Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

NOTE 4. 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 level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest-level input that is significant to the fair value measurement in its entirety.

The Company’s significant financial assets and liabilities measured at fair value as of September 30, 2024, were as follows:

	Level 1		Level 2	Level 3	Total
Financial Assets:
Interest rate swap	$	—	917	—	$	917

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 Zions Facility (as defined below), 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 three and nine months ended September 30, 2024, we reassessed the fair value of our swap which resulted in an increase of $674 a decrease of $74, respectively to the swap asset. The swap asset is recorded in Other assets on the Condensed Consolidated Balance Sheet and the change in fair value is recorded in Other income (expense), net within the Condensed Consolidated Statement of Operations and Comprehensive Loss.

The Company reassessed its Level 3 contingent earnout liability as of September 30, 2024, and determined it was not probable that the remaining two milestones associated with the acquisition of Additive Orthopaedics, LLC (“Additive Orthopaedics”) would be achieved. The Company wrote off the remaining earnout liability and recorded non-cash income of $340 in Other income (expense), net within the Consolidated Statement of Operations and Comprehensive Loss for the three and nine months ended September 30, 2024.

As of December 31, 2023, one project milestone associated with the acquisition of Disior LTD. (“Disior”) and one project milestone associated with the Additive Orthopaedics acquisition was included in Accrued expenses on the Consolidated Balance Sheet totaling $2,000. During the first quarter of 2024, $1,000 was paid in cash related to the Additive Orthopaedics milestone and the remaining $1,000 related to the Disior acquisition was paid during the second

quarter of 2024. For additional information on the Disior and Additive Orthopaedics acquisitions refer to Note 4 to our Consolidated Financial Statements included in the Amended 2023 Annual Report on Form 10-K/A for the year ended December 31, 2023.