XML 43 R16.htm IDEA: XBRL DOCUMENT

Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2023

NOTE 7. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company measures certain financial assets and liabilities at fair value. There is a fair value hierarchy which prioritizes inputs used in measuring fair value into three broad levels:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Includes other inputs that are directly or indirectly observable in the marketplace, such as quoted market prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3 - Unobservable inputs which are supported by little or no market activity.

The Company's significant financial assets and liabilities measured at fair value as of December 31, 2023, were as follows:


	Level 1		Level 2		Level 3		Total
Financial Assets:
Interest rate swap	$	—		991		—	$	991
Financial Liabilities:
Contingent consideration	$	—		—		340	$	340

The Company’s Level 2 asset pertains to an interest rate swap associated with the Company's Zions Facility, used to manage interest rate risk related to variable rate borrowings and manage exposure to the variability of cash flows. The interest rate swap is not designated for hedge accounting and is measured utilizing inputs observable in active markets. For the year ended December 31, 2023, we reassessed the fair value of our interest rate swap which resulted in an increase of $991, the change in fair value is recorded in Other assets on the Consolidated Balance Sheet, Other income (expense) within the Consolidated Statement of Operations and Comprehensive Loss.

The Company's Level 3 instruments consist of contingent consideration. The following table provides a reconciliation of the Level 3 earn-out liabilities for the year ended December 31, 2023:


Balance, December 31, 2022	$	3,640
Achieved milestones paid		(2,500	)
Achieved milestones reclassified to accrued expenses		(1,000	)
Change in fair value of earn-out liabilities		200
Balance, December 31, 2023	340

As of December 31, 2023, the contingent earn-out liabilities are included in Other-current liabilities on the Consolidated Balance Sheet. During the year ended December 31, 2023, we reassessed the estimate of the earn-out liabilities which resulted in a net increase of $200 recorded in Other (expense) income within the Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2023.

As of December 31, 2022, three project milestones associated with the Disior acquisition and two project milestones associated with the Additive Orthopaedics acquisition were included in Accrued expenses on the Consolidated Balance Sheet totaling $5,000 and $1,500, respectively. During the year ended December 31, 2023, $500 was paid in cash for one of the Additive Orthopaedics milestones and $5,000 was paid in cash for the Disior milestones. As of December 31, 2023, the remaining $1,000 related to the Additive Orthopaedics milestone was included in Accrued expenses on the Condensed Consolidated Balance Sheet and is included as restricted cash within the Consolidated Statement of Cash Flows for the year ended December 31, 2023. In addition, we completed two project milestones associated with the Disior acquisition and one project milestone associated with the Additive acquisition as of December 31, 2023. The Additive milestone and one of the Disior milestones were paid in cash during the year ended December 31, 2023, and the remaining Disior milestone totaling $1,000 is included in Accrued expenses on the Consolidated Balance Sheet as of December 31, 2023. For additional information on the Disior and Additive Orthopaedics acquisitions refer to Note 3 to our Consolidated Financial Statements.

- 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