income	(16,260)									(16,260)
Restricted stock	5,842						5,842
Restricted stock (in shares)				107,902
Stock option exercise	$ 137						137
Stock option exercise (in shares)	4,422			4,422
Consideration for acquisitions	$ 298						298
Consideration for acquisitions (in shares)				4,599
Other comprehensive income (loss)	584										584
Balance at Dec. 31, 2021	225,369			$ 5			394,899			(178,026)	8,491
Balance (in shares) at Dec. 31, 2021				19,677,214
Increase (Decrease) in Stockholders' Equity
Net (loss) income	1,258									1,258
Restricted stock	6,449						6,449
Restricted stock (in shares)				188,537
Stock option exercise	$ 63						63
Stock option exercise (in shares)	2,010			2,010
Consideration for acquisitions		$ 9,707						$ 9,707
Consideration for acquisitions (in shares)					208,140
Stock portion of ApiFix anniversary installment payment			$ 10,410						$ 10,410
Stock portion of Apifix anniversary installment payment (in shares)						185,811
Issuance of common stock, net of issuance cost	$ 139,283			$ 1			139,282
Issuance of common stock, net of issuance cost (in shares)				2,616,250
Other comprehensive income (loss)	(13,891)										(13,891)
Balance at Dec. 31, 2022	$ 378,648			$ 6			560,810			(176,768)	(5,400)
Balance (in shares) at Dec. 31, 2022	22,877,962			22,877,962
Increase (Decrease) in Stockholders' Equity
Net (loss) income	$ (20,974)									(20,974)
Restricted stock	10,526						10,526
Restricted stock (in shares)				304,889
Stock option exercise	$ 21						21
Stock option exercise (in shares)	670			670
Consideration for acquisitions	$ 2,752						2,752
Consideration for acquisitions (in shares)				54,884
Stock portion of ApiFix anniversary installment payment	6,178						6,178
Stock portion of Apifix anniversary installment payment (in shares)				140,003
Other comprehensive income (loss)	(126)										(126)
Balance at Dec. 31, 2023	$ 377,025			$ 6			$ 580,287			$ (197,742)	$ (5,526)
Balance (in shares) at Dec. 31, 2023	23,378,408			23,378,408

GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

Goodwill

The Company tests goodwill for impairment by either performing a qualitative evaluation or a quantitative test.

The qualitative evaluation is an assessment of factors including reporting unit specific operating results as well as industry, market and general economic conditions, to determine whether it is more likely than not that the fair values of a reporting unit is less than its carrying amount, including goodwill. The Company may elect to bypass the qualitative assessment for its two reporting units, a legacy surgical implants unit and a bracing reporting unit established with the acquisition of MD Ortho, and perform a quantitative test on each. The assumptions used in evaluating goodwill for impairment are subject to change and are tracked against historical results by management.

The Company elected to perform a qualitative analysis for its reporting units as of October 1, 2023. The Company determined, after performing the qualitative analysis that there was no evidence that it is more likely than not that the fair value of its reporting units were less than the carrying amount, therefore, it was not necessary to perform a quantitative impairment test.

Changes in the carrying amount of goodwill were as follows:


	Total
Goodwill at January 1, 2022	$	72,349
Pega Medical measurement period adjustment	5,450
Pega acquisition	16,528

Foreign currency translation impact	(7,506)
Goodwill at December 31, 2022	$	86,821
Pega Medical measurement period adjustment	(1,936)


Foreign currency translation impact	(1,186)
Goodwill at December 31, 2023	$	83,699

Intangible Assets

As of December 31, 2023, the balances of amortizable intangible assets were as follows:


	Weighted-Average Amortization Period	Gross Intangible Assets		Accumulated Amortization		Impairment		Net Intangible Assets
Patents	11.2 years	$	45,646	$	(11,008)	$	—	$	34,638
Intellectual Property and Capitalized Software	9.1 years	16,026		(2,524)		—		13,502
Customer Relationships & Other	12.4 years	18,862		(3,270)		—		15,592
License agreements	3.8 years	10,733		(5,190)		—		5,543
Total amortizable assets		$	91,267	$	(21,992)	$	—	$	69,275

As of December 31, 2022, the balances of amortizable intangible assets were as follows:


	Weighted-Average Amortization Period	Gross Intangible Assets		Accumulated Amortization		Impairment		Net Intangible Assets
Patents	12.2 years	$	46,005	$	(7,953)	$	—	$	38,052
Intellectual Property	9.8 years	5,859		(1,382)		—		4,477
Customer Relationships & Other	13.4 years	17,262		(1,805)		—		15,457
License agreements	4.5 years	10,697		(3,703)		—		6,994
Total amortizable assets		$	79,823	$	(14,843)	$	—	$	64,980

Amortization expense was $7,149, $5,977 and $4,531 for the years ended December 31, 2023, 2022 and 2021, respectively. Future amortization expenses are expected as follows:


Year Ending December 31:
2024	$	7,577
2025	7,379
2026	7,339
2027	6,908
2028	6,281
Thereafter	33,791
	$	69,275

Licenses are tied to product launches and do not begin amortizing until the product is launched to the market. Anticipated market launch is in 2024 through 2026 for products for which we previously obtained licensing.

On September 3, 2021, we entered into a five-year license agreement, resulting in exclusive distribution rights of the 7D Surgical FLASHTM Navigation platform for pediatric applications. We paid $750 which will be amortized over the initial three years of the agreement.

On July 20, 2021, we entered into an amended license agreement, resulting in a five-year extension of our exclusive distribution rights of the FIREFLY Technology in children's hospitals across the United States. We paid $4,300 for the amended agreement and the amount will be amortized over the life of the agreement.

On March 19, 2021, we recorded a license agreement in the amount of $2,858 in settlement of an alleged patent infringement suit related to scoliosis derotation. Amortization is recorded based on the cases completed in the given period.

Trademarks are recorded as indefinite-lived intangible assets in the amounts of $15,287 and $14,921 as of December 31, 2023 and 2022, respectively. Concurrently with our acquisition of each company, we acquired the trademark of Telos on March 9, 2020 valued at $210 and the trademark of ApiFix on April 1, 2020 valued at $8,640. In 2022 we acquired trademarks associated with MD Ortho and Pega Medical for approximately $2,410 and $3,878, respectively. In 2023 we acquired trademarks associated with MedTech and Rhino for approximately $520 and $140, respectively. Trademarks are recorded in Other Intangible assets on the Consolidated Balance Sheets.

During 2023 and 2022, management determined that a triggering event occurred for our ApiFix trademark, indicating that it was more likely than not the fair value of the trademark assets is less than the carrying value. As such, the company completed a quantitative analysis whereby we determined the fair value of the trademark asset associated with our ApiFix acquisition was below the carrying value. We recorded impairment charges of $985 and $3,609 for the years ended December 31, 2023 and 2022, respectively, to reduce the carrying amount of the intangible asset to its estimated fair value.

BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Tables)

12 Months Ended

Dec. 31, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Asset Acquisition

The table below reconciles the payments and issuances to total consideration transferred after discounting the future payments to present value.


	Consideration		Present Value
Cash consideration	$	3,000	$	3,000
Issuance of common stock	2,274		2,274
Anniversary payments	5,500		4,672
Transaction costs	97		97
Total consideration transferred	$	10,871	$	10,043

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed


Fair value of estimated total acquisition consideration	$	32,042
Assets
Cash	312
Accounts receivable - trade	2,100
Inventories	4,875
Prepaid expenses and other current assets	509
Property and equipment	600
Amortizable intangible assets	12,286
Other intangible assets	3,878
Total assets	24,560
Liabilities
Accounts payable-trade	1,682
Other current liabilities	1,393
Deferred tax liability	4,035
Total liabilities	7,110
Less: total net assets	17,450
Goodwill	$	14,592


