KIDS OrthoPediatrics Corporation

Item 1.01. Entry Into a Material Definitive Agreement.

On May 1, 2023, OrthoPediatrics Corp. (the “Company”) entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Kevin Unger and DINZE LLC, an Ohio limited liability company (collectively, the “Sellers”), and the sole member of DINZE LLC, providing for the purchase by the Company of all of the issued and outstanding membership interest of Medtech Concepts, LLC, a Delaware limited liability company (“Medtech”), from the Sellers. Medtech has developed an early-stage, pre-commercial enabling technology platform designed to increase efficiency in the perioperative environment. The solution combines hardware, software, and data analytics to help streamline operative care and support better decision making in hospital operating rooms. In the future, the Company believes this enabling technology platform will provide valuable intraoperative resources for surgeons that will improve decision making, drive operating room efficiency, and ultimately improve healthcare for children. The Company also expects that the acquisition will further support future market share gains for its implant systems, similar to what the Company has experienced with the FIREFLY^® Technology and the 7D Surgical FLASH^TM Navigation platform. The Company does not anticipate material revenue contributions from the platform in 2023.

Under the terms of the Purchase Agreement, the Sellers will be paid consideration in the aggregate amount of approximately $15.2 million, payable in the following manner: (i) cash in the aggregate amount of $3.0 million, on the transaction closing date (the “Closing Date”); (ii) 43,751 unregistered shares of the Company’s common stock, par value $0.00025 per share (“Common Stock”), on the Closing Date, representing approximately $2.2 million (based on a closing share price of $50.68 on April 27, 2023); and (iii) an aggregate of $2.5 million payable 50% in cash and 50% in shares of unregistered Common Stock, on each of the first four anniversaries of the Closing Date, all subject to the conditions set forth in the Purchase Agreement.

As Mr. Unger was a member of the Company’s Board of Directors (the “Board”) at the time the Medtech opportunity was presented to the Company’s management, the Board formed a special committee comprised of independent and disinterested directors (the “Special Committee”) with the exclusive authority to review, evaluate, and negotiate, or reject, the potential Medtech acquisition. On April 27, 2023, the Special Committee unanimously approved the terms of the Purchase Agreement and the transactions contemplated thereby and, based on the recommendation of the Special Committee, the Board (with Mr. Unger abstaining) approved the terms of the Purchase Agreement and the transactions contemplated thereby on the same date.

The Purchase Agreement contains negotiated representations, warranties, covenants and indemnities by the Sellers and the Company, which are believed to be customary for transactions of this kind. The assertions embodied in such representations and warranties are qualified by information contained in confidential disclosure schedules that the parties exchanged in connection with signing the Purchase Agreement. In addition, these representations and warranties (i) may be intended not as statements of fact, but rather as a way of allocating risk to one of the parties if those statements prove to be inaccurate, (ii) may apply materiality standards different from what may be viewed as material to investors and (iii) were made only as of the date of the Purchase Agreement or as of such other date or dates as may be specified in the Purchase Agreement. Moreover, information concerning the subject matter of such representations and warranties may change after the date of the Purchase Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures. Investors are urged not to rely on such representations and warranties as characterizations of the actual state of facts or circumstances at this time or any other time.

The foregoing description of the Purchase Agreement is qualified in its entirety by reference to the complete text thereof, a copy of which is included as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference.