v3.25.2
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS
 6 Months Ended
Jun. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS BUSINESS COMBINATIONS AND ASSET ACQUISITIONS
Medtech Concepts, LLC

On May 1, 2023, the Company entered into a Membership Interest Purchase Agreement (the "Purchase Agreement"), by and among the Company, Kevin Unger, DINZE LLC, and the sole member of DINZE LLC, pursuant to which the Company purchased all of the issued and outstanding membership interest of Medtech Concepts LLC (“MedTech”). We agreed to pay the sellers of MedTech a purchase price of approximately $15,274 in the following manner: (i) cash in the aggregate amount of $3,000 which was paid on May 1, 2023, the transaction closing date (the “Closing Date”); (ii) 43,751 unregistered shares of the Company’s common stock, par value $0.00025 per share, representing approximately $2,274 (based on a closing share price of $51.98 on May 1, 2023), were issued on the Closing Date; and (iii) an aggregate of $2,500 payable 50% in cash and 50% in shares of unregistered common stock, will be paid on each of the first four anniversaries of the Closing Date, all subject to the conditions set forth in the Purchase Agreement. Under the Purchase Agreement, a number of future payments in the form of common stock are contingent on continued service through each applicable payment anniversary date. As such, these amounts were initially excluded from measuring the cost of the acquisition, and are being recorded as stock-based compensation expense in the post-combination consolidated financial statements. All future cash payments and stock issuances that are not contingent on continuous service were included in the calculation of consideration for this asset acquisition.

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.

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 six months ended June 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. The present value of the remaining acquisition installment payable is $485 as of June 30, 2025, of which $237 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 
Assets
Cash1,310 
Accounts receivable - trade2,749 
Inventories1,075 
Prepaid expenses and other current assets447 
Property and equipment6,259 
Amortizable intangible assets2,963 
Other intangible assets3,610 
Other non-current assets2,987 
Total assets21,400 
Liabilities
Accounts payable-trade581 
Other current liabilities2,064 
Long-term debt, including current portion1,157 
Deferred tax liability2,617 
Other non-current liabilities1,803 
Total liabilities8,222 
Less: total net assets13,178 
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:

AmountRemaining Economic Useful Life
Trademarks / Names$3,610 Indefinite
Customer Relationships & Other 2,963 12 years
$6,573 


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 installments 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 June 30, 2025 was approximately $475, which comprised of $325 of cash and promissory notes
in the original principal amount of $150 payable in installments with an interest rate of 4.0% per annum. The allocation of the purchase price is considered preliminary.