Fair value measurements and investments (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of Financial Assets and Liabilities Recorded at Fair Value on Recurring Basis

The Company’s available for sale debt securities, equity securities, contingent consideration, and deferred compensation plan liabilities are the only financial instruments recorded at fair value on a recurring basis as follows:

(U.S. Dollars, in thousands)	Balance December 31, 2021			Level 1		Level 2			Level 3
Assets
Neo Medical convertible loan agreements	$	7,148		$	—	$	—		$	7,148
Neo Medical preferred equity securities		5,413			—		5,413			—
Bone Biologics equity securities		309			309		—			—
Other investments		1,505			—		—			1,505
Total	$	14,375		$	309	$	5,413		$	8,653
Liabilities
Spinal Kinetics contingent consideration	$	(17,200	)	$	—	$	—		$	(17,200	)
Other contingent consideration		—			—		—			—
Deferred compensation plan		(1,314	)		—		(1,314	)		—
Total	$	(18,514	)	$	—	$	(1,314	)	$	(17,200	)

(U.S. Dollars, in thousands)	Balance December 31, 2020			Level 1		Level 2			Level 3
Assets
Neo Medical convertible loan agreement	$	7,160		$	—	$	—		$	7,160
Neo Medical preferred equity securities		5,000			—		5,000			—
Bone Biologics equity securities		—			—		—			—
Total	$	12,160		$	—	$	5,000		$	7,160
Liabilities
Spinal Kinetics contingent consideration	$	(35,400	)	$	—	$	—		$	(35,400	)
Other contingent consideration		(375	)		—		—			(375	)
Deferred compensation plan		(1,441	)		—		(1,441	)		—
Total	$	(37,216	)	$	—	$	(1,441	)	$	(35,775	)

Schedule of Reconciliation of Carrying Value of Investments in Equity Securities

The table below presents a reconciliation of the carrying value of the Company’s investment in Neo Medical preferred equity securities for the years ended December 31, 2021, and 2020:

(U.S. Dollars, in thousands)	2021		2020
Fair value of Neo Medical preferred equity securities at January 1	$	5,000	$	—
Additions		—		5,000
Foreign currency remeasurement recognized in other income, net		77		—
Unrealized gain recognized in other income (expense), net		336		—
Fair value of Neo Medical preferred equity securities at December 31		5,413		5,000

Schedule of Changes in Valuation of Securities

The following table presents the changes in fair value recognized for the equity securities for each of the years ended December 31, 2021, 2020, and 2019:

(U.S. Dollars, in thousands)	2021		2020			2019
Bone Biologics equity securities at January 1	$	—	$	219		$	219
Fair value adjustments and impairments recognized in other income (expense), net		309		(219	)		—
Bone Biologics equity securities at December 31	$	309	$	—		$	219

Schedule of Reconciliation For Contingent Consideration Measured At Fair Value Using Significant Unobservable Inputs

The following table provides a reconciliation of the beginning and ending balances for the contingent consideration measured at fair value using significant unobservable inputs (Level 3):

(U.S. Dollars, in thousands)	2021			2020
Spinal Kinetics contingent consideration at January 1	$	35,400		$	42,700
Decrease in fair value recognized in acquisition-related amortization and remeasurement		(3,200	)		(7,300	)
Payment made		(15,000	)		—
Spinal Kinetics contingent consideration at December 31	$	17,200		$	35,400

Fair Value, Inputs, Level 3 [Member]

Schedule of Reconciliation For Convertible Loan Measured At Fair Value Using Significant Unobservable Inputs

The following table provides a reconciliation of the beginning and ending balances of the Convertible Loans, measured at fair value using significant unobservable inputs (Level 3):

(U.S. Dollars, in thousands)	2021			2020
Fair value of Neo Medical Convertible Loans at January 1	$	7,160		$	—
Additions		671			5,000
Interest recognized in interest income, net		421			103
Foreign currency remeasurement recognized in other income (expense), net		(162	)		176
Unrealized gain (loss) recognized in other comprehensive income (loss)		(942	)		1,881
Fair value of Neo Medical Convertible Loans at December 31		7,148			7,160
Amortized cost basis of Neo Medical Convertible Loans at December 31		6,209			5,279

Schedule of Changes in Valuation of Securities

The following table provides quantitative information related to certain key assumptions utilized within the valuation of the Convertible Loans as of December 31, 2021:

(U.S. Dollars, in thousands)	Fair Value as of December 31, 2021		Unobservable inputs	Estimate
Neo Medical Convertible Loans	$	7,148	Cost of equity discount rate		16.1	%
			Implied volatility		67.8	%

The following table provides a range of key assumptions used within the valuation as of December 31, 2021:

(U.S. Dollars, in thousands)	Fair Value as of December 31, 2021		Valuation Technique	Unobservable inputs	Range
Spinal Kinetics contingent consideration	$	17,200	Discounted cash flow	Revenue discount rate	7.13% - 7.55%
				Payment discount rate	3.38% - 3.81%
				Projected year of achievement	2022