K2M 10-Q 2 May 16 2016 Q1 Quarterly report Financial data

DOCUMENT AND ENTITY INFORMATION

DOCUMENT AND ENTITY INFORMATION DOCUMENT AND ENTITY INFORMATION - shares	3 Months Ended
	Mar. 31, 2016	Apr. 25, 2016
Entity [Abstract]
Entity Registrant Name	K2M Group Holdings, Inc.
Entity Central Index Key	1,499,807
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		41,485,126

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 21,177	$ 34,646
Accounts receivable, net	41,675	38,773
Inventory, net	64,564	62,002
Prepaid expenses and other current assets	10,737	19,820
Total current assets	138,153	155,241
Property, plant and equipment, net	50,133	38,318
Goodwill	121,814	121,814
Intangible assets, net	30,554	33,123
Other assets, net	25,946	26,016
Total assets	366,600	374,512
Current liabilities:
Current maturities under capital lease obligation	508	284
Accounts payable	21,198	22,483
Accrued expenses	11,103	13,559
Accrued payroll liabilities	10,250	11,507
Total current liabilities	43,059	47,833
Bank line of credit	5,000	0
Capital lease obligation, net of current maturities	34,487	34,140
Deferred income taxes, net	5,042	5,042
Other liabilities	830	835
Total liabilities	$ 88,418	$ 87,850
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value, 750,000,000 shares authorized; 41,481,461 and 41,337,692 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively	$ 41	$ 41
Additional paid-in capital	456,624	454,153
Accumulated other comprehensive income	1,123	1,889
Accumulated deficit	(179,606)	(169,421)
Total stockholders’ equity	278,182	286,662
Total liabilities and stockholders’ equity	$ 366,600	$ 374,512

CONSOLIDATED BALANCE SHEETS (Un

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Common stock, par value per share (in usd per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	750,000,000	750,000,000
Common stock, shares issued (in shares)	41,481,461	41,337,692
Common stock, shares outstanding (in shares)	41,481,461	41,337,692

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Statement [Abstract]
Revenue	$ 56,306	$ 50,424
Cost of revenue	19,604	17,497
Gross profit	36,702	32,927
Operating expenses:
Research and development	5,028	4,633
Sales and marketing	27,755	25,010
General and administrative	13,848	13,329
Total operating expenses	46,631	42,972
Loss from operations	(9,929)	(10,045)
Other income (expense), net:
Foreign currency transaction gain (loss)	420	(4,137)
Interest expense	(651)	(80)
Total other income (expense), net	(231)	(4,217)
Loss before income taxes	(10,160)	(14,262)
Income tax expense	25	23
Net loss	$ (10,185)	$ (14,285)
Net loss per share attributable to common stockholders:
Basic and diluted (in dollars per share)	$ (0.25)	$ (0.37)
Weighted average shares outstanding:
Basic and diluted (in shares)	41,353,123	38,739,798

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Statement of Comprehensive Income [Abstract]
Net loss	$ (10,185)	$ (14,285)
Other comprehensive (loss) income:
Foreign currency translation adjustment	(766)	2,646
Other comprehensive (loss) income	(766)	2,646
Comprehensive loss	$ (10,951)	$ (11,639)

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited) - 3 months ended Mar. 31, 2016 - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Other Comprehensive Loss [Member]	Accumulated Deficit [Member]
Beginning Balance (in shares) at Dec. 31, 2015	41,337,692	41,337,692
Beginning Balance at Dec. 31, 2015	$ 286,662	$ 41	$ 454,153	$ 1,889	$ (169,421)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(10,185)				(10,185)
Other comprehensive income	(766)			(766)
Stock-based compensation expense	$ 2,106		2,106
Exercise of options (in shares)	63,829	143,769
Issuances and exercise of stock-based compensation benefit plans, net of income tax	$ 365	$ 0	365
Ending Balance (in shares) at Mar. 31, 2016	41,481,461	41,481,461
Ending Balance at Mar. 31, 2016	$ 278,182	$ 41	$ 456,624	$ 1,123	$ (179,606)

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating activities
Net loss	$ (10,185)	$ (14,285)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	6,743	6,036
Provision for allowance for doubtful accounts	(57)	41
Provision for inventory reserves	1,013	1,239
Stock-based compensation expense	2,106	1,901
Deferred income taxes	0	21
Changes in operating assets and liabilities:
Accounts receivable	(2,862)	(1,345)
Inventory	(2,139)	(1,536)
Prepaid expenses and other assets	(2,705)	(2,745)
Accounts payable, accrued expenses, and accrued payroll liabilities	(3,351)	3,655
Net cash used in operating activities	(11,437)	(7,018)
Investing activities
Purchase of surgical instruments	(3,339)	(1,430)
Purchase of property, plant and equipment	(6,141)	(649)
Restricted cash used for leasehold improvements	3,333	0
Purchase of intangible assets	(1,282)	(17)
Net cash used in investing activities	(7,429)	(2,096)
Financing activities
Borrowings on bank line of credit	5,000	0
Proceeds from issuances of common stock, net of issuance costs	0	36,455
Issuances and exercise of stock-based compensation benefit plans, net of income tax	365	382
Net cash provided by financing activities	5,365	36,837
Effect of exchange rate changes on cash and cash equivalents	32	(114)
Net increase in cash and cash equivalents	(13,469)	27,609
Cash and cash equivalents at beginning of period	34,646	11,411
Cash and cash equivalents at end of period	21,177	39,020
Significant non-cash financing activities
Leasehold improvements under capital lease	8,562	0
Additions to property, plant and equipment	1,234	0
Deferred offering costs	0	1,007
Cash paid for:
Income taxes	109	52
Interest	$ 623	$ 24

GENERAL AND SUMMARY OF SIGNIFIC

GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES In this Quarterly Report on Form 10-Q, unless the context otherwise requires, references to “K2M,” “the Company,” “we,” “us” and “our,” refer to K2M Group Holdings, Inc. together with its consolidated subsidiaries. We are a global medical device company focused on designing, developing and commercializing innovative and proprietary complex spine technologies and techniques. Our complex spine products are used by spine surgeons to treat some of the most difficult and challenging spinal pathologies, such as deformity (primarily scoliosis), trauma, and tumor. We have applied our product development expertise in innovating complex spine technologies and techniques to the design, development, and commercialization of an expanding number of proprietary minimally invasive surgery, or MIS products. Our MIS products are designed to allow for less invasive access to the spine and faster patient recovery times as compared to traditional open access surgical approaches for both complex spine and degenerative spine pathologies. We have leveraged these core competencies in the design, development and commercialization of an increasing number of products for patients suffering from degenerative spinal conditions. Unaudited Interim Results The accompanying condensed consolidated balance sheets as of March 31, 2016 and December 31, 2015 , the condensed consolidated statements of operations, the condensed consolidated statements of comprehensive loss for the three months ended March 31, 2016 and 2015 , the condensed consolidated statements of changes in stockholders’ equity as of March 31, 2016 , and the condensed consolidated statements of cash flows for the three months ended March 31, 2016 and 2015 are unaudited. The unaudited interim financial statements have been prepared on the same basis of accounting as the annual financial statements and, in the opinion of management, reflect all adjustments, which include normal recurring adjustments, necessary to present fairly our financial position and results of operations and cash flows for the periods presented. The results for the three months ended March 31, 2016 are not necessarily indicative of future results. All information as of March 31, 2016 and for the three month periods ending March 31, 2016 and 2015 within these notes to the condensed consolidated financial statements is unaudited. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and all of its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States or US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Net Loss per Share Basic net loss per common share is determined by dividing the net loss allocable to common stockholders by the weighted average number of common shares outstanding during the periods presented, without consideration of common stock equivalents. Diluted loss per share is computed by dividing the net loss allocable to common stockholders by the weighted average number of shares of common stock and common stock equivalents outstanding for the period. The treasury stock method is used to determine the dilutive effect of our stock option grants. The weighted average shares used to calculate both basic and diluted loss per share are the same because common stock equivalents were excluded in the calculation of diluted loss per share because their effect would be anti-dilutive. Although included in our outstanding share total as of March 31, 2016, shares of restricted stock are contingently issuable until their restrictions lapse and have been excluded from the weighted average shares outstanding. Foreign Currency Translation and Other Comprehensive Loss Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates. Our reporting currency is the U.S. dollar, which is also the functional currency of our domestic entities, while the functional currency of our foreign subsidiaries are the British Pound, Euro and Swiss Franc. Assets and liabilities denominated in foreign currencies are translated at the rate of exchange on the balance sheet date. Revenues and expenses are translated using the average exchange rate for the period. Net gains and losses resulting from the translation of foreign financial statements are recorded in other comprehensive income (loss). Net foreign currency gains or losses resulting from transactions in currencies other than the functional currencies are included in other expense, net on the consolidated statements of operations. Recent Accounting Pronouncements We qualify as an “emerging growth company” (EGC) pursuant to the provisions of the JOBS Act and elected to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act which permits EGCs to defer compliance with new or revised accounting standards (the EGC extension) until non-issuers are required to comply with such standards. Accordingly, so long as we continue to qualify as an EGC, we will not have to adopt or comply with new accounting standards until non-issuers are required to comply with such standards. In March 2016, the FASB issued implementation guidance on principal versus agent considerations, reporting revenue gross versus net in the new revenue recognition standard. The guidance clarifies how an entity should evaluate the unit of accounting to determine whether it is a specified good or service and how it should apply the control principle to certain types of arrangements. The guidance will be effective for annual reporting periods beginning after December 15, 2017, with early adoption permitted for reporting periods beginning after December 15, 2016. EGCs that have elected the EGC extension, including us, and non-public entities will be required to comply with the guidance for annual reporting periods beginning after December 15, 2018. The guidance may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of the initial application. We are currently assessing the impact of this guidance. In March 2016, the FASB issued authoritative guidance intended to improve employee share-based payment accounting for companies that issue share-based awards to their employees. This guidance simplifies the accounting for share-based payment transactions, including consequences of income tax award, classification as either equity or liability, treatment of forfeitures, and classification on statement of cash flows. The recognition, measurement and reporting for share-based payments will be affected by this new guidance. For public entities other than EGCs that have elected the EGC extension, the guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. For all other entities, EGCs that have elected the EGC extension, including us, and non-public entities will be required to comply with the guidance for fiscal years beginning after December 15, 2017, and interim periods within fiscal years beginning after December 15, 2018. Early adoption is permitted in any annual or interim period for which financial statements have not been issued or made available for issuance, but all of the guidance must be adopted in the same period. We are currently evaluating the impact of this guidance. In April 2016, the FASB issued final amendments to clarify the guidance on identifying performance obligations and accounting for licenses of intellectual property ("IP") in its new revenue recognition standard. The amendment allows entities to disregard goods or services that are immaterial in the context of a contract, assess whether these performance obligations are separately identifiable and whether the shipping and handling activities are a promised service in a contract. This guidance also clarifies how an entity should evaluate the nature of its promise in granting a license of IP and when a promised good or service is distinct within the context of a contract. The guidance will be effective for annual reporting periods beginning after December 15, 2017, with early adoption permitted for reporting periods beginning after December 15, 2016. EGCs that have elected the EGC extension, including us, and non-public entities will be required to comply with the guidance for annual reporting periods beginning after December 15, 2018. We are currently assessing the impact of this guidance.

ACCOUNTS RECEIVABLE

ACCOUNTS RECEIVABLE	3 Months Ended
	Mar. 31, 2016
Receivables [Abstract]
ACCOUNTS RECEIVABLE	ACCOUNTS RECEIVABLE The following table summarizes the accounts receivables, net of allowances: March 31, December 31, Accounts receivable $ 44,086 $ 41,210 Allowances (2,411 ) (2,437 ) Accounts receivable, net $ 41,675 $ 38,773

INVENTORY

INVENTORY	3 Months Ended
	Mar. 31, 2016
Inventory Disclosure [Abstract]
INVENTORY	INVENTORY The following table summarizes the inventory, net of allowance: March 31, December 31, Finished goods $ 93,636 $ 90,226 Inventory allowances (29,072 ) (28,224 ) Inventory, net $ 64,564 $ 62,002 Inventory includes surgical instruments available for sale with a carrying value of $ 8,637 and $ 8,946 at March 31, 2016 and December 31, 2015 , respectively.

PREPAID AND OTHER CURRENT ASSET

PREPAID AND OTHER CURRENT ASSETS (Notes)	3 Months Ended
	Mar. 31, 2016
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
PREPAIDS AND OTHER CURRENT ASSETS	PREPAID EXPENSES AND OTHER CURRENT ASSETS The following table summarizes prepaid expenses and other current assets: March 31, December 31, Restricted cash $ 3,336 $ 6,669 Landlord incentives for leasehold improvements — 6,454 Prepaid expenses 2,947 2,408 Other 4,454 4,289 Total $ 10,737 $ 19,820 Restricted cash represents funds designated for tenant improvements related to the new headquarters and operations facilities. Landlord incentives for leasehold improvements represents incentives to be provided by the Landlord of our new headquarters and operations facilities under the capital lease agreement, which commenced in October 2015. Such incentives are received from our landlord upon the completion of actual improvements.

Property, plant and equipment (

Property, plant and equipment (Notes)	3 Months Ended
	Mar. 31, 2016
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment Disclosure [Text Block]	PROPERTY, PLANT AND EQUIPMENT The following table summarizes property, plant and equipment: Estimated Useful Lives March 31, December 31, Buildings under capital lease 16 years $ 26,469 $ 26,469 Leasehold improvements, including property under capital lease Various 18,447 9,717 Equipment 3 years 2,862 3,054 Software 3 years 4,902 4,231 Computer equipment 3 years 1,494 1,493 Furniture and office equipment 5 years 4,890 1,050 Vehicles and other Various 426 795 Total 59,490 46,809 Less accumulated depreciation and amortization (9,357 ) (8,491 ) Property, plant and equipment, net $ 50,133 $ 38,318 Depreciation and amortization expense for property, plant and equipment was $ 877 and $ 458 for the three months ended March 31, 2016 and 2015 , respectively, and included $ 416 and $ 0 of amortization expense for buildings under capital lease for the same periods. Interest expense on the capital lease obligation was $ 568 for the three months ended March 31, 2016 . As of March 31, 2016 and December 31, 2015 , we had leasehold improvements of approximately $ 16,996 and $ 8,242 , respectively for our new headquarters and operations facilities that are under construction and will commence depreciating and amortizing these assets when they are placed in service in the second quarter of 2016. Furniture and equipment at March 31, 2016 includes $ 3,637 of furniture and equipment acquired for use in our new headquarters and operations facilities which we expect to put into service and begin depreciation of during the second quarter of 2016 following our occupancy of the new premises.

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS	3 Months Ended
	Mar. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
GOODWILL AND INTANGIBLE ASSETS	INTANGIBLE ASSETS Intangible assets, net comprise the following: March 31, 2016 Estimated Useful Lives Gross Accumulated Amortization Net Indefinite-lived intangible assets: Trademarks — $ 12,900 $ — $ 12,900 In-process research and development — 900 — 900 Other — 266 — 266 Subtotal 14,066 — 14,066 Subject to amortization Developed technology 4 - 6 years 62,000 (53,689 ) 8,311 Licensed technology 4 - 6 years 52,600 (52,363 ) 237 Customer relationships 4 - 7 years 29,700 (23,866 ) 5,834 Patents and other 2 - 17 years 3,277 (1,171 ) 2,106 Subtotal 147,577 (131,089 ) 16,488 Total Intangible Assets, net $ 161,643 $ (131,089 ) $ 30,554 December 31, 2015 Estimated Useful Lives Gross Accumulated Amortization Net Indefinite-lived intangible assets: Trademarks — $ 12,900 $ — $ 12,900 In-process research and development — 900 — 900 Other — 266 — 266 Subtotal 14,066 — 14,066 Subject to amortization Developed technology 4 - 6 years 62,000 (52,243 ) 9,757 Licensed technology 4 - 6 years 52,600 (52,325 ) 275 Customer relationships 4 - 7 years 29,700 (22,805 ) 6,895 Patents and other 2 - 17 years 3,245 (1,115 ) 2,130 Subtotal 147,545 (128,488 ) 19,057 Total Intangible Assets, net $ 161,611 $ (128,488 ) $ 33,123 Amortization expense of intangible assets was $ 2,601 and $ 2,622 for the three months ended March 31, 2016 and 2015 , respectively. As of March 31, 2016 , the expected amortization expense for the remainder of 2016 and the following four years and thereafter is as follows: March 31, 2016 2016 $ 7,833 2017 6,763 2018 267 2019 257 2020 227 Thereafter 1,141 Total $ 16,488

OTHER ASSETS

OTHER ASSETS	3 Months Ended
	Mar. 31, 2016
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
OTHER ASSETS	OTHER ASSETS Other assets consist of the following: March 31, December 31, Surgical instruments, net $ 24,164 $ 23,945 Restricted cash 928 1,298 Other 854 773 Total $ 25,946 $ 26,016 Surgical instruments are stated net of accumulated amortization and allowances of $ 28,388 and $ 26,609 at March 31, 2016 and December 31, 2015 , respectively. Amortization expense was $ 2,395 and $ 2,155 for the three months ended March 31, 2016 and 2015 , respectively. Restricted cash balances includes deposits made on pending bids or contracts with customers.

ACCRUED EXPENSES

ACCRUED EXPENSES	3 Months Ended
	Mar. 31, 2016
Payables and Accruals [Abstract]
ACCRUED EXPENSES	ACCRUED EXPENSES Accrued expenses consist of the following: March 31, December 31, Accrued commissions $ 4,784 $ 5,336 Accrued royalties 2,474 2,704 Other 3,845 5,519 Total $ 11,103 $ 13,559

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	3 Months Ended
	Mar. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
STOCK-BASED COMPENSATION	STOCK-BASED COMPENSATION As of March 31, 2016 , there was a total of 666,161 shares of common stock available for future grants under our stock purchase and equity award or incentive plans. The following table summarizes the stock-based compensation expense by financial statement line item, employees and non-employees and type of award: Three Months Ended March 31, 2016 2015 Cost of revenue $ 60 $ 181 Research and development 181 149 Sales and marketing 542 756 General and administrative 1,323 815 $ 2,106 $ 1,901 Employees $ 2,106 $ 1,827 Non-employees — 74 Total $ 2,106 $ 1,901 Three Months Ended March 31, 2016 2015 Stock options $ 649 $ 537 Restricted stock and restricted stock units 1,358 1,298 ESPP 99 66 Total $ 2,106 $ 1,901 The following table summarizes stock option plans activity: Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value (1) Outstanding at December 31, 2015 3,682,019 $ 11.51 5.98 $ 31,586 Granted 20,000 9.64 Exercised (63,829 ) 5.73 Expired (5,771 ) 5.73 Forfeited (9,901 ) 11.50 Outstanding at March 31, 2016 (2) 3,622,518 $ 11.61 5.87 $ 14,899 Vested or expected to vest: At March 31, 2016 (3) 3,338,259 $ 11.72 5.89 $ 13,557 Vested: At March 31, 2016 1,744,272 $ 9.63 4.91 $ 9,175 (1) Calculated using the estimated per-share fair market value of our common stock on March 31, 2016 and December 31, 2015 , which was $ 14.83 , and $ 19.74 , respectively. (2) The total includes 994,768 performance-based options at March 31, 2016 and December 31, 2015 . (3) Outstanding options, net of forfeiture rate. As of March 31, 2016 , we had 414,001 and 79,940 unvested restricted stock units (“RSUs”) and shares of restricted stock outstanding, respectively. No RSUs or shares of restricted stock were granted or vested during the three months ended March 31, 2016 .

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Mar. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES Intellectual Property In the normal course of business, we enter into agreements to obtain the rights to certain intellectual property. These agreements may require an up-front payment, milestone payments and/or royalties. Typically, we have certain rights to cancel these agreements, with notice, without additional payments due other than the amount due at the time of cancellation. As of March 31, 2016 , the aggregate amount of these future payments, assuming achievement of applicable milestones and non-cancellation, was $ 1,358 over a period not less than five years. Royalties ranging from 2% to 10% of net sales may be due on the sales of related products. Some of the agreements contain minimum annual royalty amounts. In November 2011, we entered into an agreement to purchase certain proprietary technology which could require us to make additional aggregate payments of up to $ 13,350 should certain milestones be met, including milestones related to regulatory applications and approvals. Cumulative payments under this agreement totaled $ 1,350 through March 31, 2016 . In addition, milestone payments of $ 500 , $ 2,000 and $ 4,000 are due upon the achievement of net sales of related products of $ 10,000 , $ 25,000 and $ 50,000 , respectively. A royalty payment of 7% of net sales of related products may be due until such sales reaches $ 20,000 . The medical device industry is characterized by frequent claims and litigation, including claims regarding patent and other intellectual property rights, as well as, improper hiring practices. We are not aware of any pending or threatened legal proceeding against us that would have a material adverse effect on our business, operating results or financial condition. However, we are a party in multiple legal actions involving claimants seeking various remedies, including monetary damages, and none of the outcomes are certain or entirely within our control.

INCOME TAXES

INCOME TAXES	3 Months Ended
	Mar. 31, 2016
Income Tax Disclosure [Abstract]
INCOME TAXES	INCOME TAXES The provision for income taxes for the three months ended March 31, 2016 and 2015 includes both domestic and foreign income taxes at applicable statutory rates adjusted for permanent differences and valuation allowances. For the three months ended March 31, 2016 and 2015 , the income tax expense was $ 25 and $ 23 , resulting in an effective tax rate of (0.2)% and (0.2)% , respectively. The effective tax rate differs from the statutory rate due to permanent differences, an increase to the valuation allowance and foreign tax rate differentials.

NET LOSS PER SHARE

NET LOSS PER SHARE	3 Months Ended
	Mar. 31, 2016
Earnings Per Share [Abstract]
NET LOSS PER SHARE	NET LOSS PER SHARE The following table sets forth the computation of basic and diluted loss per share: Three Months Ended March 31, 2016 2015 Net loss per common share: Net loss $ (10,185 ) $ (14,285 ) Basic and diluted loss per common share: Basic and diluted weighted average common shares outstanding 41,353,123 38,739,798 Basic and diluted loss per common share $ (0.25 ) $ (0.37 ) Diluted loss per share for the three months ended March 31, 2016 and 2015 does not reflect the following outstanding common shares, as the effect would be antidilutive: Three Months Ended March 31, 2016 2015 Stock options 3,622,518 4,023,206 Restricted stock units 414,001 765,023 Restricted stock 79,940 —

SEGMENT AND GEOGRAPHICAL CONCEN

SEGMENT AND GEOGRAPHICAL CONCENTRATION	3 Months Ended
	Mar. 31, 2016
Segment Reporting [Abstract]
SEGMENT AND GEOGRAPHICAL CONCENTRATION	SEGMENT AND GEOGRAPHICAL CONCENTRATION Operating segments are defined as components of an enterprise for which separate discrete financial information is available and evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. We manage the business globally within one reporting segment. Segment information is consistent with how management reviews the business, makes investing and resource allocation decisions and assesses operating performance. Products are sold principally in the United States. International revenue represented 25.1% of total revenue for the three months ended March 31, 2016 ; however, revenue earned in any individual foreign country is below 10% of our consolidated revenue. The following table represents total revenue by geographic area, based on the location of the customer: Three Months Ended March 31, 2016 2015 United States $ 42,193 $ 35,162 International 14,113 15,262 Total $ 56,306 $ 50,424 We classify sales within the United States into three categories: complex spine pathologies, minimally invasive procedures and degenerative and other conditions. A significant portion of our international revenue is derived from our distributor partners who do not report their product usage at the surgeon or hospital level, which prevents us from providing a specific breakdown for our international revenue among its three product categories. These sales transactions are settled when we ship the product to the agent. In the fourth quarter of 2015, we refined our reporting of procedure revenue that included the sale of certain single-use MIS products which are sold in support of degenerative surgical procedures as degenerative revenue. Historically these sales were reflected in the MIS product category. As a result of this reclassification, our historically reported MIS revenue has decreased and our degenerative revenue has increased by approximately $ 429 for the three months ended March 31, 2015 to conform to the current year presentation. The following table represents domestic revenue by current procedure category: Three Months Ended March 31, 2016 2015 Complex spine $ 15,930 $ 14,221 Minimally invasive 6,881 5,380 Degenerative 19,382 15,561 42,193 35,162 International 14,113 15,262 Total $ 56,306 $ 50,424

GENERAL AND SUMMARY OF SIGNIF21

GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Policies)	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Principles of Consolidation	Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and all of its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States or US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates
Net Loss per Share	Net Loss per Share Basic net loss per common share is determined by dividing the net loss allocable to common stockholders by the weighted average number of common shares outstanding during the periods presented, without consideration of common stock equivalents. Diluted loss per share is computed by dividing the net loss allocable to common stockholders by the weighted average number of shares of common stock and common stock equivalents outstanding for the period. The treasury stock method is used to determine the dilutive effect of our stock option grants. The weighted average shares used to calculate both basic and diluted loss per share are the same because common stock equivalents were excluded in the calculation of diluted loss per share because their effect would be anti-dilutive
Foreign Currency Translation and Other Comprehensive Loss	Foreign Currency Translation and Other Comprehensive Loss Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates. Our reporting currency is the U.S. dollar, which is also the functional currency of our domestic entities, while the functional currency of our foreign subsidiaries are the British Pound, Euro and Swiss Franc. Assets and liabilities denominated in foreign currencies are translated at the rate of exchange on the balance sheet date. Revenues and expenses are translated using the average exchange rate for the period. Net gains and losses resulting from the translation of foreign financial statements are recorded in other comprehensive income (loss). Net foreign currency gains or losses resulting from transactions in currencies other than the functional currencies are included in other expense, net on the consolidated statements of operations.
Recent Accounting Pronouncements	Recent Accounting Pronouncements We qualify as an “emerging growth company” (EGC) pursuant to the provisions of the JOBS Act and elected to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act which permits EGCs to defer compliance with new or revised accounting standards (the EGC extension) until non-issuers are required to comply with such standards. Accordingly, so long as we continue to qualify as an EGC, we will not have to adopt or comply with new accounting standards until non-issuers are required to comply with such standards. In March 2016, the FASB issued implementation guidance on principal versus agent considerations, reporting revenue gross versus net in the new revenue recognition standard. The guidance clarifies how an entity should evaluate the unit of accounting to determine whether it is a specified good or service and how it should apply the control principle to certain types of arrangements. The guidance will be effective for annual reporting periods beginning after December 15, 2017, with early adoption permitted for reporting periods beginning after December 15, 2016. EGCs that have elected the EGC extension, including us, and non-public entities will be required to comply with the guidance for annual reporting periods beginning after December 15, 2018. The guidance may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of the initial application. We are currently assessing the impact of this guidance. In March 2016, the FASB issued authoritative guidance intended to improve employee share-based payment accounting for companies that issue share-based awards to their employees. This guidance simplifies the accounting for share-based payment transactions, including consequences of income tax award, classification as either equity or liability, treatment of forfeitures, and classification on statement of cash flows. The recognition, measurement and reporting for share-based payments will be affected by this new guidance. For public entities other than EGCs that have elected the EGC extension, the guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. For all other entities, EGCs that have elected the EGC extension, including us, and non-public entities will be required to comply with the guidance for fiscal years beginning after December 15, 2017, and interim periods within fiscal years beginning after December 15, 2018. Early adoption is permitted in any annual or interim period for which financial statements have not been issued or made available for issuance, but all of the guidance must be adopted in the same period. We are currently evaluating the impact of this guidance. In April 2016, the FASB issued final amendments to clarify the guidance on identifying performance obligations and accounting for licenses of intellectual property ("IP") in its new revenue recognition standard. The amendment allows entities to disregard goods or services that are immaterial in the context of a contract, assess whether these performance obligations are separately identifiable and whether the shipping and handling activities are a promised service in a contract. This guidance also clarifies how an entity should evaluate the nature of its promise in granting a license of IP and when a promised good or service is distinct within the context of a contract. The guidance will be effective for annual reporting periods beginning after December 15, 2017, with early adoption permitted for reporting periods beginning after December 15, 2016. EGCs that have elected the EGC extension, including us, and non-public entities will be required to comply with the guidance for annual reporting periods beginning after December 15, 2018. We are currently assessing the impact of this guidance.

ACCOUNTS RECEIVABLE - (Tables)

ACCOUNTS RECEIVABLE - (Tables)	3 Months Ended
	Mar. 31, 2016
Receivables [Abstract]
Schedule of Accounts Receivable	The following table summarizes the accounts receivables, net of allowances: March 31, December 31, Accounts receivable $ 44,086 $ 41,210 Allowances (2,411 ) (2,437 ) Accounts receivable, net $ 41,675 $ 38,773

INVENTORY - (Tables)

INVENTORY - (Tables)	3 Months Ended
	Mar. 31, 2016
Inventory Disclosure [Abstract]
Schedule of Current Inventory	The following table summarizes the inventory, net of allowance: March 31, December 31, Finished goods $ 93,636 $ 90,226 Inventory allowances (29,072 ) (28,224 ) Inventory, net $ 64,564 $ 62,002

PREPAID AND OTHER CURRENT ASS24

PREPAID AND OTHER CURRENT ASSETS (Tables)	3 Months Ended
	Mar. 31, 2016
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Schedule of prepaid expenses and other current assets	The following table summarizes prepaid expenses and other current assets: March 31, December 31, Restricted cash $ 3,336 $ 6,669 Landlord incentives for leasehold improvements — 6,454 Prepaid expenses 2,947 2,408 Other 4,454 4,289 Total $ 10,737 $ 19,820

Property, plant and equipment25

Property, plant and equipment (Tables)	3 Months Ended
	Mar. 31, 2016
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment [Table Text Block]	The following table summarizes property, plant and equipment: Estimated Useful Lives March 31, December 31, Buildings under capital lease 16 years $ 26,469 $ 26,469 Leasehold improvements, including property under capital lease Various 18,447 9,717 Equipment 3 years 2,862 3,054 Software 3 years 4,902 4,231 Computer equipment 3 years 1,494 1,493 Furniture and office equipment 5 years 4,890 1,050 Vehicles and other Various 426 795 Total 59,490 46,809 Less accumulated depreciation and amortization (9,357 ) (8,491 ) Property, plant and equipment, net $ 50,133 $ 38,318

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS - (Tables)	3 Months Ended
	Mar. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Intangible Assets and Goodwill	Intangible assets, net comprise the following: March 31, 2016 Estimated Useful Lives Gross Accumulated Amortization Net Indefinite-lived intangible assets: Trademarks — $ 12,900 $ — $ 12,900 In-process research and development — 900 — 900 Other — 266 — 266 Subtotal 14,066 — 14,066 Subject to amortization Developed technology 4 - 6 years 62,000 (53,689 ) 8,311 Licensed technology 4 - 6 years 52,600 (52,363 ) 237 Customer relationships 4 - 7 years 29,700 (23,866 ) 5,834 Patents and other 2 - 17 years 3,277 (1,171 ) 2,106 Subtotal 147,577 (131,089 ) 16,488 Total Intangible Assets, net $ 161,643 $ (131,089 ) $ 30,554 December 31, 2015 Estimated Useful Lives Gross Accumulated Amortization Net Indefinite-lived intangible assets: Trademarks — $ 12,900 $ — $ 12,900 In-process research and development — 900 — 900 Other — 266 — 266 Subtotal 14,066 — 14,066 Subject to amortization Developed technology 4 - 6 years 62,000 (52,243 ) 9,757 Licensed technology 4 - 6 years 52,600 (52,325 ) 275 Customer relationships 4 - 7 years 29,700 (22,805 ) 6,895 Patents and other 2 - 17 years 3,245 (1,115 ) 2,130 Subtotal 147,545 (128,488 ) 19,057 Total Intangible Assets, net $ 161,611 $ (128,488 ) $ 33,123
Schedule of Expected Amortization Expense	As of March 31, 2016 , the expected amortization expense for the remainder of 2016 and the following four years and thereafter is as follows: March 31, 2016 2016 $ 7,833 2017 6,763 2018 267 2019 257 2020 227 Thereafter 1,141 Total $ 16,488

OTHER ASSETS - (Tables)

OTHER ASSETS - (Tables)	3 Months Ended
	Mar. 31, 2016
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Schedule of Other Assets	Other assets consist of the following: March 31, December 31, Surgical instruments, net $ 24,164 $ 23,945 Restricted cash 928 1,298 Other 854 773 Total $ 25,946 $ 26,016

ACCRUED EXPENSES - (Tables)

ACCRUED EXPENSES - (Tables)	3 Months Ended
	Mar. 31, 2016
Payables and Accruals [Abstract]
Schedule of Accrued Expenses	Accrued expenses consist of the following: March 31, December 31, Accrued commissions $ 4,784 $ 5,336 Accrued royalties 2,474 2,704 Other 3,845 5,519 Total $ 11,103 $ 13,559

STOCK-BASED COMPENSATION - (Tab

STOCK-BASED COMPENSATION - (Tables)	3 Months Ended
	Mar. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of stock-based compensation expense	The following table summarizes the stock-based compensation expense by financial statement line item, employees and non-employees and type of award: Three Months Ended March 31, 2016 2015 Cost of revenue $ 60 $ 181 Research and development 181 149 Sales and marketing 542 756 General and administrative 1,323 815 $ 2,106 $ 1,901 Employees $ 2,106 $ 1,827 Non-employees — 74 Total $ 2,106 $ 1,901 Three Months Ended March 31, 2016 2015 Stock options $ 649 $ 537 Restricted stock and restricted stock units 1,358 1,298 ESPP 99 66 Total $ 2,106 $ 1,901
Schedule of employee stock option plan activity	The following table summarizes stock option plans activity: Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value (1) Outstanding at December 31, 2015 3,682,019 $ 11.51 5.98 $ 31,586 Granted 20,000 9.64 Exercised (63,829 ) 5.73 Expired (5,771 ) 5.73 Forfeited (9,901 ) 11.50 Outstanding at March 31, 2016 (2) 3,622,518 $ 11.61 5.87 $ 14,899 Vested or expected to vest: At March 31, 2016 (3) 3,338,259 $ 11.72 5.89 $ 13,557 Vested: At March 31, 2016 1,744,272 $ 9.63 4.91 $ 9,175 (1) Calculated using the estimated per-share fair market value of our common stock on March 31, 2016 and December 31, 2015 , which was $ 14.83 , and $ 19.74 , respectively. (2) The total includes 994,768 performance-based options at March 31, 2016 and December 31, 2015 . (3) Outstanding options, net of forfeiture rate

NET LOSS PER SHARE - (Tables)

NET LOSS PER SHARE - (Tables)	3 Months Ended
	Mar. 31, 2016
Earnings Per Share [Abstract]
Schedule of Basic and Diluted Earnings Per Share	The following table sets forth the computation of basic and diluted loss per share: Three Months Ended March 31, 2016 2015 Net loss per common share: Net loss $ (10,185 ) $ (14,285 ) Basic and diluted loss per common share: Basic and diluted weighted average common shares outstanding 41,353,123 38,739,798 Basic and diluted loss per common share $ (0.25 ) $ (0.37 )
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share	Diluted loss per share for the three months ended March 31, 2016 and 2015 does not reflect the following outstanding common shares, as the effect would be antidilutive: Three Months Ended March 31, 2016 2015 Stock options 3,622,518 4,023,206 Restricted stock units 414,001 765,023 Restricted stock 79,940 —

SEGMENT AND GEOGRAPHICAL CONC31

SEGMENT AND GEOGRAPHICAL CONCENTRATION - (Tables)	3 Months Ended
	Mar. 31, 2016
Segment Reporting [Abstract]
Schedule of Revenue by Geographic Area	The following table represents total revenue by geographic area, based on the location of the customer: Three Months Ended March 31, 2016 2015 United States $ 42,193 $ 35,162 International 14,113 15,262 Total $ 56,306 $ 50,424
Schedule of Revenue by Products	The following table represents domestic revenue by current procedure category: Three Months Ended March 31, 2016 2015 Complex spine $ 15,930 $ 14,221 Minimally invasive 6,881 5,380 Degenerative 19,382 15,561 42,193 35,162 International 14,113 15,262 Total $ 56,306 $ 50,424

ACCOUNTS RECEIVABLE - (Details)

ACCOUNTS RECEIVABLE - (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Receivables [Abstract]
Accounts receivable	$ 44,086	$ 41,210
Allowances	(2,411)	(2,437)
Accounts receivable, net	$ 41,675	$ 38,773

INVENTORY - (Details)

INVENTORY - (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Inventory [Line Items]
Finished goods	$ 93,636	$ 90,226
Inventory allowances	(29,072)	(28,224)
Inventory, net	64,564	62,002
Surgical and Medical Instruments [Member]
Inventory [Line Items]
Inventory, net	$ 8,637	$ 8,946

PREPAID AND OTHER CURRENT ASS34

PREPAID AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Restricted cash	$ 3,336	$ 6,669
Landlord incentives for leasehold improvements	0	6,454
Prepaid expenses	2,947	2,408
Other	4,454	4,289
Total	$ 10,737	$ 19,820

Property, plant and equipment35

Property, plant and equipment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Total	$ 59,490	$ 46,809
Less accumulated depreciation and amortization	(9,357)	(8,491)
Property, plant and equipment, net	$ 50,133	38,318
Buildings under capital lease
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	16 years
Total	$ 26,469	26,469
Leasehold improvements, including property under capital lease
Property, Plant and Equipment [Line Items]
Total	$ 18,447	9,717
Equipment
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	3 years
Total	$ 2,862	3,054
Software
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	3 years
Total	$ 4,902	4,231
Computer equipment
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	3 years
Total	$ 1,494	1,493
Furniture and office equipment
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	5 years
Total	$ 4,890	1,050
Vehicles and other
Property, Plant and Equipment [Line Items]
Total	$ 426	$ 795

Property, plant and equipment P

Property, plant and equipment PPE narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Depreciation	$ 877	$ 458
Capital Leases, Income Statement, Amortization Expense	416	$ 0
Interest Expense, Lessee, Assets under Capital Lease	568
Total	59,490		$ 46,809
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Leasehold Improvements, Gross	16,996		8,242
Furniture and office equipment
Property, Plant and Equipment [Line Items]
Total	4,890		$ 1,050
Corporate Headquarters and Other Operational Facilities [Member] | Furniture and office equipment
Property, Plant and Equipment [Line Items]
Total	$ 3,637

GOODWILL AND INTANGIBLE ASSET37

GOODWILL AND INTANGIBLE ASSETS - (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Schedule of Intangible Asset by Major Class [Line Items]
Indefinite-lived intangible assets	$ 14,066		$ 14,066
Subject to amortization, Gross	147,577		147,545
Accumulated Amortization	(131,089)		(128,488)
Total	16,488		19,057
Intangible Assets, Gross	161,643		161,611
Intangible Assets, Net	30,554		33,123
Amortization expense	2,601	$ 2,622
Developed Technology Rights [Member]
Schedule of Intangible Asset by Major Class [Line Items]
Subject to amortization, Gross	62,000		62,000
Accumulated Amortization	(53,689)		(52,243)
Total	8,311		9,757
Licensed technology [Member]
Schedule of Intangible Asset by Major Class [Line Items]
Subject to amortization, Gross	52,600		52,600
Accumulated Amortization	(52,363)		(52,325)
Total	237		275
Customer Relationships [Member]
Schedule of Intangible Asset by Major Class [Line Items]
Subject to amortization, Gross	29,700		29,700
Accumulated Amortization	(23,866)		(22,805)
Total	5,834		6,895
Patents and Other [Member]
Schedule of Intangible Asset by Major Class [Line Items]
Subject to amortization, Gross	3,277		3,245
Accumulated Amortization	(1,171)		(1,115)
Total	2,106		2,130
Trademarks [Member]
Schedule of Intangible Asset by Major Class [Line Items]
Indefinite-lived intangible assets	12,900		12,900
In-process research and development [Member]
Schedule of Intangible Asset by Major Class [Line Items]
Indefinite-lived intangible assets	900		900
Other [Member]
Schedule of Intangible Asset by Major Class [Line Items]
Indefinite-lived intangible assets	$ 266		$ 266
Minimum [Member] | Developed Technology Rights [Member]
Schedule of Intangible Asset by Major Class [Line Items]
Estimated Useful Lives	4 years		4 years
Minimum [Member] | Licensed technology [Member]
Schedule of Intangible Asset by Major Class [Line Items]
Estimated Useful Lives	4 years		4 years
Minimum [Member] | Customer Relationships [Member]
Schedule of Intangible Asset by Major Class [Line Items]
Estimated Useful Lives	4 years		4 years
Minimum [Member] | Patents and Other [Member]
Schedule of Intangible Asset by Major Class [Line Items]
Estimated Useful Lives	2 years		2 years
Maximum [Member] | Developed Technology Rights [Member]
Schedule of Intangible Asset by Major Class [Line Items]
Estimated Useful Lives	6 years		6 years
Maximum [Member] | Licensed technology [Member]
Schedule of Intangible Asset by Major Class [Line Items]
Estimated Useful Lives	6 years		6 years
Maximum [Member] | Customer Relationships [Member]
Schedule of Intangible Asset by Major Class [Line Items]
Estimated Useful Lives	7 years		7 years
Maximum [Member] | Patents and Other [Member]
Schedule of Intangible Asset by Major Class [Line Items]
Estimated Useful Lives	17 years		17 years

GOODWILL AND INTANGIBLE ASSET38

GOODWILL AND INTANGIBLE ASSETS Schedule of Expected Amortization Expense (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
2,016	$ 7,833
2,017	6,763
2,018	267
2,019	257
2,020	227
Thereafter	1,141
Total	$ 16,488	$ 19,057

OTHER ASSETS - (Details)

OTHER ASSETS - (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Surgical instruments, net	$ 24,164		$ 23,945
Deposits Assets, Noncurrent	928		1,298
Other	854		773
Total	25,946		26,016
Surgical instruments accumulated amortization	28,388		$ 26,609
Amortization expense	$ 2,395	$ 2,155

ACCRUED EXPENSES - (Details)

ACCRUED EXPENSES - (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Payables and Accruals [Abstract]
Accrued commissions	$ 4,784	$ 5,336
Accrued royalties	2,474	2,704
Other	3,845	5,519
Total	$ 11,103	$ 13,559

STOCK-BASED COMPENSATION - Allo

STOCK-BASED COMPENSATION - Allocation of Share-based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated stock-based compensation expense	$ 2,106	$ 1,901
Cost of revenue
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated stock-based compensation expense	60	181
Research and development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated stock-based compensation expense	181	149
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated stock-based compensation expense	542	756
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated stock-based compensation expense	1,323	815
Employees
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated stock-based compensation expense	2,106	1,827
Non-employees
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated stock-based compensation expense	0	74
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated stock-based compensation expense	649	537
Restricted stock and restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated stock-based compensation expense	1,358	1,298
ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated stock-based compensation expense	$ 99	$ 66

STOCK-BASED COMPENSATION - Summ

STOCK-BASED COMPENSATION - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		12 Months Ended
		Mar. 31, 2016		Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding Beginning Balance, Shares		3,682,019
Granted, Shares		20,000
Exercised, Shares		(63,829)
Expired, Shares		(5,771)
Forfeited, Shares		(9,901)
Outstanding Ending Balance, Shares		3,622,518	[1]	3,682,019
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Beginning, Weighted-Average Exercise Price (in usd per share)		$ 11.51
Granted, Weighted-Average Exercise Price (in usd per share)		9.64
Exercised, Weighted-Average Exercise Price (in usd per share)		5.73
Expired, Weighted-Average Exercise Price (in usd per share)		5.73
Forfeited, Weighted-Average Exercise Price (in usd per share)		11.50
Ending, Weighted-Average Exercise Price (in usd per share)		$ 11.61		$ 11.51
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Outstanding, Weighted- Average Remaining Contractual Term (years)		5 years 10 months 13 days		5 years 11 months 23 days
Outstanding, Aggregate Intrinsic Value	[2]	$ 31,586
Outstanding, Aggregate Intrinsic Value	[2]	$ 14,899		$ 31,586
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract]
Vested or expected to vest, shares	[3]	3,338,259
Vested or expected to vest, Weighted-Average Exercise Price (in usd per share)		$ 11.72
Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term		5 years 10 months 20 days
Vested or expected to vest, Aggregate Intrinsic Value	[2]	$ 13,557
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested [Abstract]
Vested, shares		1,744,272
Vested, Weighted-Average Exercise Price (in usd per share)		$ 9.63
Vested, Weighted-Average Remaining Contractual Term		4 years 10 months 27 days
Vested, Aggregate Intrinsic Value	[2]	$ 9,175
Fair value valuation, estimated fair market value of stock (in dollars per share)		$ 14.83		$ 19.74
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding Beginning Balance, Shares		994,768
Outstanding Ending Balance, Shares		994,768		994,768
[1]	The total includes 994,768 performance-based options at March 31, 2016 and December 31, 2015.
[2]	Calculated using the estimated per-share fair market value of our common stock on March 31, 2016 and December 31, 2015, which was $14.83, and $19.74, respectively
[3]	Outstanding options, net of forfeiture rate.

STOCK-BASED COMPENSATION - Narr

STOCK-BASED COMPENSATION - Narrative (Details)	3 Months Ended
	Mar. 31, 2016shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee Stock Purchase Plans, Shares Reserved for Future Issuance (in shares)	666,161
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity instruments, other than options, outstanding	414,001
Shares, other than options, granted	0
Shares, other than options, vested	0
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity instruments, other than options, outstanding	79,940
Shares, other than options, granted	0
Shares, other than options, vested	0

COMMITMENTS AND CONTINGENCIES -

COMMITMENTS AND CONTINGENCIES - (Details) - USD ($)	1 Months Ended	3 Months Ended
	Nov. 30, 2011	Mar. 31, 2016	Mar. 31, 2015
Long-term Purchase Commitment [Line Items]
Initial payment to acquire proprietary technology		$ 1,282,000	$ 17,000
Licensed technology [Member]
Long-term Purchase Commitment [Line Items]
Other Commitment		$ 1,358,000
Minimum contractual term		5 years
Licensed technology [Member] | Minimum [Member]
Long-term Purchase Commitment [Line Items]
Future maximum royalty payments		2.00%
Licensed technology [Member] | Maximum [Member]
Long-term Purchase Commitment [Line Items]
Future maximum royalty payments		10.00%
In Process Research and Development [Member]
Long-term Purchase Commitment [Line Items]
Future maximum royalty payments	7.00%
Initial payment to acquire proprietary technology		$ 1,350,000
Milestone payment one	$ 500,000
Milestone payment two	2,000,000
Milestone payment three	4,000,000
Milestone for milestone payment one	10,000,000
Milestone for milestone payment two	25,000,000
Milestone for milestone payment three	50,000,000
Milestone for ending royalty payments, cumulative sales	20,000,000
In Process Research and Development [Member] | Maximum [Member]
Long-term Purchase Commitment [Line Items]
Other Commitment	$ 13,350,000

INCOME TAXES - (Details)

INCOME TAXES - (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Tax Disclosure [Abstract]
Income tax (benefit) expense	$ 25	$ 23
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent	(0.20%)	(0.20%)

NET LOSS PER SHARE - (Details)

NET LOSS PER SHARE - (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Earnings Per Share [Abstract]
Net loss	$ (10,185)	$ (14,285)
Basic and diluted weighted average common shares outstanding	41,353,123	38,739,798
Basic and diluted loss per common share (in dollars per share)	$ (0.25)	$ (0.37)

NET LOSS PER SHARE - Antidiluti

NET LOSS PER SHARE - Antidilutive Shares (Details) - shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Stock options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Earnings Per Share (in shares)	3,622,518	4,023,206
Restricted Stock Units (RSUs) [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Earnings Per Share (in shares)	414,001	765,023
Restricted Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Earnings Per Share (in shares)	79,940	0

SEGMENT AND GEOGRAPHICAL CONC48

SEGMENT AND GEOGRAPHICAL CONCENTRATION - Narrative (Details)	3 Months Ended
	Mar. 31, 2016Segment
Segment Reporting Information [Line Items]
Number of reportable segments	1
Sales Revenue, Net [Member] | Geographic Concentration Risk [Member] | United States [Member]
Segment Reporting Information [Line Items]
International revenue as a percentage of total revenue	10.00%
Sales Revenue, Net [Member] | Geographic Concentration Risk [Member] | International [Member]
Segment Reporting Information [Line Items]
International revenue as a percentage of total revenue	25.10%

SEGMENT AND GEOGRAPHICAL CONC49

SEGMENT AND GEOGRAPHICAL CONCENTRATION - Revenues by Geographic Area (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Segment Reporting Information [Line Items]
Revenue	$ 56,306	$ 50,424
Sales Revenue, Net [Member]
Segment Reporting Information [Line Items]
Revenue	56,306	50,424
United States [Member]
Segment Reporting Information [Line Items]
Revenue	42,193	35,162
United States [Member] | Sales Revenue, Net [Member]
Segment Reporting Information [Line Items]
Revenue	42,193	35,162
International [Member]
Segment Reporting Information [Line Items]
Revenue	14,113	15,262
International [Member] | Sales Revenue, Net [Member]
Segment Reporting Information [Line Items]
Revenue	$ 14,113	$ 15,262

SEGMENT AND GEOGRAPHICAL CONC50

SEGMENT AND GEOGRAPHICAL CONCENTRATION - Revenues by Product (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenue from External Customer [Line Items]
Revenue	$ 56,306	$ 50,424
United States [Member]
Revenue from External Customer [Line Items]
Revenue	42,193	35,162
United States [Member] | Complex Spine [Member]
Revenue from External Customer [Line Items]
Revenue	15,930	14,221
United States [Member] | Minimally Invasive [Member]
Revenue from External Customer [Line Items]
Revenue	6,881	5,380
United States [Member] | Degenerative [Member]
Revenue from External Customer [Line Items]
Revenue	19,382	15,561
International [Member]
Revenue from External Customer [Line Items]
Revenue	$ 14,113	15,262
Scenario, Adjustment [Member] | Minimally Invasive [Member]
Revenue from External Customer [Line Items]
Revenue		$ (429)