What changed in this filing

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Item 1. Financial Statements

2022-08-04 compared with 2022-05-10 · 112 added, 75 removed, 575 unchanged (25% of the section changed)

32 unchanged sentences

Authorized 500,000,000 shares;

issued and outstanding 79,297,823 and 79,113,916 shares at March 31, 2022 and December 31, 2021, respectively

issued and outstanding 77,037,205 and 79,113,916 shares at June 30, 2022 and December 31, 2021, respectively

Class B common stock;

1 unchanged sentence

Authorized 275,000,000 shares;

issued and outstanding 22,430,097 and 22,430,097 shares at March 31, 2022 and December 31, 2021, respectively

issued and outstanding 22,430,097 and 22,430,097 shares at June 30, 2022 and December 31, 2021, respectively

Additional paid-in capital

7 unchanged sentences

Three Months Ended

Six Months Ended

(In thousands, except per share amounts)

39 unchanged sentences

Balance at March 31, 2022

‎ Common Stock

Stock-based compensation

Grant of restricted stock units

Exercise of stock options

Comprehensive income/(loss)

Repurchase and retirement of common stock

Balance at June 30, 2022

Class B Common Stock

Additional paid-in

8 unchanged sentences

Balance at March 31, 2021

Stock-based compensation

Grant of restricted stock units

Exercise of stock options

Comprehensive income/(loss)

Balance at June 30, 2021

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

(In thousands)

28 unchanged sentences

Proceeds from exercise of stock options

Repurchase of common stock

Net cash provided by/(used in) financing activities

Effect of foreign exchange rates on cash

Net increase in cash and cash equivalents

Net increase/(decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

28 unchanged sentences

Accordingly, certain information and footnote disclosures normally included in complete financial statements prepared in accordance with U.S.

GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

GAAP have been condensed or omitted pursuant to the rules and regulations of the U.S.

Securities and Exchange Commission (“SEC”).

As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2021.

In the opinion of management, these condensed consolidated financial statements include all adjustments necessary, which are of a normal and recurring nature, for the fair presentation of our financial position as of March 31, 2022, and results of operations for the three months ended March 31, 2022.

In the opinion of management, these condensed consolidated financial statements include all adjustments necessary, which are of a normal and recurring nature, for the fair presentation of our financial position as of June 30, 2022, and results of operations for the three and six months ended June 30, 2022.

The results of operations for any interim period may not be indicative of results for the full year.

34 unchanged sentences

Maintenance and support services are generally invoiced annually, at the beginning of each contract period, and revenue is recognized ratably over the maintenance period.

For the three months ended March 31, 2022, there was an immaterial amount of revenue recognized from previously deferred revenue.

For the three and six months ended June 30, 2022, there was an immaterial amount of revenue recognized from previously deferred revenue.

GLOBUS MEDICAL, INC.

4 unchanged sentences

(f) Marketable Securities

Our marketable securities include municipal bonds, corporate debt securities, commercial paper, asset-backed securities, and securities of government, federal agency, and other sovereign obligations and are classified as available-for-sale as of March 31, 2022 .

S hort-term and long-term marketable securities are recorded at fair value on our condensed consolidated balance sheets.

43 unchanged sentences

We consider qualitative indicators of the fair value of a reporting unit when it is unlikely that a reporting unit has impaired goodwill.

During the three months ended March 31, 2022 and 2021, we did no t record any impairment charges related to goodwill.

During the six months ended June 30, 2022 and 2021, we did no t record any impairment charges related to goodwill.

Intangible assets consist of purchased in-process research and development (“IPR&D”), developed technology, supplier network, patents, customer relationships, re-acquired rights, and non-compete agreements.

3 unchanged sentences

Fair value is generally determined using a discounted future cash flow analysis.

There were no impairments of finite-lived intangible assets during the three months ended March 31, 2022 or 2021.

There were no impairments of finite-lived intangible assets during the six months ended June 30, 2022 or 2021.

IPR&D has an indefinite life and is not amortized until completion of the project at which time the IPR&D becomes an amortizable asset.

Intangible assets with indefinite useful lives are tested for impairment annually or whenever events or circumstances indicate that a carrying amount of an asset (asset group) may not be recoverable If the related project is not completed in a timely manner, we may have an impairment related to the IPR&D, calculated as the excess of the asset’s carrying value over its fair value.

There were no impairments of IPR&D during the three months ended March 31, 2022 or 2021.

Intangible assets with indefinite useful lives are tested for impairment annually or whenever events or circumstances indicate that a carrying amount of an asset (asset group) may not be recoverable.

If the related project is not completed in a timely manner, we may have an impairment related to the IPR&D, calculated as the excess of the asset’s carrying value over its fair value.

There were no impairments of IPR&D during the six months ended June 30, 2022 or 2021.

(j) Stock -Based Compensation

21 unchanged sentences

Asset Acquisitions

During the fourth quarter of 2021, the Company acquired substantially all the assets of Capstone Surgical Technologies, LLC (“Capstone”), which engages in the business of advanced drill and robotic surgery platforms.

During the fourth quarter of 2021, the Company acquired substantially all the assets of Capstone Surgical Technologies, LLC, which engages in the business of advanced drill and robotic surgery platforms.

The purchase price consisted of $ 24.5 million of cash paid at closing, subject to net working capital and other post-closing adjustments, if applicable.

5 unchanged sentences

Contingent consideration is not recorded in an asset acquisition until the milestone is met.

During the second quarter of 2020, the Company acquired Synoste Oy (“Synoste”), a Finnish engineering company that specializes in the research and development of a limb lengthening system.

During the second quarter of 2020, the Company acquired Synoste Oy, a Finnish engineering company that specializes in the research and development of a limb lengthening system.

The fair value of the net assets acquired was $ 25.3 million, and the consideration consisted of approximately $ 22.8 million of cash paid at closing plus $ 2.5 million of a contractual holdback obligation payable eighteen months from the closing date of the transaction, subject to net working capital and other post-closing adjustments, if applicable.

During the fourth quarter of 2021, the contractual holdback and net working capital and other post-closing adjustments were settled for $ 2.7 million.

The transaction also provides for additional consideration of $ 8.0 million contingent upon the developed product obtaining approval from the U.S.

Food and Drug Administration (the “FDA”) within the third anniversary, or $ 4.0 million if within the fourth anniversary of the acquisition closing date, respectively.

The transaction also provides for additional consideration of $ 8.0 million contingent upon the developed product obtaining approval from the FDA within the third anniversary, or $ 4.0 million if within the fourth anniversary of the acquisition closing date, respectively.

Contingent consideration is not recorded in an asset acquisition until the milestone is met.

3 unchanged sentences

Business Combinations

During 2022, the Company completed one acquisition in the second quarter that was not considered material to the condensed consolidated financial statements during the periods presented.

This acquisition has been included in the condensed consolidated financial statements from the date of acquisition.

The purchase price consisted of approximately $ 0.2 million of cash paid at closing and $ 4.4 million of contingent consideration payments, resulting in goodwill of $ 4.6 million based on the estimated fair values.

The contingent payments for this acquisition are based upon achieving various performance milestones over a period of 10 years and are payable in a combination of cash and RSUs.

During 2021, the Company completed three acquisitions that were not considered material, individually or collectively, to the condensed consolidated financial statements during the periods presented.

7 unchanged sentences

These acquisitions have been included in the condensed consolidated financial statements from the date of acquisition.

The combined purchase price consisted of approximately $ 1.5 million of cash paid at closing, plus $ 0.3 million of other liabilities and $ 33.2 million of contingent consideration payments.

The contingent payments are based upon achieving various performance milestones over a period of 10 years and are payable in a combination of cash and RSUs.

The Company recorded other intangible assets of $ 8.8 million, with a weighted average useful life of 4.2 years, and goodwill of $ 26.2 million based on their fair values.

The combined purchase price consisted of approximately $ 1.5

GLOBUS MEDICAL, INC.

AND SUBSIDIARIES

million of cash paid at closing, plus $ 0.3 million of other liabilities and $ 33.2 million of contingent consideration payments.

The contingent payments are based upon achieving various performance milestones over a period of 10 years and are payable in a combination of cash and RSUs.

The Company recorded other intangible assets of $ 8.8 million, with a weighted average useful life of 4.2 years, and goodwill of $ 26.2 million based on their fair values.

The following table represents net sales by product category:

Three Months Ended

Six Months Ended

(In thousands)

4 unchanged sentences

The composition of our short-term and long-term marketable securities was as follows:

March 31, 2022

June 30, 2022

(In thousands)

11 unchanged sentences

Total long-term marketable securities

GLOBUS MEDICAL, INC.

AND SUBSIDIARIES

December 31, 2021

11 unchanged sentences

Total long-term marketable securities

GLOBUS MEDICAL, INC.

AND SUBSIDIARIES

The short-term marketable securities have effective maturity dates of less than one year and the long-term marketable securities have effective maturity dates ranging from one to three years as of March 31, 2022 and December 31, 2021, respectively.

Purchases of marketable securities include amounts payable to brokers of $ 2.2 million as of December 31, 2021.

Purchases of marketable securities included no amounts payable to brokers as of March 31, 2022.

Purchases of marketable securities included no amounts payable to brokers as of June 30, 2022.

FAIR VALUE MEASUREMENTS

30 unchanged sentences

* The weighted average rates were calculated based on the relative fair value of each business acquisition liability.

The change in the carrying value of the business acquisition liabilities during the three months ended March 31, 2022 and 2021, respectively included the following:

The change in the carrying value of the business acquisition liabilities during the three and six months ended June 30, 2022 and 2021, respectively included the following:

Three Months Ended

Six Months Ended

(In thousands)

Beginning balance

Purchase price contingent consideration

Contingent cash payments

10 unchanged sentences

Total inventories

During the three months ended March 31, 2022 and 2021, net adjustments to cost of sales related to excess and obsolete inventory were $ 1.8 million and $ 1.6 million, respectively.

The net adjustments for the three months ended March 31, 2022 and 2021 reflect a combination of additional expense for excess and obsolete related provisions ($ 3.4 million and $ 3.8 million, respectively) offset by sales and disposals ($ 1.6 million and $ 2.2 million, respectively) of inventory for which an excess and obsolete provision was provided previously through expense recognized in prior periods.

During the three months ended June 30, 2022 and 2021, net adjustments to cost of sales related to excess and obsolete inventory were $ 2.3 million and $ 3.4 million, respectively.

The net adjustments for the three months ended June 30, 2022 and 2021 reflect a combination of additional expense for excess and obsolete related provisions ($ 5.2 million and $ 7.6 million, respectively) offset by sales and disposals ($ 2.9 million and $ 4.2 million, respectively) of inventory for which an excess and obsolete provision was provided previously through expense recognized in prior periods.

During the six months ended June 30, 2022 and 2021, net adjustments to cost of sales related to excess and obsolete inventory were $ 4.1 million and $ 5.0 million, respectively.

The net adjustments for the six months ended June 30, 2022 and 2021 reflect a combination of additional expense for excess and obsolete related provisions ($ 8.6 million and $ 11.4 million, respectively) offset by sales and disposals ($ 4.5 million and $ 6.4 million, respectively) of inventory for which an excess and obsolete provision was provided previously through expense recognized in prior periods.

GLOBUS MEDICAL, INC.

11 unchanged sentences

Three Months Ended

Six Months Ended

(In thousands)

GOODWILL AND INTANGIBLE ASSETS

The change in the carrying amount of goodwill during the twelve months ended December 31, 2021 and the three months ended March 31, 2022, respectively included the following:

The change in the carrying amount of goodwill during the twelve months ended December 31, 2021 and the six months ended June 30 , 2022, respectively included the following:

(In thousands)

3 unchanged sentences

December 31, 2021

Additions and adjustments

Foreign exchange

March 31, 2022

June 30, 2022

The composition of intangible assets was as follows:

March 31, 2022

June 30, 2022

(In thousands)

13 unchanged sentences

Total intangible assets

The following table summarizes amortization of intangible assets for future periods as of March 31, 2022:

The following table summarizes amortization of intangible assets for future periods as of June 30, 2022:

(In thousands)

12 unchanged sentences

The Revolving Credit Facility includes up to a $ 25.0 million sub limit for letters of credit.

Revolving loans under the Credit Agreement will bear interest, at the Company’s option, at either a base rate or the Adjusted LIBOR Rate (as defined in the Credit Agreement), plus, in each case, an applicable margin, as determined in accordance with the provisions of the Credit Agreement.

Revolving loans under the Credit Agreement will bear interest, at the Company’s option, at either a base rate or the Daily Bloomberg Short-Term Bank Yield (“BSBY”) (as defined in the Credit Agreement), plus, in each case, an applicable margin, as determined in accordance with the provisions of the Credit Agreement.

The base rate will be the highest of:

2 unchanged sentences

the federal funds effective rate plus 1/2 of 1 %;

and the Adjusted LIBOR Rate for a one-month period plus 1 %.

and the Daily BSBY Rate plus 1 %.

The applicable margin is subject to adjustment as provided in the Credit Agreement.

The Credit Agreement contains financial and other customary covenants, including a maximum leverage ratio.

As of March 31, 2022, we have no t borrowed under the Credit Agreement.

As of June 30 , 2022, we have no t borrowed under the Credit Agreement.

GLOBUS MEDICAL, INC.

AND SUBSIDIARIES

Stock Repurchases

In March 2020, the Company announced a stock repurchase plan, pursuant to which the Company was authorized to repurchase up to $ 200 million of the Company’s Class A common stock.

In March 2022, the Company announced the expansion of the stock repurchase plan, pursuant to which the Company is authorized to repurchase an additional $ 200 million of the Company’s Class A common stock.

Share Repurchases

On March 11, 2020, the Company announced a share repurchase program, which authorized the Company to repurchase up to $ 200 million of the Company’s Class A common stock.

On March 4, 2022, the share repurchase program was expanded by authorizing the Company to repurchase an additional $ 200 million of the Company’s Class A common stock.

The repurchase program has no time limit and may be suspended for periods or discontinued at any time.

As of March 31, 2022, $ 295.3 million of this authorization is remaining.

As of June 30, 2022, the Company is authorized to repurchase a total of $ 150.8 million of Class A common stock.

The timing and actual number of shares repurchased will depend on various factors including price, corporate and regulatory requirements, debt covenant requirements, alternative investment opportunities and other market conditions.

17 unchanged sentences

January 1, 2022 - March 31, 2022

January 1, 2020 - March 31, 2022

April 1, 2022 - June 30, 2022

January 1, 2020 - June 30, 2022

(1) Inclusive of an immaterial amount of commission fees

4 unchanged sentences

The holders of Class A Common and Class B Common vote together as one class of common stock on all matters submitted to a vote of stockholders, except as required by law or our amended and restated Certificate of Incorporation.

Each share of our Class B common stock is convertible at any time at the option of the holder into one share of our Class A common stock.

In addition, each share of our Class B common stock will convert automatically into one share of our Class A common stock upon any transfer, whether or not for value, except for permitted transfers.

For more details relating to the conversion of our Class B common stock please see “Exhibit 4.2, Description of Securities of the Registrant” filed with our Annual Report on Form 10-K on February 17, 2022.

Each share of our Class B Common is convertible at any time at the option of the holder into one share of our Class A Common.

In addition, each share of our Class B Common will convert automatically into one share of our Class A Common upon any transfer, whether or not for value, except for permitted transfers.

For more details relating to the conversion of our Class B Common please see “Exhibit 4.2, Description of Securities of the Registrant” filed with our Annual Report on Form 10-K on February 17, 2022.

GLOBUS MEDICAL, INC.

1 unchanged sentence

Accumulated Other Comprehensive Income (Loss)

The tables below present the changes in each component of accumulated other comprehensive income/(loss), including current period other comprehensive income/(loss) and reclassifications out of accumulated other comprehensive income/(loss) for the three months ended March 31, 2022 and 2021, respectively:

The tables below present the changes in each component of accumulated other comprehensive income/(loss), including current period other comprehensive income/(loss) and reclassifications out of accumulated other comprehensive income/(loss) for the six months ended June 30 , 2022 and 2021, respectively:

(In thousands)

6 unchanged sentences

Other comprehensive income/(loss), net of tax

Accumulated other comprehensive income/(loss), net of tax, at March 31, 2022

Accumulated other comprehensive income/(loss), net of tax, at June 30, 2022

(In thousands)

6 unchanged sentences

Other comprehensive income/(loss), net of tax

Accumulated other comprehensive income/(loss), net of tax, at March 31, 2021

Accumulated other comprehensive income/(loss), net of tax, at June 30, 2021

Amounts reclassified from accumulated other comprehensive loss, net of tax, related to unrealized gains/losses on marketable securities were released to other income, net in our condensed consolidated statements of operations and comprehensive income.

4 unchanged sentences

The contingently issuable shares are included in basic net income per share as of the date that all necessary conditions have been satisfied and are included in the denominator for dilutive calculation for the entire period if such shares would be issuable as of the end of the reporting period assuming the end of the reporting period was the end of the contingency period.

GLOBUS MEDICAL, INC.

AND SUBSIDIARIES

The following table sets forth the computation of basic and diluted earnings per share:

Three Months Ended

Six Months Ended

(In thousands, except per share amounts)

6 unchanged sentences

Anti-dilutive stock options and RSUs excluded from the calculation

GLOBUS MEDICAL, INC.

AND SUBSIDIARIES

STOCK-BASED AWARDS

We have two stock plans:

our 2012 Equity Incentive Plan (the “2012 Plan”) and our 2021 Equity Incentive Plan (the “2021 Plan”).

our 2012 Equity Incentive Plan (the “2012 Plan”) and our 2021 Equity Incentive Plan (the “2021 Plan”), together with the 2012 Plan, the “Plans”.

The 2021 Plan is the only active stock plan.

6 unchanged sentences

The 2012 Plan terminated pursuant to its terms in 2022.

Following the effectiveness of our 2021 Equity Incentive Plan, we have not issued any additional awards under the 2012 Plan;

however, awards previously granted under the 2012 Plan remain outstanding and are administered by our Board of Directors under the terms and conditions of the 2012 Plan.

Under the 2012 Plan, the aggregate number of shares of Class A Common stock that were able to be issued subject to options and other awards is equal to the sum of (i) 3,076,923 shares, (ii) any shares available for issuance under the 2008 Plan as of March 13, 2012, (iii) any shares underlying awards outstanding under the 2008 Plan as of March 13, 2012 that, on or after that date, are forfeited, terminated, expired or lapse for any reason, or are settled for cash without delivery of shares and (iv) starting January 1, 2013, an annual increase in the number of shares available under the 2012 Plan equal to up to 3 % of the number of shares of our common and preferred stock outstanding at the end of the previous year, as determined by our Board.

Following the effectiveness of the 2021 Plan, we have not issued any additional awards under the 2012 Plan;

however, awards previously granted under the 2012 Plan remain outstanding and are administered by our Board under the terms and conditions of the 2012 Plan.

Under the 2012 Plan, the aggregate number of shares of Class A Common that were able to be issued subject to options and other awards is equal to the sum of (i) 3,076,923 shares, (ii) any shares available for issuance under the 2008 Equity Incentive Plan as of March 13, 2012, (iii) any shares underlying awards outstanding under the 2008 Plan as of March 13, 2012 that, on or after that date, are forfeited, terminated, expired or lapse for any reason, or are settled for cash without delivery of shares and (iv) starting January 1, 2013, an annual increase in the number of shares available under the 2012 Plan equal to up to 3 % of the number of shares of our common and preferred stock outstanding at the end of the previous year, as determined by our Board.

The number of shares that were able to be issued or transferred pursuant to incentive stock options under the 2012 Plan was limited to 10,769,230 shares.

The shares of Class A Common stock covered by the 2012 Plan included authorized but unissued shares, treasury shares or shares of common stock purchased on the open market.

The shares of Class A Common covered by the 2012 Plan included authorized but unissued shares, treasury shares or shares of common stock purchased on the open market.

The 2021 Plan was approved by our Board in March 2021, and by our stockholders in June 2021.

Under the 2021 Plan, the aggregate number of shares of Class A Common stock that were able to be issued subject to options and other awards is equal to the sum of (i) 2,000,000 shares, (ii) any shares available for issuance under the 2012 Plan as of June 3, 2021 and (iii) any shares underlying awards outstanding under the 2012 Plan or 2021 Plan as of June 3, 2021 that, on or after that date, are forfeited, terminated, expired or lapse for any reason, or are settled for cash without delivery of shares.

The number of shares that may be issued or transferred pursuant to incentive stock options under the 2021 Plan is limited to 2,000,000 shares.

The shares of Class A Common stock covered by the 2021 Plan include authorized but unissued shares, treasury shares or shares of common stock purchased on the open market.

As of March 31, 2022, pursuant to the 2021 Plan, there were 3,247,276 shares of Class A Common stock reserved and 1,333,253 shares of Class A Common stock available for future grants.

Under the 2021 Plan, as originally approved, the aggregate number of shares of Class A Common that were able to be issued subject to options and other awards was equal to the sum of (i) 2,000,000 shares, (ii) any shares available for issuance under the 2012 Plan as of June 3, 2021 and (iii) any shares underlying awards outstanding under the 2012 Plan or 2021 Plan as of June 3, 2021 that, on or after that date, were forfeited, terminated, expired or lapse for any reason, or were settled for cash without delivery of shares.

The number of shares that could be issued or transferred pursuant to incentive stock options under the 2021 Plan was limited to 2,000,000 shares.

The shares of Class A Common covered by the 2021 Plan include authorized but unissued shares, treasury shares or shares of common stock purchased on the open market.

On June 2, 2022, the Company’s stockholders approved an amendment to the 2021 Plan (the “2021 Plan Amendment”).

The 2021 Plan Amendment increased the number of shares of Class A Common that may be issued or transferred pursuant to awards under the 2021 Plan by 2,000,000 shares to 4,000,000 shares.

The 2021 Plan Amendment also increased the aggregate number of shares of Class A Common that may be issued or transferred under the 2021 Plan pursuant to incentive stock options under Section 422 of the Code from 2,000,000 to 4,000,000 .

As of June 30, 2022, pursuant to the 2021 Plan, there were 5,514,293 shares of Class A Common reserved and 3,520,451 shares of Class A Common available for future grants.

GLOBUS MEDICAL, INC.

AND SUBSIDIARIES

Stock Options

Stock option activity during the three months ended March 31, 2022 is summarized as follows:

Stock option activity during the six months ended June 30 , 2022 is summarized as follows:

‎ Shares (thousands)

3 unchanged sentences

Outstanding at December 31, 2021

Outstanding at March 31, 2022

Exercisable at March 31, 2022

Expected to vest at March 31, 2022

The total intrinsic value of stock options exercised was $ 4.7 million and $ 10.1 million during the three months ended March 31, 2022, and 2021, respectively.

GLOBUS MEDICAL, INC.

AND SUBSIDIARIES

Outstanding at June 30, 2022

Exercisable at June 30, 2022

Expected to vest at June 30, 2022

The total intrinsic value of stock options exercised was $ 2.7 million and $ 25.0 million during the three months ended June 30, 2022, and 2021, respectively.

The total intrinsic value of stock options exercised was $ 7.4 million and $ 35.1 million during the six months ended June 30, 2022, and 2021, respectively.

The fair value of the options was estimated on the date of the grant using a Black-Scholes option pricing model with the following assumptions:

Three Months Ended

Six Months Ended

Risk-free interest rate

2 unchanged sentences

Expected dividend yield

The weighted average grant date fair value of stock options granted during the three months ended March 31, 2022, and 2021 was $ 20.48 and $ 19.26 per share, respectively.

The weighted average grant date fair value of stock options granted during the three months ended June 30, 2022, and 2021 was $ 23.93 and $ 21.30 per share, respectively.

The weighted average grant date fair value of stock options granted during the six months ended June 30, 2022, and 2021 was $ 21.05 and $ 19.58 per share, respectively.

Restricted Stock Units

Restricted stock unit activity during the three months ended March 31, 2022 is summarized as follows:

Restricted stock unit activity during the six months ended June 30, 2022 is summarized as follows:

Restricted Stock

4 unchanged sentences

Outstanding at December 31, 2021

Outstanding at March 31, 2022

Outstanding at June 30, 2022

GLOBUS MEDICAL, INC.

AND SUBSIDIARIES

Stock-Based Compensation

1 unchanged sentence

Three Months Ended

Six Months Ended

(In thousands)

2 unchanged sentences

Total stock-based compensation cost

As of March 31, 2022, there was $ 78.8 million of unrecognized compensation expense related to unvested employee stock options that are expected to vest over a weighted average period of approximately three years .

As of June 30, 2022, there was $ 68.8 million of unrecognized compensation expense related to unvested employee stock options that are expected to vest over a weighted average period of approximately three years .

In computing our income tax provision, we make certain estimates and judgments, such as estimated annual taxable income or loss, annual effective tax rate, the nature and timing of permanent and temporary differences between taxable income for financial reporting and tax reporting, and the recoverability of deferred tax assets.

1 unchanged sentence

Should facts and circumstances change during a quarter causing a material change to the estimated effective income tax rate, a cumulative adjustment is recorded.

The following table provides a summary of our effective tax rate for the three months ended March 31, 2022 and 2021, respectively:

The following table provides a summary of our effective tax rate for the three and six months ended June 30, 2022 and 2021, respectively:

Three Months Ended

Six Months Ended

Effective income tax rate

GLOBUS MEDICAL, INC.

AND SUBSIDIARIES

COMMITMENTS AND CONTINGENCIES

15 unchanged sentences

District Court for the Eastern District of Pennsylvania.

The outcome of this litigation cannot be determined, nor can we estimate a range of potential loss, therefore, we have no t recorded a liability related to this litigation as of March 31, 2022.

The outcome of this litigation cannot be determined, nor can we estimate a range of potential loss, therefore, we have no t recorded a liability related to this litigation as of June 30, 2022.

GLOBUS MEDICAL, INC.

AND SUBSIDIARIES

SEGMENT AND GEOGRAPHIC INFORMATION

Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance.

We manage our business globally within one operating segment, and segment information is consistent with how the chief operating decision makers review the business, makes investing and resource allocation decisions and assesses operating performance.

We manage our business globally within one operating segment, and segment information is consistent with how the chief operating decision makers review the business, make investing and resource allocation decisions and assess operating performance.

The following table represents total net sales by geographic area, based on the location of the customer:

Three Months Ended

Six Months Ended

(In thousands)

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements