What changed in this filing

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Item 1. Financial Statements

2024-07-29 compared with 2024-05-06 · 318 added, 184 removed, 724 unchanged (41% of the section changed)

4 unchanged sentences

(Dollars in thousands, except per share amounts)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Total revenue, net $ 418,175 $ 381,267 $ 787,047 $ 762,113

24 unchanged sentences

(Dollars in thousands, except per share amounts)

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Current assets:

38 unchanged sentences

240,000 authorized shares;

91,484 and 90,920 issued at March 31, 2024 and December 31, 2023, respectively

91,591 and 90,920 issued at June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 1,301,582 1,302,484

Treasury stock, at cost;

12,735 shares and 12,751 shares at March 31, 2024 and December 31, 2023, respectively

14,008 shares and 12,751 shares at June 30, 2024 and December 31, 2023, respectively

( 680,753 ) ( 647,262 )

7 unchanged sentences

(Dollars in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

OPERATING ACTIVITIES:

20 unchanged sentences

Purchases of property and equipment ( 45,172 ) ( 29,252 )

Cash (paid) for business acquisitions, net of cash acquired ( 281,994 ) —

Purchases of Investments ( 48,997 ) —

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Purchases of treasury stock ( 50,000 ) ( 150,000 )

Payments for Contingent Consideration ( 11,923 ) —

Proceeds from exercised stock options 6,398 3,437

2 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents ( 6,088 ) 724

Net increase (decrease) in cash and cash equivalents 315,504 ( 149,294 )

Net (decrease) in cash and cash equivalents ( 61,166 ) ( 147,469 )

Cash and cash equivalents at beginning of period 276,402 456,661

4 unchanged sentences

(Dollars in thousands)

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

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

6 unchanged sentences

Share-based compensation — 4 — — 5,608 — — 5,612

Accelerated shares repurchased — $ — — — — $ — — —

Balance, March 31, 2024 91,484 $ 915 ( 12,735 ) $ ( 646,422 ) $ 1,310,527 $ ( 10,646 ) $ 943,578 $ 1,597,952

Three Months Ended March 31, 2023

Net income — — — — — — ( 12,402 ) ( 12,402 )

Other comprehensive loss, net of tax — — — — — ( 8,080 ) — ( 8,080 )

Issuance of common stock for vesting of share based awards, net of shares withheld for taxes 107 1 — 20 ( 101 ) — — ( 80 )

Share-based compensation — — — — 7,305 — — 7,305

Accelerated shares repurchased — $ — ( 1,273 ) ( 34,351 ) ( 16,149 ) $ — $ — ( 50,500 )

Balance, June 30, 2024 91,591 $ 916 ( 14,008 ) $ ( 680,753 ) $ 1,301,582 $ ( 18,726 ) $ 931,176 $ 1,534,195

Six Months Ended June 30, 2023

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

3 unchanged sentences

Net income — — — — — — 24,226 24,226

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

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

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

4 unchanged sentences

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

Net income — — — — — — 4,184 4,184

Other comprehensive income (loss), net of tax — — — — — ( 2,237 ) — ( 2,237 )

Issuance of common stock for vesting of share based awards, net of shares withheld for taxes 68 1 — 21 985 — — 1,007

Share-based compensation — — — — 5,268 — — 5,268

Accelerated shares repurchased — $ — ( 609 ) $ ( 32,125 ) $ 32,125 $ — $ — —

Balance, June 30, 2023

90,881 909 ( 9,527 ) ( 513,782 ) 1,283,675 4,830 907,528 1,683,160

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

3 unchanged sentences

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 March 31, 2024 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.

In the opinion of management, the June 30, 2024 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, 2023 included in the Company’s Annual Report on Form 10-K.

The December 31, 2023 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, 2024 are not necessarily indicative of the results to be expected for the entire year.

The consolidated balance sheet as of December 31, 2023 was derived from audited financial statements, but does not include all disclosures required by GAAP.

Operating results for the three and six-month period ended June 30, 2024 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.

Significant estimates affecting amounts reported or disclosed in the unaudited 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.

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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.

In addition, on April 17, 2023 the Company entered into an amendment (the “April 2023 Amendment”) of the Securitization Facility (as defined below) and amended the interest rate from LIBOR to SOFR indexed rate.

(See Note 6, Debt ).

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 Topic 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.

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

The Company has elected to adopt the optional expedient under Topic 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.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

2 unchanged sentences

Improvements to Income Tax Disclosures which enhances the transparency of income tax disclosures by expanding annual disclosure requirements related to the rate reconciliation and income taxes paid.

The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024.

The amendments are effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

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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.

Cash and cash equivalents

The Company had cash and cash equivalents, primarily consisting of cash on-hand as well as time deposits with original maturities of three months or less and money market funds which are highly liquid and readily convertible to cash, totaling approximately $ 215.2 million and $ 276.4 million at June 30, 2024 and December 31, 2023 respectively.

Time deposits with original maturities of three months or less and money market funds are valued based on Level 1 measurements in the fair value hierarchy established within FASB Topic 820, Fair Value Measurement (“ASC 820”).

Level 1 inputs represent quoted prices in active markets for identical assets or liabilities.

Short-term investments

The Company had short term investments, primarily consisting of time deposits with original maturities between three months and one year, which are valued based on Level 1 measurements in the fair value hierarchy, totaling approximately $ 81.7 million at June 30, 2024 compared to $ 32.7 million at December 31, 2023.

ACQUISITIONS AND DIVESTITURES

Acquisition of Acclarent, Inc.

In December 2023, the Company entered into a definitive agreement to acquire Acclarent, Inc.

(“Acclarent”) from Ethicon, Inc., a subsidiary of Johnson & Johnson, for $ 275.0 million in cash at closing, subject to customary purchase price adjustments, and an additional $ 5.0 million contingent upon the achievement of a regulatory milestone, which was achieved prior to closing.

Acclarent is a developer and marketer of medical devices used in Ear, Nose, Throat (“ENT”) procedures.

Acclarent’s results of operations will be reported in the Company’s Codman Specialty Surgical reportable segment from the date of acquisition.

On April 1, 2024, the Company successfully completed the acquisition of 100 % of Acclarent for approximately $ 282.0 million in cash, subject to customary adjustments set forth in the purchase agreement related to working capital balances transferred to the Company.

To facilitate the completion of the acquisition of Acclarent, the Company drew from the revolving portion of the Senior Credit Facility during the three months ended March 31, 2024.

For further detail on the Company’s additional borrowings, see Note 6.

On April 1, 2024, the Company completed the acquisition of all of the outstanding capital stock of Acclarent, Inc.

(“Acclarent”), a developer and marketer of medical devices used in ear, nose, throat (“ENT”) procedures, from Ethicon, Inc., a subsidiary of Johnson & Johnson, for approximately $ 282.0 million in cash, subject to customary adjustments set forth in the purchase agreement related to working capital balances transferred to the Company.