Fair value of estimated total acquisition consideration	$	18,487
Assets
Cash	420
Accounts receivable - trade	1,062
Inventories	1,126
Prepaid expenses and other current assets	100
Property and equipment	2,444
Amortizable intangible assets	9,120
Other intangible assets	2,410
Total assets	16,682
Liabilities
Accounts payable and accrued liabilities	45
Other current liabilities	586
Deferred tax liability	3,014
Total liabilities	3,645
Less: total net assets	13,037
Goodwill	$	5,450

Schedule of Indefinite-lived Intangible Assets Acquired as Part of Business Combination


	Amount		Remaining Economic Useful Life
Trademarks / Names	$	3,878	Indefinite
Patents	3,545		10 years

Customer Relationships & Other	8,741		15 years
	$	16,164


	Amount		Remaining Economic Useful Life
Trademarks / Names	$	2,410	Indefinite
Patents	2,660		10 years
Customer Relationships	6,460		15 years
	$	11,530

Schedule of Business Acquisition, Pro Forma Information

The following table represents the pro forma net revenue and net income (loss) assuming the acquisitions of MD Ortho and Pega Medical occurred on January 1, 2021.


	December 31,
	2022		2021
Net revenue	$	128,648	$	113,899
Net income (loss)	$	2,110	$	(12,810)

Schedule of Total Consideration Transferred After Discounting Future Payments

Schedule of Business Acquisitions by Acquisition, Contingent Consideration

Presented below is a summary of the present value of the anniversary payments and fair value of the system sales payment related to the ApiFix acquisition:


	December 31, 2023		December 31, 2022
Anniversary Payments:

Third Year Payment	$	—	$	7,815
Fourth Year Payment	8,804		8,019
Total acquisition installment payable	8,804		15,834
Less: current portion of acquisition installment payable	8,804		7,815
Acquisition installment payable, net of current portion	—		8,019
System sales payment	—		2,980
ApiFix future consideration, net of current portion	$	—	$	10,999

DEBT AND CREDIT ARRANGEMENTS - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Debt Instrument
Mortgage balance	$ 11,063	$ 907
Less: debt discount and issuance costs	1,003	0
Less: current maturities	152	144
Long-term debt, net of current maturities	9,908	763
Revolving Credit Facility \| Term Loan
Debt Instrument
Mortgage balance	10,300	0
Mortgage payable to affiliate
Debt Instrument
Mortgage balance	$ 763	$ 907

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 835
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+ Details

- Definition

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

+ References + Details

FAIR VALUE OF FINANCIAL INSTRUMENTS - Schedule of Assets and Liabilities Measured at Fair Value (Details) - Fair Value, Recurring - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Contingent Consideration		$ 2,980
Certificates of Deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short term investments	$ 25,792	25,148
Exchange Trade Mutual Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short term investments	5,015
Treasury Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short term investments	18,235	65,040
Corporate Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short term investments		18,939
Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short term investments	207	172
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Contingent Consideration		0
Level 1 \| Certificates of Deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short term investments	0	0
Level 1 \| Exchange Trade Mutual Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short term investments	5,015
Level 1 \| Treasury Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short term investments	18,235	65,040
Level 1 \| Corporate Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short term investments		18,939
Level 1 \| Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short term investments	207	172
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Contingent Consideration		0
Level 2 \| Certificates of Deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short term investments	25,792	25,148
Level 2 \| Exchange Trade Mutual Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short term investments	0
Level 2 \| Treasury Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short term investments	0	0
Level 2 \| Corporate Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short term investments		0
Level 2 \| Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short term investments	0	0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Contingent Consideration		2,980
Level 3 \| Certificates of Deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short term investments	0	0
Level 3 \| Exchange Trade Mutual Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short term investments	0
Level 3 \| Treasury Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short term investments	0	0
Level 3 \| Corporate Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short term investments		0
Level 3 \| Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short term investments	$ 0	$ 0

SIGNIFICANT ACCOUNTING POLICIES - Shipping and Handling Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
New Accounting Pronouncements or Change in Accounting Principle
Cost of revenue	$ 37,479	$ 31,629	$ 24,646
Shipping and Handling, Billed
New Accounting Pronouncements or Change in Accounting Principle
Cost of revenue	1,244	1,027	803
Shipping and Handling, Not Billed
New Accounting Pronouncements or Change in Accounting Principle
Cost of revenue	$ 5,655	$ 4,270	$ 2,899

- Definition

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

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+ Details

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following tables summarize the assets and liabilities measured at fair value on a recurring basis as of December 31, 2023 and 2022, respectively.


	December 31, 2023
	Level 1		Level 2		Level 3		Total
Financial Assets

Short term investments
Certificates of Deposit	$	—	$	25,792	$	—	$	25,792
Exchange Trade Mutual Funds	$	5,015	$	—	$	—	$	5,015
Treasury Bonds	$	18,235	$	—	$	—	$	18,235

Other	$	207	$	—	$	—	$	207


	December 31, 2022
	Level 1		Level 2		Level 3		Total
Financial Assets

Short term investments
Certificates of Deposit	$	—	$	25,148	$	—	$	25,148
Corporate Bonds	$	18,939	$	—	$	—	$	18,939
Treasury Bonds	$	65,040	$	—	$	—	$	65,040

Other	$	172	$	—	$	—	$	172
Financial Liabilities
Contingent Consideration	$	—	$	—	$	2,980	$	2,980

Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The following table summarizes the change in fair value of the Level 3 instrument:


	Total

Balance at December 31, 2021	$	28,910
Change in fair value of contingent consideration	(25,930)
Balance at December 31, 2022	2,980
Change in fair value of contingent consideration	(2,980)
Balance at December 31, 2023	$	—

Schedule of Fair Value Measurement Inputs and Valuation Techniques


	December 31, 2023		December 31, 2022		December 31, 2021
Valuation techniques	Discounted cash flow, Monte Carlo
Present value discount rate(1)	—	%	16.6	%	18.4	%
Volatility factor	—	%	48.0	%	50.3	%
Expected Years	0.4 years		1.4 years		2.4 years

(1) The present value discount rate includes estimated risk premium.

BUSINESS SEGMENT

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

BUSINESS SEGMENT

Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. We have one operating and reportable segment, OrthoPediatrics, which designs, develops and markets anatomically appropriate specialized braces, implants and devices for children with orthopedic problems. Our chief operating decision-maker, our Chief Executive Officer, reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance, accompanied by disaggregated revenue information by product category. We do not assess the performance of our individual product categories on measures of profit or loss, or other asset-based metrics. Therefore, the information below is presented only for revenue by category and geography.

Product sales attributed to a country or region includes product sales to hospitals, physicians and distributors and is based on the final destination where the products are sold. No individual customer accounted for more than

10% of total product sales for any of the periods presented. No customer accounted for more than 10% of consolidated accounts receivable as of December 31, 2023 or 2022.

Disaggregated revenue - product sales by source were as follows:


	Year Ended December 31,
Product sales by geographic location:	2023		2022		2021
U.S.	$	111,010	$	92,419	$	77,781
International	37,722		29,870		20,268
Total	$	148,732	$	122,289	$	98,049


	Year Ended December 31,
Product sales by category:	2023		2022		2021
Trauma and deformity	$	106,781	$	85,055	$	65,829
Scoliosis	37,933		33,428		28,046
Sports medicine/other	4,018		3,806		4,174
Total	$	148,732	$	122,289	$	98,049

No individual country with sales originating outside of the United States accounted for more than 10% of consolidated revenue for the years ended December 31, 2023, 2022 and 2021.

No individual country held long-lived assets in excess of 10% of consolidated long-lived assets as of December 31, 2023 or 2022.

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

+ Details

SIGNIFICANT ACCOUNTING POLICIES - Advertising Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Accounting Policies [Abstract]
Advertising costs	$ 2,409	$ 1,906	$ 898

SIGNIFICANT ACCOUNTING POLICIES - Foundation for Advancing Pediatric Orthopedics (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Accounting Policies [Abstract]
Contributions to charity fund	$ 286	$ 524	$ 88

PROPERTY AND EQUIPMENT, NET (Tables)

12 Months Ended

Dec. 31, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment, Net

Sample inventory is carried at cost less accumulated depreciation.

Depreciable lives are generally as follows:


Building and building improvements			25 to 30 years
Furniture and fixtures			5 to 7 years
Computer equipment			3 to 5 years
Business software			3 years
Office and other equipment			5 to 7 years
Instruments			5 years
Sample inventory			2 years

Property and equipment, net consisted of the following:


	December 31,
	2023		2022
Land	$	1,725	$	1,725
Building and building improvements	5,870		5,729
Computer equipment and software	5,828		3,319
Office and other equipment	5,821		4,328
Instruments	53,093		43,596
Sample inventory	2,780		2,674
Construction in progress	5,519		3,719
	80,636		65,090
Less: accumulated depreciation	(39,588)		(30,804)
Total property and equipment, net	$	41,048	$	34,286

SIGNIFICANT ACCOUNTING POLICIES - Inventories, net (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Accounting Policies [Abstract]
Charges for obsolete inventory	$ 995	$ 1,011	$ 1,100

ACCRUED COMPENSATION AND BENEFITS (Tables)

12 Months Ended

Dec. 31, 2023

Schedule of Accrued Compensation and Benefits

Accrued compensation and benefits consisted of the following:


	December 31,
	2023		2022
Accrued compensation and related costs	$	4,279	$	3,282
Accrued commissions	7,046		3,462
Total accrued compensation and benefits	$	11,325	$	6,744

SIGNIFICANT ACCOUNTING POLICIES - Stock-Based Compensation (Details) - shares	1 Months Ended	12 Months Ended
	Apr. 30, 2018	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award
Vesting period (in years)		3 years
Options, granted (in shares)		0	0	0
Stock options
Share-based Compensation Arrangement by Share-based Payment Award
Vesting period (in years)		3 years	3 years
Options, granted (in shares)		0	0	0
Stock options \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award
Vesting period (in years)		3 years
Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award
Vesting period (in years)	6 years
2007 Plan
Share-based Compensation Arrangement by Share-based Payment Award
Shares available for award (in shares)		1,585,000
2017 Plan
Share-based Compensation Arrangement by Share-based Payment Award
Shares available for award (in shares)		1,832,460

- Definition

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

+ References

+ Details

SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable and Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Accounts Receivable, Allowance for Credit Loss
Balance at beginning of year	$ 1,056	$ 347	$ 433
Adjustments charged to expense (income)	499	723	(5)
Write-offs & other adjustments	182	174	81
Carrying amount as a result of acquisitions	0	160	0
Balance at end of year	$ 1,373	$ 1,056	$ 347

FAIR VALUE OF FINANCIAL INSTRUMENTS - Change in Fair Value of Level 3 Instruments (Details) - Contingent Consideration Liability - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Fair Value, Liabilities Measured on Recurring Basis
Fair value adjustment of contingent consideration	$ (2,980)	$ (25,930)
Fair Value, Recurring
Fair Value, Liabilities Measured on Recurring Basis
Contingent consideration, beginning balance	2,980	28,910
Contingent consideration, ending balance	$ 0	$ 2,980

INCOME TAXES - Components of income tax expense (benefit) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Current:
Federal	$ 0	$ 0	$ 0
State	85	68	0
Foreign	740	17	0
Current income tax expense (benefit)	825	85	0
Deferred:
Federal	0	0	0
State	0	0	0
Foreign	(1,163)	(2,018)	(1,128)
Decrease in valuation allowance	0	(3,014)	0
Total income tax expense (benefit)	$ (338)	$ (4,947)	$ (1,128)