10-Q

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, 2023

OR

☐ 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: 0-19961

 

ORTHOFIX MEDICAL INC.

(Exact name of registrant as specified in its charter)

Delaware	98-1340767
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
3451 Plano Parkway, Lewisville, Texas	75056
(Address of principal executive offices)	(Zip Code)

(214) 937-2000

(Registrant’s telephone number, including area code)

Not applicable

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

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, 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 4, 2023, 36,738,681 shares of common stock were issued and outstanding.

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, $0.10 par value per share	OFIX	Nasdaq Global Select Market

Table of Contents

		Page
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements	4
	Condensed Consolidated Balance Sheets as of June 30, 2023, and December 31, 2022	4
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and six months ended June 30, 2023, and 2022	5
	Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three and six months ended June 30, 2023, and 2022	6
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023, and 2022	7
	Notes to the Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	29
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	32
Item 6.	Exhibits	32
SIGNATURES		34

2

Forward-Looking Statements

This Quarterly Report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (“the Exchange Act”), and Section 27A of the Securities Act of 1933, as amended, relating to our business and financial outlook, which are based on our current beliefs, assumptions, expectations, estimates, forecasts, and projections. All statements, other than statements of historical fact, contained in this report, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “intends,” “predicts,” “potential,” or “continue” or the negative version of those terms and other similar expressions. Forward-looking statements include, but are not limited to, statements about:

•our future operations, sales, expenses, and financial performance;

•the anticipated benefits of the merger with SeaSpine Holdings Corporation that was completed in January 2023, including the anticipated synergies and cost-savings from the merger, and our ability to successfully integrate SeaSpine's business with ours;

•our operating results;

•our plans for future products and enhancements of existing products;

•anticipated growth and trends in our business;

•the timing of and our ability to maintain and obtain regulatory clearances or approvals;

•our belief that our cash and cash equivalents, investments, and access to our revolving line of credit will be sufficient to satisfy our anticipated cash requirements;

•our relationships with customers and distributors;

•our manufacturing abilities and the performance of our suppliers;

•our ability to achieve market penetration and the success of our expansion efforts;

•anticipated trends and challenges in the markets in which we operate; and

•the impact of investigations, claims, and litigation.

Forward-looking statements are not guarantees of future performance and involve risks, uncertainties, estimates, and assumptions. Any or all forward-looking statements that we make may turn out to be wrong (due to inaccurate assumptions that we make or otherwise), and our actual outcomes and results may differ materially from those expressed in forward-looking statements. Potential risks and uncertainties that could cause actual results to differ materially include, but are not limited to, those set forth in Part I, Item 1A under the heading Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2022 ("2022 10-K"); Part II, Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations of the 2022 10-K; and elsewhere throughout the 2022 10-K, and in our reports filed with the U.S. Securities and Exchange Commission (the "SEC") subsequent to the date we filed the 2022 10-K with the SEC. You should not place undue reliance on any forward-looking statements. Further, any forward-looking statement in this report speaks only as of the date hereof, unless it is specifically otherwise stated to be made as of a different date. Except as required by law, we undertake no obligation to update, and expressly disclaim any duty to update, our forward-looking statements, whether as a result of circumstances or events that arise after the date hereof, new information, or otherwise.

Trademarks

Solely for convenience, our trademarks and trade names in this report are referred to without the ® and ™ symbols, but such references should not be construed as any indicator that we will not assert, to the fullest extent under applicable law, our rights thereto.

3

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ORTHOFIX MEDICAL INC.

Condensed Consolidated Balance Sheets

(U.S. Dollars, in thousands, except par value data)	June 30, 2023			December 31, 2022
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	37,607		$	50,700
Accounts receivable, net of allowances of $7,015 and $6,419, respectively		112,320			82,857
Inventories		222,474			100,150
Prepaid expenses and other current assets		26,947			22,283
Total current assets		399,348			255,990
Property, plant, and equipment, net		140,584			58,229
Intangible assets, net		126,000			47,388
Goodwill		191,727			71,317
Other long-term assets		43,628			25,705
Total assets	$	901,287		$	458,629
Liabilities and shareholders’ equity
Current liabilities
Accounts payable	$	51,349		$	27,598
Current portion of finance lease liability		678			652
Other current liabilities		89,777			55,374
Total current liabilities		141,804			83,624
Long-term borrowings under credit facility		51,000			—
Long-term portion of finance lease liability		18,894			19,239
Other long-term liabilities		49,604			18,906
Total liabilities		261,302			121,769
Contingencies (Note 8)
Shareholders’ equity
Common shares $0.10 par value; 100,000 shares authorized;     36,733 and 20,162 issued and outstanding as of June 30,     2023 and December 31, 2022, respectively		3,673			2,016
Additional paid-in capital		735,533			334,969
Retained earnings (accumulated deficit)		(99,113	)		1,251
Accumulated other comprehensive loss		(108	)		(1,376	)
Total shareholders’ equity		639,985			336,860
Total liabilities and shareholders’ equity	$	901,287		$	458,629

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

4

ORTHOFIX MEDICAL INC.

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

	Three Months Ended June 30,						Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands, except per share data)	2023			2022			2023			2022
Net sales	$	187,016		$	118,070		$	362,220		$	224,488
Cost of sales		67,465			31,600			132,340			59,918
Gross profit		119,551			86,470			229,880			164,570
Sales and marketing		99,249			59,888			193,040			114,025
General and administrative		34,177			15,846			82,988			35,174
Research and development		19,424			12,758			42,731			23,970
Acquisition-related amortization and remeasurement (Note 12)		3,333			(8,663	)		7,467			(12,162	)
Operating income (loss)		(36,632	)		6,641			(96,346	)		3,563
Interest expense, net		(1,266	)		(407	)		(2,555	)		(782	)
Other income (expense), net		(20	)		(3,192	)		656			(4,128	)
Income (loss) before income taxes		(37,918	)		3,042			(98,245	)		(1,347	)
Income tax expense		(1,508	)		(553	)		(2,119	)		(624	)
Net income (loss)	$	(39,426	)	$	2,489		$	(100,364	)	$	(1,971	)
Net income (loss) per common share:
Basic	$	(1.07	)	$	0.12		$	(2.77	)	$	(0.10	)
Diluted		(1.07	)		0.12			(2.77	)		(0.10	)
Weighted average number of common shares:
Basic		36,762			20,031			36,252			19,965
Diluted		36,762			20,113			36,252			19,965
Other comprehensive income (loss), before tax
Unrealized gain (loss) on debt securities		381			161			318			(513	)
Currency translation adjustment		457			(1,820	)		950			(2,308	)
Other comprehensive income (loss), before tax		838			(1,659	)		1,268			(2,821	)
Income tax benefit (expense) related to other comprehensive income (loss)		—			—			—			—
Other comprehensive income (loss), net of tax		838			(1,659	)		1,268			(2,821	)
Comprehensive income (loss)	$	(38,588	)	$	830		$	(99,096	)	$	(4,792	)

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

5

ORTHOFIX MEDICAL INC.

Condensed Consolidated Statements of Changes in Shareholders’ Equity

(Unaudited, U.S. Dollars, in thousands)	Number of Common Shares Outstanding		Common Shares		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Total Shareholders’ Equity
At December 31, 2022		20,162	$	2,016	$	334,969		$	1,251		$	(1,376	)	$	336,860
Net loss		—		—		—			(60,938	)		—			(60,938	)
Other comprehensive income, net of tax		—		—		—			—			430			430
Share-based compensation expense		—		—		13,020			—			—			13,020
Common shares issued in connection with SeaSpine merger		16,047		1,605		375,140			—			—			376,745
Common shares issued, net		254		26		(1,984	)		—			—			(1,958	)
At March 31, 2023		36,463	$	3,647	$	721,145		$	(59,687	)	$	(946	)	$	664,159
Net loss		—		—		—			(39,426	)		—			(39,426	)
Other comprehensive income, net of tax		—		—		—			—			838			838
Share-based compensation expense		—		—		13,246			—			—			13,246
Common shares issued, net		270		26		1,142			—			—			1,168
At June 30, 2023		36,733	$	3,673	$	735,533		$	(99,113	)	$	(108	)	$	639,985

(Unaudited, U.S. Dollars, in thousands)	Number of Common Shares Outstanding		Common Shares		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Total Shareholders’ Equity
At December 31, 2021		19,837	$	1,983	$	313,951		$	21,000			—		$	336,934
Net loss		—		—		—			(4,460	)		—			(4,460	)
Other comprehensive loss, net of tax		—		—		—			—			(1,162	)		(1,162	)
Share-based compensation expense		—		—		4,332			—			—			4,332
Common shares issued, net		5		1		(70	)		—			—			(69	)
At March 31, 2022		19,842	$	1,984	$	318,213		$	16,540		$	(1,162	)	$	335,575
Net income		—		—		—			2,489			—			2,489
Other comprehensive loss, net of tax		—		—		—			—			(1,659	)		(1,659	)
Share-based compensation expense		—		—		4,460			—			—			4,460
Common shares issued, net		158		16		1,065			—			—			1,081
At June 30, 2022		20,000	$	2,000	$	323,738		$	19,029		$	(2,821	)	$	341,946

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

6

ORTHOFIX MEDICAL INC.

Condensed Consolidated Statements of Cash Flows

	Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023			2022
Cash flows from operating activities
Net loss	$	(100,364	)	$	(1,971	)
Adjustments to reconcile net loss to net cash from operating activities
Depreciation and amortization		25,997			14,028
Inventory reserve expenses		17,057			6,625
Amortization of inventory fair value step up		21,085			—
Amortization of operating lease assets, debt costs, and other assets		3,319			1,567
Provision for expected credit losses		490			1,139
Deferred income taxes		815			236
Share-based compensation expense		26,266			8,792
Change in valuation of investment securities		(492	)		188
Change in fair value of contingent consideration		(1,300	)		(16,214	)
Other		(372	)		1,149
Changes in operating assets and liabilities, net of effects of acquisitions
Accounts receivable		5,615			(208	)
Inventories		(33,168	)		(22,214	)
Prepaid expenses and other current assets		275			(1,769	)
Accounts payable		1,800			7,176
Other current liabilities		(6,425	)		(7,495	)
Contract liability		—			(4,791	)
Other long-term assets and liabilities		(134	)		1,140
Net cash provided by (used in) operating activities		(39,536	)		(12,622	)
Cash flows from investing activities
Capital expenditures for property, plant, and equipment		(23,823	)		(11,032	)
Capital expenditures for intangible assets		(831	)		(671	)
Contingent consideration payments related to asset acquisitions		—			(1,500	)
Cash acquired in the SeaSpine merger		29,419			—
Other investing activities		(500	)		42
Net cash provided by (used in) investing activities		4,265			(13,161	)
Cash flows from financing activities
Proceeds from issuance of common shares		2,377			2,400
Payments related to tax withholdings for share-based compensation		(3,167	)		(1,388	)
Payments related to finance lease obligation		(320	)		(2,291	)
Borrowings under credit facility		51,000			—
Payment of debt acquired from SeaSpine merger		(26,899	)		—
Contingent consideration milestone payment		(920	)		—
Other financing activities		(280	)		(45	)
Net cash provided by (used in) financing activities		21,791			(1,324	)
Effect of exchange rate changes on cash		387			(1,204	)
Net change in cash and cash equivalents		(13,093	)		(28,311	)
Cash and cash equivalents at the beginning of period		50,700			87,847
Cash and cash equivalents at the end of period	$	37,607		$	59,536
Noncash investing activities - Purchase of intangible assets	$	—		$	2,000

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

7

ORTHOFIX MEDICAL INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

1. Business and basis of presentation

Description of the Business

Orthofix Medical Inc. (“Orthofix”) and its subsidiaries (the "Company"), following its merger with SeaSpine Holdings Corporation ("SeaSpine") that was completed in January 2023, is a leading global spine and orthopedics company with a comprehensive portfolio of biologics, innovative spinal hardware, bone growth therapies, specialized orthopedic solutions, and a leading surgical navigation system. The Company's products are distributed in approximately 68 countries worldwide.

The Company is headquartered in Lewisville, Texas, and has primary offices in Carlsbad, California, with a focus on spinal product innovation and surgeon education, and in Verona, Italy, with an emphasis on product innovation, production, and medical education for orthopedics. The combined Company's global research and development, commercial, and manufacturing footprint also includes facilities and offices in Irvine, California, Toronto, Canada, Sunnyvale, California, Wayne, Pennsylvania, Olive Branch, Mississippi, Maidenhead, United Kingdom, Munich, Germany, Paris, France, and Sao Paulo, Brazil.

The merger with SeaSpine was completed on January 5, 2023, with SeaSpine continuing as a wholly-owned subsidiary of Orthofix following the transaction. For additional discussion of the merger with SeaSpine, see Note 3. The shares of common stock of Orthofix, as the corporate parent entity in the combined company structure, continue to trade on NASDAQ under the symbol "OFIX". The combined company will be renamed at a later date and until then will continue to be known as Orthofix Medical Inc.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Pursuant to these rules and regulations, certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair statement have been included. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company’s Form 10-K for the year ended December 31, 2022. Operating results for the three and six months ended June 30, 2023, are not necessarily indicative of the results that may be expected for other interim periods or the year ending December 31, 2023.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company evaluates its estimates, including those related to revenue recognition; contractual allowances; allowances for expected credit losses; inventories; valuation of intangible assets; goodwill; fair value measurements, including contingent consideration; litigation and contingent liabilities; tax matters; and share-based compensation. Actual results could differ from these estimates.

Changes in Presentation of Consolidated Financial Statements

Certain prior year balances have been reclassified in the condensed consolidated financial statements to conform to current period presentation.

2. Recently adopted accounting standards, recently issued accounting pronouncements

Adoption of Accounting Standards Update (“ASU”) 2021-08— Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers

In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-08, which aims to address diversity in practice and inconsistency related to the accounting for acquired revenue contracts with customers in a business combination. The amendments require that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. The Company adopted this standard effective January 1, 2023, on a prospective basis. Adoption of this standard resulted in the recognition of $2.2 million in contract liabilities associated with acquired revenue contracts as a result of the Company’s merger with SeaSpine, which closed on January 5, 2023.
 

8

Recently Issued Accounting Pronouncements

Topic	Description of Guidance	Effective Date	Status of Company's Evaluation
Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (ASU 2022-03)	Clarifies the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions. Certain of the provisions are to be applied retrospectively with other provisions applied prospectively.	January 1, 2024	The Company is currently evaluating the impact this ASU may have on its consolidated financial statements.

Other recently issued ASUs, excluding those ASUs which have already been disclosed as adopted or described above, were assessed and determined not applicable, or are expected to have minimal impact on the Company's condensed consolidated financial statements.

3. Merger and acquisitions

Merger with SeaSpine

On January 5, 2023, the Company and SeaSpine completed an all-stock merger of equals (the "Merger") to create a leading global spine and orthopedics company with highly complementary portfolios of biologics, innovative spinal hardware, bone growth therapies, specialized orthopedic solutions, and a leading surgical navigation system. As a result of the Merger, each share of SeaSpine common stock issued and outstanding immediately prior to the closing of the Merger was converted into the right to receive 0.4163 shares of Orthofix common stock.

The Merger is being accounted for as an acquisition of SeaSpine by Orthofix under the acquisition method of accounting for business combinations in accordance with U.S. GAAP. Thus, Orthofix is treated as the acquirer for accounting purposes. In identifying the acquirer, Orthofix and SeaSpine considered the structure of the transaction and other actions contemplated by the merger agreement (the “Merger Agreement”), relative outstanding share ownership, market values, the composition of the combined company's board of directors, and the relative size of Orthofix and SeaSpine. Under the acquisition method of accounting, the assets and liabilities of SeaSpine and its subsidiaries have been recorded at their respective fair values as of the acquisition date.

The total estimated fair value of consideration associated with the Merger as of the acquisition date was comprised of:

(Unaudited, U.S. Dollars, in thousands, except shares and price per share)
Share Consideration:
Orthofix common shares to be issued in exchange for SeaSpine common shares		16,047,315
Orthofix closing price per share as of January 4, 2023	$	22.76
Estimated fair value of shares issued in exchange for SeaSpine common shares	$	365,237
Estimated fair value of Orthofix stock options and RSUs issued in exchange for outstanding SeaSpine equity awards	$	11,508
Total estimated fair value of consideration	$	376,745

The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the acquisition date. Certain of the acquired assets and liabilities assumed were valued utilizing Level 3 inputs and assumptions. A final determination of the allocation of the purchase price to assets acquired and liabilities assumed has not been made and the following should be considered preliminary. Adjustments to the preliminary purchase price allocation could be material. The final determination is subject to completion of the Company's valuation of the assets acquired and liabilities assumed, including contingent liabilities and deferred income taxes, which it expects to complete within one year of the acquisition date.

9

(Unaudited, U.S. Dollars, in thousands)	Previously Reported		Adjustments			As Revised		Assigned Useful Life
Assets acquired:
Current assets
Cash and cash equivalents	$	29,419	$	—		$	29,419
Accounts receivable, net		35,313		—			35,313
Inventories		129,610		3,026			132,636
Prepaid expenses and other current assets		4,600		(10	)		4,590
Total current assets		198,942		3,016			201,958
Property, plant, and equipment, net		68,911		(48	)		68,863
Customer relationships		27,100		6,000			33,100	13 years
Developed technology		45,400		1,800			47,200	6 - 8 years
In-process research and development ("IPR&D")		5,600		150			5,750	Indefinite
Other long-term assets		20,472		29			20,501
Total identifiable assets acquired	$	366,425	$	10,947		$	377,372
Liabilities assumed:
Current liabilities
Accounts payable	$	21,602	$	—		$	21,602
Other current liabilities		41,224		(920	)		40,304
Total current liabilities		62,826		(920	)		61,906
Long-term borrowings under SeaSpine credit facility		26,298		—			26,298
Other long-term liabilities		31,950		883			32,833
Total liabilities assumed		121,074		(37	)		121,037
Net identifiable assets acquired	$	245,351	$	10,984		$	256,335
Total fair value of consideration transferred		376,745		—			376,745
Residual goodwill	$	131,394	$	(10,984	)	$	120,410

The purchase price exceeded the fair value of the net tangible and identifiable intangible assets acquired in the Merger. As a result, the Company recorded goodwill totaling $120.4 million, which was assigned to the Global Spine reporting segment. Specifically, the goodwill includes the assembled workforce and synergies associated with the combined entity. The goodwill is not deductible for tax purposes.

The IPR&D intangible assets are considered an indefinite-lived asset until the completion or abandonment of the associated research and development efforts. Accordingly, during the development period after the acquisition, these assets are not amortized but, instead, are subject to impairment assessment. Upon completion of each IPR&D project, the Company will determine the useful life of the asset and begin amortization.

The Company recognized $3.3 million and $9.8 million in direct acquisition-related costs, which exclude integration-related activities, that were expensed during the three and six months ended June 30, 2023, respectively. These costs are included in the condensed consolidated statements of operations and comprehensive income (loss), primarily within general and administrative expenses. The Company's results of operations included $64.4 million and $125.3 million of net sales from SeaSpine for the three and six months ended June 30, 2023, respectively, and a net loss attributable to SeaSpine of $24.9 million and $52.8 million for the three and six months ended June 30, 2023, respectively.

Pro Forma Financial Information

Due to the Merger closing on January 5, 2023, all SeaSpine financial results for fiscal year 2023, except for the first four days of January, are included in Orthofix's condensed consolidated statement of operations and comprehensive income (loss). The following unaudited pro forma financial information for the three and six months ended June 30, 2023, and 2022 are based on the Company's historical condensed consolidated financial statements adjusted to reflect as if the Merger closed as of January 1, 2022. The unaudited pro-forma information makes certain adjustments to depreciation and amortization expense to reflect the fair value recognized in the purchase price allocation and to remove one-time transaction-related costs. The unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the Merger closed as of January 1, 2022.

10

	Three Months Ended June 30,						Six Months Ended June 30,
(Unaudited, U.S. Dollars, in millions)	2023			2022			2023			2022
Net sales	$	187.0		$	174.4		$	362.2		$	331.5
Net income (loss)	$	(30.1	)	$	(27.1	)	$	(75.3	)	$	(69.9	)

Integration and Restructuring Activities

The Company has incurred significant integration and restructuring costs in connection with the Merger. The following table summarizes integration costs incurred for the three and six months ended June 30, 2023, and 2022.

	Three Months Ended June 30,					Six Months Ended June 30,
(Unaudited, U.S. Dollars, in millions)	2023			2022		2023		2022
Compensation-related integration costs		3.5		$	—		13.8	$	—
Fee paid to financial advisor to the Merger		—			—		5.5		—
Professional fees / consulting fees		0.7			—		5.0		—
Product rationalization charges		4.2			—		4.9		—
Other costs to complete		(0.3	)		—		1.2		—
Total		8.1		$	—		30.4	$	—

In the first quarter of 2023, the Company approved and initiated certain restructuring activities to streamline costs and to better align talent with operational needs following the consummation of the Merger. The Company expects to incur total pre-tax expense of approximately $16.7 million associated with the restructuring activities, which will be recognized within operating expenses. The table below provides a summary of restructuring costs incurred during the period and the resulting liability as of June 30, 2023, which is recognized within other current liabilities:

(Unaudited, U.S. Dollars, in millions)	Balance as of December 31, 2022		Charges Incurred		Payments Made			Balance as of June 30, 2023
Severance costs	$	—	$	10.4	$	(4.4	)	$	6.0
Retention costs		—		2.8		(0.2	)		2.6
Payroll taxes		—		0.4		(0.1	)		0.3
Total	$	—	$	13.6	$	(4.7	)	$	8.9

4. Inventories

Inventories were as follows:

(Unaudited, U.S. Dollars, in thousands)	June 30, 2023		December 31, 2022
Raw materials	$	26,791	$	17,035
Work-in-process		55,514		19,243
Finished products		140,169		63,872
Inventories	$	222,474	$	100,150

11

5. Leases

A summary of the Company’s lease portfolio as of June 30, 2023, and December 31, 2022, is presented in the table below:

(Unaudited, U.S. Dollars, in thousands)	Classification	June 30, 2023		December 31, 2022
Right-of-use assets ("ROU assets")
Operating leases	Other long-term assets	$	20,434	$	6,788
Finance leases	Property, plant and equipment, net		16,853		17,360
Total ROU assets		$	37,287	$	24,148
Lease Liabilities
Current
Operating leases	Other current liabilities	$	3,159	$	1,638
Finance leases	Current portion of finance lease liability		678		652
Long-term
Operating leases	Other long-term liabilities		17,786		5,376
Finance leases	Long-term portion of finance lease liability		18,894		19,239
Total lease liabilities		$	40,517	$	26,905

Supplemental cash flow information related to leases was as follows:

(Unaudited, U.S. Dollars, in thousands)	Six Months Ended June 30, 2023		Six Months Ended June 30, 2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	3,751	$	2,071
Operating cash flows from finance leases		428		443
Financing cash flows from finance leases		320		2,291
ROU assets obtained in exchange for lease obligations
Operating leases		15,368		4,592
Finance leases		—		—

6. Long-term debt

In connection with the closing of the Merger on January 5, 2023, the Company terminated SeaSpine's credit facility and all applicable commitments with Wells Fargo Bank, National Association and paid an aggregate amount of $26.9 million reflecting all of the outstanding obligations in respect of principal, interest, and fees, including a $0.6 million prepayment premium.

On January 3, 2023, the Company borrowed $30.0 million under its $300.0 million secured revolving credit facility under the Second Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A., dated as of October 25, 2019 (as amended by the First Amendment thereto dated March 1, 2023, the "Original Credit Agreement") for working capital purposes, including to fund certain Merger-related expenses. An additional $15.0 million and $6.0 million was borrowed on March 3, 2023 and May 10, 2023, respectively. Therefore, as of June 30, 2023, the Company had $51.0 million in principal amount of borrowings outstanding under the secured revolving credit facility. As of June 30, 2023, the Company was in compliance with all required financial covenants. The effective interest rate on amounts borrowed was 6.4%, with interest accrued of $0.6 million as of June 30, 2023, within other current liabilities. An additional $8.0 million was borrowed on July 5, 2023.

On June 13, 2023, the Company entered into a Limited Consent, Limited Waiver and Second Amendment to the Original Credit Agreement (the "Consent and Amendment" and the Original Credit Agreement as amended by the Consent and Amendment, the “Amended Credit Agreement”). Under the terms of the Consent and Amendment, the parties agreed to reduce the size of the secured revolving credit facility, off of which certain fees are based, from $300.0 million to $175.0 million, and to increase the applicable interest rate in certain circumstances. The maturity date of the credit facility remains October 25, 2024.

The Consent and Amendment permits the Company, for purposes of determining compliance with financial covenants in the Amended Credit Agreement, to include certain expense addbacks in its calculation of EBITDA and to increase the share of EBITDA attributable to certain foreign subsidiaries beginning with the fiscal quarter ended March 31, 2023. The Company also agreed to pledge under the Amended Credit Agreement its ownership interest in the Company's Italian subsidiary, Orthofix S.r.L., and cause Orthofix S.r.L. to become a loan party to the Credit Agreement.

12

The Company had no borrowings on its available lines of credit in Italy, which provide up to an aggregate amount of €5.5 million ($6.0 million) as of June 30, 2023.

7. Fair value measurements and investments

The fair value measurements of the Company’s financial assets and liabilities measured on a recurring basis were as follows:

	June 30, 2023											December 31, 2022
(Unaudited, U.S. Dollars, in thousands)	Level 1		Level 2			Level 3			Total			Total
Assets
Neo Medical convertible loan agreements	$	—	$	—		$	7,690		$	7,690		$	7,140
Neo Medical preferred equity securities		—		6,084			—			6,084			6,084
Bone Biologics equity securities		—		—			—			—			—
Other investments		—		—			1,986			1,986			1,726
Total	$	—	$	6,084		$	9,676		$	15,760		$	14,950
Liabilities
Lattus contingent consideration	$	—	$	—			(9,900	)	$	(9,900	)	$	—
Spinal Kinetics contingent consideration		—		—			—			—			—
Deferred compensation plan		—		(1,467	)		—			(1,467	)		(1,515	)
Total	$	—	$	(1,467	)	$	(9,900	)	$	(11,367	)	$	(1,515	)

Neo Medical Convertible Loan Agreements and Equity Investment

In October 2020, the Company purchased preferred equity securities of Neo Medical SA, a privately held Swiss-based company developing a new generation of products for spinal surgery ("Neo Medical"), for consideration of $5.0 million. The Company also entered into a Convertible Loan Agreement pursuant to which the Company loaned Neo Medical CHF 4.6 million, or $5.0 million at the date of issuance (the “Convertible Loan”). In October 2021, the Company entered into a second Convertible Loan Agreement (the “Second Convertible Loan” and together with the Convertible Loan, the “Neo Medical Convertible Loans”), pursuant to which the Company loaned Neo Medical an additional CHF 0.6 million, or $0.7 million as of the date of issuance.

The preferred equity securities are recorded in other long-term assets and are considered an investment that does not have a readily determinable fair value. As such, the Company measures this investment at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.

The table below presents a reconciliation of the beginning and ending balances of the Company’s investment in Neo Medical preferred equity securities:

(Unaudited, U.S. Dollars, in thousands)	2023		2022
Fair value of Neo Medical preferred equity securities at January 1	$	6,084	$	5,413
Conversion of loan into preferred equity securities		—		671
Fair value of Neo Medical preferred equity securities at June 30		6,084		6,084
Cumulative unrealized gain on Neo Medical preferred equity securities		413		413

The Company elected to convert the Second Convertible Loan into shares of Neo Medical’s preferred equity securities in January 2022. The Convertible Loan is recorded in other long-term assets as an available for sale debt security as of June 30, 2023. The fair value of the Convertible Loan is based upon significant unobservable inputs, including the use of option-pricing models, Monte Carlo simulations for certain periods, and a probability-weighted discounted cash flow model, requiring the Company to develop its own assumptions. Therefore, the Company categorized this investment as a Level 3 financial asset.

Some of the more significant unobservable inputs used in the fair value measurement of the Convertible Loan include applicable discount rates, implied volatility, the likelihood and projected timing of repayment or conversion, and projected cash flows in support of the estimated enterprise value of Neo Medical. Holding other inputs constant, changes in these assumptions could result in a significant change in the fair value of the Convertible Loan. If the amortized cost of the Convertible Loan exceeds its estimated fair value, the security is deemed to be impaired, and must be evaluated for the recognition of a credit loss. As of June 30, 2023, the Company has not recognized any credit loss related to the Convertible Loan.

13

The following table provides a reconciliation of the beginning and ending balances of the Convertible Loans, measured at fair value using significant unobservable inputs (Level 3):

(Unaudited, U.S. Dollars, in thousands)	2023		2022
Fair value of Neo Medical Convertible Loans at January 1	$	7,140	$	7,148
Interest recognized in interest income, net		238		217
Foreign currency remeasurement recognized in other expense, net		195		(257	)
Unrealized gain (loss) recognized in other comprehensive loss		117		(615	)
Conversion of Second Convertible Loan into preferred equity securities		—		(671	)
Fair value of Neo Medical Convertible Loans at June 30		7,690		5,820
Amortized cost basis of Neo Medical Convertible Loans at June 30		6,340		5,496

The following table provides quantitative information related to certain key assumptions utilized within the valuation as of June 30, 2023:

(Unaudited, U.S. Dollars, in thousands)	Fair Value as of  June 30, 2023		Unobservable inputs	Estimate
Neo Medical Convertible Loan	$	7,690	Cost of equity discount rate		18.0	%
			Estimated equity volatility		74.1	%

Bone Biologics Equity Securities

Until August 2022, the Company held an investment in common stock of Bone Biologics Inc. (“Bone Biologics”, NASDAQ: BBLG), a developer of orthobiologic products. The Company disposed of its remaining holdings in Bone Biologics equity securities during the third quarter of 2022.

Other Investments

Other investments represent assets and investments recorded at fair value that are not deemed to be material for disclosure on an individual basis. The fair value of these assets is based upon significant unobservable inputs, such as probability-weighted discounted cash flow models, requiring the Company to develop its own assumptions. Therefore, the Company has categorized these assets as Level 3 financial assets. As of June 30, 2023, this balance was classified within other current assets.

Spinal Kinetics Contingent Consideration

The Company recognized a contingent consideration obligation in connection with the acquisition of Spinal Kinetics in 2018. The fair value of the remaining Spinal Kinetics contingent consideration, attributable to a revenue-based milestone, was concluded to be zero as of June 30, 2023, as the Company did not achieve the milestone prior to April 30, 2023, the end of the measurement period for achieving such milestone.

The following table provides a reconciliation of the beginning and ending balances for the Spinal Kinetics contingent consideration measured at estimated fair value using significant unobservable inputs (Level 3):

(Unaudited, U.S. Dollars, in thousands)	2023		2022
Spinal Kinetics contingent consideration estimated fair value at January 1	$	—	$	17,200
Decrease in fair value recognized in acquisition-related amortization and remeasurement		—		(16,214	)
Spinal Kinetics contingent consideration estimated fair value at June 30	$	—	$	986

Lattus Contingent Consideration

In connection with the Merger, the Company assumed a contingent consideration obligation under a purchase agreement between SeaSpine and Lattus Spine LLC ("Lattus") executed in December 2022. Under the terms of the agreement, the Company may be required to make installment payments at certain dates based on future net sales of certain products (the "Lateral Products").

The estimated fair value of the Lattus contingent consideration as of the closing of the Merger, January 5, 2023, was $11.2 million. The estimated fair value of the Lattus contingent consideration is determined using a probability-weighted discounted cash flow model and significant inputs which are not observable in the market. The significant inputs include assumptions related to the timing and probability of the product launch dates, estimated future sales of the products, estimated commission rates, discount rates matched to the timing of payments, and probability of success rates. The following table provides a reconciliation of the beginning

14

and ending balances for the Lattus contingent consideration measured at estimated fair value using significant unobservable inputs (Level 3):

(Unaudited, U.S. Dollars, in thousands)	2023			2022
Lattus contingent consideration estimated fair value at January 5	$	11,200		$	—
Decrease in fair value recognized in acquisition-related amortization and remeasurement		(1,300	)		—
Lattus contingent consideration estimated fair value at June 30	$	9,900		$	—

The following table provides quantitative information related to certain key assumptions utilized within the valuation as of June 30, 2023:

(Unaudited, U.S. Dollars, in thousands)	Fair Value as of  June 30, 2023		Unobservable inputs	Estimate
Lattus Contingent Consideration	$	9,900	Counterparty discount rate		9.0	%
			Revenue risk-adjusted discount rate		6.5	%

8. Commitments and Contingencies

Commitments

As a result of the Merger, the Company became party to agreements with certain distributor partners that provide the Company with an option to purchase, and an option for those partners to require the Company to purchase, the distribution business of those partners at specified future dates. At such time, the Company or distributor may (in certain cases, subject to satisfying certain conditions) submit written notice to the other of its intention to exercise its rights and initiate or require the purchase. Upon receipt of the written notice, the Company and the distributor will work in good faith to consummate the purchase. Under these agreements, the purchase price would be paid in shares of the Company's common stock. Based on the closing price of the Company's common stock as of June 30, 2023, assuming the options under all the relevant agreements were exercised, the estimated total number of shares the Company would issue under these agreements was approximately 1.3 million shares. The Company has received notification from one such distributor, who has notified the Company of its decision to exercise its buyout option. The Company is currently in negotiations with this distributor in regard to the consummation of the potential acquisition.

Contingencies

In addition to the matters described below, in the normal course of its business, the Company is involved in various lawsuits from time to time and may be subject to certain other contingencies. The Company believes any losses related to these matters are individually and collectively immaterial as to a possible loss and range of loss.

Italian Medical Device Payback (“IMDP”)

In 2015, the Italian Parliament introduced rules for entities that supply goods and services to the Italian National Healthcare System. A key provision of the law is a ‘payback’ measure, requiring medical device companies in Italy to make payments to the Italian government if medical device expenditures exceed regional maximum ceilings. Companies are required to make payments equal to a percentage of expenditures exceeding maximum regional caps.

In the third quarter of 2022, the Italian Ministry of Health provided guidelines to the Italian regions and provinces on seeking payback of expenditure overruns relating to the years ended December 31, 2015, through December 31, 2018. Since receiving the guidelines, several regions and provinces have requested payment from affected medical device companies, including the Company. The Company has taken legal action to dispute the legality of such measures.

The Company accounts for the estimated cost of the IMDP as sales and marketing expense and periodically reassesses the liability based upon current facts and circumstances. As a result, the Company recorded an expense of $0.3 million and $0.6 million for the three and six months ended June 30, 2023, respectively, and an expense of $0.3 million and $0.6 million for the three and six months ended June 30, 2022, respectively. As of June 30, 2023, the Company has accrued $6.8 million related to the IMDP, which it has classified within other long-term liabilities; however, the actual liability could be higher or lower than the amount accrued once all legal proceedings are resolved and upon further clarification of the IMDP by the Italian authorities for more recent fiscal years.

15

9. Accumulated other comprehensive loss

The components of and changes in accumulated other comprehensive loss were as follows:

(Unaudited, U.S. Dollars, in thousands)	Currency Translation Adjustments			Neo Medical Convertible Loans		Other Investments		Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2022	$	(2,482	)	$	1,005	$	101	$	(1,376	)
Other comprehensive income (loss)		950			117		201		1,268
Income taxes		—			—		—		—
Balance at June 30, 2023	$	(1,532	)	$	1,122	$	302	$	(108	)

10. Revenue recognition and accounts receivable

Revenue Recognition

The Company has two reporting segments: Global Spine and Global Orthopedics. Within the Global Spine reporting segment, there are two product categories: (i) Bone Growth Therapies, and (ii) Spinal Implants, Biologics, and Enabling Technologies.

The table below presents net sales by major product category by reporting segment:

	Three Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023		2022		Change
Bone Growth Therapies	$	52,662	$	47,765		10.3	%
Spinal Implants, Biologics, and Enabling Technologies		105,314		43,017		144.8	%
Global Spine		157,976		90,782		74.0	%
Global Orthopedics		29,040		27,288		6.4	%
Net sales	$	187,016	$	118,070		58.4	%

	Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023		2022		Change
Bone Growth Therapies	$	100,376	$	89,713		11.9	%
Spinal Implants, Biologics, and Enabling Technologies		206,806		83,724		147.0	%
Global Spine		307,182		173,437		77.1	%
Global Orthopedics		55,038		51,051		7.8	%
Net sales	$	362,220	$	224,488		61.4	%

Product Sales and Marketing Service Fees

The table below presents product sales and marketing service fees, which are both components of net sales:

	Three Months Ended June 30,				Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023		2022		2023		2022
Product sales	$	174,078	$	103,559	$	336,326	$	196,167
Marketing service fees		12,938		14,511		25,894		28,321
Net sales	$	187,016	$	118,070	$	362,220	$	224,488

Product sales primarily consist of the sale of bone growth therapies devices, spinal implants, certain biologics, enabling technologies, and orthopedics products. Marketing service fees are received from MTF Biologics based on total sales of biologics tissues sourced from MTF Biologics and relate solely to the Global Spine reporting segment. The Company partners with MTF Biologics to provide certain allograft solutions (HCT/Ps) for various spine, orthopedic and other bone repair needs, with this partnership allowing us to exclusively market certain biologic offerings.

16

Accounts receivable and related allowances

The following table provides a detail of changes in the Company’s allowance for expected credit losses for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,					Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023		2022			2023			2022
Allowance for expected credit losses beginning balance	$	6,691	$	5,389		$	6,419		$	4,944
Addition resulting from the Merger with SeaSpine		—		—			137			—
Current period provision for expected credit losses		282		539			490			1,139
Write-offs charged against the allowance and other		6		(142	)		(120	)		(246	)
Effect of changes in foreign exchange rates		36		(197	)		89			(248	)
Allowance for expected credit losses ending balance	$	7,015	$	5,589		$	7,015		$	5,589

11. Business segment information

The Company has two reporting segments: Global Spine and Global Orthopedics. The primary metric used in managing the Company is adjusted earnings before interest, tax, depreciation, and amortization (“adjusted EBITDA,” a non-GAAP financial measure). Adjusted EBITDA represents earnings before interest income (expense), income taxes, depreciation, and amortization and excludes the impact of share-based compensation, gains and losses related to changes in foreign exchange rates, charges related to the SeaSpine merger and other strategic investments, acquisition-related fair value adjustments, legal judgments and settlements, and charges related to initial compliance with regulations set forth by the European Union Medical Device Regulation. Corporate activities comprise operating expenses and activities not directly identifiable within the two reporting segments, such as human resources, finance, legal, and information technology functions. The table below presents adjusted EBITDA by reporting segment:

	Three Months Ended June 30,						Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023			2022			2023			2022
Adjusted EBITDA by reporting segment
Global Spine		21,258			14,610			36,239			28,643
Global Orthopedics		(135	)		780			(91	)		(24	)
Corporate		(11,204	)		(3,967	)		(23,025	)		(10,087	)
Consolidated adjusted EBITDA	$	9,919		$	11,423		$	13,123		$	18,532
Reconciling items:
Interest expense, net		1,266			407			2,555			782
Depreciation and amortization		13,327			6,512			25,997			14,028
Share-based compensation expense		13,246			4,460			26,266			8,792
Foreign exchange impact		(269	)		2,991			(852	)		4,233
SeaSpine merger-related costs		8,206			—			28,946			—
Strategic investments		309			1,824			970			2,794
Acquisition-related fair value adjustments		8,149			(10,714	)		19,785			(16,214	)
Legal judgments/settlements		1,291			148			1,760			341
Medical device regulation		2,050			2,248			5,679			4,198
Business interruption - COVID-19		—			316			—			659
All other		262			189			262			266
Income (loss) before income taxes	$	(37,918	)	$	3,042		$	(98,245	)	$	(1,347	)

17

Geographical information

The table below presents net sales by geographic destination for each reporting segment and for the consolidated Company:

	Three Months Ended June 30,				Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023		2022		2023		2022
Global Spine
U.S.	$	147,360	$	85,899	$	286,817	$	162,965
International		10,616		4,883		20,365		10,472
Total Global Spine		157,976		90,782		307,182		173,437
Global Orthopedics
U.S.		7,223		6,903		13,859		12,230
International		21,817		20,385		41,179		38,821
Total Global Orthopedics		29,040		27,288		55,038		51,051
Consolidated
U.S.		154,583		92,802		300,676		175,195
International		32,433		25,268		61,544		49,293
Net sales	$	187,016	$	118,070	$	362,220	$	224,488

12. Acquisition-related amortization and remeasurement

Acquisition-related amortization and remeasurement consists of (i) amortization related to intangible assets acquired through business combinations or asset acquisitions and (ii) remeasurement of any related contingent consideration arrangements. Components of acquisition-related amortization and remeasurement are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023			2022			2023			2022
Amortization of acquired intangibles	$	4,633		$	2,051		$	8,767		$	4,052
Changes in fair value of contingent consideration		(1,300	)		(10,714	)		(1,300	)		(16,214	)
Total	$	3,333		$	(8,663	)	$	7,467		$	(12,162	)

13. Share-based compensation

Components of share-based compensation expense are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023		2022		2023		2022
Cost of sales	$	482	$	205	$	953	$	416
Sales and marketing		2,551		1,000		4,800		1,981
General and administrative		9,167		2,958		18,271		6,176
Research and development		1,046		297		2,242		219
Total	$	13,246	$	4,460	$	26,266	$	8,792

	Three Months Ended June 30,				Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023		2022		2023		2022
Stock options	$	2,397	$	205	$	5,153	$	564
Time-based restricted stock awards and units		10,235		2,410		20,081		4,580
Market-based / performance-based restricted stock units		113		1,497		113		2,941
Stock purchase plan		501		348		919		707
Total	$	13,246	$	4,460	$	26,266	$	8,792

18

Pursuant to the Merger Agreement, the equity awards of SeaSpine (including stock options and restricted stock units) outstanding as of immediately prior to the closing of the Merger were converted into equity awards denominated in shares of Orthofix common stock. The Company issued options to purchase 1.9 million shares of Orthofix common stock and 0.5 million shares of time-based vesting restricted stock in connection with the conversion of such awards. The estimated fair value of the portion of the SeaSpine equity awards for which the required service period had been completed at the time of the closing of the Merger was treated as purchase consideration. The remaining estimated fair value is recorded as compensation expense over the remainder of the service period associated with the awards.

During the three months ended June 30, 2023, and 2022, the Company issued 0.3 million and 0.2 million shares, respectively, of common stock related to stock purchase plan issuances, stock option exercises, and the vesting of restricted stock awards and units. During the six months ended June 30, 2023, and 2022, the Company issued 0.5 million and 0.2 million shares, respectively, of common stock related to stock purchase plan issuances, stock option exercises, and the vesting of restricted stock awards and units.

14. Income taxes

Generally, income tax provisions for interim periods are based on an estimated annual income tax rate, adjusted for discrete tax items, with any changes affecting the estimated annual effective tax rate recorded in the interim period in which the change occurs. Due to the impact of losses not benefitted by the Company’s U.S. and Italian operations, the Company determined the estimated annual effective tax rate method would not provide a reliable estimate of the Company’s overall annual effective tax rate. As such, the Company has calculated the tax provision using the actual effective rate for the three and six months ended June 30, 2023. Due to the impact of temporary differences on the U.S. current tax liability without any deferred tax benefit, the actual effective rate may vary in future quarters.

For the three months ended June 30, 2023, and 2022, the effective tax rate was (4.0%) and 18.2%, respectively. For the six months ended June 30, 2023, and 2022, the effective tax rate was (2.2%) and (46.3%), respectively. The primary factors affecting the Company’s effective tax rate for the three and six months ended June 30, 2023, were certain losses not benefitted and tax amortization on certain acquired intangibles.

15. Earnings per share (“EPS”)

For the three and six months ended June 30, 2023, no adjustments were made to net income for purposes of calculating basic and diluted EPS. The following is a reconciliation of the weighted average shares used in diluted EPS computations.

	Three Months Ended June 30,				Six Months Ended June 30,
(Unaudited, In thousands)	2023		2022		2023		2022
Weighted average common shares-basic		36,762		20,031		36,252		19,965
Effect of dilutive securities
Unexercised stock options and stock purchase plan		—		23		—		—
Unvested restricted stock units		—		59		—		—
Weighted average common shares-diluted		36,762		20,113		36,252		19,965

There were 7.0 million and 1.6 million weighted average outstanding stock options and restricted stock units not included in the diluted EPS computation for the three months ended June 30, 2023, and 2022, respectively, and 7.1 million and 1.6 million weighted average outstanding stock options and restricted stock units not included in the diluted EPS computation for the six months ended June 30, 2023, and 2022, respectively, because inclusion of these awards was anti-dilutive.

 

19

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

The following discussion and analysis of Orthofix Medical Inc.’s (sometimes referred to as “we,” “us” or “our”) financial condition and results of operations should be read in conjunction with the discussion under the heading “Forward-Looking Statements” and our condensed consolidated financial statements and related notes thereto appearing elsewhere in this Form 10-Q.

Executive Summary

Following our merger (the “Merger”) with SeaSpine Holdings Corporation ("SeaSpine"), which was completed in January 2023, the newly merged Orthofix-SeaSpine organization is a leading global spine and orthopedics company with a comprehensive portfolio of biologics, innovative spinal hardware, bone growth therapies, specialized orthopedic solutions, and a leading surgical navigation system. Headquartered in Lewisville, Texas, our spine and orthopedic products are distributed in approximately 68 countries via our sales representatives and distributors. For more information, please visit www.Orthofix.com. Information included on our website is not incorporated into, or otherwise creates a part of, this report.

Notable financial metrics in the second quarter of 2023 and recent achievements include the following:

•Net sales of $187.0 million, an increase of 58% on both a reported and constant currency basis over prior year

•Bone Growth Therapies growth of 10%, marking two consecutive quarters with double-digit net sales increases, with growth coming from both spine and fracture commercial channels

•Spinal Implants, Biologics, and Enabling Technologies sales growth of 145%, largely as a result of the Merger

•Global Orthopedics net sales increase of 6% on a reported basis and 5% on a constant currency basis over prior year
 

Results of Operations

The following table provides certain items in our condensed consolidated statements of operations as a percent of net sales:

	Three Months Ended June 30,						Six Months Ended June 30,
(Unaudited)	2023 (%)			2022 (%)			2023 (%)			2022 (%)
Net sales		100.0			100.0			100.0			100.0
Cost of sales		36.1			26.8			36.5			26.7
Gross profit		63.9			73.2			63.5			73.3
Sales and marketing		53.0			50.7			53.3			50.8
General and administrative		18.3			13.4			22.9			15.7
Research and development		10.4			10.8			11.8			10.7
Acquisition-related amortization and remeasurement		1.8			(7.3	)		2.1			(5.5	)
Operating income (loss)		(19.6	)		5.6			(26.6	)		1.6
Net income (loss)		(21.1	)		2.1			(27.7	)		(0.9	)

Net Sales by Product Category and Reporting Segment

The following tables provide net sales by major product category by reporting segment:

	Three Months Ended June 30,				Percentage Change
(Unaudited, U.S. Dollars, in thousands)	2023		2022		Reported			Constant Currency
Bone Growth Therapies	$	52,662	$	47,765		10.3	%		10.3	%
Spinal Implants, Biologics, and Enabling Technologies		105,314		43,017		144.8	%		144.8	%
Global Spine		157,976		90,782		74.0	%		74.0	%
Global Orthopedics		29,040		27,288		6.4	%		5.0	%
Net sales	$	187,016	$	118,070		58.4	%		58.1	%

20

	Six Months Ended June 30,				Percentage Change
(Unaudited, U.S. Dollars, in thousands)	2023		2022		Reported			Constant Currency
Bone Growth Therapies	$	100,376	$	89,713		11.9	%		11.9	%
Spinal Implants, Biologics, and Enabling Technologies		206,806		83,724		147.0	%		147.1	%
Global Spine		307,182		173,437		77.1	%		77.2	%
Global Orthopedics		55,038		51,051		7.8	%		9.0	%
Net sales	$	362,220	$	224,488		61.4	%		61.7	%

Global Spine

Global Spine offers the following product categories:

-Bone Growth Therapies, which manufactures, distributes, sells, and provides support services for market leading devices used adjunctively in high risk spinal fusion procedures and to treat both non-union and acute fractures in the orthopedic space. Bone Growth Therapies uses distributors and a direct sales channel to sell its devices and provide associated support services to hospitals, healthcare providers, and patients in the U.S.

-Spinal Implants, Biologics, and Enabling Technologies is comprised of a broad portfolio of spine fixation and motion preservation implant products used in surgical procedures of the spine, one of the most comprehensive biologics portfolios in both the demineralized bone matrix and cellular allograft market segments, and image-guided surgical solutions to facilitate degenerative, minimally invasive, and complex surgical procedures. Spinal Implants, Biologics, and Enabling Technologies products are sold through a network of distributors and sales representatives to hospitals and healthcare providers on a global basis for Spinal Implants and Enabling Technologies, and primarily within the U.S. for Biologics.

Three months ended June 30, 2023 compared to 2022

Net sales of $158.0 million, an increase of $67.2 million or 74.0%

•Bone Growth Therapies net sales increased $4.9 million or 10.3%, largely driven by an increase in complex spine procedures, which are typically paired within our CervicalStim and SpinalStim devices, and growth in our spine and fracture sales channels as a result of investments made in the commercial channel in the prior year, as well as the launch of AccelStim for the healing of fresh and non-union fractures

•Spinal Implants, Biologics, and Enabling Technologies net sales increased $62.3 million or 144.8%, primarily due to the contribution of SeaSpine net sales in the second quarter of 2023 in addition to growth driven by the onboarding of new, high-volume distribution partners along with multiple recent product launches

Six months ended June 30, 2023 compared to 2022

Net sales of $307.2 million, an increase of $133.7 million or 77.1%

•Bone Growth Therapies net sales increased $10.7 million or 11.9%, largely driven by a continued increase in complex spine procedures and growth in our spine and fracture sales channels, as well as the launch of AccelStim

•Spinal Implants, Biologics, and Enabling Technologies net sales increased $123.1 million or 147.0%, primarily due to the contribution of SeaSpine net sales and growth driven by the onboarding of new, high-volume distribution partners along with multiple recent product launches

21

Global Orthopedics

Global Orthopedics offers products and solutions that allow physicians to successfully treat a variety of orthopedic conditions specifically related to limb reconstruction and deformity correction unrelated to the spine. Global Orthopedics distributes its products globally through a network of distributors and sales representatives to sell orthopedic products to hospitals and healthcare providers.

Three months ended June 30, 2023 compared to 2022

Net sales of $29.0 million, an increase of $1.8 million or 6.4%

•Growth of 4.6% in the U.S., primarily due to recent product launches and commercial execution within our sales channels

•International growth of 7.0% largely due to an increase in stocking distributor orders

•Increase of $0.4 million due to movement in foreign currency exchange rates, which had a favorable impact on net sales in the second quarter of 2023

Six months ended June 30, 2023 compared to 2022

Net sales of $55.0 million, an increase of $4.0 million or 7.8%

•Double-digit growth in the U.S. largely as a result of investments made in recent product launches and commercial execution within our U.S. sales channel

•International growth of 6.1% largely due to an increase in stocking distributor orders

•Partially offset by a decrease of $0.6 million due to movement in foreign currency exchange rates, which had an unfavorable impact on net sales in 2023

Gross Profit

	Three Months Ended June 30,									Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023			2022			% Change			2023			2022			% Change
Net sales	$	187,016		$	118,070			58.4	%	$	362,220		$	224,488			61.4	%
Cost of sales		67,465			31,600			113.5	%		132,340			59,918			120.9	%
Gross profit	$	119,551		$	86,470			38.3	%	$	229,880		$	164,570			39.7	%
Gross margin		63.9	%		73.2	%		(9.3	%)		63.5	%		73.3	%		-9.8	%

Three months ended June 30, 2023 compared to 2022

Gross profit increased $33.1 million

•Gross profit largely increased due to the contribution of SeaSpine results in the second quarter of 2023, as SeaSpine contributed approximately $64.4 million in net sales

•Partially offset by $9.4 million in amortization of the inventory fair value step up at acquisition, which is being recognized over the expected sales cycles of the acquired inventory

•Further offset by approximately $4.2 million in inventory-related charges as a result of product rationalization decisions that have been made related to the Merger

Six months ended June 30, 2023 compared to 2022

Gross profit increased $65.3 million

•Gross profit largely increased due to the contribution of SeaSpine results in the second quarter of 2023, as SeaSpine contributed approximately $125.3 million in net sales

•Partially offset by $21.1 million in amortization of the inventory fair value step up at acquisition, which is being recognized over the expected sales cycles of the acquired inventory

•Further offset by approximately $4.9 million in inventory-related charges as a result of product rationalization decisions that have been made related to the Merger

22

Sales and Marketing Expense

	Three Months Ended June 30,									Six Months Ended June 30,
(U.S. Dollars, in thousands)	2023			2022			% Change			2023			2022			% Change
Sales and marketing	$	99,249		$	59,888			65.7	%	$	193,040		$	114,025			69.3	%
As a percentage of net sales		53.0	%		50.7	%		2.3	%		53.3	%		50.8	%		2.5	%

Three months ended June 30, 2023 compared to 2022

Sales and marketing expense increased $39.4 million

•Increase largely due to the contribution of SeaSpine results in the second quarter of 2023 and the overall increase in net sales as compared to the prior year period, which resulted in increased variable expenses, such as commissions and bonus expenses associated with the achievement of sales objectives

•Included within sales and marketing expenses for the second quarter of 2023 are integration-related expenses of $1.1 million, which are mainly severance and retention costs

Six months ended June 30, 2023 compared to 2022

Sales and marketing expense increased $79.0 million

•Increase largely due to the contribution of SeaSpine results in the second quarter of 2023 and the overall increase in net sales as compared to the prior year period, which resulted in increased variable expenses, such as commissions and bonus expenses associated with the achievement of sales objectives

•Included within sales and marketing expenses for the second quarter of 2023 are integration-related expenses of $3.0 million, which are mainly severance and retention costs

General and Administrative Expense

	Three Months Ended June 30,									Six Months Ended June 30,
(U.S. Dollars, in thousands)	2023			2022			% Change			2023			2022			% Change
General and administrative	$	34,177		$	15,846			115.7	%	$	82,988		$	35,174			135.9	%
As a percentage of net sales		18.3	%		13.4	%		4.9	%		22.9	%		15.7	%		7.2	%

Three months ended June 30, 2023 compared to 2022

General and administrative expense increased $18.3 million

•Increase largely due to the contribution of SeaSpine results in the second quarter of 2023 and resulting integration costs incurred as a result of the Merger

•Included within general and administrative expenses for the second quarter of 2023 are merger and integration-related expenses of $2.7 million, which are mainly comprised of (i) professional fees totaling $0.7 million, and (ii) severance and retention costs totaling $1.9 million

•Increase also driven by $6.2 million in higher share-based compensation expense as a result of a larger employee base post-Merger and from accelerated vesting of certain equity-based awards as a result of the Merger

Six months ended June 30, 2023 compared to 2022

General and administrative expense increased $47.8 million

•Increase largely due to the contribution of SeaSpine results in the second quarter of 2023 and resulting integration costs incurred as a result of the Merger

•Included within general and administrative expenses for the second quarter of 2023 are merger and integration-related expenses of $20.0 million, which are mainly comprised of (i) professional fees totaling $10.5 million, inclusive of a $5.5 million payment to Orthofix's financial advisor for the Merger upon closing of the transaction, and (ii) severance and retention costs totaling $9.0 million

•Increase also driven by an increase of $12.1 million in share-based compensation expense as a result of a larger employee base post-Merger and from accelerated vesting of certain equity-based awards as a result of the Merger

23

Research and Development Expense

	Three Months Ended June 30,									Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023			2022			% Change			2023			2022			% Change
Research and development	$	19,424		$	12,758			52.2	%	$	42,731		$	23,970			78.3	%
As a percentage of net sales		10.4	%		10.8	%		(0.4	%)		11.8	%		10.7	%		1.1	%

Three months ended June 30, 2023 compared to 2022

Research and development expense increased $6.7 million

•Increase largely due to the contribution of SeaSpine results in the second quarter of 2023 and resulting integration costs incurred as a result of the Merger

•Included within research and development expenses for the second quarter of 2023 are merger and integration-related expenses of $0.5 million, which are mainly comprised of severance and retention costs

Six months ended June 30, 2023 compared to 2022

Research and development expense increased $18.8 million

•Increase largely due to the contribution of SeaSpine results in 2023 and resulting integration costs incurred as a result of the Merger

•Included within research and development expenses for 2023 are merger and integration-related expenses of $2.1 million, which are mainly comprised of severance and retention costs

•Increase of $0.8 million related to the attainment of a development milestone with MTF Biologics achieved in the first quarter of 2023

Acquisition-related Amortization and Remeasurement

	Three Months Ended June 30,									Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023			2022			% Change			2023			2022			% Change
Acquisition-related amortization and remeasurement	$	3,333		$	(8,663	)		(138.5	%)	$	7,467		$	(12,162	)		(161.4	%)
As a percentage of net sales		1.8	%		(7.3	%)		9.1	%		2.1	%		(5.5	%)		7.6	%

Acquisition-related amortization and remeasurement consists of (i) amortization related to intangible assets acquired through business combinations or asset acquisitions and (ii) remeasurement of any related contingent consideration arrangement.

Three months ended June 30, 2023 compared to 2022

Acquisition-related amortization and remeasurement increased $12.0 million

•Increase of $10.7 million related to a benefit recognized in the second quarter of 2022 from the remeasurement of potential revenue-based milestone payments associated with the Spinal Kinetics acquisition; we did not achieve the remaining milestone prior to April 30, 2023, the end of the measurement period for achieving such milestone

•Increase in amortization expense of $2.6 million during the second quarter of 2023 associated with intangible assets recognized as a result of the Merger

•Partially offset by a decrease of $1.3 million associated with the remeasurement of a contingent consideration obligation with Lattus Spine LLC assumed in the Merger

Six months ended June 30, 2023 compared to 2022

Acquisition-related amortization and remeasurement increased $19.6 million

•Increase of $16.2 million related to a benefit recognized in 2022 from the remeasurement of potential revenue-based milestone payments associated with the Spinal Kinetics acquisition; we did not achieve the remaining milestone prior to April 30, 2023, the end of the measurement period for achieving such milestone

•Increase in amortization expense of $4.7 million during the second quarter of 2023 associated with intangible assets recognized as a result of the Merger

24

•Partially offset by a decrease of $1.3 million associated with the remeasurement of a contingent consideration obligation with Lattus Spine LLC assumed in the Merger

Non-operating Income and Expense

	Three Months Ended June 30,									Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023			2022			% Change			2023			2022			% Change
Interest expense, net	$	(1,266	)	$	(407	)		211.1	%	$	(2,555	)	$	(782	)		226.7	%
Other income (expense), net		(20	)		(3,192	)		(99.4	%)		656			(4,128	)		(115.9	%)

Three months ended June 30, 2023 compared to 2022

Interest expense, net increased $0.9 million

•Increase of $0.8 million attributable to an increase in borrowings outstanding on our secured revolving credit facility in the second quarter of 2023 as no such balance was outstanding in the prior year

Six months ended June 30, 2023 compared to 2022

Interest expense, net increased $1.8 million

•Increase of $0.6 million attributable to an early termination prepayment penalty associated with the payoff of the assumed indebtedness of SeaSpine as of the close of the Merger

•Increase of $1.3 million attributable to an increase in borrowings outstanding on our secured revolving credit facility in 2023 as no such balance was outstanding in the prior year

Three months ended June 30, 2023 compared to 2022

Other income (expense), net increased $3.2 million

•Increase of $3.3 million associated with changes in foreign currency exchange rates, as we recorded a non-cash remeasurement gain of $0.3 million in the second quarter of 2023 compared to a loss of $3.0 million in the second quarter of 2022

Six months ended June 30, 2023 compared to 2022

Other income (expense), net increased $4.8 million

•Increase of $5.1 million associated with changes in foreign currency exchange rates, as we recorded a non-cash remeasurement gain of $0.9 million in 2023 compared to a loss of $4.2 million in 2022

Income Taxes

	Three Months Ended June 30,									Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023			2022			% Change			2023			2022			% Change
Income tax expense	$	1,508		$	553			172.7	%	$	2,119		$	624			239.6	%
Effective tax rate		(4.0	%)		18.2	%		(22.2	%)		(2.2	%)		(46.3	%)		44.1	%

Three months ended June 30, 2023 compared to 2022

•The primary factors affecting our tax expense for the second quarter of 2023 compared to the prior year period were financial statement losses not benefitted

•The increase in tax expense compared to the prior year period is partially attributable to amortization expense on long lived intangible assets of $0.4 million and withholding tax on anticipated cash repatriation of $0.6 million.

Six months ended June 30, 2023 compared to 2022

•The primary factors affecting our tax expense for the second quarter of 2023 compared to the prior year period were financial statement losses not benefitted

•The increase in tax expense compared to the prior year period is partially attributable to amortization expense on long lived intangible assets of $0.8 million and withholding tax on anticipated cash repatriation of $0.6 million

25

Segment Review

Our business is managed through two reporting segments: Global Spine and Global Orthopedics. The primary metric used in managing the business by segment is adjusted earnings before interest, tax, depreciation, and amortization (“adjusted EBITDA,” a non-GAAP financial measure) (which is described further in Note 11 to the Notes to the Unaudited Condensed Consolidated Financial Statements contained herein). The following table presents adjusted EBITDA by segment and reconciles consolidated adjusted EBITDA to loss before income taxes:

	Three Months Ended June 30,						Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023			2022			2023			2022
Adjusted EBITDA by reporting segment
Global Spine		21,258			14,610			36,239			28,643
Global Orthopedics		(135	)		780			(91	)		(24	)
Corporate		(11,204	)		(3,967	)		(23,025	)		(10,087	)
Consolidated adjusted EBITDA	$	9,919		$	11,423		$	13,123		$	18,532
Reconciling items:
Interest expense, net		1,266			407			2,555			782
Depreciation and amortization		13,327			6,512			25,997			14,028
Share-based compensation expense		13,246			4,460			26,266			8,792
Foreign exchange impact		(269	)		2,991			(852	)		4,233
SeaSpine merger-related costs		8,206			—			28,946			—
Strategic investments		309			1,824			970			2,794
Acquisition-related fair value adjustments		8,149			(10,714	)		19,785			(16,214	)
Legal judgments/settlements		1,291			148			1,760			341
Medical device regulation		2,050			2,248			5,679			4,198
Business interruption - COVID-19		—			316			—			659
All other		262			189			262			266
Income (loss) before income taxes	$	(37,918	)	$	3,042		$	(98,245	)	$	(1,347	)

Liquidity and Capital Resources

Cash and cash equivalents at June 30, 2023, totaled $37.6 million compared to $50.7 million at December 31, 2022. The following table presents the net change in cash and cash equivalents for the six months ended June 30, 2023, and 2022, respectively:

	Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023			2022			Change
Net cash provided by (used in) operating activities	$	(39,536	)	$	(12,622	)	$	(26,914	)
Net cash provided by (used in) investing activities		4,265			(13,161	)		17,426
Net cash provided by (used in) financing activities		21,791			(1,324	)		23,115
Effect of exchange rate changes on cash		387			(1,204	)		1,591
Net change in cash and cash equivalents	$	(13,093	)	$	(28,311	)	$	15,218

The following table presents free cash flow, a non-GAAP financial measure, which is calculated by subtracting capital expenditures from net cash from operating activities:

	Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023			2022			Change
Net cash provided by (used in) operating activities	$	(39,536	)	$	(12,622	)	$	(26,914	)
Capital expenditures		(24,654	)		(11,703	)		(12,951	)
Free cash flow	$	(64,190	)	$	(24,325	)	$	(39,865	)

Operating Activities

Cash flows from operating activities decreased $26.9 million

•Unfavorable change in net loss of $98.4 million

26

•Favorable change of $75.4 million associated with non-cash gains and losses, largely related to the amortization of the inventory fair value step up at acquisition, share-based compensation expense, changes in fair value of contingent consideration, depreciation and amortization, and inventory reserve expenses

•Unfavorable change of $3.9 million relating to changes in working capital accounts, primarily attributable to changes in inventory levels and accounts payable, partially offset by recoupment activity associated with the CMS Accelerated and Advance Payment Program in the prior year and favorable changes in accounts receivable

Two of our primary working capital accounts are accounts receivable and inventory. Days sales in receivables were 55 days at June 30, 2023, compared to 59 days at June 30, 2022. Inventory turns decreased to 0.9 times as of June 30, 2023 compared to 1.3 times as of June 30, 2022.

Investing Activities

Cash flows from investing activities increased $17.4 million

•Increase of $29.4 million attributable to cash acquired as a result of the Merger

•Increase of $1.5 million associated with the payment of a contingent consideration milestone achieved in 2022 related to a previous asset acquisition

•Partially offset by an increase of $13.0 million in capital expenditures, largely due to the inclusion of SeaSpine's financial results within the six months of 2023 financial results

Financing Activities

Cash flows from financing activities increased $23.1 million

•Increase of $51.0 million associated with borrowings under our secured revolving credit facility for working capital purposes, including to fund certain Merger-related expenses, during 2023

•Increase of $2.0 million related to the conclusion of the FITBONE Contract Manufacturing and Supply Agreement with Wittenstein, resulting in a $2.0 million payment in the first quarter of 2022

•Partially offset by a decrease of $26.9 million associated with the termination and repayment of SeaSpine's credit facility

•Further offset by a decrease in net proceeds of $1.8 million from the issuance of common shares and a decrease in other financing activities of $1.2 million

Credit Facilities

On January 3, 2023, we borrowed $30.0 million under our $300.0 million secured revolving credit facility for working capital purposes, including to fund certain Merger-related expenses. Following the completion of the Merger, we terminated SeaSpine's credit facility and all applicable commitments with Wells Fargo Bank, National Association and repaid all outstanding obligations in respect to principal, interest, and fees on January 5, 2023.

Additional borrowings were made under the credit facility subsequent to the closing of the acquisition and as of June 30, 2023, we had $51.0 million borrowings outstanding under our secured revolving credit facility. We borrowed an additional $8.0 million on July 5, 2023.

On June 13, 2023, we entered into a Limited Consent, Limited Waiver and Second Amendment to the Original Credit Agreement (the "Consent and Amendment" and the Original Credit Agreement as amended by the Consent and Amendment, the “Amended Credit Agreement”). Under the terms of the Consent and Amendment, the parties agreed to reduce the size of the secured revolving credit facility, off of which certain fees are based, from $300.0 million to $175.0 million, and to increase the applicable interest rate in certain circumstances. The maturity date of the credit facility remains October 25, 2024.

The Consent and Amendment permits us, for purposes of determining compliance with financial covenants in the Amended Credit Agreement, to include certain expense addbacks in our calculation of EBITDA and to increase the share of EBITDA attributable to certain foreign subsidiaries beginning with the fiscal quarter ended March 31, 2023. We also agreed to pledge under the Amended

27

Credit Agreement our ownership interest in our Italian subsidiary, Orthofix S.r.L., and cause Orthofix S.r.L. to become a loan party to the Amended Credit Agreement.

As of June 30, 2023, we had no borrowings outstanding under our available lines of credit in Italy, which provide up to an aggregate amount of €5.5 million ($6.0 million). We were in compliance with all required financial covenants of our credit facilities as of June 30, 2023.

Other

For information regarding contingencies, see Note 8 to the Notes to the Unaudited Condensed Consolidated Financial Statements contained herein.

IGEA S.p.A Exclusive License and Distribution Agreement

In April 2021, we entered into an Exclusive License and Distribution Agreement (the “License Agreement”) with IGEA S.p.A (“IGEA”), an Italian manufacturer and distributor of bone and cartilage stimulation systems. Per the terms of the License Agreement, we have the exclusive right to sell IGEA products in the U.S. and Canada. As consideration for the License Agreement, we agreed to pay up to $4.0 million, with certain payments contingent upon achieving an FDA milestone. As of June 30, 2023, we have a remaining liability under this agreement of $1.0 million which is accrued within other current liabilities.

CGBio Co., Ltd. Exclusive License and Distribution Agreement

On July 30, 2022, we entered into a long-term strategic License and Distribution Agreement (the “Agreement”) with CGBio Co., Ltd. (“CGBio”), a developer of innovative, synthetic bone grafts. The agreement grants us the exclusive right to conduct pre-clinical and clinical studies, commercialize, promote, market, and sell the Novosis recombinant human bone morphogenetic protein-2 (rhBMP-2) bone growth materials and other future tissue regenerative solutions in the U.S. and Canada. As consideration, we paid CGBio an upfront payment of $1.4 million with additional payments contingent upon the achievement of specified development milestones.

Lattus Spine LLC ("Lattus") Contingent Consideration

In connection with the Merger, we assumed a contingent consideration obligation under a purchase agreement between SeaSpine and Lattus executed in December 2022. Under the terms of the agreement, we may be required to make installment payments at certain dates based on future net sales of certain products (the "Lateral Products"). The estimated fair value of the contingent consideration arrangement as of June 30, 2023, was $9.9 million; however, the actual amount ultimately paid could be higher or lower than the estimated fair value of the contingent consideration. As of June 30, 2023, we classified the remaining contingent consideration liability within other long-term liabilities. For additional discussion of this matter, see Note 7 of the Notes to the Unaudited Condensed Consolidated Financial Statements.

Off-balance Sheet Arrangements

As of June 30, 2023, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, cash flows, liquidity, capital expenditures or capital resources that are material to investors.

Contractual Obligations

There have been no material changes in any of our material contractual obligations as disclosed in our Form 10-K for the year ended December 31, 2022.

Critical Accounting Estimates

Our discussion of operating results is based upon the condensed consolidated financial statements and accompanying notes. The preparation of these statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Our critical accounting estimates are described in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022. There have been no significant changes to our critical accounting estimates during the quarter covered by this report.

Recently Issued Accounting Pronouncements

See Note 2 of the Notes to the Unaudited Condensed Consolidated Financial Statements for detailed information regarding the status of recently issued or adopted accounting pronouncements.

28

Non-GAAP Financial Measures

We believe that providing non-GAAP financial measures that exclude certain items provides investors with greater transparency to the information used by senior management in its financial and operational decision-making. We believe it is important to provide investors with the same non-GAAP financial measures used to supplement information regarding the performance and underlying trends of our business operations to facilitate comparisons to historical operating results and internally evaluate the effectiveness of our operating strategies. Disclosure of these non-GAAP financial measures also facilitates comparisons of our underlying operating performance with other companies in the industry that also supplement their GAAP results with non-GAAP financial measures.

The non-GAAP financial measures used in this filing may have limitations as analytical tools and should not be considered in isolation or as a replacement for GAAP financial measures. Some of the limitations associated with the use of these non-GAAP financial measures are that they exclude items that reflect an economic cost that can have a material effect on cash flows.

Constant Currency

Constant currency is calculated by using foreign currency rates from the comparable, prior-year period to present net sales at comparable rates. Constant currency can be presented for numerous GAAP measures, but is most commonly used by management to analyze net sales without the impact of changes in foreign currency rates.

Adjusted EBITDA

EBITDA is a non-GAAP financial measure defined as earnings before interest income (expense), income taxes, depreciation, and amortization. Adjusted EBITDA is the primary metric used by our Chief Operating Decision Maker in managing the business. Adjusted EBITDA represents earnings before interest income (expense), income taxes, depreciation, and amortization and excludes the impact of: share-based compensation, gains and losses related to changes in foreign exchange rates, SeaSpine Merger-related costs, strategic investments, acquisition-related fair value adjustments, legal judgments and settlements, and charges related to initial compliance with regulations set forth by the European Union Medical Device Regulation.

Free Cash Flow

Free cash flow is calculated by subtracting capital expenditures from net cash from operating activities. Management uses free cash flow as an important indicator of how much cash is generated or used by our normal business operations, including capital expenditures. Management uses free cash flow as a measure of progress on its capital efficiency and cash flow initiatives.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to our market risks as disclosed in our Form 10-K for the year ended December 31, 2022.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) designed to provide reasonable assurance that the information required to be disclosed in reports filed or submitted under the Exchange Act are recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. These include controls and procedures designed to ensure that this information is accumulated and communicated to management, including our President and Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Management, with the participation of the President and Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2023. Based on this evaluation, our President and Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of June 30, 2023.

On January 5, 2023, the Company completed a merger of equals with SeaSpine, whose financial statements reflect total assets and revenues constituting 52% and 35%, respectively, of the condensed consolidated financial statement amounts as of and for the six months ended June 30, 2023. As permitted by the rules of the SEC, the Company will exclude SeaSpine from its annual assessment of the effectiveness on internal control over financial reporting for the year ending December 31, 2023, the year of acquisition. Management continue to monitor SeaSpine's internal controls over financial reporting.

29

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the quarterly period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

30

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

For information regarding legal proceedings, see Note 8 to the Notes to the Unaudited Condensed Consolidated Financial Statements contained herein, which is incorporated by reference into this Part II, Item 1.

Item 1A. Risk Factors

There have been no material changes from the risk factors disclosed in "Part I, Item 1A. Risk Factors” in our Form 10-K for the year ended December 31, 2022, except as follows.

We maintain a $175.0 million secured revolving credit facility secured by a pledge of substantially all of our property.

We and certain of our wholly-owned subsidiaries (collectively, the “Borrowers”) are party to a Second Amended and Restated Credit Agreement (as amended to date, the “Amended Credit Agreement”). The Amended Credit Agreement provides for a $175.0 million secured revolving credit facility maturing on October 25, 2024. As of June 30, 2023, $51.0 million was outstanding under the facility, all of which was borrowed during the fiscal year. The effective interest rate on amounts borrowed was 6.4%, with accrued interest of $0.6 million as of June 30, 2023, within other current liabilities.

Certain of our subsidiaries (collectively, the “Guarantors”) are required to guarantee the repayment of any obligations under the Amended Credit Agreement. The Borrowers' obligations under the Amended Credit Agreement are secured by a pledge of substantially all of the personal property assets of the Borrowers and each of the Guarantors, including accounts receivables, deposit accounts, intellectual property, investment property, and inventory, equipment, and equity interests in their respective subsidiaries.

The Amended Credit Agreement contains customary affirmative and negative covenants, including limitations on our ability to incur additional debt, grant or permit additional liens, make investments and acquisitions, merge or consolidate with others, dispose of assets, pay dividends and distributions, pay subordinated indebtedness, and enter into affiliate transactions. In addition, the Amended Credit Agreement contains financial covenants requiring us to maintain, on a consolidated basis as of the last day of any fiscal quarter, a total net leverage ratio of not more than 3.5 to 1.0 and an interest coverage ratio of at least 3.0 to 1.0. The Amended Credit Agreement also includes events of default customary for facilities of this type, and upon the occurrence of an event of default, subject to customary cure rights, all outstanding amounts borrowed under the facility may be accelerated and/or the lenders’ commitments terminated.

We believe that we are in compliance with the covenants, and that there were no events of default, at June 30, 2023 (and in prior periods). However, there can be no assurance that we will be able to meet such financial covenants in future fiscal quarters. The failure to do so could result in an event of default, which could have a material adverse effect on our financial position in the event that we have significant amounts drawn under the facility at such time.

We hold our cash and cash equivalents that we use to meet our working capital and operating expense needs in deposit accounts that could be adversely affected if the financial institutions holding such funds fail.

We hold our cash and cash equivalents used to meet our working capital and operating expense needs in deposit accounts at multiple financial institutions. The balance held in these accounts typically exceeds the Federal Deposit Insurance Corporation ("FDIC") standard deposit insurance limit or similar government guarantee schemes. If a financial institution in which we hold such funds fails or is subject to significant adverse conditions in the financial or credit markets, we could be subject to a risk of loss of all or a portion of such uninsured funds or be subject to a delay in accessing all or a portion of such uninsured funds. Any such loss or lack of access to these funds could adversely impact our short-term liquidity and ability to meet our operating expense obligations.

For example, on March 10, 2023, Silicon Valley Bank ("SVB"), and Signature Bank, were closed by state regulators and the FDIC was appointed receiver for each bank. The FDIC created successor bridge banks and all deposits of SVB and Signature Bank were transferred to the bridge banks under a systemic risk exception approved by the United States Department of Treasury, the Federal Reserve, and the FDIC. If financial institutions in which we hold funds for working capital and operating expenses were to fail, we cannot provide any assurances that such governmental agencies would take action to protect our uninsured deposits in a similar manner.

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

We have not made any repurchases of our common stock during the second quarter of 2023.

Item 3. Defaults Upon Senior Securities

Not applicable.

31

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the last fiscal quarter, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, modified or terminated any contract, instruction, or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act or any "non-Rule 10b5-1 trading arrangement."

Item 6. Exhibits

3.1(a)	Amended and Restated Certificate of Incorporation (filed as an Exhibit to the Company's Current Report on Form 8-K dated June 20, 2023 and incorporated herein by reference).
3.1(b)*	Amended and Restated Certificate of Incorporation (marked to show changes against prior version)
3.2(a)	Amended and Restated Bylaws, as amended (filed as an Exhibit to the Company's Current Report on Form 8-K dated June 20, 2023 and incorporated herein by reference).
3.2(b)*	Amended and Restated Bylaws, as amended (marked to show changes against prior version)
10.1	Limited Consent, Limited Waiver and Second Amendment to Second Amended and Restated Credit Agreement, dated June 13, 2023, between Orthofix Medical Inc., certain subsidiaries thereof, JPMorgan Chase Bank, N.A., as administrative agent, and certain lender parties thereto (filed as an Exhibit to the Company's Current Report on Form 8-K dated June 15, 2023 and incorporated herein by reference).
10.2	Change in Control and Severance Agreement, dated June 19, 2023, between the Company and Keith C. Valentine (filed as an Exhibit to the Company's Current Report on Form 8-K dated June 21, 2023 and incorporated herein by reference).
10.3	Change in Control and Severance Agreement, dated June 19, 2023, between the Company and John J. Bostjancic (filed as an Exhibit to the Company's Current Report on Form 8-K dated June 21, 2023 and incorporated herein by reference).
10.4	Change in Control and Severance Agreement, date June 19, 2023, between the Company and Kimberley A. Elting (filed as an Exhibit to the Company's Current Report on Form 8-K dated June 21, 2023 and incorporated herein by reference).
10.5	Change in Control and Severance Agreement, date June 19, 2023, between the Company and Kevin Kenny (filed as an Exhibit to the Company's Current Report on Form 8-K dated June 21, 2023 and incorporated herein by reference).
10.6	Change in Control and Severance Agreement, dated June 19, 2023, between the Company and Patrick L. Keran (filed as an Exhibit to the Company's Current Report on Form 8-K dated June 21, 2023 and incorporated herein by reference).
10.7	Amendment No. 4 to the Orthofix Medical Inc. Amended and Restated 2012 Long-Term Incentive Plan (filed as an Exhibit to the Company's Current Report on Form 8-K dated June 20, 2023 and incorporated herein by reference).
10.8	Amendment No. 3 to the Orthofix Medical Inc. Second Amended and Restated Stock Purchase Plan (filed as an Exhibit to the Company's Current Report on Form 8-K dated June 20, 2023 and incorporated herein by reference).
10.9	Letter Agreement, dated April 4, 2023, between the Company and Kevin Kenny (filed as an Exhibit to the Company's Current Report on Form 8-K dated April 4, 2023 and incorporated herein by reference).
31.1*	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
31.2*	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
32.1#	Section 1350 Certifications of each of the Chief Executive Officer and Chief Financial Officer.
101.INS*	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).

32

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 (formatted as inline XBRL and contained in Exhibit 101).

* Filed herewith.

# Furnished herewith.

33

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ORTHOFIX MEDICAL INC.
Date: August 8, 2023	By:	/s/ KEITH VALENTINE
	Name:	Keith Valentine
	Title:	President and Chief Executive Officer, Director
Date: August 8, 2023	By:	/s/ JOHN BOSTJANCIC
	Name:	John Bostjancic
	Title:	Chief Financial Officer

34

EX-3.1(B)

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
ORTHOFIX MEDICAL INC.

CERTIFICATE OF INCORPORATION

Orthofix Medical Inc., a corporation organized and existing under the laws of the State of Delaware (the “Company”), does hereby certify as follows:

The Company’s present name and the name under which it was originally incorporated is Orthofix Medical Inc., and its original certificate of incorporation was filed with the Secretary of State of the State of Delaware on July 31, 2018 (the “Original Certificate”).

This Amended and Restated Certificate of Incorporation amends, restates and integrates the provisions of the Original Certificate and was duly adopted in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware.

This Amended and Restated Certificate of Incorporation shall become effective on the date of filing with the Secretary of State of the State of Delaware.

The text of the Original Certificate is hereby amended and restated in its entirety to read as follows:

ARTICLE I: NAME

The name of the corporation is Orthofix Medical Inc. (the “Corporation”).

ARTICLE II: AGENT FOR SERVICE OF PROCESS

The address of the Corporation’s registered office in the State of Delaware is 251 Little Falls Drive, Wilmington, New Castle County, DE 19808. The registered agent at such address is Corporation Service Company.

ARTICLE III: PURPOSE

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the Delaware General Corporation Law (the “DGCL”).

ARTICLE IV: AUTHORIZED STOCK

1.Total Authorized Stock. The total number of shares of stock that the Corporation has authority to issue is 50,000,000100,000,000 shares of common stock, $0.10 par value per share (the “Common Stock”).

2.Common Stock.

2.1Relative Rights. The Common Stock shall be subject to all of the rights, privileges, preferences, and priorities set forth in this Amended and Restated Certificate of Incorporation (this “Restated Certificate”).

1

2.2Dividends. Dividends may be paid on the Common Stock out of any assets legally available for the payment of dividends thereon, but only when and as declared by the Board of Directors of the Corporation (the “Board”). Any dividends on the Common Stock will not be cumulative.

2.3Dissolution, Liquidation, Winding Up. In the event of any dissolution, liquidation, or winding up of the Corporation, whether voluntary or involuntary, the holders of the Common Stock shall be entitled to participate in the distribution of any assets of the Corporation remaining after the Corporation shall have paid, or provided for payment of, all debts and liabilities of the Corporation.

2.4Voting Rights. Each holder of shares of the Common Stock shall be entitled to notice of and to attend all special and annual meetings of stockholders. Except as may otherwise be required by law, each holder of Common Stock shall be entitled to one vote per share of Common Stock held of record by such holder on all matters on which stockholders are entitled to vote generally. Each holder of shares of the Common Stock may exercise its vote either in person or by proxy, in accordance with the DGCL, this Restated Certificate of Incorporation and the Bylawsbylaws of the Corporation (as the same may be amended from time to time, the “Bylaws”).

ARTICLE V: AMENDMENT OF BYLAWS

In furtherance and not in limitation of the powers conferred by the DGCL, the Board is expressly authorized and empowered to adopt, alter, amend, repeal and rescind the Bylawsbylaws of the Corporation and any provision or provisions thereof.

ARTICLE VI: BOARD OF DIRECTORS

3.Director Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board. In addition to the powers and authority expressly conferred upon them by statute or by this Restated Certificate of Incorporation or the Bylaws of the Corporation, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation.

4.Number of Directors. The powers of the incorporator are to terminate upon the filing of this Certificate of Incorporation with the Secretary of State of the State of Delaware. Effective at the time of such filing, the number of directors comprising the entire Board shall be nine (9). Thereafter, the number of directors comprising the entire Board shall be fixed by or in the manner provided in the Bylaws of the Corporation.

The names and addresses of the persons who shall serve as directors of the Corporation upon the filing of this Certificate of Incorporation are as follows:

Bradley R. Mason	c/o Orthofix Medical Inc., 3451 Plano Parkway, Lewisville, Texas 75056
Ronald A. Matricaria	c/o Orthofix Medical Inc., 3451 Plano Parkway, Lewisville, Texas 75056

2

Luke Faulstick	c/o Orthofix Medical Inc., 3451 Plano Parkway, Lewisville, Texas 75056
James Hinrichs	c/o Orthofix Medical Inc., 3451 Plano Parkway, Lewisville, Texas 75056
Alexis V. Lukianov	c/o Orthofix Medical Inc., 3451 Plano Parkway, Lewisville, Texas 75056
Lilly Marks	c/o Orthofix Medical Inc., 3451 Plano Parkway, Lewisville, Texas 75056
Michael E. Paolucci	c/o Orthofix Medical Inc., 3451 Plano Parkway, Lewisville, Texas 75056
Maria Sainz	c/o Orthofix Medical Inc., 3451 Plano Parkway, Lewisville, Texas 75056
John Sicard	c/o Orthofix Medical Inc., 3451 Plano Parkway, Lewisville, Texas 75056

The foregoing directors shall hold office until the next annual meeting of stockholders and until their successors shall have been duly elected and qualified, or until their earlier resignations or removal.

5.No Cumulative Voting. No person entitled to vote at an election for directors may cumulate votes to which such person is entitled.

6.Term and Removal. Each director shall hold office until such director’s successor is elected and qualified, or until such director’s earlier death, resignation or removal. Any director may resign at any time upon notice to the Corporation given in writing or by any electronic transmission permitted in the Corporation’s Bylaws. Any director or the entire Board may be removed, with or without cause, by the holders of capital stock having a majority in voting power of the shares entitled to vote in the election of directors. No decrease in the authorized number of directors constituting the Board shall shorten the term of any incumbent director.

7.Board Vacancies and Newly Created Directorships. Any vacancy occurring in the Board for any reason, and any newly created directorship resulting from any increase in the authorized number of directors, shall, unless (a) the Board determines by resolution that any such vacancies or newly created directorships shall be filled by the stockholders or (b) as otherwise provided by law, be filled only by the affirmative vote of a majority of the directors then in office, although less than a quorum, or by a sole remaining director, and not by the stockholders.

8.Vote by Ballot. Election of directors need not be by written ballot unless the Bylaws of the Corporation shall so provide.

3

9.Officers. Except as otherwise expressly provided in the Bylaws or as delegated by resolution of the Board, the Board shall have the exclusive power and authority to appoint and remove officers of the Corporation.

ARTICLE VII: DIRECTOR AND OFFICER LIABILITY

10.Limitation of Liability. No director or officer of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director or officer, as applicable, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL, as amended from time to time. Without limiting the effect of the preceding sentence, if the DGCL is hereafter amended to authorize the further elimination or limitation of the liability of a director or officer, then the liability of a director or officer of the Corporation, as applicable, shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.

11.Change in Rights. Neither any amendment, elimination nor repeal of any provision of this Article VIIARTICLE VII, nor the adoption of any provision of this Restated Certificate of Incorporationor Bylaws inconsistent with this Article VIIARTICLE VII, shall eliminate, reduce or otherwise adversely affect any limitation on the personal liability of aany director or officer of the Corporation existing at the time of such amendment, elimination, repeal or adoption of such an inconsistent provision.

ARTICLE VIII: MATTERS RELATING TO STOCKHOLDERS

12.No Action by Written Consent of Stockholders. No action shall be taken by the stockholders of the Corporation except at a duly called annual or special meeting of stockholders and no action shall be taken by the stockholders by written consent.

13.Annual Meeting of Stockholders. The annual meeting of stockholders shall be held on such date, at such time, and at such place, if any, within or without the State of Delaware, as shall be fixed by the Board and stated in the Corporation’s notice of the meeting. In lieu of holding an annual meeting of stockholders at a designated place, the Board may, in its sole discretion, determine that any annual meeting of stockholders may be held solely by means of remote communication.

14.Special Meeting of Stockholders. Special meetings of the stockholders of the Corporation may be called only (a) by or at the direction of the Board, pursuant to a resolution approved by a majority of the entire Board or (b) by such other person or persons as may be authorized by the Bylaws of the Corporation. The business permitted to be conducted at a special meeting of stockholders shall be limited to matters properly brought before the meeting by or at the direction of the Board. Special meetings shall be held on such date, at such time, and at such place, if any, within or without the State of Delaware as shall be fixed by the Board and stated in the Corporation’s notice of the meeting. In lieu of holding a special meeting of stockholders at a designated place, the Board may, in its sole discretion, determine that any special meeting of stockholders may be held solely by means of remote communication.

15.Advance Notice of Stockholder Nominations and Business Transacted at Special Meetings. Advance notice of stockholder nominations for the election of directors of the Corporation and of business to be brought by stockholders before any meeting of stockholders of the Corporation shall be given in the manner provided in the Bylaws of the Corporation. Business transacted at special meetings of stockholders shall be confined to the purpose or purposes stated in the notice of meeting.

4

ARTICLE IX: CREDITOR AND STOCKHOLDER COMPROMISES

Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/or between the Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of the Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for the Corporation under the provisions of § 291 of the DGCL or on the application of trustees in dissolution or of any receiver or receivers appointed for the Corporation under § 279 of the DGCL order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of the Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of the Corporation, as the case may be, and also on the Corporation.

ARTICLE X: EXCLUSIVE FORUM

16.Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if and only if the Court of Chancery of the State of Delaware lacks subject matter jurisdiction, the Superior Court of the State of Delaware, or, if and only if both the Court of Chancery of the State of Delaware and the Superior Court of the State of Delaware lack subject matter jurisdiction, the United States District Court for the District of Delaware) and any state (or, if applicable, federal) appellate court therefrom shall, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action, suit, or proceeding brought on behalf of the Corporation, (ii) any action, suit, or proceeding asserting a claim of breach of fiduciary duty owed by any current or former director, officer, employee, or stockholder of the Corporation to the Corporation or the Corporation’s stockholders or any action asserting a claim for aiding and abetting any such breach of fiduciary duty, (iii ) any action, suit, or proceeding asserting a claim against the Corporation or any director, officer, or other employee of the Corporation arising pursuant to, or seeking to enforce any right, obligation, or remedy under, any provision of the DGCL or this Restated Certificate or the Bylaws (in each case, as may be amended from time to time), (iv) any action, suit, or proceeding as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (v) any action, suit, or proceeding asserting a claim against the Corporation or its current or former directors, officers, employees, or stockholders governed by the internal affairs doctrine, in all cases subject to the court’s having personal jurisdiction over the indispensable parties named as defendants (including personal jurisdiction by reason of any such indispensable party’s consent to personal jurisdiction in the State of Delaware or such court). If any action, suit or proceeding the subject matter of which is within the scope of the immediately preceding sentence is filed in a court other than the courts in the State of Delaware, (a “Foreign Action”) in the name of any stockholder, such stockholder shall be deemed to have consented to (x) the personal jurisdiction of the state and federal courts in the State of Delaware in connection with any action brought in any such court to enforce the provisions of the immediately preceding sentence and (y) having service of process made upon such stockholders in any action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder.

5

17.Unless the Corporation consents in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended.

18.Notwithstanding the foregoing, the provisions of this ARTICLE X shall not apply to suits brought to enforce any liability or duty created by the Securities Exchange Act of 1934, as amended, or any claim for which the federal courts of the United States have exclusive jurisdiction.

19.If any provision of this ARTICLE X shall be held to be invalid, illegal or unenforceable as applied to an person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provisions, in any other circumstance and of the remaining provisions of this ARTICLE X (including, without limitation, each portion of any sentence of this ARTICLE X containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby.

20.To the fullest extent permitted by law, any person or entity purchasing or otherwise acquiring any interest in any security of the Corporation shall be deemed to have notice of and consented to the provisions of this ARTICLE X.

21.The existence of any consent in writing by the Corporation to the selection of an alternative forum either in accordance with Section 1 or Section 2 of this ARTICLE X, shall not act as a waiver of the Corporation’s consent right as set forth in this ARTICLE X with respect to any current or future action, suit, proceeding or complaint.

22.The failure to enforce any provision or provisions of this ARTICLE X would cause the Corporation irreparable harm and the Corporation shall be entitled to equitable relief, including injunctive relief and specific performance, to enforce such provision or provisions.

ARTICLE XIARTICLE X : AMENDMENT OF CERTIFICATE OF INCORPORATION

The Corporation reserves the right to amend or repeal any provision contained in this Restated Certificate of Incorporation in the manner prescribed by the laws of the State of Delaware and all rights conferred upon stockholders are granted subject to this reservation.

*****

IN WITNESS WHEREOF, Orthofix Medical Inc. has caused this Amended and Restated Certificate of Incorporation to be signed by its President and Chief Executive Officer on this 19th day of June, 2023.

ARTICLE XI : EFFECTIVE DATE AND TIME

The effective date and time of this Certificate of Incorporation shall be at 11:59 p.m. on the 31st day of July, 2018.

6

ARTICLE XII : INCORPORATOR

Kimberley Elting is the sole incorporator and the mailing address for the sole incorporator is 3451 Plano Parkway, Lewisville, Texas 75056.

By:	/s/ Kimberley EltingKeith Valentine
	IncorporatorKeith Valentine
DATED: July 31, 2018	Kimberley EltingPresident and Chief Executive Officer

7

EX-3.2(B)

ORTHOFIX MEDICAL INC.

AMENDED AND RESTATED
B Y L A W S

Article I
OFFICES

Section 1Offices. The registered office of the Corporation shall be in the State of Delaware. The Corporation may have offices at such other places both within and without the State of Delaware as the Board of Directors of the Corporation (the “Board of Directors” or the “Board”) may from time to time determine or as may be necessary or convenient to the business of the Corporation.

Article II
MEETINGS OF STOCKHOLDERS

Section 1Annual Meeting. The annual meeting of the stockholders of the Corporation shall be held on such date, at such time, and at such place (if any) within or without the State of Delaware as shall be designated from time to time by the Board of Directors and stated in the Corporation’s notice of the meeting. In lieu of holding an annual meeting of stockholders at a designated place, the Board of Directors may, in its sole discretion, determine that any annual meeting of stockholders may be held solely by means of remote communication.

Section 2Special Meetings.

(a)Special meetings of the stockholders of the Corporation may be called only (i) by or at the direction of the Board of Directors, pursuant to a resolution approved by a majority of the entire Board of Directors, or (ii) by the Secretary of the Corporation, following his or her receipt at the principal executive offices of the Corporation of one or more written demands to call a special meeting of the stockholders submitted by or on behalf of the record holder or holders of at least 25% percent of the voting power of the issued and outstanding shares of the Corporation (the “Requisite Percentage”); provided, however, that such stockholder demand or demands have been submitted in accordance with and in the form required by this Section 2. Special meetings of the stockholders of the Corporation (including those called by the Secretary following receipt of a written demand or demands from stockholders holding the Requisite Percentage in accordance with clause (ii) of the first sentence of this Section 2(a)) shall be held on such date, at such time, and at such place (if any) within or without the State of Delaware as shall be designated by the Board of Directors and stated in the Corporation’s notice of the meeting. In the case of a special meeting called by the Secretary following receipt of a written demand or demands from stockholders holding the Requisite Percentage in accordance with clause (ii) of the first sentence of this Section 2(a), the date of such special meeting, as fixed by the Board of Directors in accordance with this Section 2(a), shall not be fewer than thirty (30) nor more than ninety (90) days after the date a demand or demands by stockholders holding the Requisite Percentage have been received by the Secretary of the Corporation at the principal executive offices of the Corporation in accordance with this Section 2. In lieu of holding a special meeting of stockholders at a designated place, the Board of Directors may, in its sole discretion, determine that any special meeting of stockholders may be held solely by means of remote communication.

(b)To be in proper form, a demand submitted by any stockholder or stockholders pursuant to clause (ii) of the first sentence of Section 2(a) (a “Special Meeting Demand”) shall be in writing and shall set forth:

(i)as to each Demanding Person (as defined below), (A) the name and address of such Demanding Person (including, if applicable, the name and address that appear on the Corporation’s books and records) and (B) the class or series and number of shares of capital stock of the Corporation that are, directly or indirectly, owned of record or beneficially owned (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (as so amended and inclusive of such rules and regulations, the “Exchange Act”) by such Demanding Person ( provided that, for purposes of this Section 2, such Demanding Person shall in all events be deemed to beneficially own any

1

shares of any class or series and number of shares of capital stock of the Corporation as to which such Demanding Person has a right to acquire beneficial ownership at any time in the future);

(ii)As to each Demanding Person, any Disclosable Interests (as defined in Paragraph (A)(3)(b) of Section 13 of this Article II, except that for purposes of this Section 2, the term “Demanding Person” shall be substituted for the term “Proposing Person” in all places it appears in Paragraph (A)(3)(b) of Section 13 of this Article II and the disclosure required by clause (vi) of Paragraph (A)(3)(b) of Section 13 of this Article II shall be made with respect to the business proposed to be conducted at the special meeting);

(iii)The purpose or purposes for which the meeting is to be called;

(iv)As to each purpose for which the meeting is to be called, (A) a reasonably brief description of such purpose, (B) a reasonably brief description of the specific proposal to be made or business to be conducted at the special meeting in connection with such purpose, (C) the text of any proposal or business to be considered at the special meeting in connection with such purpose (including the text of any resolutions proposed for consideration and if such business includes a proposal to amend thethese Bylaws of the Corporation, the language of the proposed amendment), (D) the reasons for calling a special meeting of stockholders for such purpose, and (E) a reasonably brief description of any material interest of each Demanding Person in any proposal or business to be considered at the special meeting in connection with such purpose; and

(v)If a purpose for which the special meeting is to be called is the election of one or more directors to the Board of Directors, the name of each person the Demanding Persons propose to nominate at the special meeting for election to the Board of Directors (each, a “nominee”), and as to each such nominee, (A) the name, age, business and residence address, and principal occupation or employment of the nominee, (B) all other information relating to the nominee that would be required to be disclosed about such nominee if proxies were being solicited for the election of the nominee as a director in an election contest (whether or not such proxies are or will be solicited), or that is otherwise required, in each case pursuant to and in accordance with Regulation 14A under the Exchange Act, (C) such nominee’s written consent to being named in the proxy statement, if any, as a nominee andin any proxy statement relating to the special meeting and any associated proxy card, and to serving as a director if elected, and (D) all information with respect to such nominee that would be required to be set forth in a stockholder’s Special Meeting Demand pursuant to this subsection (b) if such nominee were a Demanding Person.; and

The Corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine (i) the eligibility of such proposed nominee to serve as a director of the Corporation, and (ii) whether such nominee qualifies as an “independent director” or “audit committee financial expert” under applicable law, securities exchange rule or regulation, or any publicly disclosed corporate governance guideline or committee charter of the Corporation.

(vi)If a purpose for which the special meeting is to be called is the election of one or more directors to the Board of Directors, as to each Demanding Person, a representation that the Demanding Person will, or is part of a group that will, (i) solicit proxies from the holders of the Corporation’s outstanding capital stock representing at least 67% of the voting power of the Corporation's outstanding capital stock entitled to vote in the election of directors in support of each nominee, (ii) include a statement to that effect in its proxy statement and/or its form of proxy, (iii) otherwise comply with Rule 14a-19 under the Exchange Act and (iv) provide the Secretary of the Corporation not less than five business days prior to the applicable meeting or any adjournment or postponement thereof, with reasonable documentary evidence that such each Demanding Person complied with such representations.

(c)In the case of a special meeting called by the Secretary following receipt of Special Meeting Demand(s) from stockholders holding the Requisite Percentage in accordance with clause (ii) of the first sentence of Section 2(a), each Demanding Person shall further update and supplement his or her Special Meeting Demand so that the information provided or required to be provided in such Special Meeting Demand pursuant to subsection (b) of this Section 2 shall be true and correct both as of the record date for the determination of stockholders entitled to

2

notice of the special meeting and as of the date that is ten (10) business days before the special meeting or any adjournment or postponement thereof, and such updated and supplemental information shall be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation (i) in the case of information that is required to be updated and supplemented to be true and correct as of the record date for the determination of stockholders entitled to notice of the special meeting, not later than the later of five (5) business days after such record date or five (5) business days after the public announcement of such record date, and (ii) in the case of information that is required to be updated and supplemented to be true and correct as of ten (10) business days before the special meeting or any adjournment or postponement thereof, not later than eight (8) business days before the special meeting or any adjournment or postponement thereof (or if not practicable to provide such updated and supplemental information not later than eight (8) business days before any adjournment or postponement, on the first practicable date before any such adjournment or postponement). For the avoidance of doubt, the obligation to update and supplement as set forth in this paragraph or any other Section of these Bylaws shall not limit the Corporation’s rights with respect to any deficiencies in any notice provided by a stockholder, extend any applicable deadlines hereunder, or enable or be deemed to permit a stockholder who has previously submitted notice under these Bylaws to amend any notice (including any nomination) or to submit any new notice (including any nomination), including by changing or adding nominees, matters, business or resolutions proposed to be brought before a meeting of the stockholders.

(d)The Secretary shall not accept, and shall consider ineffective, a Special Meeting Demand from a stockholder (i) that does not comply with this Section 2Section 2, (ii) that relates to an item of business to be transacted at the proposed special meeting that is not a proper subject for stockholder action under applicable law, or (iii) if the business proposed to be conducted at the special meeting as set forth in such Special Meeting NoticeDemand is identical to or substantially similar to an item of business that will be submitted for stockholder approval or consideration at any meeting of stockholders to be held on or before the ninetieth (90th) day after the Secretary receives such Special Meeting Demand. In addition to the requirements of this Section 2Section 2, each Demanding Person shall comply with all requirements of applicable law, including all requirements of the Exchange Act, with respect to any Special Meeting Demand.

(e)Nothing in this Section 2 shall be deemed or construed to give any stockholder a right to fix the date, time, or place of, or to fix any record date for, any special meeting of the stockholders of the Corporation. Except as expressly provided in, and in accordance with, this Section 2, stockholders shall not be permitted (i) to call or cause any officer of the Corporation to call a special meeting of stockholders or (ii) to propose business to be brought before a special meeting of the stockholders, other than the nomination of persons for election to the Board of Directors at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting, which nominations may be made only in accordance with, and subject to, this Section 2 or Section 13(B) of this Article II.

(f)Anything in Section 13(B) of this Article II to the contrary notwithstanding, in the case of a special meeting called by the Secretary following receipt of Special Meeting Demand(s) from stockholders holding the Requisite Percentage in accordance with clause (ii) of the first sentence of Section 2(a)Section 2(a), if a purpose of such special meeting is to elect directors to the Board of Directors of the Corporation and a Demanding Person has included in his or her Special Meeting Demand the names of each person the Demanding Person proposes to nominate at the special meeting for election to the Board of Directors, together with all other information required by subsection (b) of this Section 2Section 2, and so long as the Demanding Person has otherwise complied with this Section 2Section 2, then the Demanding Person’s Special Meeting Demand shall be deemed to be, and shall substitute for, the notice contemplated by Paragraph (B) of Section 13 of this Article II and such Demanding Person shall be deemed to have given timely notice of such nominations in the proper form for purposes of Paragraph (B) of Section 13 of this Article II and otherwise to have complied with the notice procedures set forth in Paragraph (B)(2) of Section 13 of this Article II, so long as such Demanding Person (y) provides any updates or supplements to such Special Meeting Demand at such times and in the forms required by subsection (c) of this Section 2., and (z) provides notice and conducts a solicitation pursuant to and in accordance with Rule 14a-19 promulgated under the Exchange Act; provided, however, for the avoidance of doubt, the Demanding Person and the candidate nominated by a Demanding Person must comply with the requirements of the other Paragraphs of Section 13 of this Article II, to the extent applicable, including the requirements of Paragraph (D) of Section 13 of this Article II.

(g)(f) Anything in this Section 2 to the contrary notwithstanding, in the case of a special meeting called by the Secretary following receipt of Special Meeting Demand(s) from stockholders holding the Requisite

3

Percentage in accordance with clause (ii) of the first sentence of Section 2(a), the Board of Directors may submit its own proposal or proposals for consideration at such special meeting, and at the direction of the Board of Directors, such proposal or proposals shall be included in the notice for the special meeting as a purpose or purposes for which the meeting is called.

(h)(g) A stockholder may revoke a Special Meeting Demand by written revocation delivered to, or mailed and received by, the Secretary at the principal executive office of the Corporation at any time before the special meeting. If any such revocation(s) are delivered to or received by the Secretary after the Secretary’s receipt of Special Meeting Demands from the holders of the Requisite Percentage, and as a result of such revocation(s), there no longer are unrevoked demands from stockholders holding the Requisite Percentage, the Board of Directors shall have the discretion to determine whether or not to proceed with the special meeting.

(i)Notwithstanding anything in these Bylaws to the contrary, unless otherwise required by law, (i) no Demanding Person shall solicit proxies in support of the election of director nominees at any meeting of stockholders of the Corporation other than the Board of Directors’ nominees unless such Demanding Person has complied with Rule 14a-19 under the Exchange Act in connection with the solicitation of such proxies with respect to such meeting, including the provision to the Corporation of notices required thereunder in a timely manner, (ii) if a Demanding Person (1) provides notice pursuant to Rules 14a-19(a)(1) and (b) under the Exchange Act and (2) subsequently fails to comply with the requirements of Rule 14a‑19 under the Exchange Act (including the provision to the Corporation of notices required thereunder in a timely manner and whether the Demanding Person on whose behalf a nomination is made solicited (or is part of a group which solicited) proxies in support of such nomination in compliance with the Demanding Person’s representation as required by Section 2(b)(vi)), then such nomination shall be disregarded, and the Corporation shall disregard any proxies or votes solicited for the Demanding Person’s nominees notwithstanding that proxies or votes with respect to such nominees may have been received by the Corporation, but such proxies or votes will be considered for the purposes of establishing a quorum, and (iii) if a stockholder intending to make a nomination at a special meeting of stockholders or propose business to be transacted at a special meeting of stockholders does not provide the information required under this Section 2 to the Corporation (including the updated and supplemented information required by Section 2(c)), in each case by the deadlines specified therein, or the stockholder (or a qualified representative of the stockholder) is not present in person (as defined below) at such meeting to present the nomination or proposed business, then such nomination shall be disregarded and such proposed business shall not be transacted, and the Corporation shall disregard any proxies or votes solicited for the Demanding Person’s nominee(s) or the proposed business notwithstanding that proxies or votes with respect to such nominees or proposed business may have been received by the Corporation, but such proxies or votes will be considered for the purposes of establishing a quorum.

(j)(h) For purposes of this Section 2, (i) “Demanding Person” shall mean (A) each stockholder making a demand pursuant to the first sentence of subsection (a) of this Section 2, (B) the beneficial owner or beneficial owners, if different, on whose behalf such notice is given, and (C) any affiliates or associates (each within the meaning of Rule 12b-2 under the Exchange Act) of such stockholder or beneficial owner, (ii) “Exchange Act” shall have the meaning provided in Section 13 of this Article II, and (iii) “publicly announce” shall mean making a public announcement (as defined in Section 13 of this Article II)., (iii) a “qualified representative” shall mean a duly authorized officer, manager or partner of the stockholder or any other person authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the special meeting of stockholders and such person must provide such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, to the Secretary of the Corporation at or prior to such special meeting; and (iv) “present in person” shall mean that the stockholder making the nomination or proposing that the business be brought before the special meeting, or a qualified representative of such proposing stockholder, appears in person at such special meeting if it is held solely at a physical location or, in the event that the special meeting permits stockholder attendance by means of remote communication, appears by such means of remote communication.

(k)Any written notice required to be delivered by a stockholder to the Corporation pursuant to this Section 2 must be given, either by personal delivery or by registered or certified mail, postage prepaid, to the Secretary of the Corporation at the Corporation’s principal executive office.

Section 3Notice of Meetings.(a) The Corporation shall give notice of any annual or special meeting of stockholders in the manner set forth in the General Corporation Law of the State of Delaware (the “DGCL”).

4

(b)Whenever notice is required to be given under any provision of the DGCL, the Certificate of Incorporation of the Corporation (the “Certificate of Incorporation”) or these Bylaws, a written waiver, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by any provision of the DGCL, the Certificate of Incorporation or these Bylaws.

Section 3 Notice of Meetings. (a) The Corporation shall give notice of any annual or special meeting of stockholders. Notices of meetings of the stockholders shall state the place, if any, date, and hour of the meeting, the record date for determining stockholders entitled to vote at the meeting, if such record date is different from the record date for determining stockholders entitled to notice of the meeting, and the means of remote communication, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting. In the case of a special meeting, the notice shall state the purpose or purposes for which the meeting is called. No business other than that specified in the notice thereof shall be transacted at any special meeting. Unless otherwise provided by applicable law or the Certificate of Incorporation, notice shall be given to each stockholder entitled to receive notice of such meeting not fewer than ten (10) days or more than sixty (60) days before the date of the meeting.

(b) Notice to stockholders may be given by personal delivery, mail, or, with the consent of the stockholder entitled to receive notice, by facsimile or other means of electronic transmission. If mailed, such notice shall be delivered by postage prepaid envelope directed to each stockholder at such stockholder’s address as it appears in the records of the Corporation and shall be deemed given when deposited in the United States mail. Notice given by electronic transmission pursuant to this subsection shall be deemed given: (i) if by facsimile telecommunication, when directed to a facsimile telecommunication number at which the stockholder has consented to receive notice, (ii) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice, (iii) if by posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice, and (iv) if by any other form of electronic transmission, when directed to the stockholder. An affidavit of the secretary or an assistant secretary or of the transfer agent or other agent of the Corporation that the notice has been given by personal delivery, by mail, or by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

(c) Notice of any meeting of stockholders need not be given to any stockholder if waived by such stockholder either in a writing signed by such stockholder or by electronic transmission, whether such waiver is given before or after such meeting is held. If such a waiver is given by electronic transmission, the electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the stockholder.

Section 4Quorum and Adjournment. Except as otherwise required by law, by the Certificate of Incorporation of the Corporation, or by these Bylaws, the presence, in person or represented by proxy, of the holders of a majority of the aggregate voting power of the stock issued and outstanding, entitled to vote thereat, shall constitute a quorum for the transaction of business at all meetings of the stockholders. If such majority shall not be present or represented at any meeting of the stockholders, a majority of the stockholders present, although less than a quorum, or the presiding officer of such meeting shall have the power to adjourn the meeting to another time and place.

Section 5Adjourned Meetings. When a meeting is adjourned to another date, time and/or place, if any (including an adjournment taken to address a technical failure to convene or continue a meeting using remote communication), unless otherwise provided by these Bylaws, notice need not be given of the adjourned meeting if the date, time, and place, if any, thereof and the means of remote communication, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting, are (i) announced at the meeting at which the adjournment is taken; (ii) displayed, during the time scheduled for the meeting, on the same electronic network used to enable stockholders and proxyholders to participate in the meeting by means of remote communication; or (iii) set forth in the notice of meeting given in accordance with Section 3(a). At the adjourned meeting, the stockholders may transact any business that might have been transacted at the original meeting. If an

5

adjournment is for more than thirty (30) days or, if after an adjournment, a new record date is fixed for determining the stockholders entitled to vote at the adjourned meeting, a notice of the adjourned meeting specifying the new date, time and place (if changed) shall be given to each stockholder entitled to vote at the meeting.

Section 6Vote Required. Except as otherwise provided by law, the Certificate of Incorporation, or these Bylaws:

(a)Each director shall be elected by a majority of the votes cast with respect to the director, provided, however, that the directors shall be elected by the vote of a plurality of the shares represented in person or by proxy at any such meeting and entitled to vote on the election of directors if (i)(A) the Secretary of the Corporation receives a notice that a stockholder has nominated a person for election to the Board of Directors in compliance with the advance notice requirements for stockholder nominees for directors set forth in Article II, Section 13(A) of these Bylaws for annual meetings of the Corporation or Article II, Section 13(B) of these Bylaws for special meetings of the Corporation or otherwise becomes aware that a stockholder has nominated a person for election to the Board of Directors and (B) such nomination has not been withdrawn by such stockholder on or prior to the third business day next preceding the date the Corporation first mails its notice of meeting for such meeting to the stockholders or (ii) the number of nominees for election to the Board of Directors at such meeting exceeds the number of directors to be elected; and

(b)Whenever any corporate action other than the election of directors is to be taken, it shall be authorized by a majority in voting power of the shares present in person or represented by proxy at a meeting of stockholders and entitled to vote on the subject matter.

For purposes of this Section 6 of Article II, a majority of the votes cast means that the number of shares voted “for” a director must exceed the number of votes cast “against” that director (with “abstentions” and “broker nonvotes” not counted as a vote cast either “for” or “against” that director’s election). If directors are to be elected by a plurality of the shares represented in person or by proxy at any such meeting and entitled to vote on the election of directors, then the stockholders shall not be permitted to vote “against” a nominee.

Section 7Manner of Voting; Proxies.(a) At each meeting of stockholders, each stockholder having the right to vote shall be entitled to vote in person or by proxy. Each stockholder shall be entitled to vote each share of stock having voting power and registered in such stockholder’s name on the books of the Corporation on the record date fixed for determination of stockholders entitled to vote at such meeting.

(b)Each person entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only so long as, it is coupled with an interest sufficient in law to support an irrevocable power. Proxies need not be filed with the Secretary of the Corporation until the meeting is called to order, but shall be filed before being voted. Without limiting the manner in which a stockholder may authorize another person or persons to act for such stockholder as proxy, the following shall constitute valid means by which a stockholder may grant such authority:

(i)A stockholder may execute a writing authorizing another person or persons to act for such stockholder as proxy. Execution may be accomplished by the stockholder or the stockholder’s authorized officer, director, employee, or agent signing such writing or causing such person’s signature to be affixed to such writing by any reasonable means including, but not limited to, by facsimile signature; and

(ii)A stockholder may authorize another person or persons to act for such stockholder as proxy by transmitting or authorizing the transmission of a telegram, cablegram, or other means of electronic transmission to the person or persons who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization, or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission; provided, however, that any such telegram, cablegram, or other means of electronic transmission must either set forth or be submitted with information from which it can be determined that the telegram, cablegram, or other electronic transmission was authorized by the stockholder. If it is determined that any such telegram, cablegram, or other electronic transmission is valid, the inspectors

6

or, if there are no inspectors, such other persons making that determination, shall specify the information upon which they relied.

Any copy, facsimile telecommunication, or other reliable reproduction of a writing or electronic transmission authorizing a person or persons to act as proxy for a stockholder may be substituted or used in lieu of the original writing or electronic transmission for any and all purposes for which the original writing or electronic transmission could be used; provided, however, that such copy, facsimile telecommunication, or other reproduction shall be a complete reproduction of the entire original writing or electronic transmission.

(c)Any stockholder directly or indirectly soliciting proxies from other stockholders must use a proxy card that is a color other than white, which shall be reserved for the exclusive use for solicitation by the Board of Directors of the Corporation.

Section 8Remote Communication. For the purposes of these Bylaws, if authorized by the Board of Directors in its sole discretion, and subject to such guidelines and procedures as the Board of Directors may adopt, stockholders and proxyholders may, by means of remote communication:

(a)participate in a meeting of stockholders; and

(b)be deemed present in person and vote at a meeting of stockholders whether such meeting is to be held at a designated place or solely by means of remote communication, provided that (i) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxyholder, (ii) the Corporation shall implement reasonable measures to provide such stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (iii) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the Corporation.

Section 9No Stockholder Action Without a Meeting. Stockholder action by written consent in lieu of a meeting is prohibited by the Certificate of Incorporation.

Section 10Presiding Officer and Secretary.(a) The Chief Executive Officer shall preside at meetings of the stockholders. In the absence of the Chief Executive Officer, the President shall preside at meetings of the stockholders. In the absence of each of the Chief Executive Officer and the President, any director or officer designated by the Board of Directors shall preside at meetings of the stockholders.

(b)The Secretary of the Corporation shall act as secretary of all meetings of the stockholders, but, in the absence of the Secretary, the Assistant Secretary designated in accordance with Section 11(b) of Article IV of these Bylaws shall act as secretary of meetings of the stockholders. In the absence of the Secretary and any designated Assistant Secretary, the presiding officer of the meeting may appoint any person to act as secretary of the meeting.

Section 11Conduct of Meetings. At each meeting of stockholders, the presiding officer of the meeting shall fix and announce the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at the meeting and shall determine the order of business and all other matters of procedure. The Board of Directors may adopt by resolution such rules, regulations, and procedures for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with any such rules and regulations adopted by the Board of Directors, the presiding officer of the meeting shall have the right and authority to convene and to adjourn the meeting and to establish rules, regulations, and procedures, which need not be in writing, for the conduct of the meeting and to maintain order and safety. Without limiting the foregoing, he or she may:

(a)restrict attendance at any time to bona fide stockholders of record and their proxies and other persons in attendance at the invitation of the presiding officer or Board of Directors;

7

(b)place restrictions on entry to the meeting after the time fixed for the commencement thereof;

(c)restrict dissemination of solicitation materials and use of audio or visual recording devices at the meeting;

(d)adjourn the meeting without a vote of the stockholders, whether or not there is a quorum present; and

(e)make rules governing speeches and debate, including time limits and access to microphones.

The presiding officer of the meeting shall act in his or her absolute discretion, and his or her rulings shall not be subject to appeal.

Section 12Inspectors of Election. The Corporation may, and shall if required by law, in advance of any meeting of stockholders, appoint one or more inspectors of election, who may be employees of the Corporation, to act at the meeting or any adjournment thereof and to make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector so appointed or designated is able to act at a meeting of stockholders, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath to execute faithfully the duties of inspector with strict impartiality and according to the best of his or her ability. The inspector or inspectors so appointed or designated shall (a) ascertain the number of shares of capital stock of the Corporation outstanding and the voting power of each such share, (b) determine the shares of capital stock of the Corporation represented at the meeting and the validity of proxies and ballots, (c) count all votes and ballots, (d) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors, and (e) certify their determination of the number of shares of capital stock of the Corporation represented at the meeting and such inspectors’ count of all votes and ballots. Such certification and report shall specify such other information as may be required by law. In determining the validity and counting of proxies and ballots cast at any meeting of stockholders of the Corporation, the inspectors may consider such information as is permitted by applicable law. No person who is a candidate for an office at an election may serve as an inspector at such election.

Section 13Notice of Stockholder Business and Nominations.

(A) Annual Meetings of Stockholders.

(1) Nominations of persons for election to the Board of Directors and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders only (a) pursuant to the Corporation’s notice of meeting (or any supplement thereto), (b) by or at the direction of the Board of Directors, or (c) by any stockholder of the Corporation (present in person (as defined below) (i) who was a stockholder of record of the Corporation (and, with respect to any beneficial owner, if different, on whose behalf such business is proposed or such nomination or nominations are made, only if such beneficial owner was the beneficial owner of shares of the Corporation) both at the time the notice provided for in Paragraphs (A)(2) and (A)(3) of this Section 13 is delivered to the Secretary of the Corporation and on the record date for the determination of stockholders entitled to vote at the meeting, (ii) who is entitled to vote at the meeting upon such election of directors or upon such business, as the case may be, and (iii) who complies with the notice procedures set forth in Paragraphs (A)(2) and (A)(3) of this Section 13 and, in the case of nominations of persons for election to the Board of Directors, with the requirements of Rule 14a-19 under the Exchange Act. Except for proposals properly made in accordance with Rule 14a-8 under the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (as so amended and inclusive of such rules and regulations, the “Exchange Act”), and included in the notice of meeting given by or at the direction of the Board of Directors, the foregoing clause (c) shall be the exclusive means for a stockholder to propose business to be brought before an annual meeting of stockholders. In addition, for business (other than the nomination of persons for election to the Board of Directors) to be properly brought before an annual meeting by a stockholder, such business must be a proper matter for stockholder action pursuant to the Certificate of Incorporation, these Bylaws, and applicable law.

8

(2) For nominations or other business to be properly brought before an annual meeting of stockholders by a stockholder pursuant to clause (c) of Paragraph (A)(1) of this Section 13, the stockholder (a) must have given timely notice thereof in writing and in proper form to the Secretary at the principal executive offices of the Corporation, and (b) must provide any updates or supplements to such notice at such times and in the forms required by this Section 13. To be timely, a stockholder’s notice relating to an annual meeting shall be delivered to, or mailed to and received by, the Secretary at the principal executive offices of the Corporation not later than the close of business on the ninetieth (90th) day and not earlier than the close of business on the one hundred twentieth (120th) day before the date of the one-year anniversary of the immediately preceding year’s annual meeting (provided, however, that if the date of the annual meeting is more than thirty (30) days before or more than sixty (60) days after such anniversary date, notice by the stockholder must be so delivered, or mailed and received, not earlier than the close of business on the one hundred twentieth (120th) day before such annual meeting and not later than the close of business on the later of the ninetieth (90th) day before such annual meeting or the tenth (10th) day following the day on which public announcement (as defined below) of the date of such meeting is first made by the Corporation). In no event shall the public announcement of an adjournment or postponement of an annual meeting of stockholders commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.

(3) To be in proper form for purposes of this Section 13, a stockholder’s notice to the Secretary (whether pursuant to this Paragraph (A) or Paragraph (B) of this Section 13) must set forth:

(a) as to each Proposing Person (as defined below), (i) the name and address of such Proposing Person (including, if applicable, the name and address that appear on the Corporation’s books and records) and (ii) the class or series and number of shares of capital stock of the Corporation that are, directly or indirectly, owned of record or beneficially owned (within the meaning of Rule 13d-3 under the Exchange Act) by such Proposing Person (provided that for purposes of this Section 13, such Proposing Person shall in all events be deemed to beneficially own any shares of any class or series and number of shares of capital stock of the Corporation as to which such Proposing Person has a right to acquire beneficial ownership at any time in the future);

(b) as to each Proposing Person, (i) any derivative, swap, or other transaction or series of transactions engaged in, directly or indirectly, by such Proposing Person, the purpose or effect of which is to give such Proposing Person economic risk similar to ownership of shares of any class or series of capital stock of the Corporation, including due to the fact that the value of such derivative, swap, or other transactions are determined by reference to the price, value, or volatility of any shares of any class or series of capital stock of the Corporation, or which derivative, swap, or other transactions provide, directly or indirectly, the opportunity to profit from any increase in the price or value of shares of any class or series of capital stock of the Corporation (“Synthetic Equity Interests”), which Synthetic Equity Interests shall be disclosed without regard to whether (x) the derivative, swap, or other transactions convey any voting rights in such shares to such Proposing Person, (y) the derivative, swap, or other transactions are required to be, or are capable of being, settled through delivery of such shares, or (z) such Proposing Person may have entered into other transactions that hedge or mitigate the economic effect of such derivative, swap, or other transactions, (ii) any proxy (other than a revocable proxy or consent given in response to a solicitation made pursuant to, and in accordance with, Section 14(a) of the Exchange Act by way of a solicitation statement filed on Schedule 14A), agreement, arrangement, understanding, or relationship pursuant to which such Proposing Person has or shares a right to vote any shares of any class or series of capital stock of the Corporation (including the number of shares and class or series of capital stock of the Corporation that are subject to such proxy, agreement, arrangement, understanding, or relationship), (iii) any agreement, arrangement, understanding, or relationship, including any repurchase or similar so-called “stock borrowing” agreement or arrangement, engaged in, directly or indirectly, by such Proposing Person, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) of shares of any class or series of capital stock of the Corporation by, manage the risk of share price changes for, or increase or decrease the voting power of, such Proposing Person with respect to the shares of any class or series of capital stock of the Corporation, or that provides, directly or indirectly, the opportunity to profit from any decrease in the price or value of the shares of any class or series of capital stock of the Corporation (“Short Interests”), (iv) any rights to dividends on the shares of any class or series of capital stock of the Corporation owned beneficially by such Proposing Person that are separated or separable from the underlying shares of the Corporation, (v) any performance related fees (other than an asset based fee) to which such Proposing Person is entitled based on any increase or decrease in the price or value of shares of any class or series of the capital stock of the Corporation, or any Synthetic Equity Interests or Short Interests, if any, and (vi) any other information relating to such Proposing Person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with

9

solicitations of proxies or consents by such Proposing Person in support of the nominations of directors for election or business proposed to be brought before the meeting pursuant to Regulation 14A under the Exchange Act (the disclosures to be made pursuant to the foregoing clauses (i) through (vi) are referred to as “Disclosable Interests”); provided, however, that Disclosable Interests shall not include any such disclosures with respect to the ordinary course business activities of any broker, dealer, commercial bank, trust company, or other nominee who is a Proposing Person solely as a result of being the stockholder directed to prepare and submit the notice required by these Bylaws on behalf of a beneficial owner;

(c) if such notice pertains to the nomination by the stockholder of a person or persons for election to the Board of Directors (each, a “nominee”), as to each nominee, (i) the name, age, business and residence address, and principal occupation or employment of the nominee, (ii) all other information relating to the nominee that would be required to be disclosed about such nominee if proxies were being solicited for the election of the nominee as a director in an election contest (whether or not such proxies are or will be solicited), or that is otherwise required, in each case pursuant to and in accordance with Regulation 14A under the Exchange Act, (iii) such nominee’s written consent to being named in the proxy statement, if any, as a nominee andin any proxy statement relating to the meeting and any associated proxy card, and to serving as a director if elected, and (iv) all information with respect to such nominee that would be required to be set forth in a stockholder’s notice pursuant to this Section 1313 if such nominee were a Proposing Person;

(d) if the notice relates to any business (other than the nomination of persons for election to the Board of Directors) that the stockholder proposes to bring before the meeting, (i) a reasonably brief description of the business desired to be brought before the meeting, (ii) the text of the proposal or business (including the text of any resolutions proposed for consideration and if such business includes a proposal to amend thethese Bylaws of the Corporation, the language of the proposed amendment), (iii) the reasons for conducting such business at the meeting, and (iv) any material interest in such business of each Proposing Person;

(e) a representation that the stockholder giving the notice is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business or nomination; and

(f) a representation whether any Proposing Person intendswill, or is part of a group that intendswill, (i) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve or adopt the proposal or elect the nominee and/or (ii) otherwise to solicit proxies from stockholders in support of such proposal or nomination.; and

The Corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine (i) the eligibility of such proposed nominee to serve as a director of the Corporation, and (ii) whether such nominee qualifies as an “independent director” or “audit committee financial expert” under applicable law, securities exchange rule or regulation, or any publicly disclosed corporate governance guideline or committee charter of the Corporation.

(g)a representation whether any Proposing Person will, or is part of a group that will, (i) solicit proxies from the holders of the Corporation’s outstanding capital stock representing at least 67% of the voting power of the Corporation's outstanding capital stock entitled to vote in the election of directors in support of each nominee, (ii) include a statement to that effect in its proxy statement and/or its form of proxy, (iii) otherwise comply with Rule 14a-19 under the Exchange Act and (iv) provide the Secretary of the Corporation not less than five (5) business days prior to the applicable meeting or any adjournment or postponement thereof, with reasonable documentary evidence that such each Proposing Person complied with such representations.

(4) Notwithstanding anything in the second sentence of paragraphParagraph (A)(2) of this Section 13 to the contrary, if the number of directors to be elected to the Board of Directors of the Corporation at an annual meeting is increased and there is no public announcement by the Corporation naming all of the Board of Directors’ nominees for director or specifying the size of the increased Board of Directors at least one hundred (100) days before the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this Section 13 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to, or mailed to and received by, the Secretary at the principal executive offices of the

10

Corporation not later than the close of business on the tenth (10th) day following the day on which such public announcement is first made by the Corporation.

(5) Only such persons who are nominated in accordance with the procedures set forth in Paragraph (A) of this Section 13 (including those persons nominated by or at the direction of the Board of Directors), and with respect to persons nominated by a stockholder, only such persons who comply with the procedures set forth in Paragraph (D) of this Section 13, shall be eligible to be elected at an annual meeting of stockholders of the Corporation to serve as directors. Only such business shall be conducted at an annual meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in Paragraph (A) of this Section 13. Except as otherwise provided by law, the chairmanpresiding officer of an annual meeting of stockholders shall have the power and duty (a) if the facts warrant, to determine that a nomination or any business proposed to be brought before the annual meeting was not made or was not proposed, as the case may be, in accordance with the procedures set forth in Paragraph (A) of this Section 13, and (b)(i) if any proposed nomination or business was not made or waswas not made in compliance with Paragraph (A) of this Section 13, or if the solicitation in support of nominees for the election of directors other than the Board of Directors’ nominees was not conducted in compliance with Rule 14a-19 under the Exchange Act, or if a person nominated by a stockholder did not comply with the procedures set forth in Paragraph (D) of this Section 13, to declare that such nomination shall be disregarded, notwithstanding that proxies or votes in respect of such nomination may have been received by the Corporation, but such proxies or votes will be considered for the purposes of establishing a quorum, and (ii) if any proposed business was not proposed in compliance with Paragraph (A) of this Section 13, to declare that such nomination shall be disregarded or that such proposed business shall not be transacted, notwithstanding that proxies or votes in respect of such proposed business may have been received by the Corporation, but such proxies or votes will be considered for the purposes of establishing a quorum.

(B) Special Meetings of Stockholders.

(1) Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting pursuant to Section 2 of these Bylaws. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting only (a) by or at the direction of the Board of Directors or (b) if a purpose for such meeting as stated in the Corporation’s notice for such meeting is the election of one or more directors, by any stockholder of the Corporation present in person (i) who was a stockholder of record of the Corporation (and, with respect to any beneficial owner, if different, on whose behalf such nomination or nominations are made, only if such beneficial owner was the beneficial owner of shares of the Corporation) both at the time the notice provided for in Paragraph (B)(2) of this Section 13 is delivered to the Secretary of the Corporation and on the record date for the determination of stockholders entitled to vote at the special meeting, (ii) who is entitled to vote at the meeting and upon such election, and (iii) who complies with the notice procedures set forth in Paragraph (B)(2) of this Section 13 and with the requirements of Rule 14a-19 under the Exchange Act; provided, however, that a stockholder may nominate persons for election at a special meeting only to such position(s) as specified in the Corporation’s notice of the meeting.

(2) If a special meeting has been called in accordance with Section 2 of this Article II for the purpose of electing one or more directors to the Board of Directors, then for nominations of persons for election to the Board of Directors to be properly brought before such special meeting by a stockholder pursuant to clause (b) of Paragraph (B)(1) of this Section 13, the stockholder (a) must have given timely notice thereof in writing and in the proper form to the Secretary of the Corporation at the principal executive offices of the Corporation, and (b) must provide any updates or supplements to such notice at such times and in the forms required by this Section 13. To be timely, a stockholder’s notice relating to a special meeting shall be delivered to, or mailed to and received by, the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the one hundred twentieth (120th) day before such special meeting and not later than the close of business on the later of the ninetieth (90th) day before such special meeting or the tenth (10th) day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. To be in proper form for purposes of this Paragraph (B) of this Section 13, such notice shall set forth the information required by clauses (a), (b), (c), (e), and (f) and (g) of Paragraph (A)(3) of this Section 13.

11

(3) Only such persons who are nominated in accordance with the procedures set forth in Paragraph (B) of this Section 13 (including those persons nominated by or at the direction of the Board of Directors), and with respect to persons nominated by a stockholder, only such persons who comply with the procedures set forth in Paragraph (D) of this Section 13, shall be eligible to be elected at a special meeting of stockholders of the Corporation to serve as directors. Except as otherwise provided by law, the chairmanpresiding officer of a special meeting of stockholders shall have the power and duty (a) if the facts warrant, to determine that a nomination proposed to be made at the special meeting was not made in accordance with the procedures set forth in Paragraph (B) of this Section 13, and (b) if any proposed nomination was not made in compliance with Paragraph (B) of this Section 13, or if the solicitation in support of nominees for the election of directors other than the Board of Directors’ nominees was not conducted in compliance with Rule 14a-19 under the Exchange Act, or if a person nominated by a stockholder did not comply with the procedures set forth in Paragraph (D) of this Section 13, to declare that such nomination shall be disregarded, notwithstanding that proxies or votes in respect of such nomination may have been received by the Corporation, but such proxies or votes will be considered for the purposes of establishing a quorum.

(C) General.

(1) A stockholder providing notice of nominations of persons for election to the Board of Directors at an annual or special meeting of stockholders or notice of business proposed to be brought before an annual meeting of stockholders shall further update and supplement such notice so that the information provided or required to be provided in such notice pursuant to Paragraph (A)(3)(a) through Paragraph (A)(3)(f) of this Section 13 shall be true and correct both as of the record date for the determination of stockholders entitled to notice of the meeting and as of the date that is ten (10) business days before the meeting or any adjournment or postponement thereof, and such updated and supplemental information shall be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation (a) in the case of information that is required to be updated and supplemented to be true and correct as of the record date for the determination of stockholders entitled to notice of the meeting, not later than the later of five (5) business days after such record date or five (5) business days after the public announcement of such record date, and (b) in the case of information that is required to be updated and supplemented to be true and correct as of ten (10) business days before the meeting or any adjournment or postponement thereof, not later than eight (8) business days before the meeting or any adjournment or postponement thereof (or if not practicable to provide such updated and supplemental information not later than eight (8) business days before any adjournment or postponement, on the first practicable date before any such adjournment or postponement). For the avoidance of doubt, the obligation to update and supplement as set forth in this paragraph or any other Section of these Bylaws shall not limit the Corporation’s rights with respect to any deficiencies in any notice provided by a stockholder, extend any applicable deadlines hereunder, or enable or be deemed to permit a stockholder who has previously submitted notice under these Bylaws to amend any notice (including any nomination) or to submit any new notice (including any nomination), including by changing or adding nominees, matters, business or resolutions proposed to be brought before a meeting of the stockholders.

(2)Each Proposing Person seeking to nominate a person for election as a director of the Corporation shall deliver evidence to the Secretary of the Corporation that the Proposing Person solicited proxies from holders representing at least 67% of the voting power of the Corporation’s outstanding capital stock entitled to vote in the election of directors, which evidence shall be delivered to the Secretary at the principal executive offices of the Corporation not later than five (5) business days after the Proposing Person files a definitive proxy statement in connection with the applicable annual or special meeting of stockholders. Notwithstanding the foregoing provisions of this Section 13, unless otherwise required by law, (i) no Proposing Person shall solicit proxies in support of the election of director nominees at any annual or special meeting of stockholders of the Corporation other than the Board of Directors’ nominees unless such Proposing Person has complied with Rule 14a-19 under the Exchange Act in connection with the solicitation of such proxies with respect to such meeting, including the provision to the Corporation of notices required thereunder in a timely manner, (ii) if a Proposing Person (1) provides notice pursuant to Rules 14a-19(a)(1) and (b) under the Exchange Act and (2) subsequently fails to comply with the requirements of Rule 14a‑19 under the Exchange Act (including the provision to the Corporation of notices required thereunder in a timely manner and whether the Proposing Person on whose behalf a nomination is made solicited (or is part of a group which solicited) proxies in support of such nomination in compliance with the Proposing Person’s representation as required by Section 13(A)(3)(f)), then such nomination shall be disregarded, and the Corporation shall disregard any proxies or votes solicited for the Proposing Person’s nominees notwithstanding that proxies or votes with respect to such nominees may have been received by the Corporation, but such proxies or votes will be considered for the

12

purposes of establishing a quorum, and (iii) if a stockholder nominating a person for election as a director of the Corporation at an annual or special meeting of stockholders of the Corporation does not provide the information required under this Section 13 to the Corporation (including the updated and supplemented information required by Section 13(C)(1)), in each case by the deadlines specified therein, then such nomination shall be disregarded, and the Corporation shall disregard any proxies or votes solicited for the stockholder’s nominees notwithstanding that proxies or votes with respect to such nominees may have been received by the Corporation, but such proxies or votes will be considered for the purposes of establishing a quorum.

(23) Notwithstanding the foregoing provisions of this Section 13Section 13, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) doesis not appearpresent in person at the annual or special meeting of stockholders of the Corporation to present a nomination or proposed business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies or votes in respect of such vote may have been received by the Corporation. For purposes of this Section 13, to be considered a qualified representative of the stockholder, a person must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders., but such proxies or votes will be considered for the purposes of establishing a quorum.

(34) For purposes of this Section 13Section 13, (a) “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press, or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14, or 15(d) of the Exchange Act, and (b) “Proposing Person” shall mean (i) the stockholder giving the notice required by Paragraph (A) or Paragraph (B) of this Section 13, (ii) the beneficial owner or beneficial owners, if different, on whose behalf such notice is given, and (iii) any affiliates or associates (each within the meaning of Rule 12b-2 under the Exchange Act for purposes of these Bylaws) of such stockholder or beneficial owner., (c) a “qualified representative” shall mean a duly authorized officer, manager or partner of the stockholder or any other person authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the annual or special meeting of stockholders and such person must provide such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, to the Secretary of the Corporation at or prior to such annual or special meeting; and (d) “present in person” shall mean that the stockholder making the nomination or proposing that the business be brought before the special meeting, or a qualified representative of such proposing stockholder, appears in person at such special meeting if it is held solely at a physical location or, in the event that the special meeting permits stockholder attendance by means of remote communication, appears by such means of remote communication.

(45) Paragraph (A) of this Section 13 is expressly intended to apply to any business proposed to be brought before an annual meeting of stockholders other than any proposal made pursuant to Rule 14a-8 under the Exchange Act. Nothing in this Section 1313 shall be deemed to (a) affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 (or any successor thereto) promulgated under the Exchange Act, (b) confer upon any stockholder a right to have a nominee or any proposed business included in the Corporation’s proxy statement, or (c) affect any rights of the holders of any class or series of preferred stock of the Corporation to nominate and elect directors pursuant to and to the extent provided in any applicable provisions of the Certificate of Incorporation.

(6)Any written notice required to be delivered by a stockholder to the Corporation pursuant to this Section 13 must be given, either by personal delivery or by registered or certified mail, postage prepaid, to the Secretary of the Corporation at the Corporation’s principal executive office.

(D)Additional Requirements For Valid Nomination Of Candidates To Serve As Director And, If Elected, To Be Seated As Directors

(1)Candidate to Provide Questionnaire, Representation and Agreement. To be eligible to be a candidate for election as a director of the Corporation at an annual meeting or special meeting of the stockholders of the Corporation, a candidate must be nominated in the manner prescribed in this Section 13 and the candidate for nomination, whether nominated by the Board of Directors of the Corporation or by a stockholder, must have previously

13

delivered (in accordance with the time period prescribed for delivery in a notice to such candidate given by or on behalf of the Board of Directors), to the Secretary of the Corporation at the principal executive offices of the Corporation, (a) a completed written questionnaire with respect to the background, qualifications, stock ownership and independence of such proposed nominee and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the Corporation upon written request of a stockholder therefor) and (b) a written representation and agreement (in a form provided by the Corporation upon written request of a shareholder therefor) that such candidate for nomination (i) is not and will not become a party to any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question if such agreement, arrangement or understanding has not been disclosed to the Corporation, or if such agreement, arrangement or understanding could limit or interfere with such person’s ability to comply, if elected as a director of the Corporation, with such person’s fiduciary duties under applicable law, (ii) may not be, and may not become, a party to any compensatory, payment, indemnification or other financial agreement, arrangement or understanding with any person or entity other than the Corporation in connection with service or action as a director that has not been disclosed to the Corporation and (iii) will comply with all of the Corporation’s corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines, and any other Corporation policies and guidelines applicable to directors (and, if requested by any candidate for nomination, the Secretary of the Corporation shall provide to such candidate for nomination all such policies and guidelines then in effect).

(2)Candidate to Furnish Certain Other Information. The Corporation may require any candidate nominated for election as a director of the Corporation, whether nominated by the Board of Directors of the Corporation or by a stockholder, to furnish to the Corporation such additional information as it may reasonably require to permit the Board of Directors to determine (a) the eligibility of such nominee to serve as a director of the Corporation, and (b) whether such nominee qualifies as an “independent director” or “audit committee financial expert” under applicable law, securities exchange rule or regulation, or any publicly disclosed corporate governance guideline or committee charter of the Corporation or any publicly disclosed standards used by the Board of Directors in determining and disclosing the independence of the Corporation’s directors.

(3)Updating Candidate Information. A candidate nominated for election as a director of the Corporation, whether nominated by the Board of Directors of the Corporation or by a stockholder, shall further update and supplement the materials delivered pursuant to this Paragraph (D), if necessary, so that the information provided or required to be provided pursuant to this Paragraph (D) shall be true and correct as of the record date for shareholders entitled to vote at the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to, or mailed and received by, the Secretary of the Corporation at the principal executive offices of the Corporation (or any other office specified by the Corporation in any public disclosure) not later than five (5) business days after the record date for shareholders entitled to vote at the meeting (in the case of the update and supplement required to be made as of such record date), and not later than eight (8) business days prior to the date for the meeting or, if practicable, any adjournment or postponement thereof (and, if not practicable, on the first practicable date prior to the date to which the meeting has been adjourned or postponed) (in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof). For the avoidance of doubt, the obligation to update and supplement as set forth in this paragraph or any other Section of these Bylaws shall not limit the Corporation’s rights with respect to any deficiencies in any notice provided by a stockholder, extend any applicable deadlines hereunder, or enable or be deemed to permit a stockholder who has previously submitted notice under these Bylaws to amend any notice (including any nomination) or to submit any new notice (including any nomination), including by changing or adding nominees, matters, business or resolutions proposed to be brought before a meeting of the stockholders.

(4)Rejection of Nominee for Non-compliance. No candidate nominated for election as a director of the Corporation shall be eligible for nomination as a director of the Corporation unless such candidate has complied with this Paragraph (D).

Section 14Record Dates.

(f)In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which

14

record date shall not be more than sixty (60) or fewer than ten (10) days before the date of such meeting. If the Board of Directors so fixes a record date for determining the stockholders entitled to notice of any meeting of stockholders, such date shall also be the record date for determining the stockholders entitled to vote at such meeting, unless the Board of Directors determines, at the time it fixes the record date for determining the stockholders entitled to notice of such meeting, that a later date on or before the date of the meeting shall be the record date for determining the stockholders entitled to vote at such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of and to vote at any meeting of stockholders or any adjournment thereof shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of such meeting; provided, however, that the Board of Directors may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to receive notice of such adjourned meeting the same or an earlier date as that fixed for determining the stockholders entitled to vote at such adjourned meeting in accordance with the foregoing provisions of this subsection (a) of this Section 14.

(g)In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution, or allotment of any rights, or the stockholders entitled to exercise any rights in respect of any change, conversion, or exchange of capital stock, or for the purpose of any other lawful action, except as may otherwise be provided in these Bylaws, the Board of Directors may fix a record date. Such record date shall not precede the date upon which the resolution fixing such record date is adopted, and shall not be more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

Article III
DIRECTORS

Section 1Number. The number of directors that shall constitute the whole Board of Directors initially shall be nine (9), and thereafter shall be no fewer than six (6) and no greater than fifteen (15), the exact number of directors to be determined from time to time by resolution adopted by the Board of Directors.

Section 2Powers. Subject to any limitations set forth in the Certificate of Incorporation and to any provision of the General Corporation Law of the State of DelawareDGCL relating to powers or rights conferred upon or reserved to the stockholders or the holders of any class or series of the Corporation’s issued and outstanding stock, the business and affairs of the corporation shall be managed, and all corporate powers shall be exercised, by or under the direction of the Board of Directors.

Section 3Resignations and Removal.(a) Any director may resign at any time by giving notice in writing or by electronic transmission to the Board of Directors or the Secretary; provided, however, that if such notice is given by electronic transmission, such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the director. Such resignation shall take effect at the date of receipt of such notice or at any later time specified therein. Acceptance of such resignation shall not be necessary to make it effective unless the resignation specifies that it will not be effective unless accepted.

(b)Except as otherwise may be provided in the Certificate of Incorporation, any director or the entire Board of Directors may be removed, with or without cause, by the holders of capital stock having a majority in voting power of the shares entitled to vote in the election of directors.

(c)Without limiting the foregoing, any incumbent director who is nominated for election by the Board of Directors or a committee thereof shall, as a condition to such nomination submit, (a) in the case of a contested election, a conditional letter of resignation and, (b) in the case of an uncontested election, a conditional and irrevocable letter of resignation, in each case to the ChairmanChair of the Board. If an incumbent director is not elected, the Nominating, Governance & Sustainability Committee of the Board (or any successor committee thereto whose purpose includes assisting the Board in identifying candidates for service on the Board, the “Nominating and Governance Committee”) will consider the conditional resignation of such nominee and make a recommendation to the Board of Directors on whether to accept or reject the conditional resignation, or whether other action should be taken. The Board of Directors will act on the Nominating and Governance Committee’s recommendation and publicly

15

disclose its decision and the rationale behind it within 90 days from the date of the certification of the election results. The director whose conditional resignation is being considered will not participate in the Nominating and Governance Committee’s recommendation or the Board of Directors’ decision. In addition, if there are not at least two members of the Nominating and Governance Committee who either were elected at the meeting or did not stand for election, then each of the independent members of the Board of Directors who either were elected at the meeting or did not stand for election shall appoint a committee amongst themselves to consider the resignation offer and recommend to the Board of Directors whether to accept it (which committee of the independent members shall act in lieu of the Nominating and Governance Committee with respect to the resignation offer in such situation). Each director shall hold office for the term for which he or she is elected and until his or her successor shall have been duly elected and qualified or until death, or until he or she shall have resigned or have been removed or disqualified in accordance with these Bylaws and the Certificate of Incorporation.

Section 4Annual Meetings. The Board of Directors shall meet each year as soon as practicable following the annual meeting of stockholders, at the place where such meeting of stockholders has been held, or at such other place as shall be fixed by the Board of Directors (or if not previously fixed by the Board of Directors, by the person presiding over the meeting of the stockholders), for the purpose of election of officers and consideration of such other business as the Board of Directors considers relevant to the management of the Corporation.

Section 5Regular Meetings. Regular meetings of the Board of Directors shall be held on such dates and at such times and places, within or without the State of Delaware, as shall from time to time be determined by the Board of Directors, such determination to constitute the only notice of such regular meetings to which any director shall be entitled. In the absence of any such determination, such meetings shall be held, upon notice to each director in accordance with Section 7 of this Article III, at such times and places, within or without the State of Delaware, as shall be designated by the ChairmanChair of the Board.

Section 6Special Meetings. Special meetings of the Board of Directors shall be held at the call of the ChairmanChair of the Board at such times and places, within or without the State of Delaware, as he or she shall designate, upon notice to each director in accordance with Section 7 of this Article III. Special meetings shall be called by the Chief Executive Officer, President or Secretary on like notice at the written request of any two directors then in office.

Section 7Notice. Notice of any regular (if required) or special meeting of the Board of Directors may be given by personal delivery, mail, telegram, courier service (including, without limitation, Federal Express), facsimile transmission (directed to the facsimile transmission number at which the director has consented to receive notice), electronic mail (directed to the electronic mail address at which the director has consented to receive notice), or other form of electronic transmission pursuant to which the director has consented to receive notice. If notice is given by personal delivery, by facsimile transmission, by telegram, by electronic mail, or by other form of electronic transmission pursuant to which the director has consented to receive notice, then such notice shall be given on not less than twenty-four (24) hours’ notice to each director. If written notice is delivered by mail, then it shall be given on not less than four (4) calendar days’ notice to each director. If written notice is delivered by courier service, then it shall be given on not less than two (2) calendar days’ notice to each director.

Section 8Waiver of Notice. Notice of any meeting of the Board of Directors, or any committee thereof, need not be given to any member if waived by him or her in writing or by electronic transmission, whether before or after such meeting is held, or if he or she shall sign the minutes of such meeting or attend the meeting, except that if such director attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened, then such director shall not be deemed to have waived notice of such meeting. If waiver of notice is given by electronic transmission, such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the director.

Section 9Quorum and Powers of a Majority. At all meetings of the Board of Directors and of each committee thereof, a majority of the total number of directors constituting the whole Board of Directors or such committee shall be necessary and sufficient to constitute a quorum for the transaction of business. The act of a majority of the members present at any meeting of the Board of Directors or a committee thereof at which a quorum is present shall be the act of the Board of Directors or such committee, unless by express provision of applicable law, the

16

Certificate of Incorporation, or these Bylaws, a different vote is required, in which case such express provision shall govern and control. In the absence of a quorum, a majority of the members present at any meeting may, without notice other than announcement at the meeting, adjourn such meeting from time to time until a quorum is present.

Section 10Manner of Acting.(a) Members of the Board of Directors, or any committee thereof, may participate in any meeting of the Board of Directors or such committee by means of conference telephone or other communications equipment by means of which all persons participating therein can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

(b)Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting if all members of the Board of Directors or such committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or such committee; provided, however, that such electronic transmission or transmissions must either set forth or be submitted with information from which it can be determined that the electronic transmission or transmissions were authorized by the director. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

Section 11Organization. Meetings of the Board of Directors shall be presided over by the ChairmanChair of the Board, if any, or in his or her absence by a presiding person chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his or her absence the presiding person at the meeting may appoint any person to act as secretary of the meeting.

Section 12Committees. The Board of Directors may designate one or more committees, each committee to consist of one or more directors, which to the extent provided in said resolution or resolutions shall have and may exercise the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation (including the power and authority to designate other committees of the Board of Directors); provided, however, that no such committee shall have the power or authority in reference to the following matters: (a) approving or adopting, or recommending to the stockholders, any action or matter expressly required by the General Corporation Law of the State of DelawareDGCL to be submitted to stockholders for approval (other than recommending the election or removal of directors) or (b) adopting, amending, or repealing any Bylaw of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee to replace any absent or disqualified member of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting of such committee and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of such absent or disqualified director.

Section 13Committee Procedure.(a)

(a)Except as otherwise determined by the Board of Directors or provided by these Bylaws, each committee shall adopt its own rules governing the time, place, and method of holding its meetings and the conduct of its proceedings and shall meet as provided by such rules or by resolution of the Board of Directors. Unless otherwise provided by these Bylaws or any such rules or resolutions, notice of the time and place of each meeting of a committee shall be given to each member of such committee as provided in Section 7 of this Article III with respect to notices of meetings of the Board of Directors.

(b)Each committee shall keep regular minutes of its proceedings and report the same to the Board of Directors when required.

(c)Any member of any committee may be removed from such committee either with or without cause, at any time, by the Board of Directors at any meeting thereof. Any vacancy in any committee may be filled by the Board of Directors in the manner prescribed by the Certificate of Incorporation or these Bylaws for the original appointment of the members of such committee.

17

Section 14Vacancies and Newly-Created Directorships. Unless otherwise provided in the Certificate of Incorporation or in these Bylaws, vacancies and newly-created directorships resulting from any increase in the authorized number of directors may be filled only by a majority of the directors then in office (and not by stockholders), although less than a quorum, or by a sole remaining director, and directors so chosen shall serve for a term expiring at the annual meeting of stockholders at which the term of office to which they have been elected expires and until such directors’ successors have been duly elected and qualified. Unless otherwise provided in the Certificate of Incorporation or these Bylaws, when one or more directors shall resign from the Board, effective at a future date, a majority of directors then in office, including those who have resigned, shall have the power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective.

Section 15Director Compensation.

(a) (a) The Board of Directors, by a resolution or resolutions, may fix, and from time to time change, the compensation of Directors.

(b)(a) Each director shall be entitled to reimbursement from the Corporation for his or her reasonable expenses incurred with respect to duties as a member of the Board of Directors or any committee thereof.

(c)(b) Nothing contained in these Bylaws shall be construed to preclude any director from serving the Corporation in any other capacity and from receiving compensation from the Corporation for service rendered to it in such other capacity.

Article IV
OFFICERS

Section 1Number. The officers of the Corporation shall include a President and a Secretary. The Board of Directors also shall elect a ChairmanChair of the Board. The Board of Directors also may elect a Chief Executive Officer, a Chief Financial Officer, one or more Vice Presidents (who may have such additional descriptive designations as the Board of Directors may determine), one or more Assistant Secretaries, one or more Treasurers, one or more Assistant Treasurers, and such other officers as the Board of Directors may from time to time deem appropriate or necessary.

Section 2Election of Officers, Term, and Qualifications. The officers of the Corporation shall be elected from time to time by the Board of Directors and shall hold office at the pleasure of the Board of Directors. A vacancy in any office because of death, resignation, removal, disqualification, or any other cause shall be filled in the manner prescribed in this Section 2 for the regular election to such office. Except for the ChairmanChair of the Board, none of the officers of the Corporation needs to be a director of the Corporation. Any two or more offices may be held by the same person to the extent permitted by the General Corporation Law of the State of DelawareDGCL and other applicable law.

Section 3Divisional or Departmental Vice Presidents. The Board of Directors may delegate to the President the power to appoint one or more employees of the Corporation as divisional or departmental vice presidents and fix the duties of such appointees. However, no such divisional or departmental vice president shall be considered to be an officer of the Corporation, the officers of the Corporation being limited to those officers elected by the Board of Directors in accordance with this Article IVArticle IV.

Section 4Removal.AnySubject to the rights, if any, of an officer under any employment contract, any officer may be removed, either with or without cause, by the Board of Directors at any meeting thereof, or to the extent delegated to the ChairmanChair of the Board, by the ChairmanChair of the Board.

Section 5Resignations. Any officer of the Corporation may resign at any time by giving notice in writing or by electronic transmission to the Board of Directors or to the ChairmanChair of the Board; provided, however, that if such notice is given by electronic transmission, such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the officer. Such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein

18

and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective unless the resignation specifies that it will not be effective unless accepted.

Section 6Compensation of Officers. The salaries and other compensation of all officers of the Corporation shall be fixed by or in the manner directed by the Board of Directors from time to time, and no officer shall be prevented from receiving such salary by reason of the fact that he or she also is a director of the Corporation.

Section 7The ChairmanChair of the Board. The ChairmanChair of the Board shall have the powers and duties customarily and usually associated with the office of the ChairmanChair of the Board, as well as such additional powers and duties as may be from time to time assigned to him or her by the Board of Directors. The Chairman of the Board shall preside at meetings of the stockholders and of the Board of Directors.

Section 8The Chief Executive Officer. The Chief Executive Officer shall have responsibility for implementation of the policies of the Corporation, as determined by the Board of Directors, for the general management and administration of the business affairs of the Corporation, and for the supervision of other officers, together with any other powers and duties as may be prescribed by the Board of Directors.

Section 9The President. The President shall have, subject to the supervision, direction, and control of the Board of Directors and the Chief Executive Officer, the general powers and duties of supervision, direction, and management of the affairs and business of the Corporation customarily and usually associated with the position of President, including, without limitation, all powers necessary to direct and control the organizational and reporting relationships within the Corporation. The President shall have such additional powers and duties as may be from time to time assigned to him or her by the Board of Directors or the Chief Executive Officer. In the absence or disability of the President, his or her duties shall be performed by the Chief Executive Officer or such persons as the Board of Directors or the Chief Executive Officer may designate.

Section 10The Vice Presidents. Each Vice President shall have such powers and perform such duties as may from time to time be assigned to him or her by the Board of Directors, the ChairmanChair of the Board, the Chief Executive Officer, or the President.

Section 11The Secretary and Assistant Secretaries.(a) The Secretary shall attend meetings of the Board of Directors and meetings of the stockholders and record all votes and minutes of all such proceedings in a book or books kept for such purpose. The Secretary shall have all such furtherhave such powers and duties as are customarily and usually associated with the position of Secretary or as may from time to time be assigned to him or her by the Board of Directors, the ChairmanChair of the Board, the Chief Executive Officer, or the President.

(b)Each Assistant Secretary shall have such powers and perform such duties as may from time to time be assigned to him or her by the Board of Directors, the ChairmanChair of the Board, the Chief Executive Officer, the President, or the Secretary. In the case of absence or disability of the Secretary, the Assistant Secretary designated by the Chief Executive Officer or the President (or, in the absence of such designation, by the Secretary) shall perform the duties and exercise the powers of the Secretary.

Section 12The Chief Financial Officer. The Chief Financial Officer shall have all such powers and duties as are customarily and usually associated with the position of Chief Financial Officer or as may from time to time be assigned to him or her by the Board of Directors, the ChairmanChair of the Board, the Chief Executive Officer, or the President.

Section 13The Treasurer and Assistant Treasurers.(a) The Treasurer shall have custody of the Corporation’s funds and securities, shall be responsible for maintaining the Corporation’s accounting records and statements, shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation, and shall deposit or cause to be deposited moneys or other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer also shall maintain adequate records of all assets, liabilities, and transactions of the Corporation and shall assure that adequate audits thereof are currently and regularly made. The Treasurer shall have all such furthersuch powers and duties as are customarily and usually associated with the position of Treasurer or as may from time to time be assigned to him or

19

her by the Board of Directors, the ChairmanChair of the Board, the Chief Executive Officer, the President, or the Chief Financial Officer. In the absence of a designation of a Chief Financial Officer by the Board of Directors, the Treasurer shall be the Chief Financial Officer of the Corporation unless the Board of Directors designates another person to be Treasurer.

(b)Each Assistant Treasurer shall have such powers and perform such duties as may from time to time be assigned to him or her by the Board of Directors, the Chief Executive Officer, the Chief Financial Officer, the President, or the Treasurer. In the case of absence or disability of the Treasurer, the Assistant Treasurer designated by the Chief Executive Officer or the President (or, in the absence of such designation, by the Treasurer) shall perform the duties and exercise the powers of the Treasurer.

Article V
STOCK

Section 1Certificates. The shares of capital stock of the Corporation shall be represented by certificates, unless the Certificate of Incorporation otherwise provides or unless the Board of Directors provides by resolution or resolutions that some or all of the shares of any class or classes, or series thereof, of the Corporation’s capital stock shall be uncertificated. Every holder of capital stock of the Corporation represented by certificates shall be entitled to a certificate representing such shares. Certificates for shares of stock of the Corporation shall be issued under the seal of the Corporation, or a facsimile thereof, and shall be numbered and shall be entered in the books of the Corporation as they are issued. Each certificate shall bear a serial number, shall exhibit the holder’s name and the number of shares evidenced thereby, and shall be signed by the ChairmanChair of the Board or the Chief Executive Officer, or the President or any Vice President, and by the Secretary or an Assistant Secretary, or the Chief Financial Officer, or the Treasurer or an Assistant Treasurer. Any or all of the signatures on the certificate may be a facsimile. If any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, the certificate may be issued by the Corporation with the same effect as if such person or entity were such officer, transfer agent, or registrar at the date of issue.

Section 2Transfers. Transfers of stock of the Corporation shall be made on the books of the Corporation only upon surrender to the Corporation (or a transfer agent designed to transfer shares of stock of the Corporation) of a certificate (if any) for the shares duly endorsed or accompanied by proper evidence of succession, assignment, or authority to transfer; provided, however, that such succession, assignment, or transfer is not prohibited by the Certificate of Incorporation, these Bylaws, applicable law, or contract. Thereupon, the Corporation shall issue a new certificate (if requested) to the person entitled thereto, cancel the old certificate (if any), and record the transaction upon its books.

Section 3Lost, Stolen, or Destroyed Certificates. Any person claiming a certificate of stock to be lost, stolen, or destroyed shall make an affidavit or an affirmation of that fact, and shall give the Corporation a bond of indemnity in satisfactory form and with one or more satisfactory sureties, whereupon a new certificate (if requested) may be issued of the same tenor and for the same number of shares as the one alleged to be lost, stolen, or destroyed.

Section 4Registered Stockholders. The names and addresses of the holders of record of the shares of each class and series of the Corporation’s capital stock, together with the number of shares of each class and series held by each record holder and the date of issue of such shares, shall be entered on the books of the Corporation. Except as otherwise required by the General Corporation Law of the State of DelawareDGCL or other applicable law, the Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares of capital stock of the Corporation as the person entitled to exercise the rights of a stockholder, including, without limitation, the right to vote in person or by proxy at any meeting of the stockholders of the Corporation. The Corporation shall not be bound to recognize any equitable or other claim to or interest in any such shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly required by the General Corporation Law of the State of DelawareDGCL or other applicable law.

Section 5Fractional Shares. The Corporation may, but shall not be required to, issue fractional shares of its capital stock if necessary or appropriate to effect authorized transactions. If the Corporation does not issue fractional shares, it shall (a) arrange for the disposition of fractional interests on behalf of those that otherwise would

20

be entitled thereto, (b) pay in cash the fair value of fractions of a share as of the time when those who otherwise would be entitled to receive such fractions are determined, or (c) issue scrip or warrants in registered form (either represented by a certificate or uncertificated) or in bearer form (represented by a certificate), which scrip or warrants shall entitle the holder to receive a full share upon surrender of such scrip or warrants aggregating a full share. Fractional shares shall, but scrip or warrants for fractional shares shall not (unless otherwise expressly provided therein), entitle the holder to exercise voting rights, to receive dividends thereon, to participate in the distribution of any assets in the event of liquidation, and otherwise to exercise rights as a holder of capital stock of the class or series to which such fractional shares belong.

Section 6Additional Powers of the Board.(a) In addition to, and without limiting, those powers set forth in Section 2 of Article III, the Board of Directors shall have power and authority to make all such rules and regulations as it shall deem expedient concerning the issue, transfer, and registration of certificates for shares of stock of the Corporation, including the use of uncertificated shares of stock, subject to the provisions of the General Corporation Law of the State of DelawareDGCL, other applicable law, the Certificate of Incorporation, and these Bylaws.

(b)The Board of Directors may appoint and remove transfer agents and registrars of transfers, and may require all stock certificates to bear the signature of any such transfer agent and/or any such registrar of transfers.

Article VI
INDEMNIFICATION

Section 1Indemnification.(a) Subject to Section 3 of this Article VI, the Corporation shall indemnify, to the full extent that it shall have power under applicable law to do so and in a manner permitted by such law, any person who is made or threatened to be made a party to or is otherwise involved (as a witness or otherwise) in any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (hereinafter, a “Proceeding”), by reason of the fact that such person is or was a director or officer of the Corporation, or while serving as a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, including service with respect to an employee benefit plan (collectively, “Another Enterprise”), against expenses (including attorneys’ fees), judgments, fines (including ERISA excise taxes or penalties) and amounts paid in settlement actually and reasonably incurred by him or her in connection with such Proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.

(b)The Corporation may indemnify, to the full extent that it shall have power under applicable law to do so and in a manner permitted by such law, any person who is made or threatened to be made a party to or is otherwise involved (as a witness or otherwise) in any threatened, pending, or completed Proceeding, by reason of the fact that such person is or was an employee or agent of the Corporation, or while not serving as a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee, or agent of Another Enterprise, against expenses (including attorneys’ fees), judgments, fines (including ERISA excise taxes or penalties) and amounts paid in settlement actually and reasonably incurred by him or her in connection with such Proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.

(c)To the extent that a present or former director or officer of the Corporation has been successful on the merits or otherwise in defense of any threatened, pending, or completed Proceeding referred to in Section 145(a) or (b) of the General Corporation Law of the State of DelawareDGCL, or in defense of any claim, issue, or matter therein, he or she shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by him or her in connection therewith.

(d)The termination of any Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendre or its equivalent, shall not, of itself, create a presumption that the person seeking indemnification

21

did not act in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.

Section 2Advancement of Expenses.(a) Subject to Section 3 of this Article VI, with respect to any person who is made or threatened to be made a party to or is otherwise involved (as a witness or otherwise) in any threatened, pending, or completed Proceeding, by reason of the fact that such person is or was a director or officer of the Corporation or while serving as a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee, or agent of Another Enterprise, the Corporation shall pay the expenses (including attorneys’ fees) incurred by such person in defending any such Proceeding in advance of its final disposition (hereinafter an “advancement of expenses”); provided, however, that any advancement of expenses shall be (i) upon such terms and conditions and subject to such procedures, if any, as the Board of Directors of the Corporation deems appropriate, and (ii) made only upon receipt of an undertaking (hereinafter an “undertaking”) by such person to repay all amounts advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such person is not entitled to be indemnified for such expenses under this Article VI or otherwise.

(b)With respect to any person who is made or threatened to be made a party to or is otherwise involved (as a witness or otherwise) in any threatened, pending, or completed Proceeding, by reason of the fact that such person is or was an employee or agent of the Corporation, or while not serving as a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee, or agent of Another Enterprise, the Corporation may, in its discretion and upon such terms and conditions, if any, as the Corporation deems appropriate, pay the expenses (including attorneys’ fees) incurred by such person in defending any such Proceeding in advance of its final disposition.

Section 3Actions Initiated Against The Corporation. Anything in Section 1(a) or Section 2(a) of this Article VI to the contrary notwithstanding, except as provided in Section 5(b) of this Article VI, with respect to a Proceeding initiated against the Corporation by a person who is or was a director or officer of the Corporation (whether initiated by such person in or by reason of such capacity or in or by reason of any other capacity, including as a director, officer, employee, or agent of Another Enterprise), the Corporation shall not be required to indemnify or to advance expenses (including attorneys’ fees) to such person in connection with prosecuting such Proceeding (or part thereof) or in defending any counterclaim, cross-claim, affirmative defense, or like claim of the Corporation in such Proceeding (or part thereof) unless such Proceeding was authorized by the Board of Directors of the Corporation.

Section 4Contract Rights. The rights to indemnification and advancement of expenses conferred upon any current or former director or officer of the Corporation pursuant to this Article VI (whether by reason of the fact that such person is or was a director or officer of the Corporation, or while serving as a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee, or agent of Another Enterprise) shall be contract rights, shall vest when such person becomes a director or officer of the Corporation, and shall continue as vested contract rights even if such person ceases to be a director or officer of the Corporation. Any amendment, repeal, or modification of, or adoption of any provision inconsistent with, this Article VI (or any provision hereof) shall not adversely affect any right to indemnification or advancement of expenses granted to any person pursuant hereto with respect to any act or omission of such person occurring prior to the time of such amendment, repeal, modification, or adoption (regardless of whether the Proceeding relating to such acts or omissions, or any proceeding relating to such person’s rights to indemnification or to advancement of expenses, is commenced before or after the time of such amendment, repeal, modification, or adoption), and any such amendment, repeal, modification, or adoption that would adversely affect such person’s rights to indemnification or advancement of expenses hereunder shall be ineffective as to such person, except with respect to any threatened, pending, or completed Proceeding that relates to or arises from (and only to the extent such Proceeding relates to or arises from) any act or omission of such person occurring after the effective time of such amendment, repeal, modification, or adoption.

Section 5Claims.(a) If (i) a claim under Section 1(a) of this Article VI with respect to any right to indemnification is not paid in full by the Corporation within sixty (60) days after a written demand has been received by the Corporation or (ii) a claim under Section 2(a) of this Article VI with respect to any right to the advancement of expenses is not paid in full by the Corporation within twenty (20) days after a written demand has been received by the Corporation, then the person seeking to enforce a right to indemnification or to an advancement of expenses, as

22

the case may be, may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim.

(b)If successful in whole or in part in any suit brought pursuant to Section 5(a) of this Article VI, or in a suit brought by the Corporation to recover an advancement of expenses (whether pursuant to the terms of an undertaking or otherwise), the person seeking to enforce a right to indemnification or an advancement of expenses hereunder or the person from whom the Corporation sought to recover an advancement of expenses, as the case may be, shall be entitled to be paid by the Corporation the reasonable expenses (including attorneys’ fees) of prosecuting or defending such suit.

(c)In any suit brought by a person seeking to enforce a right to indemnification hereunder (but not a suit brought by a person seeking to enforce a right to an advancement of expenses hereunder), it shall be a defense that the person seeking to enforce a right to indemnification has not met any applicable standard for indemnification under applicable law. With respect to any suit brought by a person seeking to enforce a right to indemnification or right to advancement of expenses hereunder or any suit brought by the Corporation to recover an advancement of expenses (whether pursuant to the terms of an undertaking or otherwise), neither (i) the failure of the Corporation to have made a determination prior to commencement of such suit that indemnification of such person is proper in the circumstances because such person has met the applicable standards of conduct under applicable law, nor (ii) an actual determination by the Corporation that such person has not met such applicable standards of conduct, shall create a presumption that such person has not met the applicable standards of conduct or, in a case brought by such person seeking to enforce a right to indemnification, be a defense to such suit.

(d)In any suit brought by a person seeking to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses (whether pursuant to the terms of an undertaking or otherwise), the burden shall be on the Corporation to prove that the person seeking to enforce a right to indemnification or to an advancement of expenses or the person from whom the Corporation seeks to recover an advancement of expenses is not entitled to be indemnified, or to such an advancement of expenses, under this Article VI or otherwise.

Section 6Determination of Entitlement to Indemnification. Any indemnification required or permitted under this Article VI (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because he or she has met all applicable standards of conduct set forth in this Article VI and Section 145 of the General Corporation Law of the State of DelawareDGCL. Such determination shall be made, with respect to a person who is a director or officer of the Corporation at the time of such determination, (a) by a majority vote of the directors who are not parties to such Proceeding, even though less than a quorum, (b) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, (c) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (d) by the stockholders. Such determination shall be made, with respect to any person who is not a director or officer of the Corporation at the time of such determination, in the manner determined by the Board of Directors (including in such manner as may be set forth in any general or specific action of the Board of Directors applicable to indemnification claims by such person) or in the manner set forth in any agreement to which such person and the Corporation are parties.

Section 7Non-Exclusive Rights. The indemnification and advancement of expenses provided in this Article VI shall not be deemed exclusive of any other rights to which any person may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be such director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such person.

Section 8Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, or agent of Another Enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not

23

the Corporation would have the power to indemnify such person against such liability under the provisions of this Article VI or otherwise.

Section 9Severability. If any provision or provisions of this Article VI shall be held to be invalid, illegal, or unenforceable for any reason whatsoever: (a) the validity, legality, and enforceability of the remaining provisions of this Article VI (including, without limitation, each portion of any paragraph or clause containing any such provision held to be invalid, illegal, or unenforceable, that is not itself held to be invalid, illegal, or unenforceable) shall not in any way be affected or impaired thereby and (b) to the fullest extent possible, the provisions of this Article VI (including, without limitation, each such portion of any paragraph or clause containing any such provision held to be invalid, illegal, or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal, or unenforceable.

Section 10Miscellaneous. For purposes of this Article VI: (a) references to serving at the request of the Corporation as a director or officer of Another Enterprise shall include any service as a director or officer of the Corporation that imposes duties on, or involves services by, such director or officer with respect to an employee benefit plan, (b) references to serving at the request of the Corporation as an employee or agent of Another Enterprise shall include any service as an employee or agent of the Corporation that imposes duties on, or involves services by, such employee or agent with respect to an employee benefit plan, (c) a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner not opposed to the best interests of the Corporation, and (d) references to a director of Another Enterprise shall include, in the case of any entity that is not managed by a board of directors, such other position, such as manager or trustee or member of the governing body of such entity, that entails responsibility for the management and direction of such entity’s affairs, including, without limitation, general partner of any partnership (general or limited) and manager or managing member of any limited liability company.

Article VII
MISCELLANEOUS

Section 1Books and Records.(a) Any books or records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or by means of, or be in the form of, any information storage device or method; provided, however, that the books and records so kept can be converted into clearly legible paper form within a reasonable time. The Corporation shall so convert any books or records so kept upon the request of any person entitled to inspect such records pursuant to the Certificate of Incorporation, these Bylaws, or the provisions of the General Corporation Law of the State of DelawareDGCL.

(b)It shall be the duty of the Secretary or other officer of the Corporation who shall have charge of the stock ledger to prepare and make, at least ten (10) daysno later than the tenth (10th) day before every meeting of the stockholders, a complete list of the stockholders entitled to vote thereat, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the stockholder’s name; provided, however, if the record date for determining the stockholders entitled to vote at the meeting is fewer than ten (10) days before the meeting date, the list shall reflect the stockholders entitled to vote as of the tenth (10th) day before the meeting date. Nothing contained in this subsection (b) shall require the Corporation to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, for a period of at least ten (10) days prior toending on the day before the meeting:date (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the principal place of business of the Corporation. If the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible network, and the information required to access such list shall be provided with the notice of the meeting. The stock ledger shall be the only evidence of the identity of the stockholders entitled to examine such list.

24

(c)Except to the extent otherwise required by law, or by the Certificate of Incorporation, or by these Bylaws, the Board of Directors shall determine from time to time whether and, if allowed, when and under what conditions and regulations the stock ledger, books, records, and accounts of the Corporation, or any of them, shall be open to inspection by the stockholders and the stockholders’ rights, if any, in respect thereof. Except as otherwise provided by law, the stock ledger shall be the only evidence of the identity of the stockholders entitled to examine the stock ledger, the books, records, or accounts of the Corporation.

Section 2Voting Shares in Other Business Entities. The Chief Executive Officer, the President, any Vice President, or any other officer or officers of the Corporation designated by the Board of Directors, the Chief Executive Officer or the President may vote, and otherwise exercise on behalf of the Corporation any and all rights and powers incident to the ownership of, any and all shares of stock or other equity interest held by the Corporation in any other corporation or other business entity. The authority herein granted may be exercised either by any such officer in person or by any other person authorized to do so by proxy or power of attorney duly executed by any such officer.

Section 3Execution of Corporate Instruments.

(a)The Board of Directors may in its discretion determine the method and designate the signatory officer or officers, or other person or persons, to execute, sign, or endorse any corporate instrument or document, or to sign the corporate name without limitation, except where otherwise provided by law, and such execution or signature shall be binding upon the Corporation.

(b)Unless otherwise specifically determined by the Board of Directors or otherwise required by law, formal contracts of the Corporation, promissory notes, deeds of trust, mortgages, and other evidences of indebtedness of the Corporation, and other corporate instruments or documents requiring the corporate seal, shall be executed, signed, or endorsed by the ChairmanChair of the Board, the Chief Executive Officer, the President, any Vice President, the Secretary, the Chief Financial Officer, the Treasurer, or any Assistant Secretary or Assistant Treasurer. All other instruments and documents requiring a corporate signature but not requiring the corporate seal may be executed as aforesaid or in such other manner and by such other person or persons as may be determined from time to time by the Board of Directors or the President.

(c)All checks and drafts drawn on banks or other depositaries on funds to the credit of the Corporation or in special accounts of the Corporation shall be executed, signed, or endorsed by the Chief Financial Officer, the Treasurer, any Assistant Treasurer, or in such other manner and by such other person or persons as may be determined from time to time by the Board of Directors.

(d)Unless otherwise specifically determined by the Board of Directors or otherwise required by law, the execution, signing, or endorsement of any corporate instrument or document may be effected manually, by facsimile, or (to the extent permitted by applicable law and subject to such policies and procedures as the Corporation may have in effect from time to time) by electronic signature.

Section 4Fiscal Year. The fiscal year of the Corporation shall be such fiscal year as the Board of Directors from time to time by resolution shall determine.

Section 5Gender/Number. As used in these Bylaws, the masculine, feminine, or neuter gender, and the singular and plural number, shall each include the other whenever the context so indicates.

Section 6Section Titles. The titles of the sections and subsections have been inserted as a matter of reference only and shall not control or affect the meaning or construction of any of the terms and provisions hereof.

Section 7Electronic Transmission. For purposes of these Bylaws, “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.has the meaning given to it in Section 232 of the DGCL (or any successor statute thereto).

25

Section 8Amendment. These Bylaws, or any of them, may be altered, amended, or repealed, and new Bylaws may be made, (a) at any annual or regular meeting of the Board of Directors or at any special meeting of the Board of Directors if notice of the proposed alteration, amendment, or repeal be contained in written notice of such special meeting or (b) at any annual meeting of the stockholders (subject to Section 13 of Article II of these Bylaws) or at any special meeting of the stockholders of the Corporation if noticed of the proposed alteration, amendment, or repeal is contained in the Corporation’s notice of such special meeting of stockholders (and subject to Section 2 of Article II of these Bylaws). Anything herein to the contrary notwithstanding, any alteration, amendment, or repeal of these Bylaws, or the making of any new Bylaw, by the stockholders shall require the affirmative vote of the holders of not less than a majority of the voting power represented by the issued and outstanding shares of the Corporation entitled to vote thereon. Any Bylaws altered, amended, or made by the stockholders may be altered, amended, or repealed by either the Board of Directors or the stockholders, in the manner set forth in this Section 8, except a Bylaw amendment adopted by the stockholders that specifies the votes that shall be necessary for the election of directors shall not be amended or repealed by the Board of Directors.

Section 9Certificate of Incorporation. Anything herein to the contrary notwithstanding, if any provision contained in these Bylaws is inconsistent with or conflicts with a provision of the Certificate of Incorporation, such provision of these Bylaws shall be superseded by the inconsistent provision in the Certificate of Incorporation to the extent necessary to give effect to such provision in the Certificate of Incorporation.

Section 10 Forum. (a) Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if and only if the Court of Chancery of the State of Delaware lacks subject matter jurisdiction, the Superior Court of the State of Delaware, or, if and only if both the Court of Chancery of the State of Delaware and the Superior Court of the State of Delaware lack subject matter jurisdiction, the United States District Court for the District of Delaware) and any state (or, if applicable, federal) appellate court therefrom shall, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action, suit, or proceeding brought on behalf of the Corporation, (ii) any action, suit, or proceeding asserting a claim of breach of fiduciary duty owed by any current or former director, officer, employee, or stockholder of the Corporation to the Corporation or the Corporation’s stockholders or any action asserting a claim for aiding and abetting any such breach of fiduciary duty, (iii ) any action, suit, or proceeding asserting a claim against the Corporation or any director, officer, or other employee of the Corporation arising pursuant to, or seeking to enforce any right, obligation, or remedy under, any provision of the DGCL or the Certificate of Incorporation or the Corporation’s Bylaws (in each case, as may be amended from time to time), (iv) any action, suit, or proceeding as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (v) any action, suit, or proceeding asserting a claim against the Corporation or its current or former directors, officers, employees, or stockholders governed by the internal affairs doctrine, in all cases subject to the court’s having personal jurisdiction over the indispensable parties named as defendants (including personal jurisdiction by reason of any such indispensable party’s consent to personal jurisdiction in the State of Delaware or such court). If any action, suit or proceeding the subject matter of which is within the scope of the immediately preceding sentence is filed in a court other than the courts in the State of Delaware, (a “Foreign Action”) in the name of any stockholder, such stockholder shall be deemed to have consented to (x) the personal jurisdiction of the state and federal courts in the State of Delaware in connection with any action brought in any such court to enforce the provisions of the immediately preceding sentence and (y) having service of process made upon such stockholders in any action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder.

(b) Unless the Corporation consents in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended.

(c) Notwithstanding the foregoing, the provisions of this Section 10 of Article VII shall not apply to suits brought to enforce any liability or duty created by the Securities Exchange Act of 1934, as amended, or any claim for which the federal courts of the United States have exclusive jurisdiction.

(d) If any provision of this Section 10 of Article VII shall be held to be invalid, illegal or unenforceable as applied to an person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provisions, in any other circumstance and of the remaining provisions of this Section 10 of Article VII (including, without limitation, each portion of any

26

sentence of this Section 10 of Article VII containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby.

END OF BYLAWS

27

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Keith Valentine, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarterly period ended June 30, 2023, of Orthofix Medical Inc.;

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;

4. 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 material 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.

Dated: August 8, 2023	By:	/s/ KEITH VALENTINE
	Name:	Keith Valentine
	Title:	President and Chief Executive Officer, Director

EX-31.2

Exhibit 31.2

CERTIFICATION

I, John Bostjancic, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarterly period ended June 30, 2023, of Orthofix Medical Inc.;

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;

4. 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 material 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.

Dated: August 8, 2023	By:	/s/ JOHN BOSTJANCIC
	Name:	John Bostjancic
	Title:	Chief Financial Officer

EX-32.1

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 Orthofix Medical Inc. (“Orthofix”) on Form 10-Q for the quarterly period ended June 30, 2023, (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, Jon Serbousek, Chief Executive Officer and President of Orthofix, and Doug Rice, Chief Financial Officer, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his 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 Orthofix.

Dated: August 8, 2023	/s/ KEITH VALENTINE
	Name:	Keith Valentine
	Title:	President and Chief Executive Officer
Dated: August 8, 2023	/s/ JOHN BOSTJANCIC
	Name:	John Bostjancic
	Title:	Chief Financial Officer

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2023	Aug. 04, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Trading Symbol	OFIX
Entity Registrant Name	ORTHOFIX MEDICAL INC.
Entity Central Index Key	0000884624
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Current Reporting Status	Yes
Entity Common Stock, Shares Outstanding		36,738,681
Entity File Number	0-19961
Entity Tax Identification Number	98-1340767
Entity Address, Address Line One	3451 Plano Parkway
Entity Address, City or Town	Lewisville
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75056
City Area Code	214
Local Phone Number	937-2000
Entity Incorporation, State or Country Code	DE
Title of 12(b) Security	Common stock, $0.10 par value per share
Security Exchange Name	NASDAQ
Entity Interactive Data Current	Yes
Document Quarterly Report	true
Document Transition Report	false

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 37,607	$ 50,700
Accounts receivable, net of allowances of $7,015 and $6,419, respectively	112,320	82,857
Inventories	222,474	100,150
Prepaid expenses and other current assets	26,947	22,283
Total current assets	399,348	255,990
Property, plant, and equipment, net	140,584	58,229
Intangible assets, net	126,000	47,388
Goodwill	191,727	71,317
Other long-term assets	43,628	25,705
Total assets	901,287	458,629
Current liabilities
Accounts payable	51,349	27,598
Current portion of finance lease liability	678	652
Other current liabilities	89,777	55,374
Total current liabilities	141,804	83,624
Long-term borrowings under credit facility	51,000
Long-term portion of finance lease liability	18,894	19,239
Other long-term liabilities	49,604	18,906
Total liabilities	261,302	121,769
Contingencies (Note 8)
Shareholders’ equity
Common shares $0.10 par value; 100,000 shares authorized; 36,733 and 20,162 issued and outstanding as of June 30, 2023 and December 31, 2022, respectively	3,673	2,016
Additional paid-in capital	735,533	334,969
Retained earnings (accumulated deficit)	(99,113)	1,251
Accumulated other comprehensive loss	(108)	(1,376)
Total shareholders’ equity	639,985	336,860
Total liabilities and shareholders’ equity	$ 901,287	$ 458,629

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Trade accounts receivable, allowance for doubtful accounts	$ 7,015	$ 6,419
Common shares, par value	$ 0.1	$ 0.1
Common shares, authorized	100,000,000	100,000,000
Common shares, issued	36,733,000	20,162,000
Common shares, outstanding	36,733,000	20,162,000

XML

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Net sales	$ 187,016	$ 118,070	$ 362,220	$ 224,488
Cost of sales	67,465	31,600	132,340	59,918
Gross profit	119,551	86,470	229,880	164,570
Sales and marketing	99,249	59,888	193,040	114,025
General and administrative	34,177	15,846	82,988	35,174
Research and development	19,424	12,758	42,731	23,970
Acquisition-related amortization and remeasurement (Note 12)	3,333	(8,663)	7,467	(12,162)
Operating income (loss)	(36,632)	6,641	(96,346)	3,563
Interest expense, net	(1,266)	(407)	(2,555)	(782)
Other income (expense), net	(20)	(3,192)	656	(4,128)
Income (loss) before income taxes	(37,918)	3,042	(98,245)	(1,347)
Income tax expense	(1,508)	(553)	(2,119)	(624)
Net income (loss)	$ (39,426)	$ 2,489	$ (100,364)	$ (1,971)
Net income (loss) per common share:
Basic	$ (1.07)	$ 0.12	$ (2.77)	$ (0.1)
Diluted	$ (1.07)	$ 0.12	$ (2.77)	$ (0.1)
Weighted average number of common shares:
Basic	36,762	20,031	36,252	19,965
Diluted	36,762	20,113	36,252	19,965
Other comprehensive income (loss), before tax
Unrealized gain (loss) on debt securities	$ 381	$ 161	$ 318	$ (513)
Currency translation adjustment	457	(1,820)	950	(2,308)
Other comprehensive income (loss), before tax	838	(1,659)	1,268	(2,821)
Other comprehensive income (loss), net of tax	838	(1,659)	1,268	(2,821)
Comprehensive income (loss)	$ (38,588)	$ 830	$ (99,096)	$ (4,792)

XML

Condensed Consolidated Statements of Changes in Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Shares [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Loss [Member]
Beginning Balance at Dec. 31, 2021	$ 336,934	$ 1,983	$ 313,951	$ 21,000
Balance, Shares at Dec. 31, 2021		19,837
Net Income (Loss)	(4,460)			(4,460)
Other comprehensive income (loss), net of tax	(1,162)				$ (1,162)
Share-based compensation expense	4,332		4,332
Common shares issued, net	(69)	$ 1	(70)
Common shares issued, net, Shares		5
Ending Balance at Mar. 31, 2022	335,575	$ 1,984	318,213	16,540	(1,162)
Balance, Shares at Mar. 31, 2022		19,842
Beginning Balance at Dec. 31, 2021	336,934	$ 1,983	313,951	21,000
Balance, Shares at Dec. 31, 2021		19,837
Net Income (Loss)	(1,971)
Other comprehensive income (loss), net of tax	(2,821)
Ending Balance at Jun. 30, 2022	341,946	$ 2,000	323,738	19,029	(2,821)
Balance, Shares at Jun. 30, 2022		20,000
Beginning Balance at Mar. 31, 2022	335,575	$ 1,984	318,213	16,540	(1,162)
Balance, Shares at Mar. 31, 2022		19,842
Net Income (Loss)	2,489			2,489
Other comprehensive income (loss), net of tax	(1,659)				(1,659)
Share-based compensation expense	4,460		4,460
Common shares issued, net	1,081	$ 16	1,065
Common shares issued, net, Shares		158
Ending Balance at Jun. 30, 2022	341,946	$ 2,000	323,738	19,029	(2,821)
Balance, Shares at Jun. 30, 2022		20,000
Beginning Balance at Dec. 31, 2022	$ 336,860	$ 2,016	334,969	1,251	(1,376)
Balance, Shares at Dec. 31, 2022	20,162	20,162
Net Income (Loss)	$ (60,938)			(60,938)
Other comprehensive income (loss), net of tax	430				430
Share-based compensation expense	13,020		13,020
Common shares issued in connection with SeaSpine merger, Shares		16,047
Common shares issued in connection with SeaSpine merger	376,745	$ 1,605	375,140
Common shares issued, net	(1,958)	$ 26	(1,984)
Common shares issued, net, Shares		254
Ending Balance at Mar. 31, 2023	664,159	$ 3,647	721,145	(59,687)	(946)
Balance, Shares at Mar. 31, 2023		36,463
Beginning Balance at Dec. 31, 2022	$ 336,860	$ 2,016	334,969	1,251	(1,376)
Balance, Shares at Dec. 31, 2022	20,162	20,162
Net Income (Loss)	$ (100,364)
Other comprehensive income (loss), net of tax	1,268
Ending Balance at Jun. 30, 2023	$ 639,985	$ 3,673	735,533	(99,113)	(108)
Balance, Shares at Jun. 30, 2023	36,733	36,733
Beginning Balance at Mar. 31, 2023	$ 664,159	$ 3,647	721,145	(59,687)	(946)
Balance, Shares at Mar. 31, 2023		36,463
Net Income (Loss)	(39,426)			(39,426)
Other comprehensive income (loss), net of tax	838				838
Share-based compensation expense	13,246		13,246
Common shares issued, net	1,168	$ 26	1,142
Common shares issued, net, Shares		270
Ending Balance at Jun. 30, 2023	$ 639,985	$ 3,673	$ 735,533	$ (99,113)	$ (108)
Balance, Shares at Jun. 30, 2023	36,733	36,733

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities
Net loss	$ (100,364)	$ (1,971)
Adjustments to reconcile net loss to net cash from operating activities
Depreciation and amortization	25,997	14,028
Inventory reserve expenses	17,057	6,625
Amortization of inventory fair value step up	21,085
Amortization of operating lease assets, debt costs, and other assets	3,319	1,567
Provision for expected credit losses	490	1,139
Deferred income taxes	815	236
Share-based compensation expense	26,266	8,792
Change in valuation of investment securities	(492)	188
Change in fair value of contingent consideration	(1,300)	(16,214)
Other	(372)	1,149
Changes in operating assets and liabilities, net of effects of acquisitions
Accounts receivable	5,615	(208)
Inventories	(33,168)	(22,214)
Prepaid expenses and other current assets	275	(1,769)
Accounts payable	1,800	7,176
Other current liabilities	(6,425)	(7,495)
Contract liability		(4,791)
Other long-term assets and liabilities	(134)	1,140
Net cash provided by (used in) operating activities	(39,536)	(12,622)
Cash flows from investing activities
Capital expenditures for property, plant and equipment	(23,823)	(11,032)
Capital expenditures for intangible assets	(831)	(671)
Contingent consideration payments related to asset acquisitions		(1,500)
Cash acquired in the SeaSpine merger	29,419
Other investing activities	(500)	42
Net cash provided by (used in) investing activities	4,265	(13,161)
Cash flows from financing activities
Proceeds from issuance of common shares	2,377	2,400
Payments related to tax withholdings for share-based compensation	(3,167)	(1,388)
Payments related to finance lease obligation	(320)	(2,291)
Borrowings under credit facility	51,000
Payment of debt acquired from SeaSpine merger	(26,899)
Contingent consideration milestone payment	(920)
Other financing activities	(280)	(45)
Net cash provided by (used in) financing activities	21,791	(1,324)
Effect of exchange rate changes on cash	387	(1,204)
Net change in cash, cash equivalents, and restricted cash	(13,093)	(28,311)
Cash and cash equivalents at the beginning of period	50,700	87,847
Cash and cash equivalents at the end of period	$ 37,607	59,536
Noncash investing activities - Purchase of intangible assets		$ 2,000

XML

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Pay vs Performance Disclosure
Net Income (Loss)	$ (39,426)	$ (60,938)	$ 2,489	$ (4,460)	$ (100,364)	$ (1,971)

XML

Insider Trading Arrangements	6 Months Ended
	Jun. 30, 2023
Trading Arrangements, by Individual
Title	directors or officers
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

XML

Business and basis of presentation

6 Months Ended

Jun. 30, 2023

Organization Consolidation And Presentation Of Financial Statements And Unusual Or Infrequent Items Disclosure [Abstract]

Business and basis of presentation

1. Business and basis of presentation

Description of the Business

Orthofix Medical Inc. (“Orthofix”) and its subsidiaries (the "Company"), following its merger with SeaSpine Holdings Corporation ("SeaSpine") that was completed in January 2023, is a leading global spine and orthopedics company with a comprehensive portfolio of biologics, innovative spinal hardware, bone growth therapies, specialized orthopedic solutions, and a leading surgical navigation system. The Company's products are distributed in approximately 68 countries worldwide.

The Company is headquartered in Lewisville, Texas, and has primary offices in Carlsbad, California, with a focus on spinal product innovation and surgeon education, and in Verona, Italy, with an emphasis on product innovation, production, and medical education for orthopedics. The combined Company's global research and development, commercial, and manufacturing footprint also includes facilities and offices in Irvine, California, Toronto, Canada, Sunnyvale, California, Wayne, Pennsylvania, Olive Branch, Mississippi, Maidenhead, United Kingdom, Munich, Germany, Paris, France, and Sao Paulo, Brazil.

The merger with SeaSpine was completed on January 5, 2023, with SeaSpine continuing as a wholly-owned subsidiary of Orthofix following the transaction. For additional discussion of the merger with SeaSpine, see Note 3. The shares of common stock of Orthofix, as the corporate parent entity in the combined company structure, continue to trade on NASDAQ under the symbol "OFIX". The combined company will be renamed at a later date and until then will continue to be known as Orthofix Medical Inc.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Pursuant to these rules and regulations, certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair statement have been included. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company’s Form 10-K for the year ended December 31, 2022. Operating results for the three and six months ended June 30, 2023, are not necessarily indicative of the results that may be expected for other interim periods or the year ending December 31, 2023.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company evaluates its estimates, including those related to revenue recognition; contractual allowances; allowances for expected credit losses; inventories; valuation of intangible assets; goodwill; fair value measurements, including contingent consideration; litigation and contingent liabilities; tax matters; and share-based compensation. Actual results could differ from these estimates.

Changes in Presentation of Consolidated Financial Statements

Certain prior year balances have been reclassified in the condensed consolidated financial statements to conform to current period presentation.

XML

Recently adopted accounting standards, recently issued accounting pronouncements

6 Months Ended

Jun. 30, 2023

Accounting Changes and Error Corrections [Abstract]

Recently adopted accounting standards, recently issued accounting pronouncements

2. Recently adopted accounting standards, recently issued accounting pronouncements

Adoption of Accounting Standards Update (“ASU”) 2021-08— Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers

In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-08, which aims to address diversity in practice and inconsistency related to the accounting for acquired revenue contracts with customers in a business combination. The amendments require that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. The Company adopted this standard effective January 1, 2023, on a prospective basis. Adoption of this standard resulted in the recognition of $2.2 million in contract liabilities associated with acquired revenue contracts as a result of the Company’s merger with SeaSpine, which closed on January 5, 2023.
 

Recently Issued Accounting Pronouncements

Topic	Description of Guidance	Effective Date	Status of Company's Evaluation
Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (ASU 2022-03)	Clarifies the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions. Certain of the provisions are to be applied retrospectively with other provisions applied prospectively.	January 1, 2024	The Company is currently evaluating the impact this ASU may have on its consolidated financial statements.

Other recently issued ASUs, excluding those ASUs which have already been disclosed as adopted or described above, were assessed and determined not applicable, or are expected to have minimal impact on the Company's condensed consolidated financial statements.

XML

Merger and Acquisitions

6 Months Ended

Jun. 30, 2023

Business Combinations [Abstract]

Merger and Acquisitions

3. Merger and acquisitions

Merger with SeaSpine

On January 5, 2023, the Company and SeaSpine completed an all-stock merger of equals (the "Merger") to create a leading global spine and orthopedics company with highly complementary portfolios of biologics, innovative spinal hardware, bone growth therapies, specialized orthopedic solutions, and a leading surgical navigation system. As a result of the Merger, each share of SeaSpine common stock issued and outstanding immediately prior to the closing of the Merger was converted into the right to receive 0.4163 shares of Orthofix common stock.

The Merger is being accounted for as an acquisition of SeaSpine by Orthofix under the acquisition method of accounting for business combinations in accordance with U.S. GAAP. Thus, Orthofix is treated as the acquirer for accounting purposes. In identifying the acquirer, Orthofix and SeaSpine considered the structure of the transaction and other actions contemplated by the merger agreement (the “Merger Agreement”), relative outstanding share ownership, market values, the composition of the combined company's board of directors, and the relative size of Orthofix and SeaSpine. Under the acquisition method of accounting, the assets and liabilities of SeaSpine and its subsidiaries have been recorded at their respective fair values as of the acquisition date.

The total estimated fair value of consideration associated with the Merger as of the acquisition date was comprised of:

(Unaudited, U.S. Dollars, in thousands, except shares and price per share)
Share Consideration:
Orthofix common shares to be issued in exchange for SeaSpine common shares		16,047,315
Orthofix closing price per share as of January 4, 2023	$	22.76
Estimated fair value of shares issued in exchange for SeaSpine common shares	$	365,237
Estimated fair value of Orthofix stock options and RSUs issued in exchange for outstanding SeaSpine equity awards	$	11,508
Total estimated fair value of consideration	$	376,745

The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the acquisition date. Certain of the acquired assets and liabilities assumed were valued utilizing Level 3 inputs and assumptions. A final determination of the allocation of the purchase price to assets acquired and liabilities assumed has not been made and the following should be considered preliminary. Adjustments to the preliminary purchase price allocation could be material. The final determination is subject to completion of the Company's valuation of the assets acquired and liabilities assumed, including contingent liabilities and deferred income taxes, which it expects to complete within one year of the acquisition date.

(Unaudited, U.S. Dollars, in thousands)	Previously Reported		Adjustments			As Revised		Assigned Useful Life
Assets acquired:
Current assets
Cash and cash equivalents	$	29,419	$	—		$	29,419
Accounts receivable, net		35,313		—			35,313
Inventories		129,610		3,026			132,636
Prepaid expenses and other current assets		4,600		(10	)		4,590
Total current assets		198,942		3,016			201,958
Property, plant, and equipment, net		68,911		(48	)		68,863
Customer relationships		27,100		6,000			33,100	13 years
Developed technology		45,400		1,800			47,200	6 - 8 years
In-process research and development ("IPR&D")		5,600		150			5,750	Indefinite
Other long-term assets		20,472		29			20,501
Total identifiable assets acquired	$	366,425	$	10,947		$	377,372
Liabilities assumed:
Current liabilities
Accounts payable	$	21,602	$	—		$	21,602
Other current liabilities		41,224		(920	)		40,304
Total current liabilities		62,826		(920	)		61,906
Long-term borrowings under SeaSpine credit facility		26,298		—			26,298
Other long-term liabilities		31,950		883			32,833
Total liabilities assumed		121,074		(37	)		121,037
Net identifiable assets acquired	$	245,351	$	10,984		$	256,335
Total fair value of consideration transferred		376,745		—			376,745
Residual goodwill	$	131,394	$	(10,984	)	$	120,410

The purchase price exceeded the fair value of the net tangible and identifiable intangible assets acquired in the Merger. As a result, the Company recorded goodwill totaling $120.4 million, which was assigned to the Global Spine reporting segment. Specifically, the goodwill includes the assembled workforce and synergies associated with the combined entity. The goodwill is not deductible for tax purposes.

The IPR&D intangible assets are considered an indefinite-lived asset until the completion or abandonment of the associated research and development efforts. Accordingly, during the development period after the acquisition, these assets are not amortized but, instead, are subject to impairment assessment. Upon completion of each IPR&D project, the Company will determine the useful life of the asset and begin amortization.

The Company recognized $3.3 million and $9.8 million in direct acquisition-related costs, which exclude integration-related activities, that were expensed during the three and six months ended June 30, 2023, respectively. These costs are included in the condensed consolidated statements of operations and comprehensive income (loss), primarily within general and administrative expenses. The Company's results of operations included $64.4 million and $125.3 million of net sales from SeaSpine for the three and six months ended June 30, 2023, respectively, and a net loss attributable to SeaSpine of $24.9 million and $52.8 million for the three and six months ended June 30, 2023, respectively.

Pro Forma Financial Information

Due to the Merger closing on January 5, 2023, all SeaSpine financial results for fiscal year 2023, except for the first four days of January, are included in Orthofix's condensed consolidated statement of operations and comprehensive income (loss). The following unaudited pro forma financial information for the three and six months ended June 30, 2023, and 2022 are based on the Company's historical condensed consolidated financial statements adjusted to reflect as if the Merger closed as of January 1, 2022. The unaudited pro-forma information makes certain adjustments to depreciation and amortization expense to reflect the fair value recognized in the purchase price allocation and to remove one-time transaction-related costs. The unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the Merger closed as of January 1, 2022.

	Three Months Ended June 30,						Six Months Ended June 30,
(Unaudited, U.S. Dollars, in millions)	2023			2022			2023			2022
Net sales	$	187.0		$	174.4		$	362.2		$	331.5
Net income (loss)	$	(30.1	)	$	(27.1	)	$	(75.3	)	$	(69.9	)

Integration and Restructuring Activities

The Company has incurred significant integration and restructuring costs in connection with the Merger. The following table summarizes integration costs incurred for the three and six months ended June 30, 2023, and 2022.

	Three Months Ended June 30,					Six Months Ended June 30,
(Unaudited, U.S. Dollars, in millions)	2023			2022		2023		2022
Compensation-related integration costs		3.5		$	—		13.8	$	—
Fee paid to financial advisor to the Merger		—			—		5.5		—
Professional fees / consulting fees		0.7			—		5.0		—
Product rationalization charges		4.2			—		4.9		—
Other costs to complete		(0.3	)		—		1.2		—
Total		8.1		$	—		30.4	$	—

In the first quarter of 2023, the Company approved and initiated certain restructuring activities to streamline costs and to better align talent with operational needs following the consummation of the Merger. The Company expects to incur total pre-tax expense of approximately $16.7 million associated with the restructuring activities, which will be recognized within operating expenses. The table below provides a summary of restructuring costs incurred during the period and the resulting liability as of June 30, 2023, which is recognized within other current liabilities:

(Unaudited, U.S. Dollars, in millions)	Balance as of December 31, 2022		Charges Incurred		Payments Made			Balance as of June 30, 2023
Severance costs	$	—	$	10.4	$	(4.4	)	$	6.0
Retention costs		—		2.8		(0.2	)		2.6
Payroll taxes		—		0.4		(0.1	)		0.3
Total	$	—	$	13.6	$	(4.7	)	$	8.9

XML

Inventories

6 Months Ended

Jun. 30, 2023

Inventory Disclosure [Abstract]

Inventories

4. Inventories

Inventories were as follows:

(Unaudited, U.S. Dollars, in thousands)	June 30, 2023		December 31, 2022
Raw materials	$	26,791	$	17,035
Work-in-process		55,514		19,243
Finished products		140,169		63,872
Inventories	$	222,474	$	100,150

XML

Leases

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Leases

5. Leases

A summary of the Company’s lease portfolio as of June 30, 2023, and December 31, 2022, is presented in the table below:

(Unaudited, U.S. Dollars, in thousands)	Classification	June 30, 2023		December 31, 2022
Right-of-use assets ("ROU assets")
Operating leases	Other long-term assets	$	20,434	$	6,788
Finance leases	Property, plant and equipment, net		16,853		17,360
Total ROU assets		$	37,287	$	24,148
Lease Liabilities
Current
Operating leases	Other current liabilities	$	3,159	$	1,638
Finance leases	Current portion of finance lease liability		678		652
Long-term
Operating leases	Other long-term liabilities		17,786		5,376
Finance leases	Long-term portion of finance lease liability		18,894		19,239
Total lease liabilities		$	40,517	$	26,905

Supplemental cash flow information related to leases was as follows:

(Unaudited, U.S. Dollars, in thousands)	Six Months Ended June 30, 2023		Six Months Ended June 30, 2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	3,751	$	2,071
Operating cash flows from finance leases		428		443
Financing cash flows from finance leases		320		2,291
ROU assets obtained in exchange for lease obligations
Operating leases		15,368		4,592
Finance leases		—		—

XML

Long-term debt

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Long-term debt

6. Long-term debt

In connection with the closing of the Merger on January 5, 2023, the Company terminated SeaSpine's credit facility and all applicable commitments with Wells Fargo Bank, National Association and paid an aggregate amount of $26.9 million reflecting all of the outstanding obligations in respect of principal, interest, and fees, including a $0.6 million prepayment premium.

On January 3, 2023, the Company borrowed $30.0 million under its $300.0 million secured revolving credit facility under the Second Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A., dated as of October 25, 2019 (as amended by the First Amendment thereto dated March 1, 2023, the "Original Credit Agreement") for working capital purposes, including to fund certain Merger-related expenses. An additional $15.0 million and $6.0 million was borrowed on March 3, 2023 and May 10, 2023, respectively. Therefore, as of June 30, 2023, the Company had $51.0 million in principal amount of borrowings outstanding under the secured revolving credit facility. As of June 30, 2023, the Company was in compliance with all required financial covenants. The effective interest rate on amounts borrowed was 6.4%, with interest accrued of $0.6 million as of June 30, 2023, within other current liabilities. An additional $8.0 million was borrowed on July 5, 2023.

On June 13, 2023, the Company entered into a Limited Consent, Limited Waiver and Second Amendment to the Original Credit Agreement (the "Consent and Amendment" and the Original Credit Agreement as amended by the Consent and Amendment, the “Amended Credit Agreement”). Under the terms of the Consent and Amendment, the parties agreed to reduce the size of the secured revolving credit facility, off of which certain fees are based, from $300.0 million to $175.0 million, and to increase the applicable interest rate in certain circumstances. The maturity date of the credit facility remains October 25, 2024.

The Consent and Amendment permits the Company, for purposes of determining compliance with financial covenants in the Amended Credit Agreement, to include certain expense addbacks in its calculation of EBITDA and to increase the share of EBITDA attributable to certain foreign subsidiaries beginning with the fiscal quarter ended March 31, 2023. The Company also agreed to pledge under the Amended Credit Agreement its ownership interest in the Company's Italian subsidiary, Orthofix S.r.L., and cause Orthofix S.r.L. to become a loan party to the Credit Agreement.

The Company had no borrowings on its available lines of credit in Italy, which provide up to an aggregate amount of €5.5 million ($6.0 million) as of June 30, 2023.

XML

Fair value measurements and investments

6 Months Ended

Jun. 30, 2023

Fair Value Measurements And Investment Disclosure [Abstract]

Fair value measurements and investments

7. Fair value measurements and investments

The fair value measurements of the Company’s financial assets and liabilities measured on a recurring basis were as follows:

	June 30, 2023											December 31, 2022
(Unaudited, U.S. Dollars, in thousands)	Level 1		Level 2			Level 3			Total			Total
Assets
Neo Medical convertible loan agreements	$	—	$	—		$	7,690		$	7,690		$	7,140
Neo Medical preferred equity securities		—		6,084			—			6,084			6,084
Bone Biologics equity securities		—		—			—			—			—
Other investments		—		—			1,986			1,986			1,726
Total	$	—	$	6,084		$	9,676		$	15,760		$	14,950
Liabilities
Lattus contingent consideration	$	—	$	—			(9,900	)	$	(9,900	)	$	—
Spinal Kinetics contingent consideration		—		—			—			—			—
Deferred compensation plan		—		(1,467	)		—			(1,467	)		(1,515	)
Total	$	—	$	(1,467	)	$	(9,900	)	$	(11,367	)	$	(1,515	)

Neo Medical Convertible Loan Agreements and Equity Investment

In October 2020, the Company purchased preferred equity securities of Neo Medical SA, a privately held Swiss-based company developing a new generation of products for spinal surgery ("Neo Medical"), for consideration of $5.0 million. The Company also entered into a Convertible Loan Agreement pursuant to which the Company loaned Neo Medical CHF 4.6 million, or $5.0 million at the date of issuance (the “Convertible Loan”). In October 2021, the Company entered into a second Convertible Loan Agreement (the “Second Convertible Loan” and together with the Convertible Loan, the “Neo Medical Convertible Loans”), pursuant to which the Company loaned Neo Medical an additional CHF 0.6 million, or $0.7 million as of the date of issuance.

The preferred equity securities are recorded in other long-term assets and are considered an investment that does not have a readily determinable fair value. As such, the Company measures this investment at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.

The table below presents a reconciliation of the beginning and ending balances of the Company’s investment in Neo Medical preferred equity securities:

(Unaudited, U.S. Dollars, in thousands)	2023		2022
Fair value of Neo Medical preferred equity securities at January 1	$	6,084	$	5,413
Conversion of loan into preferred equity securities		—		671
Fair value of Neo Medical preferred equity securities at June 30		6,084		6,084
Cumulative unrealized gain on Neo Medical preferred equity securities		413		413

The Company elected to convert the Second Convertible Loan into shares of Neo Medical’s preferred equity securities in January 2022. The Convertible Loan is recorded in other long-term assets as an available for sale debt security as of June 30, 2023. The fair value of the Convertible Loan is based upon significant unobservable inputs, including the use of option-pricing models, Monte Carlo simulations for certain periods, and a probability-weighted discounted cash flow model, requiring the Company to develop its own assumptions. Therefore, the Company categorized this investment as a Level 3 financial asset.

Some of the more significant unobservable inputs used in the fair value measurement of the Convertible Loan include applicable discount rates, implied volatility, the likelihood and projected timing of repayment or conversion, and projected cash flows in support of the estimated enterprise value of Neo Medical. Holding other inputs constant, changes in these assumptions could result in a significant change in the fair value of the Convertible Loan. If the amortized cost of the Convertible Loan exceeds its estimated fair value, the security is deemed to be impaired, and must be evaluated for the recognition of a credit loss. As of June 30, 2023, the Company has not recognized any credit loss related to the Convertible Loan.

The following table provides a reconciliation of the beginning and ending balances of the Convertible Loans, measured at fair value using significant unobservable inputs (Level 3):

(Unaudited, U.S. Dollars, in thousands)	2023		2022
Fair value of Neo Medical Convertible Loans at January 1	$	7,140	$	7,148
Interest recognized in interest income, net		238		217
Foreign currency remeasurement recognized in other expense, net		195		(257	)
Unrealized gain (loss) recognized in other comprehensive loss		117		(615	)
Conversion of Second Convertible Loan into preferred equity securities		—		(671	)
Fair value of Neo Medical Convertible Loans at June 30		7,690		5,820
Amortized cost basis of Neo Medical Convertible Loans at June 30		6,340		5,496

The following table provides quantitative information related to certain key assumptions utilized within the valuation as of June 30, 2023:

(Unaudited, U.S. Dollars, in thousands)	Fair Value as of  June 30, 2023		Unobservable inputs	Estimate
Neo Medical Convertible Loan	$	7,690	Cost of equity discount rate		18.0	%
			Estimated equity volatility		74.1	%

Bone Biologics Equity Securities

Until August 2022, the Company held an investment in common stock of Bone Biologics Inc. (“Bone Biologics”, NASDAQ: BBLG), a developer of orthobiologic products. The Company disposed of its remaining holdings in Bone Biologics equity securities during the third quarter of 2022.

Other Investments

Other investments represent assets and investments recorded at fair value that are not deemed to be material for disclosure on an individual basis. The fair value of these assets is based upon significant unobservable inputs, such as probability-weighted discounted cash flow models, requiring the Company to develop its own assumptions. Therefore, the Company has categorized these assets as Level 3 financial assets. As of June 30, 2023, this balance was classified within other current assets.

Spinal Kinetics Contingent Consideration

The Company recognized a contingent consideration obligation in connection with the acquisition of Spinal Kinetics in 2018. The fair value of the remaining Spinal Kinetics contingent consideration, attributable to a revenue-based milestone, was concluded to be zero as of June 30, 2023, as the Company did not achieve the milestone prior to April 30, 2023, the end of the measurement period for achieving such milestone.

The following table provides a reconciliation of the beginning and ending balances for the Spinal Kinetics contingent consideration measured at estimated fair value using significant unobservable inputs (Level 3):

(Unaudited, U.S. Dollars, in thousands)	2023		2022
Spinal Kinetics contingent consideration estimated fair value at January 1	$	—	$	17,200
Decrease in fair value recognized in acquisition-related amortization and remeasurement		—		(16,214	)
Spinal Kinetics contingent consideration estimated fair value at June 30	$	—	$	986

Lattus Contingent Consideration

In connection with the Merger, the Company assumed a contingent consideration obligation under a purchase agreement between SeaSpine and Lattus Spine LLC ("Lattus") executed in December 2022. Under the terms of the agreement, the Company may be required to make installment payments at certain dates based on future net sales of certain products (the "Lateral Products").

The estimated fair value of the Lattus contingent consideration as of the closing of the Merger, January 5, 2023, was $11.2 million. The estimated fair value of the Lattus contingent consideration is determined using a probability-weighted discounted cash flow model and significant inputs which are not observable in the market. The significant inputs include assumptions related to the timing and probability of the product launch dates, estimated future sales of the products, estimated commission rates, discount rates matched to the timing of payments, and probability of success rates. The following table provides a reconciliation of the beginning

and ending balances for the Lattus contingent consideration measured at estimated fair value using significant unobservable inputs (Level 3):

(Unaudited, U.S. Dollars, in thousands)	2023			2022
Lattus contingent consideration estimated fair value at January 5	$	11,200		$	—
Decrease in fair value recognized in acquisition-related amortization and remeasurement		(1,300	)		—
Lattus contingent consideration estimated fair value at June 30	$	9,900		$	—

The following table provides quantitative information related to certain key assumptions utilized within the valuation as of June 30, 2023:

(Unaudited, U.S. Dollars, in thousands)	Fair Value as of  June 30, 2023		Unobservable inputs	Estimate
Lattus Contingent Consideration	$	9,900	Counterparty discount rate		9.0	%
			Revenue risk-adjusted discount rate		6.5	%

XML

Commitments and Contingencies

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

8. Commitments and Contingencies

Commitments

As a result of the Merger, the Company became party to agreements with certain distributor partners that provide the Company with an option to purchase, and an option for those partners to require the Company to purchase, the distribution business of those partners at specified future dates. At such time, the Company or distributor may (in certain cases, subject to satisfying certain conditions) submit written notice to the other of its intention to exercise its rights and initiate or require the purchase. Upon receipt of the written notice, the Company and the distributor will work in good faith to consummate the purchase. Under these agreements, the purchase price would be paid in shares of the Company's common stock. Based on the closing price of the Company's common stock as of June 30, 2023, assuming the options under all the relevant agreements were exercised, the estimated total number of shares the Company would issue under these agreements was approximately 1.3 million shares. The Company has received notification from one such distributor, who has notified the Company of its decision to exercise its buyout option. The Company is currently in negotiations with this distributor in regard to the consummation of the potential acquisition.

Contingencies

In addition to the matters described below, in the normal course of its business, the Company is involved in various lawsuits from time to time and may be subject to certain other contingencies. The Company believes any losses related to these matters are individually and collectively immaterial as to a possible loss and range of loss.

Italian Medical Device Payback (“IMDP”)

In 2015, the Italian Parliament introduced rules for entities that supply goods and services to the Italian National Healthcare System. A key provision of the law is a ‘payback’ measure, requiring medical device companies in Italy to make payments to the Italian government if medical device expenditures exceed regional maximum ceilings. Companies are required to make payments equal to a percentage of expenditures exceeding maximum regional caps.

In the third quarter of 2022, the Italian Ministry of Health provided guidelines to the Italian regions and provinces on seeking payback of expenditure overruns relating to the years ended December 31, 2015, through December 31, 2018. Since receiving the guidelines, several regions and provinces have requested payment from affected medical device companies, including the Company. The Company has taken legal action to dispute the legality of such measures.

The Company accounts for the estimated cost of the IMDP as sales and marketing expense and periodically reassesses the liability based upon current facts and circumstances. As a result, the Company recorded an expense of $0.3 million and $0.6 million for the three and six months ended June 30, 2023, respectively, and an expense of $0.3 million and $0.6 million for the three and six months ended June 30, 2022, respectively. As of June 30, 2023, the Company has accrued $6.8 million related to the IMDP, which it has classified within other long-term liabilities; however, the actual liability could be higher or lower than the amount accrued once all legal proceedings are resolved and upon further clarification of the IMDP by the Italian authorities for more recent fiscal years.

XML

Accumulated other comprehensive loss

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

Accumulated other comprehensive loss

9. Accumulated other comprehensive loss

The components of and changes in accumulated other comprehensive loss were as follows:

(Unaudited, U.S. Dollars, in thousands)	Currency Translation Adjustments			Neo Medical Convertible Loans		Other Investments		Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2022	$	(2,482	)	$	1,005	$	101	$	(1,376	)
Other comprehensive income (loss)		950			117		201		1,268
Income taxes		—			—		—		—
Balance at June 30, 2023	$	(1,532	)	$	1,122	$	302	$	(108	)

XML

Revenue recognition and accounts receivable

6 Months Ended

Jun. 30, 2023

Revenue Recognition And Accounts Receivable [Abstract]

Revenue recognition and accounts receivable

10. Revenue recognition and accounts receivable

Revenue Recognition

The Company has two reporting segments: Global Spine and Global Orthopedics. Within the Global Spine reporting segment, there are two product categories: (i) Bone Growth Therapies, and (ii) Spinal Implants, Biologics, and Enabling Technologies.

The table below presents net sales by major product category by reporting segment:

	Three Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023		2022		Change
Bone Growth Therapies	$	52,662	$	47,765		10.3	%
Spinal Implants, Biologics, and Enabling Technologies		105,314		43,017		144.8	%
Global Spine		157,976		90,782		74.0	%
Global Orthopedics		29,040		27,288		6.4	%
Net sales	$	187,016	$	118,070		58.4	%

	Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023		2022		Change
Bone Growth Therapies	$	100,376	$	89,713		11.9	%
Spinal Implants, Biologics, and Enabling Technologies		206,806		83,724		147.0	%
Global Spine		307,182		173,437		77.1	%
Global Orthopedics		55,038		51,051		7.8	%
Net sales	$	362,220	$	224,488		61.4	%

Product Sales and Marketing Service Fees

The table below presents product sales and marketing service fees, which are both components of net sales:

	Three Months Ended June 30,				Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023		2022		2023		2022
Product sales	$	174,078	$	103,559	$	336,326	$	196,167
Marketing service fees		12,938		14,511		25,894		28,321
Net sales	$	187,016	$	118,070	$	362,220	$	224,488

Product sales primarily consist of the sale of bone growth therapies devices, spinal implants, certain biologics, enabling technologies, and orthopedics products. Marketing service fees are received from MTF Biologics based on total sales of biologics tissues sourced from MTF Biologics and relate solely to the Global Spine reporting segment. The Company partners with MTF Biologics to provide certain allograft solutions (HCT/Ps) for various spine, orthopedic and other bone repair needs, with this partnership allowing us to exclusively market certain biologic offerings.

Accounts receivable and related allowances

The following table provides a detail of changes in the Company’s allowance for expected credit losses for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,					Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023		2022			2023			2022
Allowance for expected credit losses beginning balance	$	6,691	$	5,389		$	6,419		$	4,944
Addition resulting from the Merger with SeaSpine		—		—			137			—
Current period provision for expected credit losses		282		539			490			1,139
Write-offs charged against the allowance and other		6		(142	)		(120	)		(246	)
Effect of changes in foreign exchange rates		36		(197	)		89			(248	)
Allowance for expected credit losses ending balance	$	7,015	$	5,589		$	7,015		$	5,589

XML

Business segment information

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Business segment information

11. Business segment information

The Company has two reporting segments: Global Spine and Global Orthopedics. The primary metric used in managing the Company is adjusted earnings before interest, tax, depreciation, and amortization (“adjusted EBITDA,” a non-GAAP financial measure). Adjusted EBITDA represents earnings before interest income (expense), income taxes, depreciation, and amortization and excludes the impact of share-based compensation, gains and losses related to changes in foreign exchange rates, charges related to the SeaSpine merger and other strategic investments, acquisition-related fair value adjustments, legal judgments and settlements, and charges related to initial compliance with regulations set forth by the European Union Medical Device Regulation. Corporate activities comprise operating expenses and activities not directly identifiable within the two reporting segments, such as human resources, finance, legal, and information technology functions. The table below presents adjusted EBITDA by reporting segment:

	Three Months Ended June 30,						Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023			2022			2023			2022
Adjusted EBITDA by reporting segment
Global Spine		21,258			14,610			36,239			28,643
Global Orthopedics		(135	)		780			(91	)		(24	)
Corporate		(11,204	)		(3,967	)		(23,025	)		(10,087	)
Consolidated adjusted EBITDA	$	9,919		$	11,423		$	13,123		$	18,532
Reconciling items:
Interest expense, net		1,266			407			2,555			782
Depreciation and amortization		13,327			6,512			25,997			14,028
Share-based compensation expense		13,246			4,460			26,266			8,792
Foreign exchange impact		(269	)		2,991			(852	)		4,233
SeaSpine merger-related costs		8,206			—			28,946			—
Strategic investments		309			1,824			970			2,794
Acquisition-related fair value adjustments		8,149			(10,714	)		19,785			(16,214	)
Legal judgments/settlements		1,291			148			1,760			341
Medical device regulation		2,050			2,248			5,679			4,198
Business interruption - COVID-19		—			316			—			659
All other		262			189			262			266
Income (loss) before income taxes	$	(37,918	)	$	3,042		$	(98,245	)	$	(1,347	)

Geographical information

The table below presents net sales by geographic destination for each reporting segment and for the consolidated Company:

	Three Months Ended June 30,				Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023		2022		2023		2022
Global Spine
U.S.	$	147,360	$	85,899	$	286,817	$	162,965
International		10,616		4,883		20,365		10,472
Total Global Spine		157,976		90,782		307,182		173,437
Global Orthopedics
U.S.		7,223		6,903		13,859		12,230
International		21,817		20,385		41,179		38,821
Total Global Orthopedics		29,040		27,288		55,038		51,051
Consolidated
U.S.		154,583		92,802		300,676		175,195
International		32,433		25,268		61,544		49,293
Net sales	$	187,016	$	118,070	$	362,220	$	224,488

XML

Acquisition-Related Amortization and Remeasurement

6 Months Ended

Jun. 30, 2023

Acquisition Related Amortization And Remeasurement [Abstract]

Acquisition-Related Amortization and Remeasurement

12. Acquisition-related amortization and remeasurement

Acquisition-related amortization and remeasurement consists of (i) amortization related to intangible assets acquired through business combinations or asset acquisitions and (ii) remeasurement of any related contingent consideration arrangements. Components of acquisition-related amortization and remeasurement are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023			2022			2023			2022
Amortization of acquired intangibles	$	4,633		$	2,051		$	8,767		$	4,052
Changes in fair value of contingent consideration		(1,300	)		(10,714	)		(1,300	)		(16,214	)
Total	$	3,333		$	(8,663	)	$	7,467		$	(12,162	)

XML

Share-based compensation

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Share-based compensation

13. Share-based compensation

Components of share-based compensation expense are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023		2022		2023		2022
Cost of sales	$	482	$	205	$	953	$	416
Sales and marketing		2,551		1,000		4,800		1,981
General and administrative		9,167		2,958		18,271		6,176
Research and development		1,046		297		2,242		219
Total	$	13,246	$	4,460	$	26,266	$	8,792

	Three Months Ended June 30,				Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023		2022		2023		2022
Stock options	$	2,397	$	205	$	5,153	$	564
Time-based restricted stock awards and units		10,235		2,410		20,081		4,580
Market-based / performance-based restricted stock units		113		1,497		113		2,941
Stock purchase plan		501		348		919		707
Total	$	13,246	$	4,460	$	26,266	$	8,792

Pursuant to the Merger Agreement, the equity awards of SeaSpine (including stock options and restricted stock units) outstanding as of immediately prior to the closing of the Merger were converted into equity awards denominated in shares of Orthofix common stock. The Company issued options to purchase 1.9 million shares of Orthofix common stock and 0.5 million shares of time-based vesting restricted stock in connection with the conversion of such awards. The estimated fair value of the portion of the SeaSpine equity awards for which the required service period had been completed at the time of the closing of the Merger was treated as purchase consideration. The remaining estimated fair value is recorded as compensation expense over the remainder of the service period associated with the awards.

During the three months ended June 30, 2023, and 2022, the Company issued 0.3 million and 0.2 million shares, respectively, of common stock related to stock purchase plan issuances, stock option exercises, and the vesting of restricted stock awards and units. During the six months ended June 30, 2023, and 2022, the Company issued 0.5 million and 0.2 million shares, respectively, of common stock related to stock purchase plan issuances, stock option exercises, and the vesting of restricted stock awards and units.

XML

Income taxes

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Income taxes

14. Income taxes

Generally, income tax provisions for interim periods are based on an estimated annual income tax rate, adjusted for discrete tax items, with any changes affecting the estimated annual effective tax rate recorded in the interim period in which the change occurs. Due to the impact of losses not benefitted by the Company’s U.S. and Italian operations, the Company determined the estimated annual effective tax rate method would not provide a reliable estimate of the Company’s overall annual effective tax rate. As such, the Company has calculated the tax provision using the actual effective rate for the three and six months ended June 30, 2023. Due to the impact of temporary differences on the U.S. current tax liability without any deferred tax benefit, the actual effective rate may vary in future quarters.

For the three months ended June 30, 2023, and 2022, the effective tax rate was (4.0%) and 18.2%, respectively. For the six months ended June 30, 2023, and 2022, the effective tax rate was (2.2%) and (46.3%), respectively. The primary factors affecting the Company’s effective tax rate for the three and six months ended June 30, 2023, were certain losses not benefitted and tax amortization on certain acquired intangibles.

XML

Earnings per share ("EPS")

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Earnings per share ("EPS")

15. Earnings per share (“EPS”)

For the three and six months ended June 30, 2023, no adjustments were made to net income for purposes of calculating basic and diluted EPS. The following is a reconciliation of the weighted average shares used in diluted EPS computations.

	Three Months Ended June 30,				Six Months Ended June 30,
(Unaudited, In thousands)	2023		2022		2023		2022
Weighted average common shares-basic		36,762		20,031		36,252		19,965
Effect of dilutive securities
Unexercised stock options and stock purchase plan		—		23		—		—
Unvested restricted stock units		—		59		—		—
Weighted average common shares-diluted		36,762		20,113		36,252		19,965

There were 7.0 million and 1.6 million weighted average outstanding stock options and restricted stock units not included in the diluted EPS computation for the three months ended June 30, 2023, and 2022, respectively, and 7.1 million and 1.6 million weighted average outstanding stock options and restricted stock units not included in the diluted EPS computation for the six months ended June 30, 2023, and 2022, respectively, because inclusion of these awards was anti-dilutive.

XML

Recently adopted accounting standards, recently issued accounting pronouncements (Policies)

6 Months Ended

Jun. 30, 2023

Accounting Changes and Error Corrections [Abstract]

Recently adopted accounting standards and recently issued accounting pronouncements

Adoption of Accounting Standards Update (“ASU”) 2021-08— Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers

In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-08, which aims to address diversity in practice and inconsistency related to the accounting for acquired revenue contracts with customers in a business combination. The amendments require that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. The Company adopted this standard effective January 1, 2023, on a prospective basis. Adoption of this standard resulted in the recognition of $2.2 million in contract liabilities associated with acquired revenue contracts as a result of the Company’s merger with SeaSpine, which closed on January 5, 2023.
 

Recently Issued Accounting Pronouncements

Topic	Description of Guidance	Effective Date	Status of Company's Evaluation
Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (ASU 2022-03)	Clarifies the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions. Certain of the provisions are to be applied retrospectively with other provisions applied prospectively.	January 1, 2024	The Company is currently evaluating the impact this ASU may have on its consolidated financial statements.

Other recently issued ASUs, excluding those ASUs which have already been disclosed as adopted or described above, were assessed and determined not applicable, or are expected to have minimal impact on the Company's condensed consolidated financial statements.

XML

Merger and Acquisitions (Tables)

6 Months Ended

Jun. 30, 2023

Business Combinations [Abstract]

Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed

The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the acquisition date. Certain of the acquired assets and liabilities assumed were valued utilizing Level 3 inputs and assumptions. A final determination of the allocation of the purchase price to assets acquired and liabilities assumed has not been made and the following should be considered preliminary. Adjustments to the preliminary purchase price allocation could be material. The final determination is subject to completion of the Company's valuation of the assets acquired and liabilities assumed, including contingent liabilities and deferred income taxes, which it expects to complete within one year of the acquisition date.

(Unaudited, U.S. Dollars, in thousands)	Previously Reported		Adjustments			As Revised		Assigned Useful Life
Assets acquired:
Current assets
Cash and cash equivalents	$	29,419	$	—		$	29,419
Accounts receivable, net		35,313		—			35,313
Inventories		129,610		3,026			132,636
Prepaid expenses and other current assets		4,600		(10	)		4,590
Total current assets		198,942		3,016			201,958
Property, plant, and equipment, net		68,911		(48	)		68,863
Customer relationships		27,100		6,000			33,100	13 years
Developed technology		45,400		1,800			47,200	6 - 8 years
In-process research and development ("IPR&D")		5,600		150			5,750	Indefinite
Other long-term assets		20,472		29			20,501
Total identifiable assets acquired	$	366,425	$	10,947		$	377,372
Liabilities assumed:
Current liabilities
Accounts payable	$	21,602	$	—		$	21,602
Other current liabilities		41,224		(920	)		40,304
Total current liabilities		62,826		(920	)		61,906
Long-term borrowings under SeaSpine credit facility		26,298		—			26,298
Other long-term liabilities		31,950		883			32,833
Total liabilities assumed		121,074		(37	)		121,037
Net identifiable assets acquired	$	245,351	$	10,984		$	256,335
Total fair value of consideration transferred		376,745		—			376,745
Residual goodwill	$	131,394	$	(10,984	)	$	120,410

Schedule of Estimated Fair Value of Consideration Associated with Merger

The total estimated fair value of consideration associated with the Merger as of the acquisition date was comprised of:

(Unaudited, U.S. Dollars, in thousands, except shares and price per share)
Share Consideration:
Orthofix common shares to be issued in exchange for SeaSpine common shares		16,047,315
Orthofix closing price per share as of January 4, 2023	$	22.76
Estimated fair value of shares issued in exchange for SeaSpine common shares	$	365,237
Estimated fair value of Orthofix stock options and RSUs issued in exchange for outstanding SeaSpine equity awards	$	11,508
Total estimated fair value of consideration	$	376,745

Summary of Pro Forma Financial Information

The unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the Merger closed as of January 1, 2022.

	Three Months Ended June 30,						Six Months Ended June 30,
(Unaudited, U.S. Dollars, in millions)	2023			2022			2023			2022
Net sales	$	187.0		$	174.4		$	362.2		$	331.5
Net income (loss)	$	(30.1	)	$	(27.1	)	$	(75.3	)	$	(69.9	)

Summary of Integration Costs Incurred

The following table summarizes integration costs incurred for the three and six months ended June 30, 2023, and 2022.

	Three Months Ended June 30,					Six Months Ended June 30,
(Unaudited, U.S. Dollars, in millions)	2023			2022		2023		2022
Compensation-related integration costs		3.5		$	—		13.8	$	—
Fee paid to financial advisor to the Merger		—			—		5.5		—
Professional fees / consulting fees		0.7			—		5.0		—
Product rationalization charges		4.2			—		4.9		—
Other costs to complete		(0.3	)		—		1.2		—
Total		8.1		$	—		30.4	$	—

Summary of Restructuring Costs

The table below provides a summary of restructuring costs incurred during the period and the resulting liability as of June 30, 2023, which is recognized within other current liabilities:

(Unaudited, U.S. Dollars, in millions)	Balance as of December 31, 2022		Charges Incurred		Payments Made			Balance as of June 30, 2023
Severance costs	$	—	$	10.4	$	(4.4	)	$	6.0
Retention costs		—		2.8		(0.2	)		2.6
Payroll taxes		—		0.4		(0.1	)		0.3
Total	$	—	$	13.6	$	(4.7	)	$	8.9

XML

Inventories (Tables)

6 Months Ended

Jun. 30, 2023

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories were as follows:

(Unaudited, U.S. Dollars, in thousands)	June 30, 2023		December 31, 2022
Raw materials	$	26,791	$	17,035
Work-in-process		55,514		19,243
Finished products		140,169		63,872
Inventories	$	222,474	$	100,150

XML

Leases (Tables)

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Summary of Lease Portfolio

A summary of the Company’s lease portfolio as of June 30, 2023, and December 31, 2022, is presented in the table below:

(Unaudited, U.S. Dollars, in thousands)	Classification	June 30, 2023		December 31, 2022
Right-of-use assets ("ROU assets")
Operating leases	Other long-term assets	$	20,434	$	6,788
Finance leases	Property, plant and equipment, net		16,853		17,360
Total ROU assets		$	37,287	$	24,148
Lease Liabilities
Current
Operating leases	Other current liabilities	$	3,159	$	1,638
Finance leases	Current portion of finance lease liability		678		652
Long-term
Operating leases	Other long-term liabilities		17,786		5,376
Finance leases	Long-term portion of finance lease liability		18,894		19,239
Total lease liabilities		$	40,517	$	26,905

Summary of Supplemental Cash Flow Information Related to Leases

Supplemental cash flow information related to leases was as follows:

(Unaudited, U.S. Dollars, in thousands)	Six Months Ended June 30, 2023		Six Months Ended June 30, 2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	3,751	$	2,071
Operating cash flows from finance leases		428		443
Financing cash flows from finance leases		320		2,291
ROU assets obtained in exchange for lease obligations
Operating leases		15,368		4,592
Finance leases		—		—

XML

Fair value measurements and investments (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Schedule of Financial Assets and Liabilities Recorded at Fair Value on Recurring Basis

The fair value measurements of the Company’s financial assets and liabilities measured on a recurring basis were as follows:

	June 30, 2023											December 31, 2022
(Unaudited, U.S. Dollars, in thousands)	Level 1		Level 2			Level 3			Total			Total
Assets
Neo Medical convertible loan agreements	$	—	$	—		$	7,690		$	7,690		$	7,140
Neo Medical preferred equity securities		—		6,084			—			6,084			6,084
Bone Biologics equity securities		—		—			—			—			—
Other investments		—		—			1,986			1,986			1,726
Total	$	—	$	6,084		$	9,676		$	15,760		$	14,950
Liabilities
Lattus contingent consideration	$	—	$	—			(9,900	)	$	(9,900	)	$	—
Spinal Kinetics contingent consideration		—		—			—			—			—
Deferred compensation plan		—		(1,467	)		—			(1,467	)		(1,515	)
Total	$	—	$	(1,467	)	$	(9,900	)	$	(11,367	)	$	(1,515	)

Schedule of Reconciliation of Investments in Equity Securities

The table below presents a reconciliation of the beginning and ending balances of the Company’s investment in Neo Medical preferred equity securities:

(Unaudited, U.S. Dollars, in thousands)	2023		2022
Fair value of Neo Medical preferred equity securities at January 1	$	6,084	$	5,413
Conversion of loan into preferred equity securities		—		671
Fair value of Neo Medical preferred equity securities at June 30		6,084		6,084
Cumulative unrealized gain on Neo Medical preferred equity securities		413		413

Schedule of Reconciliation For Contingent Consideration Measured At Fair Value Using Significant Unobservable Inputs

The following table provides a reconciliation of the beginning and ending balances for the Spinal Kinetics contingent consideration measured at estimated fair value using significant unobservable inputs (Level 3):

(Unaudited, U.S. Dollars, in thousands)	2023		2022
Spinal Kinetics contingent consideration estimated fair value at January 1	$	—	$	17,200
Decrease in fair value recognized in acquisition-related amortization and remeasurement		—		(16,214	)
Spinal Kinetics contingent consideration estimated fair value at June 30	$	—	$	986

(Unaudited, U.S. Dollars, in thousands)	2023			2022
Lattus contingent consideration estimated fair value at January 5	$	11,200		$	—
Decrease in fair value recognized in acquisition-related amortization and remeasurement		(1,300	)		—
Lattus contingent consideration estimated fair value at June 30	$	9,900		$	—

Fair Value, Inputs, Level 3 [Member]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Schedule of Reconciliation For Convertible Loans Measured At Fair Value Using Significant Unobservable Inputs

The following table provides a reconciliation of the beginning and ending balances of the Convertible Loans, measured at fair value using significant unobservable inputs (Level 3):

(Unaudited, U.S. Dollars, in thousands)	2023		2022
Fair value of Neo Medical Convertible Loans at January 1	$	7,140	$	7,148
Interest recognized in interest income, net		238		217
Foreign currency remeasurement recognized in other expense, net		195		(257	)
Unrealized gain (loss) recognized in other comprehensive loss		117		(615	)
Conversion of Second Convertible Loan into preferred equity securities		—		(671	)
Fair value of Neo Medical Convertible Loans at June 30		7,690		5,820
Amortized cost basis of Neo Medical Convertible Loans at June 30		6,340		5,496

Schedule of Changes in Valuation of Securities

The following table provides quantitative information related to certain key assumptions utilized within the valuation as of June 30, 2023:

(Unaudited, U.S. Dollars, in thousands)	Fair Value as of  June 30, 2023		Unobservable inputs	Estimate
Neo Medical Convertible Loan	$	7,690	Cost of equity discount rate		18.0	%
			Estimated equity volatility		74.1	%

The following table provides quantitative information related to certain key assumptions utilized within the valuation as of June 30, 2023:

(Unaudited, U.S. Dollars, in thousands)	Fair Value as of  June 30, 2023		Unobservable inputs	Estimate
Lattus Contingent Consideration	$	9,900	Counterparty discount rate		9.0	%
			Revenue risk-adjusted discount rate		6.5	%

XML

Accumulated other comprehensive loss (Tables)

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

Components of Changes in Accumulated Other Comprehensive Loss

The components of and changes in accumulated other comprehensive loss were as follows:

(Unaudited, U.S. Dollars, in thousands)	Currency Translation Adjustments			Neo Medical Convertible Loans		Other Investments		Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2022	$	(2,482	)	$	1,005	$	101	$	(1,376	)
Other comprehensive income (loss)		950			117		201		1,268
Income taxes		—			—		—		—
Balance at June 30, 2023	$	(1,532	)	$	1,122	$	302	$	(108	)

XML

Revenue recognition and accounts receivable (Tables)

6 Months Ended

Jun. 30, 2023

Revenue Recognition And Accounts Receivable [Abstract]

Schedule of Net Sales by Major Product Category by Reporting Segment

The table below presents net sales by major product category by reporting segment:

	Three Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023		2022		Change
Bone Growth Therapies	$	52,662	$	47,765		10.3	%
Spinal Implants, Biologics, and Enabling Technologies		105,314		43,017		144.8	%
Global Spine		157,976		90,782		74.0	%
Global Orthopedics		29,040		27,288		6.4	%
Net sales	$	187,016	$	118,070		58.4	%

	Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023		2022		Change
Bone Growth Therapies	$	100,376	$	89,713		11.9	%
Spinal Implants, Biologics, and Enabling Technologies		206,806		83,724		147.0	%
Global Spine		307,182		173,437		77.1	%
Global Orthopedics		55,038		51,051		7.8	%
Net sales	$	362,220	$	224,488		61.4	%

Schedule of Components Net Sales

The table below presents product sales and marketing service fees, which are both components of net sales:

	Three Months Ended June 30,				Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023		2022		2023		2022
Product sales	$	174,078	$	103,559	$	336,326	$	196,167
Marketing service fees		12,938		14,511		25,894		28,321
Net sales	$	187,016	$	118,070	$	362,220	$	224,488

Allowances for Expected Credit Losses

The following table provides a detail of changes in the Company’s allowance for expected credit losses for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,					Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023		2022			2023			2022
Allowance for expected credit losses beginning balance	$	6,691	$	5,389		$	6,419		$	4,944
Addition resulting from the Merger with SeaSpine		—		—			137			—
Current period provision for expected credit losses		282		539			490			1,139
Write-offs charged against the allowance and other		6		(142	)		(120	)		(246	)
Effect of changes in foreign exchange rates		36		(197	)		89			(248	)
Allowance for expected credit losses ending balance	$	7,015	$	5,589		$	7,015		$	5,589

XML

Business segment information (Tables)

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Summary of EBITDA by Reporting Segment

The table below presents adjusted EBITDA by reporting segment:

	Three Months Ended June 30,						Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023			2022			2023			2022
Adjusted EBITDA by reporting segment
Global Spine		21,258			14,610			36,239			28,643
Global Orthopedics		(135	)		780			(91	)		(24	)
Corporate		(11,204	)		(3,967	)		(23,025	)		(10,087	)
Consolidated adjusted EBITDA	$	9,919		$	11,423		$	13,123		$	18,532
Reconciling items:
Interest expense, net		1,266			407			2,555			782
Depreciation and amortization		13,327			6,512			25,997			14,028
Share-based compensation expense		13,246			4,460			26,266			8,792
Foreign exchange impact		(269	)		2,991			(852	)		4,233
SeaSpine merger-related costs		8,206			—			28,946			—
Strategic investments		309			1,824			970			2,794
Acquisition-related fair value adjustments		8,149			(10,714	)		19,785			(16,214	)
Legal judgments/settlements		1,291			148			1,760			341
Medical device regulation		2,050			2,248			5,679			4,198
Business interruption - COVID-19		—			316			—			659
All other		262			189			262			266
Income (loss) before income taxes	$	(37,918	)	$	3,042		$	(98,245	)	$	(1,347	)

Summary of Net Sales by Geographic Destination for each Reporting Segment

The table below presents net sales by geographic destination for each reporting segment and for the consolidated Company:

	Three Months Ended June 30,				Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023		2022		2023		2022
Global Spine
U.S.	$	147,360	$	85,899	$	286,817	$	162,965
International		10,616		4,883		20,365		10,472
Total Global Spine		157,976		90,782		307,182		173,437
Global Orthopedics
U.S.		7,223		6,903		13,859		12,230
International		21,817		20,385		41,179		38,821
Total Global Orthopedics		29,040		27,288		55,038		51,051
Consolidated
U.S.		154,583		92,802		300,676		175,195
International		32,433		25,268		61,544		49,293
Net sales	$	187,016	$	118,070	$	362,220	$	224,488

XML

Acquisition-Related Amortization and Remeasurement (Tables)

6 Months Ended

Jun. 30, 2023

Acquisition Related Amortization And Remeasurement [Abstract]

Components of Acquisition-Related Amortization and Remeasurement

Components of acquisition-related amortization and remeasurement are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023			2022			2023			2022
Amortization of acquired intangibles	$	4,633		$	2,051		$	8,767		$	4,052
Changes in fair value of contingent consideration		(1,300	)		(10,714	)		(1,300	)		(16,214	)
Total	$	3,333		$	(8,663	)	$	7,467		$	(12,162	)

XML

Share-based compensation (Tables)

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Components of Share-Based Compensation Expense

Components of share-based compensation expense are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023		2022		2023		2022
Cost of sales	$	482	$	205	$	953	$	416
Sales and marketing		2,551		1,000		4,800		1,981
General and administrative		9,167		2,958		18,271		6,176
Research and development		1,046		297		2,242		219
Total	$	13,246	$	4,460	$	26,266	$	8,792

	Three Months Ended June 30,				Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023		2022		2023		2022
Stock options	$	2,397	$	205	$	5,153	$	564
Time-based restricted stock awards and units		10,235		2,410		20,081		4,580
Market-based / performance-based restricted stock units		113		1,497		113		2,941
Stock purchase plan		501		348		919		707
Total	$	13,246	$	4,460	$	26,266	$	8,792

XML

Earnings per share ("EPS") (Tables)

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Schedule of Reconciliation of Weighted Average Shares Used in Diluted EPS

The following is a reconciliation of the weighted average shares used in diluted EPS computations.

	Three Months Ended June 30,				Six Months Ended June 30,
(Unaudited, In thousands)	2023		2022		2023		2022
Weighted average common shares-basic		36,762		20,031		36,252		19,965
Effect of dilutive securities
Unexercised stock options and stock purchase plan		—		23		—		—
Unvested restricted stock units		—		59		—		—
Weighted average common shares-diluted		36,762		20,113		36,252		19,965

XML

Recently adopted accounting standards, recently issued accounting pronouncements - Additional Information (Detail) $ in Millions	6 Months Ended
	Jun. 30, 2023 USD ($)
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Contract liabilities revenue recognized	$ 2.2

XML

Merger and acquisitions -Schedule of Estimated Fair Value of Consideration Associated with Merger (Detail) - SeaSpine Holdings Corporation [Member] - USD ($) $ / shares in Units, $ in Thousands		6 Months Ended
	Jan. 05, 2023	Jun. 30, 2023
Business Acquisition [Line Items]
Orthofix common shares to be issued in exchange for SeaSpine common shares	16,047,315	1,300,000
Orthofix closing price per share as of January 4, 2023	$ 22.76
Estimated fair value of shares issued in exchange for SeaSpine common shares	$ 365,237
Estimated fair Value of Stock Options and RSU issued InExchange for Equity Awards	11,508
Total estimated fair value of consideration	$ 376,745

XML

Merger and acquisitions - Additional Information (Detail) - USD ($) $ in Thousands		3 Months Ended				6 Months Ended
	Jan. 05, 2023	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Business Acquisition [Line Items]
Conversion of stock, shares converted	0.4163
Goodwill		$ 191,727				$ 191,727		$ 71,317
Pre tax expense			$ 16,700
Net sales		187,016		$ 118,070		362,220	$ 224,488
Net loss		(39,426)	$ (60,938)	2,489	$ (4,460)	(100,364)	(1,971)
SeaSpine Holdings Corporation [Member]
Business Acquisition [Line Items]
Goodwill	$ 120,410
Direct acquisition-related costs		3,300				9,800
Net sales		64,400				125,300
Net loss		(24,900)				(52,800)
Global Spine [Member]
Business Acquisition [Line Items]
Goodwill	$ 120,400
Net sales		$ 157,976		$ 90,782		$ 307,182	$ 173,437

XML

Merger and acquisitions - Summary of Fair Values of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands	Jan. 05, 2023	Jun. 30, 2023	Dec. 31, 2022
Current liabilities
Residual goodwill		$ 191,727	$ 71,317
SeaSpine Holdings Corporation [Member]
Current assets
Cash and cash equivalents	$ 29,419
Accounts receivable, net	35,313
Inventories	132,636
Prepaid expenses and other current assets	4,590
Total current assets	201,958
Property, plant, and equipment, net	68,863
Other long-term assets	20,501
Total identifiable assets acquired	377,372
Current liabilities
Accounts payable	21,602
Other current liabilities	40,304
Total current liabilities	61,906
Long-term borrowings under credit facility	26,298
Other long-term liabilities	32,833
Total liabilities assumed	121,037
Net identifiable assets acquired	256,335
Total fair value of consideration transferred	376,745
Residual goodwill	120,410
SeaSpine Holdings Corporation [Member] | Customer Relationships [Member]
Current assets
Finite lived intangible assets, net acquired	$ 33,100
Current liabilities
Assigned Useful Life	13 years
SeaSpine Holdings Corporation [Member] | Developed Technology [Member]
Current assets
Finite lived intangible assets, net acquired	$ 47,200
SeaSpine Holdings Corporation [Member] | Developed Technology [Member] | Minimum [Member]
Current liabilities
Assigned Useful Life	6 years
SeaSpine Holdings Corporation [Member] | Developed Technology [Member] | Maximum [Member]
Current liabilities
Assigned Useful Life	8 years
SeaSpine Holdings Corporation [Member] | In Process Research and Development [Member]
Current assets
Finite lived intangible assets, net acquired	$ 5,750
Current liabilities
Assigned Useful Life	Indefinite
Previously Reported [Member] | SeaSpine Holdings Corporation [Member]
Current assets
Cash and cash equivalents	$ 29,419
Accounts receivable, net	35,313
Inventories	129,610
Prepaid expenses and other current assets	4,600
Total current assets	198,942
Property, plant, and equipment, net	68,911
Other long-term assets	20,472
Total identifiable assets acquired	366,425
Current liabilities
Accounts payable	21,602
Other current liabilities	41,224
Total current liabilities	62,826
Long-term borrowings under credit facility	26,298
Other long-term liabilities	31,950
Total liabilities assumed	121,074
Net identifiable assets acquired	245,351
Total fair value of consideration transferred	376,745
Residual goodwill	131,394
Previously Reported [Member] | SeaSpine Holdings Corporation [Member] | Customer Relationships [Member]
Current assets
Finite lived intangible assets, net acquired	27,100
Previously Reported [Member] | SeaSpine Holdings Corporation [Member] | Developed Technology [Member]
Current assets
Finite lived intangible assets, net acquired	45,400
Previously Reported [Member] | SeaSpine Holdings Corporation [Member] | In Process Research and Development [Member]
Current assets
Finite lived intangible assets, net acquired	5,600
Adjustments [Member] | SeaSpine Holdings Corporation [Member]
Current assets
Inventories	3,026
Prepaid expenses and other current assets	(10)
Total current assets	3,016
Property, plant, and equipment, net	(48)
Other long-term assets	29
Total identifiable assets acquired	10,947
Current liabilities
Other current liabilities	(920)
Total current liabilities	(920)
Other long-term liabilities	883
Total liabilities assumed	(37)
Net identifiable assets acquired	10,984
Residual goodwill	(10,984)
Adjustments [Member] | SeaSpine Holdings Corporation [Member] | Customer Relationships [Member]
Current assets
Finite lived intangible assets, net acquired	6,000
Adjustments [Member] | SeaSpine Holdings Corporation [Member] | Developed Technology [Member]
Current assets
Finite lived intangible assets, net acquired	1,800
Adjustments [Member] | SeaSpine Holdings Corporation [Member] | In Process Research and Development [Member]
Current assets
Finite lived intangible assets, net acquired	$ 150

XML

Merger and acquisitions - Summary of Pro Forma Financial Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Business Combinations [Abstract]
Net sales	$ 187,000	$ 174,400	$ 362,200	$ 331,500
Net income (loss)	$ (30,100)	$ (27,100)	$ (75,300)	$ (69,900)

XML

Merger and acquisitions - Summary of Integration Costs Incurred (Detail) - SeaSpine Holdings Corporation [Member] - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2023
Business Acquisition [Line Items]
Compensation-related integration costs	$ 3.5	$ 13.8
Fee paid to financial advisor to the Merger		5.5
Professional fees / consulting fees	0.7	5.0
Product rationalization charges	4.2	4.9
Other costs to complete	(0.3)	1.2
Total	$ 8.1	$ 30.4

XML

Merger and Acquisitions - Summary of Restructuring Costs (Detail) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Mar. 31, 2023	Jun. 30, 2023
Restructuring Cost and Reserve [Line Items]
Charges Incurred	$ 16.7
SeaSpine Holdings Corporation [Member] | Severance Costs [Member]
Restructuring Cost and Reserve [Line Items]
Charges Incurred		$ 10.4
Payments Made		(4.4)
Balance as of June 30, 2023		6.0
SeaSpine Holdings Corporation [Member] | Retention Costs [Member]
Restructuring Cost and Reserve [Line Items]
Charges Incurred		2.8
Payments Made		(0.2)
Balance as of June 30, 2023		2.6
SeaSpine Holdings Corporation [Member] | Payroll Taxes [Member]
Restructuring Cost and Reserve [Line Items]
Charges Incurred		0.4
Payments Made		(0.1)
Balance as of June 30, 2023		0.3
SeaSpine Holdings Corporation [Member] | Total [Member]
Restructuring Cost and Reserve [Line Items]
Charges Incurred		13.6
Payments Made		(4.7)
Balance as of June 30, 2023		$ 8.9

XML

Inventories - Schedule of Inventories (Detail) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials	$ 26,791	$ 17,035
Work-in-process	55,514	19,243
Finished products	140,169	63,872
Inventories	$ 222,474	$ 100,150

XML

Leases - Summary of Lease Portfolio (Detail) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Right-of-use assets ("ROU assets")
Operating leases	$ 20,434	$ 6,788
Operating lease, right-of-use asset, statement of financial position [Extensible List]	Other long-term assets	Other long-term assets
Finance leases	$ 16,853	$ 17,360
Finance lease, right-of-use asset, statement of financial position [Extensible List]	Property, plant, and equipment, net	Property, plant, and equipment, net
Total ROU assets	$ 37,287	$ 24,148
Current
Operating leases	$ 3,159	$ 1,638
Operating lease, liability, current, statement of financial position [Extensible List]	Other current liabilities	Other current liabilities
Finance leases	$ 678	$ 652
Long-term
Operating leases	$ 17,786	$ 5,376
Operating lease, liability, noncurrent, statement of financial position [Extensible List]	Other long-term liabilities	Other long-term liabilities
Finance leases	$ 18,894	$ 19,239
Total lease liabilities	$ 40,517	$ 26,905

XML

Leases - Summary of Supplemental Cash Flow Information Related to Leases (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$ 3,751	$ 2,071
Operating cash flows from finance leases	428	443
Financing cash flows from finance leases	320	2,291
ROU assets obtained in exchange for lease obligations
Operating leases	$ 15,368	$ 4,592

XML

Long-Term Debt - Additional Information (Detail)	Jan. 05, 2023 USD ($)	Jul. 05, 2023 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2023 EUR (€)	Jun. 13, 2023 USD ($)	May 10, 2023 USD ($)	Mar. 03, 2023 USD ($)	Jan. 03, 2023 USD ($)
Debt Instrument [Line Items]
Aggregate amount of borrowings paid	$ 26,900,000
Prepayment premium	$ 600,000
Other Current Liabilities [Member]
Debt Instrument [Line Items]
Effective interest on borrowings			6.40%	6.40%
Interest accrued			$ 600,000
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Amount outstanding under lines of credit			51,000,000			$ 6,000,000	$ 15,000,000	$ 30,000,000
Maximum borrowing capacity					$ 175,000,000			$ 300,000,000
Revolving Credit Facility [Member] | Subsequent Event [Member]
Debt Instrument [Line Items]
Amount outstanding under lines of credit		$ 8,000,000
Italy [Member]
Debt Instrument [Line Items]
Amount outstanding under lines of credit			0
Maximum borrowing capacity			$ 6,000,000	€ 5,500,000

XML

Fair Value Measurements and Investments - Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets fair value	$ 15,760	$ 14,950
Deferred compensation plan, Liabilities	(1,467)	(1,515)
Liabilities fair value, Total	(11,367)	(1,515)
Lattus [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Contingent consideration	(9,900)
Convertible Loan Agreements [Member] | Neo Medical [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets fair value	7,690	7,140
Preferred Equity Securities [Member] | Neo Medical [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets fair value	6,084	6,084
Other Investments [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets fair value	1,986	$ 1,726
Fair Value, Inputs, Level 2 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets fair value	6,084
Deferred compensation plan, Liabilities	(1,467)
Liabilities fair value, Total	(1,467)
Fair Value, Inputs, Level 2 [Member] | Preferred Equity Securities [Member] | Neo Medical [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets fair value	6,084
Fair Value, Inputs, Level 3 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets fair value	9,676
Liabilities fair value, Total	(9,900)
Fair Value, Inputs, Level 3 [Member] | Lattus [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Contingent consideration	(9,900)
Fair Value, Inputs, Level 3 [Member] | Convertible Loan Agreements [Member] | Neo Medical [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets fair value	7,690
Fair Value, Inputs, Level 3 [Member] | Other Investments [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets fair value	$ 1,986

XML

Fair Value Measurements and Investments - Additional Information (Detail) SFr in Millions		1 Months Ended
	Jan. 05, 2023 USD ($)	Oct. 31, 2020 USD ($)	Jun. 30, 2023 USD ($)	Oct. 31, 2021 USD ($)	Oct. 31, 2021 CHF (SFr)	Oct. 31, 2020 CHF (SFr)
Lattus [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Estimate fair value of contigent consideration	$ 11,200,000
Neo Medical [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Convertible loans		$ 5,000,000		$ 700,000	SFr 0.6	SFr 4.6
Convertible loan credit losses			$ 0
Preferred Stock [Member] | Neo Medical [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Amount of Preferred stock consideration		$ 5,000,000

XML

Fair Value Measurements and Investments - Schedule of Reconciliation of Investments in Equity Securities (Detail) - Preferred Stock [Member] - Neo Medical [Member] - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair value of equity securities beginning balance	$ 6,084	$ 5,413
Conversion of loan into preferred equity securities		671
Fair value of equity securities Ending balance	6,084	6,084
Cumulative unrealized gain on Neo Medical preferred equity securities	$ 413	$ 413

XML

Fair Value Measurements and Investments - Schedule of Reconciliation For Contingent Consideration Measured At Fair Value Using Significant Unobservable Inputs (Level 3) (Detail) - Neo Medical [Member] - Fair Value, Inputs, Level 3 [Member] - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair value of convertible loans beginning balance	$ 7,140	$ 7,148
Interest recognized in interest income, net	238	217
Foreign currency remeasurement recognized in other expense, net	195	(257)
Unrealized gain (loss) recognized in other comprehensive loss	117	(615)
Conversion of Second Convertible Loan into preferred equity securities		(671)
Fair value of convertible loans ending balance	7,690	5,820
Amortized cost basis of Neo Medical Convertible Loans at June 30	$ 6,340	$ 5,496

XML

Fair Value Measurements and Investments - Schedule of Valuation Methodology and Unobservable Inputs for Level 3 Assets and Liabilities Measured at Fair Value (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Spinal Kinetics [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Contingent consideration estimated fair value		$ 17,200
Decrease in fair value recognized in acquisition-related amortization and remeasurement		(16,214)
Contingent consideration estimated fair value at June 30		$ 986
Lattus Spine [Member]
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Consideration transferred	$ 9,900
Counterparty discount rate	9.00%
Revenue risk-adjusted discount rate	6.50%
Lattus Spine [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Contingent consideration estimated fair value	$ 11,200
Decrease in fair value recognized in acquisition-related amortization and remeasurement	(1,300)
Contingent consideration estimated fair value at June 30	9,900
Neo Medical [Member]
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Neo Medical Convertible Loan	$ 7,690
Fair value discount rate	18.00%
Estimated equity volatility	74.10%

XML

Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
	Jan. 05, 2023	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Other Commitments [Line Items]
Estimated sales and marketing expense (benefit)		$ 0.3	$ 0.3	$ 0.6	$ 0.6
Accrued other long-term liabilities		$ 6.8		$ 6.8
SeaSpine [Member]
Other Commitments [Line Items]
Number of shares issued under acquisition	16,047,315			1,300,000

XML

Accumulated other comprehensive loss - Components of Changes in Accumulated Other Comprehensive Loss (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($)
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	$ 336,860
Ending Balance	639,985
Currency Translation Adjustments [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	(2,482)
Other comprehensive income (loss)	950
Ending Balance	(1,532)
Neo Medical [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	1,005
Other comprehensive income (loss)	117
Ending Balance	1,122
Accumulated Other Comprehensive Loss [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	(1,376)
Other comprehensive income (loss)	1,268
Ending Balance	(108)
Other Investments [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	101
Other comprehensive income (loss)	201
Ending Balance	$ 302

XML

Revenue Recognition and Accounts Receivable - Schedule of Net Sales by Major Product Category by Reporting Segment (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Revenue Recognition And Accounts Receivable [Line Items]
Net sales	$ 187,016	$ 118,070	$ 362,220	$ 224,488
Change	58.40%		61.40%
Bone Growth Therapies [Member]
Revenue Recognition And Accounts Receivable [Line Items]
Net sales	$ 52,662	47,765	$ 100,376	89,713
Change	10.30%		11.90%
Spinal Implants, Biologics, and Enabling Technologies [Member]
Revenue Recognition And Accounts Receivable [Line Items]
Net sales	$ 105,314	43,017	$ 206,806	83,724
Change	144.80%		147.00%
Global Spine [Member]
Revenue Recognition And Accounts Receivable [Line Items]
Net sales	$ 157,976	90,782	$ 307,182	173,437
Change	74.00%		77.10%
Global Orthopedics [Member]
Revenue Recognition And Accounts Receivable [Line Items]
Net sales	$ 29,040	$ 27,288	$ 55,038	$ 51,051
Change	6.40%		7.80%

XML

Revenue Recognition and Accounts Receivable - Schedule of Components of Net Sales (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Revenue Recognition [Abstract]
Product sales	$ 174,078	$ 103,559	$ 336,326	$ 196,167
Marketing service fees	12,938	14,511	25,894	28,321
Net sales	$ 187,016	$ 118,070	$ 362,220	$ 224,488

XML

Revenue Recognition and Accounts Receivable - Schedule of Allowance for Expected Credit Losses (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for expected credit losses beginning balance	$ 6,691	$ 5,389	$ 6,419	$ 4,944
Addition resulting from the Merger with SeaSpine			137
Current period provision for expected credit losses	282	539	490	1,139
Write-offs charged against the allowance and other	(6)	(142)	(120)	(246)
Effect of changes in foreign exchange rates	36	(197)	89	248
Allowance for expected credit losses ending balance	$ 7,015	$ 5,589	$ 7,015	$ 5,589

XML

Business Segment Information - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2023 Segment
Segment Reporting [Abstract]
Number of reporting segments	2

XML

Business Segment Information - Summary of EBIDTA by Reporting Segment (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Segment Reporting Information [Line Items]
Consolidated adjusted EBITDA	$ 9,919	$ 11,423	$ 13,123	$ 18,532
Interest expense, net	1,266	407	2,555	782
Depreciation and amortization	13,327	6,512	25,997	14,028
Share-based compensation expense	13,246	4,460	26,266	8,792
Foreign exchange impact	(269)	2,991	(852)	4,233
SeaSpine merger-related costs	8,206		28,946
Strategic investments	309	1,824	970	2,794
Acquisition-related fair value adjustments	8,149	(10,714)	19,785	(16,214)
Legal judgments/settlements	1,291	148	1,760	341
Medical device regulation	2,050	2,248	5,679	4,198
Business interruption - COVID-19		316		659
All other	262	189	262	266
Income (loss) before income taxes	(37,918)	3,042	(98,245)	(1,347)
Operating Segments [Member] | Global Spine [Member]
Segment Reporting Information [Line Items]
Consolidated adjusted EBITDA	21,258	14,610	36,239	28,643
Operating Segments [Member] | Global Orthopedics [Member]
Segment Reporting Information [Line Items]
Consolidated adjusted EBITDA	(135)	780	(91)	(24)
Corporate, Non-Segment [Member]
Segment Reporting Information [Line Items]
Consolidated adjusted EBITDA	$ (11,204)	$ (3,967)	$ (23,025)	$ (10,087)

XML

Business Segment Information - Summary of Net Sales by Geographic Destination for Each Reporting Segment (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	$ 187,016	$ 118,070	$ 362,220	$ 224,488
Global Spine [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	157,976	90,782	307,182	173,437
Global Orthopedics [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	29,040	27,288	55,038	51,051
U.S. [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	154,583	92,802	300,676	175,195
U.S. [Member] | Global Spine [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	147,360	85,899	286,817	162,965
U.S. [Member] | Global Orthopedics [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	7,223	6,903	13,859	12,230
International [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	32,433	25,268	61,544	49,293
International [Member] | Global Spine [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	10,616	4,883	20,365	10,472
International [Member] | Global Orthopedics [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	$ 21,817	$ 20,385	$ 41,179	$ 38,821

XML

Acquisition-Related Amortization and Remeasurement - Components of Acquisition-Related Amortization and Remeasurement (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Acquisition Related Amortization And Remeasurement [Abstract]
Amortization of acquired intangibles	$ 4,633	$ 2,051	$ 8,767	$ 4,052
Changes in fair value of contingent consideration	(1,300)	(10,714)	(1,300)	(16,214)
Total	$ 3,333	$ (8,663)	$ 7,467	$ (12,162)

XML

Share-based Compensation - Schedule of Components of Share-Based Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share based compensation expense	$ 13,246	$ 4,460	$ 26,266	$ 8,792
Employee Stock Option
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share based compensation expense	2,397	205	5,153	564
Time-based Restricted Stock Awards and Units [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share based compensation expense	10,235	2,410	20,081	4,580
Market-based / Performance-based Restricted Stock Units [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share based compensation expense	113	1,497	113	2,941
Stock purchase plan [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share based compensation expense	501	348	919	707
Cost of sales [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share based compensation expense	482	205	953	416
Sales and marketing [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share based compensation expense	2,551	1,000	4,800	1,981
General and administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share based compensation expense	9,167	2,958	18,271	6,176
Research and development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share based compensation expense	$ 1,046	$ 297	$ 2,242	$ 219

XML

Share-based Compensation - Additional Information (Detail) - shares shares in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares issued under stock purchase plan, stock option exercises and restricted stock awards and units	0.3	0.2	0.5	0.2
SeaSpine [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of options issued in connection with conversion of awards			1.9
Number of time based RSU issued in exchange for equity awards			0.5

XML

Income Taxes - Additional Information (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Components Of Income Tax Expense Benefit [Line Items]
Income tax effective rate	(4.00%)	18.20%	(2.20%)	(46.30%)

XML

Earnings Per Share ("EPS") - Schedule of Reconciliation of Weighted Average Shares Used in Diluted EPS (Detail) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Earnings Per Share [Line Items]
Weighted average common shares-basic	36,762	20,031	36,252	19,965
Effect of dilutive securities
Weighted average common shares-diluted	36,762	20,113	36,252	19,965
Stock Options And Stock Purchase Plan [Member]
Effect of dilutive securities
Effect of dilutive securities		23
Restricted Stock Units [Member]
Effect of dilutive securities
Effect of dilutive securities		59

XML

Earnings Per Share ("EPS") - Additional Information (Detail) - shares shares in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Restricted Stock Units [Member] | Outstanding Stock Options [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Weighted average outstanding options, awards and units not included in diluted earnings per share	7.0	1.6	7.1	1.6