The addition of Acclarent’s ENT product portfolio, including sinus balloon dilation, eustachian tube balloon dilation, and surgical navigation systems technologies, and dedicated salesforce will enhance the Company’s position in the ENT specialty device market.

Acclarent’s results of operations have been reported in the Company’s Codman Specialty Surgical reportable segment from the date of acquisition.

The Company recorded revenue from Acclarent of approximately $ 31.3 million, in the consolidated statements of operations and comprehensive income for the three months ended June 30, 2024.

The net income or loss attributable to this acquisition cannot be identified on a stand-alone basis because it is in the process of being integrated into the Company’s operations.

Assets Acquired and Liabilities Assumed at Fair Value

The Acclarent acquisition has been accounted for using the acquisition method of accounting in accordance with FASB Topic ASC 805, Business Combinations (“ASC 805”).

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

The Company estimated fair values at the date of acquisition for the preliminary allocation of consideration to the net tangible and intangible assets acquired and liabilities assumed.

The Company has not completed its analysis regarding the assets acquired and liabilities assumed.

Therefore, the allocation to intangible assets, goodwill, and income taxes are preliminary and subject to finalization.

During the measurement period ending no later than one year after the acquisition date, the Company will continue to obtain information to assist in finalizing the fair values of the net assets acquired, which may differ materially from these preliminary estimates.

If any measurement period adjustment is material, the Company will record such adjustment, including any related impact on net income, in the reporting period in which the adjustment is determined.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

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

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

Dollars in thousands Estimated Fair Value Estimated Useful Life

Current assets:

Trade accounts receivable, net 23,716

Inventories, net 20,294

Prepaid expenses 273

Other current assets 476

Total current assets $ 44,759

Property, plant and equipment, net 7,716

Right of use asset - operating leases 989

Intangible assets, net

Completed technology 202,000 12 years

Trademarks/brand names 3,000 5 years

All other 17,000 4 years

Goodwill 65,579

Deferred tax assets 6,863

Total assets acquired $ 347,906

Current liabilities:

Accounts payable, trade $ 3,989

Contract liabilities 3,984

Accrued compensation 1,037

Accrued expenses and other current liabilities 2,278

Current portion of lease liability - operating leases 365

Total current liabilities $ 11,653

Lease liability - operating leases 624

Deferred tax liabilities 53,635

Total liabilities assumed 65,912

Net assets acquired $ 281,994

The carrying value of trade accounts receivable, prepaid expenses, other current assets, accounts payable, contract liabilities, accrued compensation, accrued expenses and other current liabilities, as well as certain other current and non-current assets and liabilities, generally represented the fair value at the date of acquisition.

Intangible Assets

The estimated fair value of the intangible assets 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 attributable to the intangible assets.

The significant assumptions used in developing the valuation included the estimated annual net cash flows including application of forecasted revenue, the discount rate that appropriately reflects the risk inherent in each future cash flow stream, and an assessment of the asset’s life cycle, as well as other factors.

The assumptions used in the financial forecasts were based on historical data, supplemented by current and anticipated growth rates, management plans, and market-comparable information.

Fair-value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors.

Preliminary assumptions may change and may result in significant changes to the final valuation.

The intangible assets acquired have a weighted average useful life of 11 years.

The Company used a discount rate of 12.2 % 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.

No assurances can be given that the underlying assumptions used to prepare the discounted cash flow analysis will not change.

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

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

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

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 has been allocated to the Codman Specialty Surgical segment, as shown in Note 5.

Goodwill and Other Intangible Assets .

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

Deferred Tax Liabilities

Deferred tax liabilities result from identifiable intangible assets’ fair value adjustments.

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

REVENUES FROM CONTRACTS WITH CUSTOMERS

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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.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

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

In 2023, due to the voluntary recall of all products manufactured at the Boston facility, including PriMatrix®, SurgiMend®, Revize™, and TissueMend™ (the “Boston recall”), the Company recorded a total of $ 18.7 million provision for product returns.

As of March 31, 2024, the Company has credited $ 16.7 million to customers and holds a remaining return reserve of $ 2.0 million.

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.

5 unchanged sentences

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 summarizes the changes in the contract asset and liability balances for the three months ended March 31, 2024:

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

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

The following table summarizes the changes in the contract asset and liability balances for the six months ended June 30, 2024:

Dollars in thousands Total

3 unchanged sentences

Contract asset, net of transferred to trade receivables on contracts during the period 6,623

Contract asset, March 31, 2024

Contract asset, June 30, 2024

Contract Liability

3 unchanged sentences

Foreign currency translation ( 77 )

Contract liability, March 31, 2024

At March 31, 2024, the short-term portion of the contract liability of $ 7.8 million and the long-term portion of $ 6.9 million are included in current liabilities and other liabilities, respectively, in the consolidated balance sheets.

As of March 31, 2024, the Company is expected to recognize revenue of approximately 53 % of unsatisfied (or partially unsatisfied) performance obligations as revenue within 12 months, with the remaining balance to be recognized thereafter.

Contract liability, June 30, 2024

At June 30, 2024, the short-term portion of the contract liability of $ 9.9 million and the long-term portion of $ 8.4 million are included in current liabilities and other liabilities, respectively, in the consolidated balance sheets.

As of June 30, 2024, the Company is expected to recognize revenue of approximately 54 % of unsatisfied (or partially unsatisfied) performance obligations as revenue within 12 months, with the remaining balance to be recognized thereafter.

Shipping and Handling Fees

8 unchanged sentences

The Company includes them in accrued expenses and other current liabilities in the consolidated balance sheet.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

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

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 entity from a customer.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

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

Disaggregated Revenue

The following table presents revenues disaggregated by the major sources of revenues for the three months ended March 31, 2024 and 2023 (dollar amounts in thousands):

Three Months Ended March 31, 2024 Three Months Ended March 31, 2023

The following table presents revenues disaggregated by the major sources of revenues for the three and six months ended June 30, 2024 and 2023 (dollar amounts in thousands):

Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 Six Months Ended June 30, 2024 Six Months Ended June 30, 2023

Neurosurgery $ 205,502 $ 205,803 $ 407,770 $ 398,673

Instruments 54,537 56,365 98,910 102,603

41,722 8,862 51,515 17,890

Total Codman Specialty Surgical 301,761 271,030 558,195 519,166

3 unchanged sentences

Total revenue $ 418,175 $ 381,267 $ 787,047 $ 762,113

(1) Prior period revenues included within our instruments business have been reclassified under the ENT business.

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 March 31, 2024 December 31, 2023

Dollars in thousands June 30, 2024 December 31, 2023

Finished goods $ 220,844 $ 196,402

3 unchanged sentences

GOODWILL AND OTHER INTANGIBLE ASSETS

Changes in the carrying amount of goodwill for the three-month period ended March 31, 2024 were as follows:

Changes in the carrying amount of goodwill for the six-month period ended June 30, 2024 were as follows:

Dollars in thousands Codman Specialty

1 unchanged sentence

Goodwill at December 31, 2023 $ 666,937 $ 388,525 $ 1,055,462

Acclarent Acquisition 65,579 — 65,579

Foreign currency translation ( 10,717 ) ( 5,684 ) ( 16,401 )

Goodwill at March 31, 2024

Goodwill at June 30, 2024

$ 721,799 $ 382,841 $ 1,104,640

5 unchanged sentences

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

The quantitative test estimates the fair value of the reporting unit using a

The quantitative test estimates the fair value of the reporting unit using a discounted cash flow model, which incorporates significant estimates and assumptions made by management which, by their nature, are characterized by uncertainty.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

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

discounted cash flow model, which incorporates significant estimates and assumptions made by management which, by their nature, are characterized by uncertainty.

Due to third-party audit findings and an update to the estimated timeframe to resume the commercial distribution of products manufactured in the Boston facility, the Company elected to perform a quantitative analysis of its Tissue Technologies reporting unit in the first quarter of 2024 in accordance with ASC 350.

Due to third-party audit findings and an update to the estimated timeframe to resume the commercial distribution of products manufactured in the Company’s manufacturing facility located in Boston, Massachusetts (the “Boston facility”), the Company elected to perform a quantitative analysis of its Tissue Technologies reporting unit in the first quarter of 2024 in accordance with ASC 350.

The quantitative test estimates the fair value of the reporting unit using a discounted cash flow model, which incorporates significant estimates and assumptions made by management with respect to future revenue and expense growth rates and discount rates which, by their nature, are characterized by uncertainty.

4 unchanged sentences

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

March 31, 2024

June 30, 2024

Dollars in thousands Weighted

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$ 1,729,837 $ ( 662,004 ) $ 1,067,833

Total amortization of intangible assets for the three months ended March 31, 2024 was $ 27.7 million.

Of these amounts, $ 17.6 million was related to amortization of technology based intangibles and included in cost of goods sold.

Total amortization of intangible assets for the three and six months ended June 30, 2024 was $ 25.4 million and $ 53.1 million, respectively.

Of these amounts, $ 21.7 million and $ 39.3 million, respectively, was related to amortization of technology based intangibles and included in cost of goods sold.

$ 7.1 million related to the impairment of a customer relationship intangible and the remainder were included in intangible amortization in the statement of operations.

Total amortization of intangible assets for the three months ended March 31, 2023 was $ 20.6 million.

Of these amounts, $ 17.5 million was related to amortization of technology based intangibles and included in cost of goods sold, with the remainder included in intangible amortization in the statement of operations.

Total amortization of intangible assets for the three and six months ended June 30, 2023 was $ 20.6 million and $ 41.3 million, respectively.

Of these amounts, $ 17.6 million and $ 35.1 million, respectively, was related to amortization of technology based intangibles and included in cost of goods sold, with the remainder included in intangible amortization in the statement of operations.

Based on quarter-end exchange rates, amortization expense (including amounts reported in cost of goods sold) is expected to be approximately $ 50.8 million for the remainder of 2024, $ 101.6 million in 2025, $ 101.4 million in 2026, $ 100.4 million in 2027, $ 96.9 million in 2028, $ 91.6 million in 2029 and $ 506.8 million thereafter.

3 unchanged sentences

Due to third-party audit findings and an update to the estimated timeframe to resume the commercial distribution of products manufactured in the Boston facility, the Company elected to perform impairment testing on certain definite-lived intangible assets including completed technology and customer relationships in accordance with FASB ASC Topic 360, Property, Plant and Equipment .

For the three months ended March 31, 2024, the Company recorded an impairment charge related to the definite-lived intangible asset associated with the customer relationships of $ 7.1 million in intangible asset amortization in the consolidated statement of operations.

With respect to the definite-lived intangible assets associated with the completed technology of SurgiMend® and PriMatrix®, the carrying values are $ 38.3 million and $ 27.7 million, respectively, as of March 31, 2024.

We determined that the carrying amount of these definite-lived intangible assets were recoverable and, therefore, the intangible assets were not deemed to be impaired.

In the first quarter of 2024, the Company recorded an impairment charge related to the definite-lived intangible asset associated with the customer relationships of $ 7.1 million in intangible asset amortization in the consolidated statement of operations.

With respect to the definite-lived intangible assets associated with the completed technology of SurgiMend® and PriMatrix®, the Company determined that the carrying amount of these definite-lived intangible assets were recoverable and, therefore, the intangible assets were not deemed to be impaired.

The carrying values of SurgiMend® and PriMatrix® are $ 36.5 million and $ 26.6 million, respectively, as of June 30, 2024.

Amendment to the Seventh Amended and Restated Senior Credit Agreement

3 unchanged sentences

(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) was modified to the following:

The terms of the Senior Credit Facility limit the amount of dividends we may pay.

The Company’s maximum Consolidated Total Leverage Ratio (as defined in the March 2023 Amendment) in the financial covenants was modified to the following:

Fiscal Quarter Ending Maximum Consolidated Total Leverage Ratio

8 unchanged sentences

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.

The applicable rates are based on the Company’s Consolidated Total Leverage Ratio (defined, as of any date of determination, as the ratio of (a) Consolidated Funded Indebtedness as of such date (as defined in the Credit Agreement) less cash that is not subject to any restriction on the use or investment thereof to (b) Consolidated EBITDA (as defined by the Seventh Amended and Restated Credit Agreement (the “Credit Agreement”)), for the period of four consecutive fiscal quarters ending on such date).

The Senior Credit Facility is collateralized by substantially all of the assets of the Company’s U.S.

subsidiaries, excluding intangible assets.

The Senior Credit Facility is subject to various financial and negative covenants and, at March 31, 2024, the Company was in compliance with all such covenants.

The Senior Credit Facility is subject to various financial and negative covenants and, at June 30, 2024, 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, 2024 and December 31, 2023 there wa s $ 420.0 million and $ 70.0 million, respectively, ou tstanding under the revolving portion of the Senior Credit Facility.

At March 31, 2024 and December 31, 2023, there was $ 775.0 million outstanding under the term loan component of the Senior Credit Facility at a weighted average interest rate of 6.8 % and 6.8 %, respectively.

As of March 31, 2024 and December 31, 2023 there was $ 19.4 million and $ 14.5 million, respectively, of the term loan component of the Senior Credit Facility classified as current on the condensed consolidated balance sheet.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

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

The fair value of outstanding borrowings of the Senior Credit Facility’s term loan component at March 31, 2024 was $ 765.5 million.

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

At June 30, 2024 and December 31, 2023 there wa s $ 410.0 million and $ 70.0 million, respectively, ou tstanding under the revolving credit facility component of the Senior Credit Facility.

At June 30, 2024 and December 31, 2023, there was $ 770.2 million and $ 775.0 million outstanding under the term loan component of the Senior Credit Facility at a weighted average interest rate of 6.8 % and 6.8 %, respectively.

As of June 30, 2024 and December 31, 2023 there was $ 24.2 million and $ 14.5 million, respectively, of the term loan component of the Senior Credit Facility classified as current on the condensed consolidated balance sheet.

