What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-20 compared with 2024-02-21 · 345 added, 289 removed, 938 unchanged (40% of the section changed)

27 unchanged sentences

Critical Audit Matter

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Inventories Valuation – Refer to Notes 2 and 7 to the financial statements

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• We tested the mathematical accuracy of management’s calculations.

Business Combinations – NuVasive Merger — Refer to Notes 1 and 3 to the financial statements

Critical Audit Matter Description

On September 1, 2023, the Company completed its merger with NuVasive, Inc.

with NuVasive, Inc.

surviving as a wholly owned subsidiary of the Company, for total consideration of approximately $2.604 billion.

Management accounted for the acquisition as a business combination using the acquisition method of accounting.

The most significant items recorded included intangible assets of $899.0 million, inventories of $558.0 million, senior convertible notes of $409.5 million, and resulting goodwill of $1,234 million.

Management utilized third-party valuation specialists to assist in the determination of the fair value of the assets acquired.

The methods used to estimate the fair value involved significant assumption.

The principal considerations for our determination that performing procedures relating to the accounting for this transition is a critical audit matter are (i) the significant judgment by management when developing the fair value estimates of the assets acquired;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to management's fair value estimates of the assets acquired;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the NuVasive Merger included the following, among others:

• We read the agreement and plan of merger.

• We tested the effectiveness of controls relating to the purchase price allocation, including controls over management’s valuation of the assets acquired and liabilities acquired.

• We evaluated the appropriateness of the valuation methods and completeness and accuracy of significant inputs for fair value measurements used to develop estimates of assets and liabilities acquired.

• We tested the accuracy of the purchase price allocation and goodwill recorded.

• We utilized professionals with specialized skill and knowledge to assist in evaluating the appropriateness of the valuation methods and the reasonableness of the significant inputs for fair value measurements.

/s/ DELOITTE & TOUCHE LLP

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We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2024, of the Company and our report dated February 20, 2025, expressed an unqualified opinion on those financial statements.

As described in Management’s Annual Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting at NuVasive, Inc., which was acquired on September 1, 2023 and whose financial statements constitute 26% of total assets and 26% of revenues of the consolidated financial statement amounts as of and for the year ended December 31, 2023.

Accordingly, our audit did not include the internal control over financial reporting at NuVasive, Inc.

Basis for Opinion

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Income taxes payable

Senior convertible notes

Business acquisition liabilities

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(In thousands, except per share amounts)

Cost of sales

Operating expenses:

Cost of Sales and Operating expenses:

Cost of sales (exclusive of amortization of intangibles)

Research and development

3 unchanged sentences

Acquisition-related costs

Total operating expenses

Restructuring costs

Operating income/(loss)

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Income/(loss) before income taxes

Income tax provision

Income tax provision/(benefit)

Net income/(loss)

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Issuance of Class A common stock under employee and director equity option plans, net

Issuance of equity for NuVasive Merger

Comprehensive income/(loss)

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Exercise of stock options

Issuance of Class A common stock under employee and director equity option plans, net

Issuance of equity for NuVasive Merger

Comprehensive income/(loss)

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Comprehensive income/(loss)

Repurchase and retirement of common stock

Balance at December 31, 2022

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Amortization of inventory fair value step-up

Amortization of 2025 Note fair value step up

Amortization of 2025 Notes fair value step-up

Stock-based compensation expense

Allowance for doubtful accounts

Allowance for expected credit losses

Change in fair value of business acquisition liabilities

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We are an engineering-driven company with a history of rapidly developing and commercializing advanced products and procedures to assist surgeons in effectively treating their patients and to address new treatment options.

With numerous products launched since the founding of the Company, including 10 products launched in 2023, we offer a comprehensive portfolio of innovative and differentiated technologies that address a variety of musculoskeletal pathologies, anatomies, and surgical approaches.

We are headquartered in Audubon, Pennsylvania, and market and sell our products through our exclusive sales force in the United States, as well as within North, Central & South America, Europe, Asia, Africa and Australia.

The sales force consists of direct sales representatives and distributor sales representatives employed by exclusive independent distributors.

With numerous products launched since the founding of the Company, we offer a comprehensive portfolio of innovative and differentiated technologies that address a variety of musculoskeletal pathologies, anatomies, and surgical approaches.

We are headquartered in Audubon, Pennsylvania, and market and sell our products through our exclusive sales force in the United States (“U.S.”), as well as within North, Central & South America, Europe, Asia, Africa and Australia.

We sell our products in the U.S.

through a sales force comprised primarily of directly-employed and independent sales representatives.

Our international sales force is comprised of directly-employed sales personnel, independent sales representatives, as well as exclusive and non-exclusive independent third-party distributors.

The terms the “Company,” “Globus,” “we,” “us” and “our” refer to Globus Medical, Inc.

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(b) NuVasive Merger

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

On September 1, 2023, pursuant to that certain merger agreement (the “NuVasive 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.

(“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 “NuVasive Merger”) .

Upon the consummation of the NuVasive Merger, each issued and outstanding share of common stock of NuVasive, $ 0.001 par value per share, was converted into 0.75 fully paid and non-assessable shares of the Company’s Class A common stock (“Class A Common”), and the right to receive cash in lieu of fractional shares.

Refer to Note 3, Asset acquisitions and Business Combinations for further information.

Globus was deemed to be the accounting acquirer of NuVasive for accounting purposes under U.S.

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The accompanying consolidated financial statements have been prepared in conformity with U.S.

(b) Prior Period Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

“Operating lease right of use assets” were reclassified out of “Other assets”, and “Operating lease liabilities” were reclassified out of “Accrued expenses” and “Other liabilities”, respectively, depending on the short-term and long-term nature, on our consolidated balance sheets.

(b) Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Globus and its majority-owned or controlled subsidiaries .

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In accordance with authoritative guidance, the Company has determined that the PCs are variable interest entities and therefore, the accompanying consolidated financial statements include the accounts of the PCs from the date of acquisition.

During the periods presented, the results of the PCs were immaterial to the Company’s

During the periods presented, the results of the PCs were immaterial to the Company’s financial statements.

The creditors of the PCs have claims only to the assets of the PCs, which are not material, and the assets of the PCs are not available to the Company.

GLOBUS MEDICAL, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

financial statements.

The creditors of the PCs have claims only to the assets of the PCs, which are not material, and the assets of the PCs are not available to the Company.

(d) Use of Estimates

The preparation of consolidated financial statements in conformity with U.S.

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Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the consolidated financial statements in the period they are determined to be necessary.

Significant areas that require estimates include revenue recognition, intangible assets, business acquisition liabilities, allowance for doubtful accounts, stock-based compensation, reserves for excess and obsolete inventory, fair value measurements, useful lives of assets, the outcome of litigation, recoverability of intangible assets and income taxes.

Significant areas that require estimates include revenue recognition, intangible assets, business acquisition liabilities, allowance for expected credit losses, stock-based compensation, reserves for excess and obsolete inventory, fair value measurements, useful lives of assets, the outcome of litigation, recoverability of intangible assets and income taxes.

We are subject to risks and uncertainties due to changes in the healthcare environment, regulatory oversight, competition, and legislation that may cause actual results to differ from estimated results.

(e) Revenue Recognition

In accordance with Accounting Standards Codification 606 Revenue from Contracts with Customers, (“ASC 606”), the Company recognizes revenue upon the transfer of goods or services to a customer at an amount that reflects the expected consideration to be received in exchange for those goods or services.

(d) Revenue Recognition

In accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, the Company recognizes revenue upon the transfer of goods or services to a customer at an amount that reflects the expected consideration to be received in exchange for those goods or services.

The principles in ASC 606 are applied using the following five steps:

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The majority of our Musculoskeletal Solutions contracts have a single performance obligation and revenue is recognized at a point in time.

For our IONM services, revenue is recognized in the period the service is performed, which can be either point in time or over time, depending how the performance obligation is defined for the amount of consideration expected to be received.

For our IONM services, revenue is recognized in the period the service is performed, which can be either at a point in time or over time, depending on how the performance obligation is defined for the amount of consideration expected to be received.

Our policy is to classify shipping and handling costs billed to customers as sales and the related expenses as cost of sales.

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When contracts have multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract .

Revenue associated with products holding rights of return or trade-in are recognized when the Company concludes there is not a risk of significant revenue reversal in future periods for the expected consideration in the transaction.

Our policy is to classify shipping and handling costs billed to customers as sales and the related expenses as cost of sales.

Nature of Products and Services

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Revenue for the performance obligations recognized at a point of time is recognized when we transfer control to the customer, which is generally at the point of shipment, but can also be at either delivery or installation, depending on the terms of the arrangement .

In certain cases, we offer the ability for customers to lease enabling technologies primarily on a non-sales type basis.

GLOBUS MEDICAL, INC.

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

For the years ended December 31, 2023, 2022, and 2021, there was an immaterial amount of revenue recognized from previously deferred revenue.

(f) Concentrations of Credit Risk

(In thousands)

Beginning contract liabilities

Revenue recognized from contract liabilities

Advance consideration received during the period

Ending contract liabilities

(e) Concentrations of Credit Risk

Financial instruments, which potentially subject us to concentrations of credit risk, are primarily marketable securities and accounts receivable.

