XML 32 R17.htm IDEA: XBRL DOCUMENT v3.25.0.1
Fair Value Measurements of Assets and Liabilities
 12 Months Ended
Dec. 31, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements of Assets and Liabilities

8. Fair Value Measurements of Assets and Liabilities

 

The fair value of foreign currency exchange forward contracts (see Note 10) are determined using Level 2 inputs. The carrying value of our debt (see Note 9) approximates fair value as it bears interest at floating rates. The carrying amounts of other financial instruments (i.e., cash and cash equivalents, restricted cash, bank time deposits, accounts receivable, net and accounts payable) approximated their fair values at December 31, 2024 and December 31, 2023 due to their short-term nature.

 

As discussed in Notes 1 and 3, on April 1, 2024, we completed the sale of the spine segment. A portion of the consideration was in the form of a $60.0 million promissory note that accrues interest at a rate of 10% per annum, compounded semi-annually with interest payable in kind. The note matures on October 1, 2029, contains change of control provisions and allows for optional prepayment at any time. Including consideration of paid-in-kind interest, the fair value of the note was $64.6 million as of December 31, 2024, which was determined using a discounted cash flow analysis, where contractual cash flows were discounted to present value at a risk-adjusted rate

of return. The fair value of the note is determined each period by applying the same approach, considering changes to the risk-adjusted rate of return given observed changes to the interest rate environment, market pricing of credit risk and issuer-specific credit risk.

 

The fair values of acquisition-related contingent payments are estimated using Level 3 inputs. Contingent payments related to acquisitions consist of sales-based payments and are valued using discounted cash flow techniques. The fair value of sales-based payments is based upon probability-weighted future revenue estimates and increases as revenue estimates increase.

 

The following table provides a reconciliation of the beginning and ending balances of items measured at fair value on a recurring basis in the tables above that used significant unobservable inputs (Level 3) (in thousands):

 

 

 

Level 3 - Liabilities

 

Contingent payments related to acquisitions

 

 

 

Balance December 31, 2022

 

$

13,250

 

Settlements

 

 

(3,451

)

Balance December 31, 2023

 

$

9,799

 

Settlements

 

 

(5,213

)

Balance December 31, 2024

 

$

4,586