The fair value of the term loan and revolving portion of the Senior Credit Facility at June 30, 2024 was $ 759.8 million, and $ 404.2 million, respectively.

The 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 March 31, 2024 and December 31, 2023 to taled $ 1.7 million.

There were no amounts drawn under the letters of credit outstanding as of March 31, 2024.

Letters of credit outstanding as of June 30, 2024 and December 31, 2023 to taled $ 1.7 million.

There were no amounts drawn under the letters of credit outstanding as of June 30, 2024.

Contractual repayments of the term loan component of the Senior Credit Facility are due as follows:

As of March 31, 2024

As of June 30, 2024

Principal Repayment

5 unchanged sentences

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

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

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

Convertible Senior Notes

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”).

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”) pursuant to an indenture, dated as of February 4, 2020 (the “Original Indenture”), between the Company and Citibank, N.A., as trustee.

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.

3 unchanged sentences

(1) if the closing price of the Company’s common stock has been at least 130 % of the conversion price during the period;

(2) if the average trading price per $1,000 principal amount of the 2025 Notes is less than or equal to 98 % of the average conversion value of the 2025 Notes during a period as defined in the indenture;

(3) if the Company calls the notes for optional redemption as defined in the indenture;

(2) if the average trading price per $1,000 principal amount of the 2025 Notes is less than or equal to 98 % of the average conversion value of the 2025 Notes during a period specified in the Original Indenture;

(3) if the Company calls the notes for optional redemption as described in the Original Indenture;

or (4) if specified corporate transactions occur.

As of March 31, 2024, none of these conditions existed and the 2025 Notes are classified as long term obligations.

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

The Company irrevocably elected (1) to eliminate the Company’s option to choose physical settlement on any conversion of the 2025 Notes that occurs on or after the date of the First Supplemental Indenture and (2) with respect to any Combination Settlement (as defined in the indenture) for a conversion of the 2025 Notes, the Specified Dollar Amount (as defined in the indenture) that will be settled in cash per $1,000 principal amount of the 2025 Notes shall be no lower than $ 1,000 .

Holders of the 2025 Notes will have the right to require the Company to repurchase for cash all or a portion of their 2025 Notes at 100 % of their principal amount, plus any accrued and unpaid interest, upon the occurrence of a fundamental change (as defined in the indenture relating to the 2025 Notes).

The Company will also be required to increase the conversion rate for holders who convert their 2025 Notes in connection with certain fundamental changes occurring prior to the maturity date or following delivery by the Company of a notice of redemption.

As of June 30, 2024, none of these conditions existed and the 2025 Notes are classified as long term obligations.

On December 9, 2020, the Company entered into the first supplemental indenture to the Original Indenture (the “First Supplemental Indenture” and, together with Original Indenture, the “Indenture”), pursuant to which the Company irrevocably elected (1) to eliminate the Company’s option to choose physical settlement on any conversion of the 2025 Notes that occurs on or after the date of the First Supplemental Indenture and (2) with respect to any Combination Settlement (as defined in the First Supplemental Indenture) for a conversion of the 2025 Notes, the Specified Dollar Amount (as defined in the First Supplemental Indenture) that will be settled in cash per $1,000 principal amount of the 2025 Notes shall be no lower than $ 1,000 .

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

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

The Company will also be required to increase the conversion rate for holders who convert their 2025 Notes in connection with certain Fundamental Changes occurring prior to the maturity date or following delivery by the Company of a notice of redemption.

In connection with the issuance of the 2025 Notes, the Company entered into call transactions and warrant transactions, primarily with affiliates of the initial purchasers of the 2025 Notes (the “hedge participants”).

4 unchanged sentences

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

At March 31, 2024 , the carrying amount of the liability w as $ 575.0 million.

The fair value of the 2025 Notes at March 31, 2024 was $ 549.7 million.

At June 30, 2024 , the carrying amount of the liability of the 2025 Notes w as $ 575.0 million.

The fair value of the 2025 Notes at June 30, 2024 was $ 539.6 million.

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

The 2025 Notes are valued based on Level 1 measurements in the fair value hierarchy.

Level 1 inputs represent quoted prices in active markets for identical assets or liabilities.

Securitization Facility

5 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 March 31, 2024, the Company was in compliance with the covenants and none of the termination events had occurred.

As of June 30, 2024, the Company was in compliance with the covenants and none of the termination events had occurred.

On December 15, 2023, the Company entered into an amendment (the “December 2023 Amendment”) of the Securitization Facility which extended the maturity date from May 28, 2024 to December 15, 2026.

3 unchanged sentences

The December 2023 Amendment and April 2023 Amendment did not increase the Company’s total indebtedness.

At March 31, 2024 and December 31, 2023, the Company had $ 94.6 million and $ 89.2 million, respectively, of outstanding borrowings under its Securitization Facility at a weighted average interest rate of 6.5 % and 5.9 %, respectively.

The fair value of the outstanding borrowing of the Securitization Facility at March 31, 2024 was $ 92.7 million.

At June 30, 2024 and December 31, 2023, the Company had $ 77.7 million and $ 89.2 million, respectively, of outstanding borrowings under its Securitization Facility at a weighted average interest rate of 6.8 % and 5.9 %, respectively.

The fair value of the outstanding borrowing of the Securitization Facility at June 30, 2024 was $ 76.1 million.

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

10 unchanged sentences

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

The Company held the following interest rate swaps as of March 31, 2024 and December 31, 2023 (dollar amounts in thousands):

March 31, 2024 December 31, 2023 March 31, 2024 December 31, 2023

The Company held the following interest rate swaps as of June 30, 2024 and December 31, 2023 (dollar amounts in thousands):

June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023

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

14 unchanged sentences

The interest rate 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 accumulated other comprehensive income (“AOCI”).

For the three months ended March 31, 2024 and 2023, the Company recorded a gain of $ 14.7 million and a loss of $ 10.5 million, respectively, in AOCI related to the change in fair value of the interest rate swaps.

For the three months ended March 31, 2024 and 2023, the Company recorded gains of $ 5.2 million and $ 3.5 million, respectively, in the consolidated statements of operations related to the interest rate differential of the interest rate swaps.

The estimated gain that is expected to be reclassified to interest income from AOCI as of March 31, 2024 within the next twelve months is $ 13.6 million.

For the three and six months ended June 30, 2024, the Company recorded a gain of $ 5.1 million and $ 19.8 million, respectively, in AOCI related to the change in fair value of the interest rate swaps.

For the three and six months ended June 30, 2023 the Company recorded a gain of $ 18.7 million and $ 8.2 million, respectively, in AOCI related to the change in fair value of the interest rate swaps.

For the three and six months ended June 30, 2024, the Company recorded gains of $ 5.0 million and $ 10.3 million, respectively, in the consolidated statements of operations related to the interest rate differential of the interest rate swaps.

