What changed in this filing

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Item 1. Financial Statements

2026-05-01 compared with 2025-10-29 · 151 added, 226 removed, 399 unchanged (49% of the section changed)

3 unchanged sentences

(In Thousands, Except Share Data)

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Current assets:

36 unchanged sentences

50,000,000 shares authorized;

25,077,330 shares and 24,217,508 shares issued as of September 30, 2025 and December 31, 2024, respectively

25,604,900 shares and 25,093,792 shares issued as of March 31, 2026 and December 31, 2025, respectively

Additional paid-in capital 626,009 622,325

7 unchanged sentences

(In Thousands, Except Share and Per Share Data)

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Net revenue $ 59,362 $ 52,411

4 unchanged sentences

General and administrative 31,024 30,280

Intangible asset impairment 2,268 — 2,268 —

Restructuring — 40

4 unchanged sentences

Interest expense, net 2,102 1,126

Loss on early extinguishment of debt — 3,230 — 3,230

Other expense (income) 648 ( 63 ) ( 5,705 ) 33

Other expense (income), net 421 ( 1,644 )

Total other expense (income), net 2,523 ( 518 )

10 unchanged sentences

(Unaudited) (In Thousands)

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Net loss $ ( 10,687 ) $ ( 10,659 )

1 unchanged sentence

Foreign currency translation adjustment ( 770 ) ( 929 )

Unrealized gain on short-term investments 112 — 208 109

Adjustment for realized losses ( 26 ) — ( 1 ) ( 118 )

Other comprehensive gain (loss), net of tax 1,317 3,623 7,144 ( 1,075 )

Unrealized (loss) gain on short-term investments ( 195 ) 69

Adjustment for realized gains 84 7

Other comprehensive loss, net of tax ( 881 ) ( 853 )

Comprehensive loss $ ( 11,568 ) $ ( 11,512 )

3 unchanged sentences

(In Thousands, Except Share Data)

Three and Nine Months Ended September 30, 2025

Three Months Ended March 31, 2026

Additional Other Total

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Balance at March 31, 2026 25,604,900 $ 6 $ 626,009 $ ( 285,899 ) $ ( 1,404 ) $ 338,712

Net loss — — — ( 7,113 ) — ( 7,113 )

Other comprehensive gain — — — — 6,680 6,680

Restricted stock 178,552 — 5,252 — — 5,252

Issuance of common stock 55,143 — 1,261 — — 1,261

Stock portion of MedTech anniversary payment 10,830 — 226 — — 226

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

Balance at June 30, 2025 25,072,502 $ 6 $ 613,790 $ ( 253,336 ) $ ( 4,946 ) $ 355,514

Net loss — — — ( 11,773 ) — ( 11,773 )

Other comprehensive gain — — — — 1,317 1,317

Restricted stock 4,828 — 4,251 — — 4,251

Balance at September 30, 2025 25,077,330 $ 6 $ 618,041 $ ( 265,109 ) $ ( 3,629 ) $ 349,309

See notes to condensed consolidated financial statements.

2 unchanged sentences

(In Thousands, Except Share Data)

Three and Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Additional Other Total

5 unchanged sentences

Restricted stock 601,547 — 3,859 — — 3,859

Issuance of common stock 8,922 — 233 — — 233

Balance at March 31, 2025 24,827,977 $ 6 $ 604,989 $ ( 246,223 ) $ ( 11,626 ) $ 347,146

Net loss — — — ( 6,029 ) — ( 6,029 )

Other comprehensive loss — — — — ( 3,263 ) ( 3,263 )

Stock portion of MedTech anniversary payment 4,288 — 133 — — 133

Stock portion of ApiFix anniversary installment 245,812 — 6,929 — — 6,929

Restricted stock 426,227 — 2,939 — — 2,939

Balance at June 30, 2024 24,216,738 $ 6 $ 593,087 $ ( 211,576 ) $ ( 10,224 ) $ 371,293

Net loss — — — ( 7,919 ) — ( 7,919 )

Other comprehensive gain — — — — 3,623 3,623

Restricted stock ( 2,692 ) — 3,922 — — 3,922

Balance at September 30, 2024 24,214,046 $ 6 $ 597,009 $ ( 219,495 ) $ ( 6,601 ) $ 370,919

See notes to condensed consolidated financial statements.

2 unchanged sentences

(Unaudited) (In Thousands)

Nine Months Ended

September 30,

Three Months Ended

OPERATING ACTIVITIES

1 unchanged sentence

Adjustments to reconcile net loss to net cash used in operating activities:

Goodwill and other intangible asset impairments 4,163 —

Depreciation and amortization 5,721 5,048

Stock-based compensation 3,982 3,859

Loss on early extinguishment of debt — 3,230

Accretion of acquisition installment payable 72 62

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INVESTING ACTIVITIES

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

Acquisitions, net of cash acquired ( 8,852 ) ( 475 )

Other acquisitions, including clinics, net of cash acquired ( 6,777 ) ( 220 )

Sale of short-term marketable securities 5,000 —

Investment in private companies ( 2,007 ) ( 380 )

Purchase of short-term marketable securities ( 15,000 ) ( 25,000 )

Investment in private companies and purchases of licenses ( 250 ) ( 1,540 )

Purchases of property and equipment ( 1,760 ) ( 4,227 )

1 unchanged sentence

FINANCING ACTIVITIES

Proceeds from issuance of debt 25,000 73,533

Payments on mortgage notes ( 41 ) ( 39 )

Payment of debt issuance costs — ( 3,085 )

Payment on debt — ( 12,231 )

Installment payment for ApiFix — ( 2,250 )

Installment payment for MedTech — ( 1,250 )

Payments on clinic acquisition notes ( 489 ) ( 928 )

Net cash provided by financing activities 24,392 53,676

Payments on acquisition notes ( 573 ) ( 87 )

Net cash used in financing activities ( 614 ) ( 126 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash 313 ( 79 )

NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH ( 26,893 ) 20,018

NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH ( 7,375 ) ( 10,348 )

Cash, cash equivalents and restricted cash, beginning of year $ 21,620 $ 45,777

3 unchanged sentences

Transfer of instruments between property and equipment and inventory $ ( 126 ) $ ( 461 )

Issuance of common shares for ApiFix installment $ — $ 6,929

Issuance of common shares for MedTech installment $ 226 $ 133

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

Right-of-use assets obtained in exchange for lease liabilities $ 793 $ 1,682

Issuance of common shares in connection with LOC acquisition $ 257 $ —

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

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

Debt issuance costs not yet paid $ 289 $ —

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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, 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 manufactured in-house.

We also operate multiple orthotic and prosthetic ("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.

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/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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As such, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to applicable rules and regulations thereunder.

The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements as of and for the year ended December 31, 2024 and, in management’s opinion, include all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the financial statements for the interim periods.

The results of

operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the full fiscal year or for any other period.

The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements as of and for the year ended December 31, 2025 and, in management’s opinion, include all adjustments, consisting of only normal recurring adjustments,

necessary for the fair presentation of the financial statements for the interim periods.

The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for the full fiscal year or for any other period.

The accompanying condensed consolidated financial statements have been prepared assuming our Company will continue as a going concern.

We have experienced recurring losses from operations since our inception and had an accumulated deficit of $ 265,109 and $ 235,564 as of September 30, 2025 and December 31, 2024, respectively.

We have experienced recurring losses from operations since our inception and had an accumulated deficit of $ 285,899 and $ 275,212 as of March 31, 2026 and December 31, 2025, respectively.

Management continues to monitor cash flows and liquidity on a regular basis.

We believe that our cash balance at September 30, 2025 and expected cash flows from operations for the next twelve months subsequent to the issuance of the accompanying condensed consolidated financial statements, are sufficient to enable us to maintain current and essential planned operations for more than the next twelve months.

We believe that our cash balance at March 31, 2026 and expected cash flows from operations for the next twelve months subsequent to the issuance of the accompanying condensed consolidated financial statements, are sufficient to enable us to maintain current and essential planned operations for more than the next twelve months.

Use of Estimates

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Amendments in this Update should be applied prospectively.

If, by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity.

Company continues to analyze this ASU.

The Company continues to analyze this ASU.

The update is specific to disclosures and, therefore, is not expected to have a material impact to the condensed consolidated financial statements.

In December 2023, the FASB issued ASU No.

