What changed in this filing

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Item 1A. Risk Factors

2024-02-21 compared with 2023-02-21 · 171 added, 88 removed, 668 unchanged (28% of the section changed)

25 unchanged sentences

 We experience long and variable capital sales cycles for our Enabling Technologies products.

 Certain contractual counterparties may seek to modify contractual relationships with the Company, which could have an adverse effect on the Company’s business and operations.

 The Company may be exposed to increased litigation, which could have an adverse effect on the Company’s business and operations .

 Our IONM business exposes us to risks inherent with the sale of services.

Risks Related to our Legal and Regulatory Environment

 Our medical device products and operations are subject to extensive governmental regulation both in the United States and abroad.

 Our medical device products and operations are subject to extensive governmental regulation both in the U.S.

 Modifications to our products may require new 510(k) or de novo clearances, PMAs or PMA supplements.

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 Our results of operations could suffer if we are unable to manage our planned international expansion effectively.

 We are subject to risks arising from currency exchange rate fluctuations on our international transactions and translation of local currency results into United States dollars, which could adversely affect our profitability.

 We are subject to risks arising from currency exchange rate fluctuations on our international transactions and translation of local currency results into U.S.

dollars, which could adversely affect our profitability.

Risks Related to our Financial Results and Need for Financing

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 Our quarterly and annual operating results may fluctuate significantly.

 We have a significant amount of outstanding indebtedness, and our financial condition and results of operations could be adversely affected if we do not effectively manage our liabilities.

 The availability of funding under existing credit arrangements may be limited, and our cash and cash equivalents are subject to volatility.

 Our future capital needs are uncertain and we may need to raise funds in the future, and such funds may not be available on acceptable terms or at all.

 Our existing revolving credit facility contains restrictive covenants that may limit our operating flexibility.

Risks Related to our Intellectual Property and Potential Litigation

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 The widespread outbreak of a communicable disease, or any other public health crisis, could adversely affect our financial condition and results of operations.

Risks Relating to the Integration of NuVasive

 Integrating the NuVasive business into Globus may be more difficult, costly or time-consuming than expected and the Company may fail to realize the anticipated benefits of the Merger, which may adversely affect the Company’s business results and negatively affect the value of the Company’s common stock.

 The Company expects to incur substantial expenses related to the integration of NuVasive and may be unable to realize the anticipated synergies, which could adversely affect the Company’s business, financial condition and results of operations.

 Certain contractual counterparties may seek to modify contractual relationships with the Company, which could have an adverse effect on the Company’s business and operations.

 The Company may be exposed to increased litigation, which could have an adverse effect on the Company’s business and operations.

Risks Related to Our Business and Our Industry

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The musculoskeletal devices industry is characterized by intense competition and continues to attract numerous new companies and technologies, which has encouraged more established companies to intensify competitive pricing pressure.

As a result of this increased competition, as well as the challenges of third-party coverage and reimbursement practices, we believe there will be continued pricing pressure in the future.

As a result of this

increased competition, as well as the challenges of third-party coverage and reimbursement practices, we believe there will be continued pricing pressure in the future.

If competitive forces drive down the prices we are able to charge for our products, our profit margins will shrink, which will adversely affect our ability to maintain our profitability and to invest in and grow our business.

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Hospitals and other healthcare providers that purchase our Musculoskeletal Solutions products generally rely on third-party payors to cover all or part of the costs associated with the procedures performed with these products, including the cost to purchase the product.

Our customers’ access to adequate coverage and reimbursement for the procedures performed with our Musculoskeletal Solutions

products by government and private insurance plans is central to the acceptance of our current and future products.

Our customers’ access to adequate coverage and reimbursement for the procedures performed with our Musculoskeletal Solutions products by government and private insurance plans is central to the acceptance of our current and future products.

We may be unable to sell our Musculoskeletal Solutions products on a profitable basis, or at all, if third-party payors deny coverage or reduce their current levels of payment.

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Medicaid payments to physicians and facilities are often lower than payments by other third-party payors and some state Medicaid programs may not pay an adequate amount for the procedures performed with our products, if any payment is made at all.

Furthermore, the healthcare industry in the United States has experienced a trend toward cost containment as government and private insurers seek to control rising healthcare costs by imposing lower payment rates and negotiating reduced contract rates with service providers.

Furthermore, the healthcare industry in the U.S.

has experienced a trend toward cost containment as government and private insurers seek to control rising healthcare costs by imposing lower payment rates and negotiating reduced contract rates with service providers.

Third-party payors, including public and private payors, may develop negative coverage policies impacting our Musculoskeletal Solutions products.

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We face significant challenges and risks in managing our geographically dispersed distribution network and retaining the individuals who make up that network.

If certain of our direct sales representatives were to leave us, or if certain of our independent distributors were to cease to do business with us, our sales could be adversely affected.

If certain of our direct sales representatives were to leave us, or if certain of our independent

distributors were to cease to do business with us, our sales could be adversely affected.

Some of our independent distributors account for a significant portion of our sales volume, and if any such independent distributor were to cease to distribute our products, our sales could be adversely affected.

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As we launch new products and increase our marketing efforts with respect to existing products, we will need to expand the reach of our marketing and sales networks.

Our future success will depend largely on our ability to continue to hire, train, retain and

motivate skilled direct sales representatives and independent distributors with significant technical knowledge in various areas.

Our future success will depend largely on our ability to continue to hire, train, retain and motivate skilled direct sales representatives and independent distributors with significant technical knowledge in various areas.

New hires require training and take time to achieve full productivity.

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Our industry is intensely competitive, subject to rapid change and highly sensitive to the introduction of new products or other market activities of industry participants.

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.

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 industry 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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If alternative treatments are, or are perceived to be, superior to our musculoskeletal surgery products, sales of our products could be negatively affected and our results of operations could suffer.

Many of our current and potential competitors are major medical device companies that have substantially greater financial, technical and marketing resources than we do, and they may succeed in developing products that would render our products obsolete or noncompetitive.

Many of our larger competitors enjoy several competitive advantages over us, including:

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The loss of members of our management team, key advisors or personnel, or our inability to attract or retain other qualified personnel or advisors, could have a material adverse effect on our business, results of operations and financial condition.

Though members of our sales force generally enter into noncompetition agreements that restrict their ability to compete with us, most of the members of our executive management team are not subject to such agreements.

Though members of our sales force generally enter into non-compete agreements that restrict their ability to compete with us, most of the members of our executive management team are not subject to such agreements.

Accordingly, the adverse effect resulting from the loss of certain executives could be compounded by our inability to prevent them from competing with us.

The safety and efficacy of our products is not yet supported by long-term clinical data, which could limit sales, and our products might therefore prove to be less safe and effective than initially thought.

All of the products we currently market in the United States, other than our SECURE ® -C cervical disc, have either received pre-market clearance under Section 510(k) of the Federal Food, Drug, and Cosmetic Act (“FDCA”) or are exempt from pre-market review.

The FDA's 510(k) clearance process requires us to show that our proposed product is “substantially equivalent” to another 510(k)-cleared product.

Many of our products we currently market in the U.S., have either received pre-market clearance under Section 510(k) of the Federal Food, Drug, and Cosmetic Act (“FDCA”) or are exempt from pre-market review.

The FDA's 510(k) clearance process, and similar regulatory processes in other countries, requires us to show that our proposed product is “substantially equivalent” to another

510(k)-cleared product.

This process is shorter and typically requires the submission of less supporting documentation than other FDA approval processes and does not always require long-term clinical studies.

Additionally, to date, we have not been required to complete long-term clinical studies in connection with the sale of our products outside the United States, except our SECURE ® -C device, which was prospectively studied through seven-year postoperative clinical study as part of the Post-Market Approval (PMA) process.

Additionally, for most products launched to date, we have not been required to complete long-term clinical studies in connection with the sale of our products outside the U.S.

Our SECURE ® -C device was prospectively studied through a seven-year postoperative clinical study as part of the Postmarket Approval process.

As a result, we currently lack the breadth of published long-term clinical data supporting the safety and efficacy of virtually all of our products and the benefits they offer that might have been generated in connection with other approval processes.

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Many of our Musculoskeletal Solutions products come in sets, which feature components in a variety of sizes to satisfy the particular patient’s anatomical needs.

In order to market our Musculoskeletal Solutions products effectively, we often must maintain implant sets consisting

of the full range of product sizes.

In order to market our Musculoskeletal Solutions products effectively, we often must maintain implant sets consisting of the full range of product sizes.

For each surgery, fewer than all of the components of the set are used, and therefore certain portions of the set, like uncommon sizes, may become obsolete before they can be used.

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We are increasingly dependent on sophisticated information technology systems to operate our business, including to process, transmit and store sensitive data, and many of our products and services include or use integrated software and information technology that may collect data regarding customers, patients, suppliers and third parties, or connects to our systems.

Given the nature of our business, we also may maintain personally identifiable information (“PII”) or access to protected health information (“PHI”).

Given the nature of our business, we also may maintain personally identifiable information (“PII”) or access to PHI.

Specifically, we rely on our information technology systems to effectively manage sales and marketing, accounting and financial functions, inventory management, engineering and product development tasks, and our research and development data.

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federal and state, international and industry levels.

federal and state laws, such as the Health Insurance Portability and Accountability Act of 1996, protect the confidentiality of certain patient health information, including patient medical records, and restrict the use and disclosure of patient health information.

federal and state laws, such as HIPAA, protect the confidentiality of certain patient health information, including patient medical records, and restrict the use and disclosure of patient health information.

In addition to the regulation of personal health information, a number of states have also adopted laws and regulations that may affect our privacy and data security practices for other kinds of PII, such as state laws that govern the use, disclosure and protection of sensitive personal information, such as social security numbers, or that are designed to protect credit card account data.

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More privacy and security laws and regulations are being adopted, and more are being enforced, with potential for significant financial penalties.

In the European Union (“E.U.”), stringent data protection and privacy rules impact the use of patient data across the healthcare industry.

General Data Protection Regulation (“GDPR”) applies across the E.U., with similar requirements applying to the United Kingdom and European Economic Area countries, and includes, among other things, a requirement for prompt notice of data breaches to data subjects and supervisory authorities in certain circumstances and imposes significant fines for non-compliance.

In the EU, stringent data protection and privacy rules impact the use of patient data across the healthcare industry.

The GDPR applies across the EU, with similar requirements applying to the UK and European Economic Area countries, and includes, among other things, a requirement for prompt notice of data breaches in certain circumstances and imposes significant fines for non-compliance.

Data protection authorities from different EU member states may interpret and apply the GDPR somewhat differently, and the GDPR also permits EU member states to create supplemental national laws, which increases the complexity for compliance.

Failure to comply with GDPR requirements could result in penalties of up to €20 million or 4% of worldwide revenue, whichever is greater, for serious

Failure to comply with GDPR requirements could result in penalties of up to €20 million or 4% of worldwide revenue, whichever is greater, for serious violations.

Within the U.S., a number of states have enacted more onerous privacy laws, such as the California Consumer Privacy Act (the “CCPA”), which also impose stricter privacy requirements and are enforced by state attorneys general and other state agencies.

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These approval and bidding processes can be lengthy.

Further, the introduction of new products could adversely impact

our sales cycle as customers take additional time to assess the benefits and costs of such products.

Further, the introduction of new products could adversely impact our sales cycle as customers take additional time to assess the benefits and costs of such products.

As a result, it is difficult for us to predict the length of capital sales cycles and, therefore, the exact timing of capital sales.

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If that happens, the market price of our stock would likely decrease.

Our IONM business exposes us to risks inherent with the sale of services .

Our IONM services and support business exposes us to different risks than our other products and technologies.

Through NuVasive Clinical Services, a Globus subsidiary, we provide onsite and remote monitoring of the neurological systems of patients undergoing spinal and brain-related surgeries.

Our neurophysiologists are present in the operating room during procedures and work with supervising physicians who remotely oversee and interpret neurophysiologic data gathered via broadband transmission over the Internet.

Providing this service subjects us to malpractice exposure.

In addition, given the reliance on technology, any disruption to our IONM equipment or the Internet could harm our service operations and our reputation among our customers.

Further, any disruption to our information technology systems could adversely impact the performance of our neurophysiologists and oversight physicians.

In addition, IONM services are directly billed to Medicare and commercial payors, which brings with it additional risks associated with proper billing practice regulations, HIPAA compliance, corporate practice of medicine laws, and collections risk associated with third-party payors.

Due to the breadth of many healthcare laws and regulations, our IONM business could also be subject to healthcare fraud regulation and enforcement by both the federal government and the states in which we conduct our business, including under the Anti-Kickback Statute, the federal false claims laws and state law equivalents.

Further, in December 2020, in connection with the Consolidated Appropriations Act of 2021, the No Surprises Act was signed into law in the U.S., which introduced national limitations on physician billing for certain services furnished by providers who are not in-network with the patient’s self-insured health plan, individual or group health plan.

This federal law became effective on January 1, 2022, and several states where we conduct business have also enacted similar laws that would apply to patients having state-regulated insurance.

These measures could limit the amount we can charge and recover for the IONM services we furnish where we have not contracted with the patient’s insurer, which could negatively impact the profitability of our IONM services business.

If our operations are found to be in violation of any of these laws or any other governmental regulations that apply to us, we may be subject to sanctions, including civil penalties and damages, criminal fines and imprisonment, exclusion from participation in federal and state healthcare programs, suspension and debarment from federal procurement and non-procurement programs, refusal of orders under existing government contracts, and the curtailment or restructuring of our operations.

Any penalties, damages, fines, exclusion or debarment, or curtailment or restructuring of our operations could adversely affect our ability to operate our business and our financial results.

Risks Related to our Legal and Regulatory Environment

Our medical device products and operations are subject to extensive governmental regulation both in the United States and abroad, and our failure to comply with applicable requirements could cause our business to suffer.

Our medical device products and operations are subject to extensive governmental regulation both in the U.S.

and abroad, and our failure to comply with applicable requirements could cause our business to suffer.

The medical device industry is regulated extensively by governmental authorities, principally the FDA and corresponding state and foreign regulatory agencies.

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The processes by which 510(k) clearance, grant of a de novo classification request, or PMA approval is obtained can be expensive and lengthy and require the payment of significant fees.

The FDA’s 510(k) clearance process usually takes from three to 12 months, but may last longer.

The FDA’s 510(k) clearance process usually takes from three to twelve months, but may last longer.

The FDA’s goal is to review de novo classification requests within 150 FDA review days, but presently, the current average review period is about eight months.

The process of obtaining a PMA is much costlier and more uncertain than the 510(k) clearance process and generally takes one to three years, or even longer, from the time the application is submitted to the FDA until an approval is obtained.

The process of obtaining regulatory clearances through the 510(k) process, de novo classification, or approvals through the PMA process to market a medical device in the United States or internationally can be costly and time-consuming, and we may not be able to obtain these clearances, grants of de novo classification, or approvals on a timely basis, if at all.

In the United States, all of our currently commercialized medical device products, other than SECURE ® -C have either received pre-market clearance under Section 510(k) of the FDCA or are exempt from pre-market review.

The process of obtaining regulatory clearances through the 510(k) process, de novo classification, or approvals through the PMA process to market a medical device in the U.S.

or internationally can be costly and time-consuming, and we may not be able to obtain these clearances, grants of de novo classification, or approvals on a timely basis, if at all.

In the U.S., all of our currently commercialized medical device products, other than SECURE ® -C have either received premarket clearance under Section 510(k) of the FDCA or are exempt from PMA review.

If the FDA requires us to go through a lengthier, more rigorous examination for future products or modifications to existing products than we had expected, our product introductions or modifications could be delayed or canceled, which could cause our sales to decline and potentially harm our ability to compete.

In addition, if the FDA disagrees with our determination that a product we currently market is subject to an exemption from pre-market review, the FDA may require us to submit a 510(k), de novo , or PMA and may require us to cease distribution of the product and/or recall the product unless and until we obtain 510(k) or de novo clearance or PMA.

In addition, if the FDA disagrees with our determination that a product we currently market is subject to an exemption from premarket review, the FDA may require us to submit a 510(k), de novo , or PMA and may require us to cease distribution of the product and/or recall the product unless and until we obtain 510(k) or de novo clearance or PMA.

Further, even with respect to those future products where a PMA is not required, we cannot assure you that we will be able to obtain the 510(k) or de novo clearances with respect to those products.

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In addition, the FDA may change its clearance and approval policies, adopt additional regulations or revise existing regulations, or take other actions which may prevent or delay approval or clearance of our products under development or impact our ability to modify our currently approved or cleared products on a timely basis.

Most recently, the FDA has been required to dedicate a significant amount of its resources to the review and oversight of medical products intended for COVID-19 or other pandemic-related purposes.

This strain on the FDA’s resources could lead to delays in the FDA’s review of new 510(k) or other marketing applications that are unrelated to COVID-19.

It is also possible that, if we obtain new FDA regulatory clearances or approvals, the clearances or approvals may contain limitations on the indicated uses or may prohibit certain uses which may impact the marketability of the product.

It is also possible that, if we obtain new FDA regulatory clearances

or approvals, the clearances or approvals may contain limitations on the indicated uses or may prohibit certain uses which may impact the marketability of the product.

Any delay in, or failure to receive or maintain, clearance or approval for our medical device products under development could prevent us from generating revenue from these products or achieving profitability.

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These studies can be very expensive and time-consuming to conduct.

Failure to comply with those studies in a timely manner could result in the revocation of the 510(k) clearance for the product that is subject to such a Section 522 Order and the recall or withdrawal of the product, which could prevent us from generating sales from that product in the United States.

Similarly, we must comply with numerous international laws and regulations in order to market our products outside of the United States;

Similarly, we must comply with numerous international laws and regulations in order to market our products outside of the U.S.;

Government Regulation;

International” above for a summary of certain international laws and regulations to which we are subject.

As is the case in the United States, the applicable regulatory body may change its clearance and approval policies, adopt additional regulations or revise existing regulations, or take other actions which may prevent or delay approval or clearance of our products under development or impact our ability to modify our currently approved or cleared products on a timely basis.

As is the case in the U.S., the applicable regulatory body may change its clearance and approval policies, adopt additional regulations or revise existing regulations, or take other actions which may prevent or delay approval or clearance of our products under development or impact our ability to modify our currently approved or cleared products on a timely basis.

Any delay in, or failure to receive or maintain, clearance or approval for our products under development could prevent us from generating revenue from these products or achieving profitability.

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The FDA requires every manufacturer to make this determination in the first instance, but the FDA may review any manufacturer’s decision.

FDA may not agree with our decisions regarding whether new clearances or approvals are necessary.

The FDA may not agree with our decisions regarding whether new clearances or approvals are necessary.

We have modified some of our 510(k)-cleared products, and have determined based on our review of the applicable FDA guidance that in certain instances new 510(k) clearances or PMAs are not required.

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Our HCT/P products are subject to extensive government regulation and our failure to comply with these requirements could cause our business to suffer.

In the United States, we are marketing our human tissue products as Section 361 HCT/Ps, which are not subject to FDA premarket clearance or approval requirements.

The FDA could disagree with our determination that our human tissue products are Section 361 HCT/Ps and could determine that these products are biologics requiring a biological license application approval or medical devices requiring 510(k) or de novo clearance or PMA approval, or New Drug Application (“NDA”) approval.

In the U.S., we are marketing our human tissue products as Section 361 HCT/Ps, which are not subject to FDA premarket clearance or approval requirements.

The FDA may then require that we cease marketing our human tissue products and/or recall the products unless and until we receive the appropriate clearance or approval from the FDA.

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If we or our suppliers fail to comply with these requirements, we could be subject to FDA enforcement action, including, for example, warning letters, fines, injunctions, product recalls or seizures, and, in the most serious cases, criminal penalties.

We received an FDA warning letter on October 31, 2018 related to observed non-conformities to the FDA’s HCT/P regulations.

Government Regulation.”

If we or our suppliers fail to comply with the FDA’s good manufacturing practice regulations and similar international regulations, this could impair our ability to market our products in a cost-effective and timely manner.

We and our third-party suppliers are required to comply with the FDA’s Quality System Regulation (“QSR”), which covers the methods and documentation of the design, testing, production, control, quality assurance, labeling, packaging, sterilization, storage and shipping of our products.

We and our third-party suppliers are required to comply with the FDA’s QSR, which covers the methods and documentation of the design, testing, production, control, quality assurance, labeling, packaging, sterilization, storage and shipping of our products.

In addition, suppliers and processors of allograft must comply with the CGTP, which govern the methods used in and the facilities and controls used for the manufacture of human cell tissue and cellular and tissue-based products, record-keeping and the establishment of a quality program.

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Any of these sanctions could have a material adverse effect on our reputation, business, results of operations and financial condition.

Outside the United States, our products and operations are also often required to comply with standards set by industrial standards bodies, such as the ISO.

Outside the U.S., our products and operations are also often required to comply with standards set by industrial standards bodies, such as the ISO.

Foreign regulatory bodies may evaluate our products or the testing that our products undergo against these standards.

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A FSCA may include the recall, modification, exchange, destruction or retrofitting of the device.

Any adverse event involving our products, whether in the United States or abroad, could result in future voluntary corrective actions, such as recalls or customer notifications, or agency action, such as inspection, mandatory recall or other enforcement action.

Any adverse event involving our products, whether in the U.S.

or abroad, could result in future voluntary corrective actions, such as recalls or customer notifications, or agency action, such as inspection, mandatory recall or other enforcement action.

Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, will require the dedication of our time and capital, distract management from operating our business and may harm our reputation and financial results.

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In that event, our reputation could be damaged and adoption of the products would be impaired.

Although our policy is to refrain from statements that could be considered off-label promotion of our products, the FDA, or another regulatory agency or a Relator under the FCA could disagree and conclude that we have engaged in off-label promotion.

Although our policy is to refrain from statements that could be considered off-label promotion of our products, the FDA, or another regulatory agency or a Relator under the FCA could disagree and allege that we have engaged in off-label promotion.

In addition, the off-label use of our products may increase the risk of injury to patients, and, in turn, the risk of product liability claims.

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Governmental regulation and limited sources and suppliers could restrict our procurement and use of tissue.

In the United States, the procurement and transplantation of allograft bone tissue is subject to federal law pursuant to the 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.

We provide services in all of these areas in the United States, with the exception of removal and implantation, and receive payments for all such services.

In the U.S., the procurement and transplantation of allograft bone tissue is subject to federal law pursuant to the 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.

We provide services in all of these areas in the U.S., with the exception of removal and implantation, and receive payments for all such services.

We make payments to tissue banks for their services related to recovering allograft bone tissue on our behalf.

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The processing of human tissue into our regenerative biologics products is very labor-intensive and it is therefore difficult to maintain a steady supply stream.

In addition, due to seasonal changes in mortality rates, some scarce tissues used in our regenerative biologics products are at

times in particularly short supply.

In addition, due to seasonal changes in mortality rates, some scarce tissues used in our regenerative biologics products are at times in particularly short supply.

We cannot be certain that our current supply of human tissue and allograft implants, plus any additional source that we identify in the future, will be sufficient to meet our needs.

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Media reports or other negative publicity concerning both alleged improper methods of tissue recovery from donors and disease transmission from donated tissue could limit widespread acceptance of some of our regenerative biologics products.

Unfavorable reports of improper or illegal tissue recovery practices, both in the United States and internationally, as well as incidents of improperly processed tissue leading to the transmission of disease, may broadly affect the rate of future tissue donation and market acceptance of technologies incorporating human tissue.

Unfavorable reports of improper or illegal tissue recovery practices, both in the U.S.and internationally, as well as incidents of improperly processed tissue leading to the transmission of disease, may broadly affect the rate of future tissue donation and market acceptance of technologies incorporating human tissue.

In addition, such negative publicity could cause the families of potential donors to become reluctant to agree to donate tissue to for-profit tissue processors.

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There are numerous U.S.

federal and state laws pertaining to healthcare fraud and abuse, including anti-kickback laws and physician self-referral laws.

federal and state laws pertaining to healthcare fraud and abuse, including anti-kickback laws.

False claims laws and physician self-referral laws.

Our relationships with surgeons, hospitals and our independent distributors are subject to scrutiny under these laws.

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Examples of laws that may affect our ability to operate include:

 the Federal Anti-Kickback Statute, which prohibits, 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 for, or the purchase, order or recommendation of, any good or service for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs;

 the Federal Anti-Kickback Statute, which prohibits, 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 for, or the purchase, order or recommendation of, any good or service for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs;

 federal false claims laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment to Medicare, Medicaid, or other government payors that are false or fraudulent;

 the federal Health Insurance Portability and Accountability Act of 1996, which created federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;

 HIPAA, which created federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;

 the Federal Trade Commission Act and similar laws regulating advertisement and consumer protections;

 the FCPA, which prohibits corrupt payments, gifts or transfers of value to foreign officials;

 the Physician Payment Sunshine Act, which requires medical device companies to report ownership and investment interests by physicians and members of their immediate family as well as certain payments and other transfers of value, including gifts and other benefits, provided to physicians and certain other healthcare professionals licensed in the U.S.

and other benefits, provided to physicians and certain other healthcare professionals licensed in the U.S.

and to teaching hospitals;

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Dealing with investigations can be time- and resource-consuming and can divert management’s attention from the business.

Additionally, if an investigation were initiated involving us and we decided to settle that investigation with the DOJ or other law enforcement agencies, we may be forced to agree to additional onerous and expensive compliance and reporting requirements for a period of years as part of a consent decree or corporate integrity agreement.

Any such investigation or settlement could increase our costs or otherwise have an adverse effect on our business, financial condition and results of operations.

In addition, there has been a recent trend of increased federal and state regulation on payments and other transfers of value made to healthcare professionals related to marketing and other activities.

Some states mandate implementation of healthcare compliance programs, impose gift bans, and/or require the tracking and reporting of gifts, compensation and other remuneration to physicians and certain other US-licensed healthcare professionals and US teaching hospitals.

licensed healthcare professionals and U.S.

teaching hospitals.

The shifting commercial compliance environment and the need to build and maintain robust and expandable systems to comply with different compliance and/or reporting requirements in multiple jurisdictions increase the possibility that a healthcare company may run afoul of one or more of the requirements.

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If the assessment is not favorable, it could prevent us from selling that product in the EEA, which could adversely impact our business and results of operations.

In addition, on January 1, 2021 the UK left the European Union.

In addition, on January 1, 2021 the UK left the EU.

EU CE markings for medical devices will continue to be recognized in Great Britain until June 30, 2028, and certificates issued for medical devices by EU-recognized Notified Bodies will continue to be valid for the Great Britain market until June 30, 2028 and the EU no longer recognizes UK Notified Bodies.

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corporations and their foreign affiliates, which are intended to prevent the diversion of corporate funds to the payment of bribes and other improper payments, and to prevent the establishment of “off books” slush funds from which such improper payments can be made.

Because of the predominance of government-sponsored healthcare systems around the world, many of our customer relationships outside of the United States are with governmental entities and are therefore subject to such anti-bribery laws.

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

are with governmental entities and are therefore subject to such anti-bribery laws.

Our internal control policies and procedures may not always protect us from reckless or criminal acts committed by our employees or agents.

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We also could suffer severe penalties, including criminal and civil penalties, disgorgement and other remedial measures, including further changes or enhancements to our procedures, policies and controls, as well as potential personnel changes and disciplinary actions.

Furthermore, we are subject to the export controls and economic embargo rules and regulations of the United States, including, but not limited to, the Export Administration Regulations and trade sanctions against embargoed countries, which are administered by the Office of Foreign Assets Control within the Department of the Treasury, as well as the laws and regulations administered by the Department of Commerce.

Furthermore, we are subject to the export controls and economic embargo rules and regulations of the U.S.

, including, but not limited to, the Export Administration Regulations and trade sanctions against embargoed countries, which are administered by the Office of Foreign Assets Control within the Department of the Treasury, as well as the laws and regulations administered by the Department of Commerce.

These regulations limit our ability to market, sell, distribute or otherwise transfer our products or technology to prohibited countries or persons.

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Expansion into international markets is an element of our business strategy and involves risk.

The sale and shipment of our products across international borders, as well as the purchase of components and products from international sources, subject us to

extensive U.S.

The sale and shipment of our products across international borders, as well as the purchase of components and products from international sources, subject us to extensive U.S.

and foreign governmental trade, import and export and customs regulations and laws.

Compliance with these regulations and laws is costly and exposes us to penalties for non-compliance.

Compliance with these regulations

and laws is costly and exposes us to penalties for non-compliance.

Other laws and regulations that can significantly affect us include various anti-bribery laws, including the FCPA and anti-boycott laws.

Any failure to comply with applicable legal and regulatory obligations in the United States or abroad could adversely affect us in a variety of ways that include, but are not limited to, significant criminal, civil and administrative penalties, including imprisonment of individuals, fines and penalties, denial of export privileges, seizure of shipments and restrictions on certain business activities.

Any failure to comply with applicable legal and regulatory obligations in the U.S.

or abroad could adversely affect us in a variety of ways that include, but are not limited to, significant criminal, civil and administrative penalties, including imprisonment of individuals, fines and penalties, denial of export privileges, seizure of shipments and restrictions on certain business activities.

Also, the failure to comply with applicable legal and regulatory obligations could result in the disruption of our distribution and sales activities.

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Failure to manage these and other risks may have a material adverse effect on our operations in any particular country and on our business as a whole.

We are subject to risks arising from currency exchange rate fluctuations on our international transactions and translation of local currency results into United States dollars, which could adversely affect our profitability.

We are subject to risks arising from currency exchange rate fluctuations on our international transactions and translation of local currency results into U.S.

dollars, which could adversely affect our profitability.

International operations account for approximately 18.4% of our total net sales, and we intend to continue to expand our international presence.

A significant portion of our foreign revenues and expenses are generated in Japan, the Euro zone, United Kingdom and Australia.

A significant portion of our foreign revenues and expenses are generated in Japan, the Euro zone, UK and Australia.

As our reporting currency is the U.S.

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We may be unable to grow our revenue or earnings as anticipated, which may have a material adverse effect on our results of operations.

We have experienced rapid growth since our inception and have increased our net sales to $1,022.8 million in 2022.

Our ability to achieve future growth will depend upon, among other things, the success of our growth strategies, which we cannot assure

will be successful.

In addition, we may have more difficulty maintaining our historical or prior rate of growth of revenues, profitability or cash flows.

We have experienced rapid growth since our inception and increased our net sales to $1,568.5 million in 2023.

Our ability to achieve future growth will depend upon, among other things, the success of our growth strategies, which we cannot assure will be successful.

In addition, we may have more difficulty maintaining our historical or prior rate of growth of revenues, profitability or cash

Our future success will depend upon numerous factors, including the strength of our brand, the market success of our current and future products, competitive conditions, our ability to attract and retain our employees and our ability to manage our business and implement our growth strategy.

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 our ability to expand the geographic reach of our sales and marketing efforts.

Many of the products we may seek to develop and introduce in the future will require FDA approval or clearance before commercialization in the United States, and commercialization of such products outside of the United States would likely require additional regulatory approvals and import licenses.

Many of the products we may seek to develop and introduce in the future will require FDA approval or clearance before commercialization in the U.S.

, and commercialization of such products outside of the U.S.

would likely require additional regulatory approvals and import licenses.

As a result, it will be difficult for us to forecast demand for these products with any degree of certainty.

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If inflation in the cost of raw materials increases beyond our ability to manage it, we may not be able to adjust prices sufficiently to offset the effect of the various cost increases without negatively impacting our consumer demand.

Furthermore, the continuing impacts of the COVID-19 pandemic could lead to greater increases in inflation, which could adversely affect our operations and financial performance.

The availability of funding under existing credit arrangements might be limited, and our cash and cash equivalents are subject to volatility .

We have a significant amount of outstanding indebtedness, and our financial condition and results of operations could be adversely affected if we do not effectively manage our liabilities.

As of December 31, 2023, we had outstanding $450.0 million aggregate principal amount of our 0.375% Convertible Senior Notes due March 15, 2025, (the “2025 Notes”).

This significant amount of debt has important risks to us and our investors, including:

 requiring a portion of our cash flow from operations to make interest payments on this debt;

 increasing our vulnerability to general adverse economic and industry conditions;

 reducing the cash flow available to fund capital expenditures and other corporate purposes and to grow our business;

 limiting our flexibility in planning for, or reacting to, changes in our business and the industry;

 limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise.

The availability of funding under existing credit arrangements may be limited, and our cash and cash equivalents are subject to volatility .

Any lender that is obligated to provide funding to us under any now existing or future credit agreement with us may not be able to provide funding in a timely manner, or at all, when we require it.

The cost of, or lack of, available credit or equity financing could impact our ability to develop sufficient liquidity to maintain or grow our company, which in turn may adversely affect our business, results of operations or financial condition.

The cost of, or lack of, available credit or equity financing could

impact our ability to develop sufficient liquidity to maintain or grow our company, which in turn may adversely affect our business, results of operations or financial condition.

We also manage cash and cash equivalents and short-term investments through various institutions.

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Competitors may be able to design around our patents or develop products that provide outcomes which are comparable to ours without infringing on our intellectual property rights.

We have entered into confidentiality agreements and intellectual property assignment agreements with our officers, employees, consultants and advisors regarding our intellectual property and proprietary technology.

We have entered into

confidentiality agreements and intellectual property assignment agreements with our officers, employees, consultants and advisors regarding our intellectual property and proprietary technology.

In the event of unauthorized use or disclosure or other breaches of such agreements, we may not be provided with meaningful protection for our trade secrets or other proprietary information.

Due to differences between foreign and U.S.

patent laws, our patented intellectual property rights may not receive the same degree of protection in foreign countries as they would in the United States.

Even if patents are granted outside the United States, effective enforcement in those countries may not be available.

Since most of our issued patents and pending patent applications are for the United States only, we lack

a corresponding scope of patent protection in other countries.

patent laws, our patented intellectual property rights may not receive the same degree of protection in foreign countries as they would in the U.S.

Even if patents are granted outside the U.S.

, effective enforcement in those countries may not be available.

Since most of our issued patents and pending patent applications are for the U.S.

only, we lack a corresponding scope of patent protection in other countries.

In countries where we do not have significant patent protection, we may not be able to stop a competitor from marketing products in such countries that are the same as or similar to our products.

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Significant litigation regarding patent rights exists in our industry.

Our competitors in both the United States and abroad, many of which have substantially greater resources and have made substantial investments in competing technologies, may have applied for or obtained or may in the future apply for and obtain, patents that will prevent, limit or otherwise interfere with our ability to make and sell our products.

Our competitors in both the U.S.

and abroad, many of which have substantially greater resources and have made substantial investments in competing technologies, may have applied for or obtained or may in the future apply for and obtain, patents that will prevent, limit or otherwise interfere with our ability to make and sell our products.

We have not conducted an independent review of patents issued to third parties.

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Based on an aggregate of 136,335,662 shares of our Class A and Class B common stock outstanding as of December 31, 2023, our executive officers and directors and their affiliates beneficially owned, in the aggregate, approximately 66.1% of the voting power of our outstanding capital stock.

particular, as of December 31, 2022, David C.

In particular, as of December 31, 2023, David C.

Paul, our Executive Chairman, and his family members, controlled approximately 16.3% of our Class A and Class B common stock, representing approximately 65.8% of the voting power of our outstanding capital stock as of that date.

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A novel strain of coronavirus was first identified in Wuhan, China in December 2019, and the disease caused by it, COVID-19, was subsequently declared a pandemic by the World Health Organization in March 2020.

The continuing preventative and precautionary measures that hospitals and federal, state, local, and international governments have taken to mitigate the spread of the disease has led to restrictions on, disruptions in, and other related impacts on elective procedure rates.

Further, worldwide supply chain disruption relating to the COVID-19 pandemic has resulted in delays and component shortages that have and may continue to impact our ability to manufacture our products by extending our lead times.

These disruptions may, among other things, impact our ability to satisfy customer demand, which could negatively impact our results of operations.

These challenges and restrictions will likely continue for the duration of the pandemic, which is uncertain, and could continue beyond the pandemic.

Many jurisdictions are relaxing restrictions and resuming business operations, but a resurgence in infections or mutations of the coronavirus that causes COVID-19 could cause governments, hospitals, public institutions, or other authorities to reinstate such restrictions or impose additional restrictions.

Given the dynamic nature of this situation, the Company cannot reasonably estimate the impacts of COVID-19 on our financial condition, results of operations or cash flows in the future.

However, if a resurgence occurs and governments mandate restrictions, including restrictions on elective surgeries, we expect that it could have a material adverse impact on our revenue growth, operating profit and cash flow, lead to revised payment terms with certain of our customers, and change the effective tax rate driven by changes in the mix of earnings across the Company’s jurisdictions.

Unresolved Staff Comments

The preventative and precautionary measures that hospitals and federal, state, local, and international governments took to mitigate the spread of the disease led to restrictions on, disruptions in, and other related impacts on elective procedure rates.

On May 5, 2023 the World Health Organization declared the end of the COVID-19 pandemic as a public health emergency .

The worldwide supply chain disruption relating to the COVID-19 pandemic resulted in delays and component shortages that impacted and may continue to impact our ability to manufacture our products by extending our lead times.

These disruptions, or disruptions from future pandemics, among other things, may continue to impact our ability to satisfy customer demand, which could negatively impact our results of operations.

Most jurisdictions have relaxed restrictions and resumed business operations, but a resurgence in infections or mutations of the coronavirus that causes COVID-19 could cause governments, hospitals, public institutions, or other authorities to reinstate such restrictions or impose additional restrictions.

If a resurgence occurs, or a new pandemic arises, and governments mandate restrictions, including restrictions on elective surgeries, we expect that it could have a material adverse impact on our revenue growth, operating profit and cash flow, leading to revised payment terms with certain of our customers, and could change the effective tax rate driven by changes in the mix of earnings across the Company’s jurisdictions.

Risks Relating to the Integration of NuVasive

Integrating the NuVasive business into Globus may be more difficult, costly or time-consuming than expected and the Company may fail to realize the anticipated benefits of the Merger, which may adversely affect the Company’s business results and negatively affect the value of the Company’s common stock.

The success of the Merger will depend on, among other things, our ability to realize the anticipated synergies, efficiencies and other benefits from combining the businesses of Globus and NuVasive.

This success will depend on, among other factors, our ability to successfully integrate the Company’s business with the business of NuVasive.

If we are not able to successfully integrate NuVasive’s business into the Company within the anticipated timeframe, or at all, the anticipated synergies, efficiencies and other benefits of the Merger may not be realized fully, or at all, or may take longer to realize than expected.

An inability to realize the full extent of the anticipated benefits of the Merger, as well as any delays encountered in the integration process, could have an adverse effect upon the revenues, level of expenses and operating results of the Company, which may adversely affect the value of the common stock of the Company.

There can be no assurances that the NuVasive business can be integrated successfully.

It is possible that the integration process could result in the loss of key employees, the loss of customers, the disruption of the Company’s business, inconsistencies in standards, controls, procedures and policies, unexpected integration issues, higher than expected integration costs and an overall post-Merger integration process that takes longer than originally anticipated.

The challenges involved in this integration, which will be complex and time-consuming, include the following:

 combining the businesses of Globus and NuVasive, including respective operations and corporate functions, and meeting the capital requirements of the Company in a manner that permits the Company to achieve any revenue synergies or efficiencies anticipated to result from the Merger, the failure of which would result in the anticipated benefits of the Merger not being realized in the timeframe currently anticipated or at all;

 integrating and retaining personnel from the two companies while continuing to provide consistent, high-quality products and services to customers;

 integrating each company’s technologies and technologies licensed by them from third parties;

 identifying and eliminating redundant and underperforming functions and assets;

 harmonizing each company’s operating practices, employee development and compensation programs, financial reporting, internal controls and other policies, procedures and processes;

 maintaining existing agreements with each company’s business partners, surgeons, suppliers and vendors, avoiding delays in entering into new agreements with prospective business partners, surgeons, suppliers and vendors, and leveraging relationships with such third parties for the benefit of the Company;

 addressing possible differences in business backgrounds, corporate cultures and management philosophies;

 consolidating each company’s administrative and information technology infrastructure;

 combining the companies’ research and development functions;

 integrating and unifying the products and services available to historical Globus and NuVasive customers;

 coordinating sales activities and go-to-market efforts;

 managing the movement of certain positions to different locations;

 coordinating geographically dispersed organizations;

 managing the operations of a significantly larger and more complex company;

 effecting actions that may be required in connection with obtaining regulatory or other governmental approvals.

In addition, at times the attention of certain members of the Company’s management and resources may be focused on the integration of the businesses of the two companies and diverted from day-to-day business operations or other opportunities that may have been beneficial to such company, which may disrupt each company’s ongoing business and the business of the Company.

The Company expects to incur substantial expenses related to the integration of NuVasive and may be unable to realize the anticipated synergies , which could adversely affect the Company’s business, financial condition and results of operations.

The Company’s ability to achieve estimated synergies in the timeframe anticipated, or at all, is subject to various assumptions, which may or may not prove to be accurate.

As a consequence, the Company may not be able to realize all of these synergies within the timeframe expected or at all.

In addition, the Company may incur additional or unexpected costs in order to realize these benefits.

Failure to achieve the expected synergies could significantly reduce the expected benefits associated with the Merger.

Certain contractual counterparties may seek to modify contractual relationships with the Company, which could have an adverse effect on the Company’s business and operations.

As a result of the Merger, the Company may experience impacts on relationships with contractual counterparties (such as business partners, surgeons, vendors, sales representatives, contractors, distributors or other third-party service providers) that may harm the Company’s business and results of operations.

Certain counterparties may seek to terminate or modify contractual obligations following the Merger whether or not contractual rights are triggered as a result of the Merger.

There can be no guarantee that Globus’s or NuVasive’s contractual counterparties will remain with or continue to have a relationship with the Company or do so on the same or similar contractual terms following the Merger.

If any contractual counterparties (such as business partners, surgeons, vendors, sales representatives, contractors, distributors or other third-party service providers) seek to terminate or modify contractual obligations or discontinue their respective relationships with the Company, then the Company’s business and results of operations may be harmed.

The Company may be exposed to increased litigation, which could have an adverse effect on the Company’s business and operations .

The Company may be exposed to increased litigation from stockholders, customers, partners, suppliers, contractors and other third parties due to the Merger of Globus’s and NuVasive’s businesses.

Such litigation may have an adverse impact on the Company’s business and results of operations or may cause disruptions to the Company’s operations.

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-K

Item 1A. Risk Factors