For the three and six months ended June 30, 2023 the Company recorded gains of $ 4.5 million and $ 8.0 million, respectively, in the consolidated statements of operations related to the interest rate differential of the interest rate swaps.

The estimated gain that is expected to be reclassified to interest income from AOCI as of June 30, 2024 within the next twelve months is $ 11.0 million.

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

25 unchanged sentences

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

The Company held the following cross-currency rate swaps as of March 31, 2024 and December 31, 2023 (dollar amounts in thousands):

March 31, 2024 December 31, 2023 March 31, 2024 December 31, 2023

The Company held the following cross-currency rate swaps as of June 30, 2024 and December 31, 2023 (dollar amounts in thousands):

June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023

Effective Date Termination Date Fixed Rate Aggregate Notional Amount Fair Value

Asset (Liability)

Pay CHF December 21, 2020 December 22, 2025 3.00 % CHF 333,887 351,137 ( 9,902 ) ( 38,324 )

Pay CHF December 21, 2020 December 22, 2025 3.00 % CHF CHF 339,637 351,137 ( 12,894 ) ( 38,324 )

Receive U.S.$ 3.98 % $ 381,272 394,183

Pay CHF September 22, 2023 September 29, 2024 2.40 % CHF 28,500 28,500 ( 2,578 ) ( 2,348 )

Pay CHF September 22, 2023 September 29, 2024 2.40 % CHF CHF 28,500 28,500 ( 283 ) ( 2,348 )

Receive U.S.$ 6.27 % $ 31,457 31,457

3 unchanged sentences

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 AOCI.

For the three months ended March 31, 2024 the Company recorded a gain of $ 30.1 million 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, the Company recorded a loss of $ 4.9 million 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, 2024, the Company recorded a gain of $ 29.5 million in AOCI related to change in fair value of the cross-currency swaps.

For the three months ended March 31, 2023, the Company recorded a gain of $ 2.2 million in AOCI related to change in fair value of the cross-currency swaps.

For the three months ended March 31, 2024, the Company recorded a gain of $ 1.3 million in other income, net included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.

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

The estimated loss that is expected to be reclassified to other income (expense), net from AOCI as of March 31, 2024 within the next twelve months is $ 1.9 million.

As of March 31, 2024, the Company does not expect any gains or losses will be reclassified into earnings because the original forecasted transactions will not occur.

For the three and six months ended June 30, 2024, the Company recorded a gain of $ 0.6 million and $ 30.1 million, respectively, in AOCI related to change in fair value of the cross-currency swaps.

For the three and six months ended June 30, 2023, the Company recorded a loss of $ 12.9 million and $ 10.7 million in AOCI related to change in fair value of the cross-currency swaps.

For the three and six months ended June 30, 2024 the Company recorded a loss of $ 1.5 million and a gain of $ 28.6 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 and six months ended June 30, 2023, the Company recorded a loss of $ 10.0 million and $ 14.9 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 and six months ended June 30, 2024, the Company recorded a gain of $ 1.3 million and $ 2.6 million, respectively, in other income, net included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.

For the three and six months ended June 30, 2023, the Company recorded a gain of $ 1.4 million and $ 2.9 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 loss that is expected to be reclassified to other income (expense), net from AOCI as of June 30, 2024 within the next twelve months is $ 2.7 million.

As of June 30, 2024, the Company does not expect any gains or losses will be reclassified into earnings because the original forecasted transactions 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 May 2, 2024, the Company entered into a cross-currency swap agreement with a notional amount of CHF 68.5 million, equivalent to $ 75.0 million, where the Company agreed with third-parties to sell Swiss francs in exchange for U.S.

dollars at a specified rate at the maturity of the contract.

The new cross-currency swap agreement was designated as a net investment hedge to partially offset the effects of foreign currency on foreign subsidiaries.

On October 1, 2018 May 24, 2022, and November 17, 2023, the Company entered into cross-currency swap agreements designated as net investment hedges to partially offset the effects of foreign currency on foreign subsidiaries.

The Company held the following cross-currency rate swaps designated as net investment hedges as of March 31, 2024 and December 31, 2023, respectively (dollar amounts in thousands):

March 31, 2024 December 31, 2023 March 31, 2024

December 31, 2023

The Company held the following cross-currency rate swaps designated as net investment hedges as of June 30, 2024 and December 31, 2023, respectively (dollar amounts in thousands):

June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023

Effective Date Termination Date Fixed Rate Aggregate Notional Amount Fair Value

4 unchanged sentences

Receive U.S.$ 1.94 % $ 300,000 300,000

Pay CHF November 21, 2023 December 17, 2029 — % CHF 66,525 66,525 ( 736 ) ( 4,037 )

Pay CHF November 21, 2023 December 17, 2029 — % CHF CHF 66,525 66,525 ( 1,960 ) ( 4,037 )

Receive U.S.$ 2.54 % $ 75,000 75,000

Pay CHF May 6, 2024 December 18, 2030 — % CHF CHF 68,483 — ( 3,078 ) —

Receive U.S.$ 2.74 % $ 75,000 —

Total ( 33,577 ) ( 49,609 )

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 AOCI.

For the three months ended March 31, 2024, the Company recorded a gain of $ 24.9 million in AOCI related to the change in fair value of the cross-currency swaps.

For the three months ended March 31, 2023, the Company recorded a gain of $ 1.0 million in AOCI related to change in fair value of the cross-currency swaps.

For the three months ended March 31, 2024, the Company recorded a gain of $ 2.2 million in interest income included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.

For the three months ended March 31, 2023, the Company recorded a gain of $ 2.1 million 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 AOCI as of March 31, 2024 within the next twelve months is $ 4.1 million.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

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

dollars at a specified rate at the maturity of the contract.

The new cross-currency swap agreement was designated as a net investment hedge to partially offset the effects of foreign currency on foreign subsidiaries.

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 AOCI.

For the three and six months ended June 30, 2024, the Company recorded a loss of $ 4.2 million and a gain of $ 20.7 million, respectively, in AOCI related to the change in fair value of the cross-currency swaps.

For the three and six months ended June 30, 2023, the Company recorded a loss of $ 11.1 million and $ 10.1 million, respectively, in AOCI related to change in fair value of the cross-currency swaps.

For the three and six months ended June 30, 2024, the Company recorded a gain of $ 2.5 million and $ 4.7 million, respectively, in interest income included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.

For the three and six months ended June 30, 2023, the Company recorded a gain of $ 2.1 million and $ 4.2 million 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 AOCI as of June 30, 2024 within the next twelve months is $ 9.7 million.

Foreign Currency Forward Contracts

4 unchanged sentences

These contracts typically settle at various dates within twelve months of execution.

As of March 31, 2024 the notional amount of foreign currency forward contracts was CHF 13.3 million.

For the three months ended March 31, 2024 the Company recorded a loss of $ 0.6 million in AOCI related to the change in fair value of the foreign currency forward contracts and a loss of $ 0.1 million in cost of goods sold included in the consolidated statements of operations.

As of June 30, 2024 the notional amount of foreign currency forward contracts was 6.5 million CHF.

