Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 10, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | SRGA | ||
Entity Registrant Name | Surgalign Holdings, Inc. | ||
Entity Central Index Key | 0001760173 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 110,268,280 | ||
Entity File Number | 001-38832 | ||
Entity Tax Identification Number | 83-2540607 | ||
Entity Address, Address Line One | 520 Lake Cook Road | ||
Entity Address, Address Line Two | Suite 315 | ||
Entity Address, City or Town | Deerfield | ||
Entity Address, State or Province | IL | ||
Entity Address, Postal Zip Code | 60015 | ||
City Area Code | 224 | ||
Local Phone Number | 303-4651 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Interactive Data Current | Yes | ||
Security Exchange Name | NASDAQ | ||
Title of 12(b) Security | common stock, $0.001 par value | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
ICFR Auditor Attestation Flag | true | ||
Entity Public Float | $ 241.5 | ||
Documents Incorporated by Reference | As stated in Part III of this Annual Report on Form 10-K, portions of the registrant’s definitive proxy statement for the registrant’s 2021 Annual Meeting of Stockholders are incorporated by reference in Part III of this Annual Report on Form 10-K. |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 43,962 | $ 5,608 |
Accounts receivable - less allowances of $8,203 at December 31, 2020 and $4,803 at December 31, 2019 | 27,095 | 23,216 |
Inventories - current | 22,841 | 24,574 |
Prepaid and other current assets | 10,284 | 4,034 |
Current assets of discontinued operations | 138,382 | |
Total current assets | 104,182 | 195,814 |
Non-current inventories | 7,856 | 6,637 |
Property and equipment - net | 521 | 789 |
Other assets - net | 10,145 | 5,418 |
Non-current assets of discontinued operations | 135,851 | |
Total assets | 122,704 | 344,509 |
Current Liabilities: | ||
Accounts payable | 13,418 | 10,236 |
Accrued expenses | 21,644 | 15,099 |
Accrued income taxes | 11,761 | 424 |
Current liabilities of discontinued operations | 214,629 | |
Total current liabilities | 46,823 | 240,388 |
Acquisition contingencies | 47,519 | 1,130 |
Other long-term liabilities | 4,192 | 1,732 |
Non-current liabilities of discontinued operations | 285 | |
Total liabilities | 98,534 | 243,535 |
Commitments and contingencies (Note 24) | ||
Preferred stock Series A, $.001 par value: 5,000,000 shares authorized; 50,000 shares issued and outstanding as of 12/31/2019 | 66,410 | |
Stockholders' equity: | ||
Common stock, $.001 par value: 150,000,000 shares authorized; 81,678,179 and 75,213,515 shares issued and outstanding, as of December 31, 2020 and 2019, respectively | 81 | 75 |
Additional paid-in capital | 517,123 | 498,438 |
Accumulated other comprehensive loss | (2,416) | (7,629) |
Accumulated deficit | (484,962) | (451,179) |
Less treasury stock, 1,444,578 and 1,285,224 shares, as of December 31, 2020 and 2019, respectively, at cost | (5,656) | (5,141) |
Total stockholders' equity | 24,170 | 34,564 |
Total liabilities and stockholders' equity | $ 122,704 | $ 344,509 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 8,203 | $ 4,803 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 50,000 | |
Preferred stock, shares outstanding | 0 | 50,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 81,678,179 | 75,213,515 |
Common stock, shares outstanding | 81,678,179 | 75,213,515 |
Treasury stock, shares | 1,444,578 | 1,285,224 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | |||
Revenues | $ 101,749 | $ 117,423 | $ 92,112 |
Costs of goods sold | 44,002 | 32,777 | 33,593 |
Gross profit | 57,747 | 84,646 | 58,519 |
Expenses: | |||
Marketing, general and administrative | 124,390 | 135,396 | 98,152 |
Research and development | 11,947 | 16,836 | 14,410 |
Severance and restructuring costs | 34 | 773 | |
Loss (gain) on acquisition contingency | 4,753 | (76,033) | |
Asset acquisition expenses | 94,999 | ||
Asset impairment and abandonments | 14,773 | 97,341 | 5,070 |
Goodwill impairment | 140,003 | ||
Transaction and integration expenses | 4,872 | 13,999 | 4,928 |
Total operating expenses | 255,768 | 327,542 | 123,333 |
Operating loss | (198,021) | (242,896) | (64,814) |
Other (expense) income: | |||
Interest expense | (31) | ||
Interest income | 92 | 161 | 35 |
Foreign exchange gain (loss) | 279 | (122) | (29) |
Total other income - net | 340 | 39 | 6 |
Loss before income tax benefit (provision) | (197,681) | (242,857) | (64,808) |
Income tax benefit (provision) | 3,486 | (5,921) | 15,159 |
Net loss from continuing operations | (194,195) | (248,778) | (49,649) |
Discontinued operations (Note 5) | |||
Income from operations of discontinued operations | 179,934 | 48,452 | 57,417 |
Income tax provision | (19,522) | (11,316) | (10,891) |
Net income from discontinued operations | 160,412 | 37,136 | 46,526 |
Net loss | (33,783) | (211,642) | (3,123) |
Convertible preferred dividend | (2,120) | ||
Net loss applicable to common shares | (33,783) | (211,642) | (5,243) |
Other comprehensive loss (income): | |||
Unrealized foreign currency translation loss (income) | 23 | (351) | (941) |
Comprehensive loss | $ (33,760) | $ (211,993) | $ (6,184) |
Net loss from continuing operations per common share - basic | $ (2.61) | $ (3.55) | $ (0.85) |
Net income from discontinued operations per common share - basic | 2.16 | 0.53 | 0.76 |
Net loss per common share - basic | (0.45) | (3.02) | (0.09) |
Net loss from continuing operations per common share - diluted | (2.61) | (3.55) | (0.85) |
Net income from discontinued operations per common share - diluted | 2.16 | 0.53 | 0.76 |
Net loss per common share - diluted | $ (0.45) | $ (3.02) | $ (0.09) |
Weighted average shares outstanding - basic | 74,403,155 | 70,150,492 | 61,031,265 |
Weighted average shares outstanding - diluted | 74,403,155 | 70,150,492 | 61,031,265 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Paradigm Spine [Member] | Holo Surgical Inc. [Member] | Series A Preferred Stock [Member] | Cumulative Effect, Period of Adoption, Adjustment | Common Stock [Member] | Common Stock [Member]Paradigm Spine [Member] | Common Stock [Member]Holo Surgical Inc. [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member]Paradigm Spine [Member] | Additional Paid-in Capital [Member]Holo Surgical Inc. [Member] | Additional Paid-in Capital [Member]Series A Preferred Stock [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] | Accumulated Deficit [Member]Cumulative Effect, Period of Adoption, Adjustment | Treasury Stock [Member] |
Beginning Balance at Dec. 31, 2017 | $ 181,517 | $ 63 | $ 429,459 | $ (6,329) | $ (237,286) | $ (4,390) | ||||||||||
Net loss | (3,123) | (3,123) | ||||||||||||||
Foreign currency translation adjustment | (941) | (941) | ||||||||||||||
Exercise of common stock options | 1,243 | 1 | 1,242 | |||||||||||||
Stock-based compensation | 4,745 | 4,745 | ||||||||||||||
Purchase of treasury stock | (479) | (479) | ||||||||||||||
Amortization of preferred stock | (183) | (183) | ||||||||||||||
Preferred stock Series A dividend | $ (2,120) | $ (2,120) | ||||||||||||||
Ending Balance at Dec. 31, 2018 | 181,531 | 64 | 433,143 | (7,270) | (239,537) | (4,869) | ||||||||||
Accumulated deficit | $ 872 | $ 872 | ||||||||||||||
Net loss | (211,642) | (211,642) | ||||||||||||||
Foreign currency translation adjustment | (359) | (359) | ||||||||||||||
Exercise of common stock options | 395 | 395 | ||||||||||||||
Equity instruments issued in connection with acquisition - net of fees | $ 60,730 | $ 11 | $ 60,719 | |||||||||||||
Stock-based compensation | 4,367 | 4,367 | ||||||||||||||
Purchase of treasury stock | (272) | (272) | ||||||||||||||
Amortization of preferred stock | (186) | (186) | ||||||||||||||
Ending Balance at Dec. 31, 2019 | 34,564 | 75 | 498,438 | (7,629) | (451,179) | (5,141) | ||||||||||
Accumulated deficit | (451,179) | |||||||||||||||
Net loss | (33,783) | (33,783) | ||||||||||||||
Foreign currency translation adjustment | 23 | 23 | ||||||||||||||
Foreign currency translation adjustment related to the impact of discontinued operations | 5,190 | 5,190 | ||||||||||||||
Vesting of Restricted Stock Awards | 22 | 22 | ||||||||||||||
Equity instruments issued in connection with acquisition - net of fees | $ 12,250 | $ 6 | $ 12,244 | |||||||||||||
Stock-based compensation | 6,528 | 6,528 | ||||||||||||||
Purchase of treasury stock | (515) | (515) | ||||||||||||||
Amortization of preferred stock | (109) | (109) | ||||||||||||||
Ending Balance at Dec. 31, 2020 | 24,170 | $ 81 | $ 517,123 | $ (2,416) | $ (484,962) | $ (5,656) | ||||||||||
Accumulated deficit | $ (484,962) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||
Net loss | $ (33,783) | $ (211,642) | $ (3,123) |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||
Depreciation and amortization expense | 6,581 | 22,675 | 14,579 |
Provision for bad debts and product returns | 4,286 | 2,937 | 1,721 |
Inventory write-down | 17,691 | 8,493 | 15,122 |
Revenue recognized due to change in deferred revenue | (2,618) | (4,906) | (4,958) |
Deferred income tax provision | (1,807) | 17,066 | (4,692) |
Stock-based compensation | 6,528 | 4,367 | 4,745 |
Asset impairment and abandonments | 14,773 | 97,341 | 5,070 |
Goodwill impairment | 140,003 | ||
Cardiothoracic closure business divestiture contingency consideration | (3,000) | ||
Loss (gain) on acquisition contingency | 4,753 | (76,033) | |
Paid in kind interest expense | 4,408 | ||
Loss on extinguishment of debt | 2,686 | ||
Amortization of debt issuance costs | 283 | ||
Amortization of debt discount | 2,479 | ||
Derivative loss | 12,641 | ||
Gain on sale of OEM Businesses | (209,800) | ||
Other | 279 | 1,673 | 1,330 |
Change in assets and liabilities: | |||
Accounts receivable | 4,444 | (9,013) | (10,829) |
Inventories | (12,607) | (14,219) | (11,957) |
Accounts payable | 5,306 | (974) | 8,035 |
Accrued expenses | 3,731 | 4,489 | (827) |
Contract liability | 2,956 | 2,000 | 2,000 |
Other operating assets and liabilities | (11,839) | 1,879 | 4,036 |
Net cash (used in) provided by operating activities | (88,038) | (9,456) | 17,252 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (10,115) | (14,426) | (11,042) |
Patent and acquired intangible asset costs | (3,923) | (2,007) | (3,695) |
Net cash provided by (used in) investing activities | 390,942 | (116,125) | (32,737) |
Cash flows from financing activities: | |||
Proceeds from exercise of common stock options | 22 | 395 | 2,356 |
Repayment of short-term obligations | (76,912) | ||
Proceeds from long-term obligations | 89,892 | 121,500 | 74,425 |
Payments of debt issuance costs | (1,740) | (826) | |
Payments on long-term obligations | (207,266) | (500) | (71,171) |
Payments for treasury stock | (515) | (273) | (478) |
Redemption of preferred stock | (66,519) | ||
Other financing activities | (1,039) | ||
Net cash (used in) provided by financing activities | (263,038) | 120,296 | 4,093 |
Effect of exchange rate changes on cash and cash equivalents | (1,512) | (56) | (40) |
Net increase (decrease) in cash and cash equivalents | 38,354 | (5,341) | (11,432) |
Cash and cash equivalents, beginning of period | 5,608 | 10,949 | 22,381 |
Cash and cash equivalents, end of period | 43,962 | 5,608 | 10,949 |
Supplemental cash flow disclosure: | |||
Cash paid for interest | 14,964 | 7,121 | 3,047 |
Cash paid for income taxes, net of refunds | 7,103 | (1,994) | (6,403) |
Non-cash acquisition of property and equipment | 750 | 1,468 | 1,217 |
Change in accrual for dividend payable | 2,120 | ||
OEM Business [Member] | |||
Cash flows from investing activities: | |||
Proceeds from sale of business | 437,097 | ||
Cardiothoracic [Member] | |||
Cash flows from investing activities: | |||
Proceeds from sale of business | 3,000 | ||
Holo Surgical Inc. [Member] | |||
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||
Holo acquisition | 94,999 | ||
Cash flows from investing activities: | |||
Payments to acquire businesses | (32,117) | ||
Zyga Technology Inc [Member] | |||
Cash flows from investing activities: | |||
Payments to acquire businesses | $ (21,000) | ||
Paradigm Spine [Member] | |||
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||
Loss (gain) on acquisition contingency | $ (72,177) | ||
Cash flows from investing activities: | |||
Payments to acquire businesses | $ (99,692) |
Business
Business | 12 Months Ended |
Dec. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Business | 1. Business Surgalign Holdings, Inc. (the “Company”), (formerly known as RTI Surgical Holdings, Inc. (“RTI”)) is a global medical technology company focused on advancing the science of spine care by delivering innovative solutions, including the application of digital technologies, to drive superior patient outcomes. The Company has a broad portfolio of spinal hardware implants, including solutions for fusion procedures in the lumbar, thoracic, and cervical spine, motion preservation solutions for the lumbar spine, and a minimally invasive surgical implant system for fusion of the sacroiliac joint. The Company also has a portfolio of advanced and traditional orthobiologics, or biomaterials. In addition to its spinal hardware and biomaterials portfolios, the Company is developing an Augmented Reality and Artificial Intelligence digital surgery platform called ARAI TM OEM Disposition On July 20, 2020, pursuant to the Equity Purchase Agreement, dated as of January 13, 2020 (as amended from time to time, the “OEM Purchase Agreement”), by and between the Company and Ardi Bidco Ltd. (the “Buyer”), the Company completed the sale of its former original equipment manufacturing business and business related to processing donated human musculoskeletal and other tissue and bovine and porcine animal tissue in producing allograft and xenograft implants using BIOCLEANSE®, TUTOPLAST®and CANCELLE®SP sterilization processes (collectively, the “OEM Businesses”) to Buyer and its affiliates for a purchase price of $440 million of cash, subject to certain adjustments (the “Transactions”). More specifically, pursuant to the terms of the OEM Purchase Agreement, the Company sold to the Buyer and its affiliates all of the issued and outstanding shares of RTI OEM, LLC (which, prior to the Transactions, was converted to a corporation and changed its name to “RTI Surgical, Inc.”), RTI Surgical, LLC (which, prior to the Transactions, was converted to a corporation and changed its name to “Pioneer Surgical Technology, Inc.”), Tutogen Medical (United States), Inc. and Tutogen Medical GmbH. The Transactions were previously described in the Proxy Statement filed by the Company with the SEC on June 18, 2020. Subsequent to the Transactions, the Company changed its name to Surgalign Holdings, Inc, operating as Surgalign Spine Technologies. Where obvious and appropriate from the context, references herein to Surgalign or the Company refer to the Company including the disposed OEM Businesses. In connection with the sale of the OEM Businesses on July 20, 2020, the Company (i) paid in full its $80,000 revolving credit facility under that certain Credit Agreement dated as of June 5, 2018, by and among Surgalign Spine Technologies, Inc. (formerly known as RTI Surgical, Inc.) Prior to the sale of the OEM Businesses, the Company operated two reportable segments: Spine and OEM. Subsequent to the sale of the OEM Businesses, the Company operates only one reportable segment. Retirement of Series A Convertible Preferred Stock On July 17, 2020, the Company received a notification from WSHP Biologics Holdings, LLC (“WSHP”) seeking redemption on or before September 14, 2020 of all of the outstanding shares of the Company’s Series A Convertible Preferred Stock (“Series A Preferred Stock”), all of which are held by WSHP. On July 24, 2020 the Company redeemed the Series A Preferred Stock for approximately $66,519, a Certificate of Retirement was filed with the Delaware Secretary of State retiring the Series A Preferred Stock, and the WSHP representatives on the Company’s Board of Directors, Curtis M. Selquist and Chris Sweeney resigned from the Board of Directors. Holo Acquisition On October 23, 2020, the Company completed the acquisition of Holo Surgical Inc. (“Holo Surgical”) pursuant to the Stock Purchase Agreement dated as of September 29, 2020 (the “Holo Surgical Purchase Agreement”), by and among the Company, Roboticine, Inc. (the “Seller”) and the other parties signatory thereto. Holo Surgical is a privately-held technology company that is developing ARAI, to enable digital spine surgery. As consideration for the transactions contemplated by the Holo Surgical Purchase Agreement, at closing, the Company paid to the Seller $30,000 in cash and issued to the Seller 6,250,000 shares of its common stock with a fair value of $12,250. In addition, the Seller will be entitled to receive contingent consideration from the Company valued in an aggregate amount of $50,632 as of October 23, 2020, which must be first paid in shares of the Company’s common stock (in an amount up to 8,650,000 shares) and then paid in cash thereafter, contingent upon and following the achievement of certain regulatory, commercial and utilization milestones by specified time periods occurring up to the sixth (6th) anniversary of the closing. The number of shares of common stock issued as contingent consideration with respect to the achievement of a post-closing milestone, if any, will be calculated based on the volume weighted average price of the common stock for the five (5) day trading period commencing on the opening of trading on the third trading day following the achievement of the applicable milestone. COVID-19 The coronavirus (COVID-19) pandemic, as well as the corresponding governmental response and the Company’s management of the crisis has had a significant impact on the Company’s business. The consequences of the outbreak and impact on the economy continues to evolve and the full extent of the impact is uncertain as of the date of this filing. The outbreak has already brought a significant disruption to the operations of the Company. At times throughout 2020, many hospitals and other medical facilities canceled elective surgeries, reduced and diverted staffing and diverted other resources to patients suffering from the infectious disease and limited hospital access for non-patients, including the Company’s direct and indirect sales representatives. Because of the COVID-19 pandemic, surgeons and their patients are required, or are choosing, to defer procedures in which the Company’s products would be used, and many facilities that specialize in the procedures in which the Company’s products would be used have closed or reduced operating hours. These circumstances have negatively impacted the ability of the Company’s employees and distributors to effectively market and sell its products. In addition, even after the pandemic has subsided and/or governmental orders no longer prohibit or recommend against performing such procedures, patients may continue to defer such procedures out of concern of being exposed to coronavirus for other reasons. The COVID-19 pandemic has also caused adverse effects on general commercial activity and the global economy, which has led to an economic slowdown or recession, and which has adversely affected the Company’s business, operating results or financial condition. The adverse effect of the pandemic on the broader economy has also negatively affected demand for procedures using the Company’s products, and could cause one or more of the Company’s distributors, customers, and suppliers to experience financial distress, cancel, postpone or delay orders, be unable to perform under a contract, file for bankruptcy protection, go out of business, or suffer disruptions in their business. This could impact the Company’s ability to provide products and otherwise operate its business, as well as increase its costs and expenses. The COVID-19 pandemic has also led to and could continue to lead to severe disruption and volatility in the global capital markets, which could increase the Company’s cost of future capital and adversely affect its ability to access the capital markets in the future. In response to the COVID-19 novel coronavirus pandemic and the resulting federal and local guidelines, the Company furloughed or reduced the hours of a majority of its U.S.-based employees in Q2 2020. While the employees have since returned to work, the Company cannot predict when its operations will return to pre-pandemic levels and will continue to carefully monitor the situation and the needs of the business. The above and other continued disruptions to the Company’s business as a result of COVID-19 has resulted in a material adverse effect on its business, operating results and financial condition. Although vaccines have recently been made available, it remains uncertain when our business will return to normal operations. The full extent to which the COVID-19 pandemic will impact the Company’s business will depend on future developments that are highly uncertain and cannot be accurately predicted, including the possibility that new adverse information may emerge concerning COVID-19 and additional actions to contain it or treat its impact may be required. Going Concern The accompanying consolidated financial statements of the Company have been prepared assuming the Company will continue as a going concern and in accordance with generally accepted accounting principles in the United States of America. The going concern basis of presentation assumes that we will continue in operation one year after the date these financial statements are issued, and we will be able to realize our assets and discharge our liabilities and commitments in the normal course of business. As of December 31, 2020, the Company had cash of $43,962 and an accumulated deficit of $484,962. For the year ended December 31, 2020, the Company had a loss from continuing operations of $194,195. The Company has incurred losses from operations in the previous two fiscal years and did not generate positive cash flows from operations in fiscal year 2020. On February 1, 2021, we closed a public offering and sold a total 28,700,000 shares of our common stock at a price of $1.50 per share, less the underwriter discounts and commissions. We received net proceeds of $40,467 from the offering after deducting the underwriting discounts and commission of $2,583. The Company is projecting it will continue to generate significant negative operating cash flows over the next 12-months and beyond. In consideration of i) COVID-19 uncertainties, ii) negative cash flows that are projected over the next 12-month period, iii) the income taxes to be paid related to the gain on sale associated with the OEM Businesses, iv) uncertainty regarding potential settlements related to ongoing litigation and regulatory investigations, approximately $8,993 of the total contingent consideration of $50,632 are expected In consideration of the inherent risks and uncertainties and the Company’s forecasted negative cash flows as described above, management has concluded that substantial doubt exists with respect to the Company’s ability to continue as a going concern within one year after the date the financial statements are issued. Management is planning to raise additional debt and/or equity financing and will attempt to curtail discretionary expenditures in the future, if necessary, however, in consideration of the risks and uncertainties mentioned, such plans cannot be considered probable of occurring at this time. The recoverability of a major portion of the recorded asset amounts shown in the Company’s accompanying consolidated balance sheets is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to meet its funding requirements on a continuous basis, to maintain existing financing and to succeed in its future operations. The Company’s financial statements do not include any adjustment relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation — The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Surgalign, Inc., Paradigm Spine, LLC (“Paradigm”), Pioneer Surgical Technology, Inc. (“Pioneer Surgical”), Zyga Technology, Inc. (“Zyga”) and Holo Surgical Inc. (“Holo Surgical”). The financial positions and operating results of the disposed OEM Businesses have been reported as discontinued operations in the consolidated financial statements in the current as well as prior comparative periods. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates —The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions relating to inventories, receivables, long-lived assets, contingent considerations and litigation are made at the end of each financial reporting period by management. Actual results could differ from those estimates. Foreign Currency Translation —The functional currency of the Company’s foreign subsidiaries is the Euro. Assets and liabilities of the foreign subsidiaries are translated at the period end exchange rate while revenues and expenses are translated at the average exchange rate for the period. The resulting translation adjustments, representing unrealized, noncash gains and losses are recorded and presented as a component of comprehensive loss. Gains and losses resulting from transactions of the Company and its subsidiaries, which are made in currencies different from their own, are included in income or loss as they occur and are included in other expenses in the consolidated statements of comprehensive loss. Fair Value of Financial Instruments —The estimated fair value of financial instruments disclosed in the consolidated financial statements has been determined by using available market information and appropriate valuation methodologies. The carrying value of all current assets and current liabilities approximates fair value because of their short-term nature. Cash and Cash Equivalents — The Company considers all funds in banks and short-term highly liquid investments with an original maturity of three months or less to be cash and cash equivalents. Cash equivalents comprise overnight repurchase agreements. Cash balances are held at a few financial institutions and usually exceed insurable amounts. The Company mitigates this risk by depositing its uninsured cash in major well capitalized financial institutions. At December 31, 2020 and 2019, the Company had no cash equivalents. Accounts Receivable Allowances — Since the adoption of the ASU 2016-13, Financial Instruments — Credit Losses (Topic326): Measurement of Credit Losses on Financial Instruments ( the “CECL standards”) on January 1, 2020, the Company maintains the allowance for estimated losses resulting from the inability of its customers to make required payments. The allowance represents the current estimate of lifetime expected credit losses over the remaining duration of existing accounts receivable considering current market conditions and supportable forecasts when appropriate. The estimate is a result of the Company’s ongoing evaluation of collectability, customer creditworthiness, historical levels of credit losses, and future expectations. Write-off activity and recoveries for the years were not material. Before 2020, the Company maintained allowances for doubtful accounts based on the Company’s review and assessment of payment history and its estimate of the ability of each customer to make payments on amounts invoiced. If the financial condition of any of its customers were to deteriorate, additional allowances might be required. From time to time the Company must adjust its estimates. Changes in estimates of the collection risk related to accounts receivable can result in decreases and increases to current period net loss. Inventories — Inventories are stated at the lower of cost or market, with cost determined using the first-in, first-out method. Non-current inventory represents those the Company anticipates will not be sold within the next year. Non-current inventory is estimated by comparing historical and projected sales trends and inventory quantities on hand. Inventory is evaluated for obsolescence and excess quantities by analyzing inventory levels, historical loss trends, expected product lives, product at risk of expiration, sales levels by product and projections of future sales demand. The Company’s calculation of the amount of inventory that is excess, obsolete, or will expire prior to sale has two components: 1) a demand or consumption based component that compares projected sales, expected consumption and historical sales to inventory quantities on hand; and 2) for expiring inventory we assesses the risk related to inventory that is near expiration by analyzing historical expiration trends to project inventory that will expire prior to being sold. The Company’s demand based consumption model assumes that inventory will be sold on a first-in-first-out basis. The Company’s metal inventory does not expire and can be re-sterilized and sold; however, the Company assesses quantities on hand, historical sales, projected sales, projected consumption, the number of forecasted years, safety stock and those products we have determined to sunset when calculating the estimate. Property and equipment —Property and equipment are stated at cost less accumulated depreciation. The cost of leasehold improvements is amortized on the straight-line method over the shorter of the lease term or the estimated useful life of the asset. Included in property and equipment are costs related to purchased software that are capitalized. Surgical instruments which are included in property and equipment are handheld devices used by surgeons during implant procedures. The Company retains title to the surgical instruments. Depreciation for surgical instruments is included in selling and marketing expenses in the accompanying consolidated statements of comprehensive loss. Depreciation is computed on the straight-line method over the following estimated useful lives of the assets: Processing equipment 7 to 10 years Office equipment, furniture and fixtures 5 to 7 years Computer equipment and software 3 to 7 years Surgical instruments 1 year Derivative Instruments— The Company reviews debt agreements for embedded features. If these features are not clearly and closely related to the debt host, they meet the definition of a derivative and require bifurcation from the host contract. All derivative instruments, including embedded derivatives are recorded on the balance sheet at their respective fair values. The Company will adjust the carrying value of the derivative liability to fair value at each subsequent reporting date. The changes in the fair value of the derivatives are recorded in the period they occur. Debt Issuance Costs— Debt issuance costs include costs incurred to obtain financing and are amortized using the straight-line method, which approximates the effective interest method, over the life of the related debt. Debt issuance costs related to a recognized debt liability are presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. Long-Lived Assets —The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. Recoverability is measured by a comparison of the carrying amount to the net undiscounted cash flows expected to be generated by the asset. An impairment loss would be recorded for the excess of net carrying value over the fair value of the asset impaired. The fair value is estimated based on expected discounted future cash flows. The results of impairment tests are subject to management’s estimates and assumptions of projected cash flows and operating results. Changes in assumptions or market conditions could result in a change in estimated future cash flows and the likelihood of materially different reported results. Because the Company’s forecasted cash flow is negative, Long-lived assets, including property and equipment and intangible assets subject to amortization were impaired and written down to their estimated fair values in 2020 and 2019. Goodwill — Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350 , Goodwill and Other Intangible Assets (“ASC 350”) requires companies to test goodwill for impairment on an annual basis at the reporting unit level (or an interim basis if an event occurs that might reduce the fair value of a reporting unit below its carrying value). The Company has one reporting unit and the annual impairment test was performed at each year-end unless indicators of impairment are present and require more frequent testing. Goodwill is tested for impairment annually by comparing the fair value of the reporting unit to its carrying amount, including goodwill. The income approach employs a discounted cash flow model that considers: 1) assumptions that marketplace participants would use in their estimates of fair value, including the cash flow period, terminal values based on a terminal growth rate and the discount rate; 2) current period actual results; and 3) projected results for future periods that have been prepared and approved by senior management of the Company. The market approach employs market multiples from guideline public companies operating in our industry. Estimates of fair value are derived by applying multiples based on revenue and earnings before interest, taxes, depreciation and amortization (“EBITDA”) adjusted for size and performance metrics relative to peer companies. The cost approach considers the replacement cost adjusted for certain factors. Certain balance sheet items were adjusted to fair value before being utilized in estimating the value of the reporting unit under the cost approach, including inventory, property and equipment, right of use assets, and other intangible assets. All three approaches used in the analysis have a degree of uncertainty. Potential events or changes in circumstances which could impact the key assumptions used in our goodwill impairment evaluation are as follows: • Change in peer group or performance of peer group companies • Change in the Company’s markets and estimates of future operating performance • Change in the Company’s estimated market cost of capital • Change in implied control premiums related to acquisitions in the medical device industry Goodwill represents the excess of purchase price over fair value of tangible net assets of acquired businesses at the acquisition date, after amounts allocated to other identifiable intangible assets. Factors that contribute to the recognition of goodwill include securing synergies that are specific to our business, not available to other market participants, and are expected to increase revenues and profits; acquisition of a talented workforce; cost savings opportunities; the strategic benefit of expanding our presence in core and adjacent markets; and diversifying our product portfolio. Other Intangible Assets —Other intangible assets, which constitutes finite lives assets, generally consist of patents, acquired exclusivity rights, licensing rights, distribution agreements, and procurement contracts. Patents are amortized on the straight-line method over the shorter of the remaining protection period or estimated useful lives of between 8 and 16 years. Tradenames, procurement contracts, customer lists, acquired exclusivity rights, and distribution agreements are amortized over estimated useful lives of between 5 to 25 years Revenue Recognition — The Company recognizes revenue upon transfer of control of promised products in an amount that reflects the consideration it expects to receive in exchange for those products. The Company typically transfers control at a point in time upon shipment or delivery of the implants for direct sales, or upon implantation for sales of consigned inventory. The customer is able to direct the use of, and obtain substantially all of the benefits from, the implant at the time the implant is shipped, delivered, or implanted, respectively based on the terms of the contract. The Company’s performance obligations consist mainly of transferring control of implants identified in the contracts. The Company’s transaction price is generally fixed. Any discounts or rebates are estimated at the inception of the contract and recognized as a reduction of the revenue. Some of the Company’s contracts offer assurance-type warranties in connection with the sale of a product to a customer. Assurance-type warranties provide a customer with assurance that the related product will function as the parties intended because it complies with agreed-upon specifications. Such warranties do not represent a separate performance obligation and are not material to the condensed consolidated financial statements. Stock-Based Compensation Plans —The Company accounts for its stock-based compensation plans in accordance with ASC 718, Accounting for Stock Compensation (“ASC 718”). ASC 718 requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors, including employee stock options and restricted stock. Under the provisions of ASC 718, stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense on a straight-line basis over the requisite service period of the entire award (generally the vesting period of the award). The Company uses the Black-Scholes model to value its stock option grants under ASC 718 and expenses the related compensation cost using the straight-line method over the vesting period. The fair value of stock options is determined on the grant date using assumptions for the expected term, expected volatility, dividend yield, and the risk free interest rate. The term assumption is primarily based on the contractual vesting term of the option and historic data related to exercise and post-vesting cancellation history experienced by the Company. The Company uses the simplified method for estimating the expected term used to determine the fair value of options under ASC 718. The expected term is determined separately for options issued to the Company’s directors and to employees. The Company’s anticipated volatility level is primarily based on the historic volatility of the Company’s common stock. The Company’s model includes a zero dividend yield assumption, as the Company has not historically paid nor does it anticipate paying dividends on its common stock. The risk free interest rate approximates recent U.S. Treasury note auction results with a similar life to that of the option. The Company’s model does not include a discount for post-vesting restrictions, as the Company has not issued awards with such restrictions. The period expense is then determined based on the valuation of the options, and at that time an estimated forfeiture rate is used to reduce the expense recorded. The Company’s estimate of pre-vesting forfeitures is primarily based on the recent historical experience of the Company, and is adjusted to reflect actual forfeitures as the options vest. The Company uses a Monte Carlo simulation model to estimate the fair value of restricted stock awards that contain a market condition. Research and Development Costs —Research and development costs, including the cost of research and development conducted for others and the cost of contracted research and development, are expensed as incurred. Income Taxes —The Company uses the asset and liability method of accounting for income taxes. Deferred income taxes are recorded to reflect the tax consequences on future years for differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to amounts which are more likely than not to be realized. Contingent Consideration — The Company accounts for the contingent consideration related to the Holo Acquisition as a liability in accordance with the guidance of ASC 480, Distinguishing Liabilities from Equity , because the contingent consideration represents a conditional obligation that has a fixed monetary value known at inception and we may settle by issuing a variable number of our equity shares. The liability is recorded at its fair value at inception and shall be marked to market subsequently at the end of each reporting period, with any change recognized in the current earnings. See Note 9 for further discussion related to the Holo Acquisition. Treasury Stock — The Company may periodically repurchase shares of its common stock from employees for the satisfaction of their individual payroll tax withholding upon vesting of restricted stock awards in connection with the Company’s incentive plans. The Company’s repurchases of common stock are recorded at the stock price on the vesting date of the common stock. The Company repurchased 159,354, 64,044, and 107,109 shares of its common stock for $515, $272, and $479 for the years ended December 31, 2020, 2019, and 2018, respectively Earnings Per Share —Basic earnings per share (“EPS”) is computed by dividing earnings attributable to common stockholders by the weighted-average number of common shares outstanding for the periods. Diluted EPS reflects the incremental shares issuable upon the assumed exercise of securities that could share in earnings. Shares whose issuance is contingent upon the satisfaction of certain conditions shall be considered outstanding and included in the computation of diluted EPS as follows: a. If all necessary conditions have been satisfied by the end of the period (the events have occurred), those shares shall be included as of the beginning of the period in which the conditions were satisfied (or as of the date of the contingent stock agreement, if later). b. If all necessary conditions have not been satisfied by the end of the period, the number of contingently issuable shares included in diluted EPS shall be based on the number of shares, if any, that would be issuable if the end of the reporting period were the end of the contingency period (for example, the number of shares that would be issuable based on current period earnings or period-end market price) and if the result would be dilutive. Those contingently issuable shares shall be included in the denominator of diluted EPS as of the beginning of the period (or as of the date of the contingent stock agreement, if later). |
Recently Issued and Adopted Acc
Recently Issued and Adopted Accounting Standards | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Changes And Error Corrections [Abstract] | |
Recently Issued and Adopted Accounting Standards | 3. Recently Issued and Adopted Accounting Standards. Reference Rate Reform — In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by the discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank offered rates. This guidance is effective beginning on March 12, 2020 through December 31, 2022. The Company adopted ASU 2020-04 and it did not have an impact on its consolidated financial statements. Income Taxes — In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 was issued to reduce the complexity of accounting for income taxes for those entities that fall within the scope of the accounting standard. The guidance is to be applied using a prospective method, excluding amendments related to franchise taxes, which should be applied on either a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. The Company early adopted ASU 2019-12 on January 1, 2020, and there was no material impact on the Company’s consolidated financial statements. Financial Instruments — In May 2019, the FASB issued ASU No. 2019-05 Financial Instruments — Credit Losses (Topic 326) which provides relief to certain entities adopting ASU 2016-13 (discussed below). The amendments accomplish those objectives by providing entities with an option to irrevocably elect the fair value option in Subtopic 825-10, applied on an instrument-by-instrument basis for eligible instruments, that are within the scope of Subtopic 326-20, upon adoption of Topic 326. The fair value option election does not apply to held-to-maturity debt securities. ASU 2019-05 has the same transition as ASU 2016-13 and is effective for periods beginning after December 15, 2019, with adoption permitted after this update. The Company adopted ASU 2019-05 on January 1, 2020 and it did not have an impact on the consolidated financial statements. In April 2019, the FASB issued ASU No. 2019-04 Codification Improvements to Topic 326, Financial Instruments — Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities; Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Credit losses for trade receivables is determined based on historical information, current information and reasonable and supportable forecasts. The Company has concluded that the adoption of the standard was not material as the composition of the trade receivables at the reporting date is consistent with that used in developing the historical credit-loss percentages. Further, the risk characteristics of the Company’s customer and composition of the portfolio have not changed significantly over time. Fair Value Measurement — In August 2018, the FASB issued Accounting Standards Update (“ASU”) 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement.” This ASU modifies the disclosure requirements on fair value measurements by removing, modifying, or adding certain disclosures. ASU 2018-13 is effective for the Company beginning January 1, 2020 (with early adoption permitted). Certain disclosures in ASU 2018-13 are required to be applied on a retrospective basis and others on a prospective basis. The Company adopted ASU 2018-13 and it did not have an impact on the consolidated financial statements. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | 4 . Leases The Company’s leases are classified as operating leases and includes office space, automobiles, and copiers. The Company does not have any finance leases and the Company’s operating leases do not have any residual value guarantees, restrictions or covenants. The Company does not have any leases that have not yet commenced as of December 31, 2020. The majority of our leases have remaining lease terms of 1 to 9 years, some of which include options to extend or terminate the leases. The option to extend or terminate is only included in the lease term if the Company is reasonably certain of exercising that option. Operating lease ROU assets are presented within other assets-net on the consolidated balance sheet. The current portion of operating lease liabilities are presented within accrued expenses, and the non-current portion of operating lease liabilities are presented within other long-term liabilities on the consolidated balance sheet. A subset of the Company’s automobile and copier leases contain variable payments. The variable lease payments for such automobile leases are based on actual mileage incurred at the standard contractual rate. The variable lease payments for such copier leases are based on actual copies incurred at the standard contractual rate. The variable lease costs for all leases are immaterial. The components of operating lease expense were as follows: For the Year Ended For the Year Ended December 31, 2020 December 31, 2019 Operating lease cost $ 1,179 $ 1,108 Short-term operating lease cost — 36 Total operating lease cost $ 1,179 $ 1,144 Supplemental cash flow information related to operating leases was as follows: For the Year Ended For the Year Ended December 31, 2020 December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities $ 1,313 $ 1,007 ROU assets obtained in exchange for lease obligations 242 103 Supplemental balance sheet information related to operating leases was as follows: Balance at Balance at Balance Sheet Classification December 31, 2020 December 31, 2019 Assets: Right-of-use assets Other assets - net $ 1,425 $ 1,903 Liabilities: Current Accrued expenses $ 650 $ 967 Noncurrent Other long-term liabilities 1,200 1,487 Total operating lease liabilities $ 1,850 $ 2,454 As of December 31, 2020, the weighted-average remaining lease term was 5.5 years. The rate implicit on the Company’s leases are not readily determinable nor is it available to the Company from its lessors. Thus, the Company estimates its incremental borrowing rate based on information available at lease commencement in order to discount lease payments to present value. The weighted-average discount rate of the Company’s operating leases was 4.92%, as of December 31, 2020. Based on the income approach, including consideration of present value of market-based rent payments for the applicable properties of the Spine segment leases, the Company recorded a write down of $201 related to a right of use assets in 2019. As of December 31, 2020, maturities of operating lease liabilities were as follows: Balance at Maturity of Operating Lease Liabilities December 31, 2020 2021 $ 684 2022 337 2023 217 2024 173 2025 162 2026 and beyond 557 Total future minimum lease payments 2,130 Less imputed interest (280 ) Total $ 1,850 |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Discontinued Operations | 5. Discontinued Operations In connection with the Transactions, on July 20, 2020, the Company completed the disposition of its OEM Businesses. Accordingly, the OEM Businesses are reported as discontinued operations in accordance with ASC 205-20, Discontinued Operations The following table presents the assets and liabilities of the discontinued operations as of December 31, 2019: As of December 31, 2019 Carrying amounts of the major classes of assets included in discontinued operations: Accounts receivable - net $ 36,072 Inventories 99,575 Prepaid and other current assets 2,735 Total current assets 138,382 Property and equipment - net 69,102 Goodwill 55,384 Other intangible assets - net 10,492 Other assets - net 873 Total noncurrent assets 135,851 Total assets of discontinued operations $ 274,233 Carrying amounts of the major classes of liabilities included in discontinued operations: Accounts payable $ 19,890 Accrued expenses 17,814 Current portion of deferred revenue 2,748 Current portion of long-term obligations 174,177 Total current liabilities 214,629 Other long-term liabilities 285 Total liabilities of discontinued operations $ 214,914 The current portion of the long-term obligations relates to the 2018 Credit Agreement and 2019 Credit Agreement. In accordance with the terms and conditions in the OEM Purchase Agreement and approved by respective lenders, on July 20, 2020, the Company (i) paid in full its $80,000 revolving credit facility under the 2018 Credit Agreement, (ii) terminated the 2018 Credit Agreement, (iii) paid in full its $100,000 term loan and $30,000 incremental term loan commitment under the 2019 Credit Agreement, and (iv) terminated the 2019 Credit Agreement. The related obligations as of December 31, 2019 and 2018, as well as the related interest expense and debt issuance costs for the years ended December 31, 2020, 2019 and 2018 related to these loans have been included in the discontinued operations. The following table presents the financial results of the discontinued operations: Year Ended December 31, Year Ended December 31, Year Ended December 31, 2020 2019 2018 Major classes of line items constituting net income from discontinued operations: Revenues $ 87,192 $ 190,961 $ 188,250 Costs of goods sold 49,678 104,482 107,126 Gross profit 37,514 86,479 81,124 Expenses: Marketing, general and administrative 12,889 22,279 21,572 Severance and restructuring costs 604 - 2,035 Transaction and integration expenses 23,598 3,160 15 Cardiothoracic closure business divestiture contingency consideration - - (3,000 ) Total operating expenses 37,091 25,439 20,622 Operating income 423 61,040 60,502 Other expense (income): Interest expense 14,965 12,571 2,771 Loss on extinguishment of debt 2,686 - 309 Derivative loss 12,641 - - Foreign exchange (gain) loss (3 ) 17 5 Total other expense - net 30,289 12,588 3,085 (Loss) income from discontinued operations (29,866 ) 48,452 57,417 Gain on sale of net assets of discontinued operations 209,800 - - Income from discontinued operations before income tax provision 179,934 48,452 57,417 Income tax provision (19,522 ) (11,316 ) (10,891 ) Net income on discontinued operations $ 160,412 $ 37,136 $ 46,526 In accordance with ASC 205-20, only expenses specifically identifiable and related to a business to be disposed may be presented in discontinued operations. As such, the marketing and general and administrative expenses in discontinued operations include corporate costs incurred directly to solely support the Company’s OEM Businesses. Pursuant to the OEM Purchase Agreement, the Company and the Buyer have also entered into a Transition Services Agreement, through which the disposed OEM Businesses will provide to the Company transitional services related to IT support, customer and vendor management, procurement and other services for periods ranging from 3 to 12 months after the disposal. The Company applied the “Intraperiod Tax Allocation” rules under ASC 740, Income Taxes On December 1, 2020, pursuant to the OEM Purchase Agreement, the Company received a notice from the Buyer indicating that a post-closing adjustment in an amount of up to $14 million may be owed in respect of the working capital adjustment paid at closing. The Company disagrees with Buyer’s proposed post-closing adjustment and is disputing the adjustment in accordance with the terms of the OEM Purchase Agreement. The Company updated the working capital adjustment for $1,376 which was agreed with the Buyer as part of the adjustment report and recorded the amount in Q4, 2020 in the discontinued operations. Total operating and investing cash flows of discontinued operations for the years ended December 31, 2020, 2019 and 2018 are comprised of the following, which exclude the effect of income taxes: Year Ended December 31, Year Ended December 31, Year Ended December 31, 2020 2019 2018 Significant operating non-cash reconciliation items: Depreciation and amortization $ 2,125 $ 4,466 $ 5,120 Provision for bad debts and product returns $ 456 $ 101 $ 857 Provision for inventory write-downs $ — $ 6,340 $ 7,142 Revenue recognized due to change in deferred revenue $ (2,618 ) $ (4,906 ) $ (4,958 ) Deferred income tax (benefit) provision $ (1,609 ) $ (3,989 ) $ 3,682 Stock-based compensation $ 792 $ 540 $ 374 Gain on sale of discontinued assets, net $ (209,800 ) $ — $ — Paid in kind interest expense $ — $ 4,408 $ — Cardiothoracic closure business divestiture contingency consideration $ — $ — $ (3,000 ) Loss on extinguishment of debt $ 2,686 $ — $ — Amortizations of debt issuance costs $ 283 $ — $ — Amortizations of debt discount $ 2,479 $ — $ — Significant investing items: Purchases of property and equipment $ (1,867 ) $ (6,866 ) $ (6,200 ) Patent and acquired intangible asset costs $ (419 ) $ (578 ) $ (1,028 ) Proceeds from sale of OEM Businesses $ 437,097 $ — $ — Proceeds from cardiothoracic closure business divestiture $ — $ — $ 3,000 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 12 Months Ended |
Dec. 31, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Revenue from Contracts with Customers | 6. Revenue from Contracts with Customers The Company recognizes revenue upon transfer of control of promised products in an amount that reflects the consideration it expects to receive in exchange for those products. The Company typically transfers control at a point in time upon shipment or delivery of the implants for direct sales, or upon implantation for sales of consigned inventory. The customer is able to direct the use of, and obtain substantially all of the benefits from, the implant at the time the implant is shipped, delivered, or implanted, respectively based on the terms of the contract. Disaggregation of Revenue The Company’s entire revenue for the years ended December 31, 2020, 2019 and 2018, were recognized at a point in time. The following table represents total revenue by geographical region for the years ended December 31, 2020, 2019 and 2018: Year Ended Year Ended Year Ended December 31, 2020 December 31, 2019 December 31, 2018 Revenues: Domestic $ 85,612 $ 97,703 $ 78,580 International 16,137 19,720 13,532 Total revenues from contracts with customers $ 101,749 $ 117,423 $ 92,112 The Company’s performance obligations consist mainly of transferring control of implants identified in the contracts. Some of the Company’s contracts offer assurance-type warranties in connection with the sale of a product to a customer. Assurance-type warranties provide a customer with assurance that the related product will function as the parties intended because it complies with agreed-upon specifications. Such warranties do not represent a separate performance obligation and are not material to the consolidated financial statements. |
Acquisition of Paradigm Spine,
Acquisition of Paradigm Spine, LLC | 12 Months Ended |
Dec. 31, 2020 | |
Acquisition | 9. Holo Surgical Acquisition On September 29, 2020, the Company entered into a Stock Purchase Agreement The Acquisition was closed on October 23, 2020. As consideration for the Holo Acquisition, the Company paid to the Seller $30,000 in cash and issue to the Seller 6,250,000 shares of common stock, par value $0.001 of the Company (“Common Stock”). In addition, following the closing, the Seller will be entitled to receive contingent consideration from the Company valued in an aggregate amount of up to $83 million, to be paid through the issuance of Common Stock or the payment of cash, contingent upon and following the achievement of certain regulatory, commercial and utilization milestones by specified time periods occurring up to the sixth (6th) anniversary of the closing. The Purchase Agreement provides that the Company will issue Common Stock to satisfy any contingent consideration payable to the Seller, until the total number of shares of Common Stock issued to the Seller pursuant to the Purchase Agreement (including the 6,250,000 shares of Common Stock issued at closing) is equal to 14,900,000 shares of Common Stock (or otherwise, to the extent a lower number, the maximum number of shares of Common Stock that would not require obtaining stockholder approval under the applicable rules of the Nasdaq Stock Market). Following the attainment of that limitation, the post-closing contingent payments would be payable in cash. The number of shares of Common Stock issued as contingent consideration with respect to the achievement of a post-closing milestone, if any, will be calculated based on the volume weighted average price of the Common Stock for the five (5) day trading period commencing on the opening of trading on the third trading day following the achievement of the applicable milestone. The Purchase Agreement also includes certain covenants and obligations of the Company with respect to the operation of the business of Holo Surgical that apply during the period in which the milestones may be achieved. The Company determined that substantially all of the fair value was concentrated in the acquired in-process research and development (“IPR&D”) asset in accordance with the guidance of ASC 805, Business Combinations Distinguishing Liabilities from Equity The total purchase price paid in the Holo Acquisition has been allocated to the net assets acquired based on their relative fair value as of the completion of the acquisition, primarily including the IPR&D related to Holo Surgical’s development of ARAI and other intangible asset for assembled workforce. The ARAI has not yet reached technological feasibility and has no alternative future use; thus, the purchased IPR&D was expensed immediately subsequent to the acquisition, result in a one-time charge of $94,541 recognized in the asset acquisition expenses line of the consolidated statements of comprehensive loss for the year ended December 31, 2020. Additionally, the intangible asset related to the assembled workforce was immediately impaired together with other intangible assets in Q4 2020 due to the Company’s negative projected cash flow. The related expense of $458 as also included in the asset acquisition expenses. |
Paradigm Spine [Member] | |
Acquisition | 7. Acquisition of Paradigm Spine, LLC On March 8, 2019, pursuant to the Master Transaction Agreement (the “Master Transaction Agreement”), dated as of November 1, 2018, by and among Legacy RTI, PS Spine Holdco, LLC, a Delaware limited liability company (“PS Spine”), the Company, and Bears Merger Sub, Inc., a Delaware corporation and direct wholly owned subsidiary of the Company (“Merger Sub”), the Company acquired all of the outstanding equity interests of Paradigm, through a transaction in which: (i) PS Spine contributed all of the issued and outstanding equity interests in Paradigm to the Company (the “Contribution”); (ii) Merger Sub merged with and into Legacy RTI (the “Merger”), with Legacy RTI surviving as a wholly owned direct subsidiary of the Company; and (iii) the Company was renamed “RTI Surgical Holdings, Inc.” (collectively, the “Transaction”). Legacy RTI retained its existing name “RTI Surgical, Inc.” Pursuant to the Master Transaction Agreement: (i) each share of common stock, par value $0.001 per share, of Legacy RTI issued and outstanding immediately prior to the Transaction (other than shares held by Legacy RTI as treasury shares or by the Company or Merger Sub immediately prior to the Transaction, which were automatically cancelled and ceased to exist) was converted automatically into one fully paid and non-assessable share of Company common stock , par value $0.001 per share; (ii) each share of Series A convertible preferred stock, par value $0.001 per share, of Legacy RTI issued and outstanding immediately prior to the Transaction (other than shares held by Legacy RTI as treasury shares or by the Company or Merger Sub immediately prior to the Transaction, which were automatically cancelled and ceased to exist) was converted automatically into one fully paid and non-assessable share of Series A convertible preferred stock, par value $0.001 per share, of the Company; and (iii) each stock option and restricted stock award granted by Legacy RTI was converted into a stock option or restricted stock award, as applicable, of the Company with respect to an equivalent number of shares of the Company common stock on the same terms and conditions as were applicable prior to the closing. The consideration for the Contribution was $100,000 (the “Cash Consideration Amount”) in cash and 10,729,614 shares of Company common stock (the “Stock Consideration Amount”). The Cash Consideration Amount was adjusted by Paradigm’s working capital of $7,000. In addition to the Cash Consideration Amount and the Stock Consideration Amount, the Company may be required to make further cash payments or issue additional shares of Company common stock to PS Spine in an amount up to $50,000 of shares of Company common stock to be valued based upon the Legacy RTI Price and an additional $100,000 of cash and/or Company common stock to be valued at the time of issuance, in each case, if certain revenue targets are achieved between closing, March 8, 2019, and December 31, 2022. The Company estimates the fair value of the contingent liability at acquisition date related to the revenue based earnout of $72,177 utilizing a Monte-Carlo simulation model. A Monte-Carlo simulation is an analytical method used to estimate fair value by performing a large number of simulations or trial runs and thereby determining a value based on the possible outcomes. Accounted for as a liability to be revalued at each reporting period, the fair value of the contingent liability was measured using Level 3 inputs, which includes weighted average cost of capital and projected revenues and costs. Transaction and integration related costs, specific to Paradigm, were approximately $15,537, of which approximately $4,143 was incurred during 2018, $11,394 (which includes integration costs of business development expenses of $462 and severance expense of $896) was incurred for the year ended December 31, 2019 and is reflected separately in the accompanying consolidated statements of comprehensive gain (loss). The Company has accounted for the acquisition of Paradigm under ASC 805, Business Combinations The purchase price was financed as follows: Cash proceeds from second lien credit agreement $ 100,000 Fair market value of securities issued 60,730 Fair market value of contingent earnout 72,177 Total purchase price $ 232,907 In the f irst quarter of 201 9 , the Company completed its valuation s and purchase price allocation. The table below represents the final allocation of the total purchase price to Paradigm ’s tangible and intangible assets and liabilities fair values as of March 8 , 201 9 . Balance at March 8, 2019 Cash $ 307 Accounts receivable 5,220 Inventories 17,647 Other current assets 934 Property, plant and equipment 379 Other non-current assets 1,079 Current liabilities (6,169 ) Lease liabilities (1,079 ) Net tangible assets acquired 18,318 Other intangible assets 79,000 Goodwill 135,589 Total net assets acquired $ 232,907 As of March 8, 2019, the inventory fair value was composed of current inventory of $7,122 and non-current inventory of $10,525. Total net assets acquired as of March 8, 2019, were included in the Company’s only operating segment at that time. Fair values are based on management’s estimates and assumptions including variations of the income approach, the cost approach and the market approach. The Company believes that the acquisition of Paradigm, a spine focused business, offers the potential for substantial strategic and financial benefits. The transaction further advances the Company’s strategic transformation focused on reducing complexity, driving operational excellence and accelerating growth. The Company believes the acquisition will enhance stockholder value through, among other things, enabling the Company to capitalize on the following strategic advantages and opportunities: • Paradigm will strengthen the Company’s spine portfolio with the addition of the coflex® Interlaminar Stabilization® device. Coflex is a differentiated and minimally invasive motion preserving stabilization implant that is FDA PMA-approved for the treatment of moderate to severe lumbar spinal stenosis (“LSS”) in conjunction with decompression. • Coflex allows the Company to provide surgeons who treat patients with moderate to severe LSS with a PMA-approved device supported by more than 12 years of clinical data. These potential benefits resulted in the Company paying a premium for Paradigm resulting in the recognition of $135,589 of goodwill. The following unaudited pro forma information shows the results of the Paradigm’s operations as though the acquisition had occurred as of the beginning of the prior comparable period, January 1, 2018, (in thousands): For the Year Ended December 31, 2019 2018 Revenues $ 37,374 $ 40,810 Net loss applicable to common shares (16,547 ) (42,550 ) The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the actual results of operations had the acquisition taken place as of the beginning of the periods presented, or the results that may occur in the future. |
Acquisition of Zyga Technology,
Acquisition of Zyga Technology, Inc | 12 Months Ended |
Dec. 31, 2020 | |
Acquisition | 9. Holo Surgical Acquisition On September 29, 2020, the Company entered into a Stock Purchase Agreement The Acquisition was closed on October 23, 2020. As consideration for the Holo Acquisition, the Company paid to the Seller $30,000 in cash and issue to the Seller 6,250,000 shares of common stock, par value $0.001 of the Company (“Common Stock”). In addition, following the closing, the Seller will be entitled to receive contingent consideration from the Company valued in an aggregate amount of up to $83 million, to be paid through the issuance of Common Stock or the payment of cash, contingent upon and following the achievement of certain regulatory, commercial and utilization milestones by specified time periods occurring up to the sixth (6th) anniversary of the closing. The Purchase Agreement provides that the Company will issue Common Stock to satisfy any contingent consideration payable to the Seller, until the total number of shares of Common Stock issued to the Seller pursuant to the Purchase Agreement (including the 6,250,000 shares of Common Stock issued at closing) is equal to 14,900,000 shares of Common Stock (or otherwise, to the extent a lower number, the maximum number of shares of Common Stock that would not require obtaining stockholder approval under the applicable rules of the Nasdaq Stock Market). Following the attainment of that limitation, the post-closing contingent payments would be payable in cash. The number of shares of Common Stock issued as contingent consideration with respect to the achievement of a post-closing milestone, if any, will be calculated based on the volume weighted average price of the Common Stock for the five (5) day trading period commencing on the opening of trading on the third trading day following the achievement of the applicable milestone. The Purchase Agreement also includes certain covenants and obligations of the Company with respect to the operation of the business of Holo Surgical that apply during the period in which the milestones may be achieved. The Company determined that substantially all of the fair value was concentrated in the acquired in-process research and development (“IPR&D”) asset in accordance with the guidance of ASC 805, Business Combinations Distinguishing Liabilities from Equity The total purchase price paid in the Holo Acquisition has been allocated to the net assets acquired based on their relative fair value as of the completion of the acquisition, primarily including the IPR&D related to Holo Surgical’s development of ARAI and other intangible asset for assembled workforce. The ARAI has not yet reached technological feasibility and has no alternative future use; thus, the purchased IPR&D was expensed immediately subsequent to the acquisition, result in a one-time charge of $94,541 recognized in the asset acquisition expenses line of the consolidated statements of comprehensive loss for the year ended December 31, 2020. Additionally, the intangible asset related to the assembled workforce was immediately impaired together with other intangible assets in Q4 2020 due to the Company’s negative projected cash flow. The related expense of $458 as also included in the asset acquisition expenses. |
Zyga Technology Inc [Member] | |
Acquisition | 8. Acquisition of Zyga Technology, Inc. On January 4, 2018, the Company acquired Zyga Technology, Inc. (“Zyga”), a spine-focused medical device company that develops and produces innovative minimally invasive devices to treat underserved conditions of the lumbar spine. Zyga’s primary product is the SImmetry® Sacroiliac Joint Fusion System. Under the terms of the merger agreement dated January 4, 2018, the Company acquired Zyga for $21,000 in consideration paid at closing (consisting of borrowings of $18,000 on the Company’s revolving credit facility and $3,000 cash on hand), $1,100 contingent upon the successful achievement of a clinical milestone, and a revenue based earnout consideration of up to $35,000. Based on a probability weighted model, the Company estimates a contingent liability related to the clinical milestone and revenue based earnout of $4,986. Acquisition related costs were approximately $1,430, of which approximately $630 was incurred in 2017 and $800 was incurred for the three months ended March 31, 2018 and is reflected separately in the accompanying Consolidated Statements of Comprehensive (Loss) Gain. As of December 31, 2020, the Company determined that Zyga was not expected to meet the clinical milestone to earn the contingent consideration, and therefore, reduced the liability for the contingent consideration to zero. The Company has accounted for the acquisition of Zyga under ASC 805. Zyga’s results of operations are included in the consolidated financial statements beginning after January 4, 2018, the acquisition date. Including acquisition contingencies, the total consideration for the Zyga acquisition was $25,986. The purchase price was financed as follows: Cash proceeds from revolving credit facility $ 18,000 Cash from RTI Surgical 3,000 Total purchase price $ 21,000 In the fourth quarter of 2018, the Company completed its valuation of the purchase price allocation. The table below represents the final allocation of the total consideration to Zyga’s tangible and intangible assets and liabilities fair values as of January 4, 2018. Inventories $ 1,099 Accounts receivable 573 Other current assets 53 Property, plant and equipment 151 Other assets 26 Deferred tax assets 4,715 Current liabilities (947 ) Acquisition contingencies (4,986 ) Net tangible assets acquired 684 Other intangible assets 6,760 Goodwill 13,556 Total net assets acquired $ 21,000 Total net assets acquired as of January 4, 2018, are all part of the Company’s only operating segment and reporting unit. Fair values are based on management’s estimates and assumptions including variations of the income approach, the cost approach and the market approach. Other intangible assets include patents of $6,500 with a useful life of 13 years, trademarks of $80 with a useful life of 1 year and selling and marketing relationships of $180 with a useful life of 7 years. The Company believes that the acquisition of Zyga has offered and continues to offer the potential for substantial strategic and financial benefits. The transaction further advances our strategic transformation focused on reducing complexity, driving operational excellence and accelerating growth. The Company believes the acquisition will enhance stockholder value through, among other things, enabling the Company to capitalize on the following strategic advantages and opportunities: • Zyga’s innovative minimally invasive treatment should accentuate our spine portfolio and opens significant opportunities to accelerate our Spine-focused expansion strategy. • Zyga should leverage the core competencies of our Spine franchise by pursuing niche differentiated products, to gain scale and customer retention and support portfolio pull-through. These potential benefits resulted in the Company paying a premium for Zyga resulting in the recognition of $13,556 of goodwill assigned to the Company’s only operating segment and reporting unit. For tax purposes, none of the goodwill is deductible. The following unaudited pro forma information shows the results of the Zyga’s operations as though the acquisition had occurred as of the beginning of the prior comparable period, January 1, 2018. For the Year Ended December 31, 2018 Revenues $ 4,809 Net loss applicable to common shares (2,640 ) The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the actual results of operations had the acquisition taken place as of the beginning of the periods presented, or the results that may occur in the future. |
Holo Surgical Acquisition
Holo Surgical Acquisition | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisition | 9. Holo Surgical Acquisition On September 29, 2020, the Company entered into a Stock Purchase Agreement The Acquisition was closed on October 23, 2020. As consideration for the Holo Acquisition, the Company paid to the Seller $30,000 in cash and issue to the Seller 6,250,000 shares of common stock, par value $0.001 of the Company (“Common Stock”). In addition, following the closing, the Seller will be entitled to receive contingent consideration from the Company valued in an aggregate amount of up to $83 million, to be paid through the issuance of Common Stock or the payment of cash, contingent upon and following the achievement of certain regulatory, commercial and utilization milestones by specified time periods occurring up to the sixth (6th) anniversary of the closing. The Purchase Agreement provides that the Company will issue Common Stock to satisfy any contingent consideration payable to the Seller, until the total number of shares of Common Stock issued to the Seller pursuant to the Purchase Agreement (including the 6,250,000 shares of Common Stock issued at closing) is equal to 14,900,000 shares of Common Stock (or otherwise, to the extent a lower number, the maximum number of shares of Common Stock that would not require obtaining stockholder approval under the applicable rules of the Nasdaq Stock Market). Following the attainment of that limitation, the post-closing contingent payments would be payable in cash. The number of shares of Common Stock issued as contingent consideration with respect to the achievement of a post-closing milestone, if any, will be calculated based on the volume weighted average price of the Common Stock for the five (5) day trading period commencing on the opening of trading on the third trading day following the achievement of the applicable milestone. The Purchase Agreement also includes certain covenants and obligations of the Company with respect to the operation of the business of Holo Surgical that apply during the period in which the milestones may be achieved. The Company determined that substantially all of the fair value was concentrated in the acquired in-process research and development (“IPR&D”) asset in accordance with the guidance of ASC 805, Business Combinations Distinguishing Liabilities from Equity The total purchase price paid in the Holo Acquisition has been allocated to the net assets acquired based on their relative fair value as of the completion of the acquisition, primarily including the IPR&D related to Holo Surgical’s development of ARAI and other intangible asset for assembled workforce. The ARAI has not yet reached technological feasibility and has no alternative future use; thus, the purchased IPR&D was expensed immediately subsequent to the acquisition, result in a one-time charge of $94,541 recognized in the asset acquisition expenses line of the consolidated statements of comprehensive loss for the year ended December 31, 2020. Additionally, the intangible asset related to the assembled workforce was immediately impaired together with other intangible assets in Q4 2020 due to the Company’s negative projected cash flow. The related expense of $458 as also included in the asset acquisition expenses. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | 10. Stock-Based Compensation The Company’s policy is to grant stock options at an exercise price equal to 100% of the market value of a share of common stock at closing on the date of the grant. The Company’s stock options generally have five to ten-year one to five-year one to three-year 2018 Incentive Compensation Plan On April 30, 2018, the Company’s stockholders approved and adopted the 2018 Incentive Compensation Plan (the “2018 Plan”). The 2018 Plan provides for the grant of incentive and nonqualified stock options, restricted stock, and restricted stock units to key employees, including officers and directors of the Company. The 2018 Plan allows for up to 5,726,035 shares of common stock to be issued with respect to awards granted. Stock Options As of December 31, 2020, there was $2,613 of total unrecognized stock-based compensation expense related to nonvested stock options. That expense is expected to be recognized over a weighted-average period of 3 years. Stock options outstanding, exercisable and available for grant at December 31, 2020, are summarized as follows: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Life (Years) Value (in thousands, except for share and per share information) Outstanding at January 1, 2020 4,536,461 $ 3.75 Granted 2,161,277 3.12 Exercised (5,000 ) 4.02 Forfeited or expired (1,713,558 ) 4.32 Outstanding at December 31, 2020 4,979,180 $ 3.28 5.30 $ 142 Vested or expected to vest at December 31, 2020 4,979,180 $ 3.28 5.30 $ 142 Exercisable at December 31, 2020 2,806,401 $ 3.45 2.28 $ 6 Available for grant at December 31, 2020 842,608 The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value of stock options for which the fair market value of the underlying common stock exceeded the respective stock option exercise price. Estimated forfeitures are based on the Company’s historical forfeiture activity. Stock-based compensation expense recognized for all stock option grants is net of estimated forfeitures and is recognized over the awards’ respective requisite service periods. Other information concerning stock options are as follows: For the Year Ended December 31, 2020 2019 2018 (in thousands, except for per share information) Weighted average fair value of stock options granted $ 1.21 $ 1.56 $ 2.05 Aggregate intrinsic value of stock options exercised $ 3 $ 161 $ 349 The aggregate intrinsic value of stock options exercised in a period represents the pre-tax cumulative difference, for the stock options exercised during the period, between the fair market value of the underlying common stock and the stock option exercise prices. The following weighted-average assumptions were used to determine the fair value of options under FASB ASC 718: Year Ended December 31, 2020 2019 2018 Expected term (years) 6.50 6.50 6.50 Risk free interest rate 0.62 % 2.54 % 2.75 % Volatility factor 41.62 % 37.73 % 43.74 % Dividend yield - - - Restricted Stock Awards The value of restricted stock awards is determined by the market value of the Company’s common stock at the date of grant. In 2020, restricted stock awards in the amount of 1,453,459 shares and 441,084 shares of restricted stock were granted to employees and non-employee directors, respectively. As of December 31, 2020, there was $4,290 of total unrecognized stock-based compensation related to unvested restricted stock awards. That expense is expected to be recognized on a straight-line basis over a weighted-average period of 2 years. The following table summarizes information about unvested restricted stock awards as of December 31, 2020: Weighted Average Number of Grant Date Shares Fair Value Unvested at January 1, 2020 1,227,858 $ 4.34 Granted 1,894,543 3.47 Vested (919,330 ) 4.40 Forfeited (305,875 ) 4.19 Unvested at December 31, 2020 1,897,196 $ 3.47 Restricted Stock Units The value of restricted stock units is determined by the market value of the Company’s common stock at the date of grant. In 2020, no restricted stock units were granted. As of December 31, 2020, there was $236 of total unrecognized stock-based compensation expense related to unvested restricted stock units. That expense is expected to be recognized on a straight-line basis over a weighted-average period of 1 year. The following table summarizes information about unvested restricted stock units as of December 31, 2020: Weighted Average Number of Grant Date Shares Fair Value Unvested at January 1, 2020 184,582 $ 7.41 Granted — — Vested (85,503 ) 7.41 Forfeited (9,144 ) 7.41 Unvested at December 31, 2020 89,935 $ 7.41 For the years ended December 31, 2020, 2019 and 2018, the Company recognized stock-based compensation as follows: For the Year Ended December 31, 2020 2019 2018 Stock-based compensation: Costs of goods sold $ 169 $ 144 $ 132 Marketing, general and administrative 3,980 3,623 4,179 Research and development 72 60 60 Transaction and integration expenses 1,515 - - Total $ 5,736 $ 3,827 $ 4,371 Inducement Grant President and Chief Executive Office r On January 26, 2017, the Company issued an inducement grant to its President and Chief Executive Officer, Mr. Camille Farhat. This grant was in the form of: (1) a restricted stock award agreement (the “Restricted Stock Agreement #1”); (2) another restricted stock award agreement (the “Restricted Stock Agreement #2”); and (3) a stock option agreement. Under the Restricted Stock Agreement #1, the Company granted Mr. Farhat 850,000 shares of restricted common stock. On December 4, 2017, the Company and Mr. Farhat entered into the First Amendment to the Restricted Stock Agreement #1 (the “Amendment”). The Amendment revised the vesting conditions for the Company’s common stock (the “Common Stock”), granted under the Restricted Stock Agreement #1. Under the Restricted Stock Agreement #2, the Company granted Mr. Farhat 150,000 shares of restricted common stock. All of the shares granted to Mr. Farhat under the Restricted Stock Agreement #1, as amended, and the Restricted Stock Agreement #2 have fully vested. Under the Option Agreement, the Company granted Mr. Farhat the option to purchase 1,950,000 shares of common stock. The exercise price for the stock options is $3.20. The stock options will expire on January 26, 2022. The stock options will vest based on the Company’s attainment of three average stock price benchmarks. The first 650,000 shares will vest if the Company’s average publicly traded stock price is over $6.00 for a sixty-consecutive calendar day period. The next 650,000 shares will vest if the Company’s average publicly traded stock price is over $7.00 for a sixty-consecutive calendar day period. The final 650,000 shares will vest if the Company’s average publicly traded stock price is over $8.00 for a sixty-consecutive calendar day period. The vesting of the stock options is cumulative. Chief Financial and Administrative Officer On September 18, 2017, the Company issued an inducement grant to its Chief Financial and Administrative Officer, Mr. Jonathon Singer. This grant was in the form of: (1) a restricted stock award agreement (the “Restricted Stock Agreement”); and (2) a stock option agreement. This inducement grant was made under the RTI Surgical, Inc. 2015 Incentive Compensation Plan, which was filed with the SEC on May 5, 2015. Under the Restricted Stock Agreement, the Company granted Mr. Singer 109,890 shares of restricted stock. All of the shares granted to Mr. Singer under the Restricted Stock Agreement have fully vested. Under the Option Agreement, the Company granted Mr. Singer the option to purchase 306,900 shares of common stock, as of the grant date. The exercise price for the stock options is $4.55 per share. The stock options will expire on September 18, 2027. The stock options will vest based the Company’s attainment of three average stock price benchmarks. The first 102,300 shares will vest if the Company’s average publicly traded stock price is over $7.00 per share for a sixty-consecutive calendar day period. The next 102,300 shares will vest if the Company’s average publicly traded stock price is over $8.00 per share for a sixty-consecutive calendar day period. The final 102,300 shares will vest if the Company’s average publicly traded stock price is over $9.00 per share for a sixty-consecutive calendar day period. The vesting of the stock options is cumulative. President, Global Spine On November 29, 2019, the Company issued an inducement grant to its President of Global Spine, Mr. Terry Rich. This grant was in the form of: (1) a restricted stock award agreement (the “Restricted Stock Agreement”); and (2) a stock option agreement. This inducement grant was made under the RTI Surgical Holdings, Inc., Terry Rich Reserve Compensation Plan. Under the Restricted Stock Agreement, the Company granted Mr. Rich 125,598 shares of restricted stock. On the first anniversary of the Grant Date, 41,866 shares will vest. The remaining shares will vest on the last day of each calendar quarter at a rate of 10,467 shares per calendar quarter commencing on the fifteenth month following the Grant Date and continuing for two years year after. Vesting of these shares may accelerate upon the occurrence of certain conditions. Under the Option Agreement, the Company granted Mr. Rich the option to purchase 188,397 shares of common stock (the “Stock Options”), as of the grant date. The exercise price for the Stock Options is $2.09. On the first anniversary of the grant date, 62,799 will vest. The remaining shares will vest on the last day of each calendar quarter at a rate of 15,700 shares per calendar quarter commencing on the fifteenth month following the grant date and continuing for two years after. The vesting of the Stock Options is cumulative. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | 11. Inventories The inventory balances as of December 31, 2020 and 2019 consist entirely of finished goods. For the years ended December 31, 2020, 2019, and 2018, the Company recognized costs related to inventory write-downs of $17,691, $2,153 and $7,983, respectively, relating primarily to excess quantities and obsolescence (“E&O”) of inventories. The E&O write-downs are included in the cost of goods sold. The Company was made aware in December 2020 that its former OEM Businesses was going to recall the Cervalign ACP System (“Cervalign”). The Company got the official notice in January 2021 and started a process to recall all of the inventory currently held at the distributors. The Company is working with the former OEM Businesses to address the issue related to the recall through product design and alterations. The Company fully reserved the entire Cervalign inventory as of December 31, 2020, resulting in a charge of $2,165 in 2020 For the year ended December 31, 2019, an amount of $513 of the E&O inventory write-down was related to the valuation of the Paradigm acquisition-related inventory. Among the costs of E&O inventory write-down in 2018, an amount of $1,023 was related to related to the rationalization of our international distribution infrastructure and $6,559 related to lower distributions of the Company’s map3® implant. |
Prepaid and Other Current Asset
Prepaid and Other Current Assets | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Prepaid and Other Current Assets | 12. Prepaid and Other Current Assets Prepaid and Other Current Assets are as follows: For the Year Ended December 31, 2020 2019 Income tax receivable $ 4,836 $ 2,785 Prepaid expenses 1,543 996 Other receivable 3,795 113 Other 110 140 $ 10,284 $ 4,034 Other receivable as of December 31, 2020 included fees and expenses of $3,208 related to the Company’s public offering in January 2021, which will be recorded as a reduction of Additional paid-in-capital upon the receipt of the proceeds from the offering. The Company received the net proceeds on February 1, 2021. See Note 29 for further discussion. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | 13. Property and equipment Property and equipment are as follows: For the Year Ended December 31, 2020 2019 Processing equipment $ 35 $ 110 Surgical instruments 440 541 Office equipment, furniture and fixtures 34 122 Computer equipment and software 12 16 $ 521 $ 789 For the years ended December 31, 2020, 2019, and 2018, the Company had depreciation expense in connection with property and equipment of $3,567, $7,670, and $5,904, respectively. For the year ended December 31, 2020, the Company recorded asset impairment and abandonment charges of $11,707 based on impairment indicators within the Spine asset group. For the year ended December 31, 2019, the Company recorded asset impairment and abandonment charges of $11,856 consisting of $11,655 related to property and equipment and $201 of right-of-use lease assets. The organizational change in 2019 resulted in the creation of a new Spine asset group. Prior to the fourth quarter of 2019, the Spine asset group did not exist as the related assets were included in another asset group as it had interdependencies among the utilization of the assets property and equipment and the right of use asset, because the Spine asset group no longer had the benefit of shared resources and cashflows generated by the former asset group with which it was previously included. The fair value of property and equipment was measured utilizing an orderly liquidation value of each of the underlying assets. The right-of-use lease assets were measured utilizing a version of the income approach that considers the present value of the market based rent payments for the applicable properties. For the year ended December 31, 2018, the Company recorded asset impairment and abandonment charges of $1,797, relating to lower distributions of our map3® implant. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill | 14. Goodwill The Company fully impaired its goodwill in 2019. The change in the carrying amount of goodwill for the year ended December 31, 2019, is as follows: For the Year Ended December 31, 2019 Balance at January 1 $ 4,414 Goodwill additions related to acquisitions 135,589 Goodwill impairment (140,003 ) Balance at December 31 $ — Goodwill acquired in 2019 results from the acquisition of Paradigm. On March 8, 2019, we acquired Paradigm for a purchase price of approximately $232,907 and recorded goodwill of approximately $135,589. The valuation of goodwill requires management to use significant judgments and estimates including, but not limited to, projected future revenue and cash flows, along with risk-adjusted weighted average cost of capital. Changes in assumptions or market conditions could result in a change in estimated future cash flows and the likelihood of materially different reported results. Paradigm was acquired prior to the Company’s disposition of its OEM Businesses when the Company was structured differently. Paradigm was initially included in the Company’s single reporting unit. In the fourth quarter of 2019, the Company reorganized its operations which resulted in the Company dividing its single operating segment and reporting unit into two operating segments and reporting units: Spine and OEM. With the change in reporting units, the Company performed a relative fair value valuation calculation to allocate the Company’s historical goodwill (existing prior to the Paradigm acquisition) between the two reporting units. The goodwill arising from the Paradigm acquisition was specifically allocated to the Spine reporting unit. The Company concluded specific allocation of the Paradigm goodwill to the Spine reporting unit was most appropriate since Paradigm was recently acquired and the benefits of the acquired goodwill were never realized by the single reporting unit as Paradigm was not integrated. Based on this change in reporting units, the Company conducted an impairment test before and after the change, and it was concluded that the fair value of the single reporting unit exceeded the carrying value under the previous reporting unit structure. For the impairment test performed immediately subsequent to the change in reporting units on the OEM reporting unit, it was concluded the fair value of goodwill was substantially in excess of its carrying value. For the Spine reporting unit test, it was concluded the carrying value was in excess of the fair value of goodwill. Based on several factors, the Company weighted the income approach at 75% and the market approach at 25% in determining the fair value of the OEM reporting unit and utilized the cost approach for the Spine reporting unit for the purpose of the impairment test. The test resulted in the fair value of the OEM reporting unit exceeding the carrying value by approximately 54%, and the fair value of the Spine reporting unit could not support the allocated goodwill. As a result, for the year ended December 31, 2019, the Company recorded an impairment charge of all the goodwill in the Spine reporting unit totaling $140,003. |
Net Loss Per Common Share
Net Loss Per Common Share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Net Loss Per Common Share | 15. Net Loss Per Common Share The number of shares of common stock used in the calculation of basic and diluted net loss per common share is presented below: For the Year Ended December 31, 2020 2019 2018 Weighted average basic and dilutive shares 74,403,155 70,150,492 61,031,265 For the years ended December 31, 2020, 2019 and 2018, the Company suffered a net loss from its continuing operations. As a result, the Company has excluded all potential dilutive shares from the computation of the diluted net loss per share to avoid the anti-dilutive effect. The following table includes the number of potential dilutive shares that were excluded due to the anti-dilutive effect: For the Year Ended December 31, 2020 2019 2018 Stock Option (1) 271,351 345,154 1,154,396 RSU and RSA 1,099,018 821,888 344,273 Convertible Series A Preferred Stock 8,400,512 15,152,761 15,152,761 Total 9,770,881 16,319,803 16,651,430 (1) The number of potential dilutive shares does not include out-of-the-money stock options as their exercise prices were above the average stock price during the period. On October 23, 2020, the Company completed the acquisition of Holo and became obligated for a contingent consideration in an aggregate amount of $50,632, which must be first paid in shares of the Company’s common stock (in an amount up to 8,650,000 shares) and then paid in cash thereafter, contingent upon and following the achievement of certain regulatory, commercial and utilization milestones by specified time periods occurring up to the sixth (6th) anniversary of the closing. The number of shares of common stock issued as contingent consideration with respect to the achievement of a post-closing milestone, if any, will be calculated based on the volume weighted average price of the common stock for the five (5) day trading period commencing on the opening of trading on the third trading day following the achievement of the applicable milestone. As of December 31, 2020, none of the contingent events have occurred. See Note 9 for further discussion of the Holo Acquisition. |
Fair Value Information
Fair Value Information | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Information | 16. Fair Value Information Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy defines a three-level valuation hierarchy for classification and disclosure of fair value measurements as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. On October 23, 2020, the Company acquired Holo Surgical as previously explained in Note 9 above. A portion of the consideration is contingent upon the achievement of certain regulatory, commercial and utilization milestones (the “milestone payment”). On March 8, 2019, the Company acquired Paradigm as further explained in Note 7 above. The Company estimates a contingent liability related to the revenue based earnout of $72,177. The fair value of the contingent liability was measured using Level 3 inputs. Unobservable inputs for the probability weighted model included weighted average cost of capital (unobservable) and company specific projected revenue and costs (unobservable). As of December 31, 2020, Management determined the revenue based earnout would be $ 0 , as the probability weighted model has been updated based on the current updated forecast for the performance of the Paradigm product portfolio. Beginning in Q4 2019, in conjunction with Spine Leadership change, management reassessed the Paradigm strategy relating to roll-out of the commercial operating model, impact of physician reimbursement and progression of third-party insurance reimbursement and its related impact on the long-term outlook for the business. These items resulted in revisions of our projections and a reduction of the fair value of the earnout liability. As a result, a gain of $ 72,177 was recognized and is included in gain on acquisition contingency in the consolidated statement of comprehensive loss. On January 4, 2018 8 4,986 3 31, 2020, The contingent consideration is evaluated quarterly, or more frequently, if circumstances dictate. Changes in the fair value of contingent consideration are recorded in consolidated statements of income. Significant changes in unobservable inputs, mainly the probability of success and cash flows projected, could result in material changes to the contingent consideration liabilities. Embedded derivatives identified within the Ares incremental term loan entered into, assessed and adjusted to their estimated fair value during the second quarter of 2020. Fair value is measured as of the debt issuance date using Level 3 inputs. For the issuance, the derivative level 3 fair value was measured based on a probability-weighted discounted cash flow approach. Unobservable inputs included the probability of a shareholder approval (unobservable), a recovery scenario should shareholder approval not occur (unobservable), and an estimated discount rate based on market data of comparable debt (observable). In 2020, the related derivative loss was $12,641 which was included in the discontinued operations. Long-lived assets, including property and equipment and intangible assets subject to amortization were impaired and written down to their estimated fair values in 2020 and 2019. Fair value is measured as of the impairment date using Level 3 inputs. The long-lived asset level 3 fair value was measured base on orderly liquidation value for the Property and equipment and Other assets. Other intangible assets fair value was measured based on the income approach. Because the Company’s forecasted cash flow is negative, any intangible assets acquired during the year were immediately impaired. Unobservable inputs for the orderly liquidation value included replacement costs (unobservable), physical deterioration estimates (unobservable) and market sales data for comparable assets and unobservable inputs for the income approach included forecasted cash flows generated from use of the intangible assets (unobservable). The following tables summarize impairments of long-lived assets and the related post impairment fair values of the corresponding assets for the years ended December 31, 2020 and 2019: For the Year Ended December 31, 2020 Impairment Fair Value Property and equipment - net $ 11,707 $ - Other intangible assets - net 2,621 - Other assets - net 445 $ 14,773 $ — For the Year Ended December 31, 2019 Impairment Fair Value Property and equipment - net $ 11,655 $ - Other intangible assets - net 85,096 - Other assets - net 201 - $ 96,952 $ — In 2020, because the Company’s forecasted cash flow is negative, any intangible assets acquired during the year were immediately impaired. As of December 31, 2019, the Company concluded, through the ASC 360, Property, Plant and Equipment valuation testing, that factors existed indicating that finite-lived intangible assets were impaired. The factors included a change made to the internal organization of the Company in the fourth quarter of 2019. The organizational change resulted in the creation of a new Spine asset group. Prior to the fourth quarter of 2019, the Spine asset group did not exist as the related assets were included in another asset group as it had interdependencies among the utilization of the assets within the group, and therefore, there were no discrete cash flows. The asset group representing the Spine asset group could not support the carrying amount of the finite-lived intangible assets, because the Spine asset group no longer has the benefit of shared resources and cashflows generated by the former asset group that it was previously included in. Thus, the Company tested the carrying amount of intangible assets in the Spine asset group for impairment on December 31, 2019. As a result, for the year ended December 31, 2019, the Company recorded an impairment charge for all of the finite-lived intangible assets within Spine asset group, totaling $ 85,096 . |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Accrued Expenses | 17. Accrued Expenses Accrued expenses are as follows: For the Year Ended December 31, 2020 2019 Accrued compensation $ 2,268 $ 2,911 Accrued severance and restructuring costs — 136 Accrued distributor commissions 4,113 4,325 Accrued business development expenses — 2,555 Accrued leases 650 967 Accrued acquisition contingency -- Holo 8,996 — Other 5,617 4,205 $ 21,644 $ 15,099 |
Short and Long-Term Obligations
Short and Long-Term Obligations | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Short and Long-Term Obligations | 18. Short and Long-Term Obligations As discussed in Note 5, on July 20, 2020, the Company (i) paid in full its $80,000 revolving credit facility under the 2018 Credit Agreement, (ii) terminated the 2018 Credit Agreement, (iii) paid in full its $100,000 term loan and $30,000 incremental term loan commitment under the 2019 Credit Agreement, and (iv) terminated the 2019 Credit Agreement. Below is a summary of the short and long-term obligations that were included in discontinued operations as of December 31, 2019: For the Year Ended December 31, 2019 Ares Term loan $ 104,406 JPM facility 71,000 Less unamortized debt issuance costs (1,229 ) Total 174,177 Less current portion 174,177 Long-term portion $ — |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 19. Income Taxes The Company’s pre-tax income consists of the following components: Year Ended December 31, 2020 2019 2018 Pre-tax income: Domestic (U.S., state and local) $ (191,455 ) $ (242,896 ) $ (64,808 ) Foreign (6,226 ) 39 - Total pre-tax income (197,681 ) (242,857 ) (64,808 ) The Company’s income tax benefit (provision) consists of the following components: For the Year Ended December 31, 2020 2019 2018 Current: Federal $ 3,671 $ 312 $ 398 State - (89 ) (40 ) International 13 (138 ) - Total current 3,684 85 358 Deferred: Federal 99 (2,456 ) 11,232 State - (169 ) (419 ) International (297 ) (3,381 ) 3,988 Total deferred (198 ) (6,006 ) 14,801 Total income tax benefit (provision) $ 3,486 $ (5,921 ) $ 15,159 The Company’s deferred tax assets and liabilities consists of the following components: For the Year Ended For the Year Ended December 31, 2020 December 31, 2019 Deferred Income Tax Deferred Income Tax Assets Liabilities Assets Liabilities Accounts receivable $ 1,993 $ - $ 1,184 - Accrued liabilities 1,326 - 3,418 - Deferred compensation 1,281 - 1,526 - Fixed assets and intangibles 22,235 - 16,119 - Inventory 8,475 - 10,165 - Net operating losses 9,891 - 9,342 - Revenue - (129 ) - (59 ) Tax credits - - 6,372 - Lease Liability 446 - 695 - Right of Use Asset - (344 ) - (544 ) Other - (48 ) - (103 ) Valuation allowance (45,126 ) - (48,115 ) - Total $ 521 $ (521 ) $ 706 $ (706 ) On December 22, 2017, the US government enacted the Tax Cuts and Jobs Act of 2017 (the “Tax Legislation”). The Tax Legislation makes broad and complex changes to the U. S. tax code including, but not limited to the following: • Reduction of the U.S. federal corporate tax rate from 35% to 21% • Requiring a transition tax on certain unrepatriated earnings of foreign subsidiaries • Bonus depreciation that will allow for full expensing of qualified property • Elimination of the corporate alternative minimum tax • The repeal of the domestic production activity deduction • Limitations on the deductibility of certain executive compensation • Limitations on net operating losses generated after December 31, 2017 In addition, beginning in 2018, the Tax Legislation includes a global intangible low-taxed income (“GILTI”) provision, which, requires a tax on foreign earnings in excess of a deemed return on tangible assets of foreign subsidiaries. The Company has elected an accounting policy to account for GILTI as a period cost if incurred, rather than recognizing deferred taxes for temporary basis differences expected to reverse as a result of GILTI. On December 22, 2017, the SEC staff issued SAB 118, which provides guidance on accounting for the tax effects of the Tax Legislation. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Legislation enactment date for companies to complete the accounting under ASC 740. In 2018, the Company completed its accounting for the tax effects of the Tax Legislation and recorded a tax benefit of $650. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was enacted. As a result of the enactment of the CARES Act, net operating losses (“NOL’s”) can now be carried back for five years, which resulted in the Company recognizing a benefit during tax year 2020 of $3,464. On July 20, 2020, the Company completed the disposition of its OEM Businesses. The Company was able to partially offset the tax gain on the OEM sale with the utilization of tax attributes and year-to-date losses. The benefit for year-to-date U.S. losses from continuing operations is reported in discontinued operations pursuant to the Company’s adoption of ASU 2019-12. (See Note 5 “Discontinued Operations” for additional information). On October 23, 2020, the Company completed the acquisition of Holo Surgical pursuant to the Stock Purchase Agreement. The total consideration of the asset acquisition was determined to be $94,999, including an estimated fair value of $50,632 related to the contingent consideration. The fair value of the liability was $56,515 as of December 31, 2020 with a $5,883 change in fair value since October 23, 2020 recognized in the loss (gain) on acquisition contingency line. The Company treated the transaction as a non-taxable acquisition of stock for tax purposes and has reversed these acquisition costs and the revaluation of contingent consideration when calculating tax expense. (See Note 9 “Holo Surgical Acquisition” for additional information). As of December 31, 2020, the Company has U.S. federal net operating loss carryforwards of $9,081 that will expire in years 2037 through 2038. As of December 31, 2020, the Company has U.S. state net operating loss carryforwards of approximately $36,545, of which, approximately $24,820 will expire in the years 2022 through 2039, and approximately $11,726 will carryforward indefinitely. As of December 31, 2020, the Company has non-U.S. net operating loss carryforwards of approximately $26,228, of which approximately $20,275 will expire in years 2021 through 2027, and approximately $5,953 will carryforward indefinitely. U.S. income taxes have not been provided on the undistributed earnings of the Company’s foreign subsidiaries. It is not practicable to estimate the amount of tax that might be payable. The Company’s intention is to indefinitely reinvest earnings of its foreign subsidiaries outside of the U.S. The Company evaluates the need for deferred tax asset valuation allowances based on a more likely than not standard. The ability to realize deferred tax assets depends on the ability to generate sufficient taxable income within the carryback or carryforward periods provided for in the tax law for each applicable tax jurisdiction. The Company has evaluated all evidence, both positive and negative, and has recorded a full valuation allowance in the amount of $45,126 as of December 31, 2020, which is consistent with the $48,115 valuation allowance position recorded as of December 31, 2019. In making this determination, numerous factors were considered including the going-concern evaluation. The Company’s unrecognized tax benefits are summarized as follows: For the Year Ended December 31, 2020 2019 2018 Opening balance $ 1,088 $ 1,088 $ 1,591 Additions based on tax positions related to the current year 1,903 - - Additions for tax positions of prior years - - - Reductions for tax positions of prior years - - (415 ) Reductions for expiration of statute of limitations - - (88 ) $ 2,991 $ 1,088 $ 1,088 The unrecognized tax benefits if recognized, would favorably impact the Company’s effective tax rate. It is reasonably possibly that the unrecognized tax benefits will not significantly increase or decrease during the next twelve months. The unrecognized tax benefits of $2,991 as of December 31, 2020 was included in the other long-term liability line; while the unrecognized tax benefit of $1,088 as of December 31, 2019 and December 31, 2018 was included as an offset to the deferred tax asset. The Company’s policy is to recognize interest and penalties accrued related to unrecognized tax benefits in the provision for income taxes. Interest and penalties recorded during 2018 through 2020 and accrued as of December 31, 2020 were inconsequential. During the year ended December 31, 2018, the Internal Revenue Service (the “IRS”) completed its examination of the Company’s 2015 U. S. federal income tax return. No material adjustments were recorded to the Company’s consolidated financial statements as a result of the examination. As of December 31, 2020, we have had no ongoing audits in the U.S. or any foreign jurisdictions. The tax years that are open to examination are U.S. federal periods from 2017 to current and state taxes 2016 to current. The Company's U.S. and foreign tax attribute carryforwards remain open to examination. The effective tax rate differs from the statutory federal income tax rate for the following reasons: For the Year Ended December 31, 2020 2019 2018 Statutory federal rate 21.00 % 21.00 % 21.00 % State income taxes—net of federal tax benefit (0.07 %) (0.56 %) 2.34 % Foreign rate differential 0.90 % 0.00 % (3.59 %) Acquisition expenses (9.87 %) 0.00 % (0.83 %) Loss (Gain) on acquisition contingency (0.50 %) 6.58 % 0.00 % Goodwill impairment and disposal 0.00 % (11.88 %) 0.00 % Life insurance 0.00 % 0.00 % (0.11 %) Tax attributes 0.28 % 0.04 % 0.99 % Tax legislation 0.95 % 0.00 % 1.05 % Valuation allowances (10.57 %) (16.98 %) 3.26 % Uncertain tax positions 0.00 % 0.00 % 0.78 % Other reconciling items, net (0.36 %) (0.63 %) (1.48 %) Effective tax rate 1.76 % (2.43 %) 23.41 % For the years ended December 31, 2020, 2019 and 2018, the Company had no individually significant other reconciling items. The other reconciling items line includes non-significant officer compensation and stock-based compensation for all years presented. |
Preferred Stock
Preferred Stock | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Preferred Stock | 20. Preferred Stock Preferred stock is as follows: Preferred Stock Preferred Stock Liquidation Value Issuance Costs Net Total Balance at January 1, 2018 $ 64,399 $ (476 ) $ 63,923 Accrued dividend 2,120 - 2,120 Amortization of preferred stock issuance costs - 183 183 Balance at December 31, 2018 66,519 (293 ) 66,226 Amortization of preferred stock issuance costs - 184 184 Balance at December 31, 2019 66,519 (109 ) 66,410 Amortization of preferred stock issuance costs - 109 109 Redemption of preferred stock (66,519 ) - (66,519 ) Balance at December 31, 2020 $ — $ — $ — On June 12, 2013, the Company and WSHP Biologics Holdings, LLC, an affiliate of Water Street Healthcare Partners, a leading healthcare-focused private equity firm (“Water Street”), entered into an investment agreement. Pursuant to the terms of the investment agreement, the Company issued $50,000 of convertible preferred equity to Water Street in a private placement which closed on July 16, 2013, with preferred stock issuance costs of $1,290. The preferred stock accrues dividends at a rate of 6% per annum. To the extent dividends are not paid in cash in any quarter, the dividends which have accrued on each outstanding share of preferred stock during such three-month period will accumulate until paid in cash or converted to common stock. The preferred stock will be convertible at the election of the holders into shares of the Company’s common stock at an initial conversion price of $4.39 per share which would result in a conversion ratio of approximately 228 shares of common stock for each share of preferred stock. The preferred stock is convertible at the election of the Company five years after its issuance or at any time if the Company’s common stock closes at or above $7.98 per share for at least 20 consecutive trading days. The Company may, upon 30 days’ notice, redeem the preferred stock, in whole or in part, five years after its issuance at the initial liquidation preference of $1,000 per share of the preferred stock plus an amount per share equal to accrued but unpaid dividends (collectively, the “Liquidation Value”). The holders of the p referred s tock may require the Company to redeem their p referred s tock, in whole or in part, at the Liquidation Value seven years after its issuance or upon the occurrence of a change of control. On August 1, 2018, the Company and WSHP Biologics Holdings, LLC, a related party, entered into an Amended and Restated Certificate of Designation of Series A Convertible Preferred Stock of RTI Surgical, Inc. (the “Amended and Restated Certificate of Designation”). Pursuant to the Amended and Restated Certificate of Designation: (1) dividends on the Series A Preferred Stock will not accrue after July 16, 2018 (in the event of a default by the Company, dividends will begin accruing and will continue to accrue until the default is cured); (2) the Company may not force a redemption of the Series A Preferred Stock prior to July 16, 2020; and (3) the holders of the Series A Preferred Stock may not convert the Series A Preferred Stock into common stock prior to July 16, 2021 (with certain exceptions). The Company evaluated and concluded on a qualitative basis that the amendment qualifies as modification accounting to the preferred shares, which did not result in a change in the valuation of the shares. On July 17, 2020, the Company received a notification from WSHP seeking redemption on or before September 14, 2020 of all of the outstanding shares of the Company’s Series A Convertible Preferred Stock (“Series A Preferred Stock”), all of which are held by WSHP. On July 24, 2020, the Company redeemed the Series A Preferred Stock for approximately $66,519 and Certificate of Retirement was filed with the Delaware Secretary of State retiring the Series A Preferred Stock. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | 21. Stockholders’ Equity Preferred Stock —The Company has 5,000,000 shares of preferred stock authorized under its Certificate of Incorporation. These shares may be issued in one or more series having such terms as may be determined by the Company’s Board of Directors. As discussed in Note 20, the Company issued 50,000 shares of Series A Preferred Stock in 2013 and, subsequently, redeemed all shares outstanding on July 24, 2020. As of December 31, 2020, the Company did not have any Preferred Stock outstanding. Common Stock —The Company has 150,000,000 shares of common stock authorized. The common stock’s voting, dividend, and liquidation rights presently are subject to or qualified by the rights of the holders of any outstanding shares of preferred stock. Holders of common stock are entitled to one vote for each share held at all stockholder meetings. Shares of common stock do not have redemption rights. The Company is, and may in the future become, party to agreements and instruments that restrict or prevent the payment of dividends on our capital stock. |
Severance and Restructuring Cos
Severance and Restructuring Costs | 12 Months Ended |
Dec. 31, 2020 | |
Employee Severance [Member] | |
Severance and Restructuring Costs | 22. Severance and Restructuring Costs The Company recorded severance and restructuring costs related to the reduction of our organizational structure which resulted in $773 of expenses for the year ended December 31, 2018. The total severance and restructuring costs were paid in full in 2018. Severance and restructuring payments were made over periods ranging from one month to twelve months and did not have a material impact on cash flows of the Company in any quarterly period. As part of the acquisition of Paradigm, management implemented a plan which resulted in $896 of severance expenses for the year ended December 31, 2019. Paradigm severance expenses were offset by previous severance accrual activity and are included in transaction and integration expenses within the consolidated statements of comprehensive loss, totaling $626 for the year ended December 31, 2019. The total severance and restructuring costs were paid in full in of 2019. Severance and restructuring payments were made over periods ranging from one month to twelve months and did not have a material impact on cash flows of the Company in any quarterly period. The following table includes a rollforward of severance and restructuring costs included in accrued expenses, see Note 17. Accrued severance and restructuring charges at January 1, 2018 $ 2,886 Severance and restructuring expenses accrued in 2018 773 Severance and restructuring cash payments (2,751 ) Accrued severance and restructuring charges at December 31, 2018 908 Severance and restructuring expenses accrued in 2019 626 Severance and restructuring cash payments (1,398 ) Accrued severance and restructuring charges at December 31, 2019 136 Severance and restructuring expenses accrued in 2020 — Severance and restructuring cash payments (136 ) Accrued severance and restructuring charges at December 31, 2020 $ — |
Retirement Benefits
Retirement Benefits | 12 Months Ended |
Dec. 31, 2020 | |
Compensation And Retirement Disclosure [Abstract] | |
Retirement Benefits | 23. Retirement Benefits The Company has a qualified 401(k) plan available to all U.S. employees who meet certain eligibility requirements. The 401(k) plan allows each employee to contribute up to the annual maximum allowed under the Internal Revenue Code. The Company has the discretion to make matching contributions up to 6% of the employee’s earnings. For the years ended December 31, 2020, 2019 and 2018, the amounts expensed under the plan were $1,381, $2,908 and $2,556, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 24. Commitments and Contingencies Agreement to Acquire Paradigm – On March 8, 2019, pursuant to the Master Transaction Agreement, the Company acquired Paradigm in a cash and stock transaction valued at up to $300,000, consisting of $150,000 on March 8, 2019, plus potential future milestone payments. Established in 2005, Paradigm’s primary product is the coflex® Interlaminar Stabilization® device, a differentiated and minimally invasive motion preserving stabilization implant that is FDA premarket approved for the treatment of moderate to severe lumbar spinal stenosis in conjunction with decompression. Under the terms of the agreement, the Company paid $100,000 in cash and issued 10,729,614 shares of the Company’s common stock. The shares of Company common stock issued on March 8, 2019, were valued based on the volume weighted average closing trading price for the five trading days prior to the date of execution of the definitive agreement, representing $50,000 of value. In addition, under the terms of the agreement, The first potential earnout payment of $20,000,000 was based on revenues achieved during any twelve-month period ending on December 31, 2020. As the revenue milestone was not achieved, there was no consideration due with respect to the first earnout period and the Company has no further liability with respect thereto. utilizing a Monte-Carlo simulation model. A Monte-Carlo simulation is an analytical method used to estimate fair value by performing a large number of simulations or trial runs and thereby determining a value based on the possible outcomes. Accounted for as a liability to be revalued at each reporting period, the fair value of the contingent liability was measured using Level 3 inputs, which includes weighted average cost of capital and projected revenues and costs. Acquisition of Zyga – O n January 4, 2018, the Company acquired Zyga, a leading spine-focused medical device company that develops and produces innovative minimally invasive devices to treat underserved conditions of the lumbar spine. Zyga’s primary product is the SImmetry® Sacroiliac Joint Fusion System. Under the terms of the merger agreement dated January 4, 2018, the Company acquired Zyga for $21,000 in consideration paid at closing (consisting of borrowings of $18,000 on its revolving credit facility and $3,000 cash on hand), $1,100 contingent upon the successful achievement of a clinical milestone, and a revenue based earnout consideration of up to an additional $35,000. As of December 31, 2020, the Company determined that Zyga was not expected to meet the clinical milestone to earn the contingent consideration. Aziyo – On August 1, 2018, the Company and Aziyo Biologics, Inc. entered into a Distribution Agreement which was subsequently amended on December 3, 2018, and November 15, 2020 (the “Distribution Agreement”). Pursuant to the Distribution Agreement, the Company has exclusive distribution rights to certain biologic implants manufactured by Aziyo and marketed under the ViBone trade name (“ViBone”). The Distribution Agreement provides for minimum purchases of ViBone implants on an annual basis through calendar 2025. If the minimum purchase obligations for a particular year are not fulfilled, the Distribution Agreement provides various options for the Company to satisfy such obligations (“Shortfall Obligations”) in subsequent years, including a combination of payments and/or providing purchase orders for the amount the shortfall in a given year. For calendar years 2022 and beyond, if the Company does not satisfy the Shortfall Obligations using one of the methods specified in the Distribution Agreement, the Company can continue to market the ViBone implants on a non-exclusive basis. In January 2021, the Company issued a purchase order to Aziyo for $12,361 relating to the 2020 Shortfall Obligation. Acquisition of Holo – As discussed in Note 9, pursuant to the terms of the Holo Purchase Agreement, the Seller will be entitled to receive contingent consideration from the Company valued in an aggregate amount of up to $83 million, to be paid through the issuance of Common Stock or the payment of cash, contingent upon and following the achievement of certain regulatory, commercial and utilization milestones by specified time periods occurring up to the sixth (6th) anniversary of the closing. The Holo Purchase Agreement provides that the Company will issue Common Stock to satisfy any contingent consideration payable to the Seller, until the total number of shares of Common Stock issued to the Seller pursuant to the Purchase Agreement (including the 6,250,000 shares of Common Stock issued at closing) is equal to 14,900,000 shares of Common Stock (or otherwise, to the extent a lower number, the maximum number of shares of Common Stock that would not require obtaining stockholder approval under the applicable rules of the Nasdaq Stock Market). Following the attainment of that limitation, the post-closing contingent payments would be payable in cash. The number of shares of Common Stock issued as contingent consideration with respect to the achievement of a post-closing milestone, if any, will be calculated based on the volume weighted average price of the Common Stock for the five (5) day trading period commencing on the opening of trading on the third trading day following the achievement of the applicable milestone. The Purchase Agreement also includes certain covenants and obligations of the Company with respect to the operation of the business of Holo Surgical that apply during the period in which the milestones may be achieved. Based on a probability weighted model, the Company estimated a total contingent liability of $ with $ classified as current liabilities and $ as long-term liabilities on the acquisition date of October 23, 2020 . T he fair value of the liability was subsequently changed to $ on December 31, 2020 with $ classified as current liabilities within the a ccrued e xpenses while $ as o ther l ong-term l iabilities. The change in the fair value of the liability of $ since October 23, 2020 was recognized in the loss on a cquisition contingency line of the c onsolidated s tatements of c omprehensive l oss. Manufacturing Agreements with Former OEM Affiliates In connection with the closing of the OEM Transaction, on July 20, 2020 the Company entered into three manufacturing and distribution agreements with affiliates of Montague Private Equity: (i) a Manufacture and Distribution Agreement (the “Hardware MDA”) with Pioneer Surgical Technology, Inc. (“Pioneer”) pursuant to which Pioneer will manufacture certain hardware implants for the Company; (ii) a Processing and Distribution Agreement with RTI Surgical, Inc. (“RTI”), an affiliate of Pioneer, pursuant to which RTI would process certain biologic implants for the Company (the “PDA”); and (ii) a Manufacture and Distribution Agreement (NanOss) pursuant to which Pioneer would manufacture certain synthetic implants for the Company (the “NanOss MDA”, and together with the Hardware MDA and the PDA, the “OEM Distribution Agreements”. • Year 1: $24,201 • Year 2: $25,767 • Year 3: $27,158 The OEM Distribution Agreements contain provisions whereby the minimum purchase obligations are reduced under certain circumstances, including certain force majeure events and termination of the agreements for certain specified reasons. In addition, on July 20, 2020, the Company entered into a Design and Development Agreement with Pioneer pursuant to which Pioneer will provide certain design and development services with respect to certain implants (the “Design and Development Agreement”). The Design and Development Agreement contains a provision whereby the Company will pay Pioneer a minimum of $1.7 million for direct labor costs and certain services with respect to maintaining design history files in each of the first two years under the Design and Development Agreement. OPM Agreement On January 20, 2021, the Company and Oxford Performance Materials, Inc. (“Oxford”) entered into an Amended and Restated License and Supply Agreement (the “Oxford Supply Agreement”) pursuant to which Oxford licenses certain intellectual property to the Company and supplies the Company on an exclusive basis in the United States with PEKK material for use in spinal implants. In addition to certain royalties under the Oxford Supply Agreement the Company is obligated to issue binding purchase orders in each quarter of 2021 of at least $150, or $600 in the aggregate. Although the contract extends through 2025, there are no minimum purchase obligations beyond 2021 |
Legal Actions
Legal Actions | 12 Months Ended |
Dec. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Legal Actions | 25. Legal Actions The Company is, from time to time, involved in litigation relating to claims arising out of its operations in the ordinary course of business. Based on the information currently available to the Company, including the availability of coverage under its insurance policies, the Company does not believe that any of these claims that were outstanding as of December 31, 2020 will have a material adverse impact on its financial position or results of operations. The Company’s accounting policy is to accrue for legal costs as they are incurred. OEM Purchase Agreement Working Capital Dispute — On December 1, 2020, pursuant to the OEM Purchase Agreement, we received a notice from the Buyer indicating that a post-closing adjustment in an amount of up to $14 million may be owed in respect of the working capital adjustment paid at closing. We disagree with Buyer’s proposed post-closing adjustment and are disputing the adjustment in accordance with the terms of the OEM Purchase Agreement. The Company updated the working capital adjustment for $1,376 which was agreed with the Buyer as part of the adjustment report and recorded the amount in Q4, 2020 in the discontinued operations. Coloplast — RTI Surgical, Inc., as predecessor to the Company, is presently named as co-defendant along with other companies in a small percentage of the transvaginal surgical mesh (“TSM”) mass tort claims being brought in various state and federal courts. The TSM litigation has as its catalyst various Public Health Notifications issued by the FDA with respect to the placement of certain TSM implants that were the subject of 510k regulatory clearance prior to their distribution. The Company does not process or otherwise manufacture for distribution in the U.S. any implants that were the subject of these FDA Public Health Notifications. The Company denies any allegations against it and intends to continue to vigorously defend itself. In addition to claims made directly against the Company, Coloplast, a distributor of TSM’s and certain allografts processed and private labeled for them under a contract with the Company, has also been named as a defendant in individual TSM cases in various federal and state courts. Coloplast requested that the Company indemnify or defend Coloplast in those claims which allege injuries caused by the Company’s allograft implants, and on April 24, 2014, Coloplast sued RTI Surgical, Inc. in the Fourth Judicial District of Minnesota for declaratory relief and breach of contract. On December 11, 2014, Coloplast entered into a settlement agreement with RTI Surgical, Inc. and Tutogen Medical, Inc. (the “Company Parties”) resulting in dismissal of the case. Under the terms of the settlement agreement, the Company Parties are responsible for the defense and indemnification of two categories of present and future claims: (1) tissue only (where Coloplast is solely the distributor of Company processed allograft tissue and no Coloplast-manufactured or distributed synthetic mesh is identified) (“Tissue Only Claims”), and (2) tissue plus non-Coloplast synthetic mesh (“Tissue-Non-Coloplast Claims”) (the Tissue Only Claims and the Tissue-Non-Coloplast Claims being collectively referred to as “Indemnified Claims”). As of December 31, 2020, there are a cumulative total of 1,157 Based on the current information available to the Company, the impact that current or any future TSM litigation may have on the Company cannot be reasonably estimated. LifeNet — On June 27, 2018, LifeNet Health, Inc. (“LifeNet”) filed a patent infringement lawsuit in the United States District Court for the Middle District of Florida (since moved to the Northern District of Florida) claiming infringement of five of its patents by the Company’s predecessor RTI Surgical, Inc. The suit requests damages, enhanced damages, reimbursement of costs and expenses, reasonable attorney fees, and an injunction. The asserted patents are expired. On April 7, 2019, the Court granted the Company’s request to stay the lawsuit pending the U.S. Patent Trial and Appeal Board’s (PTAB) decision whether to institute review of the patentability of LifeNet’s patents. On August 12, 2019 the PTAB instituted review of three LifeNet patents, and on September 3, 2019 the PTAB instituted review of the remaining two. On August 4, 2020 and August 26, 2020, the PTAB issued final written decisions finding that certain claims were shown to be unpatentable and others not. Neither party appealed the PTAB’s decisions with respect to the three LifeNet patents on which the PTAB instituted review on August 12, 2019. With respect to the remaining two LifeNet patents, Surgalign filed Notices of Appeal with the Federal Circuit on October 27, 2020 and LifeNet filed a Notice of Cross-appeal on November 9, 2020. In connection with the Transactions, liabilities related to these claims remained a liability retained by the Company. The Company continues to believe the suit is without merit and will vigorously defend its position. Based on the current information available to the Company, the impact that current or any future litigation may have on the Company cannot be reasonably estimated. Securities Class Action— There is currently ongoing stockholder litigation related to the Company’s Investigation (as defined below). A class action complaint was filed by Patricia Lowry, a purported shareholder of the Company, against the Company, and certain current and former officers of the Company, in the United States District Court for the Northern District of Illinois on March 23, 2020 asserting claims under Sections 10(b) and 20(a) the Securities Exchange Act of 1934 (the “Exchange Act”) and demanding a jury trial (“Lowry Action”). The court appointed a different shareholder as Lead Plaintiff and she filed an amended complaint on August 31, 2020. On October 15, 2020, the Company and the other-named defendants moved to dismiss the amended complaint and those motions are now ripe for review. Derivative Lawsuits —Three derivative lawsuits have also been filed on behalf of the Company, naming it as a nominal defendant, and demanding a jury trial. On June 5, 2020, David Summers filed a shareholder derivative lawsuit (“ Summers Action”) against certain current and former directors and officers of the Company (as well as the Company as a nominal defendant), in the United States District Court for the Northern District of Illinois asserting statutory claims under Sections 10(b), 14(a) and 20(a) of the Exchange Act, as well as common law claims for breach of fiduciary duty, unjust enrichment and corporate waste. Thereafter, two similar shareholder derivative lawsuits asserting many of the same claims were filed in the same court against the same current and former directors and officers of the Company (as well as the Company as a nominal defendant). The three derivative lawsuits have been consolidated into the first-filed Summers Action. On September 6, 2020 the Court entered an order staying the Summers Action pending resolution of the motions to dismiss in the Lowry Action. In the future, we may become subject to additional litigation or governmental proceedings or investigations that could result in additional unanticipated legal costs regardless of the outcome of the litigation. If we are not successful in any such litigation, we may be required to pay substantial damages or settlement costs. Based on the current information available to the Company, the impact that current or any future stockholder litigation may have on the Company cannot be reasonably estimated. |
