What changed in this filing

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Item 1. Business

2024-02-21 compared with 2023-02-21 · 296 added, 105 removed, 217 unchanged (65% of the section changed)

Globus Medical, Inc.

(together, as applicable, with its consolidated subsidiaries, “Globus,” “we,” “us” or “our”), headquartered in Audubon, Pennsylvania, is a medical device company that develops and commercializes healthcare solutions whose mission is to improve the quality of life of patients with musculoskeletal disorders.

(together, as applicable, with its consolidated subsidiaries, “Globus,” the “Company,” “we,” “us” or “our”), headquartered in Audubon, Pennsylvania, is a medical device company that develops and commercializes healthcare solutions whose mission is to improve the quality of life of patients with musculoskeletal disorders.

Founded in 2003, Globus is committed to medical device innovation and delivering exceptional service to hospitals, ambulatory surgery centers and physicians to advance patient care and improve efficiency.

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Globus is an engineering-driven company with a history of rapidly developing and commercializing advanced products and procedures to address treatment challenges.

With over 230 product launches across 54 countries worldwide, we offer a comprehensive portfolio of innovative and differentiated technologies that are used to treat a variety of musculoskeletal conditions.

Although we manage our business globally within one operating segment, we separate our products into two major categories:

With over 10 product launches in 2023 and operations across 64 countries worldwide, we offer a comprehensive portfolio of innovative and differentiated technologies that are used to treat a variety of musculoskeletal conditions.

Although we manage our business globally within one reportable segment, we separate our products and services into two major categories:

Musculoskeletal Solutions and Enabling Technologies.

NuVasive Merger

On September 1, 2023, pursuant to that certain merger agreement (the “Merger Agreement”) with NuVasive, Inc.

(“NuVasive”) and Zebra Merger Sub Inc.

(“Merger Sub”), Merger Sub, a wholly owned subsidiary of the Company, merged with and into NuVasive, with NuVasive surviving as a wholly owned subsidiary of the Company (the “Merger”).

Under the Merger Agreement, each share of common stock, par value $0.001 per share, of NuVasive issued and outstanding immediately prior to the effective time of the Merger (other than certain excluded shares as described in the Merger Agreement) was cancelled and converted into the right to receive 0.75 fully paid and non-assessable shares of Class A common stock of Globus, $0.001 par value per share, and the right to receive cash in lieu of fractional shares.

Overall Business

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We believe our team-oriented and highly integrated development approach, active surgeon input, and demonstrated performance position us to maintain a rapid rate of new product launches.

We launched 8 new products in 2022, have a range of new products in various stages of development, and expect to continue to regularly launch new products.

We launched 10 new products in 2023, in addition to assuming NuVasive’s portfolio of products, which include the X360 portfolio, the C360 portfolio featuring the Simplify Cervical Disc, and the P360 portfolio.

We have a range of new products in various stages of development and expect to continue to regularly launch new products.

 Increase the size, scope and productivity of our exclusive U.S.

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sales force for Musculoskeletal Solutions.

We expect to increase the number of our direct and distributor sales representatives in the U.S., to expand into new geographic territories and to deepen our penetration in existing territories.

Through the Merger with NuVasive, we have significantly grown our global sales force.

We expect to continue to increase the number of our direct and distributor sales representatives in the U.S., to expand into new geographic territories and to deepen our penetration in existing territories.

We will also continue to provide our sales representatives with specialized development programs designed to improve their productivity.

 Continue to expand into international markets .

As of December 31, 2022, we had an existing direct or distributor sales presence in 53 countries outside the United States.

As of December 31, 2023, we had an existing direct or distributor sales presence in 64 countries outside the U.S.

We expect to continue to increase our international presence through the commercialization of additional Musculoskeletal Solutions products in current markets and through the expansion of our international sales force in current and new markets.

 Pursue strategic acquisitions .

In 2017, we acquired KB Medical SA, developer of a computer-assisted robotic guidance system, and in 2018 we acquired Nemaris Inc., a privately held company that markets and develops Surgimap ® , a leading surgical planning software platform, to further bolster our efforts to advance surgical procedures through Enabling Technologies.

In 2019, we acquired substantially all of the assets of StelKast, Inc., a privately held company that designs, manufactures and distributes orthopedic implants for knee and hip replacement surgeries.

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 fourth quarter of 2021, the Company acquired Capstone Surgical

Technologies, LLC.

(“Capstone”), a privately held company that engages in the business of creating advanced drill and robotic surgery platforms.

During the fourth quarter of 2022, the Company acquired the membership interests of Harvest Biologics LLC (“Harvest”), which engages in the business of selling systems that produce autologous biologics.

In 2017, we acquired KB Medical SA, developer of a computer-assisted robotic guidance system, and in 2018 we acquired Nemaris Inc., a company that markets and develops Surgimap ® , a leading surgical planning software platform, to further bolster our efforts to advance surgical procedures through Enabling Technologies.

In 2019, we acquired substantially all of the assets of StelKast, Inc., a company that designs, manufactures and distributes orthopedic implants for knee and hip replacement surgeries.

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.

During the fourth quarter of 2021, the Company acquired Capstone Surgical Technologies, LLC., a company that engages in the business of creating advanced drill and robotic surgery platforms.

During the fourth quarter of 2022, the Company acquired the membership interests of Harvest Biologics LLC, which engages in the business of selling systems that produce autologous biologics.

In 2023, we acquired NuVasive, a leader in spine technology innovation, with a mission to transform surgery, advance care, and change lives.

NuVasive’s less-invasive, procedurally integrated surgical solutions are designed to deliver reproducible and clinically proven outcomes.

The procedural portfolio includes surgical access instruments, spinal implants, fixation systems, biologics, software for surgical planning, navigation and imaging solutions, magnetically adjustable implant systems for spine and orthopedics, and intraoperative neuromonitoring (“IONM”) technology and service offerings.

The Merger expanded our global commercial reach, increased operational capabilities and enhanced our comprehensive offerings of Musculoskeletal Solutions and Enabling Technologies.

We intend to selectively pursue acquisitions and alliances that complement our strategic plan and provide innovative technologies, personnel with significant relevant experience, or increased market penetration.

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We believe that our focus on actively listening and responding to the needs of our customers with high quality solutions separates us from our industry peers.

Since 2003 we have introduced over 230 products designed for the treatment of musculoskeletal disorders.

Since 2003 we have introduced many products, including 10 products in 2023, designed for the treatment of musculoskeletal disorders.

Given our robust product portfolio of unique and differentiated products, as well as the numerous disruptive products in various stages of development, we believe we are well positioned for growth in the musculoskeletal markets we operate in.

We believe that our innovative Musculoskeletal Solutions products, combined with our ability to provide world-class service through a highly trained and exclusive sales force and corporate account management, create significant value for our customers.

Product Categories

While we group our products into two categories, Musculoskeletal Solutions and Enabling Technologies, they are not limited to a particular technology, platform or surgical approach.

Product & Service Categories

While we group our products and services into two categories, Musculoskeletal Solutions and Enabling Technologies, they are not limited to a particular technology, platform or surgical approach.

Instead, our goal is to offer a comprehensive product suite that can be used to safely and effectively treat patients based on their specific anatomy and condition, and is customized to the surgeon’s training and surgical preference.

Musculoskeletal Solutions

Our Musculoskeletal Solutions consist primarily of implantable devices, biologics, accessories, and unique surgical instruments used in an expansive range of spinal, orthopedic and neurosurgical procedures.

Our Musculoskeletal Solutions consist primarily of implantable devices, biologics, accessories, unique surgical instruments, and neuromonitoring services, used in an expansive range of spinal, orthopedic and neurosurgical procedures.

Musculoskeletal disorders are a leading driver of healthcare costs worldwide.

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Our broad spectrum of spine products addresses the vast majority of conditions affecting the spine including degenerative conditions, deformity, tumors, and trauma.

With almost 20 years in this competitive market, we provide comprehensive solutions that facilitate both open and minimally invasive surgery (“MIS”) techniques.

With 20 years in this competitive market, we provide comprehensive solutions that facilitate both open and minimally invasive surgery (“MIS”) techniques.

This includes traditional fusion implants such as pedicle screw and rod systems, plating systems, intervertebral spacers and corpectomy devices.

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Over 13 different implants have been marketed to date, including modular hip stems and acetabular cups for total hip arthroplasty as well as posterior stabilizing and cruciate retaining knee arthroplasty implants.

Our neuromonitoring services utilize proprietary software that employs hunting algorithms and graphical user interfaces to provide surgeons with an enhanced and intuitive nerve avoidance system.

Through our IONM platforms, we give surgeons the option to connect their instruments to a computer system that provides discrete, real-time, surgeon-directed and surgeon-controlled feedback about the directionality and relative proximity of nerves during surgery.

We believe our proprietary IONM platforms are a differentiator in the market and are unique in their ability to provide information about the directionality and proximity of nerves.

Our systems analyze and then translate complex neurophysiologic data into simple, useful information to assist the surgeon’s clinical decision-making process.

Surgeons can connect certain instruments to our IONM systems, thus creating an interactive set of instruments that better enable the safe navigation through the body’s nerve anatomy during surgery.

We provide onsite and remote monitoring of the neurological systems of patients undergoing spinal and brain-related surgeries.

Monitoring the health of the nervous system during spinal surgery has been a key component of our strategy of product differentiation since early in our development.

Enabling Technologies

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The ExcelsiusGPS ® platform has a modular design that we expect will serve as a foundation for future clinical applications using artificial intelligence and augmented reality.

Also, in 2018, we acquired Nemaris Inc., a privately held company that developed and marketed Surgimap ® , a leading surgical planning software platform.

Also, in 2018, we acquired Nemaris Inc., the company that developed and marketed Surgimap ® , a leading surgical planning software platform.

Surgimap ® ’s intuitive, patient-specific surgical planning and cloud-based infrastructure includes predictive algorithms and visual guides that enable healthcare professionals to plan and simulate surgical treatment of complex deformities.

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We market and sell our products primarily through our exclusive global sales force.

As of December 31, 2022, we had a direct or distributor sales presence in the United States and in 53 other countries.

As of December 31, 2023, we had a direct or distributor sales presence in the U.S.

and in 64 other countries.

We have dedicated spinal implant, orthopedic trauma and Enabling Technologies sales teams in place.

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and international sales forces provides us with significant opportunities for future growth as we continue to penetrate existing geographic markets and enter new ones.

Our implant sales representatives are present in the operating room during most surgeries in the United States and in many, but not all, of the other countries in which our products are sold.

These representatives have the responsibility to confirm that all of the items

needed in the surgery are available and are provided sterile or are capable of being sterilized at the hospital.

Our implant sales representatives are present in the operating room during most surgeries in the U.S.

and in many, but not all, of the other countries in which our products are sold.

These representatives have the responsibility to confirm that all of the items needed in the surgery are available and are provided sterile or are capable of being sterilized at the hospital.

An assortment of sizes and quantities of implants are made available to be able to satisfy varying surgical requirements and patient anatomy, along with numerous surgical instruments and cases needed to safely perform the surgery and implantation.

As products are used in surgeries, replacement items are shipped to our sales representatives and hospitals to replenish their supply.

All of our U.S.

independent distributors are compensated solely on commission.

Most of our new direct sales representatives start with a compensation arrangement that is largely based on salary.

Our goal is for members of our direct sales force to move toward a compensation model based solely on commission as they become familiar with our products and drive higher sales.

We believe that our significant competitors are Medtronic, DePuy Synthes, Stryker, Zimmer Biomet, Smith and Nephew, and NuVasive.

Orthofix, Integra LifeSciences, and other smaller public and private companies are also competitors of ours.

Surgeon Training and Education

We devote significant resources to training and educating surgeons regarding the safety and reproducibility of our surgical techniques and our procedurally integrated solutions.

Our surgeon education and training program integrates surgical training with professional development and enables us to introduce surgeons to our comprehensive portfolio and patented approaches to spine surgery.

We offer educational and training courses globally through in-person formats and via virtual content, including virtual conferences and video and social channels, to demonstrate the benefits of our innovative products and procedures.

We believe that our significant competitors are Medtronic, DePuy Synthes, Stryker, Zimmer Biomet, and Smith and Nephew.

Alphatec Holdings, Orthofix, Integra LifeSciences , ZimVie and other smaller public and private companies are also competitors of ours.

At any time, these or other market participants may develop alternative treatments, products or procedures for the treatment of musculoskeletal disorders that compete directly or indirectly with our products.

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We have greatly expanded our dedicated in-house manufacturing capabilities.

A significant portion of our implant products are manufactured in our facilities in Eagleville, Pennsylvania and Limerick, Pennsylvania.

Most of our regenerative biologics products are processed in our facilities in San Antonio, Texas, and in Audubon, Pennsylvania.

Our implant products are manufactured in our facilities in Eagleville, Pennsylvania, Limerick, Pennsylvania and West Carrollton, Ohio.

Most of our regenerative biologic products

are processed in our facilities in San Antonio, Texas, and in Audubon, Pennsylvania.

The ExcelsiusGPS ® robotic guidance and navigation system and Excelsius3D™ imaging system are assembled in our facility in Methuen, Massachusetts.

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Suppliers that meet our internal quality assurance standards are added to our approved supplier list.

Supplier performance is maintained and managed through a supplier qualification, performance management and corrective action program intended to ensure that all of our product requirements are met or exceeded.

All of our suppliers that provide us with implants are ISO-13485 certified, meaning they meet the International Organization for Standardization (“ISO”) requirements for the manufacture of medical devices.

Our outsourcing strategy is targeted at companies that meet U.S.

Food and Drug Administration (“FDA”), ISO, and quality standards supported by internal policies and procedures.

We currently rely on several tissue banks as suppliers of allograft tissue implants, including for our Osteocel Plus and Osteocel Pro product lines.

Like our relationships with our device manufacturing suppliers, we subject our tissue processing suppliers to the same quality criteria in terms of selection, qualification, and verification of processed tissue quality upon receipt of goods, as well as hold them accountable for compliance with FDA regulations, state requirements, and voluntary industry standards (such as those put forward by the American Association of Tissue Banks).

We also work with a limited number of suppliers for certain components of our Enabling Technologies and IONM platforms and continue to develop redundancies for critical components within those supply chains.

Our quality assurance group conducts periodic audits to ensure continued compliance with our standards.

Under our existing contracts with third-party manufacturers, we reserve the right to inspect and assure conformance of each product and product component to our specifications.

With every shipment of inventory that we receive, our suppliers provide a certificate of compliance with our quality control standards.

Our receiving group also performs inspections, packaging and labeling on site at our headquarters facility.

Our receiving group also performs inspections, packaging and labeling at one of our facilities.

We, and our third-party manufacturers, are subject to the quality system regulations of the FDA, state regulations (such as the regulations promulgated by the California Department of Health Services), and regulations promulgated by foreign regulatory bodies (such as in the European Union).

For tissue products, we are FDA registered and licensed in the States of California, Delaware, Florida, Illinois, Maryland, New York, and Oregon.

For our device implants and instruments, we are FDA-registered, California-licensed, Conformité Européenne (“CE”)-marked and ISO-certified.

CE, an acronym for “Conformité Européenne” or European Conformity, is the registration marking designating that a device can be commercially distributed throughout the European Union (“EU”).

Our facilities and the facilities of our third-party manufacturers are subject to periodic announced and unannounced inspections by regulatory authorities, and may undergo compliance inspections conducted by the FDA, state, and/or international regulatory agencies for, among other things, conformance to Quality System Regulations and Current Good Manufacturing Practice requirements as well as separate foreign or international standards.

We work closely with our suppliers to ensure that our inventory needs are met while maintaining high quality and reliability.

To date, we have experienced slight delays in locating and obtaining the materials necessary to fulfill our production requirements, but it has not caused a meaningful backlog of sales orders.

Despite such delays, we believe our supplier relationships and facilities will support our capacity needs for the foreseeable future.

However, it is possible that a prolonged COVID-19 disruption could cause a backlog of sales orders.

A majority of our product inventory is held primarily with our sales representatives and at hospitals throughout the United States.

We believe our supplier relationships and facilities will support our capacity needs for the foreseeable future.

A majority of our product inventory is held primarily with our sales representatives and at hospitals throughout the U.S.

We stock inventory in our warehouse facilities and retain title to consigned inventory which is maintained with our field representatives and hospitals in sufficient quantities so that products are available when needed for surgical procedures.

Safety stock levels are determined based on a number of factors, including demand, manufacturing lead times, and quantities required to maintain service levels.

Surgical Instrument, Implant Sets and Equipment Sales

For many of our customers, we provide surgical instrumentation sets, including both implants and instruments, as well as our IONM systems in a manner tailored to fulfill our customer’s obligations to meet surgery schedules.

We do not generally receive separate economic value specific to the surgical instrument sets from the surgeons or hospitals that utilize them.

In many cases, once the surgery is finished, the surgical instrument sets are returned to us, and we prepare them for shipment to meet future surgeries.

We complement this implant and instrument shipment model with field-based instrument assets.

This hybrid strategy is designed to improve customer service, minimize backlogs, increase asset turns, optimize freight costs, and maximize cash flow.

Our pool of surgical equipment we make available to hospitals continues to increase as we increase our product offering, expand our distribution

channels and increase the market penetration of our products.

These surgical instrumentation and implant sets are important to the growth of our business, and we anticipate additional investments in such assets going forward.

In certain cases, we will sell either surgical instruments, implant sets or both to our customers.

While this does not constitute a material component of our business, as customer penetration and volume increases, these sales of sets allow our customers to increase the amount of surgical volume performed locally.

Additionally, we offer flexibility to customers for our capital equipment by offering capital sales and leasing arrangements.

We do not have a long history of selling, leasing or servicing capital equipment, but we have invested and intend to continue to invest in building resources and expertise in this area.

Selling and leasing of capital equipment do not make up a material portion of our total net sales.

Intellectual Property

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In particular, we rely on patent, trademark, copyright, trade secret and other intellectual property laws and also utilize nondisclosure agreements and other measures to protect our rights.

We require our employees, consultants and advisors to execute confidentiality agreements in connection with their employment, consulting or advisory relationships with us.

We also require our employees, consultants and advisors who we expect to work on our products to agree to disclose and assign to us all inventions conceived using our property or which relate to our business.

Despite measures taken to protect our intellectual property, unauthorized parties may attempt to copy aspects of our products or to obtain and use information that we regard as proprietary.

As of December 31, 2023, we owned 2,583 issued U.S.

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1 design patents), and we owned 1,744 issued foreign patents and had applications pending for 502 foreign patents.

Our issued patents expired or will expire between March 2015 and December 2042.

Our issued patents expired or will expire between March 2015 and November 2043.

Our trademark portfolio contains 732 registered trademarks and 196 pending trademarks.

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Third-Party Coverage and Reimbursement

We expect that sales volumes and prices of our Musculoskeletal Solutions products including spinal implant, orthopedic trauma, hip and knee arthroplasty, regenerative biologics, and advanced technology products may grow to be more dependent on the availability of coverage and reimbursement from third-party payors, such as state and federal programs including Medicare, Medicaid and Worker’s Compensation as well as private insurance plans including Blue Cross Blue Shield plans and commercial insurers.

We expect that sales volumes and prices of our Musculoskeletal Solutions products including spinal implant, orthopedic trauma, hip and knee arthroplasty, regenerative biologics, advanced technology products and IONM services may grow to be more dependent on the availability of coverage and reimbursement from third-party payors, such as state and federal programs including Medicare, Medicaid and workers’ compensation as well as private insurance plans including Blue Cross Blue Shield plans and commercial insurers.

Reimbursement is dynamic and is contingent on coding for given services or procedures, coverage by third-party payors, and adequate payment for the services or procedures.

Physicians, hospital outpatient departments, and Ambulatory Surgery Centers (“ASC”) use Current Procedural Terminology (“CPT ® ”) codes to bill for services and procedures, which are established by the American Medical Association (“AMA”).

Specialty societies such as the North American Spine Society, the American Association of Neurological Surgeons, and the American Academy of Orthopedic Surgeons provide advice to the AMA CPT ® Editorial Panel for developing codes.

Physicians, hospital outpatient departments, and ambulatory surgery centers use Current Procedural Terminology (“CPT ® ”) codes to bill for services and procedures which are established by the American Medical Association (“AMA”).

Specialty societies such as the North American Spine Society (“NASS”), the American Association of Neurological Surgeons, and the American Academy of Orthopedic Surgeons provide advice to the AMA CPT ® Editorial Panel for developing codes.

The availability of existing codes to bill for services and procedures may impact the adoption of technology.

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Additionally, many private payors use coverage decisions and payment amounts established by CMS for the Medicare program as guidelines in setting their coverage and reimbursement policies.

Medicare may establish National Coverage Determinations (NCDs) or Medicare Administrative Contractors (MACs) may establish Local Coverage Determinations (LCDs) that provide coverage information and determine whether services are reasonable and necessary.

Medicare may establish National Coverage Determinations or Medicare Administrative Contractors may establish Local Coverage Determinations that provide coverage information and determine whether services are reasonable and necessary.

As the portion of the U.S.

population over the age of 65 and eligible for Medicare continues to grow, we may be more vulnerable to coverage and reimbursement limitations imposed by CMS.

population over the age of 65 and eligible for Medicare continues to grow, we may be more vulnerable to coverage

and reimbursement limitations imposed by CMS.

National and local coverage policy decisions are subject to unforeseeable change and have the potential to impact physician behavior.

We will continue to provide the appropriate and compliant resources to patients, physicians, hospitals, and insurers in order to promote the best patient care, provide clarity regarding coverage and reimbursement policies, and work to reverse any non-coverage policies.

However, certain third party payors, large and small, may have policies significantly limiting coverage of, products or services that we offer.

We will continue to provide resources to patients, surgeons, hospitals, and insurers in order to ensure optimum patient care and clarity regarding reimbursement and work to remove any and all non-coverage policies.

National and regional coverage policy decisions are subject to unforeseeable change and have the potential to impact physician behavior and reimbursement for physician services.

We cannot offer definitive timeframes or final outcomes regarding reversal of the coverage-limiting policies, as the process is dictated by the third-party payors.

For a discussion of these risks, please see the “Risk Factors” section of this Annual Report.

Payment amounts are established by government and private payor programs and are subject to fluctuations, which could impact physician practice behavior.

Third-party payors are increasingly challenging the prices charged for a wide range of medical products and services.

For federal/state programs, such as Medicaid, coverage and reimbursement differ from state to state.

Some state Medicaid programs may not reimburse an adequate amount for the procedures performed with our products, if any payment is made at all.

In addition, state-level worker’s compensation coverage and reimbursement vary from state to state.

In addition, state-level workers’ compensation coverage and reimbursement vary from state to state.

Payment by Medicare and other third-party payors may not be adequate to cover the cost of medical devices used in musculoskeletal procedures.

Additionally, more musculoskeletal procedures are being performed in the hospital outpatient and ASC settings, in part due to innovation.

Reimbursement levels in the hospital outpatient and ASC settings are typically lower than for the hospital inpatient setting and may not be adequate to cover the cost of innovative and novel medical devices.

Additionally, more musculoskeletal procedures are being performed in the hospital outpatient and ambulatory surgery center settings, in part due to innovation.

Reimbursement levels in the hospital outpatient and ambulatory surgery center settings are typically lower than for the hospital inpatient setting and may not be adequate to cover the cost of innovative and novel medical devices.

In international markets, reimbursement and healthcare payment systems vary significantly by country and some countries have instituted price ceilings on specific product lines.

There can be no assurance that our products will be accepted by third-party payors, that coverage and reimbursement will be available or, if available, that the third-party payors’ coverage and reimbursement policies will not adversely affect our ability to sell our products profitably.

In the U.S., as a result of healthcare reform, third-party payors are increasingly required to demonstrate they can improve quality and reduce costs;

we accordingly see an increase in pre-approval/prior authorizations and non-coverage policies citing higher levels of evidence required for medical therapies and technologies.

In addition, insured individuals are facing increased premiums and higher out–of-pocket costs for medical coverage, which may lead patients to delay medical treatment.

An increasing number of insured individuals receive their medical care through managed care programs, which monitor and often require pre-approval of the services that a member will receive.

The percentage of individuals covered by managed care programs is expected to grow in the U.S.

over the next decade.

We believe that the overall escalating cost of medical products and services has led to, and will continue to lead to, increased pressures on the healthcare industry to reduce the costs of products and services.

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Government Regulation

Our business is subject to extensive federal, state, local and foreign regulations.

Some of the pertinent laws have not been definitively interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of subjective interpretations.

In addition, these laws and their interpretations are subject to change.

Our business is subject to extensive federal, state, local and foreign laws and regulations.

These laws and regulations and their interpretations are subject to change.

Our products are medical devices and human tissue products subject to extensive regulation by the FDA and other regulatory bodies both inside and outside of the U.S.

Each of these agencies requires us to comply with laws and regulations governing the development, testing, manufacturing, storage, labeling, marketing, sales and distribution of our products.

Both federal and state governmental agencies continue to subject the healthcare industry to intense regulatory scrutiny, including heightened civil and criminal enforcement efforts.

We believe that we have structured our business operations and relationships with our customers to comply with all applicable legal requirements.

However, it is possible that governmental entities or other third parties, including Relators (whistleblowers) who can file complaints on behalf of the government and on their own behalf under the federal civil False Claims Act (“FCA”), could interpret these laws differently and assert otherwise.

However, it is possible that governmental entities or other third parties, including Relators (whistleblowers) who can file complaints on behalf of the government and on their own behalf under the federal False Claims Act (“FCA”), could interpret these laws and our efforts to comply with them differently and assert otherwise.

We discuss below the statutes and regulations that are most relevant to our business.

Food and Drug Administration Regulation

Our products are medical devices and human tissue products subject to extensive regulation by the FDA and other federal, state, local and foreign regulatory bodies.

Our products meet the FDA’s definition of medical devices (per Section 201(h)(1) of the Food, Drug, and Cosmetic Act) and human tissue products (under 21 CFR Parts 1270 and 1271 or Public Health Service Act Section 361), each subject to varying regulation(s) by the FDA and other federal, state, local and foreign regulatory bodies.

FDA regulations govern, among other things, the following activities that we or our partners perform and will continue to perform:

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 product advertising, marketing and promotion.

FDA’s Pre-Market Clearance and Approval Requirements for Medical Devices

Unless an exemption applies, each medical device we wish to commercially distribute in the United States requires either 510(k) clearance, pre-market approval (“PMA”), or grant of a de novo classification request from the FDA.

The FDA classifies medical devices into one of three classes.

Devices deemed to pose low or moderate risk are placed in either Class I or II.

Unless classified as exempt from pre-market notification, Class I and II devices generally require the manufacturer to submit to the FDA a pre-market notification requesting permission for commercial distribution.

This process is known as 510(k) clearance.

Some low risk devices are exempt from this requirement.

Devices deemed by the FDA to pose the greatest risk, such as life-sustaining, life-supporting or implantable devices, and devices deemed not substantially equivalent to a previously cleared 510(k) devices are placed in Class III, which typically requires approval of a PMA application.

For novel Class III devices that were not previously formally classified by the FDA and that present low to moderate risk, a risk-based classification determination can be requested in accordance with the de novo request process, under which the FDA may determine that the product can be appropriately regulated as a Class I or II device.

510(k) pre-market notifications, de novo requests, and PMAs are subject to the payment of user fees, paid at the time of submission for FDA review.

The FDA can also impose restrictions on the sale, distribution or use of devices at the time of their clearance or approval, or subsequent to marketing.

FDA Premarket Clearance and Approval Requirements for Medical Devices

Unless an exemption applies (as is usually the case with instruments not intended for implantation), each medical device we wish to introduce within interstate commerce in the U.S.

requires pre-authorization by the FDA either via 510(k) clearance, premarket approval (“PMA”), grant of a de novo classification request grant or, in less frequent occasions, via Humanitarian Device Exemption (“HDE”) approval.

The FDA classifies medical devices into three classes and devices deemed to pose low or moderate risk are placed in either Class I or II.

Unless determined as exempt from premarket notification, Class I and II devices generally require the manufacturer to submit to the FDA a premarket notification seeking permission for commercial distribution, and detailing substantial equivalence to another legally U.S.

marketed medical device.

This process is known as 510(k) review and if successfully resolved results in issuance of a 510(k) clearance by the FDA.

The FDA has identified low risk devices which are exempt from this pre-authorization requirement but are not exempt from Design Controls (compliance to which must be documented internally).

Devices deemed by the FDA to pose the greatest risk to patients, such as life-sustaining, life-supporting or implantable devices, and devices deemed not substantially equivalent to a previously cleared 510(k) devices are designated as Class III, which typically requires approval of a PMA application.

For novel/unclassified devices not previously formally classified by the FDA with no legally marketed predicate which present low to moderate risk, a risk-based classification determination can be requested in accordance with the de novo classification request process, under which the FDA may determine that the product can be appropriately regulated as a Class I or II device and “granted” authorization for commercialization within the U.S.

For novel/unclassified devices not previously formally classified by the FDA with no legally marketed predicate intended to treat or diagnose a disease or condition that affects fewer than 8,000 individuals per year in the U.S., the FDA requires adherence to the HDE program.

This requires a Humanitarian Use Designation (“HUD”);

if the FDA approves the HUD, manufacturers should then seek FDA approval on an Investigational Device Exemption (“IDE”) to collect the necessary human clinical data to support approval of the HDE application.

510(k) premarket notifications, de novo requests, and PMAs are subject to the payment of user fees, paid at the time of submission for FDA review.

The FDA can also impose restrictions on the sale, distribution or use of devices at the time of their clearance, approval or grant, or subsequent to marketing.

IDEs, PMAs and HDEs most often have post-approval obligations to the FDA and to participating clinical sites, including but not limited to:

continued follow-up of enrolled / implanted investigational patients, periodic annual clinical reporting, site monitoring and oversight of on-going Institutional Review Board compliance.

Since the Institute of Medicine published their review of the predicated 510(k) review process in 2010, the FDA has continually worked to strengthen and modernize the 510(k) Program.

The FDA continues to improve the program through policies which clarify the FDA’s expectations for the content of filings, establishment of alternative pathways to a Traditional 510(k) (known as the Safety and Performance Based pathway), and through the issuance of numerous draft guidance.

This evolution has impacted the ability of medical device manufacturers to obtain or maintain 510(k) clearance for devices by both driving clarity and incentivizing the development of safer, more effective devices.

Manufacturers must continue to demonstrate their product’s same / superior performance to existing devices more readily & extensively.

Among other initiatives, the FDA promotes the use of a best-practice approach as it relates to predicate devices with a long-established history of safe and effective use as opposed to simply accepting reliance on older predicate devices for purposes of comparison in new device 510(k) clearance submissions.

If a manufacturer cannot establish that a new or modified product is substantially equivalent to a predicate device, it may be required to seek premarket approval through the PMA or de novo process (the latter only for new products).

There are numerous increased burdens associated with the PMA process, which typically requires conduct and submission of human clinical trials with high costs and uncertain outcomes.

FDA Postmarket Requirements

Pursuant to FDA regulations, we can only market our medical devices for cleared, approved, or granted uses.

Although surgeons are permitted to use medical devices for indications other than those cleared, approved or granted by the FDA based on their medical judgment, manufacturers are prohibited from marketing or promoting products for uses which differ from those deemed acceptable through respective 510(k) clearance, de novo grants, or PMA/HDE approvals.

Use of our medical devices in a manner different or inconsistent than those detailed within our labeling is considered an “off-label” use.

After a medical device is placed in the U.S.

market, numerous regulatory requirements continue to apply.

These regulatory requirements could include, but are not limited to:

 device listing and establishment registration;

 adherence to the Quality System Regulation (per 21 CFR Part 820) (“QSR”) and the newly published Quality Management System Regulation (effective February 2, 2026) which requires stringent design, testing, control, documentation and other quality assurance procedures;

 labeling requirements and FDA prohibitions against the promotion of off-label uses or indications;

 adverse event reporting (Manufacturer and User Facility Device Experience);

 post-approval restrictions or conditions, which could include post-approval clinical trials or other required testing and periodic reporting;

 post-market surveillance requirements;

 the FDA’s recall authority, whereby it can ask for, or require, the recall of products from the market (see FDA Enforcement section below);

 requirements relating to voluntary corrections or removals.

Failure to comply with applicable regulatory requirements can result in fines and other enforcement actions by the FDA, which could adversely impact our business .

Human Cell, Tissue and Cellular and Tissue-Based Products

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The FDA regulates human tissue products as Human Cells and Cellular and Tissue-Based Products (“HCT/Ps”).

Certain HCT/Ps are regulated solely under Section 361 of the Public Health Service Act and are referred to as “Section 361 HCT/Ps,” while other HCT/Ps are subject to the FDA’s regulatory requirements for medical devices or biologics.

Section 361 HCT/Ps do not require 510(k) clearance, PMA approval, or other premarket approvals from the FDA before marketing.

Tissue banks that handle HCT/Ps must register their establishments with the FDA, list their HCT/P products with the FDA, and comply with FDA donor eligibility and screening requirements, current Good Tissue Practice (“CGTP”), product labeling, and post-market reporting requirements for HCT/Ps.

The FDA periodically inspects tissue processors to determine compliance with these requirements.

Section 361 HCT/Ps do not require premarket authorization (510(k) clearance, PMA approval, or other pre-market approvals) from the FDA before marketing.

Tissue banks that handle HCT/Ps must register their establishments with the FDA, list their HCT/P products with the FDA, and comply with FDA donor eligibility and screening requirements, current Good Tissue Practice (“CGTP”), Cellular- and Tissue-Based Product Establishments , product labeling, and postmarket reporting requirements for HCT/Ps.

The FDA and other state and regional agencies periodically inspect tissue processors to determine compliance with these requirements.

Entities that provide us with allograft bone tissue are responsible for performing donor recovery, donor screening and donor testing and our compliance with those aspects of the CGTP regulations that regulate those functions are dependent upon the actions of these independent entities.

The procurement and transplantation of allograft bone tissue is subject to U.S.

federal law pursuant to the National Organ Transplant Act (“NOTA”), a criminal statute which prohibits the purchase and sale of human organs used in human transplantation,

including bone and related tissue, for “valuable consideration.” NOTA permits reasonable payments associated with the removal, transportation, processing, preservation, quality control, implantation and storage of human bone tissue.

federal law pursuant to the National Organ Transplant Act (“NOTA”), a criminal statute which prohibits the purchase and sale of human organs used in human transplantation, including bone and related tissue, for “valuable consideration.” NOTA permits reasonable payments associated with the removal, transportation, processing, preservation, quality control, implantation and storage of human bone tissue.

With the exception of removal and implantation, we provide services in all of these areas.

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FDA Enforcement

The FDA enforces these requirements by inspection and market surveillance.

The FDA enforces these requirements (for both medical device and human tissue products) by inspection and routine market surveillance.

Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include any of the following sanctions:

 untitled letters or warning letters;

 untitled letters or formal warning letters;

 fines, injunctions and civil penalties;

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 operating restrictions, partial suspension or total shutdown of production;

 refusing our request for 510(k) or de novo clearance or PMA of new products;

 withdrawing 510(k) clearance or PMAs that are already granted;

 refusing our request for review of 510(k), de novo, or PMA of new products;

 withdrawal of 510(k) clearance(s), de novo grant(s), or PMA approval(s) that are already issued;

 refusal to grant export approval of our products;

 criminal prosecution.

We are subject to unannounced device inspections by the FDA’s Office of Regulatory Affairs, Office of Compliance, Center for Devices and Radiological Health, and Center for Biologics Evaluation and Research, as well as other regulatory agencies overseeing the implementation and adherence of applicable state and federal tissue licensing regulations.

These inspections may include our suppliers’ facilities.

Failure to comply with applicable regulatory requirements can result in fines and other enforcement actions by the FDA, which could adversely impact our business.

We are subject to both announced and unannounced inspections (device and tissue) by the FDA’s Office of Regulatory Affairs, Office of Compliance, Center for Devices and Radiological Health, Center for Biologics Evaluation and Research, and American Association of Tissue Banks, as well as other regulatory agencies overseeing the implementation and adherence of applicable state and federal tissue licensing regulations.

These inspections may include our manufacturing, suppliers’ and sub-contractors’ facilities.

On October 31, 2018, we received a warning letter from the FDA resulting from an inspection of the facilities of our subsidiary Human Biologics of Texas, located in San Antonio, Texas, in April 2018.

The letter described observed non-conformities to regulations for human cells, tissues, and cellular and tissue-based products relating to one allograft tissue product processed by Human Biologics of Texas and sold to end users.

We take the matters identified in the warning letter seriously and are working diligently to address the FDA’s observations.

We responded to the FDA’s warning letter on November 20, 2018, provided periodic updates to FDA on our progress, and notified FDA of actions completed to resolve the observations.

As of December 31, 2022, this warning letter remains open.

We believe that the FDA’s concerns set forth in the warning letter can be resolved without a material impact to our financial results.

We cannot, however, give any assurances that the FDA will be satisfied with our response or as to the expected date of the resolution of the matters included in the warning letter.

Until the issues cited in the warning letter are resolved to the FDA’s satisfaction, additional legal or regulatory action may be taken without further notice.

Any adverse action by the FDA, depending on its magnitude, may restrict us from effectively producing, marketing and selling the product that is the subject matter of the warning letter and could have a material adverse effect on our business, financial condition and results of operations.

We took the matters identified in the warning letter seriously and worked diligently to address the FDA’s observations.

We responded to the FDA’s warning letter on November 20, 2018, provided periodic updates to the FDA on our progress, and notified the FDA of actions completed to resolve the observations.

As of December 31, 2023, this warning letter has been resolved.

State-Level Requirements

While the FDA regulates the inter-state distribution and commerce of medical devices and tissue products within the U.S.

(as outlined above), there are a number of states with specific regional registration requirements.

We are obligated to comply with state-level requirements and register ourselves as a medical device wholesaler and human tissue processor.

States with such registration requirements include but are not limited to:

Illinois, Connecticut, Oregon, Delaware, California, Louisiana, and Pennsylvania.

These state-level agencies have varying requirements which may require annual obligations and can result in periodic inspection by respective Health Departments.

International

International sales of medical devices are subject to foreign government regulations, which vary substantially from country to country.

In order to market our products in other countries, we must obtain regulatory approvals and comply with extensive safety and quality regulations in other countries.

The time required to obtain approval by a foreign country may be longer or shorter than that required for FDA clearance or approval, and the requirements may differ.

The European Union/European Economic Area (“EEA”) requires a CE mark in order to market medical devices.

Many other countries, such as Australia, India, New Zealand, Pakistan and Sri Lanka, accept CE or FDA clearance or approval.

Other countries, such as Brazil, Canada and Japan, require separate regulatory filings.

In order to market our products in other countries, we must obtain regulatory approvals and comply with extensive country-specific device safety and quality regulations.

The time required to obtain approval by a foreign country may be longer or shorter than that required for FDA clearance, approval or grant, and the requirements may differ.

The EU/European Economic Area (“EEA”) requires a CE mark in order to place medical devices “in market”.

Many other countries, such as Australia, India, New Zealand, Pakistan and Sri Lanka, accept CE or FDA authorizations (clearance, approval or grant).

Other countries, such as Brazil, Canada, Switzerland and Japan, require separate region-specific regulatory filings.

In the EEA, our devices are required to comply with the essential requirements of the EU Medical Device Directive (Council Directive 93/42/EEC) (“MDD”).

Compliance with these requirements entitles us to affix the CE conformity mark to our medical devices, without which they cannot be commercialized in the EEA.

Compliance with these requirements entitles us to affix the CE conformity mark to our medical devices, without which medical devices cannot be commercialized in the EEA.

To demonstrate compliance with the essential requirements and obtain the right to affix the CE conformity mark we must undergo a conformity assessment procedure, which varies according to the type of medical device and its classification.

Following the expiration of the transitional provisions of the MDD relating to the CE mark (extended to May 2027), all medical device companies manufacturing and/or marketing products in the EEA, including Globus, will be required to comply with requirements of the Medical Devices Regulation EU 2017/745 (“MDR”), which are generally stricter and include increasing technical documentation requirements and altering the classification of some products.

Most devices that are CE marked under the MDD may continue to be marketed in the EU under certain conditions until May 2027, at which point these products

must comply with the new regulation.

Products placed on the market under the MDD prior to May 2027 may continue to be sold for one year after May 2027.

The method of assessing conformity varies depending on the classification of the product, but typically involves a combination of self-assessment by the manufacturer and a third-party assessment by an accredited “Notified Body”.

This third-party assessment consists of an audit of the manufacturer’s quality system and technical review of the manufacturer’s product.

The EU has also adopted the EU Medical Device Regulation (“MDR”), which replaced existing directives and imposes stricter requirements for the marketing and sale of medical devices, including new clinical evaluation, quality system, and post-market surveillance requirements.

Following the expiration of the transitional provisions of the MDD relating to the CE mark (extended to December 2027), all medical device companies intending to manufacture and/or market products in the EEA after May 2024, including Globus Medical, NuVasive and NuVasive Specialized Orthopedics), will be required to comply with requirements of the MDR EU 2017/745, which increased technical documentation requirements, imparted more labeling obligations of higher risk devices, and altered the classification of some of our products.

Most devices that are CE-marked under the MDD may continue to be marketed in the EU under certain conditions until December 2027 for Class III and IIb devices;

2028 for Class II and class I devices which require involvement of a Notified Body in the conformity assessment, at which time these products must comply with the new regulation.

MDD compliant products intended to be placed on the market after May 2024 must meet certain conditions and be under contract with an MDR accredited Notified Body and in compliance with Transitional Provisions.

Additionally, in the EEA the procurement, testing, processing, preservation, storage and distribution of human tissues and cells is subject to the requirements of the laws of individual EEA Member States implementing Directive 2004/23/EC, Directive 2006/17/EC and Directive 2006/86/EC.

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These laws and codes may limit or restrict the advertising and promotion of our products to the general public and may impose limitations on our promotional activities with healthcare professionals.

With the departure of the UK from the EU in January 2021, while CE marking will continue to be accepted by the UK until June 30, 2024 (extended from July 2023), a separate UKCA mark will be thereafter required to market a device in the UK.

We are subject to unannounced device inspections by the Notified Body (an organization accredited by a Member State of the EEA to conduct conformity assessments), as well as other regulatory agencies overseeing the implementation and adherence of applicable regulations.

In addition to the presiding MDD (93/42/EEC;

MDD) and MDR (2017/745;

MDR) outlined above, we must also comply with EU / EEA laws, directives, regulations and recognized standards as applicable to the devices we produce.

These requirements can include all facets of healthcare, including environmental compliance, product stewardship, technical considerations, material of manufacture, and labeling availability.

Below is a non-exhaustive list of requirements to apply to devices within our portfolio and to which we must demonstrate some degree of compliance:

 Regulation (EC) No 1907/2006 of the European Parliament and of the Council of 18 December 2006 concerning the Registration, Evaluation, Authorization and Restriction of Chemicals;

 Directive 2011/65/EU of the European Parliament and of the Council of 8 June 2011 on the restriction of the use of certain hazardous substances in electrical and electronic equipment (recast);

 Directive 2012/19/EU of the European Parliament and of the Council of 4 July 2012 on waste electrical and electronic equipment;

 Commission Implementing Regulation (EU) 2021/2226 of 14 December 2021 laying down rules for the application of Regulation (EU) 2017/745 of the European Parliament and of the Council as regards electronic instructions for use of medical devices;

 Directive (EU) 2023/2413 of the European Parliament and of the Council of 18 October 2023 amending Directive (EU) 2018/2001, Regulation (EU) 2018/1999 and Directive 98/70/EC as regards the promotion of energy from renewable sources, and repealing Council Directive (EU) 2015/652;

 Directive 2014/30/EU of the European Parliament and the Council of 26 February 2014 on the harmonization of the laws of the Member States relating to electromagnetic compatibility;

 Directive 2006/66/EC of the European Parliament and of the Council of 6 September 2006 on batteries and accumulators and waste batteries and accumulators and repealing Directive 91/157/EEC;

 Directive 94/62/EC of 20 December 1994 on packaging and packaging waste.

In addition to compliance with EU & EEA statutes, we must also comply with national laws of individual sovereign nations (i.e.

Member States).

These laws vary and can include additional registration efforts to be completed before CE -marked product can be distributed within respective Member States.

Following a national referendum and enactment of legislation by the government of the United Kingdom (“UK”), the UK formally withdrew from the EU and ratified a trade and cooperation agreement governing its future relationship with the EU.

The agreement addresses trade, economic arrangements, law enforcement, judicial cooperation, and a governance framework, including procedures for dispute resolution, among other things.

Because the agreement merely sets forth a framework in many respects and will require complex additional bilateral negotiations between the UK and the EU, significant political and economic uncertainty remains about how the precise terms of the relationship between the parties will differ from the terms before withdrawal.

Further, pursuant to guidance issued by the UK Government, the Medicines and Healthcare products Regulatory Agency (“MHRA”) became the standalone medicines and medical devices regulator for the UK as of January 1, 2021.

A new mark, UK Conformity Assessed (“UKCA”), has also been introduced and will replace the CE conformity mark in the UK.

UK-approved Notified Bodies designated by the MHRA will conduct conformity assessments against applicable requirements of the UKCA mark.

Obtaining the UKCA conformity mark is optional from January 2021 and will have rolling requirements for MDD/MDR certified devices through 2027.

Although CE conformity marking and certificates issued by Notified Bodies will continue to be recognized in the UK through 2027, all medical devices were required to be registered with the MHRA as of January 1, 2021 in accordance with the provided grace period depending on the product risk classification.

This grace period has been extended, and the UK Parliament intends to bring forward an additional statutory instrument to legislate for further measures in Spring 2024.

Additionally, for manufacturers based outside of the UK, a single UK Responsible Person with a place of business in the UK must be established.

Complying with this new regulatory framework will require us to invest in additional resources and could be expensive, time-consuming and disruptive to our existing operations in the UK.

In 2014, the Japanese government revised the Pharmaceutical Affairs Law, now the Pharmaceutical and Medical Device Act (“PMD Act”), which made significant changes to the pre-approval regulatory systems.

These changes have, in part, stipulated that, in addition to obtaining a manufacturing or import approval from the Ministry of Health, Labor and Welfare, certain low-risk medical devices can now be evaluated by third-party organizations.

Based on the risk-based classification, manufacturers are provided three

procedures for satisfying the PMD Act requirements prior to placing products on the market:

Premarket Submission, Premarket Certification, and Premarket Approval.

Devices marketed in Japan must comply with the PMD Act, MO169, 2021 and are assessed by both government entities and third-party organizations using all three procedures in place for manufacturers.

The level of review and timeline for medical device approval depends on the risk-based classification and subsequent regulatory procedure that the medical device is aligned based on assessment against the current PMD Act.

Manufacturers must also obtain a manufacturing or import license from the prefectural government prior to importing medical devices;

manufacturers should also expect an inspection by the government agency.

We also pursue authorizations required by the prefectural government as required.

Device and tissue pre-market approval, registration.

and facility licensing requirements also exist in other markets where international facilities are established and where we may conduct business, including, but not limited to, Southeast Asia, Australia, and Latin America.

Such requirements vary by country and Globus Medical & all its subsidiaries have established procedures to drive its compliance with these requirements.

Data protection laws, including the EU General Data Protection Regulation (“GDPR”), also apply to our international operations.

The GDPR requires, among other things, obligations and restrictions on the ability to collect, analyze and transfer EU personal data and the prompt notice of data breaches to data subjects and supervisory authorities in certain circumstances.

These data protection regulations create a range of compliance obligations and authorize substantial fines for non-compliance.

We are subject to announced and unannounced device inspections by Notified Bodies (an organization accredited by a Member State of the EEA to conduct conformity assessments), as well as other regulatory agencies overseeing the implementation and adherence of applicable regulations.

These inspections may include our suppliers’ facilities.

Sales and Marketing Commercial Compliance

Federal anti-kickback laws and regulations prohibit, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in exchange for, or to induce either the referral of an individual, or the purchase, order or recommendation of, any good or service paid for under federal healthcare programs such as the Medicare and Medicaid programs.

Federal anti-kickback laws and regulations prohibit, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in exchange for, to induce or to reward either the referral of an individual, or the purchase, order or recommendation of, any good or service paid for under federal healthcare programs such as the Medicare and Medicaid programs.

The term “remuneration” has been interpreted broadly to include anything of value.

State anti-kickback laws have similar prohibitions.

In addition, federal false claims laws prohibit any person from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment to the federal government, or knowingly making, or causing to be made, a false statement to get a false claim paid.

Violations of the federal Anti-Kickback Statute and off-label promotion have been pursued by the Department of Justice (“DOJ”) and the Department of Health and Human Services (“HHS”) as violations of the civil False Claims Act (“FCA”).

Federal false claims laws prohibit any person from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment to the federal government;

knowingly making, or causing to be made, a false statement to get a false claim paid;

or knowingly avoiding, decreasing or concealing an obligation to pay money to the federal government.

Intent to deceive is not required to establish liability under the civil False Claims Act.

Rather, a claim may be false for deliberate ignorance of the truth or falsity of the information provided or for acts in reckless disregard of the truth or falsity of that information.

Lawsuits under the FCA often are initiated by Relators on behalf of the government.

Relators are incentivized to pursue claims against manufacturers and providers by the potential to share in any monetary recoveries by the government in litigation or as part of a settlement, which can be significant.

In addition, private payers have been filing follow-on lawsuits alleging fraudulent misrepresentation, although establishing liability and damages in these cases is more difficult than under the FCA.

Pursuant to FDA regulations, we can only market our products for cleared or approved uses.

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If enacted, such legislation could apply to any case filed under the FCA on or after the date of enactment.

Additionally, the majority of states in which we market our products have similar anti-kickback, false claims, anti-fee splitting and physician self-referral laws, which may apply to items or services reimbursed by any third-party payor, including commercial insurers, and violations may result in substantial civil and criminal penalties.

Other federal statutes pertaining to healthcare fraud and abuse include the civil monetary penalties statute, which prohibits, among other things, the offer or payment of remuneration to a Medicaid or Medicare beneficiary that the offeror or payor knows or should know is likely to influence the beneficiary to order a receive a reimbursable item or service from a particular supplier, and the additional federal criminal statutes created by the Health Insurance Portability and Accountability Act of 1996, as amended (“HIPAA”), which prohibits, among other things, knowingly and willfully executing or attempting to execute a scheme to defraud any healthcare benefit program or obtain by means of false or fraudulent pretenses, representations or promises any money or property owned by or under the control of any healthcare benefit program in connection with the delivery of or payment for healthcare benefits, items or services.

Also under HIPAA, a Covered Entity is required to adhere to certain requirements regarding the use, disclosure and security of protected health information (“PHI”).

In the past, HIPAA has generally affected us indirectly, as Globus is generally neither a Covered Entity nor a Business Associate, as further defined under HIPAA, to Covered Entities, except that our provision of IONM services through various subsidiaries may create a Business Associate relationship;

additionally, we treat our IONM service business and Puerto Rico subsidiary as a Covered Entity.

Regardless of Covered Entity status under HIPAA, in those cases where patient data is received, Globus is committed to maintaining the security and privacy of PHI.

The potential for enforcement action against us is now greater, as HHS can take action directly against Business Associates.

Thus, while we believe we are and will continue to be in compliance with all required HIPAA standards, there is no guarantee that HHS will agree.

Enforcement actions can be costly and interrupt regular operations of our business.

The Physician Payments Sunshine Act of 2009 (the "Sunshine Act”) was enacted into law in 2010 and requires public disclosure to the U.S.

government of certain payments and other transfers of value to U.S.-licensed physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists and anesthesiologist assistants, nurse midwives, and teaching hospitals, including in-kind transfers of value such as educational items or meals.

Ownership and investment interests by physicians and their immediate family members also must be reported.

The Sunshine Act also provides penalties for non-compliance.

The Sunshine Act requires that we file an annual report on March 31 of a calendar year for the transfers of value incurred for the prior calendar year.

This law, along with various international and individual state reporting, compliance program, gift ban and marketing program requirements, such as in Massachusetts and Vermont, increases the possibility that a healthcare company may run afoul of one or more of the requirements.

Foreign Corrupt Practices Act (“FCPA”) and similar anti-bribery laws in non-U.S.

jurisdictions, such as the United Kingdom’s Bribery Act, generally prohibit companies and their intermediaries from making improper payments to non-U.S.

jurisdictions, such as the UK’s Bribery Act, generally prohibit companies and their intermediaries from making improper payments to non-U.S.

government officials and (in the case of the Bribery Act) private sector decision makers for the purpose of obtaining or retaining business.

Because of the predominance of government-administered healthcare systems in many jurisdictions around the world, many of our customer relationships outside of the U.S.

Because of the predominance of government-owned or-administered healthcare systems in many jurisdictions around the world, many of our customer relationships outside of the U.S.

are with governmental entities and are therefore potentially subject to such laws.

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Additionally, we must comply with a variety of other laws that protect the privacy of individually identifiable healthcare information and impose extensive tracking and reporting related to transfers of value provided to certain healthcare professionals.

The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act, imposes reporting and disclosure requirements on device manufacturers with respect to ownership and investment interests by physicians and members of their immediate family as well as certain payments or other “transfers of value” made to physicians and other healthcare providers licensed in the U.S.

and to teaching hospitals.

Several states in which we market our products also have imposed healthcare provider payment reporting, gift ban and compliance program requirements on device manufacturers.

The shifting compliance environment and the need to build and maintain robust and expandable systems to comply in multiple jurisdictions with different

compliance and/or reporting requirements increases the possibility that a healthcare company may run afoul of one or more of the requirements.

Environmental Matters

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Human Capital

Workforce Overview

We believe our employees are our most valuable asset and are critical to our success as an organization.

Our talent related initiatives, including employee recruitment and development, diversity and inclusion and compensation and benefit programs, are focused on building and retaining the world-class and talented staff that is needed to meet our goals.

As of December 31, 2022, we had over 2,600 employees, including sales and marketing, product development, general administrative and accounting, both domestically and internationally.

Our talent-related initiatives, including employee recruitment and development, compensation and benefit programs, are focused on building and retaining the world-class and talented staff that is needed to meet our goals.

As of December 31, 2023, we had over 5,000 employees worldwide , including sales and marketing, product development, general administrative and accounting, both domestically and internationally.

Our employees are not subject to a collective bargaining agreement except in a single market outside the U.S., and we consider our relationship with our employees to be good.

Compensation and Benefits

We offer competitive benefit packages, supporting our employees as they help create a leading, global musculoskeletal technology company.

This includes encouraging a culture of health by providing benefits programs to best serve our employees and their family members.

Our comprehensive benefits package may include competitive pay, annual incentive awards and bonus opportunities, health and wellness programs, healthcare and retirement benefits, and paid time off and sick leave.

Talent Development

We believe that success comes from investing in our people and ensuring our workforce is aligned with our mission and values.

To achieve this goal, we devote time and resources to assist our employees in being familiar with our business, industry, and product offerings.

We have developed a robust onboarding program for our newly hired associates that provides a comprehensive overview of our product portfolio and company history.

We put an emphasis on training our employees and sales representatives to understand our business, including the underlying medical conditions that our products treat.

In addition, we strive to support our teams in the areas of professional development, mentoring, engagement, and health and wellness, enabling them to do their best work as they grow their careers.

Employees are encouraged to partner with their manager to create individual plans to guide their development path and to incorporate training offerings and resources to support their growth and drive their continued success.

Additionally, we regularly conduct talent reviews and succession planning to identify and develop our current and future leaders.

We are committed to identifying and developing talent to help those employees accelerate their growth and achieve their career goals .

Employee Engagement and Communication

Our success depends on our employees understanding our strategy as well as our annual goals and priorities.

This is accomplished through a number of channels, including a global intranet and sales enablement platform, regional and functional meetings, and quarterly updates in global Town Halls with leadership.

We value open and direct communication with our employees about their experiences.

We use a variety of channels to obtain employee feedback, including employee surveys, open forums with leadership, and an employee resource group.

Our annual employee engagement survey provides us with actionable data for the overall company and each department and also provides managers with upward feedback on how they are progressing against expectations.

Each year, the input received through these mechanisms is used to help strengthen our culture and improve employee engagement.

Diversity and Inclusion

We recognize the value associated with fostering a work environment that is culturally diverse an d inclusive and believe that diverse teams stimulate innovation, enhance our understanding of the needs of our customers, and ultimately deliver better results for our stakeholders .

As of December 31, 2023, our Board of Directors consisted of eleven members, two of whom identified as female and two of whom identified as having a racial and ethnic background other than white.

Our goal is to cultivate a respectful and professional environment where all voices are heard and valued.

Our HR and talent teams create professional development opportunities for employees of all genders, ethnicities and minority groups, backgrounds, experience levels, and locations.

As we seek to create a more diverse and inclusive workforce, we monitor voluntarily disclosed diversity data to review hiring, promotion and attrition overall at the Company and at the department level.

We also review performance data and promotion and compensation information to ensure fair and objective decision-making.

We believe that building diverse teams and leveraging broad perspectives will empower our employees and strengthen our ability to meet the needs of our customers, patients, and communities we serve.

Health, Safety, and Wellness

We are committed to the protection of our employees, customers, communities and the environment.

Our key areas of focus include corporate compliance with responsible hazardous waste management, recycling, emergency preparedness, as well as various initiatives to improve our health and safety programs with the goal of reducing and ultimately eliminating serious injuries.

Our Environmental, Health & Safety personnel develop global safety practices and procedures, train employees, host annual safety campaigns, and monitor compliance with safety procedures.

Our employees and sales representatives have a long history of providing support and care to our communities, donating time, resources and funds to local causes.

Since 2009, we have leveraged our expertise in spine care to give back to local and global communities through Globus Cares and NuVasive Spine Foundation, both 501(c)(3) nonprofit organizations.

These organizations support life-changing spine surgery for individuals around the world with limited access to high quality medical treatment by working with surgeons to advance the quality of spine care in disadvantaged communities.

In addition, through our grants program, we support

medical research and education, charitable and philanthropic endeavors.

We believe in giving back, and we also believe it is important to operate our company in a socially responsible manner.

We were incorporated in Delaware in March 2003.

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What changed 10-K

Item 1. Business