For the three and six months ended June 30, 2024 the Company recorded an immaterial loss and a loss of $ 0.6 million, respectively, in AOCI related to the change in fair value of the foreign currency forward contracts and a loss of $ 0.1 million and $ 0.2 million, respectively in cost of goods sold included in the consolidated statements of operations.

For the three and six months ended June 30, 2023 the Company recorded a gain of $ 0.3 million and $ 0.2 million, respectively, in AOCI related to the change in fair value of the foreign currency forward contracts and a gain of $ 0.4 million and $ 0.4 million, respectively, in cost of goods sold included in the consolidated statements of operations.

On July 3, 2024, the Company entered into forward currency forwards with a notional amount of 5.2 million CHF to mitigate the exchange rate risk of Swiss franc denominated intercompany purchases.

These contracts settle at various dates within twelve months of execution.

Counterparty Credit Risk

8 unchanged sentences

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

The following table summarizes the fair value for derivatives designated as hedging instruments in the condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023:

The following table summarizes the fair value for derivatives designated as hedging instruments in the condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023:

Fair Value as of

Location on Balance Sheet (1) :

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Dollars in thousands

10 unchanged sentences

43,448 30,710

Cross-currency swap — —

Net Investment Hedges

17 unchanged sentences

(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 March 31, 2024 and December 31, 2023, the total notional amounts related to the Company’s interest rate swaps were $ 1.5 billion.

(2) At June 30, 2024 and December 31, 2023, the total notional amounts related to the Company’s interest rate swaps were $ 1.3 billion, and $ 1.5 billion , respectively.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

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

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, 2024 and 2023:

Dollars in thousands Balance in AOCI

6 unchanged sentences

Statements of

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Cash Flow Hedges

Interest rate swap $ 53,060 $ 5,088 $ 5,032 $ 53,116 Interest expense

Cross-currency swap ( 17,704 ) 598 ( 239 ) ( 16,867 ) Other income, net

Foreign Currency Forward Contract ( 519 ) ( 4 ) ( 93 ) ( 430 ) Cost of Sales

Net Investment Hedges

Cross-currency swap ( 22,780 ) ( 4,233 ) 2,453 ( 29,466 ) Interest income

$ 12,057 $ 1,449 $ 7,153 $ 6,353

Three Months Ended June 30, 2023

Cash Flow Hedges

Interest rate swap $ 42,678 $ 18,694 $ 4,471 $ 56,901 Interest expense

Cross-currency swap ( 14,576 ) ( 12,873 ) ( 8,524 ) ( 18,925 ) Other income, net

Foreign Currency Forward Contract $ ( 69 ) $ 304 $ 358 $ ( 123 )

Net Investment Hedges

Cross-currency swap ( 8,060 ) ( 11,067 ) 2,112 ( 21,239 ) Interest income

$ 19,973 $ ( 4,942 ) $ ( 1,583 ) $ 16,614

Dollars in thousands Balance in AOCI

Year Amount of

Recognized in

AOCI Amount of Gain (Loss)

Reclassified from

Earnings Balance in AOCI

End of Quarter Location in

Statements of

Six Months Ended June 30, 2024

Cash Flow Hedges

Interest rate swap $ 43,556 $ 19,811 $ 10,251 $ 53,116 Interest expense

Cross-currency swap ( 15,763 ) 30,130 31,234 ( 16,867 ) Other income (expense), net

3 unchanged sentences

$ ( 17,705 ) $ 69,995 $ 45,937 $ 6,353

Three Months Ended March 31, 2023

Six Months Ended June 30, 2023

Cash Flow Hedges

5 unchanged sentences

$ 29,527 $ ( 12,404 ) $ 509 $ 16,614

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

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

Derivative Instruments not Designated Hedges:

2 unchanged sentences

The notional amount of each currency is exchanged at the inception and termination of the currency swap by each party.

The Company subsequently paid down a portion of this swap, bringing the notional amount down to $ 5.5 million as of March 31, 2024.

The fair value of the foreign currency swaps not designated as hedges was $ 1.5 million and $ 1.2 million as of March 31, 2024 and December 31, 2023, respectively.

The following table summarizes the gains (losses) on 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 March 31,

The Company subsequently paid down a portion of this swap, bringing the notional amount down to $ 4.6 million as of June 30, 2024.

The fair value of the foreign currency swaps not designated as hedges was $ 1.5 million and $ 1.2 million as of June 30, 2024 and December 31, 2023, respectively.

The following table summarizes the gains on 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 June 30, Six Months Ended June 30,

2024 2023 2024 2023

Foreign currency swaps 135 588 408 643

1 unchanged sentence

STOCK-BASED COMPENSATION

As of March 31, 2024, 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”).

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

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

As of June 30, 2024, 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”).

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.

3 unchanged sentences

Stock Options

As of March 31, 2024, there were approximately $ 4.9 million of total unrecognized compensation costs related to unvested stock options.

As of June 30, 2024, there were approximately $ 4.1 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 243,964 stock options granted during the three months ended March 31, 2024.

For the three months ended March 31, 2024, the weighted average grant date fair value for stock options granted was $ 15.68 per option.

There were 243,964 stock options granted during the six months ended June 30, 2024.

For the six months ended June 30, 2024, the weighted average grant date fair value for stock options granted was $ 15.68 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.

As of March 31, 2024, there was approximately $ 48.6 million of total unrecognized compensation costs related to these unvested awards.

As of June 30, 2024, there was approximately $ 43.5 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 532,379 restricted stock awards and 263,350 performance stock awards during the three months ended March 31, 2024.

For the three months ended March 31, 2024, the weighted average grant date fair value for restricted stock awards and performance stock units granted was $ 36.46 and $ 36.22 per award, respectively.

The Company granted 702,687 restricted stock awards and 308,467 performance stock awards during the six months ended June 30, 2024.

For the six months ended June 30, 2024, the weighted average grant date fair value for restricted stock awards and performance stock units granted was $ 34.90 and $ 36.22 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.

The ESPP is a non-compensatory plan based on its terms.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

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

CEO Separation

On February 27th, 2024, the Company announced that Mr.

On February 27, 2024, the Company announced that Mr.

De Witte would retire from his position as President and Chief Executive Officer and director of the Company following the completion of a succession process and entered into a letter agreement with Mr.

4 unchanged sentences

De Witte’s unvested equity-based awards will continue to vest during his continued service period to the Company and vested stock options were modified such that they will remain exercisable until the lesser of (a) the stated term of the stock options and (b) six months following his cessation of continued service to the Company.

As a result of the modifications, the Company recorded incremental stock-based compensation expense of $ 0.2 million during the three months ended March 31, 2024.

As a result of the modifications, the Company recorded incremental stock-based compensation expense of $ 0.8 million during the six months ended June 30, 2024.

The Company will record a total of $ 1.9 million in accelerated stock-based compensation expenses for the twelve months ended 2024 that would not have been recognized if Mr.

2 unchanged sentences

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

Net periodic benefit costs for the Company’s defined benefit pension plans for the three months ended March 31, 2024 were $ 0.4 million.

The components of the net periodic benefit costs other than the service cost component of $ 0.8 million for the three months ended March 31, 2024 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, 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.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

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

The estimated fair values of plan assets were $ 40.4 million and $ 45.7 million as of March 31, 2024 and December 31, 2023, respectively.

The net plan assets of the pension plans are invested in common trusts as of March 31, 2024 and December 31, 2023.

Net periodic benefit costs for the Company’s defined benefit pension plans for the three and six months ended June 30, 2024 were $ 0.4 million and $ 0.9 million.

The components of the net periodic benefit costs other than the service cost component of $ 0.8 million and $ 1.6 million for the three and six months ended June 30, 2024 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 six months June 30, 2023 were $ 0.3 million and $ 0.6 million.

The components of the net periodic benefit costs other than the service cost component of $ 0.5 million and $ 1.1 million for the three and six months ended June 30, 2023 are included in other income, net in the consolidated statements of operations.

The estimated fair values of plan assets were $ 41.7 million and $ 45.7 million as of June 30, 2024 and December 31, 2023, respectively.

The net plan assets of the pension plans are invested in common trusts as of June 30, 2024 and December 31, 2023.

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 $ 5.7 million and $ 6.1 million as of March 31, 2024 and December 31, 2023, respectively.

The fair value of these assets were $ 6.0 million and $ 6.1 million as of June 30, 2024 and December 31, 2023, 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 March 31, 2024.

The Company has no finance leases as of June 30, 2024.

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).

4 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 three months ended March 31, 2024 and March 31, 2023 was $ 6.3 million and $ 6.0 million, respectively, which includes $ 0.3 million, in related party operating lease expense.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

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

Total operating lease expense for the six months ended June 30, 2024 and June 30, 2023 was $ 12.8 million and $ 11.8 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 March 31, 2024 December 31, 2023

Dollars in thousands, except lease term and discount rate June 30, 2024 December 31, 2023

ROU assets $ 147,472 $ 156,184

8 unchanged sentences

Leased vehicles 2.8 % 2.7 %

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

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

Supplemental cash flow information related to leases for the three months ended March 31, 2024 and 2023 were as follows:

Dollars in thousands March 31, 2024 March 31, 2023

Supplemental cash flow information related to leases for the six months ended June 30, 2024 and 2023 were as follows:

Dollars in thousands June 30, 2024 June 30, 2023

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

Operating cash flows from operating leases $ 12,029 $ 9,505

ROU assets obtained in exchange for lease liabilities:

ROU assets obtained in exchange for lease liabilities, net of modifications:

Operating leases $ 68 $ 7,582

Future minimum lease payments under operating leases at March 31, 2024 were as follows:

Future minimum lease payments under operating leases at June 30, 2024 were as follows:

Dollars in thousands Related Parties Third Parties Total

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Long-term lease liabilities 169,561

There were no future minimum lease payments under finance leases at March 31, 2024.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

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

There were no future minimum lease payments under finance leases at June 30, 2024.

Related Party Leases

The Company leases its manufacturing facility in Plainsboro, New Jersey, from a general partnership that is 50 % owned by a principal stockholder of the Company.

The Company leases one of its manufacturing facilities in Plainsboro, New Jersey, from a general partnership that is 50 % owned by 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.

The current lease agreement also provides (i) a 5 -year renewal option for the Company to extend the lease from November 1, 2029 through October 31, 2034 at the fair market rental rate of the premises, and (ii) another 5 -year renewal option to extend the lease from November 1, 2034 through October 31, 2039 at the fair market rental rate of the premises.

Lease Impairment Charge

During the three months ended June 30, 2024, the Company approved a plan to transition the commercial distribution of PriMatrix® and SurgiMend® from the Boston facility to the Company’s manufacturing facility in Braintree, Massachusetts and permanently cease use of the Boston facility.

As a result, the Company recorded a $ 4.6 million impairment charge for the three months ended June 30, 2024 as the carrying amounts of the operating lease right-of-use asset and fixed assets related to the Boston facility exceeded their fair values based on the Company’s estimates of future discounted cash flows through the end of the lease term and the end of their remaining useful lives, respectively.

The $ 4.6 million impairment charge was comprised of a $ 1.7 million impairment of an operating lease right-of-use asset and a $ 2.9 million write-off of fixed assets, which was recorded as a component of cost of goods sold in the condensed consolidated statements of operations.

TREASURY STOCK

As of March 31, 2024 and December 31, 2023, there were 12.7 million and 12.8 million shares of treasury stock outstanding with a cost of $ 646.4 million and $ 647.3 million, at a weighted average cost per share of $ 50.76 and $ 50.76 , respectively.

As of June 30, 2024 and December 31, 2023, there were 14.0 million and 12.8 million shares of treasury stock outstanding with a cost of $ 680.8 million and $ 647.3 million, at a weighted average cost per share of $ 48.60 and $ 50.76 , respectively.

On May 16, 2024, the Company entered into a $ 50 million accelerated share repurchase (“May 2024 ASR”) and received 1.3 million shares of common stock at inception of the May 2024 ASR, which represented approximately 70 % of the expected total shares under the May 2024 ASR.

The remaining repurchase transactions are expected to be completed in the third quarter of 2024.

On August 15, 2023, the Company entered into a $ 125 million accelerated share repurchase (“August 2023 ASR”) and received 2.3 million shares of common stock at inception of the August 2023 ASR, which represented approximately 80 % of the expected total shares under the August 2023 ASR.

1 unchanged sentence

The Company received an additional 0.9 million shares determined using the volume-weighted average price of the Company’s common stock during the term of the August 2023 ASR.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

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

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

3 unchanged sentences

On July 18, 2023, the Board of Directors authorized a new $ 225 million share repurchase program, replacing the existing $ 225 million program authorized in April 2022, under which $ 75 million remained authorized at the time of its replacement .

A s of March 31, 2024, $ 100 million remained authorized .

A s of June 30, 2024, $ 50 million remained authorized .

The program authorized in July 2023 allows the Company to repurchase its shares opportunistically from time to time.

1 unchanged sentence

The price and timing of any future purchases under the share repurchase program will depend on factors such as levels of cash generation from operations, the volume of stock option exercises by employees, cash requirements for acquisitions, dividends, economic and market conditions and stock price, and such repurchases may be discontinued at any time.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

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

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Reported tax rate 18.3 % ( 9.4 )% 23.2 % 15.5 %

The Company’s effective income tax rates for the three months ended March 31, 2024 and 2023 were 37.3 % and 18.6 %, respectively.

For the three months ended March 31, 2024, the higher tax rate is attributable to a $ 1.5 million shortfall from stock based compensation, offset by a tax benefit for the intangible asset impairment, as compared to previous year.

The Company does not have tax basis in the impaired intangible asset and has treated the tax impact as a discrete event in this quarter.

The Company’s effective income tax rates for the three months ended June 30, 2024 and 2023 were 18.3 % and ( 9.4 )%, respectively.

For the three months ended June 30, 2024, the higher tax rate is primarily driven by lower three month book income as compared to the previous year.

For the three months ended June 30, 2023, the lower rate was partially driven by a $ 1.1 million benefit associated with the Federal R&D credit.

The Company’s effective income tax rates for the six months ended June 30, 2024 and 2023 were 23.2 % and 15.5 %, respectively.

For the six months ended June 30, 2024, the higher tax rate is primarily driven by lower book income and a $ 1.7 million shortfall from stock-based compensation, as compared to the prior year.

For the six months ended June 30, 2023, the lower tax rate was primarily due to a $ 1.1 million benefit associated with the Federal R&D credit, offset by $ 0.3 million shortfall from stock-based 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.

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Basic and diluted net income per share was as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Dollars in thousands, except per share amounts 2024 2023 2024 2023

14 unchanged sentences

Potential common share equivalents have been excluded where their inclusion would be anti-dilutive.

Common stock of approximately 1.3 million and 0.3 million shares at March 31, 2024, and 2023, res pectively, were not included in the computation of diluted net (loss) 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, 2024 and 2023:

Three Months Ended March 31,

Common stock of approximately 1.3 million and 0.6 million shares at June 30, 2024, and 2023, res pectively, were not included in the computation of diluted net (loss) income per share because their effect would have been anti-dilutive.

ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

Comprehensive (loss) income for the three and six months ended June 30, 2024 and 2023:

Three Months Ended June 30, Six Months Ended June 30,

Dollars in thousands 2024 2023 2024 2023

3 unchanged sentences

Pension liability adjustment, net of tax 231 ( 5 ) 334

Comprehensive income, net $ 1,179 $ 21,028

Comprehensive (loss) income, net $ ( 20,482 ) $ 1,947 $ ( 19,303 ) $ 22,975

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

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

Changes in accumulated other comprehensive income by component between December 31, 2023 and March 31, 2024 are presented in the table below, net of tax:

Changes in accumulated other comprehensive (loss) income by component between December 31, 2023 and June 30, 2024 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) 4,330 ( 5 ) ( 7,945 ) ( 3,620 )

Balance at March 31, 2024

Balance at June 30, 2024

$ 25,819 $ 2,707 $ ( 47,252 ) $ ( 18,726 )

For the three months ended March 31, 2024, the Company reclassified a gain of $ 27.2 million and $ 5.7 million from accumulated other comprehensive income to other income, net and interest income, respectively.

For the six months ended June 30, 2024, the Company reclassified a gain of $ 26.9 million and $ 11.5 million from accumulated other comprehensive income to other income, net and interest income, respectively.

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

(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;

and (iii) the ENT business, which includes instrumentation, balloon technologies for sinus dilation and eustachian tube dilation, as well as surgical navigation systems.

• The Tissue Technologies segment consists of the Wound Reconstruction and Care business, which includes offerings such as skin and wound repair products, plastics and surgical reconstruction products, bone grafts, and nerve and tendon repair products.

The Tissue Technologies segment includes the Company’s private label business.

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 months ended March 31, 2024 and 2023 are as follows:

Three Months Ended March 31,

Net sales and profit by each reportable segment for the three and six months ended June 30, 2024 and 2023 are as follows:

Three Months Ended June 30, Six Months Ended June 30,

Dollars in thousands 2024 2023 2024 2023

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Total revenue by major geographic area consisted of the following:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Dollars in thousands 2024 2023 2024 2023

11 unchanged sentences

The Company accrues for loss contingencies when it is deemed probable that a loss has been incurred and that loss is estimable.

If the reasonable estimate of a probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is recorded.

In most cases, significant judgment is required to estimate the amount and timing of a loss to be recorded and actual results may differ from these estimates.

The amounts accrued are based on the full amount of the estimated loss before considering insurance proceeds and do not include an estimate for legal fees expected to be incurred in connection with the loss contingency.

11 unchanged sentences

The Company believes that it has strong defenses to the allegations in the Pembroke Litigation, and intends to defend the matter vigorously.

Contingent Consideration

The Company determined the fair value of contingent consideration during the three month period ended March 31, 2024 and March 31, 2023 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 three months ended March 31, 2024 and March 31, 2023 is as follows (in thousands):

Three Months Ended March 31, 2024 Contingent Consideration Liability Related to Acquisition of:

On March 17, 2021, a complaint was filed against the Company in the Court of Common Pleas of Philadelphia County in Pennsylvania asserting product liability claims relating to a surgical procedure in which the Company’s CUSA® Clarity allegedly was used.

The plaintiff seeks damages against the Company based upon plaintiff’s claim that the CUSA® Clarity did not function as intended.

The plaintiff also asserts separate claims against the surgeon and the hospital.

The outcome of this legal action is not within the Company’s control and may not be known for a prolonged period of time.

The Company believes it has meritorious defenses and the plaintiff’s claims are adequately covered by insurance.

Consequently, this matter is not expected to result in a material, adverse effect on the Company’s financial condition, results of operations and cash flows.

Notwithstanding the foregoing, in the event damages exceed the aggregate coverage limits of the Company’s insurance policies, or if the Company’s insurance carriers disclaim coverage, it is possible that costs associated with these claims could have a material impact on the consolidated financial condition, results of operations and cash flows of the Company.

Contingent Consideration

The Company determined the fair value of contingent consideration during the six month period ended June 30, 2024 and June 30, 2023 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 six months ended June 30, 2024 and June 30, 2023 is as follows (in thousands):

Six Months Ended June 30, 2024 Contingent Consideration Liability Related to Acquisition of:

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

2 unchanged sentences

$ 15,755 $ 2,557 $ 300 68,700

Payment ( 12,400 )

Change in fair value of contingent consideration liabilities ( 934 ) Research and development 75 — 3,200 Selling, general and administrative

Balance as of March 31, 2024 15,672 2,596 300 69,200

Balance as of June 30, 2024 14,821 2,632 300 59,500

Short-Term $ 8,244 $ — $ — $ 19,200 Accrued expenses and other current liabilities

1 unchanged sentence

Total 14,821 2,632 300 59,500

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

Six Months Ended June 30, 2023 Contingent Consideration Liability Related to Acquisition of:

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

3 unchanged sentences

Change in fair value of contingent consideration liabilities 3,081 Research and development ( 2,200 ) 5,200 Selling, general and administrative

Balance as of March 31, 2023

Balance as of June 30, 2023

$ 15,976 $ 230 $ 1,500 $ 62,807

2 unchanged sentences

Total 15,976 230 1,500 62,807

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

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

Arkis BioSciences Inc.

10 unchanged sentences

The potential maximum undiscounted payment amounts to $ 3.0 million.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

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

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

5 unchanged sentences

(“SIA”), the Company is required to pay to the former shareholders 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).

In the second quarter of 2024, The Company paid out $ 12.4 million related to the 2023 performance year.

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.

2 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements