What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-04 compared with 2025-03-05 · 247 added, 239 removed, 931 unchanged (34% of the section changed)

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We have audited the accompanying consolidated balance sheets of OrthoPediatrics Corp.

and subsidiaries (the “Company”) as of December 31, 2024, and 2023, the related consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

As described in Management’s Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting of Boston O&P, which was acquired on January 5, 2024, and whose financial statements constitute 8% and 16% of total assets and net revenue, respectively, of the consolidated financial statement amounts as of and for the year ended December 31, 2024.

Accordingly, our audit did not include the internal control over financial reporting of Boston O&P.

and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, shareholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”).

We have also audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Emphasis of Matter

The Company has significant transactions and relationships with related parties that are described in Notes 9 and 14 to the consolidated financial statements.

Our opinion is not modified with respect to this matter.

Critical Audit Matter

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Impairment testing of the trademarks is performed on an annual basis, and more frequently if events and circumstances indicated that the asset might be impaired.

The fair values of the trademarks are based on a relief from royalty method, and an impairment of $1,836,000 was recorded related to the ApiFix trademark during 2024.

The fair values of the trademarks are based on a relief from royalty method, and impairment charges were recorded during 2025 related to the Orthex and ApiFix trademarks, which are components of the total impairment charge of $4,228,000 recorded during 2025.

This approach requires 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.

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General and administrative 119,832 102,789 73,300

Tradename impairment 1,836 985 3,609

Intangible asset impairment 4,638 1,836 985

Restructuring 5,601 3,653 —

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Fair value adjustment of contingent consideration — — ( 2,980 )

Other expense (income) 1,068 ( 2,261 ) 1,796

Total other expenses (income), net 6,919 ( 5,439 ) ( 21,710 )

Other (income) expense ( 6,046 ) 1,068 ( 2,261 )

Total other (income) expenses, net ( 50 ) 6,919 ( 5,439 )

Net loss before income taxes ( 39,188 ) ( 41,929 ) ( 21,312 )

Income tax benefit ( 4,107 ) ( 338 ) ( 4,947 )

Net (loss) income $ ( 37,822 ) $ ( 20,974 ) $ 1,258

Income tax expense (benefit) 460 ( 4,107 ) ( 338 )

Net loss $ ( 39,648 ) $ ( 37,822 ) $ ( 20,974 )

Weighted average shares outstanding

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Diluted 23,459,425 23,077,704 22,675,477

Net (loss) income per share

Net loss per share

Basic $ ( 1.69 ) $ ( 1.64 ) $ ( 0.92 )

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2025 2024 2023

Net (loss) income $ ( 37,822 ) $ ( 20,974 ) $ 1,258

Other comprehensive (loss) income:

Net loss $ ( 39,648 ) $ ( 37,822 ) $ ( 20,974 )

Other comprehensive income (loss):

Foreign currency translation adjustment 9,988 ( 5,090 ) ( 1,631 )

Unrealized (loss) gain on short term investments ( 276 ) 68 ( 871 )

Unrealized gain (loss) on short term investments 230 ( 276 ) 68

Adjustment for realized gains 32 119 1,437

Other comprehensive loss, net of tax ( 5,247 ) ( 126 ) ( 13,891 )

Other comprehensive income (loss), net of tax 10,250 ( 5,247 ) ( 126 )

Comprehensive loss $ ( 29,398 ) $ ( 43,069 ) $ ( 21,100 )

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( in thousands, except share information)

Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity

Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders' Equity

Balance at January 1, 2023 22,877,962 $ 6 $ 560,810 $ ( 176,768 ) $ ( 5,400 ) $ 378,648

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Stock option exercise 670 — 21 — — 21

Consideration for MD Ortho and Pega acquisitions 208,140 — 9,707 — — 9,707

Consideration for MedTech and Rhino acquisitions 54,884 — 2,752 — — 2,752

Stock portion of ApiFix anniversary installment payment 140,003 — 6,178 — — 6,178

Issuance of common stock, net of issuance cost 2,616,250 1 139,282 — — 139,283

Other comprehensive loss — — — — ( 126 ) ( 126 )

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Net loss — — — ( 37,822 ) — ( 37,822 )

Stock option exercise 670 — 21 — — 21

Restricted stock 589,000 — 13,548 — — 13,548

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Restricted stock 786,795 — 17,396 — — 17,396

Acquisition consideration - MedTech installment 4,288 — 133 — — 133

Acquisition consideration - ApiFix final installment 245,812 — 6,929 — — 6,929

Other comprehensive loss — — — — ( 5,247 ) ( 5,247 )

Issuance of common stock 64,065 — 1,494 — — 1,494

Stock portion of the MedTech anniversary installment 10,830 — 226 — — 226

Consideration for distributor acquisition 14,594 — 250 — — 250

Capital contribution associated with reclassification of MedTech liability to equity — — 2,062 — — 2,062

Other comprehensive income — — — — 10,250 10,250

Balance at December 31, 2025 25,093,792 $ 6 $ 622,325 $ ( 275,212 ) $ ( 523 ) $ 346,596

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OPERATING ACTIVITIES

Net (loss) income $ ( 37,822 ) $ ( 20,974 ) $ 1,258

Net loss $ ( 39,648 ) $ ( 37,822 ) $ ( 20,974 )

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Impairment 1,836 985 3,609

Goodwill and other intangible asset impairments 6,512 1,836 985

Depreciation and amortization 21,119 19,080 17,385

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Non-cash other 244 90 —

Changes in certain operating assets and liabilities:

Changes in certain operating assets and liabilities, net of acquisitions:

Accounts receivable - trade ( 9,366 ) ( 4,749 ) ( 9,724 )

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Acquisition of Boston O&P, net of cash acquired — ( 20,225 ) —

Clinic acquisitions, net of cash acquired ( 2,882 ) — —

Other acquisitions, including clinics, net of cash acquired ( 15,502 ) ( 2,882 ) —

Acquisition of MedTech, net of cash acquired — — ( 3,097 )

Acquisition of Rhino assets — — ( 546 )

Acquisition of MDO, net of cash acquired — — ( 8,360 )

Acquisition of Pega, net of cash acquired — — ( 31,730 )

Sale of short-term marketable securities — 49,855 112,904

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Purchases of property and equipment ( 11,110 ) ( 14,263 ) ( 16,878 )

Net cash provided by (used in) investing activities ( 13,162 ) 41,677 ( 113,371 )

Net cash (used in) provided by investing activities ( 43,629 ) ( 13,162 ) 41,677

FINANCING ACTIVITIES

Payments on debt with affiliate — — ( 31,000 )

Proceeds from issuance of debt with affiliate — — 31,000

Proceeds from issuance of debt 25,000 73,533 9,424

Payment of debt issuance costs — ( 3,407 ) —

Proceeds from issuance of common stock, net of issuance costs — — 139,282

Proceeds from exercise of stock options — — 21

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Effect of exchange rate changes on cash 348 ( 175 ) 633

NET INCREASE IN CASH AND RESTRICTED CASH 12,750 22,565 1,456

NET (DECREASE) INCREASE IN CASH AND RESTRICTED CASH ( 24,157 ) 12,750 22,565

Cash and restricted cash, beginning of period 45,777 33,027 10,462

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Issuance of common shares for MedTech installment $ 226 $ 133 $ —

Issuance of common shares in connection with Boston O&P acquisition $ 233 $ — $ —

Issuance of common shares to acquire Rhino assets $ — $ — $ 478

Issuance of common shares to acquire MDO $ — $ — $ 9,707

Right-of-use assets obtained in exchange for lease liabilities $ 8,957 $ 706 $ 213

Issuance of common shares to settle an obligation with a vendor $ 1,261 $ — $ —

Issuance of common shares to acquire distributor $ 250 $ — $ —

Capital contribution associated with reclassification of MedTech liability to equity $ 2,062 $ — $ —

Debt issuance costs not yet paid $ — $ — $ 127

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December 31, 2025

( dollars in thousands, except per share information )

( dollars in thousands, except per share information or as otherwise stated )

NOTE 1 – 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, PediFlex TM nail, PediNail TM , PediLoc ® Tibia, ACL Reconstruction System, Locking Cannulated Blade, Locking Proximal Femur, Spica Tables, RESPONSE TM Spine, BandLoc TM , Pediatric Nailing Platform | Femur, Devise Rail, Orthex ® , The Fassier-Duval Telescopic Intramedullary System ® , SLIM TM Nail, The GAP Nail TM , The Free Gliding SCFE Screw System TM , GIRO TM Growth Modulation System, PNP Tibia System, ApiFix ® Mid-C System and Mitchell Ponseti ® and Boston Brace 3D 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 orthopedic bracing products are manufactured in-house.

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, PediFlex TM nail, PediNail TM , PediLoc ® Tibia, ACL Reconstruction System, Locking Cannulated Blade, Locking Proximal Femur, Spica Tables, RESPONSE TM Spine, BandLoc TM , Pediatric Nailing Platform | Femur, Devise Rail, Orthex ® , The Fassier-Duval Telescopic Intramedullary System ® , SLIM TM Nail, The GAP Nail TM , The Free Gliding SCFE Screw System TM , GIRO ™ Growth Modulation System, PNP Tibia System, ApiFix ® Mid-C System, Mitchell Ponseti ®, VerteGlide TM , and Boston Brace 3D ® 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 orthopedic bracing products are typically manufactured in-house.

We also operate multiple O&P clinics delivering leading pediatric non-surgical O&P treatment.

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 are the only global medical device company focused exclusively on providing a comprehensive trauma and deformity correction, scoliosis and sports medicine/other 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 as well as provide O&P clinic services to meet the specialized needs of pediatric surgeons and their patients, who we believe have been largely neglected by the orthopedic industry.

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In 2023 and 2024, we hired operating and sales representatives in Germany and Australia, respectively, to better serve our customers.

In 2024, we opened warehouses in Germany and Australia, and hired a European operations director to continue our growth in the European market.

In 2024, we hired a European operations director to continue our growth in the European market, and we opened warehouses in Germany and Australia.

In 2025, we opened a warehouse in the Netherlands.

In November 2025, we established a legal entity in Brazil to sell and distribute directly to the local market.

The financial statements of our foreign subsidiaries are accounted for in local functional currencies and have been translated into U.S.

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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.

Contingent consideration represents conditional amounts that the Company is either required to pay, or receive, in connection with certain acquisitions.

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.

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Sales of our implants and instruments in the United States are primarily to hospital accounts through independent sales agencies.

We recognize revenue

when our performance obligations under the terms of a contract with our customer are satisfied.

We recognize revenue when our performance obligations under the terms of a contract with our customer are satisfied.

For our implants and instruments, this typically occurs when we transfer control of our products to the customer, generally upon implantation or when title passes upon shipment.

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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 invests in 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.

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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.

however, due to the pending IMED Surgical litigation, the cash remains reported as restricted until the conclusion of the legal matter.

See Note 17 - Commitments and Contingencies for further detail.

The Company also maintains restricted cash of 625 Euro at its Netherlands entity for potential Italian tenders.

The Company also maintains restricted cash of EUR 625 at its Netherlands entity for potential Italian tenders.

Accounts Receivable

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Balance at beginning of year $ 1,145 $ 1,373 $ 1,056

Adjustments charged to expense (income) 101 499 723

Adjustments charged to expense 278 101 499

Write-offs & other adjustments ( 202 ) ( 1,132 ) ( 182 )

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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 warehouses, 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.

Our global inventory, which primarily consists of implants and instruments held in our warehouses, with third-party independent sales agencies or distributors, or consigned directly with hospitals, are considered finished goods and are purchased from third parties.

Inventory is stated at the lower of cost or net realizable value, with cost determined using the first-in-first-out method.

The implant and bracing inventory is classified as a current asset because it is expected to be sold, consumed, or converted into cash within a year or within the normal operating cycle of the business.

We adjust inventory values to reflect usage patterns and life cycle.

We continuously monitor our global inventory for excess or obsolete items in relation to estimated forecasted product demand and the product life cycle.

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.

Charges for excess and obsolete inventory are included in cost of revenue and were $ 914 , $ 995 and $ 1,011 for the years ended December 31, 2024, 2023 and 2022, respectively.

As of December 31, 2025 and 2024, our excess and obsolete inventory reserve was $ 7.7 million and $ 9.6 million, respectively.

Charges for excess and obsolete inventory are included in cost of revenue and were insignificant for the year ended December 31, 2025, and $ 914 and $ 995 for the years ended December 31, 2024 and 2023, respectively.

We also incurred an additional charge during 2024 of $ 1,756 for excess and obsolete inventory in connection with our 2024 Restructuring Plan that is included within restructuring expense in the consolidated statement of operations.

See Note 4 - Restructuring for additional information.

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

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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, Rhino, Boston O&P, and O&P clinics.

Amortizable intangible assets primarily relate to customer relationships, capitalized software, patents and licenses, and non-competition agreements related to our acquisitions.

Amortization is calculated on a straight-line basis over the estimated useful life of the asset.

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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.

No impairment charges were recorded in any of the periods presented.

Due to management's decision to exit its Telos regulatory consulting business in 2025, it was determined to fully write-off any remaining customer relationship intangible asset.

We recorded an impairment charge of $ 0.4 million for the year ended December 31, 2025 within intangible asset impairment expense in the consolidated statement of operations.

No impairment charges for amortizable intangible assets were recorded in 2024 or 2023.

Goodwill and Other Intangible Assets

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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, Boston O&P and O&P clinics.

The Company has determined the reporting units to be surgical implants and the bracing reporting units established with the acquisition of MD Ortho, Boston O&P and O&P clinics.

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.

Management made the decision to exit its Telos regulatory consulting business, in the third quarter of 2025, resulting in a write-off of its entire goodwill balance.

This goodwill impairment charge was recorded within restructuring expense in the consolidated statement of operations.

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.

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.

In 2025, we performed a quantitative analysis of our two reporting units.

Fair value was determined using a combination of the income approach (discounted cash flows) and the market approach, which are weighted based on the relevance and availability of observable inputs for each reporting units.

The income approach uses a reporting unit's projection of estimated operating results and cash flows that is discounted using a weighted-average cost of capital that reflects current market conditions appropriate to the Company's reporting unit.

The discounted cash flow model uses projections based on management's best estimates of economic and market conditions over the projected period using the best information available, including growth rates in revenues, costs and estimates of future expected changes in operating margins and cash expenditures.

Other significant estimates and assumptions include terminal value growth rates, weighted average cost of capital and changes in future working capital requirements.