Regulatory Actions
Regulatory Actions | 12 Months Ended |
Dec. 31, 2020 | |
Text Block [Abstract] | |
Regulatory Actions | 26. Regulatory Actions SEC Investigation — As previously disclosed in the Company’s Current Report on Form 8-K filed with the SEC on March 16, 2020, and the Form 10-K filed with the SEC on June 8, 2020, the Audit Committee of the Board of Directors, with the assistance of independent legal and forensic accounting advisors, conducted an internal investigation of matters relating to the Company’s revenue recognition practices for certain contractual arrangements, primarily with customers of the Company’s formerly-owned OEM Businesses, including the accounting treatment, financial reporting and internal controls related to such arrangements (the “Investigation”). The Investigation also examined transactions to understand the practices related to manual journal entries for accrual and reserve accounts. As a result of the Investigation, the Audit Committee concluded that the Company would restate its previously issued audited financial statements for fiscal years 2018, 2017 and 2016, selected financial data for fiscal years 2015 and 2014, the unaudited financial statements for the quarterly periods within these years commencing with the first quarter of 2016, as well as the unaudited financial statements for the quarterly periods within the 2019 fiscal year. The Investigation was precipitated by an investigation by the U.S. Securities and Exchange Commission initially related to the periods 2014 through 2016 (the “SEC Investigation”). The SEC Investigation is ongoing and the Company is cooperating with the SEC. The Company has contacted the SEC regarding a potential settlement of the SEC Investigation and is awaiting a response. Based on the current information available to the Company the financial or other impact of the SEC Investigation cannot be reasonably determined. Environmental Protection Agency— On January 28, 2020, RTI, as predecessor to the Company, received an Opportunity to Show Cause letter from the United States Environmental Protection Agency (“EPA”). The letter alleged potential violations of hazardous waste regulations at the Company’s Alachua, Florida facilities based on a November 20, 2019 inspection conducted by EPA, and offered the Company the opportunity to meet with EPA to explain why EPA should not take any formal enforcement action. The Company held a virtual meeting with EPA on May 19, 2020 to respond to EPA’s allegations. During subsequent discussions, EPA indicated that it intended to impose a penalty on the Company related to the allegations in the letter. The Company subsequently recorded a liability for the amount the EPA communicated it intended to impose on the Company related to the allegations in the letter. Subsequently, the Company provided additional information demonstrating its compliance with State and Federal requirements related to hazardous waste management. In January 2021, the EPA notified the Company that it would not be bringing an enforcement action against the Company at this time. As a result of this notice, the Company reversed the accrued liability relating to this matter, resulting in no impact on the Company’s consolidated statement of comprehensive loss for the year ended December 31, 2020. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 27. Related Party Transactions The Company’s related parties include: i) a person who is or was (since the beginning of the last fiscal year for which the Company has filed a Form 10-K and proxy statement, even if he or she does not presently serve in that role) an executive officer, director or nominee for election as a director; ii) granter than five percent beneficial owner of the Company’s common stock; or iii) immediate family member of any of the foregoing. The Company did not enter into any related party transactions in 2018 and 2019. In 2020, the Company has entered into the following related party transactions: The Holo Surgical Acquisition As discussed in Note 9, on September 29, 2020, the Company entered into the Holo Purchase Agreement, pursuant to which, among other things, the Company consummated the Acquisition on October 23, 2020. As consideration for the Acquisition, the Company paid to Seller $30,000 in cash and issued to Seller 6,250,000 shares of its common stock with a fair value of $12,250. In addition, the Seller will be entitled to receive contingent consideration from the Company valued at $50,632 as of October 23, 2020, which must be first paid in shares of our common stock (in an amount up to 8,650,000 shares) and then paid in cash thereafter, contingent upon and following the achievement of certain regulatory, commercial and utilization milestones by specified time periods occurring up to the sixth (6th) anniversary of the Closing Date. Dr. Pawel Lewicki, a member of the Company’s board of directors, indirectly owns approximately 57.5% of the outstanding ownership interests in the Seller. Dr. Lewicki was appointed to the Company’s board of directors on November 23, 2020. Simpson Consulting Agreement On July 15, 2020, the Board appointed Stuart F. Simpson to serve as the Chairman of the Board, effective immediately upon consummation of the transactions contemplated by the Holo Surgical Purchase Agreement. On July 20, 2020, Mr. Simpson entered into a consulting agreement (the “Consulting Agreement”) with the Company, pursuant to which he will provide consulting services to the Company. The Consulting Agreement has an initial term of three years, but may be extended with the mutual agreement of the parties. Mr. Simpson will be entitled to an annual consulting fee of $275 per year during the term of the Consulting Agreement, payable in 12 equal monthly installments, and the Company agreed to enter into a restricted stock award agreement, pursuant to which the Company will grant to Mr. Simpson a restricted stock award equal to $825. The restricted stock grant shall vest in three equal amounts on the first, second and third anniversaries of the grant date. These amounts are in lieu of any amounts Mr. Simpson would otherwise receive as a director. |
Quarterly Results of Operations
Quarterly Results of Operations (Unaudited) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results of Operations (Unaudited) | 28. Quarterly Results of Operations (Unaudited) The following tables sets forth the quarterly results of operations for the years ended December 31, 2020 and 2019: Year Ended December 31, 2020 First Second Third Forth Quarter Quarter Quarter Quarter Quarter Ended: Revenues $ 27,102 $ 20,534 $ 27,926 $ 26,187 Gross profit 17,878 11,065 16,034 12,770 Loss from continuing operations (24,540 ) (24,946 ) (26,653 ) (118,056 ) Income (loss) from discontinued operations 6,677 (13,618 ) 149,338 18,015 Net (loss) income (17,863 ) (38,564 ) 122,685 (100,041 ) Net loss from continuing operations per common share - basic $ (0.34 ) $ (0.34 ) $ (0.36 ) $ (1.51 ) Net loss from continuing operations per common share - diluted $ (0.34 ) $ (0.34 ) $ (0.36 ) $ (1.51 ) Net income (loss) from discontinued operations per common share - basic $ 0.09 $ (0.19 ) $ 2.04 $ 0.23 Net income (loss) from discontinued operations per common share - diluted $ 0.09 $ (0.19 ) $ 2.04 $ 0.23 Net (loss) income per common share - basic $ (0.25 ) $ (0.53 ) $ 1.68 $ (1.28 ) Net (loss) income per common share - diluted $ (0.25 ) $ (0.53 ) $ 1.68 $ (1.28 ) Year Ended December 31, 2019 First Second Third Forth Quarter Quarter Quarter Quarter Quarter Ended: Revenues $ 24,400 $ 32,747 $ 28,702 $ 31,574 Gross profit 16,915 23,128 21,095 23,508 Loss from continuing operations (18,212 ) (14,003 ) (16,972 ) (199,591 ) Income from discontinued operations 8,861 14,191 11,834 2,250 Net (loss) income (9,351 ) 188 (5,138 ) (197,341 ) Net loss from continuing operations per common share - basic $ (0.29 ) $ (0.19 ) $ (0.23 ) $ (2.76 ) Net loss from continuing operations per common share - diluted $ (0.29 ) $ (0.16 ) $ (0.23 ) $ (2.76 ) Net income from discontinued operations per common share - basic $ 0.14 $ 0.19 $ 0.16 $ 0.04 Net income from discontinued operations per common share - diluted $ 0.14 $ 0.16 $ 0.16 $ 0.04 Net (loss) income per common share - basic $ (0.15 ) $ 0.00 $ (0.07 ) $ (2.72 ) Net (loss) income per common share - diluted $ (0.15 ) $ 0.00 $ (0.07 ) $ (2.72 ) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 29. Subsequent Events The Company evaluated subsequent events as of the issuance date of the consolidated financial statements as defined by FASB ASC 855, Subsequent Events Public Offering On February 1, 2021, the Company closed a public offering and sold a total 28,700,000 shares of its common stock at a price of $1.50 per share, less the underwriter discounts and commissions. The Company received net proceeds of $40,467 from the offering after deducting the underwriting discounts and commission of $2,583. The shares of the common stock purchased in the offering (other than stock purchased by directors and executive officers of the Company) are not subject to lock-up restrictions. The total fees and expenses in connection of the offering, excluding underwriting discounts and commissions, were approximately $3,208. The Company has also agreed to reimburse the underwriters for certain expenses incurred by them in connection with the offering, including up to $25 relating to the clearance of this offering with the Financial Industry Regulatory Authority. Some of these fees and expenses were recorded in Other Receivable in the consolidated balance sheet as of December 31, 2020 and shall be reclassified as a reduction of equity in the first quarter of 2021. San Diego Lease On March 12, 2021, the Company entered into a Lease (the “Lease”) with SNH Medical Office Properties Trust, a Maryland real estate investment trust (the “Landlord”), to house the Company’s offices, lab and innovation space (the “Building”) in San Diego, California. The initial term of the Lease is twelve (12) years, with one (1) extension option for a period of seven (7) years. Under the terms of the Lease, the Company will lease an aggregate of approximately 94,457 rentable square feet building located at 3030 Science Park Road, San Diego, California (the “Premises”). The Landlord will make improvements over the next 12 months, after which occupancy is expected to be delivered to the Company. Aggregate payments towards base rent for the Premises over the term of the lease will be approximately $64.6 million, including 13-months of rent abatement. The Company will recognize the lease assets and liabilities when the Landlord makes the underlying asset available to the Company. Concurrent with the Company’s execution of the Lease, as a security deposit, the Company delivered to the Landlord a payment in the amount of $2.5 million. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2020 | |
Valuation And Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | Schedule II Valuation and Qualifying Accounts Years Ended December 31, 2020, 2019 and 2018 (Dollars in thousands ) Balance at Charged to Deductions, Balance at Beginning of Costs and Write-offs, or End of Description Period Expenses Payments Period For the year ended December 31, 2020: Allowance for doubtful accounts $ 4,803 $ 3,584 $ 184 $ 8,203 Allowance for product returns 106 246 247 105 Deferred tax asset valuation allowance 48,115 (2,638 ) 351 45,126 For the year ended December 31, 2019: Allowance for doubtful accounts 1,865 2,541 (397 ) 4,803 Allowance for product returns 478 — 372 106 Deferred tax asset valuation allowance 3,093 45,022 — 48,115 For the year ended December 31, 2018: Allowance for doubtful accounts 1,185 827 147 1,865 Allowance for product returns 441 37 — 478 Deferred tax asset valuation allowance 1,529 2,368 804 3,093 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation — The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Surgalign, Inc., Paradigm Spine, LLC (“Paradigm”), Pioneer Surgical Technology, Inc. (“Pioneer Surgical”), Zyga Technology, Inc. (“Zyga”) and Holo Surgical Inc. (“Holo Surgical”). The financial positions and operating results of the disposed OEM Businesses have been reported as discontinued operations in the consolidated financial statements in the current as well as prior comparative periods. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates —The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions relating to inventories, receivables, long-lived assets, contingent considerations and litigation are made at the end of each financial reporting period by management. Actual results could differ from those estimates. |
Foreign Currency Translation | Foreign Currency Translation —The functional currency of the Company’s foreign subsidiaries is the Euro. Assets and liabilities of the foreign subsidiaries are translated at the period end exchange rate while revenues and expenses are translated at the average exchange rate for the period. The resulting translation adjustments, representing unrealized, noncash gains and losses are recorded and presented as a component of comprehensive loss. Gains and losses resulting from transactions of the Company and its subsidiaries, which are made in currencies different from their own, are included in income or loss as they occur and are included in other expenses in the consolidated statements of comprehensive loss. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments —The estimated fair value of financial instruments disclosed in the consolidated financial statements has been determined by using available market information and appropriate valuation methodologies. The carrying value of all current assets and current liabilities approximates fair value because of their short-term nature. |
Cash and Cash Equivalents | Cash and Cash Equivalents — The Company considers all funds in banks and short-term highly liquid investments with an original maturity of three months or less to be cash and cash equivalents. Cash equivalents comprise overnight repurchase agreements. Cash balances are held at a few financial institutions and usually exceed insurable amounts. The Company mitigates this risk by depositing its uninsured cash in major well capitalized financial institutions. At December 31, 2020 and 2019, the Company had no cash equivalents. |
Accounts Receivable Allowances | Accounts Receivable Allowances — Since the adoption of the ASU 2016-13, Financial Instruments — Credit Losses (Topic326): Measurement of Credit Losses on Financial Instruments ( the “CECL standards”) on January 1, 2020, the Company maintains the allowance for estimated losses resulting from the inability of its customers to make required payments. The allowance represents the current estimate of lifetime expected credit losses over the remaining duration of existing accounts receivable considering current market conditions and supportable forecasts when appropriate. The estimate is a result of the Company’s ongoing evaluation of collectability, customer creditworthiness, historical levels of credit losses, and future expectations. Write-off activity and recoveries for the years were not material. Before 2020, the Company maintained allowances for doubtful accounts based on the Company’s review and assessment of payment history and its estimate of the ability of each customer to make payments on amounts invoiced. If the financial condition of any of its customers were to deteriorate, additional allowances might be required. From time to time the Company must adjust its estimates. Changes in estimates of the collection risk related to accounts receivable can result in decreases and increases to current period net loss. |
Inventories | Inventories — Inventories are stated at the lower of cost or market, with cost determined using the first-in, first-out method. Non-current inventory represents those the Company anticipates will not be sold within the next year. Non-current inventory is estimated by comparing historical and projected sales trends and inventory quantities on hand. Inventory is evaluated for obsolescence and excess quantities by analyzing inventory levels, historical loss trends, expected product lives, product at risk of expiration, sales levels by product and projections of future sales demand. The Company’s calculation of the amount of inventory that is excess, obsolete, or will expire prior to sale has two components: 1) a demand or consumption based component that compares projected sales, expected consumption and historical sales to inventory quantities on hand; and 2) for expiring inventory we assesses the risk related to inventory that is near expiration by analyzing historical expiration trends to project inventory that will expire prior to being sold. The Company’s demand based consumption model assumes that inventory will be sold on a first-in-first-out basis. The Company’s metal inventory does not expire and can be re-sterilized and sold; however, the Company assesses quantities on hand, historical sales, projected sales, projected consumption, the number of forecasted years, safety stock and those products we have determined to sunset when calculating the estimate. |
Property and Equipment | Property and equipment —Property and equipment are stated at cost less accumulated depreciation. The cost of leasehold improvements is amortized on the straight-line method over the shorter of the lease term or the estimated useful life of the asset. Included in property and equipment are costs related to purchased software that are capitalized. Surgical instruments which are included in property and equipment are handheld devices used by surgeons during implant procedures. The Company retains title to the surgical instruments. Depreciation for surgical instruments is included in selling and marketing expenses in the accompanying consolidated statements of comprehensive loss. Depreciation is computed on the straight-line method over the following estimated useful lives of the assets: Processing equipment 7 to 10 years Office equipment, furniture and fixtures 5 to 7 years Computer equipment and software 3 to 7 years Surgical instruments 1 year |
Derivative Instruments | Derivative Instruments— The Company reviews debt agreements for embedded features. If these features are not clearly and closely related to the debt host, they meet the definition of a derivative and require bifurcation from the host contract. All derivative instruments, including embedded derivatives are recorded on the balance sheet at their respective fair values. The Company will adjust the carrying value of the derivative liability to fair value at each subsequent reporting date. The changes in the fair value of the derivatives are recorded in the period they occur. |
Debt Issuance Costs | Debt Issuance Costs— Debt issuance costs include costs incurred to obtain financing and are amortized using the straight-line method, which approximates the effective interest method, over the life of the related debt. Debt issuance costs related to a recognized debt liability are presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. |
Long-Lived Assets | Long-Lived Assets —The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. Recoverability is measured by a comparison of the carrying amount to the net undiscounted cash flows expected to be generated by the asset. An impairment loss would be recorded for the excess of net carrying value over the fair value of the asset impaired. The fair value is estimated based on expected discounted future cash flows. The results of impairment tests are subject to management’s estimates and assumptions of projected cash flows and operating results. Changes in assumptions or market conditions could result in a change in estimated future cash flows and the likelihood of materially different reported results. Because the Company’s forecasted cash flow is negative, Long-lived assets, including property and equipment and intangible assets subject to amortization were impaired and written down to their estimated fair values in 2020 and 2019. |
Goodwill | Goodwill — Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350 , Goodwill and Other Intangible Assets (“ASC 350”) requires companies to test goodwill for impairment on an annual basis at the reporting unit level (or an interim basis if an event occurs that might reduce the fair value of a reporting unit below its carrying value). The Company has one reporting unit and the annual impairment test was performed at each year-end unless indicators of impairment are present and require more frequent testing. Goodwill is tested for impairment annually by comparing the fair value of the reporting unit to its carrying amount, including goodwill. The income approach employs a discounted cash flow model that considers: 1) assumptions that marketplace participants would use in their estimates of fair value, including the cash flow period, terminal values based on a terminal growth rate and the discount rate; 2) current period actual results; and 3) projected results for future periods that have been prepared and approved by senior management of the Company. The market approach employs market multiples from guideline public companies operating in our industry. Estimates of fair value are derived by applying multiples based on revenue and earnings before interest, taxes, depreciation and amortization (“EBITDA”) adjusted for size and performance metrics relative to peer companies. The cost approach considers the replacement cost adjusted for certain factors. Certain balance sheet items were adjusted to fair value before being utilized in estimating the value of the reporting unit under the cost approach, including inventory, property and equipment, right of use assets, and other intangible assets. All three approaches used in the analysis have a degree of uncertainty. Potential events or changes in circumstances which could impact the key assumptions used in our goodwill impairment evaluation are as follows: • Change in peer group or performance of peer group companies • Change in the Company’s markets and estimates of future operating performance • Change in the Company’s estimated market cost of capital • Change in implied control premiums related to acquisitions in the medical device industry Goodwill represents the excess of purchase price over fair value of tangible net assets of acquired businesses at the acquisition date, after amounts allocated to other identifiable intangible assets. Factors that contribute to the recognition of goodwill include securing synergies that are specific to our business, not available to other market participants, and are expected to increase revenues and profits; acquisition of a talented workforce; cost savings opportunities; the strategic benefit of expanding our presence in core and adjacent markets; and diversifying our product portfolio. |
Other Intangible Assets | Other Intangible Assets —Other intangible assets, which constitutes finite lives assets, generally consist of patents, acquired exclusivity rights, licensing rights, distribution agreements, and procurement contracts. Patents are amortized on the straight-line method over the shorter of the remaining protection period or estimated useful lives of between 8 and 16 years. Tradenames, procurement contracts, customer lists, acquired exclusivity rights, and distribution agreements are amortized over estimated useful lives of between 5 to 25 years |
Revenue Recognition | Revenue Recognition — The Company recognizes revenue upon transfer of control of promised products in an amount that reflects the consideration it expects to receive in exchange for those products. The Company typically transfers control at a point in time upon shipment or delivery of the implants for direct sales, or upon implantation for sales of consigned inventory. The customer is able to direct the use of, and obtain substantially all of the benefits from, the implant at the time the implant is shipped, delivered, or implanted, respectively based on the terms of the contract. The Company’s performance obligations consist mainly of transferring control of implants identified in the contracts. The Company’s transaction price is generally fixed. Any discounts or rebates are estimated at the inception of the contract and recognized as a reduction of the revenue. Some of the Company’s contracts offer assurance-type warranties in connection with the sale of a product to a customer. Assurance-type warranties provide a customer with assurance that the related product will function as the parties intended because it complies with agreed-upon specifications. Such warranties do not represent a separate performance obligation and are not material to the condensed consolidated financial statements. |
Stock-Based Compensation Plans | Stock-Based Compensation Plans —The Company accounts for its stock-based compensation plans in accordance with ASC 718, Accounting for Stock Compensation (“ASC 718”). ASC 718 requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors, including employee stock options and restricted stock. Under the provisions of ASC 718, stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense on a straight-line basis over the requisite service period of the entire award (generally the vesting period of the award). The Company uses the Black-Scholes model to value its stock option grants under ASC 718 and expenses the related compensation cost using the straight-line method over the vesting period. The fair value of stock options is determined on the grant date using assumptions for the expected term, expected volatility, dividend yield, and the risk free interest rate. The term assumption is primarily based on the contractual vesting term of the option and historic data related to exercise and post-vesting cancellation history experienced by the Company. The Company uses the simplified method for estimating the expected term used to determine the fair value of options under ASC 718. The expected term is determined separately for options issued to the Company’s directors and to employees. The Company’s anticipated volatility level is primarily based on the historic volatility of the Company’s common stock. The Company’s model includes a zero dividend yield assumption, as the Company has not historically paid nor does it anticipate paying dividends on its common stock. The risk free interest rate approximates recent U.S. Treasury note auction results with a similar life to that of the option. The Company’s model does not include a discount for post-vesting restrictions, as the Company has not issued awards with such restrictions. The period expense is then determined based on the valuation of the options, and at that time an estimated forfeiture rate is used to reduce the expense recorded. The Company’s estimate of pre-vesting forfeitures is primarily based on the recent historical experience of the Company, and is adjusted to reflect actual forfeitures as the options vest. The Company uses a Monte Carlo simulation model to estimate the fair value of restricted stock awards that contain a market condition. |
Research and Development Costs | Research and Development Costs —Research and development costs, including the cost of research and development conducted for others and the cost of contracted research and development, are expensed as incurred. |
Income Taxes | Income Taxes —The Company uses the asset and liability method of accounting for income taxes. Deferred income taxes are recorded to reflect the tax consequences on future years for differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to amounts which are more likely than not to be realized. |
Contingent Consideration | Contingent Consideration — The Company accounts for the contingent consideration related to the Holo Acquisition as a liability in accordance with the guidance of ASC 480, Distinguishing Liabilities from Equity , because the contingent consideration represents a conditional obligation that has a fixed monetary value known at inception and we may settle by issuing a variable number of our equity shares. The liability is recorded at its fair value at inception and shall be marked to market subsequently at the end of each reporting period, with any change recognized in the current earnings. See Note 9 for further discussion related to the Holo Acquisition. |
Treasury Stock | Treasury Stock — The Company may periodically repurchase shares of its common stock from employees for the satisfaction of their individual payroll tax withholding upon vesting of restricted stock awards in connection with the Company’s incentive plans. The Company’s repurchases of common stock are recorded at the stock price on the vesting date of the common stock. The Company repurchased 159,354, 64,044, and 107,109 shares of its common stock for $515, $272, and $479 for the years ended December 31, 2020, 2019, and 2018, respectively |
Earnings Per Share | Earnings Per Share —Basic earnings per share (“EPS”) is computed by dividing earnings attributable to common stockholders by the weighted-average number of common shares outstanding for the periods. Diluted EPS reflects the incremental shares issuable upon the assumed exercise of securities that could share in earnings. Shares whose issuance is contingent upon the satisfaction of certain conditions shall be considered outstanding and included in the computation of diluted EPS as follows: a. If all necessary conditions have been satisfied by the end of the period (the events have occurred), those shares shall be included as of the beginning of the period in which the conditions were satisfied (or as of the date of the contingent stock agreement, if later). b. If all necessary conditions have not been satisfied by the end of the period, the number of contingently issuable shares included in diluted EPS shall be based on the number of shares, if any, that would be issuable if the end of the reporting period were the end of the contingency period (for example, the number of shares that would be issuable based on current period earnings or period-end market price) and if the result would be dilutive. Those contingently issuable shares shall be included in the denominator of diluted EPS as of the beginning of the period (or as of the date of the contingent stock agreement, if later). |
Recently Issued and Adopted Accounting Standards | Recently Issued and Adopted Accounting Standards Reference Rate Reform — In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by the discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank offered rates. This guidance is effective beginning on March 12, 2020 through December 31, 2022. The Company adopted ASU 2020-04 and it did not have an impact on its consolidated financial statements. Income Taxes — In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 was issued to reduce the complexity of accounting for income taxes for those entities that fall within the scope of the accounting standard. The guidance is to be applied using a prospective method, excluding amendments related to franchise taxes, which should be applied on either a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. The Company early adopted ASU 2019-12 on January 1, 2020, and there was no material impact on the Company’s consolidated financial statements. Financial Instruments — In May 2019, the FASB issued ASU No. 2019-05 Financial Instruments — Credit Losses (Topic 326) which provides relief to certain entities adopting ASU 2016-13 (discussed below). The amendments accomplish those objectives by providing entities with an option to irrevocably elect the fair value option in Subtopic 825-10, applied on an instrument-by-instrument basis for eligible instruments, that are within the scope of Subtopic 326-20, upon adoption of Topic 326. The fair value option election does not apply to held-to-maturity debt securities. ASU 2019-05 has the same transition as ASU 2016-13 and is effective for periods beginning after December 15, 2019, with adoption permitted after this update. The Company adopted ASU 2019-05 on January 1, 2020 and it did not have an impact on the consolidated financial statements. In April 2019, the FASB issued ASU No. 2019-04 Codification Improvements to Topic 326, Financial Instruments — Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities; Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Credit losses for trade receivables is determined based on historical information, current information and reasonable and supportable forecasts. The Company has concluded that the adoption of the standard was not material as the composition of the trade receivables at the reporting date is consistent with that used in developing the historical credit-loss percentages. Further, the risk characteristics of the Company’s customer and composition of the portfolio have not changed significantly over time. Fair Value Measurement — In August 2018, the FASB issued Accounting Standards Update (“ASU”) 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement.” This ASU modifies the disclosure requirements on fair value measurements by removing, modifying, or adding certain disclosures. ASU 2018-13 is effective for the Company beginning January 1, 2020 (with early adoption permitted). Certain disclosures in ASU 2018-13 are required to be applied on a retrospective basis and others on a prospective basis. The Company adopted ASU 2018-13 and it did not have an impact on the consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Estimated Useful Lives of Assets | Depreciation is computed on the straight-line method over the following estimated useful lives of the assets: Processing equipment 7 to 10 years Office equipment, furniture and fixtures 5 to 7 years Computer equipment and software 3 to 7 years Surgical instruments 1 year |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of Operating Leases | The components of operating lease expense were as follows: For the Year Ended For the Year Ended December 31, 2020 December 31, 2019 Operating lease cost $ 1,179 $ 1,108 Short-term operating lease cost — 36 Total operating lease cost $ 1,179 $ 1,144 |
Schedule of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to operating leases was as follows: For the Year Ended For the Year Ended December 31, 2020 December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities $ 1,313 $ 1,007 ROU assets obtained in exchange for lease obligations 242 103 |
Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to operating leases was as follows: Balance at Balance at Balance Sheet Classification December 31, 2020 December 31, 2019 Assets: Right-of-use assets Other assets - net $ 1,425 $ 1,903 Liabilities: Current Accrued expenses $ 650 $ 967 Noncurrent Other long-term liabilities 1,200 1,487 Total operating lease liabilities $ 1,850 $ 2,454 |
Schedule of Maturities of Operating Lease Liabilities | As of December 31, 2020, maturities of operating lease liabilities were as follows: Balance at Maturity of Operating Lease Liabilities December 31, 2020 2021 $ 684 2022 337 2023 217 2024 173 2025 162 2026 and beyond 557 Total future minimum lease payments 2,130 Less imputed interest (280 ) Total $ 1,850 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Schedule of Assets and Liabilities, Financial Results and Operating and Investing Cash Flows of Discontinued Operations | The following table presents the assets and liabilities of the discontinued operations as of December 31, 2019: As of December 31, 2019 Carrying amounts of the major classes of assets included in discontinued operations: Accounts receivable - net $ 36,072 Inventories 99,575 Prepaid and other current assets 2,735 Total current assets 138,382 Property and equipment - net 69,102 Goodwill 55,384 Other intangible assets - net 10,492 Other assets - net 873 Total noncurrent assets 135,851 Total assets of discontinued operations $ 274,233 Carrying amounts of the major classes of liabilities included in discontinued operations: Accounts payable $ 19,890 Accrued expenses 17,814 Current portion of deferred revenue 2,748 Current portion of long-term obligations 174,177 Total current liabilities 214,629 Other long-term liabilities 285 Total liabilities of discontinued operations $ 214,914 The following table presents the financial results of the discontinued operations: Year Ended December 31, Year Ended December 31, Year Ended December 31, 2020 2019 2018 Major classes of line items constituting net income from discontinued operations: Revenues $ 87,192 $ 190,961 $ 188,250 Costs of goods sold 49,678 104,482 107,126 Gross profit 37,514 86,479 81,124 Expenses: Marketing, general and administrative 12,889 22,279 21,572 Severance and restructuring costs 604 - 2,035 Transaction and integration expenses 23,598 3,160 15 Cardiothoracic closure business divestiture contingency consideration - - (3,000 ) Total operating expenses 37,091 25,439 20,622 Operating income 423 61,040 60,502 Other expense (income): Interest expense 14,965 12,571 2,771 Loss on extinguishment of debt 2,686 - 309 Derivative loss 12,641 - - Foreign exchange (gain) loss (3 ) 17 5 Total other expense - net 30,289 12,588 3,085 (Loss) income from discontinued operations (29,866 ) 48,452 57,417 Gain on sale of net assets of discontinued operations 209,800 - - Income from discontinued operations before income tax provision 179,934 48,452 57,417 Income tax provision (19,522 ) (11,316 ) (10,891 ) Net income on discontinued operations $ 160,412 $ 37,136 $ 46,526 Total operating and investing cash flows of discontinued operations for the years ended December 31, 2020, 2019 and 2018 are comprised of the following, which exclude the effect of income taxes: Year Ended December 31, Year Ended December 31, Year Ended December 31, 2020 2019 2018 Significant operating non-cash reconciliation items: Depreciation and amortization $ 2,125 $ 4,466 $ 5,120 Provision for bad debts and product returns $ 456 $ 101 $ 857 Provision for inventory write-downs $ — $ 6,340 $ 7,142 Revenue recognized due to change in deferred revenue $ (2,618 ) $ (4,906 ) $ (4,958 ) Deferred income tax (benefit) provision $ (1,609 ) $ (3,989 ) $ 3,682 Stock-based compensation $ 792 $ 540 $ 374 Gain on sale of discontinued assets, net $ (209,800 ) $ — $ — Paid in kind interest expense $ — $ 4,408 $ — Cardiothoracic closure business divestiture contingency consideration $ — $ — $ (3,000 ) Loss on extinguishment of debt $ 2,686 $ — $ — Amortizations of debt issuance costs $ 283 $ — $ — Amortizations of debt discount $ 2,479 $ — $ — Significant investing items: Purchases of property and equipment $ (1,867 ) $ (6,866 ) $ (6,200 ) Patent and acquired intangible asset costs $ (419 ) $ (578 ) $ (1,028 ) Proceeds from sale of OEM Businesses $ 437,097 $ — $ — Proceeds from cardiothoracic closure business divestiture $ — $ — $ 3,000 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Schedule of Total Revenue by Geographical Region | The following table represents total revenue by geographical region for the years ended December 31, 2020, 2019 and 2018: Year Ended Year Ended Year Ended December 31, 2020 December 31, 2019 December 31, 2018 Revenues: Domestic $ 85,612 $ 97,703 $ 78,580 International 16,137 19,720 13,532 Total revenues from contracts with customers $ 101,749 $ 117,423 $ 92,112 |
Acquisition of Paradigm Spine_2
Acquisition of Paradigm Spine, LLC (Tables) - Paradigm Spine [Member] | 12 Months Ended |
Dec. 31, 2020 | |
Acquisition Purchase Price | The purchase price was financed as follows: Cash proceeds from second lien credit agreement $ 100,000 Fair market value of securities issued 60,730 Fair market value of contingent earnout 72,177 Total purchase price $ 232,907 |
Summary of Final Allocation of Total Consideration to Tangible and Intangible Assets and Liabilities | The table below represents the final allocation of the total purchase price to Paradigm ’s tangible and intangible assets and liabilities fair values as of March 8 , 201 9 . Balance at March 8, 2019 Cash $ 307 Accounts receivable 5,220 Inventories 17,647 Other current assets 934 Property, plant and equipment 379 Other non-current assets 1,079 Current liabilities (6,169 ) Lease liabilities (1,079 ) Net tangible assets acquired 18,318 Other intangible assets 79,000 Goodwill 135,589 Total net assets acquired $ 232,907 |
Pro Forma Information of Operations | The following unaudited pro forma information shows the results of the Paradigm’s operations as though the acquisition had occurred as of the beginning of the prior comparable period, January 1, 2018, (in thousands): For the Year Ended December 31, 2019 2018 Revenues $ 37,374 $ 40,810 Net loss applicable to common shares (16,547 ) (42,550 ) |
Acquisition of Zyga Technolog_2
Acquisition of Zyga Technology, Inc (Tables) - Zyga Technology Inc [Member] | 12 Months Ended |
Dec. 31, 2020 | |
Acquisition Purchase Price | The purchase price was financed as follows: Cash proceeds from revolving credit facility $ 18,000 Cash from RTI Surgical 3,000 Total purchase price $ 21,000 |
Summary of Final Allocation of Total Consideration to Tangible and Intangible Assets and Liabilities | . The table below represents the final allocation of the total consideration to Zyga’s tangible and intangible assets and liabilities fair values as of January 4, 2018. Inventories $ 1,099 Accounts receivable 573 Other current assets 53 Property, plant and equipment 151 Other assets 26 Deferred tax assets 4,715 Current liabilities (947 ) Acquisition contingencies (4,986 ) Net tangible assets acquired 684 Other intangible assets 6,760 Goodwill 13,556 Total net assets acquired $ 21,000 |
Pro Forma Information of Operations | The following unaudited pro forma information shows the results of the Zyga’s operations as though the acquisition had occurred as of the beginning of the prior comparable period, January 1, 2018. For the Year Ended December 31, 2018 Revenues $ 4,809 Net loss applicable to common shares (2,640 ) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stock Options Outstanding, Exercisable and Available for Grant | Stock options outstanding, exercisable and available for grant at December 31, 2020, are summarized as follows: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Life (Years) Value (in thousands, except for share and per share information) Outstanding at January 1, 2020 4,536,461 $ 3.75 Granted 2,161,277 3.12 Exercised (5,000 ) 4.02 Forfeited or expired (1,713,558 ) 4.32 Outstanding at December 31, 2020 4,979,180 $ 3.28 5.30 $ 142 Vested or expected to vest at December 31, 2020 4,979,180 $ 3.28 5.30 $ 142 Exercisable at December 31, 2020 2,806,401 $ 3.45 2.28 $ 6 Available for grant at December 31, 2020 842,608 |
Other Information Concerning Stock Options | Other information concerning stock options are as follows: For the Year Ended December 31, 2020 2019 2018 (in thousands, except for per share information) Weighted average fair value of stock options granted $ 1.21 $ 1.56 $ 2.05 Aggregate intrinsic value of stock options exercised $ 3 $ 161 $ 349 |
Schedule of Weighted-Average Assumptions Used to Determine Fair Value of Options | The following weighted-average assumptions were used to determine the fair value of options under FASB ASC 718: Year Ended December 31, 2020 2019 2018 Expected term (years) 6.50 6.50 6.50 Risk free interest rate 0.62 % 2.54 % 2.75 % Volatility factor 41.62 % 37.73 % 43.74 % Dividend yield - - - |
Unvested Restricted Stock Awards | The following table summarizes information about unvested restricted stock awards as of December 31, 2020: Weighted Average Number of Grant Date Shares Fair Value Unvested at January 1, 2020 1,227,858 $ 4.34 Granted 1,894,543 3.47 Vested (919,330 ) 4.40 Forfeited (305,875 ) 4.19 Unvested at December 31, 2020 1,897,196 $ 3.47 |
Stock-Based Compensation Recognized | For the years ended December 31, 2020, 2019 and 2018, the Company recognized stock-based compensation as follows: For the Year Ended December 31, 2020 2019 2018 Stock-based compensation: Costs of goods sold $ 169 $ 144 $ 132 Marketing, general and administrative 3,980 3,623 4,179 Research and development 72 60 60 Transaction and integration expenses 1,515 - - Total $ 5,736 $ 3,827 $ 4,371 |
Restricted Stock Units [Member] | |
Unvested Restricted Stock Awards | The following table summarizes information about unvested restricted stock units as of December 31, 2020: Weighted Average Number of Grant Date Shares Fair Value Unvested at January 1, 2020 184,582 $ 7.41 Granted — — Vested (85,503 ) 7.41 Forfeited (9,144 ) 7.41 Unvested at December 31, 2020 89,935 $ 7.41 |
Prepaid and Other Current Ass_2
Prepaid and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Schedule of Prepaid and Other Current Assets | Prepaid and Other Current Assets are as follows: For the Year Ended December 31, 2020 2019 Income tax receivable $ 4,836 $ 2,785 Prepaid expenses 1,543 996 Other receivable 3,795 113 Other 110 140 $ 10,284 $ 4,034 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property Plant And Equipment [Abstract] | |
Components of Property and Equipment | Property and equipment are as follows: For the Year Ended December 31, 2020 2019 Processing equipment $ 35 $ 110 Surgical instruments 440 541 Office equipment, furniture and fixtures 34 122 Computer equipment and software 12 16 $ 521 $ 789 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The Company fully impaired its goodwill in 2019. The change in the carrying amount of goodwill for the year ended December 31, 2019, is as follows: For the Year Ended December 31, 2019 Balance at January 1 $ 4,414 Goodwill additions related to acquisitions 135,589 Goodwill impairment (140,003 ) Balance at December 31 $ — |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Common Stock used in Calculation of Basic and Diluted Earnings Per Share | The number of shares of common stock used in the calculation of basic and diluted net loss per common share is presented below: For the Year Ended December 31, 2020 2019 2018 Weighted average basic and dilutive shares 74,403,155 70,150,492 61,031,265 |
Schedule of Number of Potential Dilutive Shares that Excluded Due to Anti-dilutive Effect | The following table includes the number of potential dilutive shares that were excluded due to the anti-dilutive effect: For the Year Ended December 31, 2020 2019 2018 Stock Option (1) 271,351 345,154 1,154,396 RSU and RSA 1,099,018 821,888 344,273 Convertible Series A Preferred Stock 8,400,512 15,152,761 15,152,761 Total 9,770,881 16,319,803 16,651,430 (1) The number of potential dilutive shares does not include out-of-the-money stock options as their exercise prices were above the average stock price during the period. |
Fair Value Information (Tables)
Fair Value Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Summary of Impairments of Long-Lived Assets and Related Post Impairment Fair Values | The following tables summarize impairments of long-lived assets and the related post impairment fair values of the corresponding assets for the years ended December 31, 2020 and 2019: For the Year Ended December 31, 2020 Impairment Fair Value Property and equipment - net $ 11,707 $ - Other intangible assets - net 2,621 - Other assets - net 445 $ 14,773 $ — For the Year Ended December 31, 2019 Impairment Fair Value Property and equipment - net $ 11,655 $ - Other intangible assets - net 85,096 - Other assets - net 201 - $ 96,952 $ — |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Accrued Expenses | Accrued expenses are as follows: For the Year Ended December 31, 2020 2019 Accrued compensation $ 2,268 $ 2,911 Accrued severance and restructuring costs — 136 Accrued distributor commissions 4,113 4,325 Accrued business development expenses — 2,555 Accrued leases 650 967 Accrued acquisition contingency -- Holo 8,996 — Other 5,617 4,205 $ 21,644 $ 15,099 |
Short and Long-Term Obligatio_2
Short and Long-Term Obligations (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Short and Long-Term Obligations | Below is a summary of the short and long-term obligations that were included in discontinued operations as of December 31, 2019: For the Year Ended December 31, 2019 Ares Term loan $ 104,406 JPM facility 71,000 Less unamortized debt issuance costs (1,229 ) Total 174,177 Less current portion 174,177 Long-term portion $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Summary of Pre-Tax Income | The Company’s pre-tax income consists of the following components: Year Ended December 31, 2020 2019 2018 Pre-tax income: Domestic (U.S., state and local) $ (191,455 ) $ (242,896 ) $ (64,808 ) Foreign (6,226 ) 39 - Total pre-tax income (197,681 ) (242,857 ) (64,808 ) |
Schedule of Income Tax Benefit (Provision) | The Company’s income tax benefit (provision) consists of the following components: For the Year Ended December 31, 2020 2019 2018 Current: Federal $ 3,671 $ 312 $ 398 State - (89 ) (40 ) International 13 (138 ) - Total current 3,684 85 358 Deferred: Federal 99 (2,456 ) 11,232 State - (169 ) (419 ) International (297 ) (3,381 ) 3,988 Total deferred (198 ) (6,006 ) 14,801 Total income tax benefit (provision) $ 3,486 $ (5,921 ) $ 15,159 |
Schedule of Deferred Tax Assets and Liabilities | The Company’s deferred tax assets and liabilities consists of the following components: For the Year Ended For the Year Ended December 31, 2020 December 31, 2019 Deferred Income Tax Deferred Income Tax Assets Liabilities Assets Liabilities Accounts receivable $ 1,993 $ - $ 1,184 - Accrued liabilities 1,326 - 3,418 - Deferred compensation 1,281 - 1,526 - Fixed assets and intangibles 22,235 - 16,119 - Inventory 8,475 - 10,165 - Net operating losses 9,891 - 9,342 - Revenue - (129 ) - (59 ) Tax credits - - 6,372 - Lease Liability 446 - 695 - Right of Use Asset - (344 ) - (544 ) Other - (48 ) - (103 ) Valuation allowance (45,126 ) - (48,115 ) - Total $ 521 $ (521 ) $ 706 $ (706 ) |
Summary of Unrecognized Tax Benefits | The Company’s unrecognized tax benefits are summarized as follows: For the Year Ended December 31, 2020 2019 2018 Opening balance $ 1,088 $ 1,088 $ 1,591 Additions based on tax positions related to the current year 1,903 - - Additions for tax positions of prior years - - - Reductions for tax positions of prior years - - (415 ) Reductions for expiration of statute of limitations - - (88 ) $ 2,991 $ 1,088 $ 1,088 |
Schedule of Effective Tax Rate | The effective tax rate differs from the statutory federal income tax rate for the following reasons: For the Year Ended December 31, 2020 2019 2018 Statutory federal rate 21.00 % 21.00 % 21.00 % State income taxes—net of federal tax benefit (0.07 %) (0.56 %) 2.34 % Foreign rate differential 0.90 % 0.00 % (3.59 %) Acquisition expenses (9.87 %) 0.00 % (0.83 %) Loss (Gain) on acquisition contingency (0.50 %) 6.58 % 0.00 % Goodwill impairment and disposal 0.00 % (11.88 %) 0.00 % Life insurance 0.00 % 0.00 % (0.11 %) Tax attributes 0.28 % 0.04 % 0.99 % Tax legislation 0.95 % 0.00 % 1.05 % Valuation allowances (10.57 %) (16.98 %) 3.26 % Uncertain tax positions 0.00 % 0.00 % 0.78 % Other reconciling items, net (0.36 %) (0.63 %) (1.48 %) Effective tax rate 1.76 % (2.43 %) 23.41 % |
Preferred Stock (Tables)
Preferred Stock (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of Preferred Stock | Preferred stock is as follows: Preferred Stock Preferred Stock Liquidation Value Issuance Costs Net Total Balance at January 1, 2018 $ 64,399 $ (476 ) $ 63,923 Accrued dividend 2,120 - 2,120 Amortization of preferred stock issuance costs - 183 183 Balance at December 31, 2018 66,519 (293 ) 66,226 Amortization of preferred stock issuance costs - 184 184 Balance at December 31, 2019 66,519 (109 ) 66,410 Amortization of preferred stock issuance costs - 109 109 Redemption of preferred stock (66,519 ) - (66,519 ) Balance at December 31, 2020 $ — $ — $ — |
Severance and Restructuring C_2
Severance and Restructuring Costs (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Employee Severance [Member] | |
Schedule of Restructuring Charges | The following table includes a rollforward of severance and restructuring costs included in accrued expenses, see Note 17. Accrued severance and restructuring charges at January 1, 2018 $ 2,886 Severance and restructuring expenses accrued in 2018 773 Severance and restructuring cash payments (2,751 ) Accrued severance and restructuring charges at December 31, 2018 908 Severance and restructuring expenses accrued in 2019 626 Severance and restructuring cash payments (1,398 ) Accrued severance and restructuring charges at December 31, 2019 136 Severance and restructuring expenses accrued in 2020 — Severance and restructuring cash payments (136 ) Accrued severance and restructuring charges at December 31, 2020 $ — |
Quarterly Results of Operatio_2
Quarterly Results of Operations (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Results of Operations | The following tables sets forth the quarterly results of operations for the years ended December 31, 2020 and 2019: Year Ended December 31, 2020 First Second Third Forth Quarter Quarter Quarter Quarter Quarter Ended: Revenues $ 27,102 $ 20,534 $ 27,926 $ 26,187 Gross profit 17,878 11,065 16,034 12,770 Loss from continuing operations (24,540 ) (24,946 ) (26,653 ) (118,056 ) Income (loss) from discontinued operations 6,677 (13,618 ) 149,338 18,015 Net (loss) income (17,863 ) (38,564 ) 122,685 (100,041 ) Net loss from continuing operations per common share - basic $ (0.34 ) $ (0.34 ) $ (0.36 ) $ (1.51 ) Net loss from continuing operations per common share - diluted $ (0.34 ) $ (0.34 ) $ (0.36 ) $ (1.51 ) Net income (loss) from discontinued operations per common share - basic $ 0.09 $ (0.19 ) $ 2.04 $ 0.23 Net income (loss) from discontinued operations per common share - diluted $ 0.09 $ (0.19 ) $ 2.04 $ 0.23 Net (loss) income per common share - basic $ (0.25 ) $ (0.53 ) $ 1.68 $ (1.28 ) Net (loss) income per common share - diluted $ (0.25 ) $ (0.53 ) $ 1.68 $ (1.28 ) Year Ended December 31, 2019 First Second Third Forth Quarter Quarter Quarter Quarter Quarter Ended: Revenues $ 24,400 $ 32,747 $ 28,702 $ 31,574 Gross profit 16,915 23,128 21,095 23,508 Loss from continuing operations (18,212 ) (14,003 ) (16,972 ) (199,591 ) Income from discontinued operations 8,861 14,191 11,834 2,250 Net (loss) income (9,351 ) 188 (5,138 ) (197,341 ) Net loss from continuing operations per common share - basic $ (0.29 ) $ (0.19 ) $ (0.23 ) $ (2.76 ) Net loss from continuing operations per common share - diluted $ (0.29 ) $ (0.16 ) $ (0.23 ) $ (2.76 ) Net income from discontinued operations per common share - basic $ 0.14 $ 0.19 $ 0.16 $ 0.04 Net income from discontinued operations per common share - diluted $ 0.14 $ 0.16 $ 0.16 $ 0.04 Net (loss) income per common share - basic $ (0.15 ) $ 0.00 $ (0.07 ) $ (2.72 ) Net (loss) income per common share - diluted $ (0.15 ) $ 0.00 $ (0.07 ) $ (2.72 ) |
Business - Additional Informati
Business - Additional Information (Detail) | Feb. 01, 2021USD ($)$ / sharesshares | Oct. 23, 2020USD ($)shares | Sep. 29, 2020USD ($)shares | Jul. 24, 2020USD ($) | Jul. 21, 2020Segment | Jul. 20, 2020USD ($)Segment | Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2020USD ($)Country | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Business [Line Items] | |||||||||||||||||
Number of reportable segments | Segment | 1 | 2 | |||||||||||||||
Payment on redemption of preferred stock | $ 66,519,000 | $ 66,519,000 | |||||||||||||||
Cash and cash equivalents | $ 43,962,000 | $ 5,608,000 | 43,962,000 | $ 5,608,000 | |||||||||||||
Accumulated deficit | (484,962,000) | (451,179,000) | (484,962,000) | (451,179,000) | |||||||||||||
Net loss from continuing operations | (118,056,000) | $ (26,653,000) | $ (24,946,000) | $ (24,540,000) | $ (199,591,000) | $ (16,972,000) | $ (14,003,000) | $ (18,212,000) | (194,195,000) | $ (248,778,000) | $ (49,649,000) | ||||||
COVID-19 [Member] | |||||||||||||||||
Business [Line Items] | |||||||||||||||||
Contingent consideration amounts | 50,632,000 | 50,632,000 | |||||||||||||||
Expected contingent consideration amounts | $ 8,993,000 | 8,993,000 | |||||||||||||||
Subsequent Event [Member] | Public Offering [Member] | |||||||||||||||||
Business [Line Items] | |||||||||||||||||
Common stock sold | shares | 28,700,000 | ||||||||||||||||
Common stock price per share | $ / shares | $ 1.50 | ||||||||||||||||
Net proceeds from issuance of common stock | $ 40,467,000 | ||||||||||||||||
Underwriting discounts and commission | $ 2,583,000 | ||||||||||||||||
Stock Purchase Agreement [Member] | Holo Surgical Inc. [Member] | Common Stock [Member] | |||||||||||||||||
Business [Line Items] | |||||||||||||||||
Business acquisition, contingent consideration payable upon achievement of post-closing milestones | $ 50,632,000 | ||||||||||||||||
Revolving Credit Facility [Member] | 2018 Loan Agreement [Member] | |||||||||||||||||
Business [Line Items] | |||||||||||||||||
Debt retirement | $ 80,000,000 | 80,000,000 | |||||||||||||||
Second Amendment To Second Lien Credit Agreement [Member] | Term Loans [Member] | 2019 Loan Agreement [Member] | |||||||||||||||||
Business [Line Items] | |||||||||||||||||
Debt retirement | 100,000,000 | 100,000,000 | |||||||||||||||
Second Amendment To Second Lien Credit Agreement [Member] | Incremental Term Loan [Member] | 2019 Loan Agreement [Member] | |||||||||||||||||
Business [Line Items] | |||||||||||||||||
Debt retirement | 30,000,000 | $ 30,000,000 | |||||||||||||||
Ardi Bidco Ltd. [Member] | Discontinued Operations, Held-for-sale [Member] | |||||||||||||||||
Business [Line Items] | |||||||||||||||||
Consideration received or receivable for disposal of assets | $ 440,000,000 | ||||||||||||||||
Roboticine, Inc. [Member] | Stock Purchase Agreement [Member] | Holo Surgical Inc. [Member] | |||||||||||||||||
Business [Line Items] | |||||||||||||||||
Cash to be paid at closing | 30,000,000 | $ 30,000,000 | |||||||||||||||
Business acquisition, common stock fair value | 12,250,000 | ||||||||||||||||
Business acquisition, contingent consideration payable upon achievement of post-closing milestones | $ 50,632,000 | $ 83,000,000 | |||||||||||||||
Roboticine, Inc. [Member] | Stock Purchase Agreement [Member] | Holo Surgical Inc. [Member] | Common Stock [Member] | |||||||||||||||||
Business [Line Items] | |||||||||||||||||
Business acquisition, common shares issuable at closing | shares | 6,250,000 | 6,250,000 | |||||||||||||||
Minimum [Member] | |||||||||||||||||
Business [Line Items] | |||||||||||||||||
Number of countries that receive distribution | Country | 40 | ||||||||||||||||
Maximum [Member] | Stock Purchase Agreement [Member] | Holo Surgical Inc. [Member] | Common Stock [Member] | |||||||||||||||||
Business [Line Items] | |||||||||||||||||
Business acquisition, common shares issuable at closing | shares | 8,650,000 | ||||||||||||||||
Maximum [Member] | Roboticine, Inc. [Member] | Stock Purchase Agreement [Member] | Holo Surgical Inc. [Member] | |||||||||||||||||
Business [Line Items] | |||||||||||||||||
Business acquisition, contingent consideration payable upon achievement of post-closing milestones | $ 83,000,000 | ||||||||||||||||
Maximum [Member] | Roboticine, Inc. [Member] | Stock Purchase Agreement [Member] | Holo Surgical Inc. [Member] | Common Stock [Member] | |||||||||||||||||
Business [Line Items] | |||||||||||||||||
Business acquisition, common shares issuable at closing | shares | 8,650,000 | 8,650,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2019USD ($)ReportingUnitshares | Dec. 31, 2020USD ($)ReportingUnitshares | Dec. 31, 2019USD ($)shares | Dec. 31, 2018USD ($)shares | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Cash equivalents | $ 0 | $ 0 | $ 0 | |
Number of reporting unit | ReportingUnit | 2 | 1 | ||
Amortization expense of other intangible assets | $ 889,000 | $ 10,671,000 | $ 3,555,000 | |
Dividend yield | 0.00% | |||
Repurchase of common stock | shares | 64,044 | 159,354 | 64,044 | 107,109 |
Repurchase of common stock. value | $ 515,000 | $ 272,000 | $ 479,000 | |
Patents [Member] | Minimum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of intangible assets | 8 years | |||
Patents [Member] | Maximum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of intangible assets | 16 years | |||
Trade Names [Member] | Minimum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of intangible assets | 5 years | |||
Trade Names [Member] | Maximum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of intangible assets | 25 years | |||
Procurement Contracts [Member] | Minimum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of intangible assets | 5 years | |||
Procurement Contracts [Member] | Maximum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of intangible assets | 25 years | |||
Customer Lists [Member] | Minimum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of intangible assets | 5 years | |||
Customer Lists [Member] | Maximum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of intangible assets | 25 years | |||
Acquired Exclusivity Rights [Member] | Minimum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of intangible assets | 5 years | |||
Acquired Exclusivity Rights [Member] | Maximum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of intangible assets | 25 years | |||
Distribution Agreements [Member] | Minimum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of intangible assets | 5 years | |||
Distribution Agreements [Member] | Maximum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of intangible assets | 25 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Estimated Useful Lives of Assets (Detail) | 12 Months Ended |
Dec. 31, 2020 | |
Processing Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life of Assets | 7 years |
Processing Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life of Assets | 10 years |
Computer Equipment and Software [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life of Assets | 3 years |
Computer Equipment and Software [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life of Assets | 7 years |
Office Equipment, Furniture and Fixtures [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life of Assets | 5 years |
Office Equipment, Furniture and Fixtures [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life of Assets | 7 years |
Surgical Instruments [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life of Assets | 1 year |
Recently Issued and Adopted A_2
Recently Issued and Adopted Accounting Standards - Additional Information (Detail) | Dec. 31, 2020 |
Accounting Standards Update 2020-04 [Member] | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Change in accounting principle, accounting standards update, adopted [true false] | true |
Change in accounting principle, accounting standards update, adoption date | Mar. 12, 2020 |
Change in accounting principle, accounting standards update, immaterial effect [true false] | true |
Accounting Standards Update 2019-12 [Member] | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Change in accounting principle, accounting standards update, adopted [true false] | true |
Change in accounting principle, accounting standards update, adoption date | Jan. 1, 2020 |
Change in accounting principle, accounting standards update, immaterial effect [true false] | true |
Accounting Standards Update 2019-05 [Member] | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Change in accounting principle, accounting standards update, adopted [true false] | true |
Change in accounting principle, accounting standards update, adoption date | Jan. 1, 2020 |
Change in accounting principle, accounting standards update, immaterial effect [true false] | true |
Accounting Standards Update 2017-12 [Member] | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Change in accounting principle, accounting standards update, adopted [true false] | true |
Change in accounting principle, accounting standards update, adoption date | Jan. 1, 2020 |
Change in accounting principle, accounting standards update, immaterial effect [true false] | true |
Accounting Standards Update 2016-13 [Member] | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Change in accounting principle, accounting standards update, adopted [true false] | true |
Change in accounting principle, accounting standards update, adoption date | Jan. 1, 2020 |
Change in accounting principle, accounting standards update, immaterial effect [true false] | true |
Accounting Standards Update 2018-13 [Member] | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Change in accounting principle, accounting standards update, adopted [true false] | true |
Change in accounting principle, accounting standards update, adoption date | Jan. 1, 2020 |
Change in accounting principle, accounting standards update, immaterial effect [true false] | true |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating lease, description | The Company’s leases are classified as operating leases and includes office space, automobiles, and copiers. The Company does not have any finance leases and the Company’s operating leases do not have any residual value guarantees, restrictions or covenants. | |
Lessee, operating lease, existence of residual value guarantees, restrictions or covenants | false | |
Lease not yet commenced, description | The Company does not have any leases that have not yet commenced as of December 31, 2020. | |
Operating lease remaining term | 5 years 6 months | |
Lease not yet commenced, option to extend | The option to extend or terminate is only included in the lease term if the Company is reasonably certain of exercising that option. | |
Weighted-average discount rate, operating leases | 4.92% | |
Operating lease right of use asset write Off | $ 201 | |
Minimum [Member] | ||
Operating lease remaining term | 1 year | |
Maximum [Member] | ||
Operating lease remaining term | 9 years |
Leases - Schedule of Operating
Leases - Schedule of Operating Leases (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 1,179 | $ 1,108 |
Short-term operating lease cost | 36 | |
Total operating lease cost | $ 1,179 | $ 1,144 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Cash Flow Information Related to Leases (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 1,313 | $ 1,007 |
ROU assets obtained in exchange for lease obligations | $ 242 | $ 103 |
Leases - Schedule of Suppleme_2
Leases - Schedule of Supplemental Balance Sheet Information Related to Leases (Detail) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current | $ 650 | $ 967 |
Total operating lease liabilities | 1,850 | 2,454 |
Other Assets [Member] | ||
Right-of-use assets | 1,425 | 1,903 |
Accrued Expenses [Member] | ||
Current | 650 | 967 |
Other Long Term Liabilities [Member] | ||
Noncurrent | $ 1,200 | $ 1,487 |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Operating Lease Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Year 1 | $ 684 | |
Year 2 | 337 | |
Year 3 | 217 | |
Year 4 | 173 | |
Year 5 | 162 | |
Year 6 and beyond | 557 | |
Total future minimum lease payments | 2,130 | |
Less imputed interest | (280) | |
Total | $ 1,850 | $ 2,454 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Assets and Liabilities of Discontinued Operations (Detail) $ in Thousands | Dec. 31, 2019USD ($) |
Carrying amounts of the major classes of assets included in discontinued operations: | |
Accounts receivable - net | $ 36,072 |
Inventories | 99,575 |
Prepaid and other current assets | 2,735 |
Total current assets | 138,382 |
Property and equipment - net | 69,102 |
Goodwill | 55,384 |
Other intangible assets - net | 10,492 |
Other assets - net | 873 |
Total noncurrent assets | 135,851 |
Total assets of discontinued operations | 274,233 |
Carrying amounts of the major classes of liabilities included in discontinued operations: | |
Accounts payable | 19,890 |
Accrued expenses | 17,814 |
Current portion of deferred revenue | 2,748 |
Current portion of long-term obligations | 174,177 |
Total current liabilities | 214,629 |
Other long-term liabilities | 285 |
Total liabilities of discontinued operations | $ 214,914 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Detail) - USD ($) $ in Thousands | Jul. 20, 2020 | Dec. 31, 2020 | Dec. 01, 2020 |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||
Maximum working capital adjustment amount | $ 1,376 | $ 14,000 | |
Minimum [Member] | |||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||
Transitional services period related to it support, customer and vendor management, and procurement | 3 months | ||
Maximum [Member] | |||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||
Transitional services period related to it support, customer and vendor management, and procurement | 12 months | ||
Revolving Credit Facility [Member] | 2018 Loan Agreement [Member] | |||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||
Debt retirement | $ 80,000 | $ 80,000 | |
Term Loans [Member] | 2019 Loan Agreement [Member] | Second Amendment To Second Lien Credit Agreement [Member] | |||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||
Debt retirement | 100,000 | 100,000 | |
Incremental Term Loan [Member] | 2019 Loan Agreement [Member] | Second Amendment To Second Lien Credit Agreement [Member] | |||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||
Debt retirement | $ 30,000 | $ 30,000 |
Discontinued Operations - Sch_2
Discontinued Operations - Schedule of Financial Results of Discontinued Operations (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Discontinued Operations And Disposal Groups [Abstract] | |||
Revenues | $ 87,192 | $ 190,961 | $ 188,250 |
Costs of goods sold | 49,678 | 104,482 | 107,126 |
Gross profit | 37,514 | 86,479 | 81,124 |
Expenses: | |||
Marketing, general and administrative | 12,889 | 22,279 | 21,572 |
Severance and restructuring costs | 604 | 2,035 | |
Transaction and integration expenses | 23,598 | 3,160 | 15 |
Cardiothoracic closure business divestiture contingency consideration | (3,000) | ||
Total operating expenses | 37,091 | 25,439 | 20,622 |
Interest expense | 14,965 | 12,571 | 2,771 |
Loss on extinguishment of debt | 2,686 | 309 | |
Derivative loss | 12,641 | ||
Foreign exchange (gain) loss | (3) | 17 | 5 |
Total other expense - net | 30,289 | 12,588 | 3,085 |
Operating income | 423 | 61,040 | 60,502 |
(Loss) income from discontinued operations | (29,866) | 48,452 | 57,417 |
Gain on sale of net assets of discontinued operations | 209,800 | ||
Income from discontinued operations before income tax provision | 179,934 | 48,452 | 57,417 |
Income tax provision | (19,522) | (11,316) | (10,891) |
Net income on discontinued operations | $ 160,412 | $ 37,136 | $ 46,526 |
Discontinued Operations - Summa
Discontinued Operations - Summary of Operating and Investing Cash Flows of Discontinued Operations (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Significant operating non-cash reconciliation items: | |||
Stock-based compensation | $ 6,528 | $ 4,367 | $ 4,745 |
Gain on sale of OEM Businesses | (209,800) | ||
Paid in kind interest expense | 4,408 | ||
Loss on extinguishment of debt | 2,686 | ||
Amortization of debt issuance costs | 283 | ||
Amortization of debt discount | 2,479 | ||
Significant investing items: | |||
Purchases of property and equipment | (750) | (1,468) | (1,217) |
Discontinued Operations [Member] | |||
Significant operating non-cash reconciliation items: | |||
Depreciation and amortization | 2,125 | 4,466 | 5,120 |
Provision for bad debts and product returns | 456 | 101 | 857 |
Provision for inventory write-downs | 6,340 | 7,142 | |
Revenue recognized due to change in deferred revenue | (2,618) | (4,906) | (4,958) |
Deferred income tax (benefit) provision | (1,609) | (3,989) | 3,682 |
Stock-based compensation | 792 | 540 | 374 |
Gain on sale of OEM Businesses | (209,800) | ||
Paid in kind interest expense | 4,408 | ||
Cardiothoracic closure business divestiture contingency consideration | (3,000) | ||
Loss on extinguishment of debt | 2,686 | ||
Amortization of debt issuance costs | 283 | ||
Amortization of debt discount | 2,479 | ||
Significant investing items: | |||
Purchases of property and equipment | (1,867) | (6,866) | (6,200) |
Patent and acquired intangible asset costs | (419) | $ (578) | (1,028) |
Proceeds from sale of business | $ 437,097 | ||
Proceeds from cardiothoracic closure business divestiture | $ 3,000 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Schedule of Total Revenue by Geographical Region (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation Of Revenue [Line Items] | |||||||||||
Revenues | $ 26,187 | $ 27,926 | $ 20,534 | $ 27,102 | $ 31,574 | $ 28,702 | $ 32,747 | $ 24,400 | $ 101,749 | $ 117,423 | $ 92,112 |
Transferred At Point In Time [Member] | |||||||||||
Disaggregation Of Revenue [Line Items] | |||||||||||
Revenues | 101,749 | 117,423 | |||||||||
Domestic [Member] | |||||||||||
Disaggregation Of Revenue [Line Items] | |||||||||||
Revenues | 78,580 | ||||||||||
Domestic [Member] | Transferred At Point In Time [Member] | |||||||||||
Disaggregation Of Revenue [Line Items] | |||||||||||
Revenues | 85,612 | 97,703 | |||||||||
International [Member] | |||||||||||
Disaggregation Of Revenue [Line Items] | |||||||||||
Revenues | $ 13,532 | ||||||||||
International [Member] | Transferred At Point In Time [Member] | |||||||||||
Disaggregation Of Revenue [Line Items] | |||||||||||
Revenues | $ 16,137 | $ 19,720 |
Acquisition of Paradigm Spine_3
Acquisition of Paradigm Spine, LLC - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Mar. 08, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Business Combinations [Line Items] | |||||
Common stock par value | $ 0.001 | $ 0.001 | |||
Transaction and integration expenses | $ 94,999 | ||||
Severance expenses | 34 | $ 773 | |||
Goodwill | 4,414 | ||||
Paradigm Spine [Member] | |||||
Business Combinations [Line Items] | |||||
Potential debt to finance business combination | $ 100,000 | ||||
Number of common stock to be issued at closing, shares | 10,729,614 | ||||
Cash consideration threshold working capital amount | $ 7,000 | ||||
Potential debt to finance business combination | 100,000 | ||||
Contingent liability | 72,177 | $ 0 | |||
Transaction and integration expenses | $ 15,537 | $ 11,394 | $ 4,143 | ||
Business development expenses | 462 | ||||
Severance expenses | $ 896 | ||||
Inventory fair value, current | 7,122 | ||||
Inventory fair value, noncurrent | 10,525 | ||||
Goodwill | 135,589 | ||||
Paradigm Spine [Member] | Maximum [Member] | |||||
Business Combinations [Line Items] | |||||
Number of common stock to be issued at closing, value | $ 50,000 | ||||
Master Transaction Agreement [Member] | |||||
Business Combinations [Line Items] | |||||
Common stock par value | $ 0.001 | ||||
Master Transaction Agreement [Member] | Series A Preferred Stock [Member] | |||||
Business Combinations [Line Items] | |||||
Common stock par value | 0.001 | ||||
Master Transaction Agreement [Member] | One Fully Paid and Nonassessable [Member] | |||||
Business Combinations [Line Items] | |||||
Common stock par value | 0.001 | ||||
Master Transaction Agreement [Member] | One Fully Paid and Nonassessable [Member] | Series A Preferred Stock [Member] | |||||
Business Combinations [Line Items] | |||||
Common stock par value | $ 0.001 |
Acquisition of Paradigm Spine_4
Acquisition of Paradigm Spine, LLC - Acquisition Purchase Price (Detail) - USD ($) $ in Thousands | Mar. 08, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Business Combinations [Line Items] | ||||
Cash proceeds from second lien credit agreement | $ 89,892 | $ 121,500 | $ 74,425 | |
Paradigm Spine [Member] | ||||
Business Combinations [Line Items] | ||||
Cash proceeds from second lien credit agreement | $ 100,000 | |||
Fair market value of securities issued | 60,730 | |||
Fair market value of contingent earnout | 72,177 | |||
Total purchase price | $ 232,907 | $ 99,692 |
Acquisition of Paradigm Spine_5
Acquisition of Paradigm Spine, LLC - Summary of Final Allocation of Total Consideration to Tangible and Intangible Assets and Liabilities (Detail) - USD ($) $ in Thousands | Mar. 08, 2019 | Dec. 31, 2018 |
Business Combinations [Line Items] | ||
Goodwill | $ 4,414 | |
Paradigm Spine [Member] | ||
Business Combinations [Line Items] | ||
Cash | $ 307 | |
Accounts receivable | 5,220 | |
Inventories | 17,647 | |
Other current assets | 934 | |
Property, plant and equipment | 379 | |
Other non-current assets | 1,079 | |
Current liabilities | (6,169) | |
Lease liabilities | (1,079) | |
Net tangible assets acquired | 18,318 | |
Other intangible assets | 79,000 | |
Goodwill | 135,589 | |
Total net assets acquired | $ 232,907 |
Acquisition of Paradigm Spine_6
Acquisition of Paradigm Spine, LLC. - Pro Forma Information of Operations (Detail) - Paradigm Spine [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Business Acquisition Pro Forma Information [Line Items] | ||
Revenues | $ 37,374 | $ 40,810 |
Net loss applicable to common shares | $ (16,547) | $ (42,550) |
Acquisition of Zyga Technology
Acquisition of Zyga Technology Inc. - Additional Information (Detail) - USD ($) $ in Thousands | Jan. 04, 2018 | Mar. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2018 | Dec. 31, 2017 |
Business Combinations [Line Items] | |||||
Goodwill | $ 4,414 | ||||
Zyga Technology Inc [Member] | |||||
Business Combinations [Line Items] | |||||
Date of merger agreement | Jan. 4, 2018 | ||||
Payments to acquire businesses | $ 21,000 | ||||
Cash from RTI Surgical | 3,000 | $ 21,000 | |||
Acquisition related costs | 1,430 | ||||
Acquisition and integration expenses | $ 800 | $ 630 | |||
Total considerations including acquisition contingencies | 25,986 | ||||
Goodwill | 13,556 | ||||
Zyga Technology Inc [Member] | Patents [Member] | |||||
Business Combinations [Line Items] | |||||
Other intangible assets | $ 6,500 | ||||
Other intangible assets, useful life | 13 years | ||||
Zyga Technology Inc [Member] | Trademarks [Member] | |||||
Business Combinations [Line Items] | |||||
Other intangible assets | $ 80 | ||||
Other intangible assets, useful life | 1 year | ||||
Zyga Technology Inc [Member] | Marketing-Related Intangible Assets [Member] | |||||
Business Combinations [Line Items] | |||||
Other intangible assets | $ 180 | ||||
Other intangible assets, useful life | 7 years | ||||
Zyga Technology Inc [Member] | Revolving Credit Facility [Member] | |||||
Business Combinations [Line Items] | |||||
Cash proceeds from revolving credit facility | $ 18,000 | ||||
Zyga Technology Inc [Member] | Clinical Milestones [Member] | |||||
Business Combinations [Line Items] | |||||
Contingent liability | 1,100 | $ 4,986 | |||
Zyga Technology Inc [Member] | Earn Out Payment [Member] | |||||
Business Combinations [Line Items] | |||||
Revenue based earnout consideration | $ 35,000 | 4,986 | |||
Reduction in contingent liability | $ 0 |
Acquisition of Zyga Technolog_3
Acquisition of Zyga Technology Inc. - Acquisition Purchase Price (Detail) - Zyga Technology Inc [Member] - USD ($) $ in Thousands | Jan. 04, 2018 | Dec. 31, 2018 |
Business Combinations [Line Items] | ||
Cash from RTI Surgical | $ 3,000 | $ 21,000 |
Total purchase price | 21,000 | |
Revolving Credit Facility [Member] | ||
Business Combinations [Line Items] | ||
Cash proceeds from revolving credit facility | $ 18,000 |
Acquisition of Zyga Technolog_4
Acquisition of Zyga Technology Inc. - Summary of Final Allocation of Total Consideration to Tangible and Intangible Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 04, 2018 |
Business Combinations [Line Items] | ||||
Acquisition contingencies | $ (47,519) | $ (1,130) | ||
Goodwill | $ 4,414 | |||
Zyga Technology Inc [Member] | ||||
Business Combinations [Line Items] | ||||
Inventories | $ 1,099 | |||
Accounts receivable | 573 | |||
Other current assets | 53 | |||
Property, plant and equipment | 151 | |||
Other assets | 26 | |||
Deferred tax assets | 4,715 | |||
Current liabilities | (947) | |||
Acquisition contingencies | (4,986) | |||
Net tangible assets acquired | 684 | |||
Other intangible assets | 6,760 | |||
Goodwill | 13,556 | |||
Total net assets acquired | $ 21,000 |
Acquisition of Zyga Technolog_5
Acquisition of Zyga Technology, Inc. - Pro Forma Information of Operations (Detail) - Zyga Technology Inc [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Business Acquisitions Pro Forma Infomation [Line Items] | |
Revenues | $ 4,809 |
Net loss applicable to common shares | $ (2,640) |
Holo Surgical Acquisition - Add
Holo Surgical Acquisition - Additional Information (Detail) - USD ($) | Oct. 23, 2020 | Sep. 29, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Business Combinations [Line Items] | ||||
Common stock, par value | $ 0.001 | $ 0.001 | ||
Asset acquisition expenses | $ 94,999,000 | |||
Holo Surgical Inc. [Member] | ||||
Business Combinations [Line Items] | ||||
Cash consideration | $ 32,117,000 | |||
Stock Purchase Agreement [Member] | Holo Surgical Inc. [Member] | ||||
Business Combinations [Line Items] | ||||
Business acquisition, contingent consideration arrangements, description | On October 23, 2020, the Company completed the acquisition of Holo and became obligated for a contingent consideration in an aggregate amount of $50,632, which must be first paid in shares of the Company’s common stock (in an amount up to 8,650,000 shares) and then paid in cash thereafter, contingent upon and following the achievement of certain regulatory, commercial and utilization milestones by specified time periods occurring up to the sixth (6th) anniversary of the closing. | |||
Business acquisition, contingent consideration arrangements, basis for amount | The number of shares of common stock issued as contingent consideration with respect to the achievement of a post-closing milestone, if any, will be calculated based on the volume weighted average price of the common stock for the five (5) day trading period commencing on the opening of trading on the third trading day following the achievement of the applicable milestone. | |||
Stock Purchase Agreement [Member] | Holo Surgical Inc. [Member] | Common Stock [Member] | ||||
Business Combinations [Line Items] | ||||
Business acquisition, contingent consideration payable upon achievement of post-closing milestones | $ 50,632,000 | |||
Stock Purchase Agreement [Member] | Holo Surgical Inc. [Member] | Roboticine, Inc. [Member] | ||||
Business Combinations [Line Items] | ||||
Business acquisition, cash to be paid at closing | 30,000,000 | $ 30,000,000 | ||
Common stock, par value | $ 0.001 | |||
Business acquisition, contingent consideration payable upon achievement of post-closing milestones | 50,632,000 | $ 83,000,000 | ||
Business acquisition, contingent consideration arrangements, description | In addition, following the closing, the Seller will be entitled to receive contingent consideration from the Company valued in an aggregate amount of up to $83 million, to be paid through the issuance of Common Stock or the payment of cash, contingent upon and following the achievement of certain regulatory, commercial and utilization milestones by specified time periods occurring up to the sixth (6th) anniversary of the closing. The Purchase Agreement provides that the Company will issue Common Stock to satisfy any contingent consideration payable to the Seller, until the total number of shares of Common Stock issued to the Seller pursuant to the Purchase Agreement (including the 6,250,000 shares of Common Stock issued at closing) is equal to 14,900,000 shares of Common Stock (or otherwise, to the extent a lower number, the maximum number of shares of Common Stock that would not require obtaining stockholder approval under the applicable rules of the Nasdaq Stock Market). | |||
Business acquisition, contingent consideration arrangements, basis for amount | The number of shares of Common Stock issued as contingent consideration with respect to the achievement of a post-closing milestone, if any, will be calculated based on the volume weighted average price of the Common Stock for the five (5) day trading period commencing on the opening of trading on the third trading day following the achievement of the applicable milestone. | |||
Payments to acquire businesses | $ 94,999,000 | |||
Cash consideration | 30,000,000 | |||
Direct and incremental costs | 2,117,000 | |||
Estimated fair value related to contingent consideration | 50,632,000 | $ 50,632,000 | ||
Fair value of liability | $ 56,515,000 | |||
Change in fair value of liability | 5,883,000 | |||
Stock Purchase Agreement [Member] | Holo Surgical Inc. [Member] | Roboticine, Inc. [Member] | ARAI [Member] | ||||
Business Combinations [Line Items] | ||||
Asset acquisition expenses | 94,541,000 | |||
Stock Purchase Agreement [Member] | Holo Surgical Inc. [Member] | Roboticine, Inc. [Member] | Assembled Workforce [Member] | ||||
Business Combinations [Line Items] | ||||
Asset acquisition expenses | 458,000 | |||
Stock Purchase Agreement [Member] | Holo Surgical Inc. [Member] | Roboticine, Inc. [Member] | Loss (Gain) on Acquisition Contingency [Member] | ||||
Business Combinations [Line Items] | ||||
Change in fair value of liability | $ 5,883,000 | |||
Stock Purchase Agreement [Member] | Holo Surgical Inc. [Member] | Roboticine, Inc. [Member] | Accrued Expenses [Member] | ||||
Business Combinations [Line Items] | ||||
Fair value of liability | 8,996,000 | |||
Stock Purchase Agreement [Member] | Holo Surgical Inc. [Member] | Roboticine, Inc. [Member] | Other Long-Term Liabilities [Member] | ||||
Business Combinations [Line Items] | ||||
Fair value of liability | $ 47,519,000 | |||
Stock Purchase Agreement [Member] | Holo Surgical Inc. [Member] | Roboticine, Inc. [Member] | Common Stock [Member] | ||||
Business Combinations [Line Items] | ||||
Business acquisition, common shares issuable at closing | 6,250,000 | 6,250,000 | ||
Business acquisition, equity interests issued or issuable for contingent consideration upon achievement of post-closing milestones | 14,900,000 | 14,900,000 | ||
Business acquisition, common shares issuable value | $ 12,250,000 | $ 12,250,000 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Nov. 29, 2019 | Dec. 04, 2017 | Sep. 18, 2017 | Jan. 26, 2017 | Dec. 31, 2020 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Percentage of market value of common stock, stock options exercise price | 100.00% | ||||
Percentage of market value of common stock, restricted stock award granted | 100.00% | ||||
Granted, Number of Options | 2,161,277 | ||||
2018 Equity Incentive Plan [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Shares of common stock allowed to be issued | 5,726,035 | ||||
Stock Option [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Total unrecognized stock-based compensation expense | $ 2,613 | ||||
Stock-based compensation awards, weighted-average period recognized | 3 years | ||||
Restricted Stock Awards [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Total unrecognized stock-based compensation expense | $ 4,290 | ||||
Stock-based compensation awards, weighted-average period recognized | 2 years | ||||
Shares granted | 1,894,543 | ||||
Restricted Stock Awards [Member] | Employee [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Shares granted | 1,453,459 | ||||
Restricted Stock Awards [Member] | Non-Employee [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Shares granted | 441,084 | ||||
Restricted Stock Units [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Total unrecognized stock-based compensation expense | $ 236 | ||||
Stock-based compensation awards, weighted-average period recognized | 1 year | ||||
Shares granted | 0 | ||||
Restricted Stock Agreement #1 [Member] | Common Stock [Member] | Mr. Camille Farhat [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Shares granted | 850,000 | ||||
Restricted Stock Agreement #2 [Member] | Common Stock [Member] | Mr. Camille Farhat [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Shares granted | 150,000 | ||||
Option Agreement [Member] | Mr. Camille Farhat [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share-based compensation arrangement exercise price | $ 3.20 | ||||
Share-based compensation arrangement expiration date | Jan. 26, 2022 | ||||
Option Agreement [Member] | Mr. Camille Farhat [Member] | Average Stock Price Benchmark One [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share based compensation arrangement by share based payment award number of options expected to vest | 650,000 | ||||
Stock-based compensation award, vesting rights description | Company’s average publicly traded stock price is over $6.00 for a sixty-consecutive calendar day period. | ||||
Option Agreement [Member] | Mr. Camille Farhat [Member] | Average Stock Price Benchmark Two [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share based compensation arrangement by share based payment award number of options expected to vest | 650,000 | ||||
Stock-based compensation award, vesting rights description | Company’s average publicly traded stock price is over $7.00 for a sixty-consecutive calendar day period. | ||||
Option Agreement [Member] | Mr. Camille Farhat [Member] | Average Stock Price Benchmark Three [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share based compensation arrangement by share based payment award number of options expected to vest | 650,000 | ||||
Stock-based compensation award, vesting rights description | Company’s average publicly traded stock price is over $8.00 for a sixty-consecutive calendar day period. | ||||
Option Agreement [Member] | Mr. Jonathon Singer [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share-based compensation arrangement exercise price | $ 4.55 | ||||
Share-based compensation arrangement expiration date | Sep. 18, 2027 | ||||
Option Agreement [Member] | Mr. Jonathon Singer [Member] | Average Stock Price Benchmark One [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share based compensation arrangement by share based payment award number of options expected to vest | 102,300 | ||||
Stock-based compensation award, vesting rights description | Company’s average publicly traded stock price is over $7.00 per share for a sixty-consecutive calendar day period. | ||||
Option Agreement [Member] | Mr. Jonathon Singer [Member] | Average Stock Price Benchmark Two [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share based compensation arrangement by share based payment award number of options expected to vest | 102,300 | ||||
Stock-based compensation award, vesting rights description | Company’s average publicly traded stock price is over $8.00 per share for a sixty-consecutive calendar day period. | ||||
Option Agreement [Member] | Mr. Jonathon Singer [Member] | Average Stock Price Benchmark Three [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share based compensation arrangement by share based payment award number of options expected to vest | 102,300 | ||||
Stock-based compensation award, vesting rights description | Company’s average publicly traded stock price is over $9.00 per share for a sixty-consecutive calendar day period. | ||||
Option Agreement [Member] | Mr. Terry Rich [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share-based compensation arrangement exercise price | $ 2.09 | ||||
Option Agreement [Member] | Mr. Terry Rich [Member] | Average Stock Price Benchmark One [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share based compensation arrangement by share based payment award number of options expected to vest | 62,799 | ||||
Stock-based compensation award, vesting rights description | On the first anniversary of the grant date | ||||
Option Agreement [Member] | Mr. Terry Rich [Member] | Average Stock Price Benchmark Two [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share based compensation arrangement by share based payment award number of options expected to vest | 15,700 | ||||
Stock-based compensation award, vesting rights description | per calendar quarter commencing on the fifteenth month following the grant date and continuing for two years after. | ||||
Option Agreement [Member] | Common Stock [Member] | Mr. Camille Farhat [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Granted, Number of Options | 1,950,000 | ||||
Option Agreement [Member] | Common Stock [Member] | Mr. Jonathon Singer [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Granted, Number of Options | 306,900 | ||||
Option Agreement [Member] | Common Stock [Member] | Mr. Terry Rich [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Granted, Number of Options | 188,397 | ||||
Restricted Stock Agreement [Member] | Mr. Jonathon Singer [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Shares granted | 109,890 | ||||
Restricted Stock Agreement [Member] | Mr. Terry Rich [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Shares granted | 125,598 | ||||
Restricted Stock Agreement [Member] | Mr. Terry Rich [Member] | Average Stock Price Benchmark One [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share based compensation arrangement by share based payment award number of options expected to vest | 41,866 | ||||
Stock-based compensation award, vesting rights description | On the first anniversary of the Grant Date | ||||
Restricted Stock Agreement [Member] | Mr. Terry Rich [Member] | Average Stock Price Benchmark Two [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share based compensation arrangement by share based payment award number of options expected to vest | 10,467 | ||||
Stock-based compensation award, vesting rights description | per calendar quarter commencing on the fifteenth month following the Grant Date and continuing for two years year after. | ||||
Minimum [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Contractual term of stock options granted | 5 years | ||||
Minimum [Member] | Stock Option [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock-based compensation award, vesting period | 1 year | ||||
Minimum [Member] | Restricted Stock Awards [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock-based compensation award, vesting period | 1 year | ||||
Maximum [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Contractual term of stock options granted | 10 years | ||||
Maximum [Member] | Stock Option [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock-based compensation award, vesting period | 5 years | ||||
Maximum [Member] | Restricted Stock Awards [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock-based compensation award, vesting period | 3 years |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options Outstanding, Exercisable and Available for Grant (Detail) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($)$ / sharesshares | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Outstanding, Number of Options | 4,536,461 |
Granted, Number of Options | 2,161,277 |
Exercised, Number of Options | (5,000) |
Forfeited or expired, Number of Options | (1,713,558) |
Outstanding, Number of Options | 4,979,180 |
Vested or expected to vest, Number of Options | 4,979,180 |
Exercisable, Number of Options | 2,806,401 |
Available for grant, Number of Options | 842,608 |
Outstanding, Weighted Average Exercise Price | $ / shares | $ 3.75 |
Granted, Weighted Average Exercise Price | $ / shares | 3.12 |
Exercised, Weighted Average Exercise Price | $ / shares | 4.02 |
Forfeited or expired, Weighted Average Exercise Price | $ / shares | 4.32 |
Outstanding, Weighted Average Exercise Price | $ / shares | 3.28 |
Vested or expected to vest, Weighted Average Exercise Price | $ / shares | 3.28 |
Exercisable, Weighted Average Exercise Price | $ / shares | $ 3.45 |
Outstanding, Weighted Average Remaining Contractual Life (Years) | 5 years 3 months 18 days |
Vested or expected to vest, Weighted Average Remaining Contractual Life (Years) | 5 years 3 months 18 days |
Exercisable, Weighted Average Remaining Contractual Life (Years) | 2 years 3 months 10 days |
Outstanding, Aggregate Intrinsic Value | $ | $ 142 |
Vested or expected to vest, Aggregate Intrinsic Value | $ | 142 |
Exercisable, Aggregate Intrinsic Value | $ | $ 6 |
Stock-Based Compensation - Othe
Stock-Based Compensation - Other Information Concerning Stock Options (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Weighted average fair value of stock options granted | $ 1.21 | $ 1.56 | $ 2.05 |
Aggregate intrinsic value of stock options exercised | $ 3 | $ 161 | $ 349 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Weighted-Average Assumptions Used to Determine Fair Value of Options (Detail) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Expected term (years) | 6 years 6 months | 6 years 6 months | 6 years 6 months |
Risk free interest rate | 0.62% | 2.54% | 2.75% |
Volatility factor | 41.62% | 37.73% | 43.74% |
Dividend yield | 0.00% |
Stock-Based Compensation - Unve
Stock-Based Compensation - Unvested Restricted Stock Awards (Detail) | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Restricted Stock Awards [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Beginning Balance, Number of shares | 1,227,858 |
Granted, Number of shares | 1,894,543 |
Vested, Number of shares | (919,330) |
Forfeited, Number of shares | (305,875) |
Ending Balance, Number of shares | 1,897,196 |
Beginning Balance, Weighted Average Grant Date Fair Value | $ / shares | $ 4.34 |
Granted, Weighted Average Grant Date Fair Value | $ / shares | 3.47 |
Vested, Weighted Average Grant Date Fair Value | $ / shares | 4.40 |
Forfeited, Weighted Average Grant Date Fair Value | $ / shares | 4.19 |
Ending Balance, Weighted Average Grant Date Fair Value | $ / shares | $ 3.47 |
Restricted Stock Units [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Beginning Balance, Number of shares | 184,582 |
Granted, Number of shares | 0 |
Vested, Number of shares | (85,503) |
Forfeited, Number of shares | (9,144) |
Ending Balance, Number of shares | 89,935 |
Beginning Balance, Weighted Average Grant Date Fair Value | $ / shares | $ 7.41 |
Vested, Weighted Average Grant Date Fair Value | $ / shares | 7.41 |
Forfeited, Weighted Average Grant Date Fair Value | $ / shares | 7.41 |
Ending Balance, Weighted Average Grant Date Fair Value | $ / shares | $ 7.41 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock-Based Compensation Recognized (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation | $ 5,736 | $ 3,827 | $ 4,371 |
Costs of Goods Sold [Member] | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation | 169 | 144 | 132 |
Marketing General and Administrative [Member] | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation | 3,980 | 3,623 | 4,179 |
Research and Development Expense [Member] | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation | 72 | $ 60 | $ 60 |
Transaction and Integration Expenses [Member] | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation | $ 1,515 |
Inventories - Additional inform
Inventories - Additional information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Inventory [Line Items] | |||
Inventory write-down | $ 17,691 | $ 8,493 | $ 15,122 |
Cervalign inventory reserve charge | 2,165 | ||
Paradigm Spine [Member] | |||
Inventory [Line Items] | |||
Excess quantities and obsolescence of inventory reserve costs | 513 | ||
Excess Quantities and Obsolescence ("E&O")inventories {Member] | |||
Inventory [Line Items] | |||
Inventory write-down | $ 17,691 | $ 2,153 | 7,983 |
Rationalization Of International Distribution Infrastructure [Member] | |||
Inventory [Line Items] | |||
Excess quantities and obsolescence of inventory reserve costs | 1,023 | ||
Lower Distributions [Member] | Map3 Implant [Member] | |||
Inventory [Line Items] | |||
Excess quantities and obsolescence of inventory reserve costs | $ 6,559 |
Prepaid and Other Current Ass_3
Prepaid and Other Current Assets - Schedule of Prepaid and Other Current Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | ||
Income tax receivable | $ 4,836 | $ 2,785 |
Prepaid expenses | 1,543 | 996 |
Other receivable | 3,795 | 113 |
Other | 110 | 140 |
Prepaid and other current assets | $ 10,284 | $ 4,034 |
Prepaid and Other Current Ass_4
Prepaid and Other Current Assets - Additional Information (Detail) $ in Thousands | Dec. 31, 2020USD ($) |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Other receivable included fees and expenses related to public offering | $ 3,208 |
Property and Equipment - Compon
Property and Equipment - Components of Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | $ 521 | $ 789 |
Processing Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 35 | 110 |
Surgical Instruments [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 440 | 541 |
