Form 10-Q - Quarterly report [Sections 13 or 15(d)]

As of June 30,

Stock options

Restricted stock units

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2024

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

For the transition period from to

Commission File Number: 001-40902

Paragon 28, Inc.

(Exact name of registrant as specified in its charter)


Delaware	27-3170186
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
14445 Grasslands Drive Englewood, CO	80112
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (720) 912-1332

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common stock, $0.01 par value per share

FNA

The New York Stock Exchange

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

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

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


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

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

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

As of August 2, 2024, there were 83,542,291 shares of the registrant’s common stock, $0.01 par value per share, outstanding.

Table of Contents

EXPLANATORY NOTE

As previously disclosed in Amendment No. 1 to our Annual Report on Form 10-K/A for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on August 8, 2024 (the “Amended 2023 Annual Report”) and Amendment No. 1 to our Quarterly Report on Form 10-Q/A for the three months ended March 31, 2024, filed with the SEC on August 8, 2024 (the “Amended 2024 Quarterly Report”), we restated our audited consolidated financial statements for the fiscal year ended December 31, 2023, and the unaudited interim condensed consolidated financial statements for the periods ended March 31, 2023, June 30, 2023, September 30, 2023 and March 31, 2024. Accordingly, the audited consolidated financial statements as of December 31, 2023, and the unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2023 included in this Quarterly Report on Form 10-Q have been restated to reflect the restatement as described in the Amended 2023 Annual Report and the Amended 2024 Quarterly Report.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future financial condition, future operations, projected costs, prospects, plans, objectives of management and expected market growth, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “design,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “positioned,” “potential,” “predict,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. All statements other than statements of historical fact contained in this Quarterly Report, including without limitation statements regarding our business model and strategic plans for our products, technologies and business, including our implementation thereof, the impact on our business, financial condition and results of operations from macroeconomic conditions, the timing of and our ability to obtain and maintain regulatory approvals, our commercialization efforts, our acquisitions, including resulting synergies and future milestone payouts, marketing and manufacturing capabilities and strategy, our expectations about the commercial success and market acceptance of our products, the sufficiency of our cash, cash equivalents and marketable securities, and the plans and objectives of management for future operations and capital expenditures are forward-looking statements.

The forward-looking statements in this Quarterly Report are only predictions and are based largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of known and unknown risks, uncertainties, and assumptions, including those described under the sections in this Quarterly Report entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this Quarterly Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely upon these forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance, or achievements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise. We intend the forward-looking statements contained in this Quarterly Report to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Table of Contents

Table of Contents


		Page

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss	2
	Condensed Consolidated Statements of Stockholders’ Equity	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Unaudited Interim Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24

PART II.	OTHER INFORMATION	27

Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	27
Item 5.	Other Information	27
Item 6.	Exhibits	28
	Signatures	29

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

PARAGON 28, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

(unaudited)



		June 30, 2024	December 31, 2023
			(As Restated)
ASSETS
Current assets:
Cash and cash equivalents	$	46,741	$	75,639
Trade receivables, net of allowance for doubtful accounts of $931 and $1,339, respectively		36,708		37,323
Inventories, net		96,406		90,046
Income taxes receivable		1,018		794
Other current assets		3,575		3,997
Total current assets		184,448		207,799

Property and equipment, net		74,904		74,122
Intangible assets, net		20,977		21,674
Goodwill		25,465		25,465
Deferred income taxes		714		705
Other assets		3,959		2,918
Total assets	$	310,467	$	332,683

LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	23,136	$	21,696
Accrued expenses		26,531		27,781
Other current liabilities		962		883
Current maturities of long-term debt		640		640
Income taxes payable		422		243
Total current liabilities		51,691		51,243

Long-term liabilities:
Long-term debt net, less current maturities		109,913		109,799
Other long-term liabilities		1,159		1,048
Deferred income taxes		231		233
Income taxes payable		638		635
Total liabilities		163,632		162,958

Commitments and contingencies (Note 10)

Stockholders' equity:
Common stock, $0.01 par value, 300,000,000 shares authorized; 84,417,725 and 83,738,974 shares issued, and 83,504,206 and 82,825,455 shares outstanding as of June 30, 2024 and December 31, 2023, respectively		833		827
Additional paid in capital		307,524		298,394
Accumulated deficit		(154,827)		(123,646)
Accumulated other comprehensive (loss) income		(713)		132
Treasury stock, at cost; 913,519 shares as of June 30, 2024 and December 31, 2023		(5,982)		(5,982)
Total stockholders' equity		146,835		169,725
Total liabilities & stockholders' equity	$	310,467	$	332,683

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

PARAGON 28, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share data)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
				(As Restated)				(As Restated)
Net revenue	$	61,016	$	51,009	$	122,098	$	103,045
Cost of goods sold		15,261		11,599		29,103		21,828
Gross profit		45,755		39,410		92,995		81,217

Operating expenses:
Research and development costs		7,083		7,683		14,667		14,732
Selling, general, and administrative		49,439		43,827		104,221		87,647
Total operating expenses		56,522		51,510		118,888		102,379
Operating loss		(10,767)		(12,100)		(25,893)		(21,162)

Other income (expense):
Other income (expense), net		132		(76)		647		(692)
Interest expense, net		(2,917)		(803)		(5,539)		(2,008)
Total other expense, net		(2,785)		(879)		(4,892)		(2,700)
Loss before income taxes		(13,552)		(12,979)		(30,785)		(23,862)
Income tax expense		230		269		396		198
Net loss	$	(13,782)	$	(13,248)	$	(31,181)	$	(24,060)
Foreign currency translation adjustment		252		(283)		(845)		(382)
Comprehensive loss	$	(13,530)	$	(13,531)	$	(32,026)	$	(24,442)
Weighted average number of shares of common stock outstanding:
Basic		83,115,861		82,373,441		82,984,878		81,536,607
Diluted		83,115,861		82,373,441		82,984,878		81,536,607
Net loss per share attributable to common stockholders:
Basic	$	(0.17)	$	(0.16)	$	(0.38)	$	(0.30)
Diluted	$	(0.17)	$	(0.16)	$	(0.38)	$	(0.30)

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

PARAGON 28, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except for number of shares)

(unaudited)


								Accumulated
				Additional				Other				Total
	Common Stock			Paid-in-		Accumulated		Comprehensive		Treasury		Stockholders'
For the Three Months Ended June 30, 2024	Shares	Amount		Capital		Deficit		Loss		Stock		Equity
Balance, March 31, 2024 (As Restated)	82,945,411	$	828	$	301,459	$	(141,045)	$	(965)	$	(5,982)	$	154,295
Net Loss	—		—		—		(13,782)		—		—		(13,782)
Options exercised	424,999		5		2,575		—		—		—		2,580
Restricted stock vested	64,477		—		(24)		—		—		—		(24)
Foreign currency translation	—		—		—		—		252		—		252
Employee stock purchase plan	69,319		—		490		—		—		—		490
Stock-based compensation	—		—		3,024		—		—		—		3,024
Balance, June 30, 2024	83,504,206	$	833	$	307,524	$	(154,827)	$	(713)	$	(5,982)	$	146,835

For the Six Months Ended June 30, 2024
Balance, December 31, 2023 (As Restated)	82,825,455	$	827	$	298,394	$	(123,646)	$	132	$	(5,982)	$	169,725
Net Loss	—		—		—		(31,181)		—		—		(31,181)
Options exercised	473,749		5		2,873		—		—		—		2,878
Restricted stock vested	135,683		1		(425)		—		—		—		(424)
Foreign currency translation	—		—		—		—		(845)		—		(845)
Employee stock purchase plan	69,319		—		570		—		—		—		570
Stock-based compensation	—		—		6,112		—		—		—		6,112
Balance, June 30, 2024	83,504,206	$	833	$	307,524	$	(154,827)	$	(713)	$	(5,982)	$	146,835


								Accumulated
				Additional				Other				Total
	Common Stock			Paid-in-		Accumulated		Comprehensive		Treasury		Stockholders'
For the Three Months Ended June 30, 2023	Shares	Amount		Capital		Deficit		Loss		Stock		Equity
Balance, March 31, 2023 (As Restated)	82,306,873	$	821	$	287,286	$	(76,924)	$	(132)	$	(5,982)	$	205,069
Net loss (As Restated)	—		—		—		(13,248)		—		—		(13,248)
Offering costs associated with public offering	—		—		4		—		—		—		4
Options exercised	192,027		3		840		—		—		—		843
Foreign currency translation	—		—		—		—		(283)		—		(283)
Employee stock purchase plan	37,146		—		620		—		—		—		620
Stock-based compensation	—		—		3,600		—		—		—		3,600
Balance, June 30, 2023 (As Restated)	82,536,046	$	824	$	292,350	$	(90,172)	$	(415)	$	(5,982)	$	196,605

For the Six Months Ended June 30, 2023
Balance, December 31, 2022 (As Restated)	77,770,588	$	776	$	213,956	$	(66,112)	$	(33)	$	(5,982)	$	142,605
Net loss (As Restated)	—		—		—		(24,060)		—		—		(24,060)
Issuance of common stock, net of issuance costs of $827	4,312,500		43		68,410		—		—		—		68,453
Options exercised	415,812		5		2,460		—		—		—		2,465
Foreign currency translation	—		—		—		—		(382)		—		(382)
Employee stock purchase plan	37,146		—		742		—		—		—		742
Stock-based compensation	—		—		6,782		—		—		—		6,782
Balance, June 30, 2023 (As Restated)	82,536,046	$	824	$	292,350	$	(90,172)	$	(415)	$	(5,982)	$	196,605

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

PARAGON 28, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Six Months Ended June 30,
	2024			2023
				(As Restated)
Cash flows from operating activities
Net loss	$	(31,181)	$	(24,060)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		8,868		6,414
Allowance for doubtful accounts		785		147
Provision for excess and obsolete inventories		5,932		923
Stock-based compensation		6,112		6,782
Change in fair value of financial instruments		(601)		366
Other		(581)		394
Changes in other assets and liabilities, net of acquisitions:
Accounts receivable		(360)		3,138
Inventories		(12,631)		(20,959)
Accounts payable		1,456		14,745
Accrued expenses		809		1,845
Accrued legal settlement		—		(22,000)
Income tax receivable/payable		(23)		(359)
Other assets and liabilities		211		(779)
Net cash used in operating activities		(21,204)		(33,403)

Cash flows from investing activities
Purchases of property and equipment		(9,491)		(15,354)
Proceeds from sale of property and equipment		724		635
Purchases of intangible assets		(462)		(544)
Net cash used in investing activities		(9,229)		(15,263)

Cash flows from financing activities
Payments on long-term debt		(320)		(396)
Payments of debt issuance costs		(18)		—
Proceeds from issuance of common stock, net of issuance costs		—		68,453
Options exercised		2,878		2,464
RSU vesting, taxes paid		(424)		—
Proceeds from employee stock purchase plan		403		560
Payments on earnout liability		(2,000)		(4,250)
Net cash provided by financing activities		519		66,831

Effect of exchange rate changes on cash and cash equivalents		1,016		114
Net (decrease) increase in cash and cash equivalents		(28,898)		18,279
Cash and cash equivalents at beginning of period		75,639		38,468
Cash and cash equivalents at end of period	$	46,741	$	56,747

Supplemental disclosures of cash flow information:
Restricted cash		—		2,250
Cash paid for income taxes		839		456
Cash paid for interest		5,479		2,068
Purchase of property and equipment included in accounts payable		3,325		5,617

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

(unaudited)

NOTE 1. BUSINESS AND BASIS OF PRESENTATION

Business

Paragon 28, Inc. (collectively with its subsidiaries, “we,” “us,” “our,” “P28” or the “Company”) develops, distributes, and sells medical devices in the foot and ankle segment of the orthopedic implant marketplace. Our approach to product development is procedurally focused, resulting in a full range of procedure-specific foot and ankle products designed specifically for foot and ankle anatomy. Our products and product families include plates and plating systems, screws, staples, and nails aimed to address all major foot and ankle procedures including fracture fixation, forefoot or hallux valgus - which includes bunion and hammertoe, ankle, flatfoot or progressive collapsing foot deformity (“PCDF”), charcot foot and orthobiologics. P28 is a United States (“U.S.”) based company incorporated in the State of Delaware, with headquarters in Englewood, Colorado. Our sales representatives and distributors are located globally with the majority concentrated in the U.S., Australia, South Africa, and the United Kingdom.

Basis of Presentation and Consolidation

The accompanying Condensed Consolidated Financial Statements include the accounts of Paragon 28, Inc. and its subsidiaries, all of which are wholly-owned. The accompanying Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information required by U.S. GAAP for complete financial statements. The interim Condensed Consolidated Financial Statements reflect all adjustments that are of a normal recurring nature and that are considered necessary for a fair representation of the results for the periods presented and should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2023, which include a complete set of footnote disclosures, including our significant accounting policies. The audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2023, are included in the Company’s Amended 2023 Annual Report. The results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year or for any other future period. All intercompany balances and transactions have been eliminated in consolidation.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Because future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Any changes in these estimates will be reflected in the Company’s Condensed Consolidated Financial Statements. Significant items subject to such estimates and assumptions include the determination of the credit loss reserves for trade receivables, inventory obsolescence, impairment of long-lived assets, recoverability of goodwill and intangible assets, contingent earnout liabilities, interest rate swap valuation, income taxes and stock-based compensation. On January 1, 2024, the Company revised the inputs used in estimating the reserve on obsolete and slow-moving inventory to include forecasted sales, in addition to current inventory levels and historical sales. The effect of this change in estimate was a decrease of $47 to the Company’s reserve for obsolete and slow-moving inventory during the six months ended June 30, 2024.

Foreign Currency Translation

The Condensed Consolidated Financial Statements are presented in U.S. dollars. The Company’s non-U.S. subsidiaries have a functional currency (i.e., the currency in which operational activities are primarily conducted) that is other than the U.S. dollar, generally the currency of the country in which such subsidiaries are domiciled. Such subsidiaries’ assets and liabilities are translated into U.S. dollars at quarter-end exchange rates, while revenue and expenses are translated at average exchange rates during the quarter based on the daily closing exchange rates. Adjustments that result from translating amounts from a subsidiary’s functional currency to U.S. dollars are reported in Accumulated other comprehensive income (loss), a separate component of stockholders’ equity.

Table of Contents

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except share and per share data)

(unaudited)

Transactions made in a currency other than the functional currency are remeasured to the functional currency at the exchange rates on the dates of the transactions. Foreign exchange gains and losses are recorded within Other income (expense), net on the consolidated statements of operations and comprehensive loss.

Significant Accounting Policies

There have been no changes in the Company’s significant accounting policies as disclosed in Note 2 to our audited Consolidated Financial Statements included in our Amended 2023 Annual Report on Form 10-K/A.

Recently Issued Accounting Pronouncements

In October 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. The amendments in ASU 2023-06 modify the disclosure or presentation requirements of a variety of Topics in the Codification. Certain of the amendments represent clarifications to or technical corrections of the current requirements. ASU 2023-06 is applicable to all entities subject to the SEC’s existing disclosure requirements. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The Company is currently evaluating the amendments in ASU 2023-06 and does not expect the adoption to have a significant impact on the Company’s Consolidated Financial Statements and related disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"), which provides amendments to improve reportable segment disclosures requirements. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the amendments in this guidance to determine the impact it will have on the Company's Consolidated Financial Statements and related notes for the year ended December 31, 2024, upon adoption.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), to enhance the transparency and decision usefulness of income tax disclosures. The main provisions in ASU 2023-09 enhance the disclosure requirements of rate reconciliations and income taxes paid. For public business entities, the amendments in ASU 2023-09 are effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this update should be applied on a prospective basis, retrospective application is permitted. The Company is currently evaluating the amendments in this guidance to determine the impact it will have on the Company’s Consolidated Financial Statements and related disclosures.

Table of Contents

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except share and per share data)

(unaudited)

NOTE 3. INTANGIBLE ASSETS

Intangibles

Intangible assets as of June 30, 2024, were as follows:


	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trademarks and tradenames, indefinite-lived	$	607	$	—	$	607
Patents, trademarks and tradenames, definite-lived		8,718		2,995		5,723
Customer relationships		1,733		705		1,028
Developed technology		17,690		4,071		13,619
Other intangibles		30		30		—
Total intangible assets, net	$	28,778	$	7,801	$	20,977

Intangible assets as of December 31, 2023, were as follows:


	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trademarks and tradenames, indefinite-lived	$	987	$	—	$	987
Patents, definite-lived		7,900		2,649		5,251
Customer relationships		1,733		567		1,166
Developed technology		17,690		3,424		14,266
Other intangibles		30		26		4
Total intangible assets, net	$	28,340	$	6,666	$	21,674

Amortization expense is included in Selling, general, and administrative expenses, on the Condensed Consolidated Statements of Operations and Comprehensive Loss, and was $668 and $508 for the three months ended June 30, 2024 and 2023, respectively. Amortization expense for the six months ended June 30, 2024 and 2023 totaled $1,138 and $1,011, respectively. During the three months ended June 30, 2024, the Company recategorized one of its intangible assets from Trademarks and tradenames, indefinite-lived to Patents, trademarks and tradenames, definite-lived and recorded the related amortization expense.

Expected future amortization expense is as follows:


2024 (Remaining)	$	1,019
2025		2,033
2026		2,033
2027		1,952
2028		1,953
Thereafter		11,380
Total future amortization expense	$	20,370

No impairment charges related to intangibles were recorded for the three and six months ended June 30, 2024 and 2023.

Table of Contents

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except share and per share data)

(unaudited)

NOTE 4. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company measures certain financial assets and liabilities at fair value. There is a fair value hierarchy which prioritizes inputs used in measuring fair value into three broad levels:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2- Includes other inputs that are directly or indirectly observable in the marketplace, such as quoted market prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3 - Unobservable inputs which are supported by little or no market activity.

The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest-level input that is significant to the fair value measurement in its entirety.

The Company’s significant financial assets and liabilities measured at fair value as of June 30, 2024, were as follows:


	Level 1		Level 2	Level 3	Total
Financial Assets:
Interest rate swap	$	—	1,590	—	$	1,590
Financial Liabilities:
Contingent consideration	$	—	—	340	$	340

The Company's significant financial assets and liabilities measured at fair value as of December 31, 2023, were as follows:


	Level 1		Level 2	Level 3	Total
Financial Assets:
Interest rate swap	$	—	991	—	$	991
Financial Liabilities:
Contingent consideration	$	—	—	340	$	340

The Company’s Level 2 asset pertains to an interest rate swap associated with the Company’s Zions Facility (as defined below), used to manage interest rate risk related to variable rate borrowings and manage exposure to the variability of cash flows. The interest rate swap is not designated for hedge accounting and is measured utilizing inputs observable in active markets. For the three and six months ended June 30, 2024, we reassessed the fair value of our swap which resulted in an increase of $82 and $601, respectively to the swap asset. The swap asset is recorded in Other assets on the Condensed Consolidated Balance Sheet and the change in fair value is recorded in Other income (expense), net within the Condensed Consolidated Statement of Operations and Comprehensive Loss.

As of June 30, 2024, the Company’s Level 3 contingent earnout liability of $340 is included in Other current liabilities on the Condensed Consolidated Balance Sheet. The Company’s Level 3 liability is related to the remaining two milestones associated with the Additive Orthopaedics acquisition.

As of December 31, 2023, one project milestone associated with the Disior acquisition and one project milestone associated with the Additive Orthopaedics acquisition was included in Accrued expenses on the Consolidated Balance Sheet totaling $2,000. During the first quarter of 2024, $1,000 was paid in cash related to the Additive Orthopaedics milestone and the remaining $1,000 related to the Disior acquisition was paid during the second quarter of 2024. For additional information on the Disior and Additive Orthopaedics acquisitions refer to Note 4 to our Consolidated Financial

Table of Contents

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except share and per share data)

(unaudited)

Statements included in the Company’s Amended 2023 Annual Report on Form 10-K/A for the year ended December 31, 2023.

NOTE 5. DEBT

Long-term debt as of June 30, 2024 and December 31, 2023 consists of the following:


	June 30, 2024		December 31, 2023
Ares Revolving Loan	$	25,000	$	25,000
Ares Term Loan		75,000		75,000
Zions Term Loan		14,613		14,933
		114,613		114,933
Less: deferred issuance costs		(4,060)		(4,494)
Total debt, net of issuance costs		110,553		110,439
Less: current portion		(640)		(640)
Long-term debt, net, less current maturities	$	109,913	$	109,799

Ares Credit Agreement

On November 2, 2023, the Company entered into a new credit agreement with Ares Capital Corporation to provide a total of $150,000, inclusive of a revolving credit facility of up to $50,000 (the “Ares Revolving Loan”) and a term loan facility of up to $100,000 (the “Ares Term Loan”). The obligations under the Ares Credit Agreement are guaranteed by each of the Borrowers’ current and future domestic subsidiaries and secured by liens on substantially all of the Borrowers’ and guarantors’ present and after-acquired assets, in each case, subject to certain customary exceptions. In connection with the closing of the Ares Credit Agreement, the Company drew down $25,000 and $75,000 on the Ares Revolving Loan and Ares Term Loan, respectively. The Ares Revolving Loan and Ares Term Loan bear interest at variable rates of Term SOFR plus 4% and Term SOFR plus 6.75%, respectively, subject in the case of the Ares Term Loan to certain step-downs and adjustments as set forth in the Ares Credit Agreement, and mature on the earlier of (i) November 2, 2028, and (ii) with respect to the Ares Revolving Loan, 6 months prior to the maturity date of any other indebtedness in a principal or stated amount in excess of $12,500. The Ares Credit Agreement contains a financial covenant requiring the Company to maintain certain minimum revenue levels. As of June 30, 2024, the Company was in compliance with all financial covenants under the Ares Credit Agreement. Total debt issuance costs associated with the Ares Credit Agreement were $3,849 as of June 30, 2024. Amortization expense associated with such debt issuance costs totaled $222 and $426 for the three and six months ended June 30, 2024, respectively and are included in Interest expense, net on the Condensed Consolidated Statements of Operations and Comprehensive Loss. There were no debt issuance costs associated with the Ares Credit Agreement during the three and six months ended June 30, 2023.

Vectra Bank Colorado Loan Agreements

On March 24, 2022, the Company entered into a secured term loan facility (the “Zions Facility”) with Zions Bancorporation, N.A. dba Vectra Bank Colorado in the principal amount of $16,000. The loans under the Zions Facility (i) bear interest at a variable rate per annum equal to the sum of (a) a one-month Term SOFR based rate, plus (b) 1.75%, adjusted on a monthly basis and (ii) mature on March 24, 2037. Principal and interest payments are payable monthly, with optional prepayments allowed without premium or penalty.

Effective as of November 10, 2022, the Company entered into the First Amendment to the Zions Facility. The amendment to the Zions Facility amends the financial covenants to require the Company to maintain (i) the Liquidity Ratio, if the Cash Flow as of the last day of any quarter measured on a trailing three month basis is less than or equal to $0, and (ii) the Fixed Charge Coverage Ratio which will be calculated as of the last day of each quarter on a trailing four quarter basis, as well as a certain level of Liquidity, if the Cash Flow is greater than $0. In addition, a Net Revenue Growth covenant was added which will be calculated as of the last day of each quarter on a year-over-year basis.

Table of Contents

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except share and per share data)

(unaudited)

Effective as of November 2, 2023, the Company entered into the Second Amendment to the Zions Facility (the “Second Amendment”). The Second Amendment replaces references to MidCap Financial Trust and MidCap Credit Agreements with references to Ares and the Ares Credit Agreement. As of June 30, 2024, the Company was in compliance with all financial covenants under the Second Amendment. Total debt issuance costs associated with the Zions Facility were $211 as of June 30, 2024. Amortization expense associated with such debt issuance costs was $4 and $8 for the three and six months ended June 30, 2024, and is included in Interest expense, net on the Condensed Consolidated Statements of Operations and Comprehensive Loss, respectively and totaled $4 and $8 for the three and six months ended June 30, 2023, respectively.

NOTE 6. STOCKHOLDERS’ EQUITY

Under its Amended and Restated Certificate of Incorporation, the Company has a total of 310,000,000 shares of capital stock authorized for issuance, consisting of 300,000,000 shares of common stock, par value of $0.01 per share, and 10,000,000 shares of convertible preferred stock, par value of $0.01 per share.

Common Stock

On January 30, 2023, the Company completed an underwritten public offering (“the Offering”) of 6,500,000 shares of its common stock at an offering price of $17.00 per share, which consisted of 3,750,000 shares of common stock issued and sold by the Company and 2,750,000 shares of common stock sold by certain selling securityholders. On February 17, 2023, the underwriters exercised in full their option to purchase an additional 562,500 shares and 412,500 shares of common stock from the Company and the selling securityholders, respectively.‌

The Company received aggregate net proceeds from the Offering of approximately $68,453 after deducting underwriting discounts and commissions and offering expenses payable by the Company. The selling securityholders received aggregate net proceeds from the Offering of approximately $50,700 after deducting underwriting discounts and commissions. The Company did not receive any of the proceeds from the sale of shares of Common Stock by the selling securityholders.

Treasury Stock

The Company did not purchase any of its common stock during the six months ended June 30, 2024 and 2023. All previously repurchased shares were recorded in Treasury stock at cost.

NOTE 7. LOSS PER SHARE

Basic net loss per share is computed by dividing net loss attributable to common stockholders (the numerator) by the weighted average number of common stock outstanding for the period (the denominator). Diluted net income per share of common stock attributable to common stockholders is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period adjusted for the dilutive effects of common stock equivalents using the treasury stock method or the method based on the nature of such securities. In periods when losses from operations are reported, the weighted-average number of shares of common stock outstanding excludes common stock

Table of Contents

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except share and per share data)

(unaudited)

equivalents because their inclusion would be anti-dilutive. The computation of net loss per share for the three and six months ended June 30, 2024 and 2023 was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
			(As Restated)				(As Restated)
Net loss	$	(13,782)	$	(13,248)	$	(31,181)	$	(24,060)

Weighted-average common stock outstanding:
Basic		83,115,861		82,373,441		82,984,878		81,536,607
Diluted		83,115,861		82,373,441		82,984,878		81,536,607

Loss per share:
Basic	$	(0.17)	$	(0.16)	$	(0.38)	$	(0.30)
Diluted	$	(0.17)	$	(0.16)	$	(0.38)	$	(0.30)

The following outstanding potentially dilutive securities were excluded from the calculation of diluted net loss per share attributable to common stockholders because their impact would have been antidilutive for the period presented:

NOTE 8. STOCK-BASED COMPENSATION

Employee Stock Purchase Plan

The Company’s Employee Stock Purchase Plan (“ESPP”) provides participating employees with the opportunity to purchase the Company’s common stock at 85% of the market price at the lesser of the date the purchase right is granted or exercisable. Eligible employees can contribute up to 15% of their gross base earnings for purchases under the ESPP through regular payroll deductions, limited to $25 worth of the Company’s shares of common stock for each calendar year in which the purchase right is outstanding. The Company currently holds offerings consisting of six-month periods commencing on January 1st and July 1st of each calendar year, with a single purchase date at the end of the purchase period on June 30th and December 31st of each calendar year.

The Company issued 69,319 shares upon exercise of purchase rights during the three and six months ended June 30, 2024, and 37,146 shares during the three and six months ended June 30, 2023. The Company recognizes compensation expense on a straight-line basis over the service period. During the three and six months ended June 30, 2024, the Company recognized $88 and $168, respectively, of compensation expense related to the ESPP. During the three and six months ended June 30, 2023, the Company recognized $60 and $182, respectively of compensation expense related to the ESPP. Stock-based compensation expenses are recorded in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

Table of Contents

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except share and per share data)

(unaudited)

Stock Options

The following summarizes the Company’s stock option plan and the activity for the six months ended June 30, 2024.


	Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)
Outstanding, December 31, 2023	5,943,898	$	10.28	6.53
Granted	—		—
Exercised or released	(473,749)		6.07
Forfeited or expired	(316,963)		11.22
Outstanding, June 30, 2024	5,153,186	$	10.61	5.86
Exercisable, June 30, 2024	4,207,015	$	9.36	5.48
Vested and expected to vest at June 30, 2024	5,149,253	$	10.60	5.86

During the three months ended June 30, 2024 and 2023, the Company recognized $104 and $1,840, respectively, of compensation expense related to stock options. During the six months ended June 30, 2024 and 2023, the Company recognized $1,039 and $3,596, respectively of compensation expense related to stock options. Stock-based compensation expenses are recorded in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

Restricted Stock Units

The following table summarizes the Company’s restricted stock units activity for the six months ended June 30, 2024:


	Restricted Stock Units	Weighted-Average Fair Value
Outstanding, December 31, 2023	1,317,402	$	17.06
Granted	1,429,133		12.67
Vested	(171,040)		17.86
Forfeited or expired	(232,674)		15.12
Outstanding, June 30, 2024	2,342,821	$	14.51
Vested and expected to vest at June 30, 2024	2,256,319	$	14.56

During the three months ended June 30, 2024 and 2023, the Company recognized $2,484 and $1,760, respectively of compensation expense related to RSUs. During the six months ended June 30, 2024 and 2023, the Company recognized $4,637 and $3,186, respectively of compensation expense related to RSUs. Stock-based compensation expenses are recorded in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

Performance Share Units

On March 8, 2024, the Company granted 241,881 performance share units (“PSUs”) with a weighted-average fair value of $11.69 to certain executives, of which 21,638 were forfeited with a weighted-average fair value of $11.00 during the six months ended June 30, 2024. The grant date fair value of PSUs granted to the Chief Executive Officer was calculated using a Monte Carlo simulation and was based on assumptions, including expected volatility of 59.7%, expected dividends of 0%, and a 4.21% risk-free rate. Other granted PSUs’ fair value were based on the Company’s share price on the date of grant, or $11.00 per share. The PSUs will vest based on the Company’s achievement level relative to Adjusted Free Cash Flow for the trailing twelve months ending December 31, 2026, or the consummation of a change in control if earlier (“Performance Period”). Adjusted Free Cash Flow (“aFCF”) is defined as Total Operating Cash Flow plus Investing

Table of Contents

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except share and per share data)

(unaudited)

Cash Flow adjusted for certain nonrecurring items. Upon achievement of the minimum threshold performance metric, the executive may earn a pro rata portion of their respective target shares and up to 200% of their target shares upon maximum achievement. The Chief Executive Officer was granted 166,924 of the 241,881 PSUs which may be further increased or decreased by up to 25%, based on the achievement of Relative Total Stockholder Return, as defined as the stockholder return of the Company relative to certain of its peer companies within the Healthcare Equipment Select Industry Index. The PSUs additionally require the executive to provide service over the performance period. Termination of service prior to completion of the Performance Period, except by reason of death or disability, will result in automatic forfeiture of the performance share units. If the executive’s termination of service occurs by reason of death or disability on or after January 1, 2025, a pro-rata number of the PSUs shall vest at the level based on actual performance through the end of the Performance Period, multiplied by a fraction equal to (x) the number of days elapsed between the beginning of the Performance Period and the date of executive’s termination of service, divided by (y) the total number of days in the Performance Period.

Stock-based compensation expense is recognized on a straight-line basis over the vesting period, beginning at the point in time that the performance condition is considered probable of achievement. The probability of achieving the performance condition is assessed at each reporting period. If it is deemed probable that the performance condition will be met, compensation cost will be recognized based on the grant date fair value of the award expected to be earned. If it is deemed that it is not probable that the performance condition will be met, the Company will discontinue the recognition of compensation cost and any compensation cost previously recorded will be reversed. At June 30, 2024, achievement of the performance condition for the performance share units was deemed probable with 334,215 PSUs expected to vest, and the expense recorded for the three and six months ended June 30, 2024, was $436. Stock-based compensation expenses are recorded in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

NOTE 9. INCOME TAXES

The effective tax rates for the six months ended June 30, 2024 and 2023 are as follows:


	Six Months Ended June 30,
	2024		2023
		(As Restated)
Effective tax rate	(1.286)	%	(0.830)	%

For the three months ended June 30, 2024 and 2023, the Company recorded tax expense of $230 and $269, respectively. For six months ended June 30, 2024 and 2023, the Company recorded tax expense of $396 and $198, respectively.

The Company’s fiscal year 2024 and 2023 income tax expense and rates differed from the amount of income tax determined by applying the U.S. Federal income tax rate to pre-tax income primarily due to the U.S., Finland, Germany and Italy jurisdictions that have a full valuation allowance recorded on deferred tax assets. In addition, the tax rate is lower than the U.S. statutory federal tax rate as a result of foreign earnings that are taxed at lower tax rates.

The Company continues to monitor the realization of its deferred tax assets and assesses the need for a valuation allowance. The Company analyzes available positive and negative evidence to determine if a valuation allowance is needed based on the weight of the evidence. This objectively verifiable evidence includes the current & prior two years’ profit and loss positions after considering pre-tax book income plus or minus permanent adjustments as well as other positive & negative evidence available. This process requires management to make estimates, assumptions, and judgments that are uncertain in nature. The Company has established a valuation allowance with respect to deferred tax assets in the U.S., Finland, Germany, and Italy and continues to monitor and assess potential valuation allowances in all its jurisdictions.

Table of Contents

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except share and per share data)

(unaudited)

NOTE 10. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

The Company is involved in various lawsuits, claims, inquiries, and other regulatory and compliance matters, most of which are routine to the nature of our business. When it is probable that a loss will be incurred and where a range of the loss can be reasonably estimated, the best estimate within the range is accrued. When the best estimate within the range cannot be determined, the low end of the range is accrued. The ultimate resolution of these claims could affect future results of operations should the exposure be materially different from the estimates or should liabilities be incurred that were not previously accrued. Potential insurance reimbursements are not offset against potential liabilities.

As of June 30 2024, the Company is not involved in any legal proceedings that could have a material adverse effect on its condensed consolidated financial position.

NOTE 11. RELATED PARTY TRANSACTIONS

The Company has a license agreement dated July 1, 2017 for certain intellectual property with an entity that is affiliated with one of the directors of the Company, under which the Company pays a royalty of four percent (4%) of net revenue related to the licensed intellectual property for the 15 years following the date of first sale, including a minimum annual payment of $250. The term of the agreement is 20 years and it automatically renews for five-year periods thereafter. Payments to the entity under this license agreement totaled $53 and $156 for the three months ended June 30, 2024 and 2023, respectively. Payments to the entity under this license agreement totaled $199 and $201 for the six months ended June 30, 2024 and 2023, respectively. Amounts payable to this entity as of June 30, 2024 and December 31, 2023 were $72 and $155, respectively.

The Company paid professional services fees to a related party totaling $5 and $115 for the three months ended June 30, 2024 and 2023, respectively, and $18 and $115 for the six months ended June 30, 2024 and 2023, respectively, and are included in Selling, general, and administrative expense in the Condensed Consolidated Statements of Operations and Comprehensive Loss. Amounts payable as of June 30, 2024 and December 31, 2023 to this related party were $8 and $16, respectively.

NOTE 12. SEGMENT AND GEOGRAPHIC INFORMATION

Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker, which is our Chief Executive Officer, in deciding how to allocate resources and in assessing performance. We manage our business globally within one operating segment in accordance with ASC Topic 280, Segment Reporting (“ASC 280”). Segment information is consistent with how management reviews the business, makes investing and resource allocation decisions and assesses operating performance.

The following table represents total net revenue by geographic area, based on the location of the customer for the three and six months ended June 30, 2024 and 2023, respectively.


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
United States	$	49,703	$	42,264	$	100,753	$	87,245
International		11,313		8,745		21,345		15,800
Total net revenue	$	61,016	$	51,009	$	122,098	$	103,045

No individual country with net revenue originating outside of the United States accounted for more than 10% of consolidated net revenue for the three and six months ended June 30, 2024 and 2023.

Table of Contents

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except share and per share data)

(unaudited)

The following table represents total non-current assets, excluding deferred taxes, by geographic area as of June 30, 2024 and December 31, 2023, respectively.


	June 30, 2024		December 31, 2023
United States	$	91,075	$	89,531
Finland		24,636		25,032
Other International		9,594		9,616
Total assets	$	125,305	$	124,179

NOTE 13. EMPLOYEE BENEFIT PLAN

The Company sponsors a defined contribution plan for eligible employees who are 21 years of age with three months of service. Eligible employees can voluntarily contribute up to 100% of their eligible compensation. The Company has elected a Safe Harbor plan in which the Company must contribute 3% of eligible compensation. In addition, the Company may make discretionary contributions which are determined and authorized by the Board of Directors each plan year. The Company made contributions to its employee benefit plan of $328 and $698 and $276 and $589 for three months ended and six months ended June 30, 2024 and 2023, respectively.

NOTE 14. SUBSEQUENT EVENT

On August 8, 2024, the Company announced an operational efficiency strategy targeted at optimizing the organizational structure, minimizing costs and preserving cash without compromising revenue growth opportunities. Management does not expect to incur material charges to effect this operational efficiency strategy.

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Unaudited Interim Condensed Consolidated Financial Statements and related notes thereto included in Part I - Item 1 of this Quarterly Report on Form 10-Q. As discussed in the "Explanatory Note", amounts throughout this discussion and analysis for our unaudited interim condensed consolidated statements for the three and six months ended June 30, 2023 have been restated to reflect the impact of the restatement as described in the Amended 2024 Quarterly Report. In addition to historical information, the following discussion contains forward-looking statements, including, but not limited to, statements regarding the Company's expectation for future performance, liquidity and capital resources, that involve risks, uncertainties and assumptions that could cause actual results to differ materially from the Company's expectations. The Company’s actual results may differ materially from those contained in or implied by any forward-looking statements. Factors that could cause such differences include those identified below and those described in “Special Note Regarding Forward-Looking Statements”. The Company assumes no obligation to update any of these forward-looking statements.

Overview

We are a leading medical device company exclusively focused on the foot and ankle orthopedic market and are dedicated to improving patient lives. Our innovative orthopedic solutions, procedural approaches and instrumentation cover a wide range of foot and ankle ailments including fracture fixation, forefoot, ankle, flatfoot or progressive collapsing foot deformity (“PCFD”), charcot foot and orthobiologics. To treat these painful, debilitating or even life-threatening conditions, we provide a comprehensive portfolio of solutions that includes surgical implants and disposables, as well as surgical instrumentation. We design each of our products with both the patient and surgeon in mind, with the goal of improving outcomes, reducing ailment recurrence and complication rates, and making the procedures simpler, consistent and reproducible. We believe our passion, expertise, and exclusive focus in the foot and ankle market has allowed us to better understand the needs of our patients and physicians, which has enabled us to create innovations and enhanced solutions that disrupt and transform the foot and ankle market. As a result, we have experienced significant growth and momentum in our business.

During the three and six months ended June 30, 2024, our sales increased as a result of U.S sales force expansion, growth in our international business and key product launches in the forefoot and flatfoot segments. As a result, we reported net revenue growth of 20% and 18%, respectively, during the three and six months ended June 30, 2024, as compared to the corresponding prior year periods.

Our gross profit margin was 75.0% and 76.2% for the three and six months ended June 30, 2024, respectively, compared to 77.3% and 78.8% during the three and six months ended June 30, 2023, representing decreases from the corresponding prior year periods driven primarily by higher non-cash excess and obsolete reserve expense, partially offset by lower freight expenses.

Adjusted EBITDA was negative $3.0 million and negative $5.4 million for the three months ended June 30, 2024 and 2023, respectively. Adjusted EBITDA was negative $10.7 million and negative $8.1 million for the six months ended June 30, 2024 and 2023, respectively. The improvement in Adjusted EBITDA for the three months ended June 30, 2024 is primarily attributable to an increase in gross profit, partially offset by an increase in operating expenses. The decrease in Adjusted EBITDA for the six months ended June 30, 2024 is primarily attributable to an increase in operating expenses, partially offset by an increase in gross profit.

Non-GAAP Financial Measures

Use of Non-GAAP Financial Measures and Their Limitations

In addition to our results and measures of performance determined in accordance with U.S. GAAP, we believe that certain non-GAAP financial measures are useful in evaluating and comparing our financial and operational performance over multiple periods, identifying trends affecting our business, formulating business plans and making strategic decisions.

Table of Contents

Adjusted EBITDA is a key performance measure that our management uses to assess our financial performance and is also used for internal planning and forecasting purposes.

We believe that Adjusted EBITDA, together with a reconciliation to net loss, helps identify underlying trends in our business and helps investors make comparisons between our company and other companies that may have different capital structures, tax rates, or different forms of employee compensation. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects, and allowing for greater transparency with respect to a key financial metric used by our management in its financial and operational decision-making. Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider these measures in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these potential limitations include:

●

other companies, including companies in our industry which have similar business arrangements, may report Adjusted EBITDA, or similarly titled measures but calculate them differently, which reduces their usefulness as comparative measures;

●

although depreciation and amortization expenses are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditures for such replacements or for new capital expenditure requirements;

●

Adjusted EBITDA also does not reflect changes in, or cash requirements for, our working capital needs or the potentially dilutive impact of stock-based compensation; and

●

Adjusted EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt that we may incur.

Because of these and other limitations, you should consider our non-GAAP measures only as supplemental to other GAAP-based financial measures. For a full reconciliation of Adjusted EBITDA to the most comparable GAAP financial measure, see “Reconciliation Between GAAP and Non-GAAP Measure”.

Reconciliation Between GAAP and Non-GAAP Measure

We define Adjusted EBITDA as earnings (loss) before interest expense, income tax expense (benefit), depreciation and amortization, stock-based compensation expense, employee stock purchase plan expense, non-recurring expenses and certain other non-cash expenses. For a full reconciliation of Adjusted EBITDA for the three and six months ended June 30, 2024 and 2023, to the most comparable GAAP financial measure, refer to the presentation below.


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
(in thousands)			(As Restated)				(As Restated)
Net loss	$	(13,782)	$	(13,248)	$	(31,181)	$	(24,060)
Interest expense, net		2,917		803		5,539		2,008
Income tax expense		230		269		396		198
Depreciation and amortization expense		4,610		3,297		8,868		6,414
Stock based compensation expense		3,024		3,600		6,112		6,782
Employee stock purchase plan expense		88		60		168		182
Change in fair value of financial instruments⁽¹⁾		(82)		(151)		(601)		366
Adjusted EBITDA	$	(2,995)	$	(5,370)	$	(10,699)	$	(8,110)

(1)	Represents the non-cash change in fair value of our interest rate swap contract for all periods presented contingent and earnout liability for the three and six months ended June 30, 2023.

Table of Contents

Components of Our Results of Operations

Net Revenue

We derive our revenue from the sale of our foot and ankle orthopedic solutions, primarily implants. We also record as revenue any amounts billed to customers for shipping costs and record as cost of goods sold the actual shipping costs. We have elected to exclude from the measurement of the transaction price all taxes, such as sales, use, value-added, assessed by government authorities and collected from a customer. Therefore, revenue is recognized net of such taxes. In addition, we record revenue net of estimated discounts and other price concessions. No single customer accounted for 10% or more of our net revenue in the three and six months ended June 30, 2024 and 2023. We expect our net revenue to increase in the foreseeable future as we expand our sales territories, add new customers and increase the utilization of our products by our existing customers, though net revenue may fluctuate from quarter to quarter due to a variety of factors, including availability of reimbursement, the size and success of our sales force, the number of hospitals and physicians who are aware of and use our products and seasonality.

Cost of Goods Sold, Gross Profit and Gross Margin

Cost of goods sold consists primarily of finished products purchased from third-party suppliers, shipping costs, excess and obsolete inventory adjustments and royalties. Implants are manufactured to our specifications primarily by third-party suppliers in the United States. Cost of goods sold is recognized at the time the implant is used in surgery and the related revenue is recognized. Prior to use in surgery, the cost of our implants is recorded as inventories, net in our condensed consolidated balance sheets. Cost of goods sold is expected to increase due primarily to increased sales volume.

We calculate gross profit as net revenue less cost of goods sold, and gross margin as gross profit divided by net revenue. We expect our gross profit to increase in the foreseeable future as our net revenue grows, though our gross profit and gross margin have been and will continue to be affected by a variety of factors, primarily average selling prices, third-party manufacturing costs, change in mix of customers, excess and obsolete inventory adjustments, royalties and seasonality of our business. Our gross margin is higher for products we sell in the United States versus internationally due to higher average selling prices. We expect our gross margin to fluctuate from period to period, however, based upon the factors described above and seasonality.

Operating Expenses

Research and Development

Research and development expense is comprised of engineering costs and research programs related to new product and sustaining product development activities, clinical studies and trial expenses, quality and regulatory expenses, and salaries and benefits related to research and development functions. We maintain a procedurally focused approach to product development and have projects underway to add new systems across multiple foot and ankle indications and to add additional functionality to our existing systems. We expect our research and development expenses to increase as we hire additional personnel to develop new product offerings and product enhancements.

Selling, General, and Administrative

Selling, general, and administrative expenses consist primarily of commissions paid to U.S. sales representatives, salaries, bonuses, and benefits related to selling, marketing, and general and administrative functions, and stock-based compensation. In addition, selling, general, and administrative expenses consist of the costs associated with marketing initiatives, physician and sales force medical education programs, surgical instrument depreciation, travel expenses, professional service fees (including legal, finance, audit and tax fees), insurance costs, facility expenses and other general corporate expenses.

We expect selling, general, and administrative expenses to continue to increase in the foreseeable future as we continue to grow our business. We also expect our administrative expenses, including stock-based compensation expense, to increase as we increase our headcount and expand our facilities and business processes to support our operations as a

Table of Contents

public company. Our selling, general and administrative expenses may fluctuate from period to period due to the seasonality of our business and as we continue to add direct sales territory managers in new territories.

Other Income (Expense)

Other Income (Expense), net

Other income (expense), net consists primarily of changes in fair value related to contingent earn out liabilities and our interest rate swap contract.

Interest Expense, net

Interest expense, net consists of interest incurred, amortization of financing costs and interest income earned during the reported periods.

Results of Operations

For the Three Months Ended June 30, 2024 and 2023

The following table summarizes our results of operations for the periods presented:


	Three Months Ended June 30,				Change
	2024		2023		Amount		%
(in thousands)			(As Restated)
Net revenue	$	61,016	$	51,009	$	10,007	20%
Cost of goods sold		15,261		11,599		3,662	32%
Gross profit		45,755		39,410		6,345	16%

Operating expenses:
Research and development costs		7,083		7,683		(600)	(8)%
Selling, general, administrative		49,439		43,827		5,612	13%
Total operating expenses		56,522		51,510		5,012	10%
Operating loss		(10,767)		(12,100)		1,333	11%

Other income (expense):
Other income (expense), net		132		(76)		208	*
Interest expense, net		(2,917)		(803)		(2,114)	*
Total other expense, net		(2,785)		(879)		(1,906)	*
Income tax expense		230		269		(39)	14%
Net loss	$	(13,782)	$	(13,248)	$	(534)	(4)%

^*	Not Meaningful

The following table represents total net revenue by geographic area, based on the location of the customer for the three months ended June 30, 2024 and 2023, respectively.


	Three Months Ended June 30,
	2024		2023

		(in thousands)
United States	$	49,703	$	42,264
International		11,313		8,745
Total net revenue	$	61,016	$	51,009

Table of Contents

Net Revenue. Net revenue increased $10.0 million, or 20%, from $51.0 million during the three months ended June 30, 2023, to $61.0 million during the corresponding period in 2024. Strengthening of the U.S. dollar reduced net revenue growth for the three months ended June 30, 2024, by less than 1% as compared to the prior year. U.S. net revenue was $49.7 million for the three months ended June 30, 2024, representing growth of 18% compared to the prior year. U.S. net revenue growth was the result of increased surgical volume driven primarily by sales force expansion, changes in product mix, and new product launches in our forefoot and flatfoot segments. International revenue for the three months ended June 30, 2024, was $11.3 million, representing growth of 29% compared to the prior year. International revenue growth was driven primarily by the United Kingdom, Australia, and South Africa, along with our new launch into the Kuwaiti market as we continue to focus on growing our international business.

Cost of Goods Sold and Gross Profit Margin. Cost of goods sold increased $3.7 million, or 32%, from $11.6 million during the three months ended June 30, 2023, to $15.3 million during the corresponding period in 2024, primarily due to an increase in non-cash charges for excess and obsolete inventory, non-cash changes in inventory variances, and higher variable costs. Gross profit margin for the three months ended June 30, 2024 decreased to 75.0%, compared to 77.3% in the same period of 2023. The decrease in gross profit margin is primarily the result of an increase in non-cash charges for excess and obsolete inventory, non-cash changes in inventory variances, higher prices from suppliers and increased International revenue, which has lower average selling prices, partially offset by lower freight expense as a percentage of revenue.

Research and Development Expenses. Research and development expenses decreased $0.6 million, or 8%, from $7.7 million during the three months ended June 30, 2023, to $7.1 million as compared to the corresponding period in 2024. The decrease in research and development expenses is primarily due to the implementation of cost savings initiatives to lower outsourced consulting services as the Company focuses on internalizing new product development, partially offset by increased investments in personnel and surgeon consulting.

Selling, General, and Administrative Expenses. Selling, general and administrative expenses increased $5.6 million, or 13%, from $43.8 million in the three months ended June 30, 2023, to $49.4 million during the corresponding period in 2024. The increase in selling, general, and administrative expenses was primarily driven by increased variable sales representative commission expense related to net revenue growth, increased personnel costs and an increase in depreciation expense.

Other Income (Expense), net. Other income (expense), net increased $0.2 million, from an expense of $0.1 million for the three months ended June 30, 2023, to income of $0.1 million for the three months ended June 30, 2024. The change in other income is primarily related to the changes in fair value of the Company’s contingent earnout liabilities and interest rate swap contract.

Interest Expense, net. Interest expense, net increased $2.1 million, from $0.8 million for the three months ended June 30, 2023, to $2.9 million for the three months ended June 30, 2024, primarily due to higher levels of outstanding debt and higher interest rates on our outstanding debt.

Table of Contents

For the Six Months Ended June 30, 2024 and 2023

The following table summarizes our results of operations for the periods presented:


	Six Months Ended June 30,				Change
	2024		2023		Amount		%
(in thousands)			(As Restated)
Net revenue	$	122,098	$	103,045	$	19,053	18%
Cost of goods sold		29,103		21,828		7,275	33%
Gross profit		92,995		81,217		11,778	15%

Operating expenses:
Research and development costs		14,667		14,732		(65)	0%
Selling, general, administrative		104,221		87,647		16,574	19%
Total operating expenses		118,888		102,379		16,509	16%
Operating loss		(25,893)		(21,162)		(4,731)	22%

Other income (expense):
Other income (expense), net		647		(692)		1,339	*
Interest expense, net		(5,539)		(2,008)		(3,531)	*
Total other expense, net		(4,892)		(2,700)		(2,192)	(81)%
Income tax expense		396		198		198	100%
Net loss	$	(31,181)	$	(24,060)	$	(7,121)	(30)%

^*	Not Meaningful

The following table represents total net revenue by geographic area, based on the location of the customer for the six months ended June 30, 2024 and 2023, respectively.


	Six Months Ended June 30,
	2024		2023

		(in thousands)
United States	$	100,753	$	87,245
International		21,345		15,800
Total net revenue	$	122,098	$	103,045

Net Revenue. Net revenue increased $19.1 million, or 18%, from $103.0 million during the six months ended June 30, 2023 to $122.1 million during the corresponding period in 2024. Strengthening of the U.S. dollar reduced net revenue growth for the six months ended June 30, 2024, by less than 1% as compared to the prior year. U.S. net revenue was $100.8 million for the six months ended June 30, 2024, representing growth of 15% compared to the prior year. U.S. net revenue growth was primarily the result of increased surgical volume driven primarily by sales force expansion, changes in product mix and new product launches in our forefoot, flatfoot and charcot segments. International revenue for the six months ended June 30, 2024, was $21.3 million, representing growth of 35% compared to the prior year. International revenue growth was driven primarily by the United Kingdom, Australia, and South Africa along with our new launch into the Kuwaiti market as we continue to focus on growing our international business.

Cost of Goods Sold and Gross Profit Margin. Cost of goods sold increased $7.3 million, or 33%, from $21.8 million during the six months ended June 30, 2023, to $29.1 million during the corresponding period in 2024, primarily due to an increase in non-cash charges for excess and obsolete inventory, non-cash changes in inventory variances, and higher variable costs. Gross profit margin for the six months ended June 30, 2024, decreased to 76.2%, compared to 78.8% in the same period of 2023. The decrease in gross profit margin is primarily the result of an increase in non-cash charges for excess and obsolete inventory, non-cash changes in inventory variances, higher prices from suppliers and increased International revenue, which has lower average selling prices, partially offset by lower freight expense as a percentage of revenue.

Table of Contents

Research and Development Expenses. Research and development expenses were $14.7 million during both the six months ended June 30, 2023 and 2024. Research and development costs remained consistent year-over year due to increased investments in personnel and surgeon consulting costs being offset by cost savings initiatives to lower outsourced consulting services as the Company focuses on internalizing new product development to improve patient lives.

Selling, General, and Administrative Expenses. Selling, general and administrative expenses increased $16.6 million, or 19%, from $87.6 million in the six months ended June 30, 2023, to $104.2 million during the corresponding period in 2024. The increase in selling, general, and administrative expenses was primarily driven by increased personnel expenses, increased variable sales representative commission expense related to net revenue growth, an increase in depreciation expense and an increase in professional service and legal fees.

Other Income (Expense), net. Other income (expense), net increased $1.3 million, from an expense of $0.7 for the six months ended June 30, 2023, to income of $0.6 million for the six months ended June 30, 2024. The change in other income is primarily related to the changes in fair value of the Company’s contingent earnout liabilities and interest rate swap contract.

Interest Expense, net. Interest expense, net increased $3.5 million, from $2.0 million for the six months ended June 30, 2023, to $5.5 million for the six months ended June 30, 2024, primarily due to higher levels of outstanding debt and higher interest rates on our outstanding debt.

Liquidity and Capital Resources

Our primary sources of capital from inception through June 30, 2024, have been from ongoing operations, private placements of securities, proceeds from our public offerings and the incurrence of indebtedness. As of June 30, 2024, we had cash of $46.7 million and the principal amount of our outstanding consolidated debt aggregated to $110.6 million, of which $0.6 million is classified as current in our Condensed Consolidated Balance Sheet. As of June 30, 2024, we had available borrowing capacity of $50.0 million, comprised of $25.0 million on our Ares Term Loan and $25.0 million on our Ares Revolving Loan.

We believe that our existing cash, additional available borrowing capacity and expected revenues will be sufficient to meet our capital requirements and fund our operations for at least the next 12 months. Our primary short-term needs for capital for our planned operations, which are subject to change, include:

●

expanding our research and development initiatives to improve our existing products and develop new products and solutions; and

●

continued commercialization efforts and expansion of our sales and marketing infrastructure and programs to drive anticipated sales growth in the United States and elsewhere;

We have based our short-term capital needs and planned operating requirements on assumptions that may prove to be incorrect and we may use all our available capital resources sooner than we expect. Although not anticipated at this time, we may require additional financing to fund our operations and planned growth. We may also seek additional financing opportunistically. We may seek to raise any additional capital through public or private equity offerings or debt financings, credit or loan facilities or a combination of one or more of these funding sources. Additional funds may not be available to us on acceptable terms or at all. If we fail to obtain necessary capital when needed on acceptable terms, or at all, we could be forced to delay, limit, reduce or terminate our product development programs, commercialization efforts or other operations. If we raise additional funds by issuing equity securities, our stockholders will suffer dilution and the terms of any financing may adversely affect the rights of our stockholders. In addition, as a condition to providing additional funds to us, future investors may demand, and may be granted, rights superior to those of existing stockholders. If we raise additional capital through collaborations agreements, licensing arrangements or marketing and distribution arrangements, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product or grant licenses that may not be favorable to us. Debt financing, if available, may involve restrictive covenants limiting our flexibility in conducting future business activities, and, in the event of insolvency, debt holders would be repaid before holders of our equity securities received any distribution of our corporate assets. In addition, market conditions impacting

Table of Contents

financial institutions could impact our ability to access some or all of our cash, cash equivalents and marketable securities, and we may be unable to obtain alternative funding when and as needed on acceptable terms, if at all.

Cash Flows

The following table sets forth the primary sources and uses of cash for the periods presented:


	Six Months Ended June 30,				Change
	2024		2023		Amount		%
(in thousands)			(As Restated)
Net cash (used in) provided by:
Operating activities	$	(21,204)	$	(33,403)	$	12,199	37%
Investing activities		(9,229)		(15,263)		6,034	40%
Financing activities		519		66,831		(66,312)	*
Effect of exchange rate changes on cash and cash equivalents		1,016		114		902	*
Net decrease in cash and cash equivalents	$	(28,898)	$	18,279	$	(47,177)	*

^*	Not Meaningful

Net Cash Used in Operating Activities

Net cash used in operating activities for the six months ended June 30, 2024, was $21.2 million consisting of net loss of $31.2 million, partially offset by non-cash expenses of $20.5 million, which primarily consisted of $8.9 million of depreciation and amortization, $6.1 million of stock-based compensation expense, and $5.9 million of excess and obsolete inventory, and negative changes in working capital of $10.5 million. The changes in working capital are comprised of a net inventory increase of $12.6 million and an increase in accounts receivable of $0.4 million, partially offset by an increase in accounts payable of $1.5 million.

Net cash used in operating activities for the six months ended June 30, 2023 was $33.4 million, consisting of net loss of $24.0 million offset by non-cash expenses of $15.0 million, which primarily consisted of $6.8 million of stock-based compensation expense, $6.4 million of depreciation and amortization and $0.9 million of excess and obsolete inventory, and negative changes in working capital of $24.4 million. The changes in working capital are comprised of a $22.0 million legal settlement payment and a net inventory increase of $21.0 million, partially offset by an increase in accounts payable of $14.7 million and a reduction in accounts receivable of $3.1 million.

Net Cash Used in Investing Activities

Net cash used in investing activities for the six months ended June 30, 2024 was $9.2 million, consisting primarily of surgical instrumentation purchases.

Net cash used in investing activities for the six months ended June 30, 2023 was $15.3 million, consisting primarily of surgical instrumentation purchases plus other purchases of property, plant and equipment.‌

Net Cash Provided by Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2024 was $0.5 million, consisting primarily of funds received from the exercise of options, partially offset by a $1.0 million payment related to the completion of a milestone associated with the Additive Orthopaedics acquisition and a $1.0 million payment related to the completion of a milestone associated with the Disior acquisition.

Net cash provided by financing activities for the six months ended June 30, 2023 was $66.8 million, consisting of $68.5 million of proceeds from the issuance of common stock, net of issuance costs related to the Offering on January 30,

Table of Contents

2023 and $2.5 million of proceeds from the exercise of stock options, partially offset by $4.3 million in payments related to the completion of certain milestones associated with the Disior and Additive Orthopaedics Acquisitions.

Critical Accounting Estimates

Management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenue, expenses and related disclosures. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material. During the six months ended June 30, 2024, the Company revised the inputs used in estimating the reserve on obsolete and slow-moving inventory to include forecasted sales, in addition to current inventory levels and historical sales.

During the six months ended June 30, 2024, there were no material changes to our critical accounting policies or in the methodology used for estimates from those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Amended 2023 Annual Report, other than the item described above.

Recently Issued Accounting Pronouncements

See Note 2 to our condensed consolidated financial statements included in this quarterly report for recently adopted and recently issued accounting pronouncements not yet adopted and their potential impact to our financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Interest Rate Risk

The primary objectives of our investment activities are to preserve principal and provide liquidity. In the normal course of business, we are exposed to market risk related to fluctuating interest rates. The Company has both fixed and variable rate debt to manage the impact of these fluctuations. The Company is the fixed rate payor on an interest rate swap contract to help manage some of this risk. Based on our overall interest rate exposure as of June 30, 2024, we do not believe a hypothetical 10 percent change in interest rates on our variable rate indebtedness would have a material effect on our results of operations.

Foreign Currency Risk

Our business is primarily conducted in U.S. dollars. Any transactions that may be conducted in foreign currencies are not expected to have a material effect on our results of operations, financial position or cash flows. As we expand internationally our results of operations and cash flows may become increasingly subject to fluctuations due to changes in foreign currency exchange rates.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed pursuant to the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Table of Contents

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our principal executive officer and principal financial officer have identified certain material weaknesses in our internal controls over financial reporting which were also disclosed in our Amended 2023 Annual Report. As a result of these material weaknesses, management has concluded that our disclosure controls and procedures were not effective as of June 30, 2024 at a reasonable assurance level in ensuring information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures.

Plan for Remediation of the Material Weaknesses

Management, with oversight by the Audit Committee of the Board, is devoting significant time, attention, and resources to remediate the material weaknesses and to strengthen its monitoring, control environment, and internal control over financial reporting. We have developed a remediation plan that includes:

●

Evaluating and updating (as appropriate) the organizational design and reporting structure of the controllership function, including evaluating the sufficiency, experience, and training of personnel within our accounting function.

●

Hiring, developing, and retaining accounting resources with appropriate accounting and internal controls expertise related to accounting for inventory in accordance with GAAP.

●

Engaging third-party resources with the appropriate technical knowledge and experience to assist with the accounting for inventory and designing and implementing related control activities.

●

Designing and implementing additional and/or enhancing controls relating to the valuation of inventory, including the calculation of the excess and obsolescence reserve and capitalization of purchase price variances.

●

Designing and implementing effective monitoring activities over the execution of business performance reviews and account analysis and enhance communication of internal control deficiencies to those parties responsible for taking corrective action in a timely manner.

We plan to continue to devote significant time and attention to remediate these material weaknesses as soon as reasonably practicable. Management believes that the measures described above and others that may be implemented will remediate the identified material weaknesses and strengthen the Company’s internal control over financial reporting. Management has begun to take these actions to remediate the material weaknesses and may take additional measures to address control deficiencies or determine to modify, or in the appropriate circumstances not to complete, certain of the remediation measures identified. The material weaknesses will not be considered remediated until the remediation plan has been implemented and there has been appropriate time to conclude through testing that the controls are operating effectively.

Changes in Internal Control Over Financial Reporting

Other than as described above in connection with our material weaknesses, there were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the fiscal quarter ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents

Limitations on the Effectiveness of Disclosure Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Table of Contents

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

We may in the ordinary course of business face various claims brought by third parties and we may, from time to time, make claims or take legal actions to assert our rights, including intellectual property rights as well as claims relating to employment matters and the safety or efficacy of our products. Any of these claims could cause us to incur substantial costs and, while we generally believe that we have adequate insurance to cover many different types of liabilities, our insurance carriers may deny coverage, may be inadequately capitalized to pay on valid claims, or our policy limits may be inadequate to fully satisfy any associated costs, damage awards or settlements. If this were to happen, the payment of any such awards could have a material adverse effect on our operations, cash flows and financial position. Additionally, any such claims, whether or not successful, could damage our reputation and business. We were not involved in any legal proceedings as of June 30, 2024, that could have a material adverse effect on our business, financial condition, or operating results.

Item 1A. Risk Factors.

As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in our Amended 2023 Annual Report. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None

Item 3. Defaults Upon Senior Securities.

None

Item 4. Mine Safety Disclosures.

Not applicable

Item 5. Other Information.

During the three months ended June 30, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Table of Contents

Item 6. Exhibits.

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

Incorporated by Reference

Exhibit
Number

Description

Form

Exhibit

Date Filed

File
Number

Filed
Herewith

3.1

Amended and Restated Certificate of Incorporation of Paragon 28, Inc.

8-K

3.1

10/19/2021

001-40902

3.1.1

Certificate of Amendment to amended and Restated Certificate of Incorporation of Paragon 28, Inc.

8-K

3.1

05/19/2023

001-40902

3.2

Second Amended and Restated Bylaws

8-K

3.2

05/19/2023

001-40902

4.1

Form of Common Stock Certificate

S-1/A

4.2

10/08/2021

333-259789

4.2

Amended and Restated Investors’ Rights Agreement, dated as of July 28, 2020, by and between Paragon 28, Inc. and the investors party thereto.

S-1

4.3

09/24/2021

333-259789

10.1

Agreement dated August 5, 2024, by and between Chadi Chahine and the Company.

31.1

Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*

Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*

Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS

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

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

+	Indicates management contract or compensatory plan.

The certifications attached as Exhibit 32.1 and 32.2 that accompany this Quarterly Report are deemed furnished and not filed with the U.S. Securities and Exchange Commission and are not to be incorporated by reference into any filing of Paragon 28, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report, irrespective of any general incorporation language contained in such filing.

Table of Contents

SIGNATURES

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


	PARAGON 28, INC.

Date: August 8, 2024	By:	/s/ Albert DaCosta
	Name:	Albert DaCosta
	Title:	Chief Executive Officer (Principal Executive Officer)


Date: August 8, 2024	By:	/s/ Chadi Chahine
	Name:	Chadi Chahine
	Title:	Chief Financial Officer (Principal Financial Officer)

Exhibit 10.1

PARAGON 28, INC.

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”), entered into as of the date of the last signature, between Paragon 28, Inc., a Delaware corporation (the “Company”) and Chadi Chahine (“Executive” and, together with the Company, the “Parties”).

WHEREAS, the Company desires to assure itself of the services of Executive effective as of August 5, 2024 (such date you actually commence services, the “Effective Date”) by engaging Executive to perform services under the terms hereof; and

WHEREAS, Executive desires to provide services to the Company commencing on the Effective Date on the terms herein provided.

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, including the respective covenants and agreements set forth below, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

Employment.

(a)General. The Company shall employ Executive and Executive shall enter in the employ of the Company, in each case, upon the terms and conditions provided herein effective as of the Effective Date.

(b)Position and Duties. Effective as of the Effective Date, Executive: (i) shall continue to serve as the Company’s Chief Financial Officer and Executive Vice President of Supply Chain Operations, with responsibilities, duties, and authority usual and customary for such position, subject to direction by the Chief Executive Officer of the Company (the “CEO”); (ii) shall continue to report directly to the CEO or the CEO’s designee; and (iii) agrees promptly and faithfully to comply with all present and future policies, requirements, rules and regulations, and reasonable directions and requests, of the Company in connection with the Company’s business. At the Company’s request, Executive shall serve the Company and/or its subsidiaries and affiliates in such other capacities in addition to the foregoing as the Company shall designate, provided that such additional capacities are consistent with Executive’s position as the Company’s Chief Financial Officer and Executive Vice President of Supply Chain Operations. In the event that Executive serves in any one or more of such additional capacities, Executive’s compensation shall not automatically be increased on account of such additional service.

(c)Exclusivity. Except with the prior written approval of the CEO (which the CEO may grant or withhold in his or her sole and absolute discretion), Executive shall devote Executive’s best efforts and full working time, attention, and energies to the business of the Company, except during any paid vacation or other excused absence periods. Notwithstanding the foregoing, Executive may, without violating this Section 1(d), (i) as a passive investment, own publicly traded securities in such form or manner as will not require any services by Executive in the operation of the entities in which such securities are owned; (ii) engage in charitable and civic activities; or (iii) engage in other personal passive investment activities, in each case, so long as such interests or activities do not materially interfere to the extent such activities do not,

individually or in the aggregate, interfere with or otherwise prevent the performance of Executive’s duties and responsibilities hereunder. Executive may also serve as a member of the board of directors or board of advisors of another organization provided (i) such organization is not a competitor of the Company; (ii) Executive receives prior written approval from the CEO; and (iii) such activities do not individually or in the aggregate interfere with the performance of Executive’s duties under this Agreement, violate the Company’s standards of conduct then in effect, or raise a conflict under the Company’s conflict of interest policies. For the avoidance of doubt, the CEO has approved Executive’s continued service with those organizations set forth on Exhibit A, such approval to continue until the earlier to occur of (a) the CEO’s revocation of such approval in his or her sole and absolute discretion, or (b) such time as such service interferes with the performance of Executive’s duties under this Agreement, violates the Company’s standards of conflict or raises a conflict under the Company’s conflict of interest policies.

(d)Location. The Company and Executive acknowledge and agree that Executive shall be based remotely in Boston, Massachusetts, subject to such travel as may be necessary to fulfill Executive’s responsibilities, including travel to the Company’s primary office in Englewood, Colorado.

2.Term. The period of Executive’s employment under this Agreement shall commence on the Effective Date and shall continue until Executive’s employment with the Company is terminated pursuant to Section 5. The phrase “Term” as used in this Agreement shall refer to the entire period of employment of Executive by the Company.

Compensation and Related Matters.

(a)Annual Base Salary. During the Term, Executive shall receive a base salary at the rate of $550,000 per year (as may be increased from time to time, the “Annual Base Salary”), subject to withholdings and deductions and pro-rated for any partial employment during the Term, which shall be paid to Executive in accordance with the customary payroll practices and procedures of the Company. Such Annual Base Salary shall be reviewed by the CEO, and, as applicable, the Board of Directors of the Company (the “Board”) and/or the Compensation Committee of the Board (the “Committee”), not less than annually.

(b)Annual Bonus. Executive shall be eligible to receive a discretionary annual bonus based on Executive’s achievement of performance objectives established by the Company, such bonus to be targeted at 70% of Executive’s Annual Base Salary (the “Annual Bonus”). Any Annual Bonus approved by the Board, the Committee and/or the CEO shall be paid at the same time annual bonuses are paid to other executives of the Company generally, subject to Executive’s continuous employment through the date of approval. For calendar year 2024, Executive’s earned Annual Bonus (if any) shall be pro-rated based on service from the Effective Date through year-end.

(c)Sign-on Bonus. Executive shall receive a sign-on cash bonus of $300,000 (the “Sign-on Bonus”), which shall be paid to the Executive based on the following schedule:

●

August 5, 2024: $60,000

●

February 5, 2025: $60,000

●

August 5, 2025: $60,000

●

February 5, 2026: $60,000

●

August 5, 2026: $60,000

If, during the Term and prior to August 5, 2026, Executive experiences a Covered Termination during a Change in Control Period (as defined below), then, in addition to the payments and benefits described in Section 6(a), the Company shall, subject to Executive’s delivery to the Company of the Release that becomes effective and irrevocable in accordance with Section 11(d) and Executive’s continued compliance with Section 8(a) below, accelerate the then remaining Sign-on Bonus payments. Executive acknowledges that any unpaid portion of the Sign-on Bonus shall be forfeited if: (i) Executive’s employment with the Company is terminated by the Company for cause; or (ii) Executive terminates Executive’s employment with the Company within twelve (12) months of the Effective Date.

(d)Benefits. Executive shall be entitled to participate in such employee and executive benefit plans and programs as the Company may from time to time offer to provide to its executives, subject to the terms and conditions of such plans. Notwithstanding the foregoing, nothing herein is intended, or shall be construed, to require the Company to institute or continue any particular plan or benefit.

(e)Business Expenses. The Company shall reimburse Executive for all reasonable, documented, out-of-pocket travel and other business expenses incurred by Executive in the performance of Executive’s duties to the Company in accordance with the Company’s applicable expense reimbursement policies and procedures as are in effect from time to time.

(f)Vacation. Executive will be entitled to paid vacation in accordance with the Company’s vacation policy, as in effect from time to time.

4.Equity Awards. Following the Effective Date, Executive shall be granted, subject to approval by the Board or the Committee, an equity award in the form of seventy-five percent (75%) in restricted stock units (the “RSUs”) and twenty-five percent (25%) in performance share units (the “PSUs”) covering a number of shares of the Company’s common stock with an aggregate value of $3,800,000, based on the thirty (30) day closing trading average of a share of Company common stock prior to the date of grant and rounded down the nearest whole share. The equity awards described above will be granted subject to the terms and conditions set forth in a separate grant agreement and the Company’s 2021 Incentive Award Plan, as amended. The RSUs shall vest with respect to 25% of the RSUs on each anniversary of the date of grant, subject to Executive’s continuing service with the Company through the applicable vesting date. The PSUs are subject to service and performance-vesting conditions and shall vest following the end of the defined performance period. Each RSU represents the right to receive a share of Company common stock upon vesting. For fiscal years following the Effective Date, you will be eligible for annual refresh equity awards as may be determined by the Board or the Committee along the same terms and conditions as other similarly situated employees of the Company (subject to your continued employment in good standing through the applicable date of grant).

Termination.

(a)At-Will Employment. The Company and Executive acknowledge that Executive’s employment is and shall continue to be at-will, as defined under applicable law. This means that it is not for any specified period of time and, subject to any ramifications under Section 6 of this Agreement, can be terminated by Executive or by the Company at any time, with or

without advance notice, and for any or no particular reason or cause. It also means that Executive’s job duties, title, and responsibility and reporting level, work schedule, compensation, and benefits, as well as the Company’s personnel policies and procedures, may be changed with prospective effect, with or without notice, at any time in the sole discretion of the Company (subject to any ramification such changes may have under Section 6 of this Agreement). This “at-will” nature of Executive’s employment shall remain unchanged during Executive’s tenure as an employee and may not be changed, except in an express writing signed by Executive and a duly-authorized officer of the Company. If Executive’s employment terminates for any lawful reason, Executive shall not be entitled to any payments, benefits, damages, award, or compensation other than as provided in this Agreement.

(b)Notice of Termination. During the Term, any termination of Executive’s employment by the Company or by Executive (other than by reason of death) shall be communicated by written notice (a “Notice of Termination”) from one Party hereto to the other Party hereto (i) indicating the specific termination provision in this Agreement relied upon, if any, (ii) setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated, and (iii) specifying the Date of Termination (as defined below). The failure by the Company to set forth in the Notice of Termination all of the facts and circumstances which contribute to a showing of Cause (as defined below) shall not waive any right of the Company hereunder or preclude the Company from asserting such fact or circumstance in enforcing its rights hereunder.

(c)Date of Termination. For purposes of this Agreement, “Date of Termination” shall mean the date of the termination of Executive’s employment with the Company specified in a Notice of Termination.

(d)Deemed Resignation. Upon termination of Executive’s employment for any reason, Executive shall be deemed to have resigned from all offices and board memberships, if any, then held with the Company or any of its affiliates, and, at the Company’s request, Executive shall execute such documents as are necessary or desirable to effectuate such resignations.

(e)

Executive’s Obligations upon Termination.

(i)Cooperation. Executive shall provide Executive’s reasonable cooperation in connection with any action or proceeding (or any appeal from any action or proceeding) which relates to events occurring during Executive’s employment hereunder; provided the Company shall indemnify and hold harmless Executive with respect to any such cooperation and reimburse Executive for Executive’s reasonable costs and expenses (including legal counsel selected by Executive and reasonably acceptable to the Company) and such cooperation shall not unreasonably burden Executive or unreasonably interfere with any subsequent employment that Executive may undertake.

(ii)Return of Company Property. Executive hereby acknowledges and agrees that all Company Property (as defined below) and equipment furnished to, or prepared by, Executive in the course of, or incident to, Executive’s employment, belongs to the Company and shall be promptly returned to the Company upon termination of Executive’s employment (and will not be kept in Executive’s possession or delivered to anyone else). For purposes of this Agreement, “Company Property” includes, without limitation, all books, manuals, records, reports, notes, contracts, lists, blueprints, and other

documents, or materials, or copies thereof (including computer files), keys, building card keys, company credit cards, telephone calling cards, computer hardware and software, laptop computers, docking stations, cellular and portable telephone equipment, personal digital assistant (PDA) devices and all other proprietary information relating to the business of the Company or its subsidiaries or affiliates. Following termination, Executive shall not retain any written or other tangible material containing any proprietary information of the Company or its subsidiaries or affiliates.

Consequences of Termination.

(a)Payments of Accrued Obligations upon all Terminations of Employment. Upon a termination of Executive’s employment for any reason, Executive (or Executive’s estate or legal representative, as applicable) shall be entitled to receive, within 30 days after Executive’s Date of Termination (or such earlier date as may be required by applicable law): (i) any portion of Executive’s Annual Base Salary earned through Executive’s Date of Termination not theretofore paid, (ii) any expenses owed to Executive under Section 3, (iii) any accrued but unused paid time- off owed to Executive, and (iv) any amount arising from Executive’s participation in, or benefits under, any employee benefit plans, programs, or arrangements under Section 3, which amounts shall be payable in accordance with the terms and conditions of such employee benefit plans, programs, or arrangements. Except as otherwise set forth in Sections 6(b) and (c), the payments and benefits described in this Section 6(a) shall be the only payments and benefits payable in the event of Executive’s termination of employment for any reason.

(b)Severance Payments upon Covered Termination Outside a Change in Control Period. If, during the Term, Executive experiences a Covered Termination outside a Change in Control Period (each, as defined below), then in addition to the payments and benefits described in Section 6(a), the Company shall, subject to Executive’s delivery to the Company of a waiver and release of claims agreement substantially in the form of Exhibit B hereto, but updated to the extent deemed by the Company to be necessary to reflect any such changes to applicable law (the “Release”) that becomes effective and irrevocable in accordance with Section 11(d) and Executive’s continued compliance with Section 8(a) below, provide Executive with the following:

(i)The Company shall pay to Executive an amount in cash equal to twelve (12) months of Executive’s then-existing Annual Base Salary, payable, less applicable withholdings and deductions in the form of salary continuation in regular installments over the twelve (12)-month period following the Date of Termination (the “Non-CiC Severance Period”) in accordance with the Company’s normal payroll practices with the first of such installments to commence on the first regular payroll date following the date the Release becomes effective and irrevocable or as otherwise provided in Section 11(d) below.

(ii)During the Non-CiC Severance Period or, if earlier, the date on which Executive becomes eligible for comparable replacement coverage under a subsequent employer’s group health plan (in any case, the “Non-CIC COBRA Period”), subject to Executive’s valid election to continue healthcare coverage under Section 4980B of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations thereunder, the Company shall, in its sole discretion, either (A) continue to provide to Executive and Executive’s dependents, or (B) reimburse Executive and Executive’s dependents for coverage under its group health plan (if any), in each case, at the same levels

and costs in effect on the Date of Termination (excluding, for purposes of calculating cost, an employee’s ability to pay premiums with pre-tax dollars); provided, however, that if (1) any plan pursuant to which such benefits are provided is not, or ceases prior to the expiration of the continuation coverage period to be, exempt from the application of Section 409A under Treasury Regulation Section 1.409A-1(a)(5), (2) the Company is otherwise unable to continue to cover Executive or Executive’s dependents under its group health plans, or (3) the Company cannot provide the benefit without violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then, in any such case, an amount equal to each remaining Company subsidy shall thereafter be paid to Executive in substantially equal monthly installments over the Non-CIC COBRA Period (or remaining portion thereof).

(c)Severance Payments upon Covered Termination During a Change in Control Period. If, during the Term, Executive experiences a Covered Termination during a Change in Control Period, then, in addition to the payments and benefits described in Section 6(a), the Company shall, subject to Executive’s delivery to the Company of the Release that becomes effective and irrevocable in accordance with Section 11(d) and Executive’s continued compliance with Section 8(a) below, provide Executive with the following (in lieu of the benefits and payments described in Section 6(b) above):

(i)The Company shall pay to Executive an amount in cash equal to eighteen (18) months of Executive’s then-existing Annual Base Salary, payable, less applicable withholdings and deductions in the form of salary continuation in regular installments over the eighteen (18)-month period following the Date of Termination (the “CiC Severance Period”) in accordance with the Company’s normal payroll practices with the first of such installments to commence on the first regular payroll date following the date the Release becomes effective and irrevocable or as otherwise provided in Section 11(d) below.

(ii)In addition, Executive shall be eligible to receive an amount equal to one and a half (1.5) times his or her earned Annual Bonus for the year in which the Covered Termination occurs to the extent earned based on the attainment of applicable performance goals as determined by the Board in its sole discretion following the end of the calendar year in which the Covered Termination occurs. If and to the extent earned, such Annual Bonus shall be paid out at the same time annual bonuses are paid generally to senior executives of the Company for the relevant year, less applicable withholdings, but in no event later than March 15^th of the year immediately following that in which such Annual Bonus is earned.

(iii)During the CiC Severance Period or, if earlier, the date on which Executive becomes eligible for comparable replacement coverage under a subsequent employer’s group health plan (in any case, the “CIC COBRA Period”), subject to Executive’s valid election to continue healthcare coverage under Section 4980B of the Code and the regulations thereunder, the Company shall, in its sole discretion, either (A) continue to provide to Executive and Executive’s dependents, at the Company’s sole expense, or (B) reimburse Executive and Executive’s dependents for coverage under its group health plan (if any) at the same levels in effect on the Date of Termination; provided, however, that if (1) any plan pursuant to which such benefits are provided is not, or ceases prior to the expiration of the continuation coverage period to be, exempt from the

application of Section 409A under Treasury Regulation Section 1.409A-1(a)(5), (2) the Company is otherwise unable to continue to cover Executive or Executive’s dependents under its group health plans, or (3) the Company cannot provide the benefit without violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then, in any such case, an amount equal to each remaining Company subsidy shall thereafter be paid to Executive in substantially equal monthly installments over the CIC COBRA Period (or remaining portion thereof).

(iv)Cause the vesting and, if applicable, exercisability of Executive’s then-outstanding and unvested equity awards, including, without limitation, any stock options and other equity awards, shall accelerate (and, if applicable, all restrictions and rights of repurchase on such awards shall lapse) as of immediately prior to the later of (i) the Date of Termination or (ii) the closing of such Change in Control, in respect of one hundred percent (100%) of the number of shares of Company common stock subject thereto (excluding any such awards that vest in whole or in part based on the attainment of performance-vesting conditions, which shall be governed by the terms of the applicable award agreement). To give effect to the foregoing, upon the Date of Termination that occurs prior to the closing of a Change in Control, (x) the vested portion of such equity awards shall be remain outstanding and/or be exercisable for the period(s) of time set forth in the applicable equity award agreements, (y) Executive’s outstanding equity awards shall cease vesting, and (z) the unvested shares subject to Executive’s outstanding equity awards shall remain outstanding (but unvested) until the earlier to occur of (A) the original expiration date of the equity award and (B) three (3) month anniversary of the Date of Termination (the “Equity Award Period”). In the event a Change in Control has not been consummated by end of the Equity Award Period, then the unvested portion of Executive’s equity awards shall terminate immediately without further action as of such date.

(d)No Other Severance. Except as otherwise approved by the Board, the provisions of this Section 6 shall supersede in their entirety any severance payment provisions in any severance plan, policy, program, or other arrangement maintained by the Company.

(e)No Requirement to Mitigate; Survival. Executive shall not be required to mitigate the amount of any payment provided for under this Agreement by seeking other employment or in any other manner. Notwithstanding anything to the contrary in this Agreement, the termination of Executive’s employment shall not impair the rights or obligations of any Party.

(f)Certain Reductions. The Company shall reduce Executive’s severance benefits under this Agreement, in whole or in part, by any other severance benefits, pay in lieu of notice, or other similar benefits payable to Executive by the Company in connection with Executive’s termination, including but not limited to, payments or benefits pursuant to (i) any applicable legal requirement, including, without limitation, the Worker Adjustment and Retraining Notification Act, or (ii) any Company policy or practice providing for Executive to remain on the payroll without being in active service for a limited period of time after being given notice of the termination of Executive’s employment. The benefits provided under this Agreement are intended to satisfy, to the greatest extent possible, any and all statutory obligations that may arise out of Executive’s termination of employment. Such reductions shall be applied on a retroactive basis, with severance benefits previously paid being recharacterized as payments pursuant to the Company’s statutory obligation.

(g)Definition of Cause. For purposes hereof, “Cause” shall mean any one of the following: (i) Executive’s commission of any act or involvement in any situation, whether before or during the term, which brings Executive into widespread public disrepute or scandal, and which justifiably shocks, insults or offends a significant portion of the community and results in material and adverse reputational harm to the Company; (ii) Executive’s indictment of (A) a felony (other than in connection with a traffic violation that does not result in imprisonment) or (B) any misdemeanor involving moral turpitude, deceit, dishonesty or fraud (other than in connection with a traffic violation that does not result in imprisonment); (iii) Executive’s willful failure to (A) substantially perform his/her material job functions hereunder (other than any such failure resulting from Executive’s Disability (as defined in the Plan) or to the extent inconsistent with Executive’s title, duties or responsibilities hereunder) or (B) carry out or comply with a lawful and reasonable directive of the Company, in each case, which failure has not been cured (or cannot be cured) within thirty (30) days after the Company gives written notice to Executive regarding such failure; (iv) Executive’s commission of an act of fraud, embezzlement, misappropriation of funds, misrepresentation, malfeasance, breach of fiduciary duty or other willful and material act of misconduct, in each case, against the Company or any of its affiliates, which materially and adversely reflects upon the business, operations, or reputation of the Company, and which conduct has not been cured (or cannot be cured) within thirty (30) days after the Company gives written notice to Executive regarding such misconduct; or (v) Executive’s material violation of any provision of this Agreement, the Confidentiality Agreement or any agreement(s) between Executive and the Company relating to noncompetition, nonsolicitation, nondisclosure and/or assignment of inventions, and failure to cure such breach (if capable of cure) within thirty (30) days after the Company gives written notice to Executive regarding such breach. The determination that Executive’s employment is terminated for breach of this Agreement shall be made by the Board or the Committee, in each case, in its sole discretion. For purposes of this definition, an action or inaction is only “willful” if it is done or omitted by Executive without a good faith and reasonable belief that such action or inaction is in the best interests of the Company or any of its affiliates. Without limiting the foregoing, in no event shall any of the following constitute Cause: (A) the failure to attain any individual, divisional or Company performance, implementation, integration or other objective, (B) any act or omission taken as a result of any Disability or (C) any act, or failure to act, taken in good faith and based upon authority given by the Company.

(h)Definition of Change in Control. For purposes of this Agreement, “Change in Control” shall have the meaning set forth in the Company’s 2021 Incentive Award Plan. Notwithstanding the foregoing, a “Change in Control” must also constitute a “change in control event,” as defined in Treasury Regulation §1.409A-3(i)(5).

(i)Definition of Change in Control Period. For purposes hereof, “Change in Control Period” shall mean the period commencing three months prior to the closing of a Change in Control and ending 24 months after such Change in Control.

(j)Definition of Covered Termination. For purposes hereof, “Covered Termination” shall mean the termination of Executive’s employment by the Company without Cause or by Executive for Good Reason, and shall not include a termination due to Executive’s death or disability.

(k)Definition of Good Reason. For purposes hereof, “Good Reason” shall mean that Executive has complied in all material respects with the “Good Reason Process”

(hereinafter defined) following the occurrence of any of the following events, without Executive’s prior written consent: (i) a reduction of Executive’s Annual Base Salary by more than 10% (except in connection with an across-the-board reduction in the salary of all similarly situated employees); (ii) a material diminution of Executive’s authority, duties or responsibilities (other than temporarily while physically or mentally incapacitated or as required by applicable law), provided that a mere change of title alone shall not constitute such a material diminution; or (iii) relocation of Executive’s principal place of employment by more than 30 miles from Executive’s then-current principal place of employment, except for such travel as may be reasonably necessary in the performance of Executive’s duties hereunder.

(l)Definition of Good Reason Process. For the purposes hereof, “Good Reason Process” shall mean that (A) Executive has reasonably determined in good faith that a “Good Reason” condition has occurred; (B) Executive has notified the Company in writing of the first occurrence of the Good Reason condition within 90 days of the first time the Executive becomes aware of the occurrence of such condition; (C) Executive has cooperated in good faith with the Company’s efforts, for a period not less than 30 days immediately following the Company’s receipt of such notice (the “Cure Period”), to remedy the condition; (D) notwithstanding such efforts, the Good Reason condition continues to exist; and (E) Executive terminates Executive’s employment with the Company within 30 days after the end of the Cure Period. If the Company cures the Good Reason condition during the Cure Period, Good Reason shall be deemed not to have occurred.

7.Assignment and Successors. The Company shall assign its rights and obligations under this Agreement to any successor to all or substantially all of the business or the assets of the Company (by merger or otherwise). This Agreement shall be binding upon and inure to the benefit of the Company, Executive, and their respective successors, assigns, personnel, and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable. None of Executive’s rights or obligations may be assigned or transferred by Executive, other than Executive’s rights to payments hereunder, which may be transferred only by will, operation of law, or as otherwise provided herein.

Miscellaneous Provisions.

(a)Restrictive Covenant Agreements; Right to Work. Executive hereby agrees to execute as of the date hereof and be bound by those certain Confidentiality and Non- Competition Agreement and Inventions Agreement, in each case, in the form provided by the Company (the “Confidentiality Agreement”). The Confidentiality Agreement shall survive the termination of this Agreement and Executive’s employment with the Company for the applicable period(s) set forth therein. Notwithstanding the foregoing, in the event of any conflict between the terms of the Confidentiality Agreement and the terms of this Agreement, the terms of this Agreement shall prevail. As a condition of Executive’s employment with the Company, Executive is required to provide evidence of Executive’s identity and eligibility for employment in the United States.

(b)Governing Law. This Agreement shall be governed, construed, interpreted, and enforced in accordance with its express terms, and otherwise in accordance with the substantive laws of the State of Colorado, without giving effect to any principles of conflicts of law, whether of the State of Colorado or any other jurisdiction, and where applicable, the laws of the United States, that would result in the application of the laws of any other jurisdiction.

(c)Validity. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

(d)Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement. Signatures delivered by facsimile or PDF shall be deemed effective for all purposes.

(e)Entire Agreement. The terms of this Agreement, together with the Confidentiality Agreement, are intended by the Parties to be the final expression of their agreement with respect to the employment of Executive by the Company and supersede all prior understandings and agreements, whether written or oral, regarding Executive’s service to the Company. The Parties further intend that this Agreement, together with the Confidentiality Agreement, shall constitute the complete and exclusive statement of their terms and that no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this Agreement or the Confidentiality Agreement. Notwithstanding the foregoing, in the event of any conflict between the terms of the Confidentiality Agreement and the terms of this Agreement, the terms of this Agreement shall prevail.

(f)Amendments; Waivers. This Agreement may not be modified, amended, or terminated except by an instrument in writing signed by Executive and a duly authorized representative of the Company. By an instrument in writing similarly executed, Executive or a duly authorized representative of the Company, as applicable, may waive compliance by the other Party with any specifically identified provision of this Agreement that such other Party was or is obligated to comply with or perform; provided, however, that such waiver shall not operate as a waiver of, or estoppel with respect to, any other or subsequent failure. No failure to exercise and no delay in exercising any right, remedy, or power hereunder shall preclude any other or further exercise of any other right, remedy, or power provided herein or by law or in equity.

(g)Dispute Resolution. To ensure the timely and economical resolution of disputes that arise in connection with this Agreement, Executive and the Company agree that, except as excluded herein, any and all controversies, claims and disputes arising out of or relating to this Agreement, including without limitation any alleged violation of its terms or otherwise arising out of the Parties’ relationship, shall be resolved solely and exclusively by final and binding arbitration held in Douglas County, Colorado through JAMS in conformity with Colorado law and the then-existing JAMS employment arbitration rules, which can be found at https://www.jamsadr.com/rules-employment-arbitration/. The arbitration provisions of this Agreement shall be governed by and enforceable pursuant to the Federal Arbitration Act. In all other respects for provisions not governed by the Federal Arbitration Act, this Agreement shall be construed in accordance with the laws of the State of Colorado, without reference to conflicts of law principles. The arbitrator shall: (a) provide adequate discovery for the resolution of the dispute; and (b) issue a written arbitration decision, to include the arbitrator’s essential findings and conclusions and a statement of the award. Notwithstanding the foregoing, it is acknowledged that it will be impossible to measure in money the damages that would be suffered if the Parties fail to comply with any of the obligations imposed on them under Section 8(a), and that in the event of any such failure, an aggrieved person will be irreparably damaged and will not have an adequate remedy at law. Any such person shall, therefore, be entitled to seek injunctive relief, including specific performance, to enforce such obligations, and if any action shall be brought in equity to

enforce any of the provisions of Section 8(a), none of the Parties shall raise the defense, without a good faith basis for raising such defense, that there is an adequate remedy at law. Executive and the Company understand that by agreement to arbitrate any claim pursuant to this Section 8(h), they will not have the right to have any claim decided by a jury or a court, but shall instead have any claim decided through arbitration. Executive and the Company waive any constitutional or other right to bring claims covered by this Agreement other than in their individual capacities. Except as may be prohibited by applicable law, the foregoing waiver includes the ability to assert claims as a plaintiff or class member in any purported class or representative proceeding. Nothing herein shall limit Executive’s ability to pursue claims for workers’ compensation or unemployment benefits or pursue other claims which by law cannot be subject to mandatory arbitration.

(h)Enforcement. If any provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future laws, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a portion of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid, or unenforceable provision there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable.

(i)Notices. Any notice, request, claim, demand, document and other communication hereunder to any Party shall be effective upon receipt (or refusal of receipt) and shall be in writing and delivered personally or sent by facsimile or certified or registered mail, postage prepaid, as follows:

(i)

If to the Company, to the Board at the Company’s headquarters,

(ii)If to Executive, to the last address that the Company has in its personnel records for Executive, or

(iii)At any other address as any Party shall have specified by notice in writing to the other Party.

(j)Withholding. The Company shall be entitled to withhold from any amounts payable under this Agreement any federal, state, local, or foreign withholding or other taxes or charges which the Company is required to withhold. The Company shall be entitled to rely on an opinion of counsel if any questions as to the amount or requirement of withholding shall arise.

(k)Whistleblower Protections and Trade Secrets. Notwithstanding anything to the contrary contained herein, nothing in this Agreement prohibits Executive from reporting possible violations of federal law or regulation to any United States governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002, or any other whistleblower protection provisions of state or federal law or regulation (including the right to receive an award for information provided to any such government agencies). Furthermore, in accordance with 18 U.S.C. § 1833, notwithstanding anything to the contrary in this Agreement: (i) Executive shall not be in breach of this Agreement, and shall not be held criminally or civilly liable under any federal or state trade secret law (x) for the disclosure of a trade secret that is made in

confidence to a federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (y) for the disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal; and (ii) if Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Executive may disclose the trade secret to Executive’s attorney, and may use the trade secret information in the court proceeding, if Executive files any document containing the trade secret under seal, and does not disclose the trade secret, except pursuant to court order.

(l)Anti-Kickback. Executive shall not engage in unlawful inducement, meaning the prohibitions of the federal Anti-Kickback Statute and any other applicable state anti- kickback statutes. Executive shall comply with all other applicable federal, state, and local laws and regulations in the solicitations of sales and provision of services hereunder, including those regulations promulgated by the Food & Drug Administration, the Health Insurance Portability and Accountability Act of 1996 as amended, the Physician Payment Sunshine Act provisions of the Patient Protection and Affordable Care Act, and all laws and regulations requiring Executive to possess any license, permit, or other documentation in order to lawfully carry out his/her duties hereunder. Executive shall keep himself/herself aware of and in compliance with all changes in such laws and regulations. Executive shall comply with all applicable rules and regulations of the Company, and the policies and procedures of the Company as are in effect from time-to-time and meet all training requirements established by the Company.

(m)Reporting Requirements. Executive acknowledges that the Company has certain reporting requirements under the federal law commonly referred to as the Physician Payments Sunshine Act. Executive must monthly report in writing to the Company any monies expended on Covered Recipients. Executive shall comply with the specific information requests and process requirements for such reporting and shall indemnify, defend, and hold the Company harmless from any claim brought by any third party arising from any failure of Executive to properly report any monies Executive expended on Covered Recipients. Executive agrees to fully comply with the Company’s Physician Payment Sunshine Act Policy.

(n)Acknowledgments. Executive represents that Executive has not been, and during the term of this Agreement shall not be: (i) sanctioned within the meaning of Social Security Act Section 1128A or any amendments thereof; (ii) convicted of violating the federal Stark law, federal False Claims Act, federal Anti-Kickback statute, federal Health Insurance and Portability Act provisions, federal Civil Monetary Penalties Law, federal Health Care Fraud Statute, Foreign Corrupt Practices Act, or similar state laws; or (iii) debarred, excluded, or suspended from participation in any federal or state health care program. Executive represents that Executive has not had, and during the term of this Agreement shall not have, a complaint filed against Executive by any enforcement agency, which complaint alleges felony criminal acts of a violent nature; health care-related fraud, theft, or other financial misconduct; any offenses related to the delivery of items or services under Medicare, Medicaid, SCRIP, or other state health care programs; engaging in unlawful kickback arrangements; or any crime relating to the practice of medicine.

9. Prior Employment. Executive represents and warrants that Executive’s acceptance of employment with the Company has not breached, and the performance of Executive’s duties hereunder will not breach, any duty owed by Executive to any prior employer or other person. Executive further represents and warrants to the Company that (a) the performance of Executive’s obligations hereunder will not violate any agreement between Executive and any other person,

firm, organization, or other entity; (b) Executive is not bound by the terms of any agreement with any previous employer or other party to refrain from competing, directly or indirectly, with the business of such previous employer or other party that would be violated by Executive entering into this Agreement and/or providing services to the Company pursuant to the terms of this Agreement; and (c) Executive’s performance of Executive’s duties under this Agreement will not require Executive to, and Executive shall not, rely on in the performance of Executive’s duties or disclose to the Company or any other person or entity or induce the Company in any way to use or rely on any trade secret or other confidential or proprietary information or material belonging to any previous employer of Executive.

10.

Golden Parachute Excise Tax.

(a)Best Pay. Any provision of this Agreement to the contrary notwithstanding, if any payment or benefit Executive would receive from the Company pursuant to this Agreement or otherwise (“Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment will be equal to the Reduced Amount (as defined below). The “Reduced Amount” will be either (A) the largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax or (B) the entire Payment, whichever amount after taking into account all applicable federal, state, and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and local taxes), results in Executive’ s receipt, on an after- tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in a Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (A) of the preceding sentence, the reduction shall occur in the manner (the “Reduction Method”) that results in the greatest economic benefit for Executive. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the “Pro Rata Reduction Method”). Notwithstanding the foregoing, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Payment being subject to taxes pursuant to Section 409A (as defined below) that would not otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (1) as a first priority, the modification shall preserve to the greatest extent possible, the greatest economic benefit for Executive as determined on an after-tax basis; (2) as a second priority, Payments that are contingent on future events (e.g., being terminated without cause), shall be reduced (or eliminated) before Payments that are not contingent on future events; and (3) as a third priority, Payments that are “deferred compensation” within the meaning of Section 409A shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A.

(b)Accounting Firm. The accounting firm engaged by the Company for general tax purposes as of the day prior to the Change in Control will perform the calculations set forth in Section 10(a). If the firm so engaged by the Company is serving as the accountant or auditor for the acquiring company, the Company will appoint a nationally recognized accounting firm to make the determinations required hereunder. The Company will bear all expenses with respect to the determinations by such firm required to be made hereunder. The accounting firm engaged to make the determinations hereunder will provide its calculations, together with detailed supporting documentation, to the Company within 30 days before the consummation of a Change

in Control (if requested at that time by the Company) or such other time as requested by the Company. If the accounting firm determines that no Excise Tax is payable with respect to a Payment, either before or after the application of the Reduced Amount, it will furnish the Company with documentation reasonably acceptable to the Company that no Excise Tax will be imposed with respect to such Payment. Any good faith determinations of the accounting firm made hereunder will be final, binding and conclusive upon the Company and Executive.

11.

Section 409A.

(a)General. The intent of the Parties is that the payments and benefits under this Agreement comply with or be exempt from Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date, (“Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. Notwithstanding any provision of this Agreement to the contrary, if the Company determines that any compensation or benefits payable under this Agreement may be subject to Section 409A, the Company shall work in good faith with Executive to adopt such amendments to this Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Company determines are necessary or appropriate to avoid the imposition of taxes under Section 409A, including, without limitation, actions intended to (i) exempt the compensation and benefits payable under this Agreement from Section 409A, and/or (ii) comply with the requirements of Section 409A; however, this Section 11(a) shall not create an obligation on the part of the Company to adopt any such amendment, policy or procedure or take any such other action, nor shall the Company (A) have any liability for failing to do so, or (B) incur or indemnify Executive for any taxes, interest or other liabilities arising under or by operation of Section 409A.

(b)Separation from Service, Installments and Reimbursements. Notwithstanding any provision to the contrary in this Agreement: (i) no amount that constitutes “deferred compensation” under Section 409A shall be payable pursuant to Section 6 unless the termination of Executive’s employment constitutes a “separation from service” within the meaning of Section 1.409A-1(h) of the Department of Treasury Regulations (“Separation from Service”); (ii) for purposes of Section 409A, Executive’s right to receive installment payments shall be treated as a right to receive a series of separate and distinct payments; and (iii) to the extent that any reimbursement of expenses or in-kind benefits constitutes “deferred compensation” under Section 409A, such reimbursement or benefit shall be provided no later than December 31^st of the year following the year in which the expense was incurred. The amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year. The amount of any in-kind benefits provided in one year shall not affect the amount of in-kind benefits provided in any other year.

(c)Specified Employee. Notwithstanding anything in this Agreement to the contrary, if Executive is deemed by the Company at the time of Executive’s Separation from Service to be a “specified employee” for purposes of Section 409A, to the extent delayed commencement of any portion of the benefits to which Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A, such portion of Executive’s benefits shall not be provided to Executive prior to the earlier of (i) the expiration of the six-month period measured from the date of Executive’s Separation from Service with the Company or (ii) the date of Executive’s death. Upon the first business day following the expiration

of the applicable Section 409A period, all payments deferred pursuant to the preceding sentence shall be paid in a lump sum to Executive (or Executive’s estate or beneficiaries), and any remaining payments due to Executive under this Agreement shall be paid as otherwise provided herein.

(d)Release. Notwithstanding anything to the contrary in this Agreement, to the extent that any payments due under this Agreement as a result of Executive’s termination of employment are subject to Executive’s execution and delivery of the Release, (i) if Executive fails to execute the Release on or prior to the Release Expiration Date (as defined below) or timely revokes Executive’s acceptance of the Release thereafter, Executive shall not be entitled to any payments or benefits otherwise conditioned on the Release, and (ii) in any case where Executive’s Date of Termination and the Release Expiration Date fall in two separate taxable years, any payments required to be made to Executive that are conditioned on the Release and are treated as nonqualified deferred compensation for purposes of Section 409A shall be made in the later taxable year. For purposes of this Section 11(d), “Release Expiration Date” shall mean (1) if Executive is under 40 years old as of the Date of Termination, the date that is seven days following the date upon which the Company timely delivers the Release to Executive, or such shorter time prescribed by the Company, and (2) if Executive is 40 years or older as of the Date of Termination, the date that is 21 days following the date upon which the Company timely delivers the Release to Executive, or, in the event that Executive’s termination of employment is “in connection with an exit incentive or other employment termination program” (as such phrase is defined in the Age Discrimination in Employment Act of 1967), the date that is 45 days following such delivery date. To the extent that any payments of nonqualified deferred compensation (within the meaning of Section 409A) due under this Agreement as a result of Executive’s termination of employment are delayed pursuant to this Section 11(d), such amounts shall be paid in a lump sum on the first payroll date following the date that Executive executes and does not revoke the Release (and the applicable revocation period has expired) or, in the case of any payments subject to Section 11(d)(ii), on the first payroll period to occur in the subsequent taxable year, if later.

12.Employee Acknowledgement. Executive acknowledges that Executive has read and understands this Agreement, is fully aware of its legal effect, has not acted in reliance upon any representations or promises made by the Company other than those contained in writing herein, and has entered into this Agreement freely based on Executive’s own judgment.

[Signature Page Follows]

The Parties have executed this Agreement as of the date of the last signature.

PARAGON 28, INC.

By: /s/ Matthew Millard

Name: Matthew Millard

Title: Chief HR Officer

EXECUTIVE

By:/s/ Chadi Chahine

Name: Chadi Chahine

Address:

EXHIBIT A

Affiliations

EXHIBIT B

RELEASE OF CLAIMS¹

This Release of Claims (“Release”) is entered into as of , 2024, between Chadi Chahine (“Executive”) and Paragon 28, Inc. (the “Company”) (collectively referred to herein as the “Parties”), effective [eight days after]OR[as of] Executive’s signature hereto (the “Effective Date”), unless Executive revokes his acceptance of this Release as provided in Paragraph 2(c), below. This Agreement is being executed in connection with the terms of the Employment Agreement by and between the Parties dated as of [ ], 2024 (the “Employment Agreement”), which is incorporated herein by reference.

1.Termination of Employment. The Parties hereby acknowledge and agree that Executive’s employment, including his service in all positions that Executive held as an officer of the Company and as a member of the Company’s board of directors, ended effective as of [ ] (the “Termination Date”). The Parties acknowledge and agree that Executive is entitled to receive, and has received, payment of an amount equal to all accrued wages (including base salary and bonus compensation) earned through the Termination Date, including accrued vacation, less applicable withholding, as well as reimbursement for all expenses incurred by Executive on behalf of the Company, which are consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses, subject to the Company’s requirements with respect to reporting and documenting such expenses.

2.Executive’s Release of the Company. Executive understands that by agreeing to this Release, Executive is agreeing not to sue, or otherwise file any claim against, the Company or any of its employees or other agents for any reason whatsoever based on anything that has occurred as of the date Executive signs this Release.

(a)On behalf of Executive and Executive’s heirs and assigns, Executive hereby releases and forever discharges the “Releasees” hereunder, consisting of the Company, and each of its owners, affiliates, divisions, predecessors, successors, assigns, agents, directors, officers, partners, employees, and insurers, and all persons acting by, through, under or in concert with them, or any of them, of and from any and all manner of action or actions, cause or causes of action, in law or in equity, suits, debts, liens, contracts, agreements, promises, liability, claims, demands, damages, loss, cost or expense, of any nature whatsoever, known or unknown, fixed or contingent (hereinafter called “Claims”), which Executive now has or may hereafter have against the Releasees, or any of them, by reason of any matter, cause, or thing whatsoever from the beginning of time to the date hereof, including, without limiting the generality of the foregoing, any Claims arising out of, based upon, or relating to Executive’s hire, employment, remuneration or resignation by the Releasees, or any of them, including Claims arising under federal, state, or local laws relating to employment, Claims of any kind that may be brought in any court or administrative agency, any Claims arising under the Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. § 621, et seq.; Title VII of the Civil Rights Act of 1964, as

¹ NTD: To be updated for any changes in applicable law.

amended by the Civil Rights Act of 1991, 42 U.S.C. § 2000 et seq.; the Equal Pay Act, 29 U.S.C. § 206(d); the Civil Rights Act of 1866, 42 U.S.C. § 1981; the Family and Medical Leave Act of 1993, 29 U.S.C. § 2601 et seq.; the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et seq.; the False Claims Act , 31 U.S.C. § 3729 et seq.; the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq.; the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 et seq. the Fair Labor Standards Act, 29 U.S.C. § 215 et seq., the Sarbanes-Oxley Act of 2002; the Colorado anti-discrimination statute; the Colorado Civil Rights Act (C.R.S. Sections 24-34-301 et seq. and 24-34-401 et seq.); the Colorado Wage Act; the Colorado Minimum Wage Act and Minimum Wage Order 28; Claims any other local, state or federal law governing employment; Claims for breach of contract; Claims arising in tort, including, without limitation, Claims of wrongful dismissal or discharge, discrimination, harassment, retaliation, fraud, misrepresentation, defamation, libel, infliction of emotional distress, violation of public policy, and/or breach of the implied covenant of good faith and fair dealing; and Claims for damages or other remedies of any sort, including, without limitation, compensatory damages, punitive damages, injunctive relief and attorney’s fees.

(b)Notwithstanding the generality of the foregoing, Executive does not release the following claims:

(i)

Claims to enforce this Release;

(ii)Claims for unemployment compensation or any state disability insurance benefits pursuant to the terms of applicable state law;

(iii)Claims for workers’ compensation insurance benefits under the terms of any worker’s compensation insurance policy or fund of the Company;

(iv)Claims to continued participation in certain of the Company’s group benefit plans pursuant to the terms and conditions of COBRA;

(v)Claims to any benefit entitlements vested as the date of Executive’s employment termination, pursuant to written terms of any Company employee benefit plan;

(vi)Claims for indemnification under indemnification under the Company’s governing documents or any applicable law, and under the terms of any policy of insurance purchased by the Company;

(vii)Claims for the severance benefits Executive is entitled to receive in exchange for this Release under Section 6[(b/c)] of the Employment Agreement, including any current or future claims for vesting, acceleration of vesting, or any claims Executive may have as a stockholder of the Company; and

(viii)Executive’s right to bring to the attention of the Equal Employment Opportunity Commission claims of discrimination; provided, however, that

Executive does release Executive’s right to secure any damages for alleged discriminatory treatment.

(c)[In accordance with the Older Workers Benefit Protection Act of 1990, Executive has been advised of the following:

(i)This section and this Release are written in a manner calculated to be understood by Executive;

(ii)Executive has the right to consult with an attorney before signing this Release;

(iii)

Executive has been given at least [21] days to consider this Release;

and

(iv)Executive has seven days after signing this Release to revoke it, and Executive will not receive the severance benefits provided by the Employment Agreement unless and until such seven day period has expired. If Executive wishes to revoke this Release, Executive must deliver notice of Executive’s revocation in writing, no later than 11:59 p.m. Mountain Time on the 7th day following Executive’s execution of this Release to [ ].]

Executive Representations. Executive represents and warrants that:

(a)Executive has returned to the Company Property (as defined in the Employment Agreement) which he had in his possession, custody or control at the time he signed this Release;

(b)Except as set forth herein or in any related agreement, Executive is not aware of any owed wages, commissions, bonuses or other compensation, other than wages through the date of the termination of Executive’s employment, any accrued, unused vacation earned through such date, and any severance payments that become due under the Employment Agreement;

(c)During the course of Executive’s employment Executive did not sustain any injuries for which Executive might be entitled to compensation pursuant to worker’s compensation law or Executive has disclosed any injuries of which he is currently, reasonably aware for which he might be entitled to compensation pursuant to worker’s compensation law; and

(d)Executive has not initiated any adversarial proceedings of any kind against the Company or against any other person or entity released herein, nor will Executive do so in the future, except as specifically allowed by this Release.

4.Maintaining Confidential Information. Executive reaffirms his obligations under that certain Employee Proprietary Information and Inventions Assignment Agreement entered into

between Executive and the Company (the “Confidentiality Agreement”). Executive acknowledges and agrees that the severance benefits provided in the Employment Agreement shall be subject to Executive’s continued compliance with Executive’s obligations under the Confidentiality Agreement.

5.Non-Disparagement. The Company agrees that it shall take all reasonable steps necessary to ensure that the Company’s officers and directors will not make statements or representations to any person, firm, or entity, which could reasonably be expected to case Executive in an unfavorable light or which could reasonably be anticipated to adversely affect the name or reputation of Executive. Executive agrees that Executive will not make statements or representations to any person, entity or firm which could reasonably be expected to cast the Company or any entity or employee affiliated with the Company in an unfavorable light or which could reasonably be anticipated to adversely affect the name or reputation of the Company or any entity affiliated with the Company, or the name or reputation of any officer, agent or employee of the Company or of any entity affiliated with the Company; provided that Executive will respond accurately and fully to any question, inquiry or request for information when required by legal process. Notwithstanding the foregoing, nothing in this Section 5 shall prevent Executive from making any truthful statement to the extent (i) necessary to rebut any untrue public statements made about him; (ii) necessary with respect to any litigation, arbitration or mediation involving this Release and the enforcement thereof; or (iii) required by law or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with jurisdiction over such person. In addition, nothing in this Release shall be construed to prohibit Executive from engaging in any lawfully protected activity or conduct, including reporting possible violations of law or regulation to any governmental agency or regulatory body (including but not limited to the Equal Employment Opportunity Commission, the Department of Justice, the Securities and Exchange Commission, the Congress, any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation), filing a charge with or participating in any investigation or proceeding conducted by any governmental agency or regulatory body, or making other disclosures that are protected under any law or regulation. Executive does not need the prior authorization of the Company to engage in any such lawfully protected activity, nor is Executive required to notify the other that he or it has done so.

6.Cooperation. Executive reaffirms his ongoing cooperation covenant set forth in the Employment Agreement.

7.Severability. The provisions of this Release are severable. If any provision is held to be invalid or unenforceable, it shall not affect the validity or enforceability of any other provision.

8.Choice of Law. This Release shall in all respects be governed and construed in accordance with the laws of the State of Colorado, including all matters of construction, validity and performance, without regard to conflicts of law principles.

9.Integration Clause. This Release and the severance benefits under the Employment Agreement contain the Parties’ entire agreement with regard to the separation of Executive’s

employment, and supersede and replace any prior agreements as to those matters, whether oral or written, except for the Confidentiality Agreement and any equity award agreements. This Release may not be changed or modified, in whole or in part, except by an instrument in writing signed by Executive and a duly authorized officer or director of the Company.

10.Execution in Counterparts. This Release may be executed in counterparts with the same force and effectiveness as though executed in a single document. Facsimile or PDF signatures shall have the same force and effectiveness as original signatures.

11.Intent to be Bound. The Parties have carefully read this Release in its entirety; fully understand and agree to its terms and provisions; and intend and agree that it is final and binding on all Parties.

IN WITNESS WHEREOF, and intending to be legally bound, the Parties have executed the foregoing on the dates shown below.

EXECUTIVE			PARAGON 28, INC.



Chadi Chahine			By:
			Title:

Date:			Date:

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Albert DaCosta, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Paragon 28, Inc. (the “registrant”);

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: August 8, 2024	By:	/s/ Albert DaCosta
		Albert DaCosta
		Chief Executive Officer (Principal Executive Officer)

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Chadi Chahine, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Paragon 28, Inc. (the “registrant”);

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(a)

(b)

(c)

(d)

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: August 8, 2024	By:	/s/ Chadi Chahine
		Chadi Chahine
		Chief Financial Officer (Principal Financial Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Paragon 28, Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: August 8, 2024	By:	/s/ Albert DaCosta
		Albert DaCosta
		Chief Executive Officer (Principal Executive Officer)

The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. § 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: August 8, 2024	By:	/s/ Chadi Chahine
		Chadi Chahine
		Chief Financial Officer (Principal Financial Officer)

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2024	Aug. 02, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2024
Document Transition Report	false
Entity File Number	001-40902
Entity Registrant Name	Paragon 28, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	27-3170186
Entity Address, Postal Zip Code	80112
Entity Address, Address Line One	14445 Grasslands Drive
Entity Address, City or Town	Englewood
Entity Address, State or Province	CO
City Area Code	720
Local Phone Number	912-1332
Title of 12(b) Security	Common stock, $0.01 par value per share
Trading Symbol	FNA
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		83,542,291
Entity Central Index Key	0001531978
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 46,741	$ 75,639
Trade receivables, net of allowance for doubtful accounts of $931 and $1,339, respectively	36,708	37,323
Inventories, net	96,406	90,046
Income taxes receivable	1,018	794
Other current assets	3,575	3,997
Total current assets	184,448	207,799
Property and equipment, net	74,904	74,122
Intangible assets, net	20,977	21,674
Goodwill	25,465	25,465
Deferred income taxes	714	705
Other assets	3,959	2,918
Total assets	310,467	332,683
Current liabilities:
Accounts payable	23,136	21,696
Accrued expenses	26,531	27,781
Other current liabilities	962	883
Current maturities of long-term debt	640	640
Income taxes payable	422	243
Total current liabilities	51,691	51,243
Long-term liabilities:
Long-term debt net, less current maturities	109,913	109,799
Other long-term liabilities	1,159	1,048
Deferred income taxes	231	233
Income taxes payable	638	635
Total liabilities	163,632	162,958
Commitments and contingencies (Note 10)
Stockholders' equity:
Common stock, $0.01 par value, 300,000,000 shares authorized; 84,417,725 and 83,738,974 shares issued, and 83,504,206 and 82,825,455 shares outstanding as of June 30, 2024 and December 31, 2023, respectively	833	827
Additional paid in capital	307,524	298,394
Accumulated deficit	(154,827)	(123,646)
Accumulated other comprehensive (loss) income	(713)	132
Treasury stock, at cost; 913,519 shares as of June 30, 2024 and December 31, 2023	(5,982)	(5,982)
Total stockholders' equity	146,835	169,725
Total liabilities & stockholders' equity	$ 310,467	$ 332,683

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
CONDENSED CONSOLIDATED BALANCE SHEETS
Allowance for doubtful accounts	$ 931	$ 1,339
Common stock par value	$ 0.01	$ 0.01
Common stock share authorized	300,000,000	300,000,000
Common stock share issued	84,417,725	83,738,974
Common stock shares, outstanding	83,504,206	82,825,455
Treasury stock share issued	913,519	913,519

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Net revenue	$ 61,016	$ 51,009	$ 122,098	$ 103,045
Cost of goods sold	15,261	11,599	29,103	21,828
Gross profit	45,755	39,410	92,995	81,217
Operating expenses:
Research and development costs	7,083	7,683	14,667	14,732
Selling, general, and administrative	49,439	43,827	104,221	87,647
Total operating expenses	56,522	51,510	118,888	102,379
Operating loss	(10,767)	(12,100)	(25,893)	(21,162)
Other income (expense):
Other income (expense), net	132	(76)	647	(692)
Interest expense, net	(2,917)	(803)	(5,539)	(2,008)
Total other expense, net	(2,785)	(879)	(4,892)	(2,700)
Loss before income taxes	(13,552)	(12,979)	(30,785)	(23,862)
Income tax expense	230	269	396	198
Net loss	(13,782)	(13,248)	(31,181)	(24,060)
Foreign currency translation adjustment	252	(283)	(845)	(382)
Comprehensive loss	$ (13,530)	$ (13,531)	$ (32,026)	$ (24,442)
Weighted average number of shares of common stock outstanding:
Basic (in shares)	83,115,861	82,373,441	82,984,878	81,536,607
Diluted (in shares)	83,115,861	82,373,441	82,984,878	81,536,607
Net loss per share attributable to common stockholders:
Basic (in dollars per share)	$ (0.17)	$ (0.16)	$ (0.38)	$ (0.30)
Diluted (in dollars per share)	$ (0.17)	$ (0.16)	$ (0.38)	$ (0.30)

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Additional Paid-in-Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss	Treasury stock	Total
Beginning balance, shares at Dec. 31, 2022	77,770,588
Beginning balance at Dec. 31, 2022	$ 776	$ 213,956	$ (66,112)	$ (33)	$ (5,982)	$ 142,605
Net Loss			(24,060)			(24,060)
Issuance of common stock, shares	4,312,500
Issuance of common stock	$ 43	68,410				68,453
Options exercised, shares	415,812
Options exercised	$ 5	2,460				2,465
Foreign currency translation				(382)		(382)
Employee stock purchase plan		742				742
Employee stock purchase plan, shares	37,146
Stock-based compensation		6,782				6,782
Ending balance, shares at Jun. 30, 2023	82,536,046
Ending balance at Jun. 30, 2023	$ 824	292,350	(90,172)	(415)	(5,982)	196,605
Beginning balance, shares at Mar. 31, 2023	82,306,873
Beginning balance at Mar. 31, 2023	$ 821	287,286	(76,924)	(132)	(5,982)	205,069
Net Loss			(13,248)			(13,248)
Offering costs associated with public offering		4				4
Options exercised, shares	192,027
Options exercised	$ 3	840				843
Foreign currency translation				(283)		(283)
Employee stock purchase plan		620				620
Employee stock purchase plan, shares	37,146
Stock-based compensation		3,600				3,600
Ending balance, shares at Jun. 30, 2023	82,536,046
Ending balance at Jun. 30, 2023	$ 824	292,350	(90,172)	(415)	(5,982)	196,605
Beginning balance, shares at Dec. 31, 2023	82,825,455
Beginning balance at Dec. 31, 2023	$ 827	298,394	(123,646)	132	(5,982)	169,725
Net Loss			(31,181)			$ (31,181)
Options exercised, shares	473,749					473,749
Options exercised	$ 5	2,873				$ 2,878
Restricted stock vested	$ 1	(425)				(424)
Restricted stock vested (in shares)	135,683
Foreign currency translation				(845)		(845)
Employee stock purchase plan		570				570
Employee stock purchase plan, shares	69,319
Stock-based compensation		6,112				6,112
Ending balance, shares at Jun. 30, 2024	83,504,206
Ending balance at Jun. 30, 2024	$ 833	307,524	(154,827)	(713)	(5,982)	146,835
Beginning balance, shares at Mar. 31, 2024	82,945,411
Beginning balance at Mar. 31, 2024	$ 828	301,459	(141,045)	(965)	(5,982)	154,295
Net Loss			(13,782)			(13,782)
Options exercised, shares	424,999
Options exercised	$ 5	2,575				2,580
Restricted stock vested		(24)				(24)
Restricted stock vested (in shares)	64,477
Foreign currency translation				252		252
Employee stock purchase plan		490				490
Employee stock purchase plan, shares	69,319
Stock-based compensation		3,024				3,024
Ending balance, shares at Jun. 30, 2024	83,504,206
Ending balance at Jun. 30, 2024	$ 833	$ 307,524	$ (154,827)	$ (713)	$ (5,982)	$ 146,835

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($)
Issuance costs	$ 827

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Thousands	6 Months Ended
	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)
Cash flows from operating activities
Net Income (Loss)	$ (31,181)	$ (24,060)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	8,868	6,414
Allowance for doubtful accounts	785	147
Provision for excess and obsolete inventories	5,932	923
Stock-based compensation	6,112	6,782
Change in fair value of financial instruments	(601)	366
Other	(581)	394
Changes in other assets and liabilities, net of acquisitions:
Accounts receivable	(360)	3,138
Inventories	(12,631)	(20,959)
Accounts payable	1,456	14,745
Accrued expenses	809	1,845
Accrued legal settlement		(22,000)
Income tax receivable/payable	(23)	(359)
Other assets and liabilities	211	(779)
Net cash used in operating activities	(21,204)	(33,403)
Cash flows from investing activities
Purchases of property and equipment	(9,491)	(15,354)
Proceeds from sale of property and equipment	724	635
Purchases of intangible assets	(462)	(544)
Net cash used in investing activities	(9,229)	(15,263)
Cash flows from financing activities
Payments on long-term debt	(320)	(396)
Payments of debt issuance costs	(18)
Proceeds from issuance of common stock, net of issuance costs		68,453
Options exercised	2,878	2,464
RSU vesting, taxes paid	(424)
Proceeds from employee stock purchase plan	403	560
Payments on earnout liability	(2,000)	(4,250)
Net cash provided by financing activities	519	66,831
Effect of exchange rate changes on cash and cash equivalents	1,016	114
Net (decrease) increase in cash and cash equivalents	(28,898)	18,279
Cash and cash equivalents at beginning of period	75,639	38,468
Cash and cash equivalents at end of period	46,741	56,747
Supplemental disclosures of cash flow information:
Restricted cash		2,250
Cash paid for income taxes	839	456
Cash paid for interest	5,479	2,068
Purchase of property and equipment included in accounts payable	$ 3,325	$ 5,617

Business and Basis of Presentation

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Business and Basis of Presentation

NOTE 1. BUSINESS AND BASIS OF PRESENTATION

Business

Basis of Presentation and Consolidation

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

Foreign Currency Translation

Significant Accounting Policies

Recently Issued Accounting Pronouncements

Intangible Assets

6 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

NOTE 3. INTANGIBLE ASSETS

Intangibles

Intangible assets as of June 30, 2024, were as follows:


	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trademarks and tradenames, indefinite-lived	$	607	$	—	$	607
Patents, trademarks and tradenames, definite-lived		8,718		2,995		5,723
Customer relationships		1,733		705		1,028
Developed technology		17,690		4,071		13,619
Other intangibles		30		30		—
Total intangible assets, net	$	28,778	$	7,801	$	20,977

Intangible assets as of December 31, 2023, were as follows:


	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trademarks and tradenames, indefinite-lived	$	987	$	—	$	987
Patents, definite-lived		7,900		2,649		5,251
Customer relationships		1,733		567		1,166
Developed technology		17,690		3,424		14,266
Other intangibles		30		26		4
Total intangible assets, net	$	28,340	$	6,666	$	21,674

Expected future amortization expense is as follows:


2024 (Remaining)	$	1,019
2025		2,033
2026		2,033
2027		1,952
2028		1,953
Thereafter		11,380
Total future amortization expense	$	20,370

No impairment charges related to intangibles were recorded for the three and six months ended June 30, 2024 and 2023.

Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

NOTE 4. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company measures certain financial assets and liabilities at fair value. There is a fair value hierarchy which prioritizes inputs used in measuring fair value into three broad levels:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 3 - Unobservable inputs which are supported by little or no market activity.

The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest-level input that is significant to the fair value measurement in its entirety.

The Company’s significant financial assets and liabilities measured at fair value as of June 30, 2024, were as follows:


	Level 1		Level 2	Level 3	Total
Financial Assets:
Interest rate swap	$	—	1,590	—	$	1,590
Financial Liabilities:
Contingent consideration	$	—	—	340	$	340

The Company's significant financial assets and liabilities measured at fair value as of December 31, 2023, were as follows:


	Level 1		Level 2	Level 3	Total
Financial Assets:
Interest rate swap	$	—	991	—	$	991
Financial Liabilities:
Contingent consideration	$	—	—	340	$	340

Statements included in the Company’s Amended 2023 Annual Report on Form 10-K/A for the year ended December 31, 2023.

Debt

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Debt

NOTE 5. DEBT

Long-term debt as of June 30, 2024 and December 31, 2023 consists of the following:


	June 30, 2024		December 31, 2023
Ares Revolving Loan	$	25,000	$	25,000
Ares Term Loan		75,000		75,000
Zions Term Loan		14,613		14,933
		114,613		114,933
Less: deferred issuance costs		(4,060)		(4,494)
Total debt, net of issuance costs		110,553		110,439
Less: current portion		(640)		(640)
Long-term debt, net, less current maturities	$	109,913	$	109,799

Ares Credit Agreement

Vectra Bank Colorado Loan Agreements

Stockholders' Equity

6 Months Ended

Jun. 30, 2024

Stockholders' Equity Note [Abstract]

Stockholders' Equity

NOTE 6. STOCKHOLDERS’ EQUITY

Common Stock

Treasury Stock

The Company did not purchase any of its common stock during the six months ended June 30, 2024 and 2023. All previously repurchased shares were recorded in Treasury stock at cost.

Loss Per Share

6 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Loss Per Share

NOTE 7. LOSS PER SHARE

equivalents because their inclusion would be anti-dilutive. The computation of net loss per share for the three and six months ended June 30, 2024 and 2023 was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
			(As Restated)				(As Restated)
Net loss	$	(13,782)	$	(13,248)	$	(31,181)	$	(24,060)

Weighted-average common stock outstanding:
Basic		83,115,861		82,373,441		82,984,878		81,536,607
Diluted		83,115,861		82,373,441		82,984,878		81,536,607

Loss per share:
Basic	$	(0.17)	$	(0.16)	$	(0.38)	$	(0.30)
Diluted	$	(0.17)	$	(0.16)	$	(0.38)	$	(0.30)

Stock-Based Compensation

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

NOTE 8. STOCK-BASED COMPENSATION

Employee Stock Purchase Plan

Stock Options

The following summarizes the Company’s stock option plan and the activity for the six months ended June 30, 2024.


	Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)
Outstanding, December 31, 2023	5,943,898	$	10.28	6.53
Granted	—		—
Exercised or released	(473,749)		6.07
Forfeited or expired	(316,963)		11.22
Outstanding, June 30, 2024	5,153,186	$	10.61	5.86
Exercisable, June 30, 2024	4,207,015	$	9.36	5.48
Vested and expected to vest at June 30, 2024	5,149,253	$	10.60	5.86

Restricted Stock Units

The following table summarizes the Company’s restricted stock units activity for the six months ended June 30, 2024:


	Restricted Stock Units	Weighted-Average Fair Value
Outstanding, December 31, 2023	1,317,402	$	17.06
Granted	1,429,133		12.67
Vested	(171,040)		17.86
Forfeited or expired	(232,674)		15.12
Outstanding, June 30, 2024	2,342,821	$	14.51
Vested and expected to vest at June 30, 2024	2,256,319	$	14.56

Performance Share Units

Income Taxes

6 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 9. INCOME TAXES

The effective tax rates for the six months ended June 30, 2024 and 2023 are as follows:


	Six Months Ended June 30,
	2024		2023
		(As Restated)
Effective tax rate	(1.286)	%	(0.830)	%

Commitments And Contingencies

6 Months Ended

Jun. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 10. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

As of June 30 2024, the Company is not involved in any legal proceedings that could have a material adverse effect on its condensed consolidated financial position.

Related Party Transactions

6 Months Ended

Jun. 30, 2024

Related Party Transactions

NOTE 11. RELATED PARTY TRANSACTIONS

Segment and Geographic Information

6 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

Segment and Geographic Information

NOTE 12. SEGMENT AND GEOGRAPHIC INFORMATION

The following table represents total net revenue by geographic area, based on the location of the customer for the three and six months ended June 30, 2024 and 2023, respectively.


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
United States	$	49,703	$	42,264	$	100,753	$	87,245
International		11,313		8,745		21,345		15,800
Total net revenue	$	61,016	$	51,009	$	122,098	$	103,045

No individual country with net revenue originating outside of the United States accounted for more than 10% of consolidated net revenue for the three and six months ended June 30, 2024 and 2023.

The following table represents total non-current assets, excluding deferred taxes, by geographic area as of June 30, 2024 and December 31, 2023, respectively.


	June 30, 2024		December 31, 2023
United States	$	91,075	$	89,531
Finland		24,636		25,032
Other International		9,594		9,616
Total assets	$	125,305	$	124,179

Employee Benefit Plan

6 Months Ended

Jun. 30, 2024

Employee Benefit Plan

Employee Benefit Plan

NOTE 13. EMPLOYEE BENEFIT PLAN

Subsequent Event

6 Months Ended

Jun. 30, 2024

Subsequent Events [Abstract]

Subsequent Event

NOTE 14. SUBSEQUENT EVENT

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ (13,782)	$ (13,248)	$ (31,181)	$ (24,060)

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Jun. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Summary of Significant Accounting Policies (Policies)	6 Months Ended
Summary of Significant Accounting Policies (Policies)	Jun. 30, 2024
Accounting Policies [Abstract]
Basis of Presentation and Consolidation	Basis of Presentation and Consolidation The accompanying Condensed Consolidated Financial Statements include the accounts of Paragon 28, Inc. and its subsidiaries, all of which are wholly-owned. The accompanying Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information required by U.S. GAAP for complete financial statements. The interim Condensed Consolidated Financial Statements reflect all adjustments that are of a normal recurring nature and that are considered necessary for a fair representation of the results for the periods presented and should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2023, which include a complete set of footnote disclosures, including our significant accounting policies. The audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2023, are included in the Company’s Amended 2023 Annual Report. The results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year or for any other future period. All intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates	Use of Estimates The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Because future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Any changes in these estimates will be reflected in the Company’s Condensed Consolidated Financial Statements. Significant items subject to such estimates and assumptions include the determination of the credit loss reserves for trade receivables, inventory obsolescence, impairment of long-lived assets, recoverability of goodwill and intangible assets, contingent earnout liabilities, interest rate swap valuation, income taxes and stock-based compensation. On January 1, 2024, the Company revised the inputs used in estimating the reserve on obsolete and slow-moving inventory to include forecasted sales, in addition to current inventory levels and historical sales. The effect of this change in estimate was a decrease of $47 to the Company’s reserve for obsolete and slow-moving inventory during the six months ended June 30, 2024.
Foreign Currency Translation	Foreign Currency Translation The Condensed Consolidated Financial Statements are presented in U.S. dollars. The Company’s non-U.S. subsidiaries have a functional currency (i.e., the currency in which operational activities are primarily conducted) that is other than the U.S. dollar, generally the currency of the country in which such subsidiaries are domiciled. Such subsidiaries’ assets and liabilities are translated into U.S. dollars at quarter-end exchange rates, while revenue and expenses are translated at average exchange rates during the quarter based on the daily closing exchange rates. Adjustments that result from translating amounts from a subsidiary’s functional currency to U.S. dollars are reported in Accumulated other comprehensive income (loss), a separate component of stockholders’ equity.
Significant Accounting Policies	Significant Accounting Policies There have been no changes in the Company’s significant accounting policies as disclosed in Note 2 to our audited Consolidated Financial Statements included in our Amended 2023 Annual Report on Form 10-K/A.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In October 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. The amendments in ASU 2023-06 modify the disclosure or presentation requirements of a variety of Topics in the Codification. Certain of the amendments represent clarifications to or technical corrections of the current requirements. ASU 2023-06 is applicable to all entities subject to the SEC’s existing disclosure requirements. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The Company is currently evaluating the amendments in ASU 2023-06 and does not expect the adoption to have a significant impact on the Company’s Consolidated Financial Statements and related disclosures. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"), which provides amendments to improve reportable segment disclosures requirements. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the amendments in this guidance to determine the impact it will have on the Company's Consolidated Financial Statements and related notes for the year ended December 31, 2024, upon adoption. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), to enhance the transparency and decision usefulness of income tax disclosures. The main provisions in ASU 2023-09 enhance the disclosure requirements of rate reconciliations and income taxes paid. For public business entities, the amendments in ASU 2023-09 are effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this update should be applied on a prospective basis, retrospective application is permitted. The Company is currently evaluating the amendments in this guidance to determine the impact it will have on the Company’s Consolidated Financial Statements and related disclosures.

Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible assets as of June 30, 2024, were as follows:


	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trademarks and tradenames, indefinite-lived	$	607	$	—	$	607
Patents, trademarks and tradenames, definite-lived		8,718		2,995		5,723
Customer relationships		1,733		705		1,028
Developed technology		17,690		4,071		13,619
Other intangibles		30		30		—
Total intangible assets, net	$	28,778	$	7,801	$	20,977

Intangible assets as of December 31, 2023, were as follows:


	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trademarks and tradenames, indefinite-lived	$	987	$	—	$	987
Patents, definite-lived		7,900		2,649		5,251
Customer relationships		1,733		567		1,166
Developed technology		17,690		3,424		14,266
Other intangibles		30		26		4
Total intangible assets, net	$	28,340	$	6,666	$	21,674

Schedule of expected future amortization expense


2024 (Remaining)	$	1,019
2025		2,033
2026		2,033
2027		1,952
2028		1,953
Thereafter		11,380
Total future amortization expense	$	20,370

Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Summary of Significant Financial Assets and Liabilities Measured at Fair Value

The Company’s significant financial assets and liabilities measured at fair value as of June 30, 2024, were as follows:


	Level 1		Level 2	Level 3	Total
Financial Assets:
Interest rate swap	$	—	1,590	—	$	1,590
Financial Liabilities:
Contingent consideration	$	—	—	340	$	340

The Company's significant financial assets and liabilities measured at fair value as of December 31, 2023, were as follows:


	Level 1		Level 2	Level 3	Total
Financial Assets:
Interest rate swap	$	—	991	—	$	991
Financial Liabilities:
Contingent consideration	$	—	—	340	$	340

Debt (Tables)

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments


	June 30, 2024		December 31, 2023
Ares Revolving Loan	$	25,000	$	25,000
Ares Term Loan		75,000		75,000
Zions Term Loan		14,613		14,933
		114,613		114,933
Less: deferred issuance costs		(4,060)		(4,494)
Total debt, net of issuance costs		110,553		110,439
Less: current portion		(640)		(640)
Long-term debt, net, less current maturities	$	109,913	$	109,799

Loss Per Share (Tables)

6 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Summary of Computation of Net Loss Per Share


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
			(As Restated)				(As Restated)
Net loss	$	(13,782)	$	(13,248)	$	(31,181)	$	(24,060)

Weighted-average common stock outstanding:
Basic		83,115,861		82,373,441		82,984,878		81,536,607
Diluted		83,115,861		82,373,441		82,984,878		81,536,607

Loss per share:
Basic	$	(0.17)	$	(0.16)	$	(0.38)	$	(0.30)
Diluted	$	(0.17)	$	(0.16)	$	(0.38)	$	(0.30)

Summary of Potentially Dilutive Securities Excluded from Calculation of Diluted Net Loss Per Share Attributable to Common Stockholders

Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Summary of Stock Option Activity


	Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)
Outstanding, December 31, 2023	5,943,898	$	10.28	6.53
Granted	—		—
Exercised or released	(473,749)		6.07
Forfeited or expired	(316,963)		11.22
Outstanding, June 30, 2024	5,153,186	$	10.61	5.86
Exercisable, June 30, 2024	4,207,015	$	9.36	5.48
Vested and expected to vest at June 30, 2024	5,149,253	$	10.60	5.86

Summary of Restricted Stock Units Activity


	Restricted Stock Units	Weighted-Average Fair Value
Outstanding, December 31, 2023	1,317,402	$	17.06
Granted	1,429,133		12.67
Vested	(171,040)		17.86
Forfeited or expired	(232,674)		15.12
Outstanding, June 30, 2024	2,342,821	$	14.51
Vested and expected to vest at June 30, 2024	2,256,319	$	14.56

Income Taxes (Tables)

6 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Schedule of Reconciliation of Provision for Income Taxes at Federal Statutory Rate


	Six Months Ended June 30,
	2024		2023
		(As Restated)
Effective tax rate	(1.286)	%	(0.830)	%

Segment and Geographic Information (Tables)

6 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

Schedule of Total Net Revenue by Geographic Area


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
United States	$	49,703	$	42,264	$	100,753	$	87,245
International		11,313		8,745		21,345		15,800
Total net revenue	$	61,016	$	51,009	$	122,098	$	103,045

Schedule of Total Non-current Assets, Excluding Deferred Taxes, by Geographic Area


	June 30, 2024		December 31, 2023
United States	$	91,075	$	89,531
Finland		24,636		25,032
Other International		9,594		9,616
Total assets	$	125,305	$	124,179

Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2024 USD ($)
Accounting Policies [Abstract]
Decrease in inventory reserve	$ 47

Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Indefinite Lived Intangible Assets By Major Class [Line Items]
Gross Carrying Amount	$ 28,778	$ 28,340
Accumulated Amortization	7,801	6,666
Net Carrying Amount, definite-lived	20,370
Net Carrying Amount	20,977	21,674
Trademarks and tradenames, indefinite-lived
Indefinite Lived Intangible Assets By Major Class [Line Items]
Indefinite-Lived Intangible Assets (Excluding Goodwill)	607	987
Patents, trademarks and tradenames, definite-lived
Indefinite Lived Intangible Assets By Major Class [Line Items]
Gross Carrying Amount, definite-lived	8,718
Accumulated Amortization	2,995
Net Carrying Amount, definite-lived	5,723
Patents, definite-lived
Indefinite Lived Intangible Assets By Major Class [Line Items]
Gross Carrying Amount, definite-lived		7,900
Accumulated Amortization		2,649
Net Carrying Amount, definite-lived		5,251
Customer relationships
Indefinite Lived Intangible Assets By Major Class [Line Items]
Gross Carrying Amount, definite-lived	1,733	1,733
Accumulated Amortization	705	567
Net Carrying Amount, definite-lived	1,028	1,166
Developed technology
Indefinite Lived Intangible Assets By Major Class [Line Items]
Gross Carrying Amount, definite-lived	17,690	17,690
Accumulated Amortization	4,071	3,424
Net Carrying Amount, definite-lived	13,619	14,266
Other intangibles
Indefinite Lived Intangible Assets By Major Class [Line Items]
Gross Carrying Amount, definite-lived	30	30
Accumulated Amortization	$ 30	26
Net Carrying Amount, definite-lived		$ 4

Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Finite-Lived Intangible Assets [Line Items]
Impairment charges related to intangible assets	$ 0	$ 0	$ 0	$ 0
Selling, General, and Administrative Expenses
Finite-Lived Intangible Assets [Line Items]
Amortization expense	$ 668	$ 508	$ 1,138	$ 1,011

Intangible Assets - Schedule of Expected Future Amortization Expense (Details) $ in Thousands	Jun. 30, 2024 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2024 (Remaining)	$ 1,019
2025	2,033
2026	2,033
2027	1,952
2028	1,953
Thereafter	11,380
Net Carrying Amount, definite-lived	$ 20,370

Fair Value of Financial Instruments - Summary of Significant Financial Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Financial Assets:
Interest rate swap	$ 1,590	$ 991
Financial Liabilities:
Contingent consideration	340	340
Level 2
Financial Assets:
Interest rate swap	1,590	991
Level 3
Financial Liabilities:
Contingent consideration	$ 340	$ 340

Fair Value of Financial Instruments - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Change in fair value of interest rate swap	$ 82		$ 601	$ (366)
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Other Nonoperating Income (Expense)		Other Nonoperating Income (Expense)
Contingent earnout liability	$ 340		$ 340		$ 340
Payments on earnout liability in cash			2,000	$ 4,250
Additive Orthopaedics, LLC
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Payments on earnout liability in cash		$ 1,000
Disior LTD.
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Payments on earnout liability in cash	1,000
Accrued Expenses \| Additive Orthopaedics, LLC
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Achieved milestones reclassified to accrued expenses					2,000
Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Contingent earnout liability	340		340		$ 340
Level 3 \| Other-current liabilities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Contingent earnout liability	$ 340		$ 340

Debt - Schedule of Long-term Debt Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Debt Instrument [Line Items]
Debt, gross amount	$ 114,613	$ 114,933
Less: deferred issuance costs	(4,060)	(4,494)
Total debt, net of issuance costs	110,553	110,439
Less: current portion	(640)	(640)
Long-term debt net, less current maturities	109,913	109,799
Ares Revolving Loan
Debt Instrument [Line Items]
Debt, gross amount	25,000	25,000
Ares Term Loan
Debt Instrument [Line Items]
Debt, gross amount	75,000	75,000
Zions Term Loan
Debt Instrument [Line Items]
Debt, gross amount	$ 14,613	$ 14,933

Debt - Ares Credit Agreement - Additional Information (Details) - Ares Credit Agreements - USD ($) $ in Thousands		3 Months Ended	6 Months Ended
	Nov. 02, 2023	Jun. 30, 2024	Jun. 30, 2024	Jun. 30, 2023
Debt Instrument [Line Items]
Expiration date	Nov. 02, 2028
Indebtedness principal or stated amount	$ 12,500
Debt issuance cost before amortization		$ 3,849	$ 3,849	$ 0
Interest Expense
Debt Instrument [Line Items]
Amortization expense		$ 222	$ 426
Ares Term Loan
Debt Instrument [Line Items]
Total borrowing capacity	100,000
Drew down value	$ 75,000
Variable interest rate	6.75%
Debt Instrument, Variable Interest Rate, Type [Extensible Enumeration]	us-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember
Ares Revolving Loan
Debt Instrument [Line Items]
Total borrowing capacity	$ 50,000
Drew down value	$ 25,000
Variable interest rate	4.00%
Debt Instrument, Variable Interest Rate, Type [Extensible Enumeration]	us-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember
Revolving Loan \| Secured Debt
Debt Instrument [Line Items]
Total borrowing capacity	$ 150,000

Debt - Vectra Bank Colorado Loan Agreements - Additional Information (Details) - USD ($) $ in Thousands			3 Months Ended		6 Months Ended
	Nov. 10, 2022	Mar. 24, 2022	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Line Of Credit Facility [Line Items]
Total debt issuance costs			$ 4,060		$ 4,060		$ 4,494
Secured Term Loan Facility
Line Of Credit Facility [Line Items]
Principal amount		$ 16,000
Variable interest rate		1.75%
Debt Instrument, Variable Interest Rate, Type [Extensible Enumeration]		us-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember
Maturity date		Mar. 24, 2037
Debt, frequency of payment		monthly
Threshold amount of operating cash flow to calculate liquidity ratio	$ 0
Threshold Amount of Operating Cash Flow to Calculate Fixed Charge Coverage Ratio	$ 0
Amortization of debt issuance costs			4	$ 4	8	$ 8
Zions Facility
Line Of Credit Facility [Line Items]
Total debt issuance costs			$ 211		$ 211

Stockholders Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands		6 Months Ended
	Jan. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023	Oct. 08, 2021
Class of Stock [Line Items]
Number of shares of common stock reserved for issuance					310,000,000
Common stock share authorized		300,000,000		300,000,000	300,000,000
Common stock par value		$ 0.01		$ 0.01	$ 0.01
Convertible preferred stock, authorized					10,000,000
Convertible preferred stock, par value					$ 0.01
Net proceeds after deducting underwriting discounts and commissions	$ 68,453		$ 68,453
Treasury stock repurchase shares		0	0
Common Stock
Class of Stock [Line Items]
Number of aggregate issued	6,500,000		4,312,500
Price per share	$ 17.00
Shares sold by Company \| Common Stock
Class of Stock [Line Items]
Number of shares issued and sold	3,750,000
Selling securityholders
Class of Stock [Line Items]
Net proceeds after deducting underwriting discounts and commissions	$ 50,700
Selling securityholders \| Common Stock
Class of Stock [Line Items]
Number of shares issued and sold	2,750,000
Underwriters Option to Purchase Additional Shares \| Maximum
Class of Stock [Line Items]
Number of shares issued and sold	562,500
Underwriters Option to Purchase Additional Shares \| Common Stock
Class of Stock [Line Items]
Number of shares issued and sold	412,500

Loss Per Share - Summary of Computation of Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Net loss attributable to common stockholders
Net Income (Loss)	$ (13,782)	$ (13,248)	$ (31,181)	$ (24,060)
Weighted-average common stock outstanding:
Basic (in shares)	83,115,861	82,373,441	82,984,878	81,536,607
Diluted (in shares)	83,115,861	82,373,441	82,984,878	81,536,607
Loss per share, Basic:
Basic (in dollars per share)	$ (0.17)	$ (0.16)	$ (0.38)	$ (0.30)
Loss per share, Diluted:
Diluted (in dollars per share)	$ (0.17)	$ (0.16)	$ (0.38)	$ (0.30)

Loss Per Share - Summary of Potentially Dilutive Securities Excluded from Calculation of Diluted Net Loss Per Share Attributable to Common Stockholders (Details) - shares	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Employee Stock Option
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities excluded from computation of dilutive net loss per share	5,153,186	6,154,824
Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities excluded from computation of dilutive net loss per share	2,563,064	1,339,989

Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee contribution percentage			100.00%
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	$ 104	$ 1,840	$ 1,039	$ 3,596
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	$ 2,484	$ 1,760	$ 4,637	$ 3,186
Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued	69,319	37,146	69,319	37,146
Compensation expense	$ 88	$ 60	$ 168	$ 182
Employee contribution percentage			15.00%
Market price of shares authorized percentage	85.00%		85.00%
Maximum purchase value of shares available for each employee			$ 25

Stock-Based Compensation - Summary of Stock Option Activity (Details)	6 Months Ended	12 Months Ended
	Jun. 30, 2024 $ / shares shares	Dec. 31, 2023 $ / shares shares
Share-Based Payment Arrangement [Abstract]
Shares, Outstanding, Beginning Balance \| shares	5,943,898
Shares, Exercised or Released \| shares	(473,749)
Shares, Forfeited or Expired \| shares	(316,963)
Shares Outstanding, Ending Balance \| shares	5,153,186	5,943,898
Shares, Exercisable \| shares	4,207,015
Shares, Vested and Expected To Vest \| shares	5,149,253
Weighted-Average Exercise Price, Beginning Balance \| $ / shares	$ 10.28
Weighted-Average Exercise Price, Exercised or Released \| $ / shares	6.07
Weighted-Average Exercise Price, Forfeited or Expired \| $ / shares	11.22
Weighted-Average Exercise Price, Ending Balance \| $ / shares	10.61	$ 10.28
Weighted-Average Exercise Price, Exercisable \| $ / shares	9.36
Weighted-Average Exercise Price, Vested and Expected To Vest \| $ / shares	$ 10.60
Weighted-Average Remaining Contractual Term (Years)	5 years 10 months 9 days	6 years 6 months 10 days
Weighted-Average Remaining Contractual Term (Years), Exercisable	5 years 5 months 23 days
Weighted-Average Remaining Contractual Term (Years), Vested and expected to vest	5 years 10 months 9 days

Stock-Based Compensation - Schedule of RSU Activity (Details) - Restricted stock units	6 Months Ended
	Jun. 30, 2024 $ / shares shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Outstanding, Beginning balance \| shares	1,317,402
Number of shares granted \| shares	1,429,133
Vested \| shares	(171,040)
Forfeited or expired \| shares	(232,674)
Outstanding, Ending balance \| shares	2,342,821
Vested and expected to vest \| shares	2,256,319
Weighted Average Fair Value, Beginning balance \| $ / shares	$ 17.06
Weighted Average Fair Value, Granted \| $ / shares	12.67
Weighted Average Fair Value, Vested \| $ / shares	17.86
Weighted Average Fair Value, Forfeited or expired \| $ / shares	15.12
Weighted Average Fair Value, Ending balance \| $ / shares	14.51
Weighted Average Fair Value, Vested and expected to vest \| $ / shares	$ 14.56

Stock-Based Compensation- Performance Share Units (Details) - Performance Share Units - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended	6 Months Ended
	Mar. 08, 2024	Jun. 30, 2024	Jun. 30, 2024
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted	241,881
Weighted Average Fair Value, Granted	$ 11.69
Forfeited or expired			21,638
Weighted Average Fair Value, Forfeited or expired			$ 11.00
Expected volatility	59.70%
Expected dividends	0.00%
Risk-free rate	4.21%
Share price	$ 11.00
Maximum percentage of increase decrease on additional shares issuable	25
Share-Based Payment Arrangement, Grantee Status [Extensible Enumeration]	us-gaap:ShareBasedPaymentArrangementEmployeeMember
Units expected to vest		334,215	334,215
Compensation expense		$ 436	$ 436
Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted	166,924
Share-Based Payment Arrangement, Grantee Status [Extensible Enumeration]	us-gaap:ShareBasedPaymentArrangementEmployeeMember
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage Of Targeted Shares	200.00%

Income Taxes - Schedule of Effective Tax Rates (Details)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Income Tax Disclosure [Abstract]
Effective tax rate	(1.286%)	(0.83%)

Income Taxes - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Tax Disclosure [Abstract]
Income tax expense	$ 230	$ 269	$ 396	$ 198

Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Related Party Transaction [Line Items]
Payments to related party	$ 15,261	$ 11,599	$ 29,103	$ 21,828
Other current liabilities	962		962		$ 883
Selling, general and administrative expenses from transactions with related party	$ 49,439	43,827	$ 104,221	87,647
Director \| License Agreement
Related Party Transaction [Line Items]
Percentage of revenue paid as royalty			4.00%
Royalty estimated useful life	15 years		15 years
Related party transaction term of agreement			20 years
Related party transaction, agreement renewal term			5 years
Director \| Related Party [Member] \| License Agreement
Related Party Transaction [Line Items]
Due to related parties	$ 8		$ 8		16
Payments to related party	53	156	199	201
Other current liabilities	72		72		$ 155
Selling, general and administrative expenses from transactions with related party	5	$ 115	18	$ 115
Annual Payment Threshold \| Minimum \| Director \| Related Party [Member] \| License Agreement
Related Party Transaction [Line Items]
Due to related parties	$ 250		$ 250

Segment and Geographic Information - Schedule of Total Net Revenue by Geographic Area (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Segment Reporting Information [Line Items]
Total net revenue	$ 61,016	$ 51,009	$ 122,098	$ 103,045
United States
Segment Reporting Information [Line Items]
Total net revenue	49,703	42,264	100,753	87,245
International
Segment Reporting Information [Line Items]
Total net revenue	$ 11,313	$ 8,745	$ 21,345	$ 15,800

Segment and Geographic Information - Additional Information (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2024 country	Jun. 30, 2023 country	Jun. 30, 2024 country segment	Jun. 30, 2023 country segment
Segment Reporting Information [Line Items]
Number of operating segments \| segment			1	1
International
Segment Reporting Information [Line Items]
Number of countries accounted more than ten percent of net revenue \| country	0	0	0	0

Segment and Geographic Information - Schedule of Total Non-current Assets, Excluding Deferred Taxes, by Geographic Area (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Segment Reporting Information [Line Items]
Total assets	$ 125,305	$ 124,179
United States
Segment Reporting Information [Line Items]
Total assets	91,075	89,531
Finland
Segment Reporting Information [Line Items]
Total assets	24,636	25,032
Other International
Segment Reporting Information [Line Items]
Total assets	$ 9,594	$ 9,616

Employee Benefit Plan - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Employee Benefit Plan
Defined contribution plan, maximum percentage of eligible compensation for voluntary contribution			100.00%
Defined Contribution Plan, Plan Name [Extensible Enumeration]			fna:SafeHaborPlanMember
Defined contribution plan minimum annual contributions per employee percent			3.00%
Defined benefit plan, plan assets, contributions by employer	$ 328	$ 276	$ 698	$ 589