kids-20260930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission file number: 001-38242

OrthoPediatrics Corp.

(Exact name of registrant as specified in its charter)


Delaware			26-1761833
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)


2850 Frontier Drive Warsaw, IN 46582			(574) 268-6379
(Address of principal executive offices, including zip code)			(Registrant’s telephone number, including area code)

Title of Each Class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.00025 par value per share

KIDS

Nasdaq Global Market

________________________________________________________________________________________

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 27, 2026, the registrant had 26,110,476 outstanding shares of common stock, $0.00025 par value per share.

OrthoPediatrics Corp.

Form 10-Q

For the Quarterly Period Ended September 30, 2026

TABLE OF CONTENTS


		Page No.
Note Regarding Forward-Looking Statements		3

PART I. FINANCIAL INFORMATION
Item 1	Financial Statements (unaudited)	4
	Condensed Consolidated Balance Sheets - September 30, 2026 and December 31, 2025	4
	Condensed Consolidated Statements of Operations - Three and Nine Months Ended September 30, 2026 and 2025	5
	Condensed Consolidated Statements of Comprehensive Loss - Three and Nine Months Ended September 30, 2026 and 2025	6
	Condensed Consolidated Statements of Stockholders' Equity - Three and Nin e Months Ended September 30, 2026 and 2025	7
	Condensed Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2026 and 2025	9
	Notes to Condensed Consolidated Financial Statements	11
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4	Controls and Procedures	34

PART II. OTHER INFORMATION
Item 1	Legal Proceedings	35
Item 1A	Risk Factors	35
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3	Defaults Upon Senior Securities	35
Item 4	Mine Safety Disclosures	35
Item 5	Other Information	35
Item 6	Exhibits	36
Exhibit Index		37
Signatures		38

NOTE REGARDING FORWARD-LOOKING STATEMENTS

All statements, other than statements of historical facts, contained in this quarterly report, including statements regarding our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our business, operations and financial performance and condition, are forward-looking statements. You can often identify forward-looking statements by words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "target," "ongoing," "plan," "potential," "predict," "project," "should," "will" or "would," or the negative of these terms or other terms. Forward-looking statements involve known and unknown risks, uncertainties and other factors, such as the impact of widespread health emergencies, such as respiratory syncytial virus, that may cause our results, activity levels, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements. Forward-looking statements may include, among other things, statements relating to:

•our ability to achieve or sustain profitability in the future;

•our ability to raise additional capital to fund our existing commercial operations, develop and commercialize new products and expand our operations;

•our ability to commercialize our products in development and to develop and commercialize additional products through our research and development efforts, and if we fail to do so we may be unable to compete effectively;

•our ability to generate sufficient revenue from the commercialization of our products to achieve and sustain profitability;

•our ability to comply with extensive government regulation and oversight both in the United States and abroad;

•our ability to maintain and expand our network of third-party independent sales agencies and distributors to market and distribute our products; and

•our ability to protect our intellectual property rights or if we are accused of infringing on the intellectual property rights of others.

We cannot assure you that forward-looking statements will prove to be accurate, and you are encouraged not to place undue reliance on forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations expressed or implied by the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this quarterly report, in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on March 4, 2026 and in other reports filed with the SEC that discuss the risks and factors that may affect our business. Other than as required by law, we undertake no obligation to update or revise any forward-looking statements to reflect new information, events or circumstances occurring after the date of this quarterly report.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ORTHOPEDIATRICS CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In Thousands, Except Share Data)


	September 30, 2026		December 31, 2025
ASSETS
Current assets:
Cash	$	17,141	$	19,556
Restricted cash	710		2,064
Short-term investments	27,088		41,295
Accounts receivable - trade, net of allowances of $1,619 and $1,501, respectively	59,543		53,838
Inventories, net	141,864		133,790
Prepaid expenses and other current assets	6,895		5,876
Total current assets	253,241		256,419

Property and equipment, net	46,941		49,555
Other assets:
Amortizable intangible assets, net	61,668		64,802
Goodwill	118,586		109,269
Other intangible assets	12,200		12,909
Other non-current assets	16,451		15,676
Total other assets	208,905		202,656

Total assets	$	509,087	$	508,630

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable - trade	$	24,485	$	18,786
Accrued compensation and benefits	16,657		13,693
Current portion of long-term debt with affiliate	174		170
Current portion of acquisition installment payable	1,691		2,194
Other current liabilities	12,625		11,354
Total current liabilities	55,632		46,197
Long-term liabilities:
Long-term term loan	48,560		48,189
Long-term convertible note	48,961		48,486
Long-term debt with affiliate, net of current portion	152		283
Other long-term debt, net of current portion	515		2,862
Acquisition installment payable, net of current portion	3,053		2,898
Deferred income taxes	3,140		3,582
Other long-term liabilities	9,724		9,537
Total long-term liabilities	114,105		115,837

Total liabilities	169,737		162,034

Stockholders' equity:
Common stock, $0.00025 par value; 50,000,000 shares authorized; 26,115,126 shares and 25,093,792 shares issued as of September 30, 2026 and December 31, 2025, respectively	7		6
Additional paid-in capital	637,299		622,325
Accumulated deficit	(298,992)		(275,212)
Accumulated other comprehensive income (loss)	1,036		(523)
Total stockholders' equity	339,350		346,596
Total liabilities and stockholders' equity	$	509,087	$	508,630

See notes to condensed consolidated financial statements.

ORTHOPEDIATRICS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In Thousands, Except Share and Per Share Data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Net revenue	$	72,661	$	61,250	$	202,530	$	174,743
Cost of revenue	18,685		15,976		52,798		47,188
Gross profit	53,976		45,274		149,732		127,555
Operating expenses:
Sales and marketing	23,096		18,652		62,860		54,327
General and administrative	32,029		29,155		95,866		89,878
Intangible asset impairment	611		2,268		611		2,268
Restructuring	—		2,294		1		5,305
Research and development	2,465		2,333		7,021		6,843
Total operating expenses	58,201		54,702		166,359		158,621

Operating loss	(4,225)		(9,428)		(16,627)		(31,066)
Other expense (income):
Interest expense, net	2,617		1,822		7,248		4,064
Fair value adjustment of contingent consideration	(814)		—		(814)		—
Other expense (income), net	11		648		765		(5,705)
Total other expense (income), net	1,814		2,470		7,199		(1,641)

Net loss before income taxes	$	(6,039)	$	(11,898)	$	(23,826)	$	(29,425)
Income tax (benefit) charge	(109)		(125)		(46)		120


Net loss	$	(5,930)	$	(11,773)	$	(23,780)	$	(29,545)
Weighted average shares outstanding
Basic and diluted	24,153,621		23,565,779		23,964,171		23,420,158

Net loss per share
Basic and diluted	$	(0.25)	$	(0.50)	$	(0.99)	$	(1.26)

See notes to condensed consolidated financial statements.

ORTHOPEDIATRICS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited) (In Thousands)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Net loss	$	(5,930)	$	(11,773)	$	(23,780)	$	(29,545)
Other comprehensive income (loss):
Foreign currency translation adjustment	(2,080)		1,231		1,829		6,937
Unrealized (loss) gain on short-term investments	(123)		112		(393)		208
Adjustment for realized gains (losses) on short-term investments	7		(26)		123		(1)
Other comprehensive income (loss), net of tax	(2,196)		1,317		1,559		7,144
Comprehensive loss	$	(8,126)	$	(10,456)	$	(22,221)	$	(22,401)

See notes to condensed consolidated financial statements.

ORTHOPEDIATRICS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(In Thousands, Except Share Data)


		Three and Nine Months Ended September 30, 2026
							Accumulated
					Additional		Other		Total
	Common Stock		Paid-in		Accumulated	Comprehensive	Stockholders'
		Shares	Value				Capital		Deficit		Income (Loss)		Equity
Balance at January 1, 2026		25,093,792	$	6			$	622,325	$	(275,212)	$	(523)	$	346,596
Net loss		—	—				—		(10,687)		—		(10,687)
Other comprehensive loss		—	—				—		—		(881)		(881)

Restricted stock		496,378	—				3,427		—		—		3,427
Issuance of common stock		14,730	—				257		—		—		257

Balance at March 31, 2026		25,604,900	$	6			$	626,009	$	(285,899)	$	(1,404)	$	338,712
Net loss		—	—				—		(7,163)		—		(7,163)
Other comprehensive income		—	—				—		—		4,636		4,636
Stock portion of MedTech anniversary payment		153,430	—				2,398		—		—		2,398
Restricted stock		272,223	1				3,631		—		—		3,632
Issuance of common stock		80,873	—				1,399		—		—		1,399
Balance at June 30, 2026		26,111,426	$	7			$	633,437	$	(293,062)	$	3,232	$	343,614
Net loss		—	—				—		(5,930)		—		(5,930)
Other comprehensive loss		—	—				—		—		(2,196)		(2,196)
Restricted stock		3,700	—				3,862		—		—		3,862
Balance at September 30, 2026		26,115,126	$	7			$	637,299	$	(298,992)	$	1,036	$	339,350

See notes to condensed consolidated financial statements.

ORTHOPEDIATRICS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(In Thousands, Except Share Data)


	Three and Nine Months Ended September 30, 2025
									Accumulated
					Additional				Other		Total
	Common Stock			Paid-in	Accumulated		Comprehensive		Stockholders'
	Shares	Value			Capital		Deficit		Loss		Equity
Balance at January 1, 2025	24,217,508	$	6		$	600,897	$	(235,564)	$	(10,773)	$	354,566
Net loss	—	—			—		(10,659)		—		(10,659)
Other comprehensive loss	—	—			—		—		(853)		(853)

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	—	—			—		(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 income	—	—			—		—		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.

ORTHOPEDIATRICS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) (In Thousands)


	Nine Months Ended September 30,
	2026		2025
OPERATING ACTIVITIES
Net loss	$	(23,780)	$	(29,545)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Goodwill and other intangible asset impairments	611		4,163
Depreciation and amortization	17,048		15,517
Stock-based compensation	12,592		13,362
Fair value adjustment of contingent consideration	(814)		—
Accretion of acquisition installment payable	365		105
Deferred income taxes	(393)		120
Non-cash other	695		(88)
Changes in certain operating assets and liabilities:
Accounts receivable - trade	(4,717)		(8,270)
Inventories	(4,922)		(7,893)
Prepaid expenses and other current assets	(579)		176
Accounts payable - trade	5,299		(1,961)
Accrued expenses and other liabilities	1,816		790
Other	(1,074)		(1,675)
Net cash provided by (used in) operating activities	2,147		(15,199)

INVESTING ACTIVITIES

Other acquisitions, including clinics, net of cash acquired	(8,410)		(8,852)
Sale of short-term marketable securities	15,000		—
Investment in private companies and purchases of licenses	(810)		(2,007)
Purchase of short-term marketable securities	—		(15,000)
Purchases of property and equipment	(8,716)		(10,511)
Net cash used in investing activities	(2,936)		(36,370)

FINANCING ACTIVITIES
Proceeds from issuance of debt	—		25,000
Payment on debt issuance costs	(289)		—
Payments on mortgage notes	(127)		(119)
Payments on acquisition notes	(2,464)		(489)
Net cash (used in) provided by financing activities	(2,880)		24,392

Effect of exchange rate changes on cash, cash equivalents and restricted cash	(100)		284

NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	(3,769)		(26,893)

Cash, cash equivalents and restricted cash, beginning of year	$	21,620	$	45,777
Cash, cash equivalents and restricted cash, end of period	$	17,851	$	18,884


	2026		2025
SUPPLEMENTAL DISCLOSURES
Cash paid for interest	$	5,646	$	4,562
Transfer of instruments between property and equipment and inventory	$	2,611	$	1,881
Right-of-use assets obtained in exchange for lease liabilities	$	2,838	$	4,812
Issuance of common shares to settle an obligation with a vendor	$	—	$	1,261
Issuance of common shares for MedTech installment	$	2,398	$	226
Issuance of common shares in connection with acquisitions	$	1,656	$	—
Issuance of common shares in connection with Boston O&P acquisition	$	—	$	233
Capital contribution associated with reclassification of MedTech liability to equity	$	—	$	2,062

See notes to condensed consolidated financial statements.

ORTHOPEDIATRICS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars In Thousands, Except Share and Per Share Data)

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 to various hospitals and medical facilities throughout the United States and various international markets, giving pediatric orthopedic surgeons and caregivers the ability to treat children with technologies specifically designed to meet their needs, including PediLoc®, PediPlates®, Cannulated Screws, PediFlexTM nail, PediNailTM, PediLoc® Tibia, ACL Reconstruction System, Locking Cannulated Blade, Locking Proximal Femur, Spica Tables, RESPONSETM Spine, BandLocTM, Pediatric Nailing Platform | Femur, Devise Rail, Orthex®, The Fassier-Duval Telescopic Intramedullary System®, SLIMTM Nail, The GAP NailTM, The Free Gliding SCFE Screw SystemTM, GIRO™ Growth Modulation System, PNP Tibia System, ApiFix® Mid-C System, Mitchell Ponseti®, VerteGlideTM, and Boston Brace 3D® specialized bracing products. 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. We currently serve three of the largest categories in this market.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying condensed consolidated financial statements include the accounts of OrthoPediatrics Corp. and its wholly-owned subsidiaries (collectively, the “Company,” “we,” “our” or “us”). All intercompany balances and transactions have been eliminated.

Unaudited Interim Condensed Consolidated Financial Statements

We have prepared the accompanying condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying condensed consolidated financial statements are unaudited and should be read in conjunction with the annual consolidated financial statements as of and for the year ended December 31, 2025 and related notes thereto contained in our Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on March 4, 2026. The financial data and other financial information disclosed in the notes to the accompanying condensed consolidated financial statements are also unaudited. 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, 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 and nine months ended September 30, 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 $298,992 and $275,212 as of September 30, 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, 2026 and expected cash flows from operations for the next twelve months subsequent to the issuance of the accompanying condensed consolidated financial statements, including borrowings available under our First Amendment to the Term Loan Agreement (See Note 6 - Debt and Credit Arrangements for additional information), are sufficient to enable us to maintain current and essential planned operations for more than the next twelve months.

Use of Estimates

Preparation of our condensed consolidated financial statements requires the use of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as of the date of the condensed consolidated financial statements. By their nature, these judgments are subject to an inherent degree of uncertainty. We use historical experience and other assumptions as the basis for our judgments and estimates. Because future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Any changes in these estimates will be reflected in our condensed consolidated financial statements.

Significant Accounting Policies

There have been no changes in the Company's significant accounting policies as disclosed in Note 2 to the audited consolidated financial statements included in the 2025 Annual Report on Form 10-K.

Financial Instruments and Concentration of Credit Risk

Financial instruments that could subject the Company to credit risk consist primarily of cash, cash equivalents, short-term investments and accounts receivable. We consider all highly liquid investments with original maturity of three months or less at inception to be cash equivalents. The Company performs ongoing credit evaluations of customers and maintains a reserve for expected credit losses. The Company believes the risk of credit losses associated with accounts receivable is low given the history of collections and customer base. Additionally, the Company considers the risk for credit losses associated with short-term investments to be low given the types of investments which primarily include Corporate Bonds and Treasury Bonds.

Recent Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") No. 2024-03, "Disaggregation of Income Statement Expenses" which requires disaggregated disclosure of income statement expenses into specified categories in disclosures within the footnotes to the financial statements. The standard is effective for annual periods beginning after December 15, 2026. We are currently evaluating the effect of this ASU on our consolidated financial statements and disclosures.

NOTE 3 - BUSINESS COMBINATIONS AND ASSET ACQUISITIONS

Medtech Concepts, LLC

On May 1, 2023, the Company entered into a Membership Interest Purchase Agreement (the "MedTech 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 MedTech Purchase Agreement. Under the MedTech 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 shares of our common stock approximating $133, both of which reduced the amount of the acquisition installment payable on our consolidated balance sheet. 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 MedTech Purchase Agreement (the “MedTech 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) are 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 MedTech 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 $2,062 upon execution of the MedTech 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.

In May 2026, in settlement of the third anniversary payment, we issued an aggregate of 153,430 shares of our common stock, which reduced the share-settled liability and increased additional paid-in capital by $2,398. As of September 30, 2026 and December 31, 2025, the Company has recorded a share-settled

liability of $1,181 and $1,982, respectively, related to the MedTech Amendment, of which $1,181 and $1,752, respectively, is recorded as a current liability.

Boston Brace International, Inc.

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 was 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 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 for certain of these clinic acquisitions that closed in the fourth quarter of 2025 is considered preliminary.

OP EU B.V.

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 was 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.

OrthoPediatrics EU Limited

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.

On February 1, 2026, the Company and OrthoPediatrics EU Limited entered into a Stock Purchase Agreement (the “LOC 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 LOC Purchase Agreement, OrthoPediatrics EU Limited paid to the Sellers: (i) GBP 5,083 in cash, net of cash acquired of GBP 317; and (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 4,660 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 LOC 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.

In April 2026, OrthoPediatrics EU Limited purchased all of the issued and outstanding share capital of a medical device distributor located in the UK. Total consideration was approximately GBP 1,255 after a customary working capital adjustment, which was comprised of 80,873 shares of the Company's common stock representing approximately GBP 1,060 and GBP 196 of cash, net of cash acquired of GBP 637. We allocated GBP 712 to customer relationship intangible assets and the rest to net working capital. For accounting purposes, this acquisition is accounted for as an asset acquisition since substantially all of the fair value of the gross assets acquired is concentrated in a group of similar identifiable assets.

In July 2026, OrthoPediatrics EU Limited purchased all of the issued and outstanding share capital of a manufacturer of medical devices for spinal disorders. This acquisition expands the Company's scoliosis product line and creates a larger footprint in the UK. The Company paid GBP 2,262 in total consideration for the stock, which was comprised of GBP 1,962 of cash and a promissory note in the original principal amount of GBP 300 payable in four quarterly installments with interest at the rate of 5.0% per annum. The sellers may also be entitled to an earnout payment of up to GBP 238, if certain financial performance metrics exceed a threshold in the first year after closing. We allocated GBP 1,196 to goodwill, GBP 395 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.

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 Follow Med Distribuidora de Produtos Médicos Ltda., Follow Med Sul Distribuidora Produtos Medicos Ltda., and Implant Safe Tech Ltda. (collectively "Follow Med"), 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 September 30, 2026 and December 31, 2025, we recorded a current portion of these future anniversary payments of USD $511 and USD $442, respectively, within current portion of acquisition installment payable, and USD $3,053 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

Goodwill

Changes in the carrying amount of goodwill for the nine months ended September 30, 2026 were as follows:


	Total



Goodwill at January 1, 2026	$	109,269
Clinic and other acquisitions	7,749
Foreign currency translation impact	1,568
Goodwill at September 30, 2026	$	118,586

Intangible Assets

As of September 30, 2026, the balances of amortizable intangible assets were as follows:


	Weighted-Average Amortization Period	Gross Intangible Assets		Accumulated Amortization		Net Intangible Assets
Patents	8.5 years	$	51,058	$	(21,912)	$	29,146
Intellectual Property & Capitalized Software	6.5 years	16,057		(6,803)		9,254
Customer Relationships & Other	9.2 years	28,722		(7,604)		21,118
License Agreements	2.6 years	10,865		(8,715)		2,150
Total amortizable assets		$	106,702	$	(45,034)	$	61,668

As of December 31, 2025, the balances of amortizable intangible assets were as follows:


	Weighted-Average Amortization Period	Gross Intangible Assets		Accumulated Amortization		Net Intangible Assets
Patents	9.3 years	$	49,939	$	(18,854)	$	31,085
Intellectual Property & Capitalized Software	7.1 years	16,056		(5,642)		10,414
Customer Relationships & Other	9.7 years	26,278		(6,107)		20,171
License Agreements	2.5 years	10,453		(7,321)		3,132
Total amortizable assets		$	102,726	$	(37,924)	$	64,802

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

Trademarks are non-amortizing intangible assets which were $12,200 and $12,909 as of September 30, 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, 2026 was primarily driven by impairment charges related to our ApiFix Ltd. ("ApiFix") and MedTech trademark assets.

During 2026 and 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 $611 and $2,268 for the nine months ended September 30, 2026 and 2025, respectively, to reduce the carrying amount of the intangible assets to their estimated fair value.

NOTE 5 - FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company measures certain financial assets and liabilities at fair value. The accounting standards related to fair value measurements define fair value and provide a consistent framework for measuring fair value under the authoritative literature. A fair value hierarchy was established, which prioritizes the inputs used in measuring fair value into three broad levels.

Level 1 – Quoted prices in active markets for identical assets or liabilities;

Level 2 – Observable market-based inputs or unobservable inputs that are corroborated by market data; and

Level 3 – Significant unobservable inputs that are not corroborated by market data. 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, 2026 and December 31, 2025.


	September 30, 2026
	Level 1		Level 2		Level 3		Total
Financial Assets

Short-term investments
Corporate Bonds	$	—	$	12,052	$	—	$	12,052
Treasury Bonds	$	10,805	$	—	$	—	$	10,805
Asset-Backed Securities	$	—	$	3,945	$	—	$	3,945
Exchange Mutual Funds	$	286	$	—	$	—	$	286
Financial Liabilities
Contingent consideration	$	—	$	—	$	21	$	21

	December 31, 2025
	Level 1		Level 2		Level 3		Total
Financial Assets

Short-term investments
Corporate Bonds	$	—	$	17,852	$	—	$	17,852
Treasury Bonds	$	16,956	$	—	$	—	$	16,956
Asset-Backed Securities	$	—	$	6,058	$	—	$	6,058
Exchange Mutual Funds	$	429	$	—	$	—	$	429

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 US treasury bonds.

The Company's Level 2 assets pertain to certain asset-backed securities, collateralized by non-mortgage-related consumer debt, or corporate bonds. These securities are predominantly priced by third parties, either by a pricing vendor or dealer with significant inputs observable in active markets.

The Company's Level 3 instruments consist of contingent consideration. The fair value of the contingent consideration liability assumed in business combinations is recorded as part of the purchase price

consideration of the acquisition and is determined using a discounted cash flow model or probability simulation model. The significant inputs of such models are not always observable in the market, such as forecasted annual revenues, expected volatility and discount rates. The adjustments in the fair value of the contingent consideration payments included an income adjustment of $814 for the three and nine months ended September 30, 2026, which are recorded in fair value adjustment of contingent consideration on the condensed consolidated statement of operations. The change in estimate largely relates to the sales performance of certain acquired businesses discussed in Note 3 - Business Combinations and Asset Acquisitions as compared to the initial best estimate recorded at closing of the related acquisition.

NOTE 6 - DEBT AND CREDIT ARRANGEMENTS

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


	September 30, 2026		December 31, 2025
Term loan and Final Payment	$	51,000	$	51,000
Convertible note	50,000		50,000
Mortgage payable to affiliate	326		453
Acquisition note payable	3,279		4,557
Total debt	104,605		106,010
Less: debt discount and issuance costs	3,479		4,326
Less: current maturities	2,938		1,866
Long-term debt, net of current maturities	$	98,188	$	99,818

Braidwell Term Loan

On August 5, 2024, the Company and its wholly owned domestic subsidiaries, as borrowers (collectively, the “Credit Parties”), entered into that certain Credit Agreement and Guaranty (the “Term Loan Agreement”), by and among the Credit Parties, any additional borrowers from time to time party thereto, any guarantors from time to time party thereto, one or more funds managed by Braidwell LP (“Braidwell”), as lenders, the other lenders from time to time party thereto (together with Braidwell, the “Term Lenders”), and Wilmington Trust, National Association, as agent (the “Term Agent”). 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 drew the delayed draw 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%. The Company has the option to make a payment-in-kind interest payment equal to 1.00% per annum of the interest rate. 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 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 0.00% thereafter and (ii) an exit fee equal to 2.00% of the principal amount of any such repayment ("Final

Payment"). The Term Loan Agreement contains customary mandatory prepayment provisions. Once repaid or prepaid, the Term Loans may not be reborrowed.

The Term Loan Agreement includes customary conditions to borrowing, representations and warranties and covenants, including affirmative covenants and negative covenants that restrict the Credit Parties’ and their subsidiaries’ ability to, among other things, incur indebtedness, grant liens, merge or consolidate, make investments, dispose of assets, make acquisitions, pay dividends or make distributions, repurchase stock and enter into certain transactions with affiliates, in each case subject to certain exceptions. The Term Loan Agreement also has financial covenants requiring the Credit Parties to (i) maintain at all times unrestricted cash held in US accounts subject to Term Lenders’ first priority lien equal to at least 25% of the aggregate principal amount of any outstanding Term Loans and (ii) maintain certain minimum net product sales over a trailing twelve month period as set forth therein.

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. 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.

On March 31, 2026, the Credit Parties entered into a First Amendment (the “Braidwell Amendment”) to the Term Loan Agreement. The Braidwell 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 Braidwell 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; (c) interest-only until the August 5, 2029 maturity date; 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. No amounts had been drawn under the Braidwell Amendment as of September 30, 2026.

Braidwell Convertible Note

In addition to the Term Loans, on August 5, 2024, the Company entered into a Purchase Agreement (the “Braidwell 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. 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; 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 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 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. 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. 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); (ii) the Company’s failure to send certain notices under the Indenture within specified periods of time; (iii) the Company’s failure to comply with certain covenants in the Indenture relating to the Company’s ability to consolidate with or merge with or into, or sell, lease, or otherwise transfer, in one transaction or a series of transactions, all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, to another person; (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; (vi) certain defaults by the Company or any of its significant subsidiaries with respect to indebtedness for borrowed money of at least $25,000; (vii) the rendering of certain judgments against the Company or any of its significant subsidiaries for the payment of at least $25,000 where such judgments are not discharged or stayed within 60 days after the date on which the right to appeal has expired or on which all rights to appeal have been extinguished; 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.

Other Debt

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"). Pursuant to the terms of the mortgage note, we pay Tawani Enterprises Inc. monthly principal and interest installments of $16 with interest compounded at 5% until maturity in 2028, at which time a final payment of remaining principal and interest is due. At September 30, 2026, the mortgage balance was $326 of which current principal of $174 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, including non-cash amortization of debt discount and debt issuance costs, relating to the mortgage note payable to Tawani Enterprises Inc., the term loan with Braidwell, and the convertible note with Braidwell, was $6,503 and $5,205 for the nine months ended September 30, 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 September 30, 2026 and December 31, 2025, we have recorded liabilities of $3,279 and $4,557, respectively, related to these promissory notes, of which $2,764 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

The Company utilizes an estimated annual effective tax rate to determine its provision or benefit for income taxes for interim periods. 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, 2026, the income tax benefit was $46 compared to tax expense of $120 for the nine months ended September 30, 2025. Our effective income tax rate was 0.19% and (0.40)% for the nine months ended September 30, 2026 and 2025, respectively. The higher effective tax rate is primarily due to tax benefits on projected current Canadian losses, partially offset by other foreign discrete tax expenses compared to prior period.

The deferred tax assets are offset by a valuation allowance at September 30, 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 nine months ended September 30, 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, 2026. Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth.

The Company is currently under examination by the Internal Revenue Service for the year ended December 31, 2024. The Company was notified of this examination in the fourth quarter of 2026. The Company is in the early stages of evaluating the scope and potential impact of this examination.

NOTE 8 - STOCKHOLDERS’ EQUITY

Restricted Stock

Our restricted stock activity and related information are summarized as follows:


		Weighted-Average		Weighted-Average
	Restricted	Remaining	Restricted	Remaining
	Stock	Contractual Terms	Stock	Contractual Terms
	Awards	(in Years)	Units	(in Years)
Outstanding at January 1, 2026	1,508,093	1.4	20,965	1.4
Granted	791,491		8,700
Forfeited	(22,705)		(1,400)
Vested	(320,209)		(3,515)
Outstanding at September 30, 2026	1,956,670	1.5	24,750	1.4

At September 30, 2026, there was $21,498 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 1.6 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 $4,419 and $4,251 for the three months ended September 30, 2026 and 2025, respectively and $12,592 and $13,362 for the nine months ended September 30, 2026 and 2025, respectively.

In connection with its approval of the Term Loan Agreement, Braidwell 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. 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. 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, 2026. The dollar limit on repurchases under the program after December 31, 2024 was reduced to $250 per annum.

NOTE 9 – NET LOSS PER SHARE

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


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2026		2025		2026		2025
Net loss	$	(5,930)	$	(11,773)	$	(23,780)	$	(29,545)

Weighted average shares outstanding for basic and diluted	24,153,621		23,565,779		23,964,171		23,420,158
Net loss per share - basic and diluted	$	(0.25)	$	(0.50)	$	(0.99)	$	(1.26)

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. Non-vested restricted stock that includes non-forfeitable rights to dividends is 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 1,981,420 and 1,530,550 contingently issuable and convertible equity shares excluded from the calculation of diluted net loss per share as of September 30, 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. See Note 6 - Debt and Credit Arrangements for additional information.

NOTE 10 – BUSINESS SEGMENT

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. 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. The Chief Executive Officer is regularly provided with consolidated expenses consistent with those presented in the condensed consolidated statements of operations. We do not assess the performance of our individual product categories on measures of profit or loss, or other asset-based metrics. Therefore, the information below is presented only for revenue by category and geography.

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, 2026 or 2025. No individual customer accounted for more than 10% of consolidated accounts receivable as of September 30, 2026 and December 31, 2025.

Product sales by source were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
Product sales by geographic location:	2026		2025		2026		2025
U.S.	$	57,890	$	48,718	$	157,990	$	137,757
International	14,771		12,532		44,540		36,986
Total	$	72,661	$	61,250	$	202,530	$	174,743


	Three Months Ended September 30,				Nine Months Ended September 30,
Product sales by category:	2026		2025		2026		2025
Trauma and deformity	$	52,623	$	44,143	$	148,300	$	123,665
Scoliosis	19,172		16,261		51,490		48,447
Sports medicine/other	866		846		2,740		2,631
Total	$	72,661	$	61,250	$	202,530	$	174,743

NOTE 11 - RELATED PARTY TRANSACTIONS

We currently use Structure Medical, LLC (“Structure Medical”) as one of our suppliers. 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 $256 and $1,141 for the three months ended September 30, 2026 and 2025, respectively and $1,099 and $1,930 for the nine months ended September 30, 2026 and 2025, respectively.

NOTE 12 – COMMITMENTS AND CONTINGENCIES

Restructuring

In connection with the global restructuring plan that was initiated in the fourth quarter of 2024, the Company has a restructuring accrual of $448 and $808 as of September 30, 2026 and December 31, 2025, respectively, either within accrued expenses and other current liabilities or other long-term liabilities on its condensed consolidated balance sheet.

Legal Proceedings

From time to time, we are involved in various legal proceedings arising in the ordinary course of our business.

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. 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. Patent No. 10,258,377 (titled “Point and click alignment method for orthopedic surgeons, and surgical and clinical accessories and devices,” issued on April 16, 2019) (hereinafter, the “’377 Patent”)).

In June 2019, the Company purchased all the issued and outstanding units of membership interests in Orthex, and all the issued and outstanding shares of stock of Vilex in Tennessee, Inc. for $60,000 in total consideration. Vilex and Orthex are primarily manufacturers of foot and ankle surgical implants, including cannulated screws, fusion devices, surgical staples and bone plates, as well as the Orthex Hexapod

technology, a system of rings, struts, implants, hardware accessories, and the Point & Click Software used to treat congenital deformities and limb length discrepancies. On December 31, 2019, the Company divested substantially all of the assets relating to Vilex's adult product offerings to a wholly-owned subsidiary of Squadron, in exchange for a $25,000 reduction in a term note owed to Squadron in connection with the initial acquisition. As part of the sale, the Company also executed an exclusive license arrangement with Squadron providing for perpetual access to certain intellectual property, including the ‘377 Patent. According to the lawsuit, the other defendants, who are unrelated to the Company, assigned the ‘377 Patent to Orthex in violation of certain agreements with IMED. IMED, among other things, requests that the defendants be ordered to convey and assign to IMED all of their rights, title and interests in and to the ’377 Patent and seeks certain compensatory, consequential and unjust enrichment damages from Orthex and the unrelated defendants.

On May 13, 2021, the Court ordered the lawsuit stayed pending arbitration.

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

Purchase Obligations and Performance Requirements

As a result of entering into a license agreement for the exclusive distribution of the 7D Surgical FLASHTM Navigation platform during 2021, the Company agreed to a minimum purchase commitment for the first twelve months of that agreement. Additionally, the contract requires future purchase commitments based upon a percentage of historical purchases. As a result and as of September 30, 2026, the remaining purchase commitments under the agreement were $364 for the year ending December 31, 2026 and $1,456 future purchase commitments are required for the years ending December 31, 2027 and December 31, 2028, respectively.

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 have purchased over our $3,500 requirement during the nine months ended September 30, 2026, leaving no further requirement for 2026.

Royalties

As of September 30, 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, 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.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the condensed consolidated financial statements and related notes thereto contained elsewhere in this quarterly report, as well as the information under "Note Regarding Forward-Looking Statements."

The description of our business included in this quarterly report is summary in nature and only includes material developments that have occurred since the latest full description. The full description of the history and general development of our business is included in "Item 1. Description of Business" section of the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on March 4, 2026, which section is incorporated herein by reference.

Overview

We are the only global medical device company focused exclusively on providing a comprehensive trauma and deformity correction, scoliosis, sports medicine, specialty bracing and clinical services 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 specialized braces to meet the needs of pediatric surgeons or orthotists and their patients, who we believe have been largely neglected by the orthopedic industry. We currently serve three of the largest categories in this market. We estimate that the portion of this market that we currently serve represents a $6.2 billion opportunity globally, including over $2.8 billion in the United States.

We sell implants, instruments and specialized braces to our customers for use by pediatric orthopedic surgeons, orthotists or physical therapists to treat orthopedic conditions in children. We provide our implants in sets that consist of a range of implant sizes and include the instruments necessary to perform the surgical procedure. In the United States and a few selected international markets, our customers typically expect us to have full sets of implants and instruments on site at each hospital but do not purchase the implants until they are used in surgery. Accordingly, we must make an up-front investment in inventory of consigned implants and instruments before we can generate revenue from a particular hospital and we maintain substantial levels of inventory at any given time. We operate over 60 orthotic and prosthetic ("O&P") clinics in the United States serving children's hospitals in numerous states. In the international markets where we sell to stocking distributors or in the case of our braces, we transfer control of our products to the distributor or customer when title passes upon shipment.

We currently market over 95 surgical and specialized bracing systems that serve three of the largest categories within the pediatric orthopedic market: (i) trauma and deformity correction, (ii) scoliosis and (iii) sports medicine. We manufacture the majority of our orthopedic bracing products and we rely on a broad network of third parties to manufacture the components of our surgical products, which we then inspect and package. We believe our innovative products promote improved surgical accuracy, increase consistency of outcomes and enhance surgeon confidence in achieving high standards of care. In the

future, we expect to expand our product offering within these categories, as well as to address additional categories of the pediatric orthopedic market.

The majority of our revenue from implants, instruments, and specialized braces has been generated in the United States. Our global sales management organization leads a network of sales agencies, stocking distributors as well as direct sales representatives. We sell our implants and instruments through a network of multiple direct sales representatives as well as over 30 independent sales agencies employing over 240 sales representatives specifically focused on pediatrics. These independent sales agents are trained by us, distribute our products and are compensated through sales-based commissions and performance bonuses. We do not sell our products through or participate in physician-owned distributorships, or PODs. The specialty bracing revenue generated in the United States is from selling our bracing products directly to orthopedic surgeons, orthotists, physical therapists or, at certain times, directly to the end customer.

We market and sell our products internationally in over 75 countries, through independent stocking distributors and sales agencies. Our independent distributors manage the billing relationship with each hospital in their respective territories and are responsible for servicing the product needs of their surgeon customers. In 2017, we began to supplement our international stocking distributors with sales agencies using direct sales programs in the United Kingdom, Ireland, Australia and New Zealand where we sell directly to the hospitals. We began selling direct to Canada in September 2018, Belgium and the Netherlands in January 2019, Italy in March 2020 and Germany, Switzerland and Austria in January 2021. In order to further enhance our operations in Europe, we established operating companies in the Netherlands and Germany in March 2019 and April 2022, respectively. In 2023 and 2024, we hired operating and sales representatives in Germany as salaried employees to better serve our customers and opened warehouses in Germany and Australia in 2024. 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. In June 2026, we expanded into India and in August 2026, we closed our warehouse in Germany and consolidated operations into the Netherlands warehouse. These arrangements have generated an increase in revenue and gross margin.

We believe there are significant opportunities for us to strengthen our position in U.S. and international markets by increasing investments in consigned implant and instrument sets, strengthening our global sales and distribution infrastructure, and expanding our product offering as well as our O&P clinic network.

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, is considered finished goods and is purchased from third parties. The majority of this inventory is non-sterile, metallic implants and instruments that do not have an expiration date or shelf life. We continuously monitor our global inventory for excess or obsolete items in relation to estimated forecasted product demand and product life cycles. Revenue is not recognized at the time of consignment, as we maintain control over the inventory. Revenue is recognized only upon implantation, at which point an invoice is issued. During 2026, the Company recorded adjustments to revenue related to finalization of payer reimbursement rates applicable to prior-period services. For the nine months ended September 30, 2026, consignment sales accounted for approximately 66% of our total net sales. Inventory held on consignment at sales agencies, distributors, or other customers is approximately 60% of gross inventory.

Social Impact

OrthoPediatrics was founded on the cause of impacting the lives of children with orthopedic conditions. Since inception we have impacted the lives of 1,425,000 children, when including those served by our acquired companies. We believe we should continue to expand our social impact, create an inclusive culture, and ensure good corporate governance practices.

•The Company and its associates regularly participate in philanthropic causes important to our local communities. We also partner with over 40 charitable organizations that provide pediatric orthopedic care around the world. In 2020, we were named as "Corporate Partner of the Year" by World Pediatric Project - with whom we work to provide access to medical care for children in developing countries.

•We are committed to fostering an environment that is respectful, compassionate, and inclusive of everyone in our community which is communicated in our diversity and inclusion policy. For nine years we have been recognized by the Indiana Chamber of Commerce - Best Companies to Work in Indiana.

We believe effectively managing our priorities, as well as increasing our transparency related to social impact programs, will help create long-term value for our stakeholders. We expect to continue to increase our disclosures and communicate our social impact efforts in future SEC filings.

Nothing on our website shall be deemed part of or incorporated by reference into this Quarterly Report on Form 10-Q.

Trends and Uncertainties

From time to time we acquire, make investments in or license other technologies, products and businesses that may enhance our capabilities, complement our current products or expand the breadth of our markets or customer base. As a result of these transactions, we may record certain intangible assets, including goodwill and trademarks, which are subject to annual impairment testing. Fair value is based on our current assessment of the expected future cash flows based on recent results and other specific market factors. During each of the past 5 years, the annual impairment testing determined that it was more likely than not the fair value of certain of our trademark assets were less than the associated carrying value. Subsequently, the Company completed a quantitative analysis and concluded that the fair value was in fact less than the carrying value and partial impairment losses of $0.6 million, $4.2 million, $1.8 million, $1.0 million and $3.6 million were recorded in 2026, 2025, 2024, 2023, and 2022, respectively. We believe that the expected future cash flows in the most recent calculations represent management’s best estimate; however, if actual results differ materially from these estimates, we could record an additional impairment charge which could be material to our consolidated financial statements and have an adverse impact on our results of operations.

We encourage the readers of this document to read our risk factors in their entirety contained in Item 1A “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on March 4, 2026 and in other reports filed with the SEC that discuss the risks and factors that may affect our business.

Summary of Statements of Operations for the Three and Nine Months Ended September 30, 2026 and 2025

The following table sets forth our results of operations for the three and nine months ended September 30, 2026 and 2025 (dollars in thousands):


	Three Months Ended September 30,								Nine Months Ended September 30,
	2026		2025		Increase (Decrease)		%		2026		2025		Increase (Decrease)		%
Net revenue	$	72,661	$	61,250	$	11,411	19	%	$	202,530	$	174,743	$	27,787	16	%
Cost of revenue	18,685		15,976		2,709		17	%	52,798		47,188		5,610		12	%
Sales and marketing expenses	23,096		18,652		4,444		24	%	62,860		54,327		8,533		16	%
General and administrative expenses	32,029		29,155		2,874		10	%	95,866		89,878		5,988		7	%
Intangible asset impairment	611		2,268		(1,657)		(73)	%	611		2,268		(1,657)		(73)	%
Restructuring	—		2,294		(2,294)		(100)	%	1		5,305		(5,304)		(100)	%
Research and development expenses	2,465		2,333		132		6	%	7,021		6,843		178		3	%
Other expense (income), net	1,814		2,470		(656)		(27)	%	7,199		(1,641)		8,840		539	%
Provision for income taxes (benefit)	(109)		(125)		16		(13)	%	(46)		120		(166)		(138)	%


Net loss	$	(5,930)	$	(11,773)	$	5,843	50	%	$	(23,780)	$	(29,545)	$	5,765	20	%

Net Revenue

The following tables set forth our net revenue by geography and product category for the three and nine months ended September 30, 2026 and 2025 (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
Product sales by geographic location:	2026		2025		2026		2025
U.S.	$	57,890	$	48,718	$	157,990	$	137,757
International	14,771		12,532		44,540		36,986
Total	$	72,661	$	61,250	$	202,530	$	174,743
	Three Months Ended September 30,				Nine Months Ended September 30,
Product sales by category:	2026		2025		2026		2025
Trauma and deformity	$	52,623	$	44,143	$	148,300	$	123,665
Scoliosis	19,172		16,261		51,490		48,447
Sports medicine/other	866		846		2,740		2,631
Total	$	72,661	$	61,250	$	202,530	$	174,743

Net revenue increased $11.4 million, or 19%, from $61.2 million for the three months ended September 30, 2025 to $72.7 million for the three months ended September 30, 2026. Net revenue increased $27.8 million, or 16%, from $174.7 million for the nine months ended September 30, 2025 to $202.5 million for the nine months ended September 30, 2026. The increase during the three and nine months ended September 30, 2026 was primarily driven by strong performance across global Trauma and Deformity and OP Specialty Bracing.

Trauma and deformity sales increased $8.5 million, or 19%, from $44.1 million during the three months ended September 30, 2025, to $52.6 million for the three months ended September 30, 2026, and sales increased $24.6 million, or 20%, from $123.7 million for the nine months ended September 30, 2025 to $148.3 million for the nine months ended September 30, 2026. The increase for the three and nine

months ended September 30, 2026 was primarily driven by strong growth across numerous product lines, specifically our Cannulated Screws, PNP Femur, PediPlates, the addition of 3P Hip, as well as continued OP Specialty Bracing (OPSB) growth. Scoliosis sales increased $2.9 million, or 18%, from $16.3 million during the three months ended September 30, 2025, to $19.2 million for the three months ended September 30, 2026, and sales increased $3.0 million, or 6%, from $48.4 million for the nine months ended September 30, 2025, to $51.5 million for the nine months ended September 30, 2026. The increase for the three months ended September 30, 2026 was primarily driven by increased revenue generated from VerteGlide and Response. The increase for the nine months ended September 30, 2026 was driven primarily by growth from VerteGlide sales and Response procedures, partially offset by lower 7D units. Sports medicine / other remained consistent during the three months ended September 30, 2026 and September 30, 2025. It increased $0.1 million, or 4%, during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. Nearly all the change in each category was due to an increase or decrease in the unit volume sold and not a result of price changes.

Cost of Revenue and Gross Margin

Cost of revenue increased $2.7 million, or 17%, from $16.0 million for the three months ended September 30, 2025 to $18.7 million for the three months ended September 30, 2026. Cost of revenue increased $5.6 million, or 12%, from $47.2 million for the nine months ended September 30, 2025 to $52.8 million for the nine months ended September 30, 2026. The increase was due primarily to sales volume. Gross margin was 74% and 74% for the three months ended September 30, 2026 and September 30, 2025, respectively. Gross margin was 74% and 73% for the nine months ended September 30, 2026 and September 30, 2025, respectively.

Sales and Marketing Expenses

Sales and marketing expenses increased $4.4 million, or 24%, to $23.1 million for the three months ended September 30, 2026 from $18.7 million for the three months ended September 30, 2025. Sales and marketing expenses increased $8.5 million, or 16%, to $62.9 million for the nine months ended September 30, 2026 from $54.3 million for the nine months ended September 30, 2025. The increase in the three and nine months ended September 30, 2026 was due primarily to increased sales commission expenses and an overall increase in volume of units sold.

General and Administrative Expenses

General and administrative expenses increased $2.9 million, or 10%, from $29.2 million for the three months ended September 30, 2025 to $32.0 million for the three months ended September 30, 2026, and increased $6.0 million, or 7%, from $89.9 million for the nine months ended September 30, 2025 to $95.9 million for the nine months ended September 30, 2026. The increase for the three and nine months ended September 30, 2026 was primarily due to the additional personnel supporting clinic expansions and small-scale acquisitions. General and administrative stock compensation increased $1.0 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025.

Depreciation and amortization expenses increased $0.3 million, or 7%, from $4.9 million for the three months ended September 30, 2025 to $5.3 million for the three months ended September 30, 2026, and increased $1.3 million, or 9%, from $14.6 million for the nine months ended September 30, 2025 to $16.0 million for the nine months ended September 30, 2026.

Intangible Asset Impairment

During 2026, management completed a quantitative analysis as part of our annual impairment test, and determined the fair value of our ApiFix and MedTech trademark assets were below their respective carrying values. We recorded a partial impairment charge of $0.6 million during the three and nine

months ended September 30, 2026 and $2.3 million during the three and nine months ended September 30, 2025. See Note 4 - Goodwill and Intangible Assets for further details.

Restructuring Expense

In 2024, the Company initiated a global restructuring plan aimed at improving operational efficiency, reducing costs by integrating the ApiFix product into the broader OP Scoliosis portfolio, and reducing staff across all of OrthoPediatrics Corp (the "2024 Restructuring Plan"). In connection with the 2024 Restructuring Plan, the Company recorded nominal restructuring expenses for the three and nine months ended September 30, 2026 compared to $2.3 million for the three months ended September 30, 2025 and $5.3 million for the nine months ended September 30, 2025.

Research and Development Expenses

Research and development expenses increased $0.1 million, or 6%, from $2.3 million for the three months ended September 30, 2025 to $2.5 million for the three months ended September 30, 2026, and increased by 3%, from $6.8 million for the nine months ended September 30, 2025 to $7.0 million for the nine months ended September 30, 2026.

Total Other Expense (Income), net

Other expense was $1.8 million for the three months ended September 30, 2026 compared to other expense of $2.5 million for the three months ended September 30, 2025, a change of $0.7 million, or 27%, and other expense was $7.2 million for the nine months ended September 30, 2026 compared to other income of $1.6 million for the nine months ended September 30, 2025, a change of $8.8 million, or 539%. The change for the three and nine months ended September 30, 2026 was driven by a $0.8 million contingent consideration gain, additional interest expense in 2026 compared to 2025, less interest income earned due to having less cash invested in 2026 compared to 2025, as well as changes in foreign exchange gains and losses. We incurred a foreign exchange transaction loss for the nine months ended September 30, 2026 driven largely by the strengthening of the US Dollar against the Euro, whereas we incurred a foreign exchange transaction gain for the nine months ended September 30, 2025 when the US Dollar weakened against the Euro.

Liquidity and Capital Resources

We have incurred operating losses since inception and had an accumulated deficit of $299.0 million as of September 30, 2026. For the nine months ended September 30, 2026, net cash provided by operating activities was $2.1 million, compared to net cash used in operating activities of $15.2 million for the nine months ended September 30, 2025. While we may continue to incur losses in the near term as we expand our product portfolio and invest in additional consigned implant and instrument sets to support growth in existing and new markets, we believe the improvement in operating cash flows, together with our cash and cash equivalents, restricted cash and short-term investments of $44.9 million as of September 30, 2026, will provide sufficient liquidity to fund our operations and planned growth initiatives. Since inception, we have funded our operations primarily through the sale of our common and preferred stock, convertible securities and debt, as well as through sales of our products. As of September 30, 2026, we were in compliance with all debt covenants.

Cash Flows

The following table sets forth our cash flows from operating, investing and financing activities for the periods indicated (dollars in thousands):


	Nine Months Ended September 30,
	2026		2025
Net cash provided by (used in) operating activities	$	2,147	$	(15,199)

Net cash used in investing activities	(2,936)		(36,370)

Net cash (used in) provided by financing activities	(2,880)		24,392
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(100)		284
Net decrease in cash, cash equivalents and restricted cash	$	(3,769)	$	(26,893)

Cash Provided by (Used in) Operating Activities

Net cash provided by operating activities was $2.1 million for the nine months ended September 30, 2026, compared to net cash used in operating activities of $15.2 million for the nine months ended September 30, 2025. Net cash used for working capital was $3.1 million for the nine months ended September 30, 2026 compared to $17.2 million for the nine months ended September 30, 2025. The change in cash provided by operating activities was primarily driven by management of accounts payable, lower inventory purchases as well as strong accounts receivable collections compared to the nine months ended September 30, 2025.

Cash Used in Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2026 was $2.9 million compared to $36.4 million for the nine months ended September 30, 2025. The decrease in cash used in investing activities for the nine months ended September 30, 2026 was driven by the proceeds from the sale of short-term marketable securities compared to the purchase of short-term marketable securities in the nine months ended September 30, 2025.

Cash (Used in) Provided by Financing Activities

Net cash used in financing activities for the nine months ended September 30, 2026 was $2.9 million compared to cash provided by financing activities of $24.4 million for the nine months ended September 30, 2025. The increase in cash used in financing activities was primarily driven by not drawing on debt compared to the nine months ended September 30, 2025.

Indebtedness

Term Loan Agreement and Convertible Notes

On August 5, 2024, the Company signed a $100 million term loan and private placement arrangement with Braidwell LP by and among (i) the Company and other borrowers party to the Credit Agreement and Guaranty, (ii) Braidwell LP, and (iii) the financial institutions or other entities from time to time party thereto as Lenders. Terms of the financing include a $50 million term loan and $50 million of convertible notes. The term loan consists of an initial term loan of $25 million and access to a delayed draw term loan facility for an additional $25 million, subject to certain terms and conditions. The interest rate on the term loan is SOFR + 6.50% with the Company having the option to make a payment-in-kind interest payment equal to 1.00% per annum of the rate. Payments are interest only until the maturity date in August 2029. Included in the term loan are financial covenants to maintain cash in certain pledged accounts of at least 25% of the outstanding principal amount of the loan and to maintain certain minimum net product sales during the loan period.

The $50 million of convertible notes accrue interest at a rate of 4.75% per annum. Payments will consist of interest only until the maturity date in February 2030. The notes are convertible into common stock of the Company at an initial conversion price of $40.98, which represented a 30% premium to the Company’s volume weighted average common stock price for the thirty trading days ended August 2, 2024.

In connection with its approval of the financing, the Company’s Board approved a stock repurchase program of up to $5 million in value of the Company’s outstanding common stock. Using the closing price on August 2, 2024, of $29.56, the amount of common stock subject to the repurchase program represents approximately 169,000 shares or 0.7% of the Company’s outstanding common stock. No shares were repurchased under the program which reduced to $0.25 million per annum on December 31, 2024.

The proceeds from the financing were used to repay the Company’s outstanding debt of approximately $10 million with MidCap, transaction fees incurred in connection with the financing, potential stock repurchases under the program described above, and for general corporate purposes and working capital needs.

On March 31, 2026, the Company and its wholly owned domestic subsidiaries, as borrowers (collectively, the “Credit Parties”), entered into a First Amendment (the “Braidwell Amendment”) to that certain Credit Agreement and Guaranty (the “Term Loan Agreement”) dated August 5, 2024, by and among the Credit Parties, any additional borrowers from time to time party thereto, any guarantors from time to time party thereto, one or more funds managed by Braidwell LP, as lenders, the other lenders from time to time party thereto, and Wilmington Trust, National Association, as agent. The Braidwell Amendment provides the Company with incremental committed financing capacity by establishing a new delayed draw term loan facility in an aggregate principal amount not to exceed $20.0 million, which, subject to certain conditions set forth in the Braidwell Amendment, may be drawn until June 30, 2027, in minimum $10.0 million increments. The delayed draw structure allows the Company to access capital only as needed, supporting disciplined liquidity management and capital deployment. The facility features similar terms to those previously contained in the Term Loan Agreement, including: interest at a rate per annum equal to the SOFR Interest Rate (with a floor of 3.25%) plus 6.50%; a Company election to make a payment-in-kind interest payment equal to 1.00% per annum of the interest rate; interest-only until the August 5, 2029 maturity date; and certain financial covenants. The Company believes these terms provide an efficient and flexible source of capital while preserving near-term cash flow and is not required to draw on the delayed draw facility in connection with the Braidwell Amendment. 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. No amounts had been drawn under the Braidwell Amendment as of September 30, 2026.

Tawani Mortgage

In August 2013, pursuant to the purchase of our office and warehouse space, we entered into a mortgage note payable to Tawani Enterprises Inc., an affiliate of Squadron. Pursuant to the terms of the mortgage note, we pay Tawani Enterprises Inc. monthly principal and interest installments of $15,543, with interest compounded at 5% until maturity in August 2028, at which time a final payment of remaining principal and interest will become due.

See Note 6 - Debt and Credit Arrangements in Item 1 for further detail regarding our debt.

Pediatric Orthopedic Business Seasonality

Our revenue is typically higher in the summer months and holiday periods, driven by higher sales of our trauma and deformity and scoliosis products, which is influenced by the higher incidence of pediatric surgeries during these periods due to recovery time provided by breaks in the school year. Additionally,

our scoliosis patients tend to have additional health challenges that make scheduling their procedures variable in nature.

Critical Accounting Policies and Significant Judgments and Estimates

There were no material changes to our critical accounting policies that are disclosed in our audited consolidated financial statements for the year ended December 31, 2025 filed with the SEC on March 4, 2026.

Recent Accounting Pronouncements

See Note 2 - Summary of Significant Accounting Policies in Item 1 Financial Statements of Part 1 of this Quarterly report on Form 10-Q for a description of recent accounting pronouncements applicable to our condensed consolidated financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We consider our greatest potential area of market risk exposure to be interest rate risk related to our indebtedness and foreign currency exchange rate risk on our operating results. Quantitative and qualitative disclosures about interest rate risk and exchange rate risk are included in Item 7A "Quantitative and Qualitative Disclosures About Market Risk" of our Annual Report on Form 10-K for 2025. There were no material changes from the information provided therein.

ITEM 4. CONTROLS AND PROCEDURES

a.Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) at the end of the period covered by this quarterly report.

Based on this evaluation, we concluded that, as of such date, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

We recognize that any controls system, no matter how well designed and operated, can provide only reasonable assurance of achieving its objectives, and our management necessarily applies its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

b. Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the period covered by this quarterly report that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are involved in various legal proceedings arising in the ordinary course of our business.

A discussion of certain of those legal proceedings is contained in Note 12 – Commitments and Contingencies (under the heading “Legal Proceedings”) of the notes to the condensed consolidated financial statements included in Item 1. Financial Statements of Part I of this quarterly report on Form 10-Q, which discussion is incorporated herein by reference.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this quarterly report, you should carefully consider the factors discussed in “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on March 4, 2026. There have been no material changes to these Risk Factors since the filing of our Annual Report on Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

a. Sale of Unregistered Securities.

None.

b. Use of Proceeds.

None.

c. Issuer Purchases of Equity Securities.

None.

On August 2, 2024, the Board of Directors of the Company approved a limited stock repurchase program of up to $5.0 million in aggregate investment of the Company’s outstanding common stock, $0.00025 par value per share. The dollar limit on repurchases under the program after December 31, 2024 was reduced to $250,000 per annum. The program does not have an expiration date. However, it may be discontinued by the Board of Directors at any time. The Company has not yet repurchased any shares of its common stock pursuant to the repurchase program.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

a. Information required under Form 8-K.

None.

b. Modifications to nomination process.

None.

c. Insider trading arrangements.

During the three months ended September 30, 2026, the Company's Chairman and the following Company Named Executive Officers adopted written trading arrangements intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended:

Name and title

Date of adoption

Planned Duration Date Range

Aggregate number of shares to be sold

Mark Throdahl, Chairman

August 27, 2026

November 30, 2026 - November 29, 2027

20,772

David Bailey, President & CEO

August 25, 2026

November 30, 2026 - November 29, 2027

20,000

Fred Hite, CFO & COO

September 3, 2026

December 7, 2026 - December 6, 2027

20,000

Greg Odle, President - Scoliosis

September 10, 2026

December 9, 2026 - December 8, 2027

30,000

Joe Hauser, President Trauma & Deformity and OP Specialty Bracing (OPSB)

September 11, 2026

December 14, 2026 - December 13, 2027

5,000

Daniel Gerritzen, EVP - Legal, General Counsel & Secretary

August 25, 2026

November 30, 2026 - August 29, 2027

26,000

The arrangements were adopted in accordance with the Company's insider trading policy and applicable securities laws. Moreover, the arrangements are intended to facilitate long-term personal financial planning, diversification and liquidity objectives through pre-established trading parameters.

Other than the arrangements described above, during the three months ended September 30, 2026, no director or executive officer of the Company adopted, modified, or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(c) of Regulation S-K.

ITEM 6. EXHIBITS

The following exhibits are included within this Report or incorporated herein by reference.

Exhibit

Number

Description

2.1

Membership Interest Purchase Agreement, dated May 1, 2023, by and among OrthoPediatrics Corp., Kevin Unger, DINZE LLC, and the sole member of DINZE LLC (Incorporated by reference to Exhibit 2.1 of registrant's F orm 8-K filed on May 1, 2023) (SEC File No. 001-38242)

2.2

First Amendment to Membership Interest Purchase Agreement, dated May 9, 2025 by and among OrthoPediatrics Corp., Kevin Unger, and DINZE LLC (Incorporated by reference to Exhibit 2.1 of registrant's Form 8-K filed on May 14, 2025) (SEC File No. 001-38242)

3.1

Amended and Restated Certificate of Incorporation of OrthoPediatrics Corp. (Incorporated by reference to Exhibit 3.1 of registrant's Form 8-K filed on October 16, 2017) (SEC File No. 001-38242)

3.2

Amended and Restated Bylaws of OrthoPediatrics Corp. (Incorporated by reference to Exhibit 3.1 of registrant's Form 8-K filed on November 8, 2023) (SEC File No. 001-38242)

4.1

Specimen stock certificate evidencing the shares of common stock (Incorporated by reference to Exhibit 4.1 of registrant's Amendment No. 3 to Form S-1 filed on October 2, 2017) (SEC File No. 333-212076)

4.2

Registration Rights Agreement, by and between the registrant and Squadron, dated as of May 30, 2014 (Incorporated by reference to Exhibit 4.2 of registrant's Form S-1 filed on June 16, 2016) (SEC File No. 333-212076)

4.3

First Amendment to Registration Rights Agreement, by and between the registrant and Squadron, dated October 16, 2017 (Incorporated by reference to Exhibit 10.2 of registrant's Form 8-K filed on October 16, 2017) (SEC File No. 001-38242)

4.4

Stockholders Agreement, by and between the registrant and Squadron, dated October 16, 2017 (Incorporated by reference to Exhibit 10.1 of registrant's Form 8-K filed on October 16, 2017) (SEC File No. 001-38242)

4.5

Indenture, dated as of August 12, 2024, between OrthoPediatrics Corp. and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.1 of registrant’s Form 8-K filed on August 12, 2024 ) (SEC File No. 001-38242).

4.6

Form of 4.75% Convertible Senior Notes due February 15, 2030 (incorporated by reference to Exhibit 4.2 of registrant’s Form 8-K filed on August 12, 2024 ) (SEC File No. 001-38242).

31.1

Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

Inline XBRL Instance Document (The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.)

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (formatted as Inline XBRL and included in Exhibit 101)

w The exhibits and schedules to the applicable agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish a copy of any schedule omitted from such agreement to the SEC upon request.

+ Filed herewith.

++ Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.