Office Equipment, Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 34 | 122 |
Computer Equipment and Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 12 | $ 16 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation expense in connection with property and equipment | $ 3,567 | $ 7,670 | $ 5,904 |
Property And Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Asset impairment and abandonment charges | 11,655 | ||
Right of Use Lease Asset [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Asset impairment and abandonment charges | 201 | ||
Spine [Member] | Property And Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Asset impairment and abandonment charges | $ 11,707 | ||
Map3 Implant [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Asset impairment and abandonment charges | $ 11,856 | $ 1,797 |
Goodwill - Schedule of Goodwill
Goodwill - Schedule of Goodwill (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Beginning Balance | $ 4,414 |
Goodwill additions related to acquisitions | 135,589 |
Goodwill impairment | $ (140,003) |
Goodwill - Additional Informati
Goodwill - Additional Information (Detail) $ in Thousands | Mar. 08, 2019USD ($) | Dec. 31, 2019SegmentReportingUnit | Dec. 31, 2020ReportingUnit | Dec. 31, 2019USD ($) |
Goodwill [Line Items] | ||||
Goodwill additions related to acquisitions | $ 135,589 | |||
Goodwill impairment | $ 140,003 | |||
Number of operating segment | Segment | 2 | |||
Number of reporting unit | ReportingUnit | 2 | 1 | ||
Paradigm Spine [Member] | ||||
Goodwill [Line Items] | ||||
Payments to acquire businesses | $ 232,907 | |||
Goodwill additions related to acquisitions | $ 135,589 | |||
Paradigm Spine [Member] | Valuation, Income Approach [Member] | ||||
Goodwill [Line Items] | ||||
Equity securities, fv-ni, measurement input | 0.75 | |||
Paradigm Spine [Member] | Valuation, Market Approach [Member] | ||||
Goodwill [Line Items] | ||||
Equity securities, fv-ni, measurement input | 0.25 | |||
Fair value exceeding the carrying value | 54.00% |
Net Loss Per Common Share - Com
Net Loss Per Common Share - Common Stock Used in Calculation of Basic and Diluted Earnings Per Share (Detail) - shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |||
Weighted average basic and dilutive shares | 74,403,155 | 70,150,492 | 61,031,265 |
Net Loss Per Common Share - Sch
Net Loss Per Common Share - Schedule of Number of Potential Dilutive Shares that Excluded Due to Anti-dilutive Effect (Detail) - shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Number of potential dilutive shares excluded due to anti-dilutive effect | 9,770,881 | 16,319,803 | 16,651,430 |
Stock Option [Member] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Number of potential dilutive shares excluded due to anti-dilutive effect | 271,351 | 345,154 | 1,154,396 |
RSU and RSA [Member] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Number of potential dilutive shares excluded due to anti-dilutive effect | 1,099,018 | 821,888 | 344,273 |
Convertible Series A Preferred Stock [Member] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Number of potential dilutive shares excluded due to anti-dilutive effect | 8,400,512 | 15,152,761 | 15,152,761 |
Net Loss Per Common Share - Add
Net Loss Per Common Share - Additional Information (Detail) - Holo Surgical Inc. [Member] - Stock Purchase Agreement [Member] - USD ($) $ in Thousands | Oct. 23, 2020 | Dec. 31, 2020 |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Business acquisition, contingent consideration arrangements, description | On October 23, 2020, the Company completed the acquisition of Holo and became obligated for a contingent consideration in an aggregate amount of $50,632, which must be first paid in shares of the Company’s common stock (in an amount up to 8,650,000 shares) and then paid in cash thereafter, contingent upon and following the achievement of certain regulatory, commercial and utilization milestones by specified time periods occurring up to the sixth (6th) anniversary of the closing. | |
Business acquisition, contingent consideration arrangements, basis for amount | The number of shares of common stock issued as contingent consideration with respect to the achievement of a post-closing milestone, if any, will be calculated based on the volume weighted average price of the common stock for the five (5) day trading period commencing on the opening of trading on the third trading day following the achievement of the applicable milestone. | |
Common Stock [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Business acquisition, contingent consideration payable upon achievement of post-closing milestones | $ 50,632 | |
Common Stock [Member] | Maximum [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Business acquisition, common shares issuable at closing | 8,650,000 |
Fair Value Information - Additi
Fair Value Information - Additional Information (Detail) $ in Thousands | Jan. 04, 2018USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Oct. 23, 2020USD ($) | Mar. 08, 2019USD ($) |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Gain on acquisition contingency | $ (4,753) | $ 76,033 | |||
Derivative loss | 12,641 | ||||
Impairment charge for finite-lived intangible assets | 2,621 | $ 85,096 | |||
Level 3 [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Derivative loss | 12,641 | ||||
Holo Surgical Inc. [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Fair market value of contingent earnout | 56,515,000 | $ 50,632,000 | |||
Current liabilities fair value disclosure | 8,993,000 | ||||
Non-current liabilities fair value disclosure | $ 41,639,000 | ||||
Holo Surgical Inc. [Member] | Accrued Expenses [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Current liabilities fair value disclosure | 8,996,000 | ||||
Holo Surgical Inc. [Member] | Other Long-Term Liabilities [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Non-current liabilities fair value disclosure | 47,519,000 | ||||
Paradigm Spine [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Fair market value of contingent earnout | $ 72,177 | ||||
Contingent consideration amounts | 0 | $ 72,177 | |||
Gain on acquisition contingency | 72,177 | ||||
Zyga Technology Inc [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Date of merger agreement | Jan. 4, 2018 | ||||
Zyga Technology Inc [Member] | Clinical Milestones [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Contingent consideration amounts | $ 1,100 | 4,986 | |||
Zyga Technology Inc [Member] | Earn Out Payment [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Revenue based earnout consideration | $ 35,000 | 4,986 | |||
Reduction in contingent liability | $ 0 | ||||
Measurement Input, Default Rate [Member] | Holo Surgical Inc. [Member] | Minimum [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Fair value, measurement input | 60 | ||||
Measurement Input, Default Rate [Member] | Holo Surgical Inc. [Member] | Maximum [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Fair value, measurement input | 90 | ||||
Measurement Input, Discount Rate [Member] | Holo Surgical Inc. [Member] | Minimum [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Fair value, measurement input | 0.11 | ||||
Measurement Input, Discount Rate [Member] | Holo Surgical Inc. [Member] | Maximum [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Fair value, measurement input | 16.86 |
Fair Value Information - Summar
Fair Value Information - Summary of Impairments of Long-Lived Assets and Related Post Impairment Fair Values (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | ||
Property and equipment - net, Impairment | $ 11,707 | $ 11,655 |
Other intangible assets - net, Impairment | 2,621 | 85,096 |
Other assets - net, Impairment | 445 | 201 |
Impairment | $ 14,773 | $ 96,952 |
Accrued Expenses - Accrued Expe
Accrued Expenses - Accrued Expenses (Detail) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Payables And Accruals [Abstract] | ||
Accrued compensation | $ 2,268 | $ 2,911 |
Accrued severance and restructuring costs | 136 | |
Accrued distributor commissions | 4,113 | 4,325 |
Accrued business development expenses | 2,555 | |
Accrued leases | 650 | 967 |
Accrued acquisition contingency -- Holo | 8,996 | |
Other | 5,617 | 4,205 |
Total accrued expenses | $ 21,644 | $ 15,099 |
Short and Long-Term Obligatio_3
Short and Long-Term Obligations - Additional Information (Detail) - USD ($) $ in Thousands | Jul. 20, 2020 | Dec. 31, 2020 |
Revolving Credit Facility [Member] | 2018 Loan Agreement [Member] | ||
Line Of Credit Facility [Line Items] | ||
Debt retirement | $ 80,000 | $ 80,000 |
Ares Term Loans [Member] | 2019 Loan Agreement [Member] | Second Amendment To Second Lien Credit Agreement [Member] | ||
Line Of Credit Facility [Line Items] | ||
Debt retirement | 100,000 | 100,000 |
Incremental Term Loan [Member] | 2019 Loan Agreement [Member] | Second Amendment To Second Lien Credit Agreement [Member] | ||
Line Of Credit Facility [Line Items] | ||
Debt retirement | $ 30,000 | $ 30,000 |
Short and Long-Term Obligatio_4
Short and Long-Term Obligations - Short and Long-Term Obligations (Detail) $ in Thousands | Dec. 31, 2019USD ($) |
Debt Disclosure [Abstract] | |
Ares Term loan | $ 104,406 |
JPM facility | 71,000 |
Less unamortized debt issuance costs | (1,229) |
Debt and capital lease obligation, total | 174,177 |
Less current portion | 174,177 |
Long-term portion | $ 0 |
Income Taxes - Schedule of Pre-
Income Taxes - Schedule of Pre-Tax Income (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Pre-tax income: | |||
Domestic (U.S., state and local) | $ (191,455) | $ (242,896) | $ (64,808) |
Foreign | (6,226) | 39 | |
Loss before income tax benefit (provision) | $ (197,681) | $ (242,857) | $ (64,808) |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Benefit (Provision) (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Current: | |||
Federal | $ 3,671 | $ 312 | $ 398 |
State | (89) | (40) | |
International | 13 | (138) | |
Total current | 3,684 | 85 | 358 |
Deferred: | |||
Federal | 99 | (2,456) | 11,232 |
State | (169) | (419) | |
International | (297) | (3,381) | 3,988 |
Total deferred | (198) | (6,006) | 14,801 |
Total income tax benefit (provision) | $ 3,486 | $ (5,921) | $ 15,159 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred Tax Assets, Net [Abstract] | ||
Accounts receivable | $ 1,993 | $ 1,184 |
Accrued liabilities | 1,326 | 3,418 |
Deferred compensation | 1,281 | 1,526 |
Fixed assets and intangibles | 22,235 | 16,119 |
Inventory | 8,475 | 10,165 |
Net operating losses | 9,891 | 9,342 |
Tax credits | 6,372 | |
Lease Liability | 446 | 695 |
Valuation allowance | (45,126) | (48,115) |
Total Deferred Income Tax Assets | 521 | 706 |
Deferred Tax Liabilities, Net [Abstract] | ||
Revenue | (129) | (59) |
Right of Use Asset | (344) | (544) |
Other | (48) | (103) |
Total Deferred Income Tax Liabilities | $ (521) | $ (706) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | Oct. 23, 2020 | Mar. 27, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 29, 2020 |
Income Tax [Line Items] | |||||||
U.S. federal corporate tax rate | 21.00% | 21.00% | 21.00% | 35.00% | |||
Income tax expense (benefit) due to change in tax rate | $ (650,000) | ||||||
Net operating losses carried back period | 5 years | ||||||
Income tax receivable | $ 3,464,000 | ||||||
Domestic deferred tax assets, valuation allowances | 45,126,000 | $ 48,115,000 | |||||
Unrecognized tax benefits | 2,991,000 | $ 1,088,000 | $ 1,088,000 | $ 1,591,000 | |||
U.S. Federal [Member] | |||||||
Income Tax [Line Items] | |||||||
Net operating loss carryforwards, subject to expiration | $ 9,081,000 | ||||||
Net operating loss carryforwards, expiration year start | 2037 | ||||||
Net operating loss carryforwards, expiration year end | 2038 | ||||||
U.S. State [Member] | |||||||
Income Tax [Line Items] | |||||||
Net operating loss carryforwards, subject to expiration | $ 24,820,000 | ||||||
Net operating loss carryforwards, expiration year start | 2022 | ||||||
Net operating loss carryforwards, expiration year end | 2039 | ||||||
Net operating loss carryforwards, subject to expiration | $ 36,545,000 | ||||||
Net operating loss carryforwards, not subject to expiration | 11,726,000 | ||||||
Non-U.S. [Member] | |||||||
Income Tax [Line Items] | |||||||
Net operating loss carryforwards, subject to expiration | $ 20,275,000 | ||||||
Net operating loss carryforwards, expiration year start | 2021 | ||||||
Net operating loss carryforwards, expiration year end | 2027 | ||||||
Net operating loss carryforwards, subject to expiration | $ 26,228,000 | ||||||
Net operating loss carryforwards, not subject to expiration | 5,953,000 | ||||||
Holo Surgical Inc. [Member] | Roboticine, Inc. [Member] | Stock Purchase Agreement [Member] | |||||||
Income Tax [Line Items] | |||||||
Business Combination Estimated Consideration | $ 94,999,000 | ||||||
Business acquisition, contingent consideration payable upon achievement of post-closing milestones | $ 50,632,000 | $ 83,000,000 | |||||
Fair value of liability | 56,515,000 | ||||||
Change in fair value of liability | $ 5,883,000 |
Income Taxes - Summary of Unrec
Income Taxes - Summary of Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Opening balance | $ 1,088 | $ 1,591 |
Additions based on tax positions related to the current year | 1,903 | |
Reductions for tax positions of prior years | (415) | |
Reductions for expiration of statute of limitations | (88) | |
Closing balance | $ 2,991 | $ 1,088 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Tax Rate (Detail) | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Statutory federal rate | 21.00% | 21.00% | 21.00% | 35.00% |
State income taxes—net of federal tax benefit | (0.07%) | (0.56%) | 2.34% | |
Foreign rate differential | 0.90% | 0.00% | (3.59%) | |
Acquisition expenses | (9.87%) | 0.00% | (0.83%) | |
Loss (Gain) on acquisition contingency | (0.50%) | 6.58% | 0.00% | |
Goodwill impairment and disposal | 0.00% | (11.88%) | 0.00% | |
Life insurance | 0.00% | 0.00% | (0.11%) | |
Tax attributes | 0.28% | 0.04% | 0.99% | |
Tax legislation | 0.95% | 0.00% | 1.05% | |
Valuation allowances | (10.57%) | (16.98%) | 3.26% | |
Uncertain tax positions | 0.00% | 0.00% | 0.78% | |
Other reconciling items, net | (0.36%) | (0.63%) | (1.48%) | |
Effective tax rate | 1.76% | (2.43%) | 23.41% |
Preferred Stock - Schedule of P
Preferred Stock - Schedule of Preferred Stock (Detail) - USD ($) $ in Thousands | Jul. 24, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Temporary Equity Disclosure [Abstract] | |||||
Preferred Stock Liquidation Value | $ 66,519 | $ 66,519 | $ 64,399 | ||
Accrued dividend | 2,120 | ||||
Amortization of preferred stock issuance costs | $ 109 | 184 | 183 | ||
Redemption of preferred stock | $ (66,519) | $ (66,519) | |||
Preferred Stock Issuance Costs | (109) | (293) | (476) | ||
Net Total | $ 66,410 | $ 66,226 | $ 63,923 |
Preferred Stock - Additional In
Preferred Stock - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Jul. 24, 2020 | Jul. 16, 2013 | Jun. 12, 2013 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Temporary Equity [Line Items] | |||||||
Preferred stock issuance cost | $ (109) | $ (293) | $ (476) | ||||
Payment on redemption of preferred stock | $ 66,519 | $ 66,519 | |||||
Private Placement [Member] | |||||||
Temporary Equity [Line Items] | |||||||
Preferred stock dividend rate | 6.00% | ||||||
Preferred stock conversion price per share | $ 4.39 | ||||||
Convertible preferred stock, shares issued upon conversion | 228 | ||||||
Convertible preferred stock, stock price trigger | $ 7.98 | ||||||
Convertible preferred stock, Description of Conversion | The preferred stock will be convertible at the election of the holders into shares of the Company’s common stock at an initial conversion price of $4.39 per share which would result in a conversion ratio of approximately 228 shares of common stock for each share of preferred stock. The preferred stock is convertible at the election of the Company five years after its issuance or at any time if the Company’s common stock closes at or above $7.98 per share for at least 20 consecutive trading days. | ||||||
Convertible preferred stock, stagnation period for conversion | 5 years | ||||||
Convertible preferred stock, consecutive trading days | 20 days | ||||||
Convertible preferred stock, liquidation preference per share | $ 1,000 | ||||||
Convertible referred stock, stockholders stagnation period for conversion | 7 years | ||||||
Private Placement [Member] | Convertible Preferred Stock [Member] | |||||||
Temporary Equity [Line Items] | |||||||
Convertible preferred stock issued | $ 50,000 | ||||||
Preferred stock issuance cost | $ 1,290 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - shares | 12 Months Ended | |||
Dec. 31, 2020 | Jul. 24, 2020 | Dec. 31, 2019 | Dec. 31, 2013 | |
Stockholders Equity [Line Items] | ||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | ||
Preferred stock, shares issued | 50,000 | |||
Redeemed share outstanding | 50,000 | |||
Preferred stock, shares outstanding | 0 | 50,000 | ||
Common stock, shares authorized | 150,000,000 | 150,000,000 | ||
Common stock, voting rights description | Holders of common stock are entitled to one vote for each share held at all stockholder meetings. | |||
Series A Preferred Stock [Member] | ||||
Stockholders Equity [Line Items] | ||||
Preferred stock, shares issued | 50,000 |
Severance and Restructuring C_3
Severance and Restructuring Costs - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||
Severance and restructuring costs | $ 773 | |
Employee Severance [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance and restructuring costs | $ 626 | $ 773 |
Paradigm Spine [Member] | Employee Severance [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance and restructuring costs | $ 896 |
Severance and Restructuring C_4
Severance and Restructuring Costs - Schedule of Restructuring Charges (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | |||
Accrued severance and restructuring charges, beginning balance | $ 136 | ||
Severance and restructuring expenses accrued | $ 773 | ||
Accrued severance and restructuring charges, ending balance | $ 136 | ||
Employee Severance [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Accrued severance and restructuring charges, beginning balance | 136 | 908 | 2,886 |
Severance and restructuring expenses accrued | 626 | 773 | |
Severance and restructuring cash payments | $ (136) | (1,398) | (2,751) |
Accrued severance and restructuring charges, ending balance | $ 136 | $ 908 |
Retirement Benefits - Additiona
Retirement Benefits - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Amounts expensed | $ 1,381 | $ 2,908 | $ 2,556 |
Plan name | 401(k) plan | ||
Maximum [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer matching contribution, percent of match | 6.00% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | Jan. 20, 2021 | Oct. 23, 2020 | Sep. 29, 2020 | Jul. 20, 2020 | Mar. 08, 2019 | Jan. 04, 2018 | Jan. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Manufacturing and Distribution Agreements with Affiliates of Montague Private Equity [Member] | ||||||||||
Commitment And Contingencies [Line Items] | ||||||||||
Purchase commitment, description | In connection with the closing of the OEM Transaction, on July 20, 2020 the Company entered into three manufacturing and distribution agreements with affiliates of Montague Private Equity: (i) a Manufacture and Distribution Agreement (the “Hardware MDA”) with Pioneer Surgical Technology, Inc. (“Pioneer”) pursuant to which Pioneer will manufacture certain hardware implants for the Company; (ii) a Processing and Distribution Agreement with RTI Surgical, Inc. (“RTI”), an affiliate of Pioneer, pursuant to which RTI would process certain biologic implants for the Company (the “PDA”); and (ii) a Manufacture and Distribution Agreement (NanOss) pursuant to which Pioneer would manufacture certain synthetic implants for the Company (the “NanOss MDA”, and together with the Hardware MDA and the PDA, the “OEM Distribution Agreements”. | |||||||||
Purchase obligation, year one | $ 24,201,000 | |||||||||
Purchase obligation, year two | 25,767,000 | |||||||||
Purchase obligation, year three | 27,158,000 | |||||||||
Design and Development Agreement with Pioneer [Member] | ||||||||||
Commitment And Contingencies [Line Items] | ||||||||||
Direct labor costs | $ 1,700,000 | |||||||||
Oxford Supply Agreement [Member] | ||||||||||
Commitment And Contingencies [Line Items] | ||||||||||
Contract maturity period | 2025 | |||||||||
Minimum purchase obligations beyond 2021 | $ 0 | |||||||||
Subsequent Event [Member] | Aziyo Biologics, Inc. [Member] | Distribution Agreements [Member] | 2020 Shortfall Obligation [Member] | ||||||||||
Commitment And Contingencies [Line Items] | ||||||||||
Purchase order issued | $ 12,361,000 | |||||||||
Maximum [Member] | Oxford Supply Agreement [Member] | ||||||||||
Commitment And Contingencies [Line Items] | ||||||||||
Purchase order issued | 600,000 | |||||||||
Minimum [Member] | Oxford Supply Agreement [Member] | ||||||||||
Commitment And Contingencies [Line Items] | ||||||||||
Purchase order issued | $ 150,000 | |||||||||
Paradigm Spine [Member] | ||||||||||
Commitment And Contingencies [Line Items] | ||||||||||
Agreement to acquire business | $ 300,000,000 | |||||||||
Cash to be paid at closing | 150,000,000 | |||||||||
Potential debt to finance business combination | $ 100,000,000 | |||||||||
Business acquisition, common shares issuable at closing | 10,729,614 | |||||||||
Number of common stock to be issued at closing, value | $ 50,000,000 | |||||||||
Revenue based earnout considerations | 0 | |||||||||
First potential earnout payment | $ 20,000,000,000 | |||||||||
Payments to acquire businesses | 232,907,000 | |||||||||
Cash from RTI Surgical | 232,907,000 | $ 99,692,000 | ||||||||
Contingent liability | 72,177,000 | 0 | ||||||||
Paradigm Spine [Member] | Maximum [Member] | ||||||||||
Commitment And Contingencies [Line Items] | ||||||||||
Revenue based earnout considerations | $ 150,000,000 | |||||||||
Zyga Technology Inc [Member] | ||||||||||
Commitment And Contingencies [Line Items] | ||||||||||
Date of merger agreement | Jan. 4, 2018 | |||||||||
Payments to acquire businesses | $ 21,000,000 | |||||||||
Cash from RTI Surgical | 3,000,000 | $ 21,000,000 | ||||||||
Zyga Technology Inc [Member] | Clinical Milestones [Member] | ||||||||||
Commitment And Contingencies [Line Items] | ||||||||||
Contingent liability | 1,100,000 | 4,986,000 | ||||||||
Zyga Technology Inc [Member] | Earn Out Payment [Member] | ||||||||||
Commitment And Contingencies [Line Items] | ||||||||||
Revenue based earnout consideration | 35,000,000 | 4,986,000 | ||||||||
Zyga Technology Inc [Member] | Revolving Credit Facility [Member] | ||||||||||
Commitment And Contingencies [Line Items] | ||||||||||
Cash proceeds from credit facility | $ 18,000,000 | |||||||||
Holo Surgical Inc. [Member] | ||||||||||
Commitment And Contingencies [Line Items] | ||||||||||
Cash from RTI Surgical | 32,117,000 | |||||||||
Holo Surgical Inc. [Member] | Stock Purchase Agreement [Member] | Common Stock [Member] | ||||||||||
Commitment And Contingencies [Line Items] | ||||||||||
Business acquisition, contingent consideration payable upon achievement of post-closing milestones | $ 50,632,000 | |||||||||
Holo Surgical Inc. [Member] | Roboticine, Inc. [Member] | Stock Purchase Agreement [Member] | ||||||||||
Commitment And Contingencies [Line Items] | ||||||||||
Cash to be paid at closing | 30,000,000 | $ 30,000,000 | ||||||||
Payments to acquire businesses | 94,999,000 | |||||||||
Cash from RTI Surgical | 30,000,000 | |||||||||
Business acquisition, contingent consideration payable upon achievement of post-closing milestones | 50,632,000 | 83,000,000 | ||||||||
Estimated fair value related to contingent consideration | 50,632,000 | $ 50,632,000 | ||||||||
Fair value of liability | 56,515,000 | |||||||||
Change in fair value of liability | 5,883,000 | |||||||||
Holo Surgical Inc. [Member] | Roboticine, Inc. [Member] | Stock Purchase Agreement [Member] | Loss on Acquisition Contingency [Member] | ||||||||||
Commitment And Contingencies [Line Items] | ||||||||||
Change in fair value of liability | $ 5,883,000 | |||||||||
Holo Surgical Inc. [Member] | Roboticine, Inc. [Member] | Stock Purchase Agreement [Member] | Common Stock [Member] | ||||||||||
Commitment And Contingencies [Line Items] | ||||||||||
Business acquisition, common shares issuable at closing | 6,250,000 | 6,250,000 | ||||||||
Business acquisition, equity interests issued or issuable for contingent consideration upon achievement of post-closing milestones | 14,900,000 | 14,900,000 | ||||||||
Holo Surgical Inc. [Member] | Roboticine, Inc. [Member] | Stock Purchase Agreement [Member] | long-Term liabilities [Member] | ||||||||||
Commitment And Contingencies [Line Items] | ||||||||||
Fair value of liability | $ 41,639,000 | |||||||||
Holo Surgical Inc. [Member] | Roboticine, Inc. [Member] | Stock Purchase Agreement [Member] | Accrued Expenses [Member] | ||||||||||
Commitment And Contingencies [Line Items] | ||||||||||
Fair value of liability | 8,996,000 | |||||||||
Holo Surgical Inc. [Member] | Roboticine, Inc. [Member] | Stock Purchase Agreement [Member] | Current Liabilities [Member] | ||||||||||
Commitment And Contingencies [Line Items] | ||||||||||
Fair value of liability | $ 8,993,000 | |||||||||
Holo Surgical Inc. [Member] | Roboticine, Inc. [Member] | Stock Purchase Agreement [Member] | Other Long-Term Liabilities [Member] | ||||||||||
Commitment And Contingencies [Line Items] | ||||||||||
Fair value of liability | $ 47,519,000 | |||||||||
Holo Surgical Inc. [Member] | Maximum [Member] | Stock Purchase Agreement [Member] | Common Stock [Member] | ||||||||||
Commitment And Contingencies [Line Items] | ||||||||||
Business acquisition, common shares issuable at closing | 8,650,000 | |||||||||
Holo Surgical Inc. [Member] | Maximum [Member] | Roboticine, Inc. [Member] | Stock Purchase Agreement [Member] | ||||||||||
Commitment And Contingencies [Line Items] | ||||||||||
Business acquisition, contingent consideration payable upon achievement of post-closing milestones | $ 83,000,000 | |||||||||
Holo Surgical Inc. [Member] | Maximum [Member] | Roboticine, Inc. [Member] | Stock Purchase Agreement [Member] | Common Stock [Member] | ||||||||||
Commitment And Contingencies [Line Items] | ||||||||||
Business acquisition, common shares issuable at closing | 8,650,000 | 8,650,000 |
Legal Actions - Additional Info
Legal Actions - Additional Information (Detail) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)ClaimLawsuit | Dec. 01, 2020USD ($) | |
Commitments And Contingencies Disclosure [Abstract] | ||
Maximum working capital adjustment amount | $ | $ 1,376 | $ 14,000 |
Claims for which the Company Parties are providing defense and indemnification | Claim | 1,157 | |
Number of lawsuits filed on behalf of company | Lawsuit | 3 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) | Oct. 23, 2020USD ($)shares | Sep. 29, 2020USD ($)shares | Jul. 20, 2020USD ($)Installmentshares | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2020 |
Related Party Transaction [Line Items] | ||||||
Related party transaction amounts | $ 0 | $ 0 | ||||
Mr. Simpson [Member] | Restricted Stock Awards [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Number of shares to be grants | shares | 825 | |||||
Consulting Agreement [Member] | Mr. Simpson [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Agreement initial term Period | 3 years | |||||
Annual consulting fee | $ 275,000 | |||||
Number of monthly installments | Installment | 12 | |||||
Holo Surgical Inc. [Member] | Roboticine, Inc. [Member] | Stock Purchase Agreement [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Cash to be paid at closing | $ 30,000,000 | $ 30,000,000 | ||||
Business acquisition, contingent consideration payable upon achievement of post-closing milestones | $ 50,632,000 | $ 83,000,000 | ||||
Holo Surgical Inc. [Member] | Roboticine, Inc. [Member] | Stock Purchase Agreement [Member] | Dr. Pawel Lewicki [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Business combination, equity interest in acquiree, percentage | 57.50% | |||||
Holo Surgical Inc. [Member] | Common Stock [Member] | Stock Purchase Agreement [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Business acquisition, contingent consideration payable upon achievement of post-closing milestones | $ 50,632,000 | |||||
Holo Surgical Inc. [Member] | Common Stock [Member] | Roboticine, Inc. [Member] | Stock Purchase Agreement [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Business acquisition, common shares issuable at closing | shares | 6,250,000 | 6,250,000 | ||||
Business acquisition, common shares issuable value | $ 12,250,000 | $ 12,250,000 | ||||
Minimum [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Percent of beneficial owner of common stock | 5.00% | |||||
Maximum [Member] | Holo Surgical Inc. [Member] | Roboticine, Inc. [Member] | Stock Purchase Agreement [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Business acquisition, contingent consideration payable upon achievement of post-closing milestones | $ 83,000,000 | |||||
Maximum [Member] | Holo Surgical Inc. [Member] | Common Stock [Member] | Stock Purchase Agreement [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Business acquisition, common shares issuable at closing | shares | 8,650,000 | |||||
Maximum [Member] | Holo Surgical Inc. [Member] | Common Stock [Member] | Roboticine, Inc. [Member] | Stock Purchase Agreement [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Business acquisition, common shares issuable at closing | shares | 8,650,000 | 8,650,000 |
Quarterly Results of Operatio_3
Quarterly Results of Operations (Unaudited) - Schedule of Quarterly Results of Operations (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 26,187 | $ 27,926 | $ 20,534 | $ 27,102 | $ 31,574 | $ 28,702 | $ 32,747 | $ 24,400 | $ 101,749 | $ 117,423 | $ 92,112 |
Gross profit | 12,770 | 16,034 | 11,065 | 17,878 | 23,508 | 21,095 | 23,128 | 16,915 | 57,747 | 84,646 | 58,519 |
Loss from continuing operations | (118,056) | (26,653) | (24,946) | (24,540) | (199,591) | (16,972) | (14,003) | (18,212) | (194,195) | (248,778) | (49,649) |
Income (loss) from discontinued operations | 18,015 | 149,338 | (13,618) | 6,677 | 2,250 | 11,834 | 14,191 | 8,861 | 160,412 | 37,136 | 46,526 |
Net loss | $ (100,041) | $ 122,685 | $ (38,564) | $ (17,863) | $ (197,341) | $ (5,138) | $ 188 | $ (9,351) | $ (33,783) | $ (211,642) | $ (3,123) |
Net loss from continuing operations per common share - basic | $ (1.51) | $ (0.36) | $ (0.34) | $ (0.34) | $ (2.76) | $ (0.23) | $ (0.19) | $ (0.29) | $ (2.61) | $ (3.55) | $ (0.85) |
Net loss from continuing operations per common share - diluted | (1.51) | (0.36) | (0.34) | (0.34) | (2.76) | (0.23) | (0.16) | (0.29) | (2.61) | (3.55) | (0.85) |
Net income (loss) from discontinued operations per common share - basic | 0.23 | 2.04 | (0.19) | 0.09 | 0.04 | 0.16 | 0.19 | 0.14 | 2.16 | 0.53 | 0.76 |
Net income (loss) from discontinued operations per common share - diluted | 0.23 | 2.04 | (0.19) | 0.09 | 0.04 | 0.16 | 0.16 | 0.14 | 2.16 | 0.53 | 0.76 |
Net (loss) income per common share - basic | (1.28) | 1.68 | (0.53) | (0.25) | (2.72) | (0.07) | 0 | (0.15) | (0.45) | (3.02) | (0.09) |
Net (loss) income per common share - diluted | $ (1.28) | $ 1.68 | $ (0.53) | $ (0.25) | $ (2.72) | $ (0.07) | $ 0 | $ (0.15) | $ (0.45) | $ (3.02) | $ (0.09) |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) $ / shares in Units, $ in Thousands | Mar. 12, 2021USD ($)ft² | Feb. 01, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Subsequent Event [Line Items] | ||||
Operating lease cost | $ 1,179 | $ 1,108 | ||
Operating lease payments | $ 1,313 | $ 1,007 | ||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Reimbursement to underwriters maximum clearance expenses of this offering with financial industry regulatory authority | $ 25 | |||
Subsequent Event [Member] | San Diego Lease [Member] | ||||
Subsequent Event [Line Items] | ||||
Operating lease term of contract | 12 years | |||
Operating lease, option to extend | The initial term of the Lease is twelve (12) years, with one (1) extension option for a period of seven (7) years | |||
Operating lease extension period | 7 years | |||
Subsequent Event [Member] | San Diego Lease [Member] | Premises [Member] | ||||
Subsequent Event [Line Items] | ||||
Lease rentable area | ft² | 94,457 | |||
Operating lease cost | $ 64,600 | |||
Operating lease payments | $ 2,500 | |||
Rent abatement term | 13 months | |||
Public Offering [Member] | Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Common stock sold | shares | 28,700,000 | |||
Common stock price per share | $ / shares | $ 1.50 | |||
Net proceeds from issuance of common stock | $ 40,467 | |||
Underwriting discounts and commission | 2,583 | |||
Fees and expenses in connection of the offering | $ 3,208 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Allowance for Doubtful Accounts [Member] | |||
Valuation And Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | $ 4,803 | $ 1,865 | $ 1,185 |
Charged to Costs and Expenses | 3,584 | 2,541 | 827 |
Deductions, Write-offs, or Payments | 184 | (397) | 147 |
Balance at End of Period | 8,203 | 4,803 | 1,865 |
Allowance for Product Returns [Member] | |||
Valuation And Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | 106 | 478 | 441 |
Charged to Costs and Expenses | 246 | 37 | |
Deductions, Write-offs, or Payments | 247 | 372 | |
Balance at End of Period | 105 | 106 | 478 |
Deferred Tax Asset Valuation Allowance [Member] | |||
Valuation And Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | 48,115 | 3,093 | 1,529 |
Charged to Costs and Expenses | (2,638) | 45,022 | 2,368 |
Deductions, Write-offs, or Payments | 351 | 804 | |
Balance at End of Period | $ 45,126 | $ 48,115 | $ 3,093 |