What changed in this filing

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Item 1. Financial Statements

2023-04-26 compared with 2022-10-26 · 277 added, 425 removed, 611 unchanged (53% of the section changed)

4 unchanged sentences

(Dollars in thousands, except per share amounts)

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Three Months Ended March 31,

Total revenue, net $ 380,846 $ 376,638

8 unchanged sentences

Interest expense ( 12,100 ) ( 11,655 )

Gain (loss) from the sale of businesses 644 ( 230 ) 644 41,967

Other income, net 1,389 3,429

9 unchanged sentences

Comprehensive income (See Note 14)

21,028 57,031

The accompanying unaudited notes are an integral part of these condensed consolidated financial statements.

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(Dollars in thousands, except per share amounts)

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Current assets:

4 unchanged sentences

Prepaid expenses and other current assets 116,845 116,789

Assets held for sale 1,831 —

Total current assets 1,029,482 1,161,498

30 unchanged sentences

240,000 authorized shares;

90,341 and 89,600 issued at September 30, 2022 and December 31, 2021, respectively

90,813 and 90,477 issued at March 31, 2023 and December 31, 2022, respectively

Additional paid-in capital 1,245,297 1,276,977

Treasury stock, at cost;

6,823 shares and 4,899 shares at September 30, 2022 and December 31, 2021, respectively

8,918 shares and 6,823 shares at March 31, 2023 and December 31, 2022, respectively

( 481,678 ) ( 362,862 )

7 unchanged sentences

(Dollars in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

OPERATING ACTIVITIES:

2 unchanged sentences

Depreciation and amortization 31,143 29,724

Non-cash impairment charges — 2,754

Deferred income tax provision (benefit) 1,439 ( 13,498 )

Deferred income tax provision 1,953 3,544

Share-based compensation 3,620 6,291

1 unchanged sentence

Non-cash lease expense 1,260 ( 17 )

Loss on disposal of property and equipment 914 2,029

Gain from the sale of businesses ( 644 ) ( 41,967 )

Loss (gain) on disposal of property and equipment ( 23 ) 712

Change in fair value of contingent consideration and others 4,699 ( 765 )

5 unchanged sentences

Accounts payable, accrued expenses and other current liabilities ( 4,984 ) ( 9,754 )

Contract liabilities 2,524 —

Other non-current liabilities ( 14,073 ) ( 2,576 )

2 unchanged sentences

Purchases of property and equipment ( 13,704 ) ( 9,325 )

Proceeds from sale of property and equipment — 3

Proceeds from sale of businesses 23,960 190,468

Acquired in-process research and development milestone — ( 4,742 )

Net proceeds from swaps designated as net investment hedges 4,909 76

Cash paid for business acquisitions, net of cash acquired — ( 303,910 )

Net cash used in investing activities ( 13,704 ) ( 14,067 )

15 unchanged sentences

(Dollars in thousands)

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

Common Stock Treasury Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Retained Earnings Total Equity

2 unchanged sentences

Net income — — — — — — 24,226 24,226

Other comprehensive income, net of tax — — — — — 24,130 — 24,130

Other comprehensive income (loss), net of tax — — — — — ( 3,198 ) — ( 3,198 )

Issuance of common stock through employee stock purchase plan 21 — — — 1,107 — — 1,107

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Balance, March 31, 2023 90,813 $ 908 ( 8,918 ) $ ( 481,678 ) $ 1,245,297 $ 7,067 $ 903,344 $ 1,674,938

Net income — — — — — — 44,788 44,788

Other comprehensive income, net of tax — — — — — 7,810 — 7,810

Issuance of common stock for vesting of share based awards, net of shares withheld for taxes 378 3 — 6 ( 13,655 ) — — ( 13,646 )

Share-based compensation — — — — 6,768 — — 6,768

Balance, June 30, 2022 90,334 $ 903 ( 6,823 ) $ ( 362,880 ) $ 1,259,852 $ ( 13,215 ) $ 776,257 $ 1,660,917

Net income — — — — — — 49,915 49,915

Other comprehensive income, net of tax — — — — — 5,776 — 5,776

Issuance of common stock for vesting of share based awards, net of shares withheld for taxes 7 — — 17 ( 1,160 ) — — ( 1,143 )

Share-based compensation — — — — 8,949 — — 8,949

Balance, September 30, 2022 90,341 903 ( 6,823 ) ( 362,863 ) 1,267,641 ( 7,439 ) 826,172 1,724,414

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(Dollars in thousands)

Nine Months Ended September 30, 2021

Three Months Ended March 31, 2022

Common Stock Treasury Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Retained Earnings Total Equity

2 unchanged sentences

Net income — — — — — — 32,901 32,901

Other comprehensive income, net of tax — — — — — 30,432 — 30,432

Other comprehensive income (loss), net of tax — — — — — 24,130 — 24,130

Issuance of common stock through employee stock purchase plan 17 — — — 1,078 — — 1,078

1 unchanged sentence

Share-based compensation — — — — 6,324 — — 6,324

Adoption of Update No.

2020-06 — — — — ( 63,274 ) — ( 2,772 ) ( 66,046 )

Accelerated shares repurchased — — ( 1,938 ) ( 129,152 ) 4,152 — — ( 125,000 )

Balance, March 31, 2022 89,956 $ 900 ( 6,823 ) $ ( 362,886 ) $ 1,266,739 $ ( 21,025 ) $ 731,469 $ 1,615,197

Net income — — — — — — 35,068 35,068

Other comprehensive loss, net of tax — — — — — ( 6,336 ) — ( 6,336 )

Issuance of common stock for vesting of share based awards, net of shares withheld for taxes 68 1 — — 1,175 — — 1,176

Share-based compensation — — — — 15,742 — — 15,742

Balance, June 30, 2021 89,474 $ 895 ( 4,899 ) $ ( 234,461 ) $ 1,248,555 $ ( 49,963 ) $ 609,955 $ 1,574,981

Net income — — — — — — 43,229 43,229

Other comprehensive income, net of tax — — — — — 3,189 — 3,189

Issuance of common stock for vesting of share based awards, net of shares withheld for taxes 123 1 — 12 2,529 — — 2,542

Share-based compensation — — — — 7,746 — — 7,746

Balance, September 30, 2021 89,597 896 ( 4,899 ) ( 234,449 ) 1,258,830 ( 46,774 ) 653,184 1,631,687

The accompanying unaudited notes are an integral part of these condensed consolidated financial statements.

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The terms “we,” “our,” “us,” “Company” and “Integra” refer to Integra LifeSciences Holdings Corporation, a Delaware corporation, and its subsidiaries unless the context suggests otherwise.

In the opinion of management, the September 30, 2022 unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the financial position, statement of changes in shareholders' equity, results of operations and cash flows of the Company.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.

In the opinion of management, the March 31, 2023 unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the financial position, statement of changes in shareholders' equity, results of operations and cash flows of the Company.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States ("GAAP") have been condensed or omitted in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.

These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K.

The December 31, 2021 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States.

Operating results for the three and nine-month period ended September 30, 2022 are not necessarily indicative of the results to be expected for the entire year.

The preparation of consolidated financial statements is in conformity with generally accepted accounting principles in the United States ("GAAP") which requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent liabilities, and the reported amounts of revenues and expenses.

Significant estimates affecting amounts reported or disclosed in the consolidated financial statements include allowances for doubtful accounts receivable and sales returns and allowances, net realizable value of inventories, valuation of intangible assets including amortization periods for acquired intangible assets, discount rates and estimated projected cash flows used to value and test impairments of long-lived assets and goodwill, estimates of projected cash flows and depreciation and amortization periods for long-lived assets, computation of taxes, valuation allowances recorded against deferred tax assets, the valuation of stock-based compensation, valuation of derivative instruments, valuation of contingent liabilities, the fair value of debt instruments and loss contingencies.

The December 31, 2022 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP.

Operating results for the three-month period ended March 31, 2023 are not necessarily indicative of the results to be expected for the entire year.

The preparation of consolidated financial statements is in conformity with GAAP, which requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent liabilities, and the reported amounts of revenues and expenses.

Significant estimates affecting amounts reported or disclosed in the condensed consolidated financial statements include allowances for doubtful accounts receivable and sales returns and allowances, net realizable value of inventories, valuation of intangible assets including amortization periods for acquired intangible assets, discount rates and estimated projected cash flows used to value and test impairments of long-lived assets and goodwill, estimates of projected cash flows and depreciation and amortization periods for long-lived assets, computation of taxes, valuation allowances recorded against deferred tax assets, the valuation of stock-based compensation, valuation of derivative instruments, valuation of contingent liabilities, the fair value of debt instruments and loss contingencies.

These estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the current circumstances.

Actual results could differ from these estimates.

Risks and Uncertainties

The Company is subject to risks and uncertainties as a result of the COVID-19 pandemic, including reductions in capital and overall spending by our customers, increased freight costs, decreased availability of certain raw materials used in certain of our products and labor constraints.

The COVID-19 pandemic has had, and may continue to have, an adverse effect on the Company’s business, results of operations, financial condition, and cash flows, and its future impacts remain highly uncertain and unpredictable.

Although there was not a material impact to the Company’s consolidated financial statements as of and for the nine months ended September 30, 2022, changes in the Company’s assessment about the length and severity of the pandemic, as well as other factors, could result in actual results differing from estimates.

The severity of the impact of the COVID-19 pandemic on the Company's business will depend on a number of factors, including, but not limited to, duration of the pandemic, including resurgences, new variants or strains, impact of government regulations, the speed and effectiveness of vaccine distribution, vaccine adoption rates and the duration of direct and indirect economic effects of the pandemic, containment measures and other macroeconomic factors which could cause a local/or global economic recession.

Even after the COVID-19 pandemic and government responses thereto have subsided, residual economic and other effects may have an impact on the demand for post-pandemic surgery levels that are difficult to predict.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

Employee Termination Benefits

The Company incurred employee termination costs on restructuring activities associated with a closure of a manufacturing facility in France, outsourcing plans for select transactional back office activities, and executive reorganization in the consolidated statement of operations for the nine months ended September 30, 2022.

The following table summarizes our restructuring related accrual balances included within accrued expenses and other current liabilities in the consolidated balance sheet for the nine months ended September 30, 2022.

(Dollars in thousands) Amount

Balance at December 31,2021 $ 10,226

Cost of Goods Sold $ 1,379

Research and development 130

Selling, general and administrative 3,494

Payments and other adjustments $ ( 10,569 )

Balance at September 30,2022 $ 4,660

Included in the accrual balance at September 30, 2022 above is $ 1.8 million related to the closure o f a manufacturing facility located in France, $ 1.7 million related to executive reorganization and $ 1.2 million related to the outsourcing plans for select transactional back office activities.

Assets Held for Sale

On July 18 2022, the Company entered into a preliminary agreement to sell a manufacturing facility located in France which is expected to close during the fourth quarter of 2022, subject to satisfaction of customary conditions.

The Company considered the building to be accounted as held-for-sale as the six criteria under ASC 260 were met during the third quarter of 2022.

Assets held for sale are reported at the lower of the carrying amount or fair value less estimated costs to sell and are not depreciated while they are held for sale.

The fair value of the business less costs to sell exceeded the related carrying value.

Recent Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, Income Taxes :

Simplifying the Accounting for Income Taxes, intended to simplify the accounting for income taxes by eliminating certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

This guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill.

The standard is effective for annual periods beginning after December 15, 2020 and interim periods within, with early adoption permitted.

The Company adopted ASU 2019-12 as of January 1, 2021.

Adoption of the standard requires certain changes to be made prospectively, with some changes to be made retrospectively.

The adoption of this guidance did not have a significant impact on the Company's consolidated financial statements and related disclosures.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848), and subsequent amendment to the initial guidance:

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The amendments apply only to contracts, hedging relationships, and other transactions that reference London Inter-Bank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform.

The guidance generally can be applied from March 12, 2020 through December 31, 2022.

On October 5, 2022, the FASB approved an extension of the sunset date of the reference rate reform from December 31, 2022 to December 31, 2024, past LIBOR’s end date.

The Company currently has contracts that are indexed to LIBOR and are continuing to evaluate the scope of impacted contracts and potential risk.

The Company is also monitoring the developments regarding alternative rates and may amend certain contracts to accommodate those rates if the contract does not already specify a replacement rate.

While the notional value of agreements potentially indexed to LIBOR is material, the Company does not expect a material impact to the consolidated financial statements and related disclosures associated with this transition.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

In August 2020, the FASB issued ASU 2020-06, Debt- Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40):Accounting for Convertible Instruments and Contracts in an Entity's Own Equity .

The guidance simplifies accounting for convertible instruments by removing major separation models required under current GAAP.

Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features.

The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify.

The guidance also simplifies the diluted net income per share calculation in certain areas.

The ASU was effective for annual and interim periods beginning after December 15, 2021, and early adoption was permitted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years using either the modified retrospective or full retrospective method.

As detailed in Note 6, Debt , on February 4, 2020, the Company issued $ 575.0 million aggregate principal amount of its 0.5 % Convertible Senior Notes due 2025 (the "2025 Notes").

The 2025 Notes are subject to the guidance included in ASU 2020-06.

The Company adopted this guidance on January 1, 2021 using the modified retrospective approach which resulted in a cumulative-effect adjustment that increased (decreased) the following consolidated balance sheet accounts:

Adjustment Consolidated Balance Sheet Classification Amount

(in millions)

Deferred tax impact of cumulative-effect adjustment Deferred tax liabilities $ ( 20.6 )

Debt discount reclassification Long-term convertible securities 89.1

Equity issuance costs reclassification Long-term convertible securities ( 2.5 )

Debt discount amortization and equity costs reclassification, net of tax Retained Earnings ( 2.8 )

Net impact of cumulative-effect adjustment Additional paid-in capital ( 63.3 )

On December 9, 2020, the Company made an irrevocable election under the indenture to require the principal portion of its 2025 Notes to be settled in cash and any excess in shares.

Following the irrevocable notice, only the amounts settled in excess of the principal will be considered in diluted earnings per share under the “if-converted” method.

Upon adoption of ASU 2020-06, the Company’s 2025 Notes were reflected entirely as a liability since the embedded conversion feature will no longer be separately presented within stockholders’ equity.

Additionally, from January 1, 2021, the Company is no longer incurring non-cash interest expense for the amortization of debt discount.

In October 2020, the FASB issued ASU 2020-10, Codification Improvements , which updates various codification topics by clarifying or improving disclosure requirements to align with the regulations of the U.S.

Securities and Exchange Commission (the "SEC").

The ASU has been effective for the Company for annual and interim periods beginning after January 1, 2021.

The Company adopted this standard on the January 1, 2021.

The adoption of this guidance did not have a significant impact on the Company's consolidated financial statements and related disclosures.

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options which provides guidance to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange.

The amendments in this ASU No.

2021-04 are effective for all entities for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted, including interim periods within those fiscal years.

The amendment had no impact to the Company as the effect will largely depend on the terms of written call options or financings issued or modified in the future.

The guidance generally can be applied through December 31, 2024.

The Alternative Reference Rates Committee, a group of private-market participants convened by the U.S.

Federal Reserve Board and the New York Federal Reserve, has recommended the use of the Secured Overnight Financing Rate ("SOFR") as a more robust reference rate alternative to LIBOR.

The use of SOFR as a substitute for LIBOR is, however, voluntary and may not be suitable for all market participants.

There can be no assurance that the replacement rate will be economically equivalent to LIBOR, which could result in higher interest rates for us under our debt facilities.

There is no guarantee that a transition from LIBOR to SOFR will not result in financial market disruptions, significant increases in benchmark rates, or our borrowing costs, any of which could have an adverse effect on our business, results of operations and financial condition.

On March 24, 2023, the Company entered into the seventh amendment and restatement (the "March 2023 Amendment") of its Senior Credit Facility (the “Senior Credit Facility”) with a syndicate of lending banks with Bank of America, N.A., as Administrative Agent.

In connection with the March 2023 Amendment the Company replaced all LIBOR-based contracts with SOFR, which is calculated based on overnight transactions under repurchase agreements backed by Treasury securities (See Note 6).

In March 2023, the Company entered into a basis swap where the Company receives Term SOFR and pays LIBOR to convert the portfolio of interest rate swaps from LIBOR to SOFR.

Integra has elected to adopt the optional expedient under ASC 848, which will allow the interest rate swap hedging relationship to continue, without de-designation, due to the change in the indexed rate from LIBOR to SOFR.

There are no other recently issued accounting pronouncements that are expected to have any significant effect on the Company's financial position, results of operations or cash flows.

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ACQUISITIONS AND DIVESTITURES

Sale of non-core traditional wound care business

On August 31, 2022, the Company completed its previously announced sale of its non-core traditional wound care ("TWC") business to Gentell, LLC ("Gentell") for $ 28.8 million, which consists of $ 27.8 million in cash plus $ 1.0 million in contingent consideration which may be received upon achieving certain revenue-based performance milestones two years after the closing date.

The proceeds from the sale of the TWC business of $ 27.8 million is presented in the consolidated statement of cash flows net of cash transferred of $ 3.5 million and other transaction fees .

The transaction included the sale of the Company's TWC products, such as sponges, gauze and conforming bandages, and certain advanced wound care dressings, such as supportive, calcium alginate, hydrogel, and foam dressings.

The divestiture did not represent a strategic shift that had a major effect on the Company's operations and financial statements .

Goodwill was allocated to the assets and liabilities divested using the relative fair value method of the TWC business to the Company's Tissue Technologies reportable business segment.

In connection with the sale, the Company recognized $ 0.6 million as a gain from the sale of the business in the consolidated statement of operations for the nine months ended September 30, 2022.

The transaction is subject to final working capital adjustments.

In addition to the purchase and sale agreement, the Company also entered into a contract manufacturing agreement with Gentell.

Under the terms of the agreement, Gentell received inventory, equipment, and tooling to manufacture certain MediHoney ® and TCC-EZ ® products on behalf of the Company.

On the close date of this transa ction, the Company transferred all inventory associated with these products to Gentell and subsequently recognized a prepaid asset of $ 11.1 million, as a form of a deposit for the inventory transferred.

Based on the expected timing of inventory purchases, $ 8.3 million was included within prepaid expenses and other current assets and $ 2.8 million within other assets in the consolidated balance sheet.

This deposit will be utilized by the Company on future orders placed to G entell for such products.

Sale of Extremity Orthopedics Business

On January 4, 2021, the Company completed the sale of its Extremity Orthopedics business to Smith & Nephew USD Limited ("Smith & Nephew").

The transaction included the sale of the Company's upper and lower Extremity Orthopedics product portfolio, including ankle and shoulder arthroplasty and hand and wrist product lines.

The Company received an aggregate purchase price of $ 240.0 million from Smith & Nephew and concurrently paid $ 41.5 million to the Consortium of Focused Orthopedists, LLC ("CFO") effectively terminating the licensing agreement between Integra and the CFO relating to the development of shoulder arthroplasty products.

The divestiture did not represent a strategic shift that had a major effect on the Company's operations and financial statements.

Goodwill was allocated to the assets and liabilities divested using the relative fair value method of the Extremity Orthopedics business to the Company's Tissue Technologies reportable business segment.

In connection with the sale, the Company recognized a $ 41.8 million as a gain from the sale of the business in the consolidated statement of operations for the year ended December 31, 202 1.

The Company finalized the net working capital with Smith & Nephew as of December 31, 2021.

The Company also entered into a transition services agreement ("TSA") with Smit h & Nephew which requires the Company to provide certain services on behalf of Smith & Nephew for the duration of the period subsequent to the sale of the business as defined in the TSA.

The Company recognized a payable due to Smith & Nephew of $ 3.0 million as of September 30, 2022, which is included in the consolidated balance sheets within accrued expenses and other current liabilities.

The TSA includes services such as invoicing and cash collections from customers on behalf of Smith & Nephew.

As of September 30, 2022, the Company has concluded the majority of the transition services agreement, pending final payment.

On January 20, 2021, the Company acquired ACell, Inc.

(the "ACell Acquisition") for a total purchase price of $ 306.9 million plus contingent consideration of up to $ 100 million, which may be payable upon the Company achieving certain revenue-based performance milestones in 2022, 2023 and 2025.

The final working capital adjustments of $ 1.3 million was finalized and paid as of June 30, 2021.

Prior to the acquisition, ACell was a privately-held company that offered a portfolio of regenerative products for complex wound management, including developing and commercializing products based on MatriStem Urinary Bladder Matrix, a technology platform derived from porcine urinary bladder extracellular matrix.

Surgical Innovation Associates, Inc.

On December 6, 2022, the Company completed its acquisition of Surgical Innovation Associates, Inc.

("SIA") for an acquisition purchase price of $ 51.5 million (the "SIA Acquisition").

In addition to the purchase price, the acquisition includes two separate contingent considerations payments, which are dependent on 1) achieving certain revenue-based performance milestones in 2023, 2024, and 2025 (up to $ 50.0 million in additional payments), as well as 2) the approval by the FDA of the Premarket Approval (“PMA”) Application for DuraSorb for certain uses by certain timing targets (up to $ 40.0 million in additional payments).

SIA's core technology, DuraSorb, is a fully resorbable scaffold of a globally accepted polymer, which is cleared for use in hernia repair, abdominal wall, and other soft tissue reinforcement.

DuraSorb sales will be reported within Integra’s Tissue Technologies ("TT") segment as part of its Wound Reconstruction and Care franchise.

Assets Acquired and Liabilities Assumed at Fair Value

The ACell Acquisition has been accounted for using the acquisition method of accounting.

This method requires that assets acquired and liabilities assumed in a business combination are recognized at their fair values as of the acquisition date.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The following table summarizes the final fair values of the assets acquired and liabilities assumed at the acquisition date:

Dollars in thousands Final Valuation Weighted Average Life

The SIA Acquisition has been accounted for using the acquisition method of accounting.

This method requires that assets acquired, and liabilities assumed in a business combination to be recognized at their fair values as of the acquisition date.

The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date:

Dollars in thousands Preliminary Valuation Weighted Average Life

Current assets:

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Total current assets $ 10,543

Property, plant and equipment, net 13,769

Intangible assets 75,000 14 years

Goodwill 41,854

Right of use asset - operating leases 9,259

Deferred tax assets 7,465

Other assets 148

Total assets acquired $ 127,397

Current liabilities:

Accounts payable $ 718

Accrued expenses 5,966

Current portion of lease liability - operating leases 1,673

Accounts payable and accrued expenses $ 2,044

Total current liabilities $ 2,044

Other long-term liability 276

Lease liability - operating leases 7,585

Deferred Tax Liability 11,799

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Net assets acquired $ 55,947

Intangible Assets

The estimated fair value of the developed technology acquired was determined using the multi-period excess earnings method of the income approach, which estimates value based on the present value of future economic benefits.

Some of the more significant assumptions inherent in the development of those asset valuations include the estimated net cash flows for each year for each product including net revenues, cost of sales, R&D costs, selling and marketing costs, the appropriate discount rate to select in order to measure the risk inherent in each future cash flow stream, the assessment of each asset’s life cycle, and competitive trends impacting the asset and each cash flow stream.

Developed Technology

The estimated fair value of the developed technology was determined using the multi-period excess earnings method of the income approach, which estimates value based on the present value of future economic benefits.

Some of the more significant assumptions inherent in the development of those asset valuations include the estimated net cash flows for each year for each product including net revenues, cost of sales, R&D costs, selling and marketing costs, working capital, and contributory asset charges, the appropriate discount rate to select in order to measure the risk inherent in each future cash flow stream, the assessment of the asset’s life cycle, and competitive trends impacting the asset and the cash flow stream.

The Company used a discount rate of 18 % to arrive at the present value for the acquired intangible assets to reflect the rate of return a market participant would expect to earn and incremental commercial uncertainty in the cash flow projections.

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For these and other reasons, actual results may vary significantly from estimated results.

The Company allocated goodwill related to the ACell acquisition to the Tissue Technologies reportable business segment.

Goodwill is the excess of the consideration transferred over the net assets recognized and represents the expected synergies of the combined company and assembled workforce.

Goodwill recognized as a result of this acquisition is non-deductible for income tax purposes.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The Company allocated goodwill related to the SIA Acquisition to the TT segment.

Goodwill is the excess of the consideration transferred over the net assets recognized and represents the expected revenue and cost synergies of the combined company and assembled workforce.

A key factor that contributes to the recognition of goodwill, and a driver for the Company’s acquisition of SIA, is the attractive growth opportunities presented by the surgical matrix business in the breast reconstruction market.

Goodwill recognized as a result of this acquisition is non-deductible for income tax purposes.

Contingent Consideration

As part of the ACell Acquisition, the Company is required to make payments to the former shareholders of ACell up to $ 100 million based on the achievement by the Company of certain revenue-based performance milestones in 2022, 2023, and 2025.

The Company used iterations of the Monte Carlo simulation to calculate the fair value of the contingent consideration that considered the possible outcomes of scenarios related to each specific milestone.

The Company estimated the fair value of the contingent consideration to be $ 23.9 million at the acquisition date.

The estimated fair value as of September 30, 2022 was $ 5.0 million.

The Company recorded $ 5.0 million and $ 23.0 million in other liabilities at September 30, 2022 and September 30, 2021, respectively, in the consolidated balance sheets of the Company.

The change in the fair value of the contingent obligation was primarily as a result of changes in the timing and amount of revenue estimates.

The Company determined the acquisition date fair value of contingent consideration obligations using a Monte Carlo simulation, as well as significant unobservable inputs, reflecting the Company’s assessment of the assumptions market participants would use to value these liabilities.

The Company determines the acquisition date fair value of contingent consideration obligations based on a probability-weighted income approach derived from revenue estimates and a probability assessment with respect to the likelihood of achieving contingent obligations.

The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined using the fair value concepts in ASC 820.

The resultant most likely payouts are discounted using an appropriate effective annual interest rate.

At each reporting date, the contingent consideration obligations are revalued to estimated fair value and changes in fair value will be reflected as income or expense in our consolidated statement of operations.

The resulting most likely payouts are discounted using an appropriate effective annual interest rate.

At each reporting date, the contingent consideration obligation will be revalued to estimated fair value and changes in fair value will be reflected as income or expense in the consolidated statement of operations.

Changes in the fair value of the contingent considerations may result from changes in discount periods and rates and changes in the timing and amount of revenue estimates.

Changes in assumptions utilized in the contingent consideration fair value estimates could result in an increase in the contingent consideration obligation and a corresponding charge to operating results.

As part of the SIA Acquisition, the Company is required to pay to the shareholder of SIA up to $ 90.0 million for two separate payments, which are dependent on 1) achieving certain revenue-based performance milestones in 2023, 2024, and 2025 (up to $ 50.0 million in additional payments), as well as 2) the approval by the FDA of the PMA for DuraSorb for certain uses by certain timing targets (up to $ 40.0 million in additional payments).

The Company used iterations of the Monte Carlo simulation to calculate the fair value of the contingent consideration for the revenue-based milestone that considered the possible outcomes of scenarios related to each specific milestone for the revenue based performance milestone.

The Company used probabilities of achieving the conditions to calculate the fair value of the contingent consideration for the PMA approval milestone.

The Company estimated the fair value of the contingent consideration for the revenue based milestone to be $ 32.6 million at the acquisition date and $ 25.0 million for the PMA approval milestone as of December 31, 2022.

The company recorded a total of $ 48.7 million in other liabilities as of March 31, 2023 and $ 12.5 million in accrued expenses and other current liabilities at March 31, 2023 in the consolidated balance sheet of the company.

The change in the fair value of the contingent obligation was primarily as a result of changes in the timing.

Deferred Tax Liabilities

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These adjustments create excess book basis over tax basis which is tax-effected by the statutory tax rates of applicable jurisdictions.

Sale of non-core traditional wound care business

On August 31, 2022, the Company completed its sale of its non-core traditional wound care ("TWC") business to Gentell, LLC ("Gentell") for $ 28.8 million, which consists of $ 27.8 million in cash plus $ 1.0 million in contingent consideration which may be received upon achieving certain revenue-based performance milestones two years after the closing date.

The proceeds from the sale of the TWC business of $ 27.8 million is presented in the consolidated statement of cash flows net of cash transferred of $ 3.5 million and other transaction fees.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The divestiture did not represent a strategic shift that had a major effect on the Company's operations and financial statements.

Goodwill was allocated to the assets and liabilities divested using the relative fair value method of the TWC business to the Company's TT reportable business segment.

In connection with the sale, the Company recognized $ 0.6 million as a gain from the sale of the business in the condensed consolidated statement of operations for the year ended December 31, 2022.

The transaction is subject to final working capital adjustments.

In addition to the purchase and sale agreement, the Company also entered into a contract manufacturing agreement with Gentell.

Under the terms of the agreement, Gentell received inventory, equipment, and tooling to manufacture certain MediHoney® and TCC-EZ® products on behalf of the Company.

On the close date of this transaction, the Company transferred all inventory associated with these products to Gentell and recognized an asset of $ 11.1 million, as a form of a deposit for the inventory transferred, which based on the expected timing of inventory purchases, was primarily included within prepaid expenses and other current assets in the consolidated balance sheet.

This deposit will be utilized by the Company on future orders placed to Gentell for such products.

As of March 31, 2023, the Company had a deposit remaining of $ 7.3 million which is included in prepaid assets and recognized a payable due to Gentell of $ 0.7 million, which is included in the condensed consolidated balance sheet within accrued expenses and other current liabilities.

REVENUES FROM CONTRACTS WITH CUSTOMERS

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The Company has no significant multi-element contracts with customers.

Significant Judgments

Significant Estimates

Usage-based royalties and licenses are estimated based on the provisions of contracts with customers and recognized in the same period that the royalty-based products are sold by the Company's strategic partners.

5 unchanged sentences

The Company's return policy, as set forth in its product catalogs and sales invoices, requires review and authorization in advance prior to the return of product.

Upon the authorization, a credit will be issued for the goods returned within a set amount of days from the shipment, which is generally ninety days .

In the third quarter of 2022, due to the voluntary recall of the CereLink ® intracranial pressure monitors, the Company recorded a $ 1.5 million provision for product returns, as a reduction of net revenue, and a $ 0.8 million rework accrual in cost of goods sold.

Upon the authorization, a credit will be issued for the goods returned within a set amount of days from the shipment, which is generally 90 days.

The Company disregards the effects of a financing component if the Company expects, at contract inception, that the period between the transfer and customer payment for the goods or services will be one year or less.

The Company has no significant revenues recognized on payments expected to be received more than one year after the transfer of control of products or services to customers.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

Contract Asset and Liability

Revenues recognized from the Company's private label business that are not invoiced to the customers as a result of recognizing revenue over time are recorded as a contract asset included in the prepaid expenses and other current assets account in the consolidated balance sheet.

Upon invoicing to the customer, the balance is recorded in trade receivable, net in the consolidated balance sheet.

Other operating revenues may include fees received under service agreements.

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A portion of the transaction price allocated to the performance obligations to be satisfied in the future periods is recognized as contract liability.

The following table summarized the changes in the contract asset and liability balances for the nine months ended September 30, 2022:

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The following table summarized the changes in the contract asset and liability balances for the three months ended March 31, 2023:

Dollars in thousands Total

1 unchanged sentence

Contract asset, January 1, 2023

Transferred to trade receivable of contract asset included in beginning of the year contract asset ( 11,412 )

Transferred to trade receivable from contract asset included in beginning of the year contract asset ( 9,765 )

Contract asset, net of transferred to trade receivables on contracts during the period 9,713

Contract asset, September 30, 2022

Contract asset, March 31, 2023

Contract Liability

3 unchanged sentences

Foreign currency translation 3

Contract liability, September 30, 2022

At September 30, 2022, the short-term portion of the contract liability of $ 6.4 million and the long-term portion of $ 7.9 million is included in current liabilities and other liabilities, respectively, in the consolidated balance sheets.

As of September 30, 2022, the Company is expected to recognize revenue of approximately 44 % of unsatisfied (or partially unsatisfied) performance obligations as revenue within twelve months , with the remaining balance to be recognized thereafter.

Contract liability, March 31, 2023

At March 31, 2023, the short-term portion of the contract liability of $ 7.7 million and the long-term portion of $ 8.8 million is included in current liabilities and other liabilities, respectively, in the consolidated balance sheets.

As of March 31, 2023, the Company is expected to recognize revenue of approximately 47 % of unsatisfied (or partially unsatisfied) performance obligations as revenue within 12 months, with the remaining balance to be recognized thereafter.

Shipping and Handling Fees

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Taxes Collected from Customers

The Company elected to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

1 unchanged sentence

Disaggregated Revenue

The following table presents revenues disaggregated by the major sources of revenues for the three and nine months ended September 30, 2022 and 2021 (dollar amounts in thousands):

Three Months Ended September 30, 2022 Three Months Ended September 30, 2021 Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021

The following table presents revenues disaggregated by the major sources of revenues for the three months ended March 31, 2023 and 2022 (dollar amounts in thousands):

Three Months Ended March 31, 2023 Three Months Ended March 31, 2022

Neurosurgery $ 192,870 $ 194,675

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Total Tissue Technologies 132,710 129,330

135,395 130,364 404,677 382,349

Total revenue $ 380,846 $ 376,638

(1) On August 31, 2022, the Company completed the sale of its non-core traditional wound care ("TWC") business.

See Note 2, Acquisitions and Divestitures.

See Note 15, Segment and Geographical Information , for details of revenues based on the location of the customer.

Inventories, net consisted of the following:

Dollars in thousands September 30, 2022 December 31, 2021

Dollars in thousands March 31, 2023 December 31, 2022

Finished goods $ 178,626 $ 172,088

3 unchanged sentences

GOODWILL AND OTHER INTANGIBLE ASSETS

Changes in the carrying amount of goodwill for the nine-month period ended September 30, 2022 were as follows:

Changes in the carrying amount of goodwill for the three-month period ended March 31, 2023 were as follows:

Dollars in thousands Codman Specialty

1 unchanged sentence

Goodwill at December 31, 2022 $ 656,219 $ 382,662 $ 1,038,881

Divestitures (1)

— ( 5,019 ) ( 5,019 )

SIA Acquisition Working Capital Adjustment — 129 129

Foreign currency translation 1,639 957 2,596

Goodwill at September 30, 2022

Goodwill at March 31, 2023

$ 657,858 $ 383,748 $ 1,041,606

(1) On August 31, 2022, the Company completed the sale of the TWC business.

See Note 2, Acquisitions and Divestitures.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

2 unchanged sentences

The components of the Company’s identifiable intangible assets were as follows:

September 30, 2022

March 31, 2023

Dollars in thousands Weighted

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$ 1,697,532 $ ( 570,923 ) $ 1,126,609

On August 31, 2022, $ 10.5 million of customer relationship assets, net were divested in conjunction with the sale of the TWC business.

See Note 2 , Acquisitions and Divestitures .

Goodwill and Intangible Assets with Indefinite Lives

The Company tests goodwill and intangible assets with indefinite lives for impairment annually in the third quarter in accordance with ASC Topic 350.

Additionally, the Company may perform interim tests if an event occurs or circumstances change that could potentially reduce the fair value of a reporting unit or indefinite lived intangible asset below its carrying amount.

The carrying value of each reporting unit is determined by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units.

The Company tests for impairment by either performing a qualitative evaluation or a quantitative test.

The qualitative evaluation is an assessment of factors, including reporting unit specific operating results as well as industry, market and general economic conditions, to determine whether it is more likely than not that the fair values of a reporting unit is less than its carrying amount, including goodwill.

The Company may elect to bypass this qualitative evaluation for some or all of its reporting units and perform a quantitative test.

During the third quarter of 2022, the Company elected to perform a qualitative analysis for its three reporting units and intangible asset with indefinite lives.

The Company determined, after performing the qualitative analysis, that there was no evidence that it is more likely than not that the fair value was less that the carrying amounts, therefore, it was not necessary to perform a quantitative impairment test.

Based on quarter-end exchange rates, amortization expense (including amounts reported in cost of goods sold) is expected to be approximately $ 61.8 million for the remainder of 2023, $ 81.8 million in 2024, $ 81.8 million in 2025, $ 81.6 million in 2026, $ 79.7 million in 2027, $ 78.1 million in 2028 and $ 474.4 million thereafter.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

Amendment to the Sixth Amended and Restated Senior Credit Agreement

On February 3, 2020, the Company entered into the sixth amendment and restatement (the "February 2020 Amendment") of its Senior Credit Facility (the "Senior Credit Facility") with a syndicate of lending banks with Bank of America, N.A., as Administrative Agent.

The February 2020 Amendment extended the maturity date to February 3, 2025.

Amendment to the Seventh Amended and Restated Senior Credit Agreement

On March 24, 2023, the Company entered into the March 2023 Amendment of the Senior Credit Facility with a syndicate of lending banks with Bank of America, N.A., as Administrative Agent.

The March 2023 Amendment extended the maturity date to March 24, 2028, amended the contractual repayments of Term loan A, and amended the interest rate from LIBOR to SOFR-indexed interest.

The Company continues to have the aggregate principal amount of up to approximately $ 2.1 billion available to it through the following facilities:

(i) a $ 775.0 million term loan facility, and (ii) a $ 1.3 billion revolving credit facility, which includes a $ 60 million sublimit for the issuance of standby letters of credit and a $ 60 million sublimit for swingline loans.

The Company’s maximum consolidated total leverage ratio in the financial covenants (as defined in the Senior Credit Facility) is the following:

The Company’s maximum consolidated total leverage ratio in the financial covenants (as defined in the Senior Credit Facility) was modified to the following:

Fiscal Quarter Maximum Consolidated Total Leverage Ratio

September 30, 2022 through June 30, 2023 4.50 to 1.00

March 31, 2023 through December 31, 2024 4.50 to 1.00

March 31, 2025 through June 30, 2026 4.25 to 1.00

September 30, 2026 and the last day of each fiscal quarter thereafter 4.00 to 1.00

Borrowings under the Senior Credit Facility bear interest, at the Company’s option, at a rate equal to the following:

the Eurodollar Rate (as defined in the amendment and restatement) in effect from time to time plus the applicable rate (ranging from 1.00 % to 2.25 %), or

term SOFR in effect from time to time plus 0.10 % plus the applicable rate (ranging from 1.00 % to 1.75 %), or

the highest of:

the weighted average overnight Federal funds rate, as published by the Federal Reserve Bank of New York, plus 0.50 %

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

the prime lending rate of Bank of America, N.A.

the one-month Eurodollar Rate plus 1.00 %

The applicable rates are based on the Company’s consolidated total leverage ratio (defined as the ratio of (a) consolidated funded indebtedness as of such date less cash that is not subject to any restriction on the use or investment thereof to (b) consolidated EBITDA, for the period of four consecutive fiscal quarters ending on such date).

the one-month Term SOFR plus 1.00 %

The applicable rates are based on the Company’s consolidated total leverage ratio (defined as the ratio of (a) consolidated funded indebtedness as of such date less cash that is not subject to any restriction on the use or investment thereof to (b) consolidated EBITDA (as defined by the amended Seventh Amended and Restated Credit Agreement (the "Credit Agreement")), for the period of four consecutive fiscal quarters ending on such date).

The Company will pay an annual commitment fee (ranging from 0.15 % to 0.30 %), based on the Company's consolidated total leverage ratio, on the amount available for borrowing under the revolving credit facility.

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subsidiaries, excluding intangible assets.

The Senior Credit Facility is subject to various financial and negative covenants and at September 30, 2022, the Company was in compliance with all such covenants.

At September 30, 2022 and December 31, 2021, there wa s $ 65.0 million an d $ 31.3 million, respectively, ou tstanding under the revolving portion of the Senior Credit Facility at weighted average interest rates of 4.5 % and 1.4 %, respectively.

At September 30, 2022 and December 31, 2021, there was $ 810.0 million and $ 843.8 million, respectively, outstanding under the Term Loan component of the Senior Credit Facility at a weighted average interest rate of 4.5 % and 1.4 %, respectively.

At September 30, 2022 and December 31, 2021, there was $ 56.3 million and $ 45.0 million, respectively of the Term Loan component of the Senior Credit Facility classified as current on the consolidated balance sheets.

The fair value of outstanding borrowings of the Senior Credit Facility's revolving credit and Term Loan components at September 30, 2022 wer e $ 64.1 million and $ 799.7 million, re sp ectively.

These fair values were determined by using a discounted cash flow model based on current market interest rates available to the Company.

The Senior Credit Facility is subject to various financial and negative covenants and at March 31, 2023, the Company was in compliance with all such covenants.

The Company capitalized $ 7.6 million in deferred financing costs in connection with the modification of the Senior Credit Facility and wrote off $ 0.2 million of previously capitalized financing costs during the first quarter of 2023.

At March 31, 2023 and December 31, 2022 there wa s no balance ou tstanding under the revolving portion of the Senior Credit Facility.

At March 31, 2023 and December 31, 2022, there was $ 775.0 million outstanding under the term loan component of the Senior Credit Facility at a weighted average interest rate of 6.3 % and 5.6 %, respectively.

As of March 31, 2023 there was no portion of the Term Loan component of the Senior Credit Facility classified as current on the condensed consolidated balance sheet.

As of December 31, 2022, there was $ 38.1 million of the Term Loan component of the Senior Credit Facility classified as current on the consolidated balance sheets under the prior terms of the agreement.

The fair value of outstanding borrowings of the Senior Credit Facility's Term Loan component at March 31, 2023 was $ 750.9 million.

This fair value was determined by using a discounted cash flow model based on current market interest rates available to the Company.

These inputs are corroborated by observable market data for similar liabilities and therefore classified within Level 2 of the fair value hierarchy.

Level 2 inputs represent inputs that are observable for the asset or liability, either directly or indirectly, and are other than active market observable i nputs that reflect unadjusted quoted prices for identical assets or liabilities.

Letters of credit outstanding as of September 30, 2022 and December 31, 2021 to taled $ 1.6 million.

There were no amounts drawn as of September 30, 2022.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

Letters of credit outstanding as of March 31, 2023 and December 31, 2022 to taled $ 1.6 million.

There were no amounts drawn as of March 31, 2023.

Contractual repayments of the Term Loan component of the Senior Credit Facility are due as follows:

Quarter Ended September 30, 2022

Quarter Ended March 31, 2023

Principal Repayment

1 unchanged sentence

Remainder of 2023

Future interest payments on the term loan component of the Senior Credit Facility based on current interest rates are expected to approximate $ 9.0 million for remainder of 2022, $ 34.2 million in 2023, $ 31.2 million in 2024, and $ 2.8 million in 2025.

Interest is calculated on the term loan portion of the Senior Credit Facility based on LIBOR plus the certain amounts set forth in the Sixth Amended and Restated Credit Agreement.

Thereafter 687,813

Future interest payments on the term loan component of the Senior Credit Facility based on current interest rates are expected to approximate $ 35.9 million for remainder of 2023, $ 38.1 million in 2024, $ 32.6 million in 2025, $ 30.0 million in 2026, and $ 34.5 million thereafter .

Interest is calculated on the term loan portion of the Senior Credit Facility based on SOFR plus the certain amounts set forth in the Credit Agreement.

As the revolving credit facility and Securitization Facility can be repaid at any time, no interest has been included in the calculation.

The outstanding balance of the revolving credit component of the Senior Credit Facility is due on February 3, 2025.

Any outstanding borrowings on the revolving credit component of the Senior Credit Facility is due on March 24, 2028.

Convertible Senior Notes

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The 2025 Notes will mature on August 15, 2025 and bear interest at a rate of 0.5 % per annum payable semi-annually in arrears, unless earlier converted, repurchased or redeemed in accordance with the terms of the 2025 Notes.

The portion of debt proceeds that was classified as equity at the time of the offering was $ 104.5 million.

The effective interest rate implicit in the liability component was 4.2 %.

In connection with this offering, the Company capitalized $ 13.2 million of financing fees.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The 2025 Notes are senior, unsecured obligations of the Company, and are convertible into cash and shares of its common stock based on initial conversion rate, subject to adjustment of 13.5739 shares per $1,000 principal amounts of the 2025 Notes (which represents an initial conversion price of $ 73.67 per share).

4 unchanged sentences

or (4) if specified corporate transactions occur.

As of September 30, 2022, none of these conditions existed with respect to the 2025 Notes and as a result the 2025 Notes are classified as long term.

As of March 31, 2023, none of these conditions existed with respect to the 2025 Notes and as a result the 2025 Notes are classified as long term.

On December 9, 2020, the Company entered into the First Supplemental Indenture to the original agreement dated as of February 4, 2020 between the Company and Citibank, N.A., as trustee, governing the Company’s outstanding 2025 Notes.

8 unchanged sentences

The initial strike price of the warrant transactions was $ 113.34 for the 2025 Notes, subject to customary anti-dilution adjustments.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

At December 31, 2020, the carrying amount of the liability component was $ 485.9 million , the remaining unamortized discount wa s $ 89.1 million , and the principal amount outstanding was $ 575.0 million .

On January 1, 2021, the Company adopted ASU 2020-06 using the modified retrospective method.

See Note 1, Basis of Presentation, for further details.

At September 30, 2022 , the carrying amount of the liability w as $ 575.0 million.

The fair value of the 2025 Notes at September 30, 2022 was $ 505.2 million.

At March 31, 2023 , the carrying amount of the liability w as $ 575.0 million.

The fair value of the 2025 Notes at March 31, 2023 was $ 561.7 million.

Factors that the Company considered when estimating the fair value of the 2025 Notes included recent quoted market prices or dealer quote.

The level of the 2025 Notes is considered as Level 1.

As a result of the adoption of ASU 2020-06, for the nine months ended September 30, 2022 and September 30, 2021, the Company recognized only cash interest related to the contractual interest coupon on the 2025 Notes of $ 2.2 million and $ 2.1 million, respectively.

Securitization Facility

During the fourth quarter of 2018, the Company entered into an accounts receivable securitization facility (the "Securitization Facility") under which accounts receivable of certain domestic subsidiaries are sold on a non-recourse basis to a special purpose entity (“SPE”), which is a bankruptcy-remote, consolidated subsidiary of the Company.

In 2018, the Company entered into an accounts receivable securitization facility (the "Securitization Facility") under which accounts receivable of certain domestic subsidiaries are sold on a non-recourse basis to a special purpose entity (“SPE”), which is a bankruptcy-remote, consolidated subsidiary of the Company.

Accordingly, the assets of the SPE are not available to satisfy the obligations of the Company or any of its subsidiaries.

3 unchanged sentences

An occurrence of an event of default or a termination event under this Securitization Agreement may give rise to the right of its counterparty to terminate this facility.

As of September 30, 2022, the Company was in compliance with the covenants and none of the termination events had occurred.

As of March 31, 2023, the Company was in compliance with the covenants and none of the termination events had occurred.

On May 28, 2021, the Company entered into an amendment (the "May 2021 Amendment") of the Securitization Facility which extended the maturity date from December 21, 2021 to May 28, 2024.

The May 2021 Amendment does not increase the Company’s total indebtedness.

At September 30, 2022 and December 31, 2021, the Company had $ 106.0 million and $ 112.5 million, respectively, of outstanding borrowings under its Securitization Facility at a weighted average interest rate of 3.5 % and 1.1 %, respectively.

The fair value of the outstanding borrowing of the Securitization Facility at September 30, 2022 was $ 104.5 million.

The Securitization Facility is currently indexed to LIBOR.

At March 31, 2023 and December 31, 2022, the Company had $ 102.5 million and $ 104.7 million, respectively, of outstanding borrowings under its Securitization Facility at a weighted average interest rate of 5.8 % and 5.0 %, respectively.

In April 2023, we amended the facility to replace LIBOR with SOFR-indexed interest.

The fair value of the outstanding borrowing of the Securitization Facility at March 31, 2023 was $ 102.2 million.

These fair values were determined by using a discounted cash flow model based on current market interest rates available to the Company.

8 unchanged sentences

The Company uses interest rate swap derivative instruments to manage earnings and cash flow exposure resulting from changes in interest rates.

These interest rate swaps apply a fixed interest rate on a portion of the Company's expected LIBOR-indexed floating-rate borrowings.

The Company held the following interest rate swaps as of September 30, 2022 and December 31, 2021 (dollar amounts in thousands):

September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021

These interest rate swaps apply a fixed interest rate on a portion of the Company's expected SOFR-indexed borrowings.

In connection with the March 2023 Amendment to the Senior Credit Facility, the Company amended its interest rate from LIBOR to SOFR-indexed interest.

In March 2023, the Company entered into a basis swap where the Company receives Term SOFR and pays LIBOR to convert the portfolio of swaps from LIBOR to SOFR.

The Company held the following interest rate swaps as of March 31, 2023 and December 31, 2022 (dollar amounts in thousands):

March 31, 2023 March 31, 2023

Hedged Item Notional Amount Designation Date Effective Date Termination Date Fixed Interest Rate Estimated Fair Value

Asset (Liability)

1-month USD LIBOR Loan 300,000 300,000 December 13, 2017 January 1, 2018 December 31, 2022 2.201 % 1,078 ( 5,268 )

1-month Term SOFR Loan 150,000 December 13, 2017 July 1, 2019 June 30, 2024 2.423 % 4,022

1-month Term SOFR Loan 200,000 December 13, 2017 January 1, 2018 December 31, 2024 2.313 % 6,738

1-month Term SOFR Loan 75,000 October 10, 2018 July 1, 2020 June 30, 2025 3.220 % 1,329

1-month Term SOFR Loan 75,000 October 10, 2018 July 1, 2020 June 30, 2025 3.199 % 1,539

1-month Term SOFR Loan 75,000 October 10, 2018 July 1, 2020 June 30, 2025 3.209 % 1,441

1-month Term SOFR Loan 100,000 December 18, 2018 December 30, 2022 December 31, 2027 2.885 % 2,770

1-month Term SOFR Loan 100,000 December 18, 2018 December 30, 2022 December 31, 2027 2.867 % 2,708

1-month Term SOFR Loan 575,000 December 15, 2020 July 31, 2025 December 31, 2027 1.415 % 19,406

1-month Term SOFR Loan 125,000 December 15, 2020 July 1, 2025 December 31, 2027 1.404 % 4,567

Basis Swap (1)

— March 31, 2023 March 24, 2023 December 31, 2027 N/A ( 1,842 )

$ 1,475,000 $ 42,678

(1) The notional of the basis swap amortizes to match the total notional of the interest rate swap portfolio over time

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

December 31, 2022 December 31, 2022

Hedged Item Notional Amount Designation Date Effective Date Termination Date Fixed Interest Rate Estimated Fair Value

Asset (Liability)

1-month USD LIBOR Loan 150,000 December 13, 2017 July 1, 2019 June 30, 2024 2.423 % 5,012

9 unchanged sentences

The Company has designated these derivative instruments as cash flow hedges.

The Company assesses the effectiveness of these derivative instruments and has recorded the changes in the fair value of the derivative instrument designated as a cash flow hedge as unrealized gains or losses in accumulated other comprehensive loss (“AOCL”), net of tax, until the hedged item has affected earnings, at which point any gain or loss was reclassified to earnings.

The Company assesses the effectiveness of these derivative instruments and has recorded the changes in the fair value of the derivative instrument designated as a cash flow hedge as unrealized gains or losses in accumulated other comprehensive loss (“AOCL”), net of tax, until the hedged item affected earnings, at which point any gain or loss was reclassified to earnings.

If the hedged cash flow does not occur, or if it becomes probable that it will not occur, the Company will reclassify the remaining amount of any gain or loss on the related cash flow hedge recorded in AOCL to interest expense at that time.

7 unchanged sentences

For contracts not designated as hedging instruments, the changes in fair value of the contracts are recognized in other income, net in the consolidated statements of operation, along with the offsetting foreign currency gain or loss on the underlying assets or liabilities.

The success of the Company’s hedging program depends, in part, on forecasts of certain activity denominated in foreign currency.

The Company may experience unanticipated currency exchange gains or losses to the extent that there are differences between forecasted and actual activities during periods of currency volatility.

The success of the Company’s hedging anticipated currency exchange gains or losses to the extent that there are differences between forecasted and actual activities during periods of currency volatility.

In addition, changes in currency exchange rates related to any unhedged transactions may affect earnings and cash flows.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

Cross-Currency Rate Swaps

On October 2, 2017, the Company entered into cross-currency swap agreements to convert a notional amount of $ 300.0 million equivalent to 291.2 million of Swiss Franc ("CHF") denominated intercompany loans into U.S.

The CHF-denominated intercompany loans were the result of the purchase of intellectual property by a subsidiary in Switzerland as part of an acquisition.

As of December 31, 2021, $ 150.0 million of the $ 300.0 million notional amount remained outstanding.

On September 26, 2022, the Company amended the CHF-denominated intercompany loan to extend the termination date to September 2023 and as a result, the Company early terminated the cross-currency swap designated as cash flow hedge of an intercompany loan with aggregate notional amount of 50.0 million.

5 unchanged sentences

As a result, the aggregate notional amount of the related cross-currency swaps will decrease by a corresponding amount.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The objective of these cross-currency swaps is to reduce volatility of earnings and cash flows associated with changes in the foreign currency exchange rate.

2 unchanged sentences

dollars from the counterparties.

The Company held the following cross-currency rate swaps as of September 30, 2022 and December 31, 2021 (dollar amounts in thousands):

September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021

The Company held the following cross-currency rate swaps as of March 31, 2023 and December 31, 2022 (dollar amounts in thousands):

March 31, 2023 December 31, 2022 March 31, 2023 December 31, 2022

Effective Date Termination Date Fixed Rate Aggregate Notional Amount Fair Value

Asset (Liability)

Pay CHF September 28, 2022 September 29, 2023 1.95 % CHF 48,532 — ( 106 ) —

Receive U.S.$ 5.32 % $ 49,142 —

Pay CHF October 2, 2017 October 3, 2022 1.95 % CHF 97,065 145,598 2,281 ( 8,283 )

Receive U.S.$ 4.52 % $ 100,000 150,000

Pay CHF December 21, 2020 December 22, 2025 3.00 % CHF 373,227 397,137 ( 3,033 ) ( 4,241 )

Receive U.S.$ 3.98 % $ 418,980 445,821

Pay CHF September 28, 2022 September 29, 2023 1.95 % CHF 48,533 48,532 ( 4,011 ) ( 3,528 )

Receive U.S.$ 5.32 % $ 49,142 49,142

Total $ ( 7,044 ) $ ( 7,769 )

On October 3 rd , 2022, in accordance with the termination date, the Company settled cross-currency swaps designated as cash flow hedges of an intercompany loan with aggregate notional amounts of $ 100 million.

Based on the closing exchange rates, the gain upon settlement of these swaps was approximately $ 1.6 million which was offset by the loss on the settlement of the intercompany loan.

The cross-currency swaps are carried on the consolidated balance sheet at fair value, and changes in the fair values are recorded as unrealized gains or losses in AOCL.

For the three months ended March 31, 2023, and 2022, the Company recorded a loss of $ 4.9 million and a gain $ 6.5 million, respectively, in other income, net related to change in fair value related to the foreign currency rate translation to offset the losses recognized on the intercompany loans.

For the three months ended March 31, 2023, and 2022, the Company recorded a gain of $ 7.5 million and $ 7.9 million in AOCL, respectively, related to change in fair value of the cross-currency swaps.

For the three months ended March 31, 2023, and 2022, the Company recorded a gain of $ 1.5 million and $ 1.8 million, respectively, in other income, net included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.

The estimated gain that is expected to be reclassified to other income (expense), net from AOCL as of March 31, 2023 within the next twelve months is $ 0.1 million.

As of March 31, 2023, the Company does not expect any gains or losses will be reclassified into earnings as a result of the discontinuance of these cash flow hedges because the original forecasted transaction will not occur.

Net Investment Hedges

1 unchanged sentence

The Company is exposed to foreign exchange risk from its international operations through foreign currency purchases, net investments in foreign subsidiaries, and foreign currency assets and liabilities created in the normal course of business.

On October 1, 2018, December 16, 2020 and May 26, 2022, the Company entered into cross-currency swap agreements designated as net investment hedges to partially offset the effects of foreign currency on foreign subsidiaries.

On October 1, 2018 and December 16, 2020, the Company entered into cross-currency swap agreements designated as net investment hedges to partially offset the effects of foreign currency on foreign subsidiaries.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The Company held the following cross-currency rate swaps designated as net investment hedges as of September 30, 2022 and December 31, 2021, respectively (dollar amounts in thousands):

September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021

The Company held the following cross-currency rate swaps designated as net investment hedges as of March 31, 2023 and December 31, 2022, respectively (dollar amounts in thousands):

March 31, 2023 December 31, 2022 March 31, 2023

December 31, 2022

Effective Date Termination Date Fixed Rate Aggregate Notional Amount Fair Value

4 unchanged sentences

Receive U.S.$ 2.19 % $ 45,000 45,000

Pay CHF December 16, 2020 December 16, 2027 — % CHF — 222,300 — ( 792 )

Receive U.S.$ 1.10 % $ — 250,000

Pay CHF May 26, 2022 December 16, 2028 — % CHF 288,210 288,210 ( 14,711 ) ( 14,663 )

1 unchanged sentence

Total $ ( 6,790 ) $ ( 5,643 )

On May 26, 2022, the Company early settled cross-currency swaps designated as net investment hedge with an aggregate notional amount of $ 250 million equivalent to 222.3 million CHF.

The original settlement date was December 16, 2027.

As a result of the settlement, the Company recorded a gain of $ 4.9 million in AOCL.

On May 26, 2022, the Company entered into cross-currency swap agreements designated as net investment hedge to replace these swaps with a notional amount of $ 300 million equivalent to 288 million CHF.

On September 30, 2021, in accordance with the termination date, the Company settled cross-currency swaps designated as net investment hedge with an aggregate notional amount of $ 52 million equivalent to 44.9 million Euros based on the termination date.

As a result of the settlement, the Company recorded a gain of $ 0.1 million in AOCL.

The cross-currency swaps are carried on the consolidated balance sheet at fair value, and changes in the fair values are recorded as unrealized gains or losses in AOCL

The cross-currency swaps were carried on the consolidated balance sheet at fair value and changes in the fair values were recorded as unrealized gains or losses in AOCL.

For the three months ended March 31, 2023 and 2022, the Company recorded a loss of $ 1.1 million and a gain $ 1.3 million, respectively, in AOCL related to the change in fair value of the cross-currency swaps.

For the three months ended March 31, 2023, and 2022, the Company recorded gains of $ 2.1 million and $ 1.3 million, respectively, in interest income included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.

The estimated gain that is expected to be reclassified to interest income from AOCL as of March 31, 2023 within the next twelve months is $ 10.9 million.

Foreign Currency Forward Contract

The Company has entered into a hedge for forecasted intercompany purchases denominated in foreign currencies through the use of forward contracts designated as cash flow hedges.

To the extent these forward contracts meet hedge accounting criteria, changes in their fair value are not included in accumulated comprehensive loss.

These changes in fair value will be recognized into earnings as a component of cost of sales when the forecasted-transaction occurs.

During the first quarter of 2023 the Company entered into Foreign Currency Forward Contracts with a notional amount of $ 10.8 million to mitigate the risk of foreign currency on intercompany purchases in CHF.

During the three months ended March 31, 2023 the Company recorded an immaterial loss in AOCL related to the change in fair value of the Foreign Currency Forward Contracts.

Counterparty Credit Risk

8 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

Effects of Derivative Instruments on Financial Position and Results of Operations

The following table summarizes the fair value for derivatives designated as hedging instruments in the condensed consolidated balance sheets as of September 30, 2022 and December 31, 2021:

The following table summarizes the fair value for derivatives designated as hedging instruments in the condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022:

Fair Value as of

Location on Balance Sheet (1) :

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Dollars in thousands

3 unchanged sentences

Interest rate swap (2)

$ 15,659 $ 16,682

Cross-currency swap 4,139 4,497

3 unchanged sentences

Interest rate swap (2)

28,861 40,030

Cross-currency swap — —

7 unchanged sentences

Cross-currency swap 4,011 3,528

Foreign currency forward contracts 69

Net Investment Hedges

Cross-currency swap — —

Other liabilities

Cash Flow Hedges

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(1) The Company classifies derivative assets and liabilities as current based on the cash flows expected to be incurred within the following 12 months.

(2) At September 30, 2022 and December 31, 2021, the total notional amounts related to the Company’s interest rate swaps were both $ 1.8 billion, respectively.

(2) At March 31, 2023 and December 31, 2022, the total notional amounts related to the Company’s interest rate swaps were both $ 1.5 billion, respectively.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The following table presents the effect of derivative instruments designated as cash flow hedges and net investment hedges on the AOCL and earnings, both net of tax, during the three and nine months ended September 30, 2022 and 2021:

The following presents the effect of derivative instruments designated as cash flow hedges and net investment hedges on the accompanying condensed consolidated statement of operations during the three months ended March 31, 2023 and 2022:

Dollars in thousands Balance in AOCL

6 unchanged sentences

Statements of

Three Months Ended September 30, 2022

Cash Flow Hedges

Interest rate swap $ 26,939 $ 32,939 $ ( 726 ) $ 60,604 Interest expense

Cross-currency swap ( 17,835 ) 12,332 17,627 ( 23,130 ) Other income, net

Net Investment Hedges

Cross-currency swap 7,506 9,403 2,378 14,531 Interest income

$ 16,610 $ 54,674 $ 19,279 $ 52,005

Three Months Ended September 30, 2021

Cash Flow Hedges

Interest rate swap $ ( 62,736 ) $ 2,488 $ ( 5,434 ) $ ( 54,814 ) Interest expense

Cross-currency swap ( 4,363 ) 7,045 5,874 ( 3,192 ) Other income, net

Net Investment Hedges

Cross-currency swap ( 2,078 ) 6,882 1,749 3,055 Interest income

$ ( 69,177 ) $ 16,415 $ 2,189 $ ( 54,951 )

Dollars in thousands Balance in AOCL

Year Amount of

Recognized in

AOCL Amount of Gain (Loss)

Reclassified from

Earnings Balance in AOCL

End of Quarter Location in

Statements of

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

Cash Flow Hedges

1 unchanged sentence

Cross-currency swap ( 20,271 ) 2,191 ( 3,504 ) ( 14,576 ) Other income, net

Foreign Currency Forward Contract — ( 69 ) — ( 69 ) Cost of Sales

Net Investment Hedges

1 unchanged sentence

$ 29,527 $ ( 7,462 ) $ 2,092 $ 19,973

Nine Months Ended September 30, 2021

Three Months Ended March 31, 2022

Cash Flow Hedges

4 unchanged sentences

$ ( 55,956 ) $ 43,300 $ 4,438 $ ( 17,094 )

For the three and nine months ended September 30, 2022, the Company recorded gains of $ 16.5 million and $ 42.2 million, respectively, in other income, net related to change in fair value related to the foreign currency rate translation of the cross-currency swaps, designated as cash flow hedges, to offset the losses recognized on the intercompany loans.

For the three and nine months ended September 30, 2021, the Company recorded a gains of $ 4.3 million and $ 34.3 million, respectively, in other income, net related to change in fair value related to the foreign currency rate translation of the cross-currency swaps, designated as cash flow hedges, to offset the losses recognized on the intercompany loans.

For the three and nine months ended September 30, 2022, the Company recorded gains of $ 1.1 million and $ 5.0 million, respectively, in other income, net included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps designated as cash flow hedges.

For the three and nine months ended September 30, 2021, the Company recorded gains of $ 1.5 million and $ 4.1 million, respectively, in other income, net included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps designated as cash flow hedges.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The estimated gain that is expected to be reclassified to other income, net from AOCL as of September 30, 2022, for the cross-currency swaps designated as cash flow hedges, within the next twelve months is $ 9.2 million.

As of September 30, 2022, the Company does not expect any gains or losses will be reclassified into earnings as a result of the discontinuance of these cash flow hedges because the original forecasted transaction will not occur.

The estimated gain that is expected to be reclassified to interest income from AOCL as of September 30, 2022, for the c ross-currency swaps designated as net investment hedges, within the next twelve months is $ 16.1 million.

Derivative Instruments not designated hedges:

During the fourth quarter of 2020, the Company entered into foreign currency forward contracts, with a notional amount of $ 4.2 million, to mitigate the foreign exchange risk related to certain intercompany loans denominated in Canadian Dollar ("CAD").

During the second quarter of 2022, the Company entered into foreign currency forward contract, with a notional amount of $ 4.2 million, to mitigate the foreign exchange risk related to certain intercompany receivables denominated in Japanese Yen ("JPY").

These contracts were settled in third quarter of 2022, in accordance with their termination date with a gain of $ 0.2 million.

During the third quarter of 2022, the Company also entered into foreign currency forward contracts, with a notional amount of $ 2.0 million, which was also settled in the third quarter of 2022 in accordance with its term, resulting in a gain of $ 0.1 million.

During the third quarter of 2022, the Company entered into foreign currency forward contracts, with a notional amount of $ 16.4 million, to mitigate the foreign exchange risk related to certain intercompany receivables denominated in JPY, CHF and the Chinese Renminbi traded in Hong Kong.

The contracts are not designated as hedging instruments.

The fair value of the foreign currency forward contracts was $ 1.2 million and $ 0.2 million as of September 30, 2022 and December 31, 2021, respectively.

During the third quarter of 2022, the Company entered into a foreign currency swap, with a notional amount of $ 12.2 million to mitigate the risk from fluctuations in foreign currency exchange rates associated with an intercompany loan denominated in CHF.

During the second quarter of 2021, the Company entered into a foreign currency swap, with a notional amount of $ 7.3 million to mitigate the risk from fluctuations in foreign currency exchange rates associated with an intercompany loan denominated in JPY.

3 unchanged sentences

The following table summarizes the gains (losses) of derivative instruments not designated as hedges on the condensed consolidated statements of income, which was included in other income:

Dollars in thousands Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Foreign currency forward contracts $ 1,162 $ 117 $ 1,154 $ ( 186 )

Dollars in thousands Three Months Ended March 31,

Foreign currency swaps 55 360

1 unchanged sentence

STOCK-BASED COMPENSATION

As of September 30, 2022, the Company had stock options, restricted stock awards, performance stock awards, contract stock awards and restricted stock unit awards outstanding under the Integra LifeSciences Holdings Corporation Fifth Amended and Restated 2003 Equity Incentive Plan (the “2003 Plan”).

As of March 31, 2023, the Company had stock options, restricted stock awards, performance stock awards, contract stock awards and restricted stock unit awards outstanding under the Integra LifeSciences Holdings Corporation Fifth Amended and Restated 2003 Equity Incentive Plan (the “2003 Plan”).

The 2000 and 2001 Equity Incentive Plans were terminated as of February 19, 2021, and no further awards may be issued under the plans.

Stock options issued under the 2003 Plan become exercisable over specified periods, generally within four years from the date of grant for officers and employees, within one year from date of grant for directors which generally expire eight years from the grant date for employees, and from six to ten years for directors and certain executive officers, except in certain instances that result in accelerated vesting due to death, disability, retirement age or change in-control provisions within their grant agreements.

The Company values stock option grants using the binomial distribution model.

Restricted stock issued under the 2003 Plan vests over specified periods, generally three years after the date of grant.

The vesting of performance stock issued under the 2003 Plan is subject to service and performance conditions.

Restricted stock issued under the Plans vests over specified periods, generally three years after the date of grant.

The vesting of performance stock issued under the Plans is subject to service and performance conditions.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

1 unchanged sentence

Stock Options

As of September 30, 2022, there were approx imately $ 3.9 million of total unrecognized compensation costs related to unvested stock options.

As of March 31, 2023, there were approximately $ 5.6 million of total unrecognized compensation costs related to unvested stock options.

These costs are expected to be recognized over a weighted-average period of approximately three years .

There were 145,565 stock options granted during the nine months ended September 30, 2022.

For the nine months ended September 30, 2022, the weighted average grant date fair value for stock options was $ 23.15 per option.

There were 151,293 stock options granted during the three months ended March 31, 2023.

For the three months ended March 31, 2023, the weighted average grant date fair value for stock options granted was $ 21.58 per option.

Awards of Restricted Stock and Performance Stock

2 unchanged sentences

The Company expenses the fair value of restricted stock awards on a straight-line basis over the requisite service period.

A s of September 30, 2022, there was approximately $ 33.6 million of total unrecognized compensation costs related to these unvested awards.

As of March 31, 2023, there was approximately $ 48.6 million of total unrecognized compensation costs related to these unvested awards.

The Company expects to recognize these costs over a weighted-average period of approximately two years .

The Company granted 397,333 restricted stock awards and 130,753 performance stock awards during the nine months ended September 30, 2022.

For the nine months ended September 30, 2022, the weighted average grant date fair value for restricted stock awards and performance stock units was $ 63.62 and $ 65.11 per award, respectively.

The Company granted 346,745 restricted stock awards and 161,218 performance stock awards during the three months ended March 31, 2023.

For the three months ended March 31, 2023, the weighted average grant date fair value for restricted stock awards and performance stock units granted was $ 53.37 and $ 52.87 per award, respectively.

The Company also maintains an Employee Stock Purchase Plan (the “ESPP”), which provides eligible employees with the opportunity to acquire shares of common stock at periodic intervals by means of accumulated payroll deductions.

2 unchanged sentences

The Company maintains defined benefit pension plans that cover certain employees in France, Japan, Germany and Switzerland.

Net periodic benefit cost for the Company’s defined benefit pension plans for the three and nine months ended September 30, 2022 were $ 0.3 million and $ 0.8 million.

The components of the net periodic benefit costs other than the service cost component of $ 0.6 million and $ 1.9 million for the three and nine months ended September 30, 2022 are included in other income, net in the consolidated statements of operations.

Net periodic benefit costs for the Company’s defined benefit pension plans for the three and nine months ended September 30, 2021 were $ 0.5 million and $ 1.8 million.

The components of the net periodic benefit costs other than the service cost component of $ 0.8 million and $ 2.4 million for the three and nine months ended September 30, 2021 are included in other income, net in the consolidated statements of operations.

The estimated fair values of plan assets were $ 34.0 million and $ 39.9 million as of September 30, 2022 and December 31, 2021, respectively.

The net plan assets of the pension plans are invested in common trusts as of September 30, 2022 and December 31, 2021.

Net periodic benefit costs for the Company’s defined benefit pension plans for the three months ended March 31, 2023 were $ 0.3 million.

The components of the net periodic benefit costs other than the service cost component of $ 0.5 million for the three months ended March 31, 2023 are included in other income, net in the consolidated statements of operations.

Net periodic benefit costs for the Company’s defined benefit pension plans for the three months ended March 31, 2022 were $ 0.3 million.

The components of the net periodic benefit costs other than the service cost component of $ 0.7 million for the three months ended March 31, 2022 are included in other income, net in the consolidated statements of operations.

The estimated fair values of plan assets were $ 36.4 million and $ 38.1 million as of March 31, 2023 and December 31, 2022, respectively.

The net plan assets of the pension plans are invested in common trusts as of March 31, 2023 and December 31, 2022.

Common trusts are classified as Level 2 in the fair value hierarchy.

5 unchanged sentences

Assets of the Company's deferred compensation plan are included in other current assets and recorded at fair value based on their quoted market prices.

The fair value of these assets were $ 4.3 million and $ 3.8 million as of September 30, 2022 and December 31, 2021.

The fair value of these assets were $ 5.0 million and $ 4.7 million as of March 31, 2023 and December 31, 2022, respectively.

Offsetting liabilities relating to the deferred compensation plan are included in Other liabilities.

1 unchanged sentence

The Company leases administrative, manufacturing, research and distribution facilities and vehicles through operating lease agreements.

The Company has no finance leases as of September 30, 2022.

The Company has no finance leases as of March 31, 2023.

Many of the Company's leases include both lease (e.g., fixed payments including rent) and non-lease components (e.g., common-area or other maintenance costs).

6 unchanged sentences

As most of the Company's leases do not provide an implicit rate, the Company uses a collateralized incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments.

Total operating lease expense for the nine months ended September 30, 2022 and September 30, 2021 was $ 16.6 million and $ 15.7 million respectively, which includes $ 0.2 million, in related party operating lease expense.

Total operating lease expense for the three months ended March 31, 2023 and March 31, 2022 was $ 6.0 million and $ 4.9 million respectively, which includes $ 0.1 million, in related party operating lease expense.

Supplemental balance sheet information related to operating leases were as follows:

Dollars in thousands, except lease term and discount rate September 30, 2022 December 31, 2021

Dollars in thousands, except lease term and discount rate March 31, 2023 December 31, 2022

ROU assets $ 146,514 $ 148,284

8 unchanged sentences

Leased vehicles 2.8 % 2.7 %

Supplemental cash flow information related to leases for the nine months ended September 30, 2022 and 2021 were as follows:

Dollars in thousands September 30, 2022 September 30, 2021

Supplemental cash flow information related to leases for the three months ended March 31, 2023 and 2022 were as follows:

Dollars in thousands March 31, 2023 March 31, 2022

Cash paid for amounts included in the measurement of lease liabilities:

2 unchanged sentences

Operating leases $ 1,721 $ 507

Future minimum lease payments under operating leases at September 30, 2022 were as follows:

Future minimum lease payments under operating leases at March 31, 2023 were as follows:

Dollars in thousands Related Parties Third Parties Total

14 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

There were no future minimum lease payments under finance leases at March 31, 2023.

Related Party Leases

The Company leases its manufacturing facility in Plainsboro, New Jersey, from a general partnership that is 50 % owned by a corporation whose stockholders are trusts, whose beneficiaries include family members of the Company’s former director.

The Company leases its manufacturing facility in Plainsboro, New Jersey, from Plainsboro Associates, a New Jersey general partnership.

Ocirne, Inc., a subsidiary of Provco Industries, owns a 50 % % interest in Plainsboro Associates.

Provco Industries is the corporate general partner of Tru St.

Partnership LLP, a principal stockholder of the Company.

The term of the current lease agreement is through October 31, 2029 at an annual rate of approximately $ 0.3 million per year.

1 unchanged sentence

TREASURY STOCK

On April 26 2022, the Board of Directors authorized the Company to repurchase up to $ 225.0 million of the Company’s common stock.

The program allows the Company to repurchase its shares opportunistically from time to time.

The repurchase authorization expires in December 2024.

This stock repurchase authorization replaces the previous $ 225 million stock repurchase authorization, of which $ 100 million remained authorized at the time of its replacement, and which was otherwise set to expire on December 31, 2022.

Purchases may be affected through one or more open market transactions, privately negotiated transactions, transactions structured through investment banking institutions, or a combination of the foregoing.

As of September 30, 2022 and December 31, 2021, there were 6.8 million and 4.9 million shares of treasury stock outstanding with a cost of $ 362.9 million and $ 234.4 million, at a weighted average cost per share of $ 53.18 and $ 47.86 , respectively.

On January 12, 2022, the Company entered into a $ 125.0 million accelerated share repurchase ("2022 ASR") and received 1.48 million shares of Company common stock at inception, which represented approximately 80 % of the expected total shares.

On March 24, 2022, the early exercise provision was exercised by the 2022 ASR counterparty.

As of March 31, 2023 and December 31, 2022, there were 8.9 million and 6.8 million shares of treasury stock outstanding with a cost of $ 481.7 million and $ 362.9 million, at a weighted average cost per share of $ 54.01 and $ 53.18 , respectively.

On January 26, 2023, the Company entered into a $ 150 million accelerated share repurchase ("2023 ASR") and received 2.1 million shares of the Company common stock at inception of the 2023 ASR, which represented approximately 80 % of the expected total shares under the 2023 ASR.

The remaining repurchase transactions are expected to be completed in the second quarter of 2023.

On August 16, 2022, the Inflation Reduction Act of 2022 (the “Act”) was signed into law.

The Act implements a new excise tax of 1% on the net share repurchases made by the company effective for share repurchases performed January 1, 2023, or after.

The company accrued $ 1.2 million regarding the excise tax in Q-1 related to the ASR mentioned above.

On January 12, 2022, the Company entered into a $ 125 million accelerated share repurchase ("2022 ASR") and received 1.48 million shares of Company common stock at inception of the 2022 ASR, which represented approximately 80 % of the expected total shares under the 2022 ASR.

On March 24, 2022, the early exercise provision under the 2022 ASR was exercised by 2022 ASR counterparty.

Upon settlement on March 24, 2022, the Company received an additional 0.46 million shares determined using the volume-weighted average price of the Company's common stock during the term of the 2022 ASR.

The following table provides a summary of the Company's effective tax rate:

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Three Months Ended March 31,

Reported tax rate 18.6 % 16.3 %

The Company’s effective income tax rates for the three months ended September 30, 2022 and 2021 were 15.1 % and 14.9 %, respectively.

For the three months ended September 30, 2022, the primary driver of the higher tax rate is a decrease of income in lower-taxed jurisdictions, offset by a $ 1.2 million benefit related to prior year amended tax returns.

The Company’s effective income tax rates for the nine months ended September 30, 2022 and 2021 were 14.8 % and 24.1 %, respectively.

For the nine months ended September 30, 2022, the primary driver of the lower tax rate is a $ 5.5 million benefit related to excess tax benefits from stock compensation, offset by the prior year tax impact of the gain on the sale of the Extremity Orthopedics business, which was completed during the first quarter of 2021.

The Company’s effective income tax rates for the three months ended March 31, 2023 and 2022 w ere 18.6 % and 16.3 %, respectively.

For the three months ended March 31, 2023, the primary driver of the higher tax rate relates to a reduction of excess tax benefits from stock compensation.

Changes to income tax laws and regulations, in any of the tax jurisdictions in which the Company operates, could impact the effective tax rate.

5 unchanged sentences

jurisdictions could have an adverse effect on the Company’s effective tax rate.

On August 16, President Biden signed into law the Inflation Reduction Act of 2022.

The Act imposes a Corporate Minimum Tax of 15% on book income profits greater than $1 billion.

The company is not expected to be subject to the Corporate Minimum Tax.

The act provides for credits for investments in clean energy production, and the Company is exploring whether those credits align with any plans it may develop for clean energy production.

The Act imposes an excise tax of 1% on share repurchases.

Beginning in 2023, all share repurchases shall be subject to the excise tax, but the Company does not expect the excise tax to impact the company’s capital deployment plans.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

As of September 30, 2022, the Company has not provided deferred income taxes on unrepatriated earnings from foreign subsidiaries as they are deemed to be indefinitely reinvested unless there is a manner under which to remit the earnings with no material tax cost.

As of March 31, 2023, the Company has not provided deferred income taxes on unrepatriated earnings from foreign subsidiaries as they are deemed to be indefinitely reinvested unless there is a manner under which to remit the earnings with no material tax cost.

Material taxes would primarily be attributable to foreign withholding taxes and local income taxes when such earnings are distributed.

1 unchanged sentence

Reinvestment considerations would include future acquisitions, transactions, and capital expenditure plans.

As such, the Company has determined the tax impact of repatriating these foreign earnings would not be material as of September 30, 2022.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

NET INCOME PER SHARE

Basic and diluted net income per share was as follows:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

Dollars in thousands, except per share amounts 2023 2022

10 unchanged sentences

Diluted net income per common share $ 0.29 $ 0.39

Common stock of approximately 0.3 million an d 0.1 million shares at September 30, 2022, and 2021, res pectively that are issuable through exercise of dilutive securities were not included in the computation of diluted net income per share because their effect would have been anti-dilutive.

Based on the adoption of ASU 2020-06, as the principal amount of the 2025 Notes will be paid in cash and only the conversion spread is settled in shares, the Company will be utilizing the if-converted method and only includes the net number of incremental shares that would be issued upon conversion.

ACCUMULATED OTHER COMPREHENSIVE LOSS

Comprehensive income for the nine months ended September 30, 2022 and 2021 was as follows:

Three Months Ended September 30, Nine Months Ended September 30,

Common stock of approximately 0.3 million an d 0.2 million shares at March 31, 2023, and 2022, res pectively that are issuable through exercise of dilutive securities were not included in the computation of diluted net income per share because their effect would have been anti-dilutive.

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Comprehensive income for the three months ended March 31, 2023 and 2022 was as follows:

Three Months Ended March 31,

Dollars in thousands 2023 2022

1 unchanged sentence

Foreign currency translation adjustment 4,076 ( 5,683 )

Change in unrealized gain (loss) on derivatives, net of tax 27,213 10,964 82,957 40,075

Change in unrealized loss/(gain) on derivatives, net of tax ( 7,377 ) 29,822

Pension liability adjustment, net of tax 103 ( 9 )

Comprehensive income, net $ 21,028 $ 57,031

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

Changes in accumulated other comprehensive loss by component between December 31, 2021 and September 30, 2022 are presented in the table below, net of tax:

Changes in accumulated other comprehensive income by component between December 31, 2022 and March 31, 2023 are presented in the table below, net of tax:

Dollars in thousands Gains and Losses on Derivatives Defined Benefit Pension Items Foreign Currency Items Total

4 unchanged sentences

Net current-period other comprehensive gain (loss) ( 7,377 ) 103 4,076 ( 3,198 )

Balance at September 30, 2022

Balance at March 31, 2023

$ 15,440 $ 9,425 $ ( 17,798 ) $ 7,067

For the nine months ended September 30, 2022, the Company reclassified a gain of $ 36.3 million and a loss of $ 4.0 million from accumulated other comprehensive loss to other income, net and interest income, respectively.

For the three months ended March 31, 2023, the Company reclassified a gain of $ 4.3 million and a loss of $ 2.7 million from accumulated other comprehensive income to other income, net and interest income, respectively.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

SEGMENT AND GEOGRAPHIC INFORMATION

1 unchanged sentence

The two reportable segments and their activities are described below.

• The Codman Specialty Surgical segment includes (i) the Neurosurgery business, which sells a full line of products for neurosurgery and neuro critical care such as tissue ablation equipment, dural repair products, cerebral spinal fluid management devices, intracranial monitoring equipment, cranial stabilization equipment, and solutions for use in minimally invasive neurosurgery and in the management of intracerebral hemorrhages, and (ii) the Instruments business, which sells more than 40,000 instrument patterns and surgical and lighting products to hospitals, surgery centers, dental, podiatry, and veterinary offices.

• The Tissue Technologies segment includes a large, complementary portfolio of products to address plastic and surgical reconstructive procedures such as complex and traumatic wounds, hernia and abdominal wall repair, breast reconstruction, and peripheral nerve repair.

The Tissue Technologies segment has four unique technology platforms, including bovine engineered collagen matrix, bovine dermal matrix, amniotic technology and porcine bladder matrix technology, to address regenerative soft tissue reconstruction procedures.

• The Codman Specialty Surgical segment includes (i) the Neurosurgery business, which sells a full line of products for neurosurgery and neuro critical care such as tissue ablation equipment, dural repair products, cerebral spinal fluid management devices, intracranial monitoring equipment, and cranial stabilization equipment and (ii) the Instruments business, which sells more than 40,000 instrument patterns and surgical and lighting products to hospitals, surgery centers, dental, podiatry, and veterinary offices.

• The TT segment includes such offerings as skin and wound repair, plastics & surgical reconstruction products, bone grafts, and nerve and tendon repair products.

The Corporate and other category includes (i) various executive, finance, human resource, information systems and legal functions, (ii) brand management, and (iii) share-based compensation costs.

The operating results of the various reportable segments as presented are not comparable to one another because (i) certain operating segments are more dependent than others on corporate functions for unallocated general and administrative and/or operational manufacturing functions, and (ii) the Company does not allocate certain manufacturing costs and general and administrative costs to the operating segment results.

Net sales and profit by each reportable segment for the three and nine months ended September 30, 2022 and 2021 are as follows:

Three Months Ended September 30, Nine Months Ended September 30,

Net sales and profit by each reportable segment for the three months ended March 31, 2023 and 2022 are as follows:

Three Months Ended March 31,

Dollars in thousands 2023 2022

12 unchanged sentences

Operating income $ 36,382 $ 46,164

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The Company does not allocate any assets to the reportable segments.

2 unchanged sentences

Total revenue by major geographic area consisted of the following:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

Dollars in thousands 2023 2022

7 unchanged sentences

The royalty payments that the Company made under these agreements were not significant for any of the periods presented.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The Company is subject to various claims, lawsuits and proceedings in the ordinary course of the Company's business, including claims by current or former employees, distributors and competitors and with respect to its products and product liability claims, lawsuits and proceedings, some of which have been settled by the Company.

5 unchanged sentences

Contingent Consideration

The Company determined the fair value of contingent consideration during the nine month period ended September 30, 2022 and September 30, 2021 to reflect the change in estimate, additions, payments, transfers and the time value of money during the period.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

A reconciliation of the opening balances to the closing balances of these Level 3 measurements for the nine months ended September 30, 2022 and September 30, 2021 is as follows (in thousands):

Nine Months Ended September 30, 2022 Contingent Consideration Liability Related to Acquisition of:

Arkis Location in Financial Statements Derma Sciences ACell Inc.

(See Note 2) Location in Financial Statements

Short-term Long-term Long-term Short-term Long-term

The Company determined the fair value of contingent consideration during the three month period ended March 31, 2023 and March 31, 2022 to reflect the change in estimate, additions, payments, transfers and the time value of money during the period.

A reconciliation of the opening balances to the closing balances of these Level 3 measurements for the three months ended March 31, 2023 and March 31, 2022 is as follows (in thousands):

Three Months Ended March 31, 2023 Contingent Consideration Liability Related to Acquisition of:

Arkis Location in Financial Statements Derma Sciences ACell Surgical Innovations Associates, Inc.

(FN 2) Location in Financial Statements

Short-term Long-term Long-term Long-term Short-term Long-term

Balance as of January 1, 2023

2 unchanged sentences

Change in fair value of contingent consideration liabilities 1,543 1,756 Research and development — ( 2,200 ) — 3,600 Selling, general and administrative

Balance as of September 30, 2022 $ 2,829 $ 9,589 $ 230 $ — $ 5,000

Nine Months Ended September 30, 2021 Contingent Consideration Liability Related to Acquisition of:

Balance as of March 31, 2023 4,388 11,806 230 1,500 12,500 48,707

Three Months Ended March 31, 2022 Contingent Consideration Liability Related to Acquisition of:

Arkis Location in Financial Statements Derma Sciences ACell Inc.

(See Note 2) Location in Financial Statements

Short-term Long-term Long-term Long-term

Location in Financial Statements

Short-term Long-term Long-term Short-term Long-term

Balance as of January 1, 2022

$ 3,691 $ 11,408 $ 230 $ — $ 21,800

Additions from acquisition of ACell — — — 23,900

Transfers 59 ( 59 ) — 4,885 ( 4,885 )

Change in fair value of contingent consideration liabilities — ( 1,065 ) Research and development — — 300 Selling, general and administrative

Balance as of September 30, 2021

Balance as of March 31, 2022

$ 3,750 $ 10,284 $ 230 $ 4,885 $ 17,215

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

Arkis BioSciences Inc.

On July 29, 2019, the Company acquired Arkis BioSciences Inc.

("Arkis") for an acquisition purchase price of $ 30.6 million (the "Arkis Acquisition") plus contingent consideration of up to $ 25.5 million, that may be payable based on the successful completion of certain development and commercial milestones.

Arkis was a privately-held company that marketed the CerebroFlo ® external ventricular drainage catheter with Endexo ® technology, a permanent additive designed to reduce the potential for catheter obstruction due to thrombus formation.

As part of the acquisition, the Company is required to pay the former shareholders of Arkis up to $ 25.5 million based on the timing of certain development milestones of $ 10.0 million and commercial sales milestones of $ 15.5 million, respectively.

As part of the acquisition of Arkis BioSciences Inc.

("Arkis"), the Company is required to pay the former shareholders of Arkis up to $ 25.5 million based on the timing of certain development milestones of $ 10.0 million and commercial sales milestones of $ 15.5 million, respectively.

The Company used a probability weighted income approach to calculate the fair value of the contingent consideration that considered the possible outcomes of scenarios related to each specified milestone.

The Company estimated the fair value of the contingent consideration to be $ 13.1 million at the acquisition date.

The estimated fair value as of September 30, 2022 and September 30, 2021 was $ 12.4 million and $ 14.6 million, respectively.

The Company recorded $ 9.6 million and $ 14.6 million in other liabilities at September 30, 2022 and September 30, 2021, respectively, and $ 2.8 million in accrued expenses and other current liabilities at September 30, 2022, in the consolidated balance sheet of the Company.

The estimated fair value as of March 31, 2023 and March 31, 2022 was $ 16.2 million and $ 14.0 million, respectively.

The Company recorded $ 11.8 million and $ 10.3 million in other liabilities at March 31, 2023 and March 31, 2022, respectively, and $ 4.4 million and $ 3.8 million in accrued expenses and other current liabilities at March 31, 2023 and March 31, 2022, respectively, in the consolidated balance sheet of the Company.

Derma Sciences

5 unchanged sentences

The potential maximum undiscounted payment amounts to $ 3.0 million.

The estimated fair value as of September 30, 2022 and September 30, 2021 was $ 0.2 million.

The estimated fair value as of March 31, 2023 and March 31, 2022 was $ 0.2 million.

The Company estimated the fair value of the contingent consideration to be $ 23.9 million at the acquisition date.

The estimated fair value as of March 31, 2023 was $ 1.5 million .

The Company recorded $ 1.5 million and $ 17.2 million in other liabilities at March 31, 2023 and March 31, 2022, respectively, and $ 4.9 million in accrued expenses and other current liabilities at March 31, 2022 in the consolidated balance sheets of the Company.

The change in the fair value of the contingent obligation was primarily as a result of changes in the timing and amount of revenue estimates.

Table of Contents "

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

What changed 10-Q

Item 1. Financial Statements