The market approach considered valuation multiples of comparable publicly traded companies and recent market transactions.

For all reporting units tested as part of our annual assessment, the estimated fair value exceeded the carrying value, and no impairment was recorded.

We have indefinite-lived trademark assets that are reviewed for impairment by performing a quantitative analysis, which occurs annually in the third quarter, utilizing balances as of August 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.

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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.

During 2024, 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.

During 2025, 2024, and 2023, the Company completed a quantitative analysis whereby we determined the fair value of the ApiFix trademark asset to be below the carrying value.

The primary reason for the impairment is the lower forecasted revenue of our ApiFix product than previously expected.

We recorded impairment charges of $ 1,836 , $ 985 , and $ 3,609 for the years ended December 31, 2024, 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.

Additional partial impairment charges were recorded in 2025 related to our MedTech and Orthex trademark assets, due to lower forecasted revenues, and a full impairment of the Telos tradename was recorded in connection with our decision to exit this business in 2025.

We recorded impairment charges of $ 4,228 , $ 1,836 , and $ 985 for the years ended December 31, 2025, 2024, and 2023, respectively, to reduce the carrying amount of the intangible assets to their estimated fair values.

Investments in Privately Held Companies

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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 $ 2,180 as and $ 1,855 of December 31, 2024 and 2023, respectively.

which are recorded within other non-current assets on its consolidated balance sheet.

The Company has investments of $ 3,629 , and

$ 2,180 as of December 31, 2025 and 2024, respectively, which are recorded within other non-current assets on its consolidated balance sheet.

Acquisition Payable and Contingent Consideration

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Both are included as a component of other expenses (income) on the consolidated statements of operations.

The amount of expense recorded was $ 661 , $ 1,372 and $ 2,307 for the

years ended December 31, 2024, 2023 and 2022, respectively related to the accretion of the acquisition installment payable.

The amount of expense recorded was $ 89 , $ 661 and $ 1,372 for the years ended December 31, 2025, 2024 and 2023, respectively, related to the accretion of the acquisition installment payable.

Adjustments in the fair value of the contingent consideration payment were recognized as income of $ 0 , $ 0 and $ 2,980 for the years ended December 31, 2025, 2024 and 2023, respectively.

Following the fourth year anniversary of our acquisition of ApiFix in April 2024, the sales performance period associated with our ApiFix system sales milestone ended, and no additional amounts were owed to the sellers.

There is no additional contingent consideration owed as of December 31, 2024.

Shipping and Handling Costs

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Our implants and instruments are manufactured to our specifications by third-party suppliers who meet our manufacturer qualifications standards.

We purchase the raw materials to make our specialized bracing products in our facilities in Wayland, IA and Boston, MA.

We purchase the raw materials to make our specialized bracing products in our facilities in Wayland, IA, Edenbridge, UK, and Boston, MA.

Our manufacturing sites as well as our third-party manufacturers are required to meet Food and Drug Administration (the “FDA”), International Organization for Standardization and other country-specific quality standards.

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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.

The restricted stock that has been granted under the 2017 Plan typically vests at the end of a three-year period.

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The Company has elected to account for lease and non-lease components together as a single lease component for all underlying assets.

Reclassification

In the consolidated financial statements, the Company has reclassified stock-based compensation to conform to the current period presentation.

All stock-based compensation was previously recorded within general and administrative expenses, and such costs have now been allocated between general and administrative expenses, research and development expenses and sales and marketing expenses.

The current presentation results in stock-based compensation expense being recorded in the same manner in which the award recipient's payroll costs are classified.

This reclassification did not affect previously reported total operating expenses, loss before income taxes, or net loss in the consolidated statements of operations.

The following tables present the impact of the reclassification on our consolidated statements of operations for the years ended December 31, 2023 and 2022:

Year Ended December 31,

Sales and marketing (prior presentation) $ 51,402 $ 45,053

Reclassification 1,422 1,041

Sales and marketing (new presentation) $ 52,824 $ 46,094

Year Ended December 31,

General and administrative (prior presentation) $ 75,421 $ 59,383

Reclassification ( 2,121 ) ( 1,479 )

General and administrative (new presentation) $ 73,300 $ 57,904

Year Ended December 31,

Research and development (prior presentation) $ 10,196 $ 8,014

Reclassification 699 438

Research and development (new presentation) $ 10,895 $ 8,452

Recent Accounting Pronouncements

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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.

becomes effective, with early adoption prohibited.

For all other entities, the amendments will be effective two years later.

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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.

We adopted this ASU for the annual period ended December 31, 2024 retrospectively for all periods presented.

See Note 13 - Business Segments for additional information.

In December 2023, the FASB issued ASU No.

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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 ASU on our consolidated financial statements and disclosures.

Adjustments to the annual disclosure of income taxes include:

(1) A tabular rate reconciliation comprised of eight specific categories, (2) Income taxes paid, disaggregated between significant national, state, and foreign jurisdictions, (3) Eliminates requirements to disclose the nature and estimate of reasonably possible changes to unrecognized tax benefits in the next 12 months or that an estimated range cannot be made, and (4) Adds a requirement to disclose income (or loss) from continuing operations before income tax expense (or benefit) by national and foreign, and income tax expense (or benefit) from continuing operations disaggregated between national, state and foreign.

The ASU is effective for public business entities for fiscal years beginning on or after December 15, 2024 with early adoption permitted.

The amendments in ASU 2023-09 were adopted by the Company on a prospective basis.

There was no material impact to the Company's financial statements as a result of adopting ASU 2023-09.

In November 2024, the FASB issued ASU No.

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Boston O&P 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 stock purchase agreement, the Company paid to the shareholders of Boston O&P consideration of $ 21,535 in cash, after adjusting for closing net working capital, transaction expenses, and funded indebtedness.

Under the terms of the stock purchase agreement, the Company paid to the shareholders of Boston O&P consideration of $ 21,535 in cash and $ 233 in common stock, after adjusting for closing net working capital, transaction expenses, and funded indebtedness.

Additionally, certain employees and executives of Boston O&P also received awards of restricted stock of the Company which will vest in three years subject to continuous service.

The Restricted Stock Award Agreements were to approximately 170 individuals for an aggregate of approximately 83,000 shares representing approximately $ 2,500 (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 Incentive Award Plan.

The restricted stock is not considered part of the purchase consideration.

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In 2024, Boston O&P purchased all the issued and outstanding share capital or acquired the assets of multiple domestic orthotic and prosthetic device clinics.

Total consideration for all O&P clinics acquired during 2024 was approximately $ 4,818 in total consideration, which comprised of cash of $ 3,388 and promissory notes in the original principal amount of $ 1,430 payable in installment s with an interest rate of 5.0 % per annum.

We allocated $ 680 to customer relationship intangible assets and $ 3,367 to goodwill, and the rest to net working capital and other assets acquired and liabilities assumed.

In 2025, Boston O&P purchased all the issued and outstanding membership interest or acquired the assets of multiple orthotic and prosthetic device clinics.

Total consideration for all O&P clinics acquired was approximately $ 9,042 , which comprised of cash of $ 6,796 and promissory notes in the original principal amount of $ 2,475 , with a weighted average interest rate of 4.9 % per annum.

The sellers may also be entitled to an earnout of up to $ 1,475 , if gross revenues exceed a threshold in the first year after closing.

The sellers promissory notes may also be subject to adjustments if gross revenue targets are not achieved in the first year after the applicable closing.

allocated $ 2,268 to customer relationship intangible assets and $ 5,680 to goodwill, and the rest to net working capital and other assets acquired and liabilities assumed.

The allocation of the purchase price is considered preliminary.

In July 2025, OP EU B.V., a wholly-owned Netherlands based subsidiary of the Company, purchased all of the issued and outstanding share capital of orthotic and prosthetic device clinics located in Ireland.

Total consideration was approximately EUR 1,473 which comprised of cash of EUR 1,200 and a promissory note in the original principal amount of EUR 390 , with an interest rate of 4.0 % per annum.

The sellers promissory note may be subject to adjustments if net sales targets are not achieved.

We allocated EUR 390 to customer relationship intangible assets and EUR 1,101 to goodwill, and the rest to net working capital and other assets acquired and liabilities assumed.

The allocation of the purchase price is considered preliminary.

OrthoPediatrics EU Limited

In August 2025, OrthoPediatrics EU Limited, a wholly-owned UK based subsidiary of the Company, purchased all of the issued and outstanding share capital of a designer and manufacturer of clubfoot bracing located in the UK.

Total consideration was approximately GBP 3,537 , which was comprised of cash of GBP 2,506 and promissory notes in the original principal amount of GBP 1,100 , with an interest rate of 5.0 % per annum.

We allocated GBP 695 to customer relationship intangible assets, GBP 766 to goodwill and the rest to net working capital and other assets acquired and liabilities assumed.

The allocation of the purchase price is considered preliminary.

Orthopediatrics do Brasil Ltda.

On November 25, 2025, Orthopediatrics do Brasil Ltda., a wholly-owned Brazil based subsidiary of the Company, purchased all of the issued and outstanding share capital of a local distributor.

Total consideration was approximately BRL $ 41,552 which is comprised of BRL $ 23,128 of upfront cash, 14,594 shares of the Company's common stock representing approximately BRL $ 1,329 , and approximately BRL $ 24,023 in anniversary payments, or approximately BRL $ 17,043 after giving effect to the time value of money.

The total consideration transferred, as calculated after discounting future payments to present value, is preliminary and subject to certain limitations and customary adjustments.

The Company is obligated to make anniversary payments of:

(i) BRL $ 2,762 on the first anniversary of the closing date, and (ii) BRL $ 5,315 on each of the subsequent four anniversaries of the closing date.

All anniversary payments are to be made in a combination of cash and shares of our common stock.

As of December 31, 2025, we recorded a current portion of these future anniversary payments of USD $ 442 within current portion of acquisition installment payable, and USD $ 2,668 within acquisition installment payable, net of current portion on our consolidated balance sheet.

We allocated BRL $ 5,550 to customer relationship intangible assets, BRL $ 1,440 to non-compete agreements, BRL $ 6,312 to goodwill, and the rest to net working capital and other assets acquired and liabilities assumed, including inventories of BRL $ 30,530 .

The allocation of the purchase price is considered preliminary.

Rhino Pediatric Orthopedic Designs, Inc.

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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.

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 FLASH TM Navigation platform.

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Unger abstaining).

On May 9, 2025, as part of the Company’s ongoing efforts to preserve cash, we amended the Purchase Agreement (the “Amendment”) such that the fixed cash portion of all three remaining anniversary payments (with an aggregate gross value of $ 3,750 ) will now be settled through the issuance of unregistered shares of our common stock.

The future equity issuances to one of the sellers (with an aggregate value of $ 2,250 ) is contingent upon their continuous service through the applicable third and fourth anniversary dates.

The number of shares

that is contingently issuable at the third and fourth anniversary dates is based on the volume-weighted average price over the thirty trading days ending on the second business day prior to the applicable anniversary date.

As the monetary amount is fixed and known as of the date of the Amendment, the share-settled liability is being recorded on a straight-line basis over the service period as additional stock-based compensation expense.

During the year ended December 31, 2025, the Company paid the second anniversary payment by issuing 10,830 unregistered shares of our common stock approximating $ 226 to one of the sellers, which reduced the amount of the acquisition installment payable on our consolidated balance sheet.

In addition, we issued 97,467 unregistered shares of our common stock, approximately $ 1,250 in value, of which 50 % had previously been recognized as stock-based compensation expense in the post-combination consolidated financial statements, and the other 50 % had been recorded within the acquisition installment payable on the consolidated balance sheet.

We also recorded a capital contribution for $ 2,026 upon execution of the Amendment, which represented the present value of the fixed cash payments that would be paid at the third and fourth anniversary dates, and derecognized the related acquisition installment payable which had previously been recorded on our consolidated balance sheet.

As of December 31, 2025, the Company has recorded a share-settled liability of $ 1,982 related to the Amendment, of which $ 1,752 is recorded as a current liability.

NOTE 4 - RESTRUCTURING

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The 2024 Restructuring Plan aims to improve operational efficiency, exit our physical site in Israel, and reduce costs by integrating the ApiFix product into the broader OP Scoliosis portfolio, and effect additional staff reduction across all of OrthoPediatrics Corp.

The 2024 Restructuring Plan is expected to result in total restructuring charges of approximately $ 3,877 .

In 2025, the Company made the decision to restructure Telos by dissolving the local operation and continuing staff reductions across the Company.

In 2024, we recognized expenses of $ 3,653 related to reducing the ApiFix portfolio inventory, reserving for excess inventory, and employee termination benefits.

In 2025, we expect to expense $ 246 of retention bonuses as part of the 2024 Restructuring Plan.

In 2025, we recognized expenses of $ 5,601 related to the restructuring of Telos and continuing staff reductions as part of the 2024 Restructuring Plan, which includes $ 1,431 of non-cash stock-based compensation expense.

The Company's restructuring expenses are comprised of the following:

Year Ended December 31, 2024

Year Ended December 31, 2025 Year Ended December 31, 2024

Severance and employee costs $ 3,490 $ 1,196

Write-down of inventory and property and equipment 1,771

Goodwill write-off 1,874 1,771

Other exit costs 237 686

Balance at December 31, 2024 $ 3,653

The following table summarizes the changes in our accrued restructuring balance, which is included in accrued expenses and other current liabilities in the accompanying consolidated balance sheets.

$ 5,601 $ 3,653

The following table summarizes the changes in our accrued restructuring balance, which is included in either accrued expenses and other current liabilities or other long-term liabilities in the accompanying consolidated balance sheets.

Such costs are all expected to be paid by December 31, 2027.

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Balance at December 31, 2024 $ 1,072

Restructuring charges $ 1,605

Payments ( 1,869 )

Balance at December 31, 2025 $ 808

NOTE 5 - GOODWILL AND INTANGIBLE ASSETS

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, 2024.

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:

Goodwill at January 1, 2025 $ 93,844

Boston O&P acquisition 8,357

Other clinic acquisitions 3,367

Clinic and other acquisitions 9,156

Boston O&P measurement period adjustment 233

Goodwill impairment ( 1,874 )

Foreign currency translation impact 7,910

Goodwill at December 31, 2025

Management made the decision to exit its regulatory consulting business, performed by Telos in the third quarter of 2025, resulting in a write-off of its entire goodwill balance.

This goodwill impairment charge was recorded within restructuring expenses in the consolidated statements of operations.

Intangible Assets

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Weighted-Average Amortization Period

Gross Intangible Assets Accumulated Amortization Impairment Net Intangible Assets

Gross Intangible Assets Accumulated Amortization Net Intangible Assets

Patents 9.3 years $ 49,939 $ ( 18,854 ) $ 31,085

Intellectual Property 8.2 years 16,027 ( 4,065 ) — 11,962

Intellectual Property and Capitalized Software 7.1 years 16,056 ( 5,642 ) 10,414

Customer Relationships & Other 9.7 years 26,278 ( 6,107 ) 20,171

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Weighted-Average Amortization Period

Gross Intangible Assets Accumulated Amortization Impairment Net Intangible Assets

Gross Intangible Assets Accumulated Amortization Net Intangible Assets

Patents 10.2 years $ 45,064 $ ( 13,984 ) $ 31,080

Intellectual Property 9.1 years 16,026 ( 2,524 ) — 13,502

Intellectual Property and Capitalized Software 8.2 years 16,027 ( 4,065 ) 11,962

Customer Relationships & Other 11.5 years 21,850 ( 4,783 ) 17,067

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Total amortizable assets $ 93,651 $ ( 29,224 ) $ 64,427

We recorded a full impairment of our Telos customer relationship intangible asset of $ 410 , which is recorded within intangible asset impairment expense in the consolidated statements of operations.

Amortization expense was $ 8,165 , $ 7,812 and $ 7,149 for the years ended December 31, 2025, 2024 and 2023, respectively.

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Trademarks are recorded in other intangible assets on the consolidated balance sheets.

During 2024, 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, we completed a quantitative analysis whereby we determined the fair value of the trademark asset associated with our ApiFix acquisition was below the carrying value.

During 2025, 2024, and 2023, we completed a quantitative analysis whereby we determined the fair value of certain of our trademark assets was below the carrying value.

We recorded impairment charges of $ 4,228 , $ 1,836 and $ 985 for the years ended December 31, 2025, 2024 and 2023, respectively, to reduce the carrying amount of the intangible asset to its estimated fair value.

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Short term Investments

Certificates of Deposit $ — $ 25,792 $ — $ 25,792

Exchange Trade Mutual Funds $ 5,015 $ — $ — $ 5,015

Corporate Bonds $ 10,598 $ — $ — $ 10,598

Treasury Bonds $ 9,274 $ — $ — $ 9,274

Other $ 207 $ — $ — $ 207

Asset-Backed Securities $ 4,889 $ — $ — $ 4,889

Exchange Trade Mutual Funds $ 252 $ — $ — $ 252

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.

The Company's level 2 assets pertain to corporate bonds and asset-backed securities.

These securities are predominately priced by third parties, either by a pricing vendor or dealer with significant inputs observable in active markets.

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The adjustments in the fair value of the contingent consideration payments resulted in income of $ 0 , $ 0 and $ 2,980 for the years ended December 31, 2025, 2024 and 2023, respectively.

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

Balance at December 31, 2022

Change in fair value of contingent consideration ( 2,980 )

Balance at December 31, 2023

Change in fair value of contingent consideration —

Balance at December 31, 2024

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 and 2022, respectively:

2023 December 31,

Valuation techniques

Present value discount rate (1)

Volatility factor — % 48.0 %

Expected Years 0.4 years 1.4 years

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

There was no contingent consideration recorded on the consolidated balance sheet as of December 31, 2025 and 2024.

NOTE 7 - PROPERTY AND EQUIPMENT, NET

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Mortgage payable to affiliate 453 611

Acquisition note payable 1,372 —

Acquisition promissory notes 4,557 1,372

Total debt 106,010 77,483

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The Term Loan Agreement provides for (i) an initial term loan facility in the initial principal amount of $ 25,000 , which was funded in its entirety on August 12, 2024 and (ii) a delayed draw term loan facility (the “DDTL”) in an aggregate principal amount not to exceed $ 25,000 , which, subject to certain conditions set forth in the Term Loan Agreement, may be drawn until August 5, 2025.

On June 27, 2025, the Company withdrew the delayed draw on the term loan in the amount of $ 25,000 .

Loans borrowed pursuant to the Term Loan Agreement (the “Term Loans”) bear interest at a rate per annum equal to SOFR Interest Rate (as defined in the Term Loan Agreement and with a floor of 3.25 %) plus 6.50 %.

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The Term Loans do not amortize and will be interest-only until the August 5, 2029 maturity date, at which time all unpaid principal and accrued and unpaid interest, fees and expenses due under the Term Loan Agreement will become due and payable.

The Company is obligated to pay certain upfront fees and agency fees in connection with the Term Loan Agreement.

The Company paid certain upfront fees and agency fees in connection with the Term Loan Agreement.

The Company may pay all or a portion of the outstanding principal and accrued and unpaid interest under the Term Loan Agreement at any time upon prior notice to the Term Lenders subject to (i) a repayment fee schedule of, depending on when the repayment is made, 3.00 % of the principal amount of any such repayment during the first 12 months of the Term Loan Agreement or applicable DDTL funding date, 2.00 % of the principal amount of any such repayment during months 13 through 24 of the Term Loan Agreement or applicable DDTL funding date, 1.00 % of the principal amount of any such repayment during months 25 through 36 of the Term Loan Agreement or applicable DDTL funding date, and —% thereafter and (ii) an exit fee equal to 2.00 % of the principal amount of any such repayment ("Final Payment").

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The Term Loan Agreement also contains customary events of default, including among other things, the Credit Parties’ failure to make any principal or interest payments when due, the occurrence of certain bankruptcy or insolvency events, or the Credit Parties’ breach of the covenants under the Term Loan Agreement.

occurrence of an event of default, the Term Lenders may, among other things, accelerate the Credit Parties’ obligations under the Term Loan Agreement.

Upon the occurrence of an event of default, the Term Lenders may, among other things, accelerate the Credit Parties’ obligations under the Term Loan Agreement.

As security for their obligations under the Term Loan Agreement, the Credit Parties granted the Term Agent a continuing first priority security interest in substantially all of their assets (including intellectual property), subject to certain customary exceptions.

Braidwell Convertible Note

In addition to the Term Loans, on August 5, 2024, the Company entered into a Purchase Agreement (the “Purchase Agreement”) with Braidwell Transaction Holdings LLC – Series 10 (the “Purchaser”), whereby the Purchaser agreed to purchase $ 50,000 in aggregate principal amount of the Company’s 4.75 % Convertible Senior Notes due February 15, 2030 (the “Notes”) for an aggregate purchase price of $ 49,500 .

The Notes were issued pursuant to, and are governed by, an indenture (the “Indenture”), dated as of August 12, 2024, between the Company and U.S.

In addition to the Term Loans, on August 5, 2024, the Company entered into a Purchase Agreement (the “Purchase Agreement”) with Braidwell Transaction Holdings LLC – Series 10 (the “Purchaser”), whereby the Purchaser agreed to purchase $ 50,000 in aggregate principal amount of the Company’s 4.75 % Convertible Senior Notes due February 15, 2030 (the “Convertible Notes”) for an aggregate purchase price of $ 49,500 .

The Convertible Notes were issued pursuant to, and are governed by, an indenture (the “Indenture”), dated as of August 12, 2024, between the Company and U.S.

Bank Trust Company, National Association, as trustee (the “Trustee”).

The Notes represent the Company’s senior, unsecured obligations and are (i) equal in right of payment with the Company’s existing and future senior, unsecured indebtedness;

(ii) senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated to the Notes;

The Convertible Notes represent the Company’s senior, unsecured obligations and are (i) equal in right of payment with the Company’s existing and future senior, unsecured indebtedness;

(ii) senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated to the Convertible Notes;

and (iii) effectively subordinated to the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness.

The Notes accrue interest at a rate of 4.75 % per annum, payable quarterly in arrears on February 15, May 15, August 15, and November 15 of each year, beginning on November 15, 2024.

The Notes will mature on February 15, 2030, unless earlier repurchased, redeemed, or converted.

Before November 15, 2029, noteholders will have the right to convert their Notes only upon the occurrence of certain events, including, but not limited to, the Company’s common stock trading above 130 % of the conversion price for a specified period, the Notes per $1 in principal amount trading below 98 % of the product of the trading price of the Company’s common stock and the conversion rate, and certain fundamental changes to corporate structure.

From and after November 15, 2029, noteholders may convert their Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date.

The Convertible Notes accrue interest at a rate of 4.75 % per annum, payable quarterly in arrears on February 15, May 15, August 15, and November 15 of each year, beginning on November 15, 2024.

The Convertible Notes will mature on February 15, 2030, unless earlier repurchased, redeemed, or converted.

Before November 15, 2029, noteholders will have the right to convert their Convertible Notes only upon the occurrence of certain events, including, but not limited to, the Company’s common stock trading above 130 % of the conversion price for a

specified period, the Convertible Notes per $1 in principal amount trading below 98 % of the product of the trading price of the Company’s common stock and the conversion rate, and certain fundamental changes to corporate structure.

From and after November 15, 2029, noteholders may convert their Convertible Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date.

The Company will settle conversions by paying or delivering, as applicable, cash, shares of its common stock, or a combination of cash and shares of its common stock, at the Company’s election.

The initial conversion rate is 24.4021 shares of common stock per $1 principal amount of Notes, which represents an initial conversion price of approximately $ 40.98 per share of common stock.

The initial conversion rate is 24.4021 shares of common stock per $1 principal amount of Convertible Notes, which represents an initial conversion price of approximately $ 40.98 per share of common stock.

The conversion rate and conversion price are subject to customary adjustments upon the occurrence of certain events.

In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time.

The Notes are redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after February 21, 2028 and on or before the 30th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if (i) the Notes are Freely Tradable (as defined in the Indenture) and any accrued and unpaid additional interest pursuant to the Notes has been paid as of the redemption date, and (ii) the last reported sale price per share of the Company’s common stock exceeds 140% of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice;

The Convertible Notes are redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after February 21, 2028 and on or before the 30th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if (i) the Convertible Notes are Freely Tradable (as defined in the Indenture) and any accrued and unpaid additional interest pursuant to the Convertible Notes has been paid as of the redemption date, and (ii) the last reported sale price per share of the Company’s common stock exceeds 140 % of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice;

and (2) the trading day immediately before the date the Company sends such notice.

In addition, calling any Note for redemption will constitute a Make-Whole Fundamental Change with respect to that Note, in which case the conversion rate applicable to the conversion of that Note will be increased in certain circumstances if it is converted after it is called for redemption.

If certain corporate events that constitute a “Fundamental Change” (as defined in the Indenture) occur, then, subject to a limited exception for certain cash mergers, noteholders may require the Company to repurchase their Notes at a cash repurchase price equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date.

In addition, calling any Convertible Note for redemption will constitute a Make-Whole Fundamental Change with respect to that Convertible Note, in which case the conversion rate applicable to the conversion of that Convertible Note will be increased in certain circumstances if it is converted after it is called for redemption.

If certain corporate events that constitute a “Fundamental Change” (as defined in the Indenture) occur, then, subject to a limited exception for certain cash mergers, noteholders may require the Company to repurchase their Convertible Notes at a cash repurchase price equal to the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date.

The definition of Fundamental Change includes certain business combination transactions involving the Company and certain de-listing events with respect to the Company’s common stock.

The Notes have customary provisions relating to the occurrence of “Events of Default” (as defined in the Indenture), which include the following:

(i) certain payment defaults on the Notes (which, in the case of a default in the payment of interest on the Notes, will be subject to a 30-day cure period);

The Convertible Notes have customary provisions relating to the occurrence of “Events of Default” (as defined in the Indenture), which include the following:

(i) certain payment defaults on the Convertible Notes (which, in the case of a default in the payment of interest on the Convertible Notes, will be subject to a 30-day cure period);

(ii) the Company’s failure to send certain notices under the Indenture within specified periods of time;

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(iv) a default by the Company in its obligation to convert a note in accordance with the Indenture upon the exercise of the conversion right with respect thereto, if not cured within two business days after its occurrence;

(v) a default by the Company in its other obligations or agreements under the Indenture or the Notes if such default is not cured or waived within 60 days after notice is given in accordance with the Indenture;

(v) a default by the Company in its other obligations or agreements under the Indenture or the Convertible Notes if such default is not cured or waived within 60 days after notice is given in accordance with the Indenture;

(vi) certain defaults by the Company or any of its significant subsidiaries with respect to indebtedness for borrowed money of at least $ 25,000 ;

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and (viii) certain events of bankruptcy, insolvency, and reorganization involving the Company or any of the Company’s significant subsidiaries.

If an Event of Default involving bankruptcy, insolvency, or reorganization events with respect to the Company (and not solely with respect to a significant subsidiary of the Company) occurs, then the principal amount of, and all accrued and unpaid interest on, all of the Notes then outstanding will immediately become due and payable without any further action or notice by any person.

If any other Event of Default occurs and is continuing, then, the Trustee, by notice to the Company, or noteholders of at least 25 % of the aggregate principal amount of Notes then outstanding, by notice to the Company and the Trustee, may declare the principal amount of, and all accrued and unpaid interest on, all of the Notes then outstanding to become due and payable immediately.

However, notwithstanding the foregoing, the Company may elect, at its option, that the sole remedy for an Event of Default relating to certain failures by the Company to comply with certain reporting covenants in the Indenture consists exclusively of the right of the noteholders to receive special interest on the Notes for up to 180 days at a specified rate per annum not exceeding 0.50 % on the principal amount of the Notes.

If an Event of Default involving bankruptcy, insolvency, or reorganization events with respect to the Company (and not solely with respect to a significant subsidiary of the Company) occurs, then the principal amount of, and all accrued and unpaid interest on, all of the Convertible Notes then outstanding will immediately become due and payable without any further action or notice by any person.

If any other Event of Default occurs and is continuing, then, the Trustee, by notice to the Company, or noteholders of at least 25 % of the aggregate principal amount of Convertible Notes then outstanding, by notice to the Company and the Trustee, may declare the principal amount of, and all accrued and unpaid interest on, all of the Convertible Notes then outstanding to become due and payable immediately.

However, notwithstanding the foregoing, the Company may elect, at its option, that the sole

remedy for an Event of Default relating to certain failures by the Company to comply with certain reporting covenants in the Indenture consists exclusively of the right of the noteholders to receive special interest on the Convertible Notes for up to 180 days at a specified rate per annum not exceeding 0.50 % on the principal amount of the Convertible Notes.

The debt facilities replaced the $ 80,000 Credit, Security, and Guaranty Agreement with MidCap Funding IV Trust and MidCap Financial Trust and other parties named therein, dated December 29, 2023 (the "MidCap Credit Agreement").

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If an event of default is not cured within the time periods specified (if any), the Lenders and Agent would have had the right to accelerate the Company’s payment of principal and interest in addition to other rights and remedies.

MidCap Credit Agreement included 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 and maintaining minimum liquidity of $ 10,000 .

The MidCap Credit Agreement included 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 and maintaining minimum liquidity of $ 10,000 .

The MidCap Credit Agreement was amended on May 3, 2024 to clarify the inputs into the financial covenant calculations.

As a result of the termination of the MidCap Credit Agreement, the Company recorded a loss on the extinguishment of debt in the amount of $ 3,230 on the consolidated statement of operations for the year ended December 31, 2024.

Squadron Revolver

The MidCap Credit Agreement replaced the Fourth Amended and Restated Loan and Security Agreement with Squadron Capital, LLC ("Squadron"), (as amended, the "Squadron Loan Agreement"), which provided the Company with a $ 50,000 revolving credit facility.

There was no indebtedness outstanding under the Squadron Loan Agreement when it was terminated in connection with the MidCap Credit Agreement on December 31, 2023.

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 in Tennessee, Inc.

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.

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Interest expense relating to notes payable to Squadron and mortgage note payable with Tawani wa s $ 27 , $ 35 and $ 42 for the years ended December 31, 2025, 2024 and 2023, respectively.

Acquisition Promissory Notes

As of result of multiple acquisitions in 2025 and 2024, as part of the consideration transferred, the Company is contracted to pay promissory notes to the previous owners.

As of December 31, 2025, we had $ 4,557 remaining in present value, of which $ 1,696 is classified as short-term on the consolidated balance sheet.

The payments are paid in installments with interest rates ranging from 4.0 % to 5.0 % per annum.

At December 31, 2025, the aggregate future principal payments on our debt arrangements, including the Final Payment, are as follows:

Year Ending December 31:

Thereafter 50,000

Total $ 106,010

NOTE 10 - INCOME TAXES

Total income tax benefit for the years ended December 31, 2024, 2023 and 2022 was allocated as follows:

Total income tax expense (benefit) for the years ended December 31, 2025, 2024 and 2023 was allocated as follows:

2025 2024 2023

Total income tax benefit $ ( 4,107 ) $ ( 338 ) $ ( 4,947 )

Total income tax expense (benefit) $ 460 $ ( 4,107 ) $ ( 338 )

For the years ended December 31, 2025, 2024 and 2023 loss before taxes of the Company consists of the following:

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Total $ ( 39,188 ) $ ( 41,929 ) $ ( 21,312 )

The components of income tax benefit for the years ended December 31, 2024, 2023 and 2022 are as follows:

The components of income tax expense (benefit) for the years ended December 31, 2025, 2024 and 2023 are as follows:

2025 2024 2023

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Decrease in valuation allowance — ( 2,629 ) —

Total income tax benefit $ ( 4,107 ) $ ( 338 ) $ ( 4,947 )

Total income tax expense (benefit) $ 460 $ ( 4,107 ) $ ( 338 )

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

2024 2023 2022

Year Ended December 31, 2025

Amount Percent

Federal Statutory Tax Rate $ ( 8,258 ) 21.0 %

State and Local Income Taxes, Net of Federal Income Tax Effect (a) $ 92 ( 0.2 ) %

Foreign Tax Effects

Current non-cash Tax Adjustments $ 593 ( 1.5 ) %

Other $ ( 94 ) 0.2 %

Israel $ 1,277 ( 3.3 ) %

Other Foreign Jurisdictions $ ( 293 ) 0.7 %

Foreign Tax Credits $ 426 ( 1.1 ) %

Changes in Valuation Allowance $ 8,170 ( 20.8 ) %

Nontaxable or Nondeductible Items

Excess tax benefits from stock plans $ 1,069 ( 2.7 ) %

Elimination $ ( 657 ) 1.7 %

Other $ 190 ( 0.5 ) %

Other Adjustments

Unborn foreign tax deduction $ ( 1,895 ) 4.8 %

Other $ ( 160 ) 0.4 %

Effective Tax Rate $ 460 ( 1.2 ) %

(a) State taxes in Massachusetts, New York, New York City and Texas made up the majority of the tax effect in this category.

Federal statutory rate 21.0 % 21.0 %

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Deferred tax liabilities, net $ ( 3,582 ) $ ( 3,381 )

The deferred tax assets were fully offset by a valuation allowance at December 31, 2024 and 2023, with the exception of certain deferred tax liabilities in Canada in 2024 and Canada and Israel in 2023.

The Company has recorded a tax benefit during the years ended December 31, 2024 and 2023, for losses generated in certain foreign jurisdictions.

The deferred tax assets were fully offset by a valuation allowance at December 31, 2025 and 2024, with the exception of certain deferred tax liabilities in Canada in 2025 and 2024.

The Company has recorded tax expense during the year ended December 31, 2025, and tax benefit during the year ended December 31, 2024, for losses generated in certain foreign jurisdictions.

As of December 31, 2025, we had available federal, state and foreign tax loss carryforwards of $ 172,205 , $ 103,707 and $ 37,770 , respectively.

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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.

As a result, a full valuation continues to be recorded against the Company's net deferred tax assets, with the exception of Canada.

We are subject to taxation in the United States, Indiana and various other state and international jurisdictions.

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If such earnings were to be distributed, any foreign withholding tax would not be significant.

Income Taxes Paid

2025 2024 2023

Federal $ — $ — $ —

New York 29 — 43

Texas 40 — 28

Canada 57 513 223

Other Jurisdictions 45 79 27

Total Income Taxes Paid $ 171 $ 592 $ 321

Listed jurisdictions represents those whose income taxes paid exceeds 5% of total income taxes paid, net of refunds.

NOTE 11 - STOCKHOLDERS’ EQUITY

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Outstanding at December 31, 2023 — $ — —

Forfeited or expired ( 2,886 ) $ 30.97

Exercised ( 670 ) $ 30.97

Outstanding at December 31, 2024 — $ — —

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At December 31, 2025 and 2024, all options were fully vested.

No stock options were granted during any of the years presented.

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

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Forfeited ( 6,800 ) ( 234 )

Outstanding at Vested ( 153,659 ) —

Vested ( 115,760 ) —

Outstanding at December 31, 2023 592,453 1.6 13,851 1.7

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Forfeited ( 12,503 ) ( 200 )

Outstanding at Vested ( 115,760 ) —

Vested ( 96,009 ) —

Outstanding at December 31, 2024 1,044,193 1.5 21,551 1.2

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Total $ 17,778 $ 13,548 $ 10,526

In connection with its approval of the Term Loan Agreement, Purchase Agreement, the Indenture and Notes, on August 2, 2024, the Board of Directors of the Company also approved a stock repurchase program of up to $ 5,000 in aggregate investment of the Company’s outstanding common stock, contingent upon the closing of the Term Loan and the Notes.

In connection with its approval of the Term Loan Agreement, Purchase Agreement, the Indenture and Convertible Notes, on August 2, 2024, the Board of Directors of the Company also approved a stock repurchase program of up to $ 5,000 in aggregate investment of the Company’s outstanding common stock, contingent upon the closing of the Term Loan and the Convertible Notes.

The stock repurchases may, at the discretion of management, be made from time to time, through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b5-1 plan all as effected in accordance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended.

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The dollar limit on repurchases under the program after December 31, 2024 was reduced to $ 250 per annum.

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.

NOTE 12 – NET (LOSS) EARNINGS PER SHARE

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

NOTE 12 – NET LOSS PER SHARE

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

Year Ended December 31,

2025 2024 2023

Net (loss) income $ ( 37,822 ) $ ( 20,974 ) $ 1,258

Net loss $ ( 39,648 ) $ ( 37,822 ) $ ( 20,974 )

Earnings allocated to participating securities — — —

Net (loss) income available to common shareholders $ ( 37,822 ) $ ( 20,974 ) $ 1,235

Denominator for basic and diluted net (loss) income per share

Net loss available to common shareholders $ ( 39,648 ) $ ( 37,822 ) $ ( 20,974 )

Denominator for basic and diluted net loss per share

Weighted average shares outstanding for basic 23,459,425 23,077,704 22,675,477

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23,459,425 23,077,704 22,675,477

(Loss) earnings per share:

Loss per share:

Basic $ ( 1.69 ) $ ( 1.64 ) $ ( 0.92 )

Diluted $ ( 1.69 ) $ ( 1.64 ) $ ( 0.92 )

Our basic and diluted net income (loss) per share is computed using the two-class method.

Our basic and diluted net 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.

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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.

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:

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

Year Ended December 31,

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Restricted stock 1,529,058 1,065,744 606,304

Stock options — — 3,556

1,529,058 1,065,744 606,304

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, or our convertible note.

As of December 31, 2024, we are obligated to issue additional shares of our common stock to the sellers of MedTech.

As of December 31, 2025, we are obligated to issue additional shares of our common stock to the sellers of certain acquisitions.

See Note 3 - Business Combinations and Asset Acquisitions for additional information.

We are obligated to issue additional shares of our common stock to Braidwell in the event that our convertible note is converted into shares of common stock.

We are obligated to issue additional shares of our common stock to Braidwell in the event that our Convertible Notes are converted into shares of common stock.

See Note 9 - Debt and Credit Arrangements for additional information.

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NOTE 14 - RELATED PARTY TRANSACTIONS

In addition to the expired debt and credit agreements and mortgage with Squadron and its affiliate (refer to Note 9), 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.

In addition to the mortgage with Squadron and its affiliate (refer to Note 9), 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 $ 1,931 , $ 1,006 and $ 1,060 for the years ended December 31, 2025, 2024 and 2023, respectively.

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We 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.

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.

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OrthoPediatrics Corp.

matches our employees' 401(k) contributions up to 4 %.

matches up to 4 % of our employees' salaries.

Employees of MD Ortho and Boston O&P receive contribution matches up to 3 % of their salary.

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As of December 31, 2025, and 2024 we have recorded an operating lease liability of $ 11,992 and $ 7,781 , respectively, and a corresponding right-of-use asset of $ 12,048 and $ 8,237 , respectively, on our consolidated balance sheets.

The increase during 2024 is primarily the result of our Boston O&P acquisition and our subsequent O&P clinic acquisitions where office space is leased at or in close proximity to pediatric hospitals to better serve our patients.

The increases during 2025 and 2024 are primarily the result of our Boston O&P acquisition and our subsequent O&P clinic acquisitions where office space is leased at or in close proximity to pediatric hospitals to better serve our patients.

Short-term lease costs were not material for the years ended December 31, 2025, 2024 or 2023.

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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 ("IMED"), in Broward County, Florida Circuit Court.

Jersey company ("IMED"), in Broward County, Florida Circuit Court.

In the lawsuit, IMED 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.

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Although we believe the Company has strong defenses to the IMED arbitration and we intend to vigorously defend the claims asserted against us, arbitration 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.

Boston O&P 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 O&P, 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 O&P on January 5, 2024 as described more fully under Note 3 - Business Combinations and Asset Acquisitions.

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 O&P, and loss of consortium against all defendants.

Trial is currently scheduled to begin in December 2025.

Although we believe Boston O&P 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.

As part of the Company's purchase of Boston O&P, the selling equityholders of Boston O&P expressly agreed to indemnify the Company for any claims related to this lawsuit pursuant to the Stock Purchase Agreement.

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.

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As of December 31, 2021 the remaining balance of the commitment was $ 1,900 .

During the year ended December 31, 2022, 2023, and 2024, the Company met the minimum purchase commitment as required for the first twelve months of the agreement.

For all subsequent years, the Company met the minimum purchase commitment.

Additionally, the contract requires future purchase commitments based upon a percentage of historical purchases.

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As such, the Company recorded $ 1,760 and $ 2,000 as a component of cost of revenue for the shortfall which occurred during 2024 and 2023, respectively.

Clinic acquisition promissory notes

As of result of multiple O&P clinic acquisitions in 2024, as part of the consideration transferred, the Company is contracted to pay promissory notes to the previous owners.

As of December 31, 2024, we had $ 1,372 remaining in present value, of which $ 737 is classified as short-term on the consolidated balance sheet.

The payments are paid in installments with an interest rate of 5.0 % per annum.

On May 15, 2025, the Company issued 55,143 unregistered shares of the Company's common stock to Mighty Oak to satisfy the obligation that existed for past unmet minimum performance metrics related to 2024.

In 2025, the agreement was amended and extended through 2030.

The amended agreement modified the minimum performance metrics to be based on a purchase requirement of $ 3,500 annually through 2030 instead of the number of spine procedures.

The amended threshold of units purchased was met in 2025, so there was no shortfall recorded during 2025.

As of December 31, 2025, 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.

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We do not anticipate these future payments will have a material impact on our financial results.

NOTE 18 - SUBSEQUENT EVENT

On February 1, 2026, the Company and OrthoPediatrics EU Limited, a wholly owned subsidiary of the Company, entered into a Stock Purchase Agreement (the “Purchase Agreement”) with the shareholders (the “Sellers”) of London Orthotic Consultancy Consolidated Ltd (“LOC”), pursuant to which OrthoPediatrics EU Limited acquired all of the issued and outstanding shares of capital stock of LOC.

LOC has two subsidiaries which were acquired as part of the transaction:

(i) The London Orthotic Consultancy Limited;

and (ii) L.O.C.

Manufacturing Limited.

Under the terms of the Purchase Agreement, OrthoPediatrics EU Limited paid to the Sellers:

(i) GBP 5,400 in cash, subject to customary adjustments related to working capital and indebtedness;

(ii) GBP 600 pursuant to promissory notes with interest at the rate of 4.5 percent per annum, payable in full on the 1-year anniversary of the closing.

The sellers may also be entitled to an earnout payment of up to GBP 1,700 , if certain financial performance metrics of LOC and its subsidiaries exceeds a threshold in the first year after closing.

Pursuant to the Purchase Agreement, the Sellers and one employee of LOC will also receive awards of restricted stock of the Company which will each vest over a three-year period.

Restricted stock awards having an aggregate award value of $ 235 will be granted on January 2, 2027, and restricted stock awards having an aggregate award value of $ 168 will be granted on January 2, 2028.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data