2023-09, " Income Taxes (Topic 740):

Improvements to Income Tax Disclosures " ("ASU 2023-09"), which enhances the transparency and decision usefulness of income tax disclosures.

The ASU is effective for public companies for annual periods beginning on or after December 15, 2024, with early adoption permitted.

The amendments in ASU 2023-09 should be applied on a prospective basis.

Retrospective application is permitted.

We are currently evaluating the effect of this new guidance on our consolidated financial statements and disclosures.

In November 2024, the FASB issued ASU No.

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During the year ended December 31, 2024, we paid the first anniversary payment consisting of $ 1,250 in cash and issued 4,288 of our common stock approximating $ 133 , both of which reduced the amount of the acquisition installment payable on our consolidated balance sheet.

The present value of the remaining acquisition installment payable was $ 3,799 as of December 31, 2024, of which $ 1,347 was recorded as a current liability.

In addition, we issued 38,594 unregistered shares of our common stock to one individual on the first anniversary date in exchange for their continued service through the vesting date which had been accounted for as stock-based compensation expense in the post-combination consolidated financial statements.

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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 nine months ended September 30, 2025, we 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 condensed 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 condensed 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 condensed consolidated balance sheet.

As of September 30, 2025, the Company has recorded a share-settled liability of $ 1,408 related to the Amendment, of which $ 1,181 is recorded as a current liability.

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.

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 March 31, 2026 and December 31, 2025, the Company has recorded a share-settled liability of $ 2,544 and $ 1,982 , respectively, related to the Amendment, of which $ 2,310 and $ 1,752 , respectively, is recorded as a current liability.

Boston Brace International, Inc.

On January 5, 2024, the Company purchased all of the issued and outstanding share capital of Boston Brace International, Inc., a Massachusetts corporation ("Boston O&P").

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 and $ 233 in shares of 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 units are not considered part of the purchase consideration.

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

Fair value of estimated total acquisition consideration $ 21,767

Accounts receivable - trade 2,749

Inventories 1,075

Prepaid expenses and other current assets 447

Property and equipment 6,259

Amortizable intangible assets 2,963

Other intangible assets 3,610

Other non-current assets 2,987

Total assets 21,400

Accounts payable-trade 581

Other current liabilities 2,064

Long-term debt, including current portion 1,157

Deferred tax liability 2,617

Other non-current liabilities 1,803

Total liabilities 8,222

total net assets 13,178

Goodwill $ 8,589

The fair value of identifiable intangible assets and certain long-lived assets were based on valuations using a combination of the income and cost approach, inputs which would be considered Level 3 under the fair value hierarchy.

The estimated fair value and useful life of identifiable intangible assets are as follows:

Amount Remaining Economic Useful Life

Trademarks / Names $ 3,610 Indefinite

Customer Relationships & Other 2,963 12 years

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 , which comprised of $ 3,388 of cash 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.

The allocation of the purchase price is considered preliminary.

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 through September 30, 2025 was approximately $ 6,020 , which comprised of $ 4,715 of cash and

promissory notes in the original principal amount of $ 1,305 , with a weighted average interest rate of 4.9 % per annum.

In 2025, Boston Brace International, Inc.

("Boston O&P"), a wholly-owned subsidiary of the Company, 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 note may also be subject to adjustments if gross revenue targets are not achieved in the first year after closing.

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

We 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, entered into a stock purchase agreement related to orthotic and prosthetic device clinics located in Ireland.

The Company paid 1,500 Euro in total consideration for the stock, which was comprised of 1,200 Euro of cash and a promissory note in the original principal amount of 300 Euro payable in two annual installments with interest at the rate of 4.0 % per annum.

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

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 seller 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, entered into a stock purchase agreement related to a designer and manufacturer of clubfoot bracing located in the UK.

The Company paid a purchase price of 3,400 GBP for the stock, for a total consideration, net of cash received of 3,138 GBP, which was comprised of 2,300 GBP of cash and a promissory note in the original principal amount of 1,100 GBP payable in ten quarterly installments with interest at the rate of 5.0 % per annum.

We allocated 463 GBP to customer relationship intangible assets, 564 GBP to trademarks, 151 GBP to goodwill and the rest to net working capital and other assets acquired and liabilities assumed.

In August 2025, OrthoPediatrics EU Limited 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.

On February 1, 2026, the Company and OrthoPediatrics EU Limited 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 5,220 in cash, after a customary working capital adjustment;

(ii) GBP 600 pursuant to promissory notes with interest at the rate of 4.5 % 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 exceed a threshold in the first year after closing, for which the Company recorded a contingent consideration liability of GBP 420 at closing.

We allocated GBP 4,480 to goodwill, GBP 840 to customer relationship intangible assets, and the rest to net working capital and

other assets acquired and liabilities assumed.

The allocation of the purchase price is considered preliminary.

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.

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.

As of March 31, 2026 and December 31, 2025, we recorded a current portion of these future anniversary payments of USD $ 448 and USD $ 442 , respectively, within current portion of acquisition installment payable, and USD $ 2,727 and USD $ 2,668 , respectively, within acquisition installment payable, net of current portion on our condensed consolidated balance sheets.

We allocated BRL $ 6,990 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.

NOTE 4 - GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amount of goodwill for the nine months ended September 30, 2025 were as follows:

Changes in the carrying amount of goodwill for the three months ended March 31, 2026 were as follows:

Goodwill at January 1, 2026 $ 109,269

Clinic and other acquisitions 5,787

Boston O&P measurement period adjustment 233

Goodwill impairment ( 1,874 )

Clinic acquisitions 5,915

Foreign currency translation impact ( 11 )

Goodwill at September 30, 2025

Management made the decision to exit its regulatory consulting business, performed by Telos Partners, LLC ("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 within our condensed consolidated statement of operations.

Goodwill at March 31, 2026

Intangible Assets

As of September 30, 2025, the balances of amortizable intangible assets were as follows:

As of March 31, 2026, the balances of amortizable intangible assets were as follows:

Weighted-Average Amortization Period Gross Intangible Assets Accumulated Amortization Net Intangible Assets

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Licenses are tied to product launches and do not begin amortizing until the product is launched to the market.

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

We recorded an impairment charge of $ 0.4 million as of September 30, 2025.

Trademarks are non-amortizing intangible assets which were $ 15,941 and $ 16,752 as of September 30, 2025 and December 31, 2024, respectively.

Trademarks are non-amortizing intangible assets which were $ 12,914 and $ 12,909 as of March 31, 2026 and December 31, 2025, respectively.

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

The change in balance during the nine months ended September 30, 2025 was primarily driven by impairment charges related to our ApiFix Ltd.

("ApiFix"), MedTech and Telos trademark assets.

During 2025 and 2024, management completed a quantitative analysis whereby we determined the fair value of certain of our trademark assets were below their respective carrying values.

We recorded an impairment charge of $ 1,879 and $ 1,836 as of September 30, 2025 and December 31, 2024, respectively, to reduce the carrying amount of the intangible assets to their estimated fair value.

The change in balance during the three months ended March 31, 2026 was driven by foreign currency translation adjustments.

During 2025, management completed a quantitative analysis whereby we determined the fair value of certain of our trademark assets were below their respective carrying values.

We recorded an impairment charge of $ 4,228 for the year ended December 31, 2025 to reduce the carrying amount of the intangible assets to their estimated fair value.

NOTE 5 - FAIR VALUE OF FINANCIAL INSTRUMENTS

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Generally, these fair value measures are model-based valuation techniques such as discounted cash flows, and are based on the best information available, including our own data.

The following table summarizes the assets and liabilities measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024.

September 30, 2025

The following table summarizes the assets and liabilities measured at fair value on a recurring basis as of March 31, 2026 and December 31, 2025.

March 31, 2026

Level 1 Level 2 Level 3 Total

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Exchange Mutual Funds $ 413 $ — $ — $ 413

Financial Liabilities

Contingent consideration $ — $ — $ 554 $ 554

December 31, 2025

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The significant inputs of such models are not always observable in the market, such as forecasted annual revenues, expected volatility and discount rates.

The change in the fair value of the contingent consideration liability since its initial recognition during the three months ended March 31, 2026 was not material.

NOTE 6 - DEBT AND CREDIT ARRANGEMENTS

Long-term debt consisted of the following as of the dates indicated:

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Term loan and Final Payment $ 51,000 $ 51,000

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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.

On March 31, 2026, the Credit Parties entered into a First Amendment (the “Amendment”) to the Term Loan Agreement.

The Amendment establishes a new delayed draw term loan facility in an aggregate principal amount not to exceed $ 20,000 , which, subject to certain conditions set forth in the Amendment, may be drawn until June 30, 2027, in minimum $ 10,000 increments.

The facility features similar terms to those previously contained in the Term Loan Agreement, including:

(a) interest at a rate per annum equal to the SOFR Interest Rate (with a floor of 3.25 %) plus 6.50 %;

(b) a Company election to make a payment-in-kind interest payment equal to 1.00 % per annum of the interest rate;

and (d) certain financial covenants.

The Company is also obligated to pay a 1.00 % upfront fee, a 0.05 % per annum delayed draw ticking fee and certain exit fees and prepayment fees generally consistent with those contained in the Term Loan Agreement.

Braidwell Convertible Note

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

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;

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

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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.

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").

There was approximately $ 10,000 outstanding under the MidCap Credit Agreement and it was terminated in connection with the Term Loan Agreement.

MidCap Term Loan

Borrowings under the MidCap Credit Agreement accrued interest at an annual rate equal to the greater of (a) One Month Term SOFR plus 6.50 % or (b) 9.0 % and interest on the Revolving Loan would have accrued at the greater of (a) One Month Term SOFR plus 4.0 % or (b) 6.50 % (the “Applicable Rate”).

The Company paid MidCap 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 MidCap Credit Agreement were made under a term loan (the "MidCap Term Loan") of $ 10,000 and a Revolving Loan of $ 50,000 , payable, jointly and severally, by the Company and each of its subsidiaries party thereto.

The MidCap Term Loan and Revolving Loan matured at the earlier of (i) December 1, 2028;

(ii) the occurrence of any transaction or series of transactions pursuant to which any person or entity in the aggregate acquire(s) 35 % or more of the voting capital stock of the Company;

(iii) a change in the majority of the Company’s Board of Directors over a 12-month period;

(iv) the Company ceases to own directly or indirectly, 100% of the capital stock of any of its subsidiaries (with the exception of any subsidiaries permitted to be dissolved, merged or otherwise disposed of by the MidCap Credit Agreement), or (v) the occurrence of a change in control, fundamental change, deemed liquidation event or terms of similar import under any document or instrument governing or relating to debt of or equity interests of the Company.

Borrowings under the MidCap Credit Agreement were secured by a security interest in the Company’s and other Borrowers' assets.

The MidCap Credit Agreement provided for customary events of default.

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.

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.

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.

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 Capital, LLC ("Squadron").

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monthly principal and interest installments of $ 16 with interest compounded at 5 % unt il maturity in 2028, at which time a final payment of remaining principal and interest is due.

At September 30, 2025, the mortgage balance was $ 492 of which current principal of $ 166 was included in the current portion of long-term debt.

At March 31, 2026, the mortgage balance was $ 412 of which current principal of $ 172 was included in the current portion of long-term debt.

As of December 31, 2025, the mortgage balance was $ 453 of which current principal due of $ 170 was included in the current portion of long-term debt.

The aggregate interest expense relating to the mortgage note payable to Tawani Enterprises Inc., the term loan with MidCap, the term loan with Braidwell, and the convertible note with Braidwell, was $ 2,003 and $ 945 for the three months ended September 30, 2025 and 2024, respectively, and $ 4,555 and $ 1,705 for the nine months ended September 30, 2025 and 2024, respectively.

The aggregate interest expense relating to the mortgage note payable to Tawani Enterprises Inc., the term loan with Braidwell, and the convertible note with Braidwell, was $ 1,682 and $ 1,269 for the three months ended March 31, 2026 and 2025, respectively.

Acquisition Promissory Notes

As a result of multiple acquisitions between 2024 and 2026, as part of the consideration transferred, the Company issued promissory notes to the previous owners.

As of March 31, 2026 and December 31, 2025 , we have recorded liabilities of $ 5,240 and $ 4,557 , respectively, related to these promissory notes, of which $ 2,049 and $ 1,696 , respectively, are classified as short-term within other current liabilities on our condensed consolidated balance sheets.

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

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

NOTE 7 - INCOME TAXES

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The income tax provision or benefit is computed by multiplying the estimated annual effective tax rate by the year-to-date pre-tax book income (loss).

For the nine months ended September 30, 2025, the income tax charge was $ 120 compared to a tax benefit of $ 3,767 for the nine months ended September 30, 2024.

Our effective income tax rate was ( 0.4 )% and 14.8 % for the nine months ended September 30, 2025 and 2024, respectively.

The lower effective rate compared to the prior period is from the remeasurement of the valuation allowance subsequent to recording the deferred tax liability as a result of the purchase accounting from the Boston O&P acquisition in the prior year.

The deferred tax assets were fully offset by a valuation allowance at September 30, 2025, with the exception of certain deferred tax liabilities in Canada.

The Company has recorded a tax expense for income generated in Canada during the period ended September 30, 2025.

For the three months ended March 31, 2026, the income tax benefit was $ 171 compared to expense of $ 196 for the three months ended March 31, 2025.

Our effective income tax rate was 1.6 % and ( 1.9 )% for the three months ended March 31, 2026 and 2025, respectively.

The higher effective rate compared to the prior period is primarily a result of pre-tax losses in foreign jurisdictions which do not have a full valuation allowance.

The deferred tax assets are offset by a valuation allowance at March 31, 2026, with the exception of certain deferred tax liabilities in Canada and in the UK.

The Company has recorded tax benefit for income generated in Canada during the period ended March 31, 2026.

Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets.

A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended September 30, 2025.

A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended March 31, 2026.

Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth.

On July 4th, 2025, the President signed into law significant federal tax legislation, H.R.1 (the “Tax Reform Act of 2025”).

The legislation includes numerous changes to U.S.

corporate income tax law, including but not limited to:

permanent 100% bonus depreciation for qualified property, immediate expensing of domestic research and experimental expenditures, modifications to the limitation on business interest expense, increased Section 179 expensing limits, changes to the international tax regime, and expanded limitations on the deductibility of executive compensation under IRC Section 162(m).

Most provisions are effective for tax years beginning after December 31, 2024, with certain transition rules and exceptions.

The Company has evaluated the impact of the Tax Reform Act of 2025 and determined the impact to be immaterial to its condensed consolidated financial statements for the period ended September 30, 2025.

NOTE 8 - STOCKHOLDERS’ EQUITY

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Vested ( 241,534 ) ( 3,315 )

Outstanding at September 30, 2025

Outstanding at March 31, 2026

1,759,622 1.9 25,300 1.9

At September 30, 2025, there was $ 22,843 of unrecognized compensation expense remaining related to our service-based restricted stock awards and restricted stock units.

The unrecognized compensation

cost is expected to be recognized over a weighted-average period of 1.7 years or earlier upon an elimination of the restriction period as a result of a change in control event.

Stock-based compensation expense on restricted stock amounted to $ 4,251 and $ 3,922 for the three months ended September 30, 2025 and 2024, respectively, and $ 13,362 and $ 9,660 for the nine months ended September 30, 2025 and 2024, respectively.

At March 31, 2026, there was $ 24,183 of unrecognized compensation expense remaining related to our service-based restricted stock awards and restricted stock units.

The unrecognized compensation cost is expected to be recognized over a weighted-average period of 1.9 years or earlier upon an elimination of the restriction period as a result of a change in control event.

Stock-based compensation expense on restricted stock amounted to $ 3,982 and $ 3,859 for the three months ended March 31, 2026 and 2025, respectively.

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.

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The Company is not obligated to purchase any shares under the program, and the program may be discontinued at any time.

No shares have been purchased under this program as of September 30, 2025.

No shares have been purchased under this program as of March 31, 2026.

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

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The following is a reconciliation of basic and diluted net loss per share:

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 0 2024

Three Months Ended

Net loss $ ( 10,687 ) $ ( 10,659 )

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

For purposes of our equity disclosures and calculation of weighted average shares for basic earnings per share calculations, 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.

undistributed earnings or losses.

Non-vested restricted stock that includes non-forfeitable rights to dividends are considered participating securities.

For the periods presented with a net loss, the weighted average shares outstanding remained consistent between basic and diluted as the effect of any outstanding common stock equivalents would have been anti-dilutive.

The Company had 1,530,550 and 1,068,624 contingently issuable and convertible equity shares excluded from the calculation of diluted net (loss) earnings per share as of September 30, 2025 and 2024, respectively, because their effect would have been anti-dilutive.

The Company had 1,784,922 and 1,546,358 contingently issuable and convertible equity shares excluded from the calculation of diluted net (loss) earnings per share as of March 31, 2026 and 2025, respectively, because their effect would have been anti-dilutive.

The contingently issuable shares discussed in the previous paragraph 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 acquisition of MedTech or a local distributor in Brazil as discussed in Note 3 - Business Combinations and Asset Acquisitions.

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.

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Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance.

We have one operating and reportable

segment, which designs, develops and markets anatomically appropriate implants and devices for children with orthopedic problems.

We have one operating and reportable segment, which designs, develops and markets anatomically appropriate implants and devices for children with orthopedic problems.

Our chief operating decision-maker, our Chief Executive Officer, reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance, accompanied by disaggregated revenue information by product category.

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Product sales attributed to a country or region includes product sales to hospitals, physicians and distributors and is based on the final destination where the products are sold.

No individual customer accounted for more than 10% of total product sales for the three and nine months ended September 30, 2025 or 2024.

No individual customer accounted for more than 10% of consolidated accounts receivable as of September 30, 2025 and December 31, 2024.

No individual customer accounted for more than 10% of total product sales for the three months ended March 31, 2026 or 2025.

No individual customer accounted for more than 10% of consolidated accounts receivable as of March 31, 2026 and December 31, 2025.

Product sales by source were as follows:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

Product sales by geographic location:

$ 45,309 $ 40,891

$ 48,718 $ 42,714 $ 137,757 $ 118,269

International 14,053 11,520

Total $ 59,362 $ 52,411

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

Product sales by category:

2025 2024 2025 2024

Trauma and deformity $ 43,045 $ 37,867

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Structure Medical is affiliated with Squadron (the Company's largest investor) and a supplier with which we maintain certain long-term agreements.

We made aggregate payments to Structure Medical for inventory purchases of $ 1,141 and $ 206 for the three months ended September 30, 2025 and 2024, respectively, and $ 1,930 and $ 729 for the nine months ended September 30, 2025 and 2024, respectively.

We made aggregate payments to Structure Medical for inventory purchases of $ 377 and $ 132 for the three months ended March 31, 2026 and 2025, respectively.

NOTE 12 – COMMITMENTS AND CONTINGENCIES

Restructuring

In connection with the global restructuring plan that was initiated in the fourth quarter 2024, the Company had recorded a restructuring accrual of $ 939 and $ 1,072 as of September 30, 2025 and December 31, 2024 within accrued expenses and other current liabilities on its condensed consolidated balance sheet.

The decreased accrual for the three and nine months ended September 30, 2025, was due primarily to fulfilling the obligation under the liability.

In connection with the global restructuring plan that was initiated in the fourth quarter 2024, the Company had recorded a restructuring accrual of $ 656 and $ 808 as of March 31, 2026 and December 31, 2025 either within accrued expenses and other current liabilities or other long-term liabilities on its condensed consolidated balance sheet.

Legal Proceedings

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however, IMED failed to pay the fees it was required to pay for the arbitration to continue, resulting in the arbitration panel terminating the arbitration proceedings in mid-October 2022.

In connection with the stay order, the Court also ordered the Company, Orthex and Squadron to give notice to IMED before any attempt to dispose, assign, sell or otherwise encumber the ‘377 Patent.

In connection with the stay order, the Court also ordered the Company, Orthex and Squadron to give notice to IMED before any attempt to dispose, assign, sell or otherwise encumber the

The Company, Orthex and Squadron filed an appeal of this component of the order, but the appellate court affirmed the lower court’s decision.

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On March 13, 2024, a hearing took place to discuss the status of IMED’s effort to re-initiate arbitration.

Thereafter, on March 25, 2024, the court ordered, if, by April 27, 2024, IMED has not begun arbitration, resolved this case, or substantiated (in the form of an attorney and client declaration) that it has executed an agreement with a litigation funder to pay for arbitration proceedings, to pay the

balance due to the subject arbitration association and to re-instate the arbitration, the Court will dismiss this case without prejudice.

Thereafter, on March 25, 2024, the Court ordered, if, by April 27, 2024, IMED has not begun arbitration, resolved this case, or substantiated (in the form of an attorney and client declaration) that it has executed an agreement with a litigation funder to pay for arbitration proceedings, to pay the balance due to the subject arbitration association and to re-instate the arbitration, the Court will dismiss this case without prejudice.

On April 26, 2024, IMED informed the Court it has executed an agreement with a litigation funder to pay for arbitration proceedings, to pay the balance due to the subject arbitration association, and to reinstate the arbitration, and is in the final stages of resolving the balance due to the subject arbitration association.

On September 20, 2024, the Court dismissed IMED’s lawsuit, without prejudice, for failure to prosecute.

However, contemporaneously, IMED re-initiated arbitration.

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 was scheduled to begin in December 2025.

Boston O&P reached a settlement with the Plaintiffs of all claims against Boston O&P and in late July 2025, the Court dismissed Boston O&P from the lawsuit with prejudice.

The settlement amount is expected to be covered by available insurance, and the Company does not anticipate a need to pursue any indemnity claim against the selling equityholders of Boston O&P related to this litigation.

However, contemporaneously, IMED re-initiated arbitration alleging Orthex:

1) breached a consulting

agreement between IMED and two third-parties, who are also a party to the arbitration;

and 2) IMED's

request for declaratory judgment that the intellectual property rights held by Orthex concerning inventions,

including but not limited to the '377 Patent, should have been transferred to IMED under the subject

consulting agreement.

On January 9, 2026, the arbitration tribunal granted Orthex's request to be given leave to file a dispositive motion.

Orthex submitted its motion for summary judgment and supporting exhibits on February 10, 2026 seeking dismissal of both causes of action asserted by IMED against Orthex in the subject arbitration.

On April 15, 2026, the arbitration tribunal determined both causes of action raised by IMED against Orthex should be dismissed and accordingly, dismissed Orthex with prejudice from the subject arbitration.

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

As of September 30, 2025, the Company met its purchase commitment for the year ending December 31, 2025, and $ 1,092 future purchase commitments are required for the year ending December 31, 2026.

On July 20, 2021, we entered into an amended license agreement with Mighty Oak Medical, Inc.

("Mighty Oak"), resulting in a five-year extension of our exclusive distribution rights of the FIREFLY Technology.

As a component of the agreement the Company is required to meet minimum performance metrics, measured by the number of spine procedures in the fiscal year which used the FIREFLY products against the annual requirement in the agreement.

This includes any scheduled surgeries whereby the Company has committed to payment of the product.

The number of required surgeries varies each year of the agreement.

The Company analyzes its projected achievement of these performance metrics and accrues for any estimated shortfall.

During the nine months ended September 30, 2025, the Company recorded

an expense of $ 960 based on current estimates.

The Company recorded $ 1,200 of expense for the nine months ended September 30, 2024.

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.

As of September 30, 2025, we are contracted to pay royalties to individuals and entities that provide research and development services, which range from 0.25 % to 20 % of sales.

As a result and as of March 31, 2026, the remaining purchase commitments under the agreement were $ 1,092 for the year ending December 31, 2026 and $ 1,456 future purchase commitments are required for the year ending December 31, 2027.

On July 20, 2021, we entered into an amended license agreement, resulting in a five-year extension of our exclusive distribution rights of the FIREFLY Technology.

As a component of the agreement the Company was required to meet minimum performance metrics, measured by the number of spine procedures in the fiscal year which used the FIREFLY products against the annual requirement in the agreement.

This included any scheduled surgeries whereby the Company had committed to payment of the product.

The number of required surgeries varied each year of the agreement.

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.

We purchased $ 1,255 during the three months ended March 31, 2026, leaving a requirement of $ 2,245 left for 2026.

As of March 31, 2026, we are contracted to pay royalties to individuals and entities that provide research and development services, which range from 0.25 % to 20 % of sales.

We have products in development that have royalty commitments.

In any development project, there are significant variables that will affect the amount and timing of these payments and as of September 30, 2025, we have not been able to determine the amount and timing of payments.

In any development project, there are significant variables that will affect the amount and timing of these payments and as of March 31, 2026, we have not been able to determine the amount and timing of payments.

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

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-Q

Item 1. Financial Statements