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There was no customer that accounted for 10% or more of sales for the years ended December 31, 2024, 2023, and 2022 , respectively.

(g) Cash and Cash Equivalents

(f) Cash and Cash Equivalents

The Company considers all short-term, highly liquid investments with original maturities of 90 days or less at acquisition date to be cash equivalents.

Cash equivalents, which consist of money market accounts, commercial paper and corporate debt securities are stated at fair value.

(h) Marketable Securities

Cash equivalents, which consist of money market accounts, commercial paper, government securities and corporate debt securities are stated at fair value.

(g) Marketable Securities

Our marketable securities include municipal bonds, corporate debt securities, commercial paper, asset-backed securities, and securities of government, federal agency, and other sovereign obligations and are classified as available-for-sale as of December 31, 2024 and 2023.

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

Any change in fair value for available-for-sale securities, that do not result in recognition or reversal of an allowance for credit loss or write down, is recorded, net of taxes, as a component of accumulated other comprehensive income or loss on our consolidated balance sheets.

Any change in fair value of our available-for-sale securities, that do not result in recognition or reversal of an allowance for credit loss or write-down, are recorded, net of taxes, as a component of accumulated other comprehensive income or loss on our consolidated balance sheets.

Premiums and discounts are recognized over the life of the related security as an adjustment to yield using the straight-line method.

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Any other impairments not recorded through allowance for credit losses is recognized in our other comprehensive income.

(i) Fair Value Measurements

(h) Fair Value Measurements

Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or the liability in an orderly transaction between market participants on the measurement date.

2 unchanged sentences

The level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

GLOBUS MEDICAL, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Our assets and liabilities measured at fair value on a recurring basis are classified and disclosed in one of the following three categories:

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Level 3—unobservable inputs in which there is little or no market data available, which require the reporting entity to use significant unobservable inputs or valuation techniques.

GLOBUS MEDICAL, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Contingent consideration represents contingent milestone, performance and revenue-sharing payment obligations related to acquisitions and is measured at fair value, based on significant inputs that are not observable in the market, which represents a Level 3 measurement within the fair value hierarchy.

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We assess these assumptions on an ongoing basis as additional data impacting the assumptions is obtained.

The fair value of contingent consideration is recorded in business acquisition liabilities on our consolidated balance sheets, and changes in the fair value of contingent consideration is recognized in acquisition-related costs in the consolidated statements of operations and comprehensive income.

The fair value of contingent restricted stock unit grants (“RSUs”) are recorded as additional paid-in capital in the consolidated balance sheet on the day of the grant due to the remote likelihood of forfeiture.

The fair value of contingent consideration is recorded in business acquisition liabilities on our consolidated balance sheets, and changes in the fair value of contingent consideration are recognized in acquisition-related costs in the consolidated statements of operations and comprehensive income.

The fair value of contingent restricted stock unit grants (“RSUs”) is recorded as additional paid-in capital in the consolidated balance sheet on the day of the grant due to the remote likelihood of forfeiture.

The purchase price of business acquisitions is primarily allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition date, with the excess recorded as goodwill.

We utilize Level 3 inputs in the determination of the initial fair value.

(j) Inventories

(i) Inventories

Inventories are stated at the lower of cost or net realizable value.

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Once inventory has been written down, it creates a new cost basis for inventory that is not subsequently written up.

(k) Property and Equipment

(j) Property and Equipment

Property and equipment is recorded at cost less accumulated depreciation.

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When assets are sold or otherwise disposed of, the related property, equipment, and accumulated depreciation amounts are relieved from the accounts, and any gain or loss is recorded in the consolidated statements of operations and comprehensive income.

(l) Goodwill and Intangible Assets

(k) Goodwill and Intangible Assets

Goodwill represents the excess of purchase price over the fair values of the identifiable assets acquired less the liabilities assumed in the acquisition of a business.

Goodwill is tested for impairment at least annually or whenever events or circumstances indicate that a carrying amount may be impaired.

We perform our goodwill impairment analysis at the reporting unit level.

We perform our annual impairment analysis by either comparing a reporting unit’s estimated fair value to its carrying amount or doing a qualitative assessment of a reporting unit’s fair value from the last quantitative assessment to determine if there is potential impairment.

We may do a qualitative assessment when the results of the previous quantitative test indicated the reporting unit’s estimated fair value was significantly in excess of the carrying value of its net assets and we do not believe there have been significant changes in the reporting unit’s operations that would significantly decrease its estimated fair value or significantly increase its net assets.

If a quantitative assessment is performed, the evaluation includes management estimates of discounted cash flow projections based on internal future projections and/or use of a market approach by looking at market values of comparable companies.

Goodwill is tested for impairment at least annually or whenever events or circumstances indicate that a carrying amount may not be recoverable.

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

Goodwill may also be tested for impairment at the reporting unit level by comparing the reporting unit’s carrying amount to the estimated fair value of the reporting unit.

Fair values may be estimated using an income or discounted cash flow approach.

We perform our annual impairment test of goodwill in the fourth quarter of each year.

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

Intangible assets with finite useful lives are amortized over the period of estimated benefit using the straight-line method and estimated useful lives ranging from one to twenty-one years .

Intangible assets with finite useful lives are tested whenever events or circumstances indicate that a carrying amount of an asset (asset group) more likely than not is not recoverable.

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

Intangible assets with finite useful lives are amortized over the period of estimated benefit using the straight-line method and estimated useful lives ranging from 1 to 21 years.

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

If an impairment is indicated, we measure the amount of the impairment loss as the amount by which the carrying amount exceeds the fair value of the asset.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(m) Impairment of Long-Lived Assets

(l) Impairment of Long-Lived Assets

We periodically evaluate the recoverability of the carrying amount of long-lived assets, which include property and equipment, as well as whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be fully recoverable.

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During the years ended December 31, 2024, 2023, and 2022 , we did no t record any impairment charges related to long-lived assets.

(n) Cost of Sales

(m) Cost of Sales

Cost of sales consists primarily of costs from our manufacturing operations, costs of products purchased from third-party suppliers, reserves for excess and obsolete inventory, depreciation of surgical instruments and cases, royalties, shipping, inspection and related costs incurred in making our products available for sale or use.

(o) Research and Development

(n) Research and Development

Research and development costs are expensed as incurred.

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Costs incurred in obtaining technology licenses and patents are charged immediately to research and development expense if the technology licensed has not reached technological feasibility and has no alternative future use.

(p) Stock -Based Compensation

(o) Stock -Based Compensation

The cost of employee and non-employee director awards is measured at the grant date fair value of the award and is recognized as expense over the requisite service period, which is generally the vesting period of the equity award.

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The respective fair values of restricted stock units and performance restricted stock units are estimated on the day of grant based on the closing price of the Company’s common stock.

We assumed equity-classified awards for certain NuVasive RSUs, and performance restricted stock units (“PRSUs”), as part of the Merger.

We assumed equity-classified awards for certain NuVasive RSUs, and performance restricted stock units (“PRSUs”), as part of the NuVasive Merger.

These RSUs and PRSUs are measured at the grant date based on the estimated fair value of the award.

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The fair value of RSUs including PRSUs with pre-defined performance criteria is based on the stock price on the date of grant whereas the expense for PRSUs with pre-defined performance criteria is adjusted with the probability of achievement of such performance criteria at each period end.

(q) Derivative Financial Instruments

(p) Derivative Financial Instruments

The Company recognizes all derivative instruments as assets or liabilities in its Consolidated Balance Sheets and measures these instruments at fair value by revaluing these assets and liabilities at the end of each reporting period.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(r) Other Comprehensive Income (Loss)

(q) Other Comprehensive Income (Loss)

Other comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources.

Other comprehensive income (loss) includes net of tax, unrealized gains or losses on the Company’s marketable debt securities and foreign currency translation adjustments.

(s) Provision for Litigation

(r) Provision for Litigation

We are involved in a number of proceedings, legal actions, and claims.

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We expense legal costs related to loss contingencies as incurred.

(t) Acquisition-Related Costs

(s) Acquisition-Related Costs

Acquisition-related costs represents the change in fair value of business acquisition-related contingent consideration and specific costs related to the consummation of the acquisition process such as banker fees, legal fees and other acquisition-related professional fees.

(u ) Foreign Currency Translation

(t ) Foreign Currency Translation

The functional currency of our foreign subsidiaries is generally their local currency.

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Gains and losses arising from intercompany foreign transactions are included in other income, net on the consolidated statements of operations and comprehensive income.

(u) Restructuring Costs

Restructuring costs represent costs associated with the Company’s 2024 Synergy Plan.

This plan was designed to optimize the organizational structure, realize synergies from the NuVasive Merger and leverage the strength of both Globus and NuVasive.

As a result of aligning the cost structure of the Company’s businesses and corporate functions with its financial objectives, the Company also recorded employee separation charges and one-time termination benefits.

(v) Accounts Receivable and Related Valuation Accounts

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A valuation allowance is established to offset any deferred tax assets if, based upon available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

GLOBUS MEDICAL, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Significant judgment is required in determining income tax provisions and in evaluating tax positions.

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We periodically assess the likelihood and amount of potential adjustments and adjust the income tax provision, the current tax liability, and deferred taxes in the period in which the facts that give rise to a revision become known.

GLOBUS MEDICAL, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(x) Recently Issued Accounting Pronouncements

In December 2024, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No.

2023-09 , Income Taxes (Topic 740), Improvements to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures.

2024-03 , Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) .

The update improves financial reporting by requiring that public business entities disclose additional information about certain costs and expenses categories:

(a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization in the notes to financial statements at interim and annual reporting periods.

This update is effective for fiscal years beginning after December 15, 2026, and early adoption is permitted.

The amendments should be applied prospectively with retrospective applications also permitted.

The Company is currently evaluating the impact the standard will have on its consolidated financial statements and related disclosures.

In December 2024, the FASB issued ASU No.

2024-04 Debt—Debt with Conversion and Other Options (Subtopic 470-20).

The amendments in this update clarify the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion.

To account for a settlement of a convertible debt instrument as an induced conversion, an inducement offer is required to provide the debt holder with, at a minimum, the consideration (in form and amount) issuable under the conversion privileges provided in the terms of the instrument.

This update is effective for fiscal years beginning after December 15, 2025, and early adoption is permitted.

The amendments should be applied prospectively with retrospective applications also permitted.

The Company is currently evaluating the impact the standard will have on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU No.

2023-09 , Income Taxes (Topic 740), Improvements to Income Tax Disclosures, to enhance the transparency and decision-making utility of income tax disclosures.

The enhancement will provide information to better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows.

Investors currently rely on the rate reconciliation table and other disclosures, including total income taxes paid, to evaluate income tax risks and opportunities.

This update is effective for fiscal years beginning after December 15, 2024 and early adoption is permitted.

This update is effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The amendments should be applied prospectively with retrospective applications also permitted.

The Company is currently evaluating the impact the standard will have on its consolidated financial statements and related disclosures.

(y) Recently Adopted Accounting Pronouncements

In November 2023, the FASB, issued ASU No.

2023-07 , Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures , to improve reportable segment disclosure requirements.

The amendment introduced new requirementd to disclose significant segment expenses regularly provided to the chief operating decision maker (“CODM”), extend certain annual disclosures to interim periods, clarify single reportable segment entities must apply ASC 280 in its entirety, permit more than one measure of segment profit or loss to be reported under certain conditions, and require disclosure of the title and position of the CODM.

This update is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years after December 15, 2024, early adoption is permitted.

The amendments should be applied retrospectively.

The Company is currently evaluating the impact the standard will have on its consolidated financial statements and related disclosures.

The amendment introduced new requirements to disclose significant segment expenses regularly provided to the chief operating decision maker (“CODM”), extend certain annual disclosures to interim periods, clarify that single reportable segment entities must apply ASC 280 in its entirety, permit more than one measure of segment profit or loss to be reported under certain conditions, and require disclosure of the title and position of the CODM.

This update is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years after December 15, 2024.

Early adoption is permitted.

The amendment was applied retrospectively.

The Company adopted ASU No.

2023-07 as of January 1, 2024.

See Note 16 Segment and Geographic Information in the accompanying notes to the consolidated financial statements for further detail.

In June 2022, the FASB issued ASU No.

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The amendments should be applied prospectively with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption.

The Company is currently evaluating the impact the standard will have on its consolidated financial statements .

(y) Recently Adopted Accounting Pronouncements

In October 2021, the FASB issued ASU No.

2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires an entity (acquirer) to recognize and measure contract assets and liabilities acquired in a business combination in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”).

This update is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted.

The amendments should be applied prospectively to business combinations occurring on or after the effective date of the amendments.

The Company adopted ASU No.

2022-03 as of January 1, 2024.

The adoption did not have a material impact on the Company’s consolidated financial statements.

On March 12, 2020, the FASB issued ASU No.

2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued.

The ASU is effective for all entities as of March 12, 2020, and will apply, as later extended by ASU No.

2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848 , through December 31, 2024.

To date, we have had no impacts on our investment portfolio or our credit agreement with Citizens Bank, N.A.

related to reference rate reform.

We will continue to evaluate the impact this guidance could have on our consolidated financial statements and related disclosures.

The adoption did not have any material impact on the Company’s consolidated financial statements .

In October 2021, the FASB issued ASU No.

This update is effective for fiscal years

GLOBUS MEDICAL, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted.

The amendments should be applied prospectively to business combinations occurring on or after the effective date of the amendments.

The Company adopted ASU No.

2021-08 as of January 1, 2023.

The adoption did not have a material impact on the Company’s consolidated financial statements.

ASSET ACQUISITIONS AND BUSINESS COMBINATIONS

Asset Acquisitions

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

The Company determined the transaction was an asset acquisition, by an analysis of the screen test in accordance with ASU No.

2017-01 in which substantially all of the value was concentrated in a single identifiable asset or a group of similar identifiable assets.

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

The transaction also provides for additional consideration contingent upon the developed products obtaining approval from the FDA of up to $ 15.0 million, and additional consideration contingent upon the achievement of certain performance obligations of up to $ 10.0 million.

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

Also during the fourth quarter of 2021, the Company acquired substantially all the assets of a company that engages in the development of technology for use in robotic surgery platforms which was not considered material to the consolidated financial statements during the periods presented.

The Company determined the transaction was an asset acquisition, by an analysis of the screen test in accordance with ASU No.

2017-01 in which substantially all of the value was concentrated in a single identifiable asset or a group of similar identifiable assets.

The purchase price consisted of $ 10.0 million of cash paid at closing and also provides for additional consideration contingent upon the achievement of certain performance obligations of $ 5.0 million.

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

During the first quarter of 2024, the Company completed a share acquisition of a biotechnology company focused on research and development for hemostasis solutions.

The fair value of the assets acquired are concentrated in a similar identified asset, IPR&D of the acquired technology, thus satisfying the requirements of the screen test in ASC 805, Business Combinations.

At the date of the acquisition, the Company determined that the development of the projects underway had not yet reached technological feasibility and that the research in process had no alternative future use.

Accordingly, the acquired IPR&D of $ 12.6 million was charged to research and development expense in the consolidated statements of operations and comprehensive income.

The purchase price consisted of $ 12.0 million of cash paid at closing.

The transaction also provides for $ 12.0 million of contingent consideration, which is payable upon meeting the Good Manufacturing Process milestones, as promulgated by the U.S.

Food and Drug Administration (the “FDA”), and consideration of $ 10.0 million contingent upon the developed products obtaining approval from the FDA.

Contingent consideration will not be recorded in this asset acquisition until the milestone is met.

Business Combinations

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

The purchase price was a cash payment of $ 30 million, subject to post-closing adjustments, if applicable.

The Company has included the financial results from the Harvest Acquisition in our consolidated financial statements from the acquisition date.

At acquisition date, the preliminary fair value of the net assets acquired was $ 30.1 million.

During the third quarter of 2024, the Company completed one acquisition that was not material to the overall consolidated financial statements during the periods presented.

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

The purchase price consisted of approximately $ 0.1 million of cash paid at closing and $ 4.0 million in contingent consideration payments, resulting in goodwill of $ 4.1 million based on the estimated fair values.

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

During the second quarter of 2024, the Company completed one acquisition that was not material to the overall consolidated financial statements during the periods presented.

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

The purchase price consisted of approximately $ 0.1 million of cash paid at closing and $ 1.9 million in contingent consideration payments, resulting in goodwill of $ 2.0 million based on the estimated fair values.

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

During the first quarter of 2024, the Company completed one acquisition that was not material to the overall consolidated financial statements during the periods presented.

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

The purchase price consisted of approximately $ 0.5 million of cash paid at closing and $ 19.1 million of contingent consideration payments, resulting in goodwill of $ 17.9 million and reacquired rights of $ 1.8 million based on the estimated fair values.

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

During 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.

The purchase price consisted of approximately $ 30.0 million of cash paid at closing, plus $ 0.1 million of preliminary post-closing adjustments.

The Company recorded identifiable net assets, based on their estimated fair values, for inventory of $ 3.0 million, goodwill of $ 14.2 million, customer relationships and other intangibles of $ 10.5 million with a weighted average useful life of 20 years, and developed technology of $ 2.4 million with a weighted average useful life of 8 years.

The Company has finalized the purchase price allocation of the assets and liabilities acquired.

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

The Company finalized the purchase price allocation of the assets and liabilities acquired within one year from the date of acquisition.

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

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

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

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

Two acquisitions were completed in the third quarter, while the third acquisition was completed in the fourth quarter.

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

The purchase price of the acquisition in the fourth quarter consisted of approximately $ 0.3 million of cash paid at closing and $ 13.0 million of contingent consideration payments, resulting in goodwill of $ 13.3 million based on the estimated fair values.

The combined purchase price of the two acquisitions in the third quarter consisted of approximately $ 12.6 million of contingent consideration payments.

The Company recorded other intangible assets of $ 1.6 million, with a weighted average useful life of 3.8 years, and goodwill of $ 11.0 million based on their estimated fair values.

The contingent payments for all three acquisitions are based upon achieving various performance obligations over a period of 10 years and are payable in a combination of cash and RSUs.

NuVasive Merger

On September 1, 2023, pursuant to that certain Merger Agreement with NuVasive and 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.

NuVasive has a comprehensive procedural portfolio including 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 IONM technology and service offerings.

GLOBUS MEDICAL, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As part of the Merger, the Company assumed equity awards for certain NuVasive RSUs and NuVasive PRSUs in accordance with the terms of the Merger Agreement.

Certain awards included a change in control provision (single trigger) which accelerated the vesting of the awards on the closing date of the Merger.

NuVasive Merger

On September 1, 2023, pursuant to that certain merger agreement with NuVasive and Merger Sub, Merger Sub, a wholly owned subsidiary of the Company (“Merger Sub”), merged with and into NuVasive, with NuVasive surviving as a wholly owned subsidiary of the Company (the “NuVasive Merger”).

Upon the consummation of the NuVasive Merger, each issued and outstanding share of common stock of NuVasive, $ 0.001 par value per share, was converted into 0.75 fully paid and non-assessable shares of the Company’s Class A Common, and the right to receive cash in lieu of fractional shares.

As part of the NuVasive Merger, the Company assumed equity awards for certain NuVasive RSUs and NuVasive PRSUs in accordance with the terms of the Merger Agreement.

Certain awards included a change in control provision (single trigger) which accelerated the vesting of the awards on the closing date of the NuVasive Merger.

These awards were considered as part of the total purchase price.

The unvested awards will continue to vest in accordance with the terms of the original award agreement, except for certain PRSUs that were converted into RSUs.

Once vested, the holders will receive shares of the Company’s Class A common stock.

Once vested, the holders will receive shares of the Company’s Class A Common.

Of the total consideration for the assumed equity awards, $ 28.6 million was allocated to the purchase price and $ 42.3 million was deemed compensatory as it was attributable to post acquisition vesting.

Of the $ 42.3 million of total compensation related to the assumed awards, $ 12.9 million was expensed on the acquisition date due to accelerated vesting of the awards, recognized as Merger-related costs, and $ 29.4 million relates to future services and will be expensed over the remaining service periods of the unvested awards on a straight-line basis.

Of the $ 29.4 million related to future services, $ 4.9 million of expense was recognized for the year ended December 31, 2023.

Concurrently with the Merger, the Company repaid the outstanding $ 420.8 million under NuVasive’s revolving senior credit facility in addition to assuming the 0.375 % Senior Convertible Notes due 2025 (“2025 Notes”), the privately negotiated call options (“2025 Hedge”) and the privately negotiated warrants (“2025 Warrants”).

The aggregate consideration in connection with the closing of the Merger was as follows:

Of the $ 42.3 million of total compensation related to the assumed awards, $ 12.9 million was expensed on the acquisition date due to accelerated vesting of the awards, recognized as NuVasive Merger-related costs, and $ 29.4 million relates to future services and will be expensed over the remaining service periods of the unvested awards on a straight-line basis.

Of the $ 29.4 million related to future services, $ 16.9 million of expense has been recognized for the year ended December 31, 2024.

Concurrently with the NuVasive Merger, the Company repaid the outstanding $ 420.8 million under NuVasive’s revolving senior credit facility in addition to assuming the 0.375 % Senior Convertible Notes due 2025 (the “2025 Notes”), the privately negotiated call options (the “2025 Hedges”) and the privately negotiated warrants (the “2025 Warrants”).

The aggregate consideration in connection with the closing of the NuVasive Merger was as follows:

(In thousands)

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Total purchase price

We accounted for the Merger using the acquisition method of accounting, which requires the NuVasive assets and liabilities to be recorded on our balance sheet at fair value as of the acquisition date.

We will complete a final determination of the fair value of certain assets and liabilities within the one-year measurement period from the date of the acquisition as required by FASB ASC Topic 805, “Business Combinations”.

The preliminary fair value estimates for the assets acquired and liabilities assumed were based upon preliminary calculations, valuations, and assumptions that are subject to change as the Company obtains additional information during the measurement period.

We accounted for the NuVasive Merger using the acquisition method of accounting, which requires the NuVasive assets and liabilities to be recorded on our balance sheet at fair value as of the acquisition date.

The following table summarizes the final purchase price allocation for the NuVasive Merger as of December 31, 2024:

GLOBUS MEDICAL, INC.

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Measurement Period and Other Adjustments

Purchase Price Allocation as of December 31, 2023 (as adjusted)

Preliminary Purchase Price Allocation as of December 31, 2023 (as adjusted)

Measurement Period and Other Adjustments

Final Purchase Price Allocation

Current assets (excluding accounts receivable and inventories)

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( 1,369,362 )

( 1,393,896 )

The excess of the purchase price over the net tangible and intangible assets is recorded to Goodwill and primarily reflects the assembled workforce and expected synergies.

The majority of goodwill is non-deductible for tax purposes.

During the year ended December 31, 2023, total transaction costs incurred in connection with the Merger were $ 49.8 million.

These transaction costs were recognized as acquisition-related costs in the consolidated statements of operations and comprehensive income.

Details of our valuation methodology and significant inputs for fair value measurements are included below.

The fair value measurements for property, plant and equipment and intangible assets are based on significant inputs that are not observable in the market and, therefore, represent Level 3 measurements.

The preliminary fair value of work-in-process and finished goods inventory utilizes a sales comparison approach which estimates the selling price of the inventory in completed condition less costs of disposal and a reasonable profit allowance for the selling effort.

The preliminary fair value of property and equipment utilizes a combination of the cost approach, income approach, and sales comparison approach less amounts for capitalized research and development costs existing on NuVasive’s closing balance sheet.

The preliminary fair value of the identifiable intangible assets was determined using variations of the income approach, namely the multi-period excess earnings and relief from royalty methodologies.

The fair value of work-in-process and finished goods inventory utilizes a sales comparison approach which estimates the selling price of the inventory in completed condition less costs of disposal and a reasonable profit allowance for the selling effort.

The fair value of property and equipment utilizes a combination of the cost approach, income approach, and sales comparison approach less amounts for capitalized research and development costs existing on NuVasive’s closing balance sheet.

The fair value of the identifiable intangible assets was determined using variations of the income approach, namely the multi-period excess earnings and relief from royalty methodologies.

The most significant assumptions applied in the development of the intangible asset fair values include:

the amount and timing of future cash flows, the selection of discount and royalty rates, and the assessment of the asset’s economic life.

The preliminary fair value of the operating lease ROU asset utilizes a market approach in determination of the measured asset.

The preliminary fair value of the operating lease liability utilizes a discounted cost approach in determination of the measured liability.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The identifiable intangible assets acquired are amortized on a straight-line basis over their estimated useful lives.

The following table summarizes the estimated fair value of NuVasive’s identifiable intangible assets acquired and their remaining amortization period (in years):

The following table summarizes the estimated fair value of NuVasive’s identifiable intangible assets acquired and their amortization period (in years):

Fair Value as of

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Customer Relationships

Preliminary fair value of the 2025 Notes was determined using the publicly traded price.

Fair value of the 2025 Notes was determined using the publicly traded price.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NuVasive’s results have been included in the Company’s financial statements for the period subsequent to the date of the acquisition on September 1, 2023.

NuVasive contributed revenues of $ 414.9 million, for the period from September 1, 2023 to December 31, 2023.

Due to the continuing integration of NuVasive’s operations into the Company, it is impractical to determine NuVasive’s net income/loss during the period, which is included in the Company’s Net Income.

Due to the continuing integration of NuVasive’s operations into the Company, it is impractical to determine NuVasive’s net income/loss during the current period, which is included in the Company’s Net Income.

Supplemental Unaudited Pro Forma Information

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Pro forma net income

The unaudited pro forma net income for the year ended December 31, 2023 was adjusted to exclude $ 111.4 million of acquisition-related costs incurred in 2023.

The unaudited pro forma net income for the year ended December 31, 2022, was adjusted to include the aforementioned charges.

The unaudited pro forma net income of $ 187.6 million for the year ended December 31, 2023 was updated to reflect the finalization of the purchase price allocation adjustments made during the measurement period.

The unaudited pro forma net income for the year ended December 31, 2023 was adjusted to exclude $ 111.4 million of acquisition-related costs incurred in 2023 that under a pro forma basis would be included in the year ended December 31, 2022.

The following table represents net sales by product category:

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Total net sales

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

MARKETABLE SECURITIES

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

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

December 31, 2024

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Corporate debt securities

Commercial paper

Asset-backed securities

Government, federal agency, and other sovereign obligations

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Total long-term marketable securities

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31, 2023

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Corporate debt securities

Commercial paper

Asset-backed securities

Government, federal agency, and other sovereign obligations

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FAIR VALUE MEASUREMENTS

The following table represents the fair value of assets and liabilities, as of December 31, 2023 and 2022, respectively included the following:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table represents the fair value of assets and liabilities, as of December 31, 2024 and 2023, respectively, including the following:

(In thousands)

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Corporate debt securities

Commercial paper

Asset-backed securities

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Corporate debt securities

Commercial paper

Asset-backed securities

Government, federal agency, and other sovereign obligations

Business acquisition liabilities

Our marketable securities are classified as Level 2 within the fair value hierarchy, as we measure their fair value using quoted market prices for similar instruments and inputs such as actual trade data, benchmark yields, broker/dealer quotes and other similar data obtained from quoted market prices or independent pricing vendors .

The bifurcated conversion option and 2025 Hedge are classified as Level 2 within the fair value hierarchy, based on implied equity volatility.

The estimated fair value of the 2025 Notes, inclusive of the embedded conversion option, at December 31, 2023 was $ 418.0 million.

The fair value was determined based on the quoted price of the 2025 Notes in an active market on the last trading day of the reporting period and has been classified as Level 1 within the fair value hierarchy.

GLOBUS MEDICAL, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Fair value of the revenue-based business acquisition liabilities was determined using a discounted cash flow model and an option pricing methodology.

Senior Convertible Notes due 2025

Bifurcated Conversion Option of the Senior Convertible Notes due 2025

Business acquisition liabilities

Our marketable securities and certain cash equivalents are classified as Level 2 within the fair value hierarchy, as we measure their fair value using market prices for similar instruments and inputs such as actual trade data, benchmark yields, broker/dealer quotes and other similar data obtained from quoted market prices or independent pricing vendors .

The bifurcated conversion option and 2025 Hedges are classified as Level 2 within the fair value hierarchy, based on implied equity volatility.

The estimated fair value of the 2025 Notes, inclusive of the embedded conversion option, at December 31, 2024 was $ 443.0 million.

Fair value of the revenue-based business acquisition liabilities was determined using a discounted cash flow model, probability model and an option pricing methodology.

The significant inputs of such models are not observable in the market, such as certain financial metric growth rates, volatility and discount rates, market price risk adjustment, projections associated with the applicable milestone, the interest rate, and the related probabilities and payment structure in the contingent consideration arrangement.

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Purchase price contingent consideration

Changes resulting from foreign currency fluctuations

Contingent cash payments

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Ending balance

Purchase price contingent consideration includes obligations acquired in the NuVasive Merger in addition to other immaterial acquisitions.

Changes in the fair value of business acquisition liabilities are driven by changes in market conditions and the achievement of certain performance conditions.

We translate the financial statements of our foreign subsidiaries with functional currencies other than the U.S.

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Both realized and unrealized gains and losses in the value of these receivables and payables are included in the determination of net income or loss.

Net currency exchange gains/(losses), which include gains and losses from derivative instruments, were $ 14.1 million and ($ 1.0 ) million for the year ended December 31, 2023 and December 31, 2022, respectively, and are included in other expense, net in the Consolidated Statements of Operations and Comprehensive Income.

Foreign currency translation gain/(loss), which include gains and losses from derivative instruments, was a loss of $ 43.3 million for the year ended December 31, 2024 and a gain of $ 14.1 million for the year ended December 31, 2023, and are included in other expense, net in the Consolidated Statements of Operations and Comprehensive Income.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

To manage foreign currency exposure risks, we may use derivatives for activities in entities that have short-term intercompany receivables and payables denominated in a currency other than the entity’s functional currency.

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As of December 31, 2024, a notional principal amount of $ 5.0 million was outstanding to hedge currency risk relative to our foreign currency-denominated receivables and payables.

Derivative instrument net losses on our forward exchange contracts were $ 0.1 million as of December 31, 2023 and are included in other expense, net in the Consolidated Statements of Operations and Comprehensive Income.

Derivative instrument net gain on our forward exchange contracts were $ 1.4 million as of December 31, 2024 and are included in other expense, net in the Consolidated Statements of Operations and Comprehensive Income.

The fair value of the forward exchange contract derivative instrument asset (liability) was di minimis as of December 31, 2024.

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Total inventories

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As part of the NuVasive Merger, a step-up in the value of inventory of $ 202.6 million was recorded, which was composed of $ 3.0 million for work in process and $ 199.6 million for finished goods.

The amortization of the inventory step-up recorded in product cost of sales was $ 71.7 million for the year ended December 31, 2023, respectively.

As of December 31, 2023, the total remaining balance of inventory step-up was $ 131.1 million.

As part of the NuVasive Merger, a net step-up in the value of inventory of $ 219.6 million was recorded, with certain acquired inventory receiving a step-up of $ 286.7 million, and certain acquired inventory receiving a step down of $ 67.1 million.

The net step-up was composed of $ 3.1 million for work in process and $ 216.5 million for finished goods.

The amortization of the inventory step-up recorded in product cost of sales was $ 215.4 million the year ended December 31, 2024, respectively.

Of the $ 215.4 million amortization, $ 5.5 million related to a prior period catchup of amortization associated with the final measurement period valuation adjustment recorded to the inventory balance.

During years ended December 31, 2024, 2023, and 2022, net adjustments to cost of sales related to excess and obsolete inventory were $ 23.4 million, $ 10.9 million, and $ 6.4 million, respectively.

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Modules and cases are used to store and transport the instruments and implants.

GLOBUS MEDICAL, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Depreciation expense related to property and equipment was as follows:

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December 31, 2024

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Intangible assets as of December 31, 2024 included the following:

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‎ Amortization

Supplier network

Customer relationships & other intangibles

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Total intangible assets

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes amortization of intangible assets for future periods as of December 31, 2024:

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Total accrued expenses

The carrying values of the Company’s 2025 Notes, acquired in the Merger, as of December 31, 2023, were as follows:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The carrying values of the 2025 Notes, acquired in the NuVasive Merger, as of December 31, 2024, were as follows:

(In thousands)

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Debt, net of unamortized fair value adjustments for acquisition accounting

(In thousands)

Interest expense:

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Bank National Association, as administrative agent, Citizens Bank, N.A., as syndication agent, Royal Bank of Canada, as documentation agent, U.S.

Bank National Association and Citizens Bank, N.A., as joint lead arrangers and joint book runners, and the other lenders referred to therein (the “September 2023 Credit Agreement”), that provides a revolving credit facility permitting borrowings up to $ 400.0 million and has a termination date of September 27, 2028 .

Bank National Association and Citizens Bank, N.A., as joint lead arrangers and joint book runners, and the other lenders referred to therein (the “September 2023 Credit Agreement”), that

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

provides a revolving credit facility permitting borrowings up to $ 400.0 million and has a termination date of September 27, 2028 .

We may request an increase in the revolving commitments in an aggregate amount not to exceed (i) $ 200 million or (ii) so long as the Leverage Ratio (as defined in the September 2023 Credit Agreement) is at least 0.25 to 1.00 less than the applicable Leverage Ratio then required under the September 2023 Credit Agreement, an unlimited amount.

Revolving Loans under the September 2023 Credit Agreement bear interest at either a base rate or the Term SOFR Rate (as defined in the Revolving Credit Facility) plus, in each case, an applicable margin, as determined in accordance with the provisions of the September 2023 Credit Agreement.

Revolving Loans under the September 2023 Credit Agreement bear interest at either a base rate or the Term SOFR Rate (as defined in the September 2023 Credit Agreement) plus, in each case, an applicable margin, as determined in accordance with the provisions of the September 2023 Credit Agreement.

The Applicable Margin ranges from 0.125 % to 0.625 % for the Base Rate and 1.125 % to 1.625 % for the Term SOFR Rate.

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The September 2023 Credit Agreement contains financial and other customary covenants, including a funded net indebtedness to adjusted EBITDA ratio.

As of December 31, 2023, we have no t borrowed under the September 2023 Credit Agreement and we are compliance with all covenants.

As of December 31, 2024, we have no t borrowed under the September 2023 Credit Agreement and we were in compliance with all covenants.

0.375% Senior Convertible Notes due 2025

On September 1, 2023, in connection with the closing of the Merger, the Company, NuVasive and Wilmington Trust National Association, as trustee (the “Trustee”) entered into a supplemental agreement (the “First Supplemental Indenture”) to the Indenture, dated March 2, 2020 (the “Base Indenture”), by and between NuVasive and the Trustee, relating to NuVasive’s $ 450.0 million in aggregate principal amount of 0.375 % Convertible Senior Notes due 2025.

As of the closing date of the Merger, $ 450 million of aggregate principal amount of the 2025 Notes were outstanding.

Pursuant to the First Supplemental Indenture, the 2025 Notes are convertible into the Company’s Class A common stock at a conversion rate of 8.0399 shares per $ 1,000 principal amount of 2025 Notes, which is equivalent to a conversion price of approximately $ 124.38 per share, subject to adjustments.

On September 1, 2023, in connection with the closing of the NuVasive Merger, the Company, NuVasive and Wilmington Trust National Association, as trustee (the “Trustee”) entered into a supplemental agreement (the “First Supplemental Indenture”) to the Indenture, dated March 2, 2020 (the “Base Indenture”), by and between NuVasive and the Trustee, relating to NuVasive’s $ 450.0 million in aggregate principal amount of 0.375 % Convertible Senior Notes due 2025.

As of the closing date of the NuVasive Merger, $ 450 million of aggregate principal amount of the 2025 Notes were outstanding.

Pursuant to the First Supplemental Indenture, the 2025 Notes are convertible into the Company’s Class A Common at a conversion rate of 8.0399 shares per $ 1,000 principal amount of 2025 Notes, which is equivalent to a conversion price of approximately $ 124.38 per share, subject to adjustments.

The 2025 Notes may be settled in cash, stock, or a combination thereof, solely at the Company’s discretion.

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The 2025 Notes mature on March 15, 2025 , unless earlier converted, redeemed, or repurchased in accordance with their terms.

The Merger constituted a Merger Event as defined in the Base Indenture.

The NuVasive Merger constituted a Merger Event as defined in the Base Indenture.

In the event of a Merger Event, the Company is required to execute a supplemental indenture providing for (i) each holder of 2025 Notes with the right to convert each $ 1,000 principal amount of 2025 Notes into the same type of consideration that holders would have been entitled to receive if such holders had held a number of shares of NuVasive Common Stock equal to the applicable conversion rate in effect immediately prior to such Merger Event, and (ii) subsequent adjustments to the conversion rate set forth in the Base Indenture.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Prior to September 15, 2024, holders may convert their 2025 Notes only under the following conditions:

(a) during any calendar quarter commencing after the calendar quarter ending on June 30, 2020 (and only during such calendar

quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the conversion price on each applicable trading day;

(b) during the five business day period after any five consecutive trading day period, or the measurement period, in which the

trading price of the 2025 Notes per $ 1,000 principal amount of notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s common stock and the conversion rate on such trading day;

(c) if the Company calls any or all of the 2025 Notes for redemption, at any time prior to the close of business on the second

scheduled trading day preceding the redemption date;

(d) upon the occurrence of specified corporate events, as defined in the 2025 Notes.

On or after September 15, 2024, until the close of business on the second scheduled trading day immediately preceding March 15, 2025, holders may convert their 2025 Notes at any time, regardless of the foregoing conditions.

Until the close of business on the second scheduled trading day immediately preceding March 15, 2025, holders may convert their 2025 Notes at any time.

In addition, following certain corporate events that occur prior to the maturity date or if the Company issues a notice of redemption, the Company will increase the conversion rate for a holder who elects to convert its 2025 Notes in connection with such a corporate event or in connection with such redemption in certain circumstances.

The Company may redeem the 2025 Notes, at its option, in whole or in part, until the close of business on the business day immediately preceding September 15, 2024, if the last reported sale price of the Company’s common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company delivers written notice of a redemption.

The redemption price will be equal to 100 % of the principal amount of such 2025 Notes to be redeemed plus accrued and unpaid interest to, but excluding, the redemption date.

No principal payments are due on the 2025 Notes prior to maturity.

Other than restrictions relating to certain fundamental changes and consolidations, mergers or asset sales and customary anti-dilution adjustments, the 2025 Notes do not contain any financial covenants and do not restrict the Company from conducting significant restructurings, paying dividends or issuing or repurchasing any of its other securities.

Upon the initial recognition of the 2025 Notes pursuant to the purchase accounting for the Merger, the embedded conversion feature does not meet the equity scope exception described in ASC 815-40, Contracts in Entity’s Own Equity.

Upon the initial recognition of the 2025 Notes pursuant to the purchase accounting for the NuVasive Merger, the embedded conversion feature does not meet the equity scope exception described in ASC 815-40, Contracts in Entity’s Own Equity.

The embedded conversion feature is bifurcated and presented as a liability on the consolidated balance sheet with subsequent measurement at fair value with changes in fair value recognized as “ Other income/(expense)”.

The Company recognized, at Merger closing, the embedded conversion feature at fair value of $ 1.7 million and allocated the residual $ 407.8 million of the 2025 Notes fair value to the host debt instrument.

As of the December 31, 2023, the fair value of the embedded conversion feature was $ 0.7 million.

As a result of the Merger and recognizing the fair value of the 2025 Notes, along with the embedded conversion feature, as of the acquisition date, the Company recorded $ 42.2 million debt discount to be accreted as interest expense over the life of the notes.

On September 1, 2023, in connection with the closing of the Merger, the Company, NuVasive, and certain dealers entered into amendment and guarantee agreements with respect to 2025 Hedge pursuant to which NuVasive purchased options from such dealers exercisable into its own common stock in connection with the sale of the 2025 Notes.

Pursuant to such amendment and guarantee agreements, the 2025 Hedge is exercisable into Globus Class A common stock in certain circumstances and the Company guaranteed NuVasive’s obligations under the 2025 Hedge.

Subject to the amended 2025 Hedge, the Company is entitled to purchase up to 3,617,955 shares of the Company’s Class A common stock at a strike price of $ 124.38 .

The 2025 Hedge will expire on the second scheduled trading day immediately preceding March 15, 2025 and is expected to reduce the potential equity dilution upon conversion of the 2025 Notes if the daily volume-weighted average price per share of the Company’s common stock exceeds the strike price of the 2025 Hedge.

In accordance with ASC 805, the Company recognized the 2025 Hedge at an acquisition date fair value of $ 1.7 million.

The 2025 Hedge does not meet the equity scope exception described in ASC 815-40, Contract in Entity’s Own Equity, and will be presented as asset on the consolidated balance sheet with subsequent measurement at fair value with changes in fair value recognized as other income/(expense).

As of December 31, 2023, the fair value of the 2025 Hedge is $ 0.7 million recorded within the Other Assets with the consolidated balance sheet.

An assumed exercise of the 2025 Hedge by NuVasive is considered anti-dilutive since the effect of the inclusion would always be anti-dilutive with respect to the calculation of diluted earnings per share.

The Company recognized, at the NuVasive Merger closing, the embedded conversion feature at fair value of $ 1.7 million and allocated the residual $ 407.8 million of the 2025 Notes fair value to the host debt instrument.

As of the December 31, 2024, the fair value of the embedded conversion feature was $ 21.7 thousand.

As a result of the NuVasive Merger and recognizing the fair value of the 2025 Notes, along with the embedded conversion feature, as of the acquisition date, the Company recorded $ 42.2 million debt discount to be accreted as interest expense over the life of the notes.

On September 1, 2023, in connection with the closing of the NuVasive Merger, the Company, NuVasive, and certain dealers entered into amendment and guarantee agreements with respect to privately negotiated call option transactions (the “2025 Hedges”) pursuant to which NuVasive purchased options from such dealers exercisable into its own common stock in connection with the sale of the 2025 Notes.

Pursuant to such amendment and guarantee agreements, the 2025 Hedges are exercisable into Globus Class A Common in certain circumstances and the Company guaranteed NuVasive’s obligations under the 2025 Hedges.

Subject to the amended 2025 Hedges, the Company is entitled to purchase up to 3,617,955 shares of the Company’s Class A Common at a strike price of $ 124.38 .

The 2025 Hedges will expire on the second scheduled

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

trading day immediately preceding March 15, 2025 and are expected to reduce the potential equity dilution upon conversion of the 2025 Notes if the daily volume-weighted average price per share of the Company’s common stock exceeds the strike price of the 2025 Hedges.

In accordance with ASC 805, the Company recognized the 2025 Hedges at an acquisition date fair value of $ 1.7 million.

The 2025 Hedges do not meet the equity scope exception described in ASC 815-40, Contract in Entity’s Own Equity, and will be presented as assets on the consolidated balance sheet with subsequent measurement at fair value with changes in fair value recognized as “ Other income/(expense)”.

As of December 31, 2024, the fair value of the 2025 Hedges is $ 21.7 thousand recorded within the Other Assets with the consolidated balance sheet.

An assumed exercise of the 2025 Hedges by NuVasive is considered anti-dilutive since the effect of the inclusion would always be anti-dilutive with respect to the calculation of diluted earnings per share.

2025 Warrants

On September 1, 2023, in connection with the closing of the Merger, the Company, NuVasive, and certain dealers entered into amendment and guarantee agreements with respect to the 2025 Warrants, pursuant to which NuVasive sold warrants to such dealers for its own common stock in connection with the initial sale of the 2025 Notes.

Pursuant to such amendment and guarantee agreements, the warrants are exercisable into Globus Class A common stock in certain circumstances and the Company guaranteed NuVasive’s obligations under the 2025 Warrants.

On September 1, 2023, in connection with the closing of the NuVasive Merger, the Company, NuVasive, and certain dealers entered into amendment and guarantee agreements with respect to privately negotiated warrant transactions (the “2025 Warrants”), pursuant to which NuVasive sold warrants to such dealers for its own common stock in connection with the initial sale of the 2025 Notes.

Pursuant to such amendment and guarantee agreements, the warrants are exercisable into Globus Class A Common in certain circumstances and the Company guaranteed NuVasive’s obligations under the 2025 Warrants.

Subject to the amended 2025 Warrants, the holders of the 2025 Warrants are entitled to purchase up to 3,617,955 shares of the Company’s common stock at a strike price of $ 170.45 .

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The Company uses the treasury share method for assumed exercise of its 2025 Warrants to compute the weighted average common shares outstanding for diluted earnings per share.

Stock Repurchases

On March 11, 2020, the Company announced a share repurchase program, which authorized the Company to repurchase up to $ 200.0 million of the Company’s Class A common stock (“Class A Common”).

Share Repurchases

On March 11, 2020, the Company announced a share repurchase program, which authorized the Company to repurchase up to $ 200.0 million of the Company’s Class A Common.

On March 4, 2022, the share repurchase program was expanded by authorizing the Company to repurchase an additional $ 200.0 million of the Company’s Class A Common.

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

During the year ended December 31, 2023, the Company repurchased a total of 4.3 million shares under this program at an average price of $ 52.11 , for a dollar amount of $ 225.6 million.

As of December 31, 2023, the Company has approximately $ 275.2 million remaining under the share repurchase program authorized of Class A Common.

The Company repurchased 1.6 million shares under this program at an average price of $ 52.14 , for a total dollar amount of $ 84.8 million during the 12 months ended December 31, 2024.

As of December 31, 2024, the Company has remaining authorization to repurchase a total of $ 190.3 million of the Company’s Class A Common.

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

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Shares repurchased by the Company are accounted for under the constructive retirement method, in which the shares repurchased, are immediately retired, as there is no plan to reissue the shares.

The value of the retired shares includes the 1% excise tax accrual as a result of the Inflation Reduction Act of 2022.

The Company made an accounting policy election to charge the excess of repurchase price over par value entirely to retained earnings.

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The holders of Class A Common are entitled to one vote for each share of Class A Common held.

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

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

For more details relating to the conversion of our Class B common stock please see “Exhibit 4.2, Description of Securities of the Registrant” filed herein.

The holders of Class B Common are entitled to 10 votes for each share of Class B Common held.

The holders of Class A Common and Class B Common vote together as one class of common stock.

Except for voting rights, the Class A Common and Class B Common have the same rights and privileges.

Accumulated Other Comprehensive Income (Loss)

The tables below present the changes in each component of accumulated other comprehensive income/(loss), including current period other comprehensive income/(loss) and reclassifications out of accumulated other comprehensive income/(loss) for the years ended December 31, 2023 and 2022, respectively:

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

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

For more details relating to the conversion of our Class B Common please see “Exhibit 4.2, Description of Securities of the Registrant” filed herein.

The holders of Class A Common and

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Class B Common vote together as one class of common stock.

Except for voting rights, the Class A Common and Class B Common have the same rights and privileges.

Accumulated Other Comprehensive Income (Loss)

(In thousands)

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

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Earnings Per Common Share

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

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

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Net income/(loss) for basic

Dilutive potential net income (loss):

Adjusted net income (loss) for diluted

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In accordance with ASU No.

2020-06, Debt with Conversion and Other Options (Subtopic 470-20), the Company applies the if-converted method in computing the effect of the Company's 2025 Notes on diluted net income per share.

For periods in which the Company reports net income, the numerator of the diluted per share computation is adjusted for interest expense and amortization of debt issuance costs, net of tax, and the denominator is adjusted for the weighted average number of shares into which each of the Company’s 2025 Notes could be converted.

2020-06, Debt with Conversion and Other Options (Subtopic 470-20), the Company applies the if-converted method in computing the effect of the 2025 Notes on diluted net income per share.

The effect is only included in the calculation of diluted net income per share for those 2025 Notes which reduce net income per share.

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our 2012 Equity Incentive Plan (the “2012 Plan”) and our 2021 Equity Incentive Plan (the “2021 Plan”), the NuVasive 2014 Equity Incentive Plan (the “NuVasive 2014 Plan”), and the Ellipse Technologies 2015 Incentive Award Plan (the “Ellipse 2015 Plan”).

The 2021 Plan, the NuVasive 2014 Plan and the Ellipse 2015 Plan are the only active stock plans.

The 2021 Plan and the Ellipse 2015 Plan are the only active stock plans.

The purpose of the 2012 Plan was, and of the 2021 Plan is, to provide incentive to employees, directors, and consultants of Globus.

The 2012 Plan, 2021 Plan, NuVasive 2014 Plan, and Ellipse 2015 Plan are administered by the Board of Directors of Globus (the “Board”) or its delegates.

The 2012 Plan, 2021 Plan, and Ellipse 2015 Plan are administered by the Board of Directors of Globus (the “Board”) or its delegates.

The number, type of option, exercise price, and vesting terms are determined by the Board or its delegates in accordance with the terms of the 2012 Plan and 2021 Plan.

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

Under the 2012 Plan, the aggregate number of shares of Class A Common stock that were able to be issued subject to options and other awards is equal to the sum of (i) 3,076,923 shares, (ii) any shares available for issuance under the 2008 Plan as of March 13, 2012, (iii) any shares underlying awards outstanding under the 2008 Plan as of March 13, 2012 that, on or after that date, are forfeited, terminated,

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expired or lapse for any reason, or are settled for cash without delivery of shares and (iv) starting January 1, 2013, an annual increase in the number of shares available under the 2012 Plan equal to up to 3 % of the number of shares of our common and preferred stock outstanding at the end of the previous year, as determined by our Board.

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

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

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

Under the 2021 Plan, as amended to date, the aggregate number of shares of Class A Common that were able to be issued subject to options and other awards is equal to the sum of (i) 8,000,000 shares, (ii) any shares available for issuance under the 2012 Plan as of June 3, 2021 and (iii) any shares underlying awards outstanding under the 2012 Plan or 2021 Plan as of June 3, 2021 that, on or after that date, are forfeited, terminated, expired or lapse for any reason, or are settled for cash without delivery of shares.

The number of shares that could be issued or transferred pursuant to incentive stock options under the 2021 Plan is limited to 8,000,000 shares.

Under the 2021 Plan, as amended to date, the aggregate number of shares of Class A Common that are able to be issued subject to options and other awards is equal to the sum of (i) 9,000,000 shares, (ii) any shares available for issuance under the 2012 Plan as of June 3, 2021 and (iii) any shares underlying awards outstanding under the 2012 Plan or 2021 Plan as of June 3, 2021 that, on or after that date, are forfeited, terminated, expired or lapse for any reason, or are settled for cash without delivery of shares.

The number of shares that may be issued or transferred pursuant to incentive stock options under the 2021 Plan is limited to 9,000,000 shares.

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

In connection with the Merger, the Company assumed outstanding awards for the RSUs and PRSUs under the NuVasive 2014 Plan and the Ellipse 2015 Plan in accordance with the terms in the Merger Agreement.

The PRSUs ultimate issuance amount is determined by the Company’s Compensation Committee.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In connection with the NuVasive Merger, the Company assumed outstanding awards for the RSUs and PRSUs under the NuVasive 2014 Plan and the Ellipse 2015 Plan in accordance with the terms in the Merger Agreement.

The ultimate issuance amount of the PRSUs is determined by the Company’s Compensation Committee.

Share payout levels range from 0 % to 100 % depending on the respective terms of an award.

As of December 31, 2023, pursuant to the 2021 Plan, the NuVasive 2014 Plan, and the Ellipse 2015 Plan, there were 9,799,141 shares 2,271,633 shares, and 423,886 shares of Class A Common stock reserved, respectively and 5,152,998 shares, 1,625,088 shares, and 241,048 shares of Class A Common stock available, respectively, for future grants.

As of December 31, 2024, pursuant to the 2021 Plan, the NuVasive 2014 Plan, and the Ellipse 2015 Plan, there were 9,892,082 shares 276,530 shares, and 359,464 shares, respectively, of Class A Common reserved and 3,117,085 shares, 0 shares, and 287,392 shares respectively of Class A Common available for future grants.

The NuVasive 2014 Plan terminated as to new awards pursuant to its terms in the second quarter of 2024.

Stock Options

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The weighted average grant date fair value of stock options granted during the years ended December 31, 2024, 2023, and 2022 was $ 22.53 , $ 21.47 , and $ 22.10 per share, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Restricted Stock Units

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Outstanding at December 31, 2024

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Performance-Based Restricted Stock Units

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Total stock-based compensation cost

As of December 31, 2023, there was $ 96.1 million of unrecognized compensation expense related to unvested employee stock options that vest over a weighted average period of three years .

As of December 31, 2024, there was $ 87.1 million of unrecognized compensation expense related to unvested employee stock options, RSUs, and PRSUs that vest over a weighted average period of 2.4 years.

The components of income before income taxes are as follows:

(In thousands)

The components of the provision for income taxes are as follows:

(In thousands)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The components of the provision for income taxes are as follows:

(In thousands)

A reconciliation of the statutory U.S.

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Valuation Allowance

Domestic production activities deduction

Compensation expense

Stock-based compensation windfall

Nondeductible expenses

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Acquisition related charges

Legal entity reorganization

Uncertain tax position

Effective tax rate

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Significant components of our deferred income taxes are as follows:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands)

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The Company has established valuation allowances of $ 182.6 million and $ 190.8 million at December 31, 2024 and 2023, respectively, primarily related to the uncertainty of the utilization of certain deferred tax assets comprised of tax loss carryforwards in various jurisdictions.

The increase in the valuation allowance during 2023 is primarily driven by acquired foreign deferred tax assets from the Merger that are not expected to be realized.

The decrease in the valuation allowance during 2024 was primarily driven by the internal reorganization, as well as the mix of earnings in loss entities.

The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced.

At December 31, 2023, the Company had $ 1.3 million, $ 51.7 million and $ 376.8 million of federal, state and foreign net operating loss carryforwards, respectively.

Federal net operating loss carryforwards begin to expire in 2026, state net operating loss carryforwards begin to expire in 2023, and foreign net operating losses carry forward indefinitely.

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At December 31, 2024, the Company had $ 1.3 million and $ 326.8 million of federal and foreign net operating loss carryforwards, respectively.

Federal net operating loss carryforwards begin to expire in 2026 and foreign net operating losses carry forward indefinitely.

The Company has California research and development income tax credit carryforwards of $ 40.1 million.

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The additions related to current year tax positions for the year ended December 31, 2024 of $ 2.6 million are primarily related to additional current year reserves.

The additions related to the prior year tax positions for the year ended December 31, 2023 of $ 32.0 million

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are related to the historical positions from the Merger, and recorded using the acquisition method of accounting.

The reduction s related to prior year tax positions for the year ended December 31, 2023 of $ 0.1 million are primarily related to the resolution of certain foreign tax positions.

The additions related to the prior year tax positions for the year ended December 31, 2024 of $ 27.9 million are related to the historical positions from the NuVasive Merger, partially recorded to goodwill using the acquisition method of accounting.

The reduction s related to prior year tax positions for the year ended December 31, 2024 of $ 7.9 million are primarily related to the resolution of certain foreign and U.S.

federal tax positions.

The impact of our unrecognized tax benefits to the effective income tax rate is as follows:

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Portion of total unrecognized tax benefits that, if recognized, would affect the effective income tax rate

The undistributed earnings of our foreign subsidiaries as of December 31, 2023 are immaterial.

Due to recent tax reform in the U.S.

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While it is not possible to predict the outcome for most of the matters discussed, we believe it is possible that costs associated with them could have a material adverse impact on our consolidated earnings, financial position or cash flows.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Moskowitz Family LLC Litigation

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District Court for the Western District of Texas for patent infringement.

Moskowitz, a non-practicing entity, alleges that Globus willfully infringes one or more claims of six patents by making, using, offering for sale or selling the COALITION ® , COALITION MIS ® , COALITION AGX ® , CORBEL ® , MONUMENT ® , MAGNIFY ® -S, HEDRON IATM, HEDRON IC ® , INDEPENDENCE ® , INDEPENDENCE MIS ® , INDEPENDENCE MIS AGX ® , FORTIFY ® and XPAND ® families, SABLE ® , RISE ® , RISE ® INTRALIF, RISE ® -L, ELSA ® , ELSA ® ATP, ALTERA ® , ARIEL ® , CALIBER ® and CALIBER ® -L products.

Moskowitz, a non-practicing entity, alleges that Globus willfully infringes one or more claims of six patents by making, using, offering for sale or selling the COALITION MIS ® , CORBEL ® , MAGNIFY ® -S, HEDRON IATM, INDEPENDENCE MIS ® , INDEPENDENCE MIS AGX ® , FORTIFY ® and XPAND ® families, SABLE ® , RISE ® , RISE ® INTRALIF, RISE ® -L, ELSA ® , ELSA ® ATP, ALTERA ® , ARIEL ® , CALIBER ® and CALIBER ® -L products.

Moskowitz seeks monetary damages and injunctive relief.

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On December 14, 2023, a jury returned a defense verdict in favor of Globus.

As such, we have no t recorded a liability, outside of counsel fees, related to this litigation as of December 31, 2023.

On September 30, 2024, Moskowitz Family LLC filed an appeal to the verdict.

The outcome of this litigation cannot be determined, nor can we estimate a range of potential loss, therefore, we have no t recorded a liability, outside of counsel fees, related to this litigation as of December 31, 2024.

RESTRUCTURING AND OTHER COSTS

As of December 31,2024, the Company incurred restructuring and other costs primarily related to employee termination benefits as a part of the Company’s 2024 Synergy Plan.

The Company’s 2024 Synergy Plan was designed to optimize the organizational structure of Globus by reducing the size of our workforce.

Impacted employees were notified during January 2024 and July 2024.

Totals include stock-based compensation expense, classified in accordance with ASC 420, Exit or Disposal Cost Obligations , where applicable.

The following table provides a summary of recognized pre-tax costs for the twelve months ended December 31, 2024:

Twelve Months Ended

(In thousands)

December 31, 2024

Cost of Sales

Research and Development

Selling, General and Administrative

Restructuring Costs

Total restructuring and other costs

The following table provides a summary of activity related to the restructuring program for the twelve months ended December 31, 2024:

Twelve Months Ended

(In thousands)

December 31, 2024

Beginning Balance

Cash Payments

Settled non-cash (a)

December 31, 2024

(a) Represents share-based compensation settled without cash payments.

The Company leases certain equipment, vehicles, office and storage facilities via various operating and financing lease agreements.

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We generally estimate discount rates using our incremental borrowing rate, and based on other information available, at commencement date of a lease when determining the present value of future payments, as most of our leases do not provide an implicit rate.

The Company has security deposits recorded and maintained in Other Assets totaling $ 1.5 million as of December 31, 2023.

The Company includes financing lease right-of-use assets in other assets , short-term financing lease liabilities in accrued expenses , and long-term financing lease liabilities in other liabilities on the consolidated balance sheet.

Operating lease expense is recognized on a

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

straight-line basis over the term of the lease as a component of operating income on the consolidated statement of operations and comprehensive income.

Operating lease expense is recognized on a straight-line basis over the term of the lease as a component of operating income on the consolidated statement of operations and comprehensive income.

Finance leases amortize the right-of-use assets and amortize the interest on the lease liability over the term of the lease.

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Long-term lease obligations

T he table below summarizes the Company’s supplemental cash flow information and assumptions used:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The table below summarizes the Company’s supplemental cash flow information and assumptions used:

Twelve Months Ended

(In thousands, except weighted average lease term and discount rate)

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SEGMENT AND GEOGRAPHIC INFORMATION

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

We have identified two operating segments, Musculoskeletal Solutions and Enabling Technologies, based on how management reviews the business, makes investing and resource allocation decisions and assesses operating performance.

We aggregate these operating segments into one reportable segment, based on conclusions reached after considering the factors including economic similarity, customer base, regulatory environment, production processes, nature of services and products provided, and our comprehensive approach to product development and offerings targeting patient needs through procedural-based solutions.

Operating segments are defined as components of an enterprise about which separate financial information is available that are evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance.

Generally, financial information is required to be reported on the basis that it is used internally for evaluating segment performance and deciding how to allocate resources to segments.

Scavilla, Chief Executive Officer is identified as the CODM who determines resource allocation, investing activities, and performance assessment.

The CODM uses revenue, gross profit and operating income to assess financial performance of the segments and make key operating decisions.

Our CODM does not evaluate operating segments using asset or liability information.

The Company identified two operating segments, Musculoskeletal Solutions and Enabling Technologies based on the overall management structure and business strategy.

The Company aggregates these operating segments into one reportable segment, based on conclusions reached after considering relevant factors such as economic similarity, customer base, regulatory environment, production processes, nature of services and products provided, and our comprehensive approach to product development and offerings targeting patient needs through procedural-based solutions.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table represents total net sales and property and equipment, net by geographic area, based on the location of the customer for the years ended December 31, 2023, 2022 and 2021, respectively:

The following table represents total segment revenue, significant segments expenses and other expenses for the years ended December 31, 2024, 2023 and 2022, respectively:

Cost of goods sold

Amortization of inventory fair value step-up (a)

Depreciation cost of goods sold

Research & development employee related cost

Research & development other (b)

Selling, general & administrative employee related cost

Selling, general & administrative other (c)

Provision for litigation

Acquisition related costs

Other segment expenses (d)

Operating income

Interest income (expense)

FX transactional gain (loss)

Income before taxes

(a ) Amounts primarily related to inventory step-up associated with the NuVasive Merger

(b) Amounts include IPR&D and other non-employee related costs

(d) Amounts include restructuring expense and credit losses

The following table represents total net sales by geographic area, based on the location of the customer for the years ended December 31, 2024, 2023 and 2022, respectively:

(In thousands)

United States

International

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The following table represents total property and equipment, net by geographic area:

Property and Equipment, Net

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International

SUBSEQUENT EVENT

On February 6, 2025, the Company entered into an Agreement and Plan of Merger (the “Nevro Merger Agreement”) with Nevro Corp., a Delaware corporation (“Nevro”), and Palmer Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“Palmer Merger Sub”).

The Nevro Merger Agreement provides, among other things, that subject to the satisfaction or waiver of the conditions set forth therein, Palmer Merger Sub will merge with and into Nevro (the “Nevro Merger”), with Nevro surviving the merger as a wholly owned subsidiary of the Company.

Under the Nevro Merger Agreement, at the effective time of the Nevro Merger (the “Effective Time”), each share of common stock, par value $ 0.001 per share, of Nevro (“Nevro Common Stock”) issued and outstanding immediately prior to the Effective Time (other than certain excluded shares as described in the Nevro Merger Agreement) will be cancelled and converted into the right to receive cash in an amount equal to $ 5.85 per share of Nevro Common Stock.

The transaction represents a total equity value of approximately $ 250 million.

Either Nevro or Globus may terminate the Nevro Merger Agreement under certain circumstances described in the Nevro Merger Agreement, resulting in a termination fee payable to the other equal to $ 10 million or $ 15 million, depending on such circumstances.

Nevro will also be required to make a payment to Globus equal to $ 15 million if the Nevro Merger Agreement is terminated because Nevro’s stockholders fail to approve the Nevro Merger Agreement and, at the time of such failure, Nevro’s board of directors has not changed its recommendation to its stockholders in favor of the Nevro Merger.

The transaction is expected to close late in the second quarter of 2025, subject to the approval of Nevro’s shareholders, regulatory approval, and other customary closing conditions.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data