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Item 1A. Risk Factors

2026-02-26 compared with 2025-02-25 · 149 added, 168 removed, 312 unchanged (50% of the section changed)

Our business faces significant risks.

These risks include those described below and may include additional risks and uncertainties not presently known to us or that we currently deem immaterial.

Our business, financial condition and results of operations could be materially adversely affected by any of these risks, and the trading prices of our common stock could decline by virtue of these risks.

Some of the factors, events and contingencies discussed below may have occurred in the past, but the disclosures below are not representations as to whether or not the factors, events or contingencies have occurred in the past and instead reflect our beliefs and opinions as to the factors, events or contingencies that could materially and adversely affect our business in the future.

GLOBAL CHALLENGES AND MACROECONOMIC CONDITIONS

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The United States and foreign countries have experienced recessionary pressures and face continued concerns about the systemic impacts of adverse economic conditions and geopolitical issues.

Any negative impact on economic conditions and international markets, including increased geopolitical instability and other macroeconomic factors, including inflation, supply chain disruptions, interest rate and foreign currency rate fluctuations, and volatility in the capital markets could negatively impact our business, financial condition, and results of operations.

Continued concerns about the systemic impact of potential long-term and wide-spread recession and geopolitical issues, including wars, such as the war between Russia and Ukraine and the conflicts in the Middle East involving Israel, and acts of terrorism, have contributed to increased market volatility and diminished expectations for economic growth in the world.

Any negative impact on economic conditions and international markets, including increased geopolitical instability and other macroeconomic factors, including heightened inflation, trade barriers and related restrictions (including tariffs and related countermeasures), import or export licensing requirements, armed conflict and acts of terrorism, geopolitical tension and instability, supply chain disruptions, interest rate and foreign currency rate fluctuations, and volatility in the capital markets could negatively impact our business, financial condition, and results of operations.

Our business and results of operations have been and may continue to be adversely impacted by changes in macroeconomic conditions, including inflation, rising interest rates, bank failures and the accessibility of capital markets.

Uncertainty about global economic conditions may also cause decreased demand for our products and services and increased competition, which could result in lower sales volume and downward pressure on the prices for our products, longer sales cycles, and slower adoption of new technologies.

Uncertainty about global economic and geopolitical conditions may also cause decreased demand for our products and services and increased competition, which could result in lower sales volume and downward pressure on the prices for our products, longer sales cycles, and slower adoption of new technologies.

Such conditions may also constrain the liquidity of hospitals and other customers or limit their access to financing, which could further delay or reduce capital equipment purchases.

A weakening of macroeconomic conditions may also adversely affect our suppliers, which could result in interruptions in supply.

In addition, heightened macroeconomic and geopolitical uncertainty may impair our ability to accurately forecast demand and plan our business and operational activities.

Market acceptance of our medical products in the U.S.

and other countries is dependent upon the medical equipment purchasing and procurement practices of our customers, patient need for our products and procedures and the reimbursement of patients' medical expenses by government healthcare programs and third-party payors.

The continuing uncertainty surrounding global economic conditions and financial markets may cause the purchasers of medical equipment to decrease their procurement activities.

Economic uncertainty, an increase in unemployment rates, as well as increasing health insurance premiums, co-payments and deductibles may adversely affect demand for our products and procedures.

The continuing uncertainty surrounding global economic conditions and financial markets may cause the purchasers of medical equipment to decrease their procurement activities, particularly the sales of capital equipment such as our ultrasonic surgical aspirators, neuro monitors and cranial stabilization products.

Economic uncertainty, an increase in unemployment rates, as well as increasing health insurance premiums, co-payments and deductibles may adversely affect demand for our products and elective or non-reimbursed procedures.

Furthermore, governments and other third-party payors around the world facing tightening budgets could move to further reduce the reimbursement rates or the scope of coverage offered, which could adversely affect the sales of our products.

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• economic conditions worldwide, which could affect the ability of hospitals and other customers to purchase our products and could result in a reduction in elective and non-reimbursed operative procedures;

• the impact of acquisitions, our ability to integrate acquisitions, and our restructuring activities including portfolio rationalization, and divestitures;

• inspections of our manufacturing facilities for compliance with Quality System Regulations (Good Manufacturing Practices), which could result in Form 483 observations, warning letters, injunctions or other adverse findings from the FDA or from equivalent regulatory bodies, and corrective actions, procedural changes and other actions that we determine are necessary or appropriate to address the results of those inspections, any of which may affect production and our ability to supply our customers with our products;

• changes in import and export policies, including new, increased or retaliatory tariffs, sanctions and countersanctions and customs restrictions by the U.S.

and foreign governments, which may disrupt our supply chain, adversely affect our relationships with customers, and impact our competitiveness;

• inspections of our manufacturing facilities for compliance with FDA’s Quality Management System Regulations (Good Manufacturing Practices), which have resulted in, and could result in future Form 483 observations, warning letters, injunctions or other adverse findings from the FDA or from equivalent regulatory bodies, and corrective actions, procedural changes and other actions that we determine are necessary or appropriate to address the results of those inspections, any of which may affect production and our ability to supply our customers with our products, including resuming the manufacture and sale of products subjection to prior voluntary recalls;

• the increased regulatory scrutiny of certain of our products, including products which we manufacture for others, could result in removal from the market or involve field corrective actions that could affect the marketability of our products;

• expenditures for major initiatives, including acquired businesses and integrations thereof and restructuring;

• expenditures for major initiatives, including acquired businesses and integrations thereof, restructuring and the development and implementation of the CMP;

• various cost reduction initiatives to align our cost structure with our operations, improve operational performance and reduce costs might not provide the anticipated benefits on our expected timeline, or at all, and may yield unintended consequences, including business disruption, the loss of institutional knowledge as a result of turnover and reduced employee productivity

• the timing of significant customer orders, which tend to increase in the fourth quarter coinciding with the end of budget cycles;

• increased competition for a wide range of customers across all our product lines in the markets our products are sold;

• potential difficulties in recapturing market acceptance for any of our products which were subject of a voluntary recall and which we are now seeking to resume the manufacture and sale following the remediation of the issues which prompted the initiation of any such voluntary recall;

• market acceptance of our existing products, as well as products in development;

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• changes in the variable interest rates of our debt instruments which could impact debt service requirements;

• an inability to refinance our indebtedness or to do so upon attractive terms could materially and adversely affect our business and results of operations, financial condition and cash flows;

• potential backorders, lost sales and expenses incurred in connection with product recalls or field corrective actions;

• disruption of our operations and sales resulting from political instability, war, including the war between Russia and Ukraine and the conflicts in the Middle East involving Israel, insurrections, extreme weather conditions, the outbreak of disease, natural disasters, or other events outside our control that damage our manufacturing, distribution, or infrastructure of those facilities, or the suppliers and service providers for those facilities;

• disruption of our operations and sales resulting from political instability, war, insurrections, extreme weather conditions, the outbreak of disease, natural disasters, or other events outside our control that damage our manufacturing, distribution, or infrastructure of those facilities, or the suppliers and service providers for those facilities;

• our ability to manufacture and ship our products efficiently or in sufficient quantities to meet sales demands;

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• reimbursement for our products by private and public health insurers, such as Medicare and Medicaid, and foreign governmental health systems;

• risks related public health concerns or crises, including epidemics and pandemics such as COVID-19, which may negatively impact certain aspects of our business, including the demand for and supply of certain of our products, operations, supply chains and distribution systems, and our ability to generate cash flow;

• the impact of acquisitions, our ability to integrate acquisitions, and our restructuring activities including portfolio rationalization, and divestitures;

• risks related to public health concerns or crises, including epidemics and pandemics, which may negatively impact certain aspects of our business, including the demand for and supply of certain of our products, operations, supply chains and distribution systems, and our ability to generate cash flow;

• the ability to maintain existing distribution rights to and from certain third parties;

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• the ability of our commercial sales representatives to obtain sales targets in a reasonable time frame;

• the impact of changes to our sales organization, continued channel expansion, including increased specialization;

• the impact of changes to our sales organization and continued channel expansion, including increased specialization;

• peer-reviewed publications discussing the clinical effectiveness of the products we sell;

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Our competitors may be more effective at developing commercial products or navigating the regulatory approval process in the markets in which we operate.

They may be able to gain market share by offering lower-cost products or products that enjoy better reimbursement from third-party payors and foreign governmental health systems.

In addition, unfavorable payment amounts or adverse coverage determinations of private and public health insurers, such as Medicare and Medicaid, and foreign governmental health systems, regarding our products or third-party determinations that favor a competitor’s product over ours, could harm acceptance or continued use of our products.

Our competitive position depends on our ability to achieve market acceptance for our products, develop new products, enhance existing products, implement marketing plans, secure regulatory approval for products under development and maintain previously-obtained approvals, demonstrate clinical and economic effectiveness, obtain and maintain funding, coverage and reimbursement under third-party payors and foreign governmental health systems, obtain patent protection and produce products consistently in sufficient quantities to meet demand.

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Technological advances by one or more of our current or future competitors or their achievement of superior reimbursement from third-party payors and foreign governmental health systems could render our present or future products obsolete or uneconomical.

Our future success will depend upon our ability to compete effectively against current technology as well as to respond effectively to technological advances, changes in customers' requirements or in payor or regulatory evidence requirements.

Additionally, purchasing decisions of our customers may be based on clinical evidence or

comparative effectiveness studies and, because of our vast array of products, we might not be able to fund the studies necessary to gain entry or maintain our position or provide the required information to compete effectively.

Our future success will depend upon our ability to compete effectively against current

technology as well as to respond effectively to technological advances, changes in customers' requirements or in payor or regulatory evidence requirements.

Additionally, purchasing decisions of our customers may be based on clinical evidence or comparative effectiveness studies and, because of our vast array of products, we might not be able to fund the studies necessary to gain entry or maintain our position or provide the required information to compete effectively.

Other companies may have more resources available to fund such studies.

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Any and all of the above factors could materially and adversely affect our levels of revenue and our profitability.

Our current strategy involves growth through acquisitions, which requires us to incur substantial costs and potential liabilities for which we may never realize the anticipated benefits, and also requires us to successfully integrate acquired businesses into our business operations in order to avoid our business being materially and adversely affected.

In addition to internally generated growth, our current strategy involves growth through acquisitions.

Between January 1, 2022 and December 31, 2024, we have acquired two businesses at a total cost of approximately $329.3 million, which includes our acquisition of Surgical Innovation Associates, Inc.

for $51.5 million in December 2022 and our acquisition of Acclarent, Inc.

for $277.8 million in April 2024.

In addition, on October 2, 2024, we acquired the product rights for Durepair ® Regeneration

Matrix for total consideration of $45.0 million.

These acquisitions added products to our plastic and reconstructive surgery, ENT, neurosurgery and complex wound management product portfolios and provides additional growth opportunities for our TT segment.

We may be unable to continue to implement our growth strategy and it may ultimately be unsuccessful.

A significant portion of our growth in revenues has resulted from, and is expected to continue to result from, the acquisition of businesses or products complementary to our own.

We engage in evaluations of potential acquisitions and are in various stages of discussion regarding possible acquisitions, certain of which, if consummated, could be significant to us.

Any new acquisition could result in material transaction expenses, increased operating, amortization and interest expenses, and possible in-process research and development charges for acquisitions that do not meet the definition of a “business”, any of which could have a material, adverse effect on our operating results.

Certain businesses that we acquire may not have adequate financial, disclosure, regulatory, quality or other compliance controls at the time we acquire them and could require significant expenditures to address those controls or subject us to increased risk.

As we grow by acquisition, we must manage and integrate the new businesses to bring them into our systems for financial, disclosure, compliance, regulatory and quality control, realize economies of scale, and control costs.

Failure to integrate acquired businesses and operations (including acquired employees and systems), retain key customers and suppliers of any acquired business or manage the cost of providing our products or price our products appropriately could preclude realization of the full benefits that we expect from there transactions.

Our failure to meet the challenges involved in integrating the business in order to realize the anticipated benefits of the acquisitions could cause an interruption of, or loss of momentum in, our activities and could materially and adversely affect our results of operations.

In addition, acquisitions involve other risks, including diversion of management resources otherwise available for the running of our business and the development of our business as well as risks associated with entering markets in which our marketing teams and sales force has limited experience or where experienced distribution alliances are not available.

Some acquisitions may include the need for ongoing product development to occur consistent with time sensitive milestones in order for the Company to achieve its commercial projections for the acquisition.

Our future profitability will depend in part upon our ability to develop our resources to adapt to these new products or business areas and to identify and enter into or maintain satisfactory distribution networks.

As a result of our acquisitions of other healthcare businesses, we may be subject to the risk of unanticipated business uncertainties, regulatory and other compliance matters or legal liabilities relating to those acquired businesses for which the sellers of the acquired businesses may not indemnify us, for which we may not be able to obtain insurance (or adequate insurance), or for which the indemnification may not be sufficient to cover the ultimate liabilities.

We may not be able to identify suitable acquisition candidates in the future, obtain acceptable financing or consummate any future acquisitions.

Certain potential acquisitions are subject to antitrust and competition laws that could impact our ability to pursue strategic acquisitions and could result in mandated divestitures.

If we are unsuccessful in our acquisition strategy, we may be unable to meet our financial targets and our financial performance could be materially and adversely affected.

In addition, dispositions of certain key products, technologies and other rights, including pursuant to conditions imposed on us to obtain regulatory approvals, may affect our business operations.

These risks may be heightened in cases where a substantial portion of an acquired businesses’ operations, employees or customers are located outside the U.S.

Any one or all of these factors could complicate the integration of acquired employees and operations, increase operating costs or lower anticipated financial performance.

Many of these factors are also outside of our control.

For example, the conflicts in the Middle East involving Israel, including any escalation or expansion thereof, and the measures enacted by the Israeli and other governments in response, may make it more difficult for us to both integrate Acclarent and realize the anticipated benefits of that acquisition.

We cannot guarantee that any of our acquisitions, investments or alliances will be successful.

We seek to supplement our internal growth through strategic acquisitions, investments and alliances.

Such transactions are inherently risky, and the integration of any newly-acquired business requires significant effort and management attention.

The success of any acquisition, investment or alliance may be affected by a number of factors, including our ability to properly assess and value the potential business opportunity or to successfully integrate any business we may acquire into our existing business.

Even if the operations of an acquired business are integrated successfully, we may not realize the full benefits of such acquisition, including the synergies, cost savings or sales or growth opportunities, that we expect.

These benefits may not be achieved within the anticipated time frame, or at all.

Additional unanticipated costs could be incurred in the integration of a business.

All of these factors could cause a reduction to our earnings per share, decrease or delay the expected accretive effect of a transaction, and negatively impact the price of our common stock.

Our global business exposes us to operational and economic risks.

There can be no assurance that any past or future transaction will be successful.

Our global business exposes us to certain operational, compliance and economic risks.

A significant portion of our current operations are conducted and located outside the United States, and our growth strategy involves expanding our existing foreign operations and entering into new foreign jurisdictions.

We have significant manufacturing and distribution sites in North America, Europe, China and Japan.

Our international operations subject us to laws regarding sanctioned countries, entities and persons, customs, import-export, laws regarding transactions in foreign countries, the U.S.

Our acquisition of Acclarent resulted in our acquiring research-and-development facilities and personnel located in Israel.

As we seek to continue to expand and strengthen our international operations, we may experience difficulty in growing our sales in certain new markets and other international markets in which we are attempting to increase our presence due to, among other things, customer acceptance, undeveloped and/or unfamiliar distribution channels, regulatory restrictions and changes, and business knowledge of these markets.

The success of our operations outside the U.S.

also depends, in part, on our ability to make necessary infrastructure enhancements to, among other things, our production facilities and sales and distribution networks, and our strategic staffing plans required to support our international operations.

These and other factors may adversely impact our ability to pursue our growth strategy in these markets.

Our international operations increase our compliance risk, as such operations subject us to laws regarding sanctioned countries, entities and persons, customs, import-export, laws regarding transactions in foreign countries, the U.S.

Foreign Corrupt Practices Act and local anti-bribery and other laws regarding interactions with healthcare professionals, and product registration requirements.

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In addition, these laws require that we exercise care in structuring our sales and marketing practices and effecting product registrations in foreign countries.

Changes in U.S.

and international trade policies, particularly with respect to China, may adversely impact our business and operating results.

From time to time, proposals are made to significantly change existing trade agreements and relationships between the U.S.

and other countries.

In recent years, the U.S.

government has implemented substantial changes to U.S.

trade policies, including import restrictions, increased import tariffs and changes in U.S.

participation in multilateral trade agreements, such as the United States-Mexico-Canada Agreement to replace the former North American Free Trade Agreement.

The ongoing global economic competition and trade tensions between the U.S.

and China has resulted in the U.S.

government assessing supplemental tariffs on certain goods imported from China and China’s assessment of retaliatory tariffs on certain imports of U.S.

goods into China.

It is unknown whether and to what extent new tariffs, export controls, or other new laws or regulations will be adopted, or the effect that any such actions would have on us or our industry.

For example, the recently proposed BIOSECURE Act targets U.S.

government contracts, grants, and loans for entities that use equipment and services from certain named Chinese biotech companies, and authorize the U.S.

government to name additional Chinese biotechnology companies of concern.

If the bill becomes law, or similar laws are passed, they would have the potential to severely restrict the ability of companies to work with certain Chinese biotechnology companies of concern without losing the ability to contract with, or otherwise receive funding from, the U.S.

Global enforcement of anti-corruption and bribery laws has increased substantially in recent years, with more enforcement proceedings by foreign governmental agencies and the imposition of significant fines and penalties.

While we have implemented policies, procedures and training related to compliance with these laws, our international operations, which often involve customer relationships with foreign governments, create the risk that there may be unauthorized payments or offers of payments made by employees, consultants, sales agents or distributors.

Any alleged or actual violations of these laws may subject us to government investigations and significant criminal or civil sanctions and other liabilities, and negatively affect our reputation which could result in a material adverse effect on our business, results of operations, financial condition and cash flows.

The current tensions in international trade and rising international political tensions and uncertainties may materially adversely affect our business, financial condition, and results of operations .

Our operations and performance are significantly impacted by global, regional and U.S.

economic and geopolitical conditions and increased trade barriers, including tariffs, from the U.S., China, the EU or other nations could materially adversely affect our business.

The current tariff environment is dynamic and uncertain, as the U.S.

government has imposed, modified and paused tariffs multiple times since the beginning of 2025.

Changes to tariffs and other trade restrictions can be announced at any time with little or no notice.

Additionally, potential tariffs or other U.S.

trade policy measures have already prompted, and may prompt further, retaliatory actions by other countries, including by countries that are significant markets for our products, such as China.

In addition, the U.S.

Department of Commerce recently initiated an investigation under Section 232 of the Trade Expansion Act of 1962, as amended, into (among other things) imports of personal protective equipment, medical consumables and medical equipment (including devices), to determine whether they threaten U.S.

national security, which further creates policy uncertainty in terms of tariffs.

The use of tariffs as a policy tool has created significant uncertainty about the future trading relationship among the U.S., China, the EU, Canada, Mexico and other exporting countries, including with respect to trade policies, treaties, government regulations and tariffs, and has led to concerns regarding the potential for extended trade barriers.

The escalation of trade tensions could impact us in a variety of ways, including increases in manufacturing costs, disruptions or delays to our global supply chain, limitations on our ability to sell our products;

and reductions in sales volumes and gross margins for our products, any of which could materially affect our business, financial condition and results of operations.

Political uncertainty surrounding trade and other international disputes could also have a negative effect on customer confidence and spending, including capital equipment purchases by hospitals and some of our other customers.

Changing our operations in accordance with new or changed trade restrictions may be expensive, time-consuming, disruptive to our operations and distracting to management.

Further, such trade barriers could also lead to fluctuations in both the U.S.

dollar and foreign currencies and our financial results may be materially adversely affected by such fluctuations.

Owing to the complex relationships between the U.S.

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and we generate revenues and incur operating expenses in multiple foreign currencies, we experience currency exchange risk with respect to those foreign currency-denominated revenues and expenses.

Our most significant currency exchange risk relates to transactions conducted in Australian dollars, British pounds, Canadian dollars, Chinese yuan, Euros, Japanese yen, and Swiss francs.

Our most significant currency exchange risk relates to transactions conducted in Euros, British pounds, Swiss francs, Canadian dollars, Japanese yen, Israeli shekel, Australian dollars and Chinese yuan.

We cannot predict the consolidated effects of exchange rate fluctuations upon our future operating results because of the number of currencies involved, the variability of currency exposure and the potential volatility of currency exchange rates.

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If such a decline, rate change or circumstance were to materialize, we may record an impairment of these intangible assets that could be material to the financial statements.

See Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates” of this Annual Report on Form 10-K, and Note 7.

For example, during the second quarter of 2025 we recognized an aggregate charge of $511.4 million in goodwill impairment expense in our consolidated statement of operations following our completion of a quantitative assessment of our Tissue Technologies, Neurosurgery, and Instruments and ENT reporting units in accordance with ASC 350.

The quantitative assessment was initiated following the decrease in the price per share of our common stock related to a number of factors including recent tariff changes that have created broad economic uncertainty and the impact of quality, operational, and supply issues.

For more information concerning the goodwill impairment charge we recorded in 2025 and related matters, please see Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates” of this Annual Report on Form 10-K, and Note 7.

Goodwill and Other Intangibles to the Notes to Consolidated Financial Statements (Part IV, Item 15 of this Annual Report on Form 10-K).

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The amount of any such impairment charges could be significant and have a material, adverse effect on our reported financial results for the period in which the charge is taken and could have an adverse effect on the market price of our securities, including the notes and the common stock into which they may be converted.

Lack of market acceptance for our products or market preference for technologies that compete with our products could reduce our revenues and profitability.

Market acceptance of our products depends on many factors, including our ability to convince prospective customers that our technology is an attractive alternative to other technologies, to manufacture products in sufficient quantities and at acceptable costs, and to supply and service sufficient quantities of our products directly or through our distribution alliances.

For example, the use of autograft tissue is a well-established means for repairing the dermis, and it competes for acceptance in the market with our collagen-based wound care products.

For example, greater market acceptance of our wound graft products may ultimately depend on our ability to demonstrate that coverage and reimbursement are available and favorable, or because they are an attractive, cost-effective alternative to other treatment options.

If there are negative events in the healthcare industry, whether real or perceived, there could be a negative impact on the industry as a whole.

The industry is subject to rapid and continuous change arising from, among other things, consolidation, technological improvements, the pressure on governments, third-party payors and providers to reduce healthcare costs, and healthcare reform legislation and initiatives domestically and internationally.

In addition, our future success depends, in part, on our ability to license and develop additional products.

Even if we determine that a product candidate has medical benefits, the cost of commercializing, either through internal development or payments associated with licensing arrangements, could be too high to justify development and we could ultimately face competitors with more effective products and better reimbursement status that cost less and are ready for commercial introduction before our products.

If we are unable to develop additional commercially viable products, our future prospects could be materially and adversely affected.

One or more of these factors could vary unpredictably, and such variations could have a material, adverse effect on our competitive position.

We may not be able to adjust our contemplated plan of development to meet changing market demands.

It could be difficult to replace some of our suppliers.

Outside vendors, some of whom are sole-source suppliers, provide key components and raw materials used in the manufacture of our products.

Although we believe that alternative sources for many of these components and raw materials are available, any interruption in supply of a limited or sole-source component or raw material could harm our ability to manufacture our products until a new or alternative source of supply is identified and qualified.

In addition, an uncorrected defect or supplier’s variation in a component or raw material, either unknown to us or incompatible with our manufacturing process, could harm our ability to manufacture products.

We rely on independent suppliers and third-party providers in our supply chain for raw materials, packaging materials and components, sterilization services, and some finished goods;

we could experience inventory shortages if any of these suppliers encounter a manufacturing or distribution disruption.

Outside vendors, some of whom are sole-source suppliers, provide key components, raw materials, packaging materials and components, sterilization services, and some finished goods used in the manufacture of our products.

Although we believe that alternative sources for many of these components, raw materials, packaging materials and some finished goods are available, any interruption in supply of a limited or sole-source component or raw material could harm our ability to manufacture our products until a new or alternative source of supply is identified and qualified.

We may not be able to find a sufficient alternative supplier in a reasonable time period, or on commercially reasonable terms, if at all, and our ability to produce and supply our products could be impaired.

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• our TCC-EZ ® total contact cast system products.

For example, in 2025, we initiated voluntary recalls of our MediHoney products due to a variety of packaging failures which compromised the sterility of such products.

Although MediHoney supply resiliency has been incorporated into our broader CMP efforts to strengthen our supply chains, a definitive relaunch date for our MediHoney products remains unknown at this time.

The availability of amniotic tissue-based products depends upon, among other factors, the availability of tissue from human donors.

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Although Integra has business continuity plans in place to mitigate the impact of any such disruptions, these plans may not be able to fully offset the full impact of such regulations.

Our supply chain and our cost of goods also may be negatively impacted by unanticipated price increases due to factors such as global economic disruptions, electronic component shortages, trade wars, inflation, including wage inflation, recessionary conditions and geopolitical events, including the war in Ukraine, the conflicts in the Middle East involving Israel and fear of future or ongoing pandemics, all of which are beyond our control or the control of our suppliers.

While it is our policy to maintain sufficient inventory of components so that our production will not be significantly disrupted even if a particular component or material is not available for a period of time, we remain at risk that we will not be able to qualify new components or materials quickly enough to prevent a disruption if one or more of our suppliers ceases production of important components or materials.

Our supply chain and our cost of goods also may be negatively impacted by unanticipated price increases due to factors such as global economic disruptions, electronic component shortages, trade wars, inflation, including wage inflation, recessionary conditions, geopolitical conflict and instability, including wars and acts of terrorism, and fear of future or ongoing pandemics, all of which are beyond our control or the control of our suppliers.

We may experience difficulties, delays, performance impact or unexpected costs from consolidation of facilities and transfer of manufacturing facilities.

In recent years, we consolidated several facilities or transferred manufacturing operations from third parties to our existing internal manufacturing facilities and may further undertake similar consolidations or transfers in the future in order to improve our cost structure, achieve increased operating efficiencies, and improve our competitive standing or results of operations and/or to address unfavorable economic conditions.

For example, in the second quarter of 2024, the Company announced its plans to operationalize its Braintree, Massachusetts manufacturing facility (the “Braintree facility”) by the first half of 2026 and to transition the restart of the manufacture of PriMatrix and SurgiMend to the Braintree facility rather than attempt to restart the manufacture of these products at the Company’s Boston, Massachusetts manufacturing facility (the “Boston facility”).

In recent years, we consolidated several facilities or transferred manufacturing operations (including between third parties, from third parties to our existing internal manufacturing facilities, and from our existing manufacturing facilities to new internal manufacturing facilities) and may further undertake similar consolidations or transfers in the future in order to improve our cost

structure, achieve increased operating efficiencies and reliability, and improve our competitive standing or results of operations and/or to address unfavorable economic conditions.

For example, the Company has announced its plans to operationalize its Braintree, Massachusetts manufacturing facility (the “Braintree facility”) by the first half of 2026 and to transition the restart of the manufacture of PriMatrix and SurgiMend to the Braintree facility rather than attempt to restart the manufacture of these products at the Company’s Boston, Massachusetts manufacturing facility (the “Boston facility”).

The consolidation, transfer or operationalization of manufacturing facilities requires such facilities to meet all applicable requirements related to quality control, quality assurance, and the maintenance of records and documentation as required by the FDA and any other applicable regulatory body both before and following the commencement of the manufacture of any approved product at such facility.

For more information concerning the regulation related to our products, please refer to the risk factors appearing under the heading “— Risks Related to Our Regulatory Environment ” below.

As part of these initiatives, we may also lose favorable tax incentives or not be able to renew leases on acceptable terms.

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Certain of our manufacturing facilities are located in Puerto Rico, which in the past has experienced both severe hurricanes and other natural disasters.

Climate change may increase both the frequency and severity of extreme weather conditions and natural disasters and, consequently, risks to our operations and growth.

Although we maintain property damage and business interruption insurance coverage on these facilities, our insurance might not cover all losses under such circumstances, and we may not be able to renew or obtain such insurance in the future on acceptable terms with adequate coverage or at reasonable costs.

Glo bal supply constraints have and may continue to adversely affect our ability to meet customer demand, and increase our costs to manufacture, transport and warehouse a certain subset of our products.

In addition, global supply constraints have

resulted in increases to the costs of production of certain of our products that we may not be able to pass on to our customers.

Moreover, climate change may increase both the frequency and severity of extreme weather conditions and natural disasters and, consequently, risks to our operations and growth.

S upply constraints have and may continue to adversely affect our ability to meet customer demand, and increase our costs to manufacture, transport and warehouse a certain subset of our products.

In addition, supply constraints have resulted in increases to the costs of production of certain of our products that we may not be able to pass on to our customers.

We expect these factors will continue to impact us in the future and obtaining alternative sources of raw materials and components could involve significant costs and regulatory challenges and may not be available to us on commercially reasonable terms, if at a ll.

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Our insurance may not be renewed at a cost and level of coverage comparable to that then in effect.

Economic and political instability around the world could adversely affect the ability of hospitals, other customers, suppliers and distributors to access funds or otherwise have available liquidity, which could reduce orders for our products or interrupt our production or distribution or result in a reduction in elective and non-reimbursed operative procedures.

Economic and political instability around the world could adversely affect the ability of hospitals and other customers to access funds to enable them to fund their operating and capital budgets.

As a result, hospitals and other customers could reduce budgets or put all or part of their budgets on hold or close their operations, which could have a negative effect on our sales, particularly the sales of capital equipment such as our ultrasonic surgical aspirators, neuro monitors and cranial stabilization products, or result in a reduction in elective and non-reimbursed procedures.

The occurrence of those economic conditions could make it more difficult for us to accurately forecast and plan our future business activities and depending on their severity, could have a material, adverse effect on our business, financial condition and results of operations.

Our private label product lines depend significantly on key relationships with third parties, which we could be unable to establish and maintain.

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We are also subject to regulations that may apply to certain of our products that are Drug/Device Combination products or are considered to be subject to pharmaceutical regulations outside the U.S.

Before a new medical device, or a new use of an existing product can be marketed in the United States, it must first receive either premarket clearance under Section 510(k) of the FD&C Act, a grant of a request for de novo classification, or a PMA from the FDA, unless an exemption applies.

The process of obtaining marketing approval or clearance from the FDA and comparable foreign regulatory agencies for new products, or for enhancements or modifications to existing products could be costly, time consuming and burdensome, may be impacted by failed clinical trials or weakened clinical evidence, involve modifications, repairs or replacements of our products and result in limitations on the indicated use of our products, which may negatively impact our ability to market our products and services, result in delays or prevent full commercial realization of future products or service.

The process of obtaining marketing approval or clearance from the FDA and comparable foreign regulatory agencies for

new products, or for enhancements or modifications to existing products could be costly, time consuming and burdensome, may be impacted by failed clinical trials or weakened clinical evidence, involve modifications, repairs or replacements of our products and result in limitations on the indicated use of our products, which may negatively impact our ability to market our products and services, result in delays or prevent full commercial realization of future products or service.

Furthermore, failure to obtain timely approvals, certifications or renewals may result in penalties and fines.

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We also cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad.

Further, changes or shortages in FDA staffing resulting from the change in the federal administration could result in delays in the FDA’s responsiveness or in its ability to review submissions or applications, issue regulations or guidance, or implement or enforce regulatory requirements in a timely fashion or at all, which could negatively impact our business.

In addition, government shutdowns, recent reductions in U.S.

government agency staffing and government spending more generally could impact ordinary course operations of agencies with which we interact routinely, such as the FDA.

Following these reductions, the agencies may lack adequate staff and resources to meet current review, approval and inspection schedules, which could delay the receipt of or otherwise adversely affect the outcomes of product authorizations we seek.

We are subject to extensive complex regulatory requirements by domestic and foreign government agencies and any failure to comply with our ongoing responsibilities under their applicable laws and regulations could result in a material adverse impact on our business.

Failure to comply with applicable regulations could result in future product recalls, injunctions preventing the shipment of products or other enforcement actions that could have a material adverse effect on our business.

Failure to comply with applicable regulations could result in reduced sales, increased costs, delays to new product introductions, harm to our reputation or competitiveness, future product recalls, injunctions preventing the shipment of products or other enforcement actions, all of which could have a material adverse effect on our business and financial results.

In addition, the FDA has taken the position that device manufacturers are prohibited from promoting their products other than for the uses and indications set forth in the cleared or approved product labeling, and any failure to comply could subject us to significant civil or criminal exposure, administrative obligations and costs, and/or other potential penalties from, and/or agreements with, the federal government.

Similar restrictions exist in many other countries where we do business, included EEA.

We also are subject to the EU MDR, which was adopted by the EU as a common legal framework for all EU Member States (and also applies to Norway, Iceland and Liechtenstein).

The EU MDR became applicable on May 26, 2021, repealing the EU MDD.

The EU MDR sets out certain transitional provisions that allow for medical devices covered by the repealed EU MDD (called “legacy devices”) to still be marketed in the EEA for a certain period of time.

Most Class I medical devices had to comply with the EU MDR from May 26, 2021.

However, the European Commission has recently extended the transition periods to December 31, 2027, for high-risk legacy devices (all Class III devices, and Class IIb implantable devices except sutures, staples, dental fillings, dental braces, tooth crowns, screws, wedges, plates, wires, pins, clips and connectors) and to December 31, 2028 for medium and low-risk devices (other Class IIb devices, Class IIa devices, and Class I devices placed on the market in sterile condition or having a measuring function).

Under the EU MDR, companies that wish to manufacture and distribute medical devices in EEA must meet certain quality system, performance and safety requirements as well as ongoing product monitoring responsibilities.

Companies must also affix a “CE” marking to their products.

The right to affix the “CE” marking requires that the manufacturer has previously undergone a conformity assessment procedure for the relevant medical devices, in most cases involving a Notified Body (an organization accredited by the competent authority of an EEA country to conduct conformity assessments).

Similar restrictions exist in many other countries where we do business, including the EEA.

As we disclosed above in “Part 1, Item 1.

Business – Government Regulation,” we also are subject to the EU MDR, which was adopted by the EU as a common legal framework for all EU Member States (and also applies to Norway, Iceland and Liechtenstein).

The EU MDR also sets out certain transitional provisions that permit certain legacy devices to remain on the market for a limited period, and failure to obtain, maintain, or timely transition required certifications under the EU MDR, including within those transitional periods, could restrict our ability to market certain products in the EEA and other jurisdictions that rely on EU certifications, and could adversely affect our business, financial condition, and results of operations.

Under the EU MDR, companies that wish to manufacture, import and distribute medical devices in EEA must meet certain quality system, performance and safety requirements as well as ongoing product monitoring responsibilities.

Complying with the requirements of these regulations may require us to incur significant expenditures.

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It is possible that the Chinese government’s current or future interpretation and application of existing or new regulations will negatively impact our China operations, result in regulatory investigations or lead to fines or penalties.

Should we delay or fail to comply with one or more of the regulatory requirements we could have reduced sales, increased costs, delays to new product introductions, enhancements or our strategic plans, or harm to our reputation or competitiveness, which could have a material adverse effect on our business and financial results.

In addition, maintaining compliance with multiple regulators, and multiple centers within the FDA, adds complexity and cost to our manufacturing processes.

Our manufacturing facilities and those of our contract manufacturers are subject to periodic regulatory inspections by the FDA and other regulatory agencies, and these facilities are subject to the FDA's Quality System Regulation and Good Manufacturing Practices.

Please refer to “Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations – FDA Matters" (Part II, Item 7 of this Annual Report on Form 10-K) for more information relating to the warning letter we received from the FDA related to inspection observations of the quality systems at our Boston facility and our remediation efforts and expectations regarding the operationalization of our Braintree facility and the transition of manufacturing activities from the Boston facility to the Braintree facility and the warning letter we received from the FDA in December 2024 (the “December 2024 Warning Letter”) related to quality system issues identified during FDA inspections at three of the Company’s facilities located in Mansfield, Massachusetts, Plainsboro, New Jersey, and Princeton, New Jersey.

We or our contractors may fail to satisfy these regulatory requirements in the future, and any failure to do so may prevent us from selling our products.

Further, there can be no assurance that the Company will build and operationalize the Braintree facility, transition manufacturing activities to the Braintree facility or realize the anticipated benefits of the Company’s consolidation of its efforts at Braintree on the planned timeline, or at all, which could have a material adverse effect on our business and financial results.

Some of our activities may subject us to risks under federal and state laws prohibiting “kickbacks” and false or fraudulent claims.

We are subject to laws and regulations that govern the means by which companies in the healthcare industry may market their products to healthcare professionals and may compete by discounting the prices of their products, including for example, the federal AKS, the False Claims Act, HIPAA, state law equivalents to these federal laws that are meant to protect against fraud and abuse and analogous laws in foreign countries.

Violations of these laws are punishable by criminal and civil sanctions, including, but not limited to, in some instances civil and criminal penalties, damages, fines, restitution and exclusion from

participation in federal and state healthcare programs, including Medicare and Medicaid.

Violations of these laws are punishable by criminal and civil sanctions, including, but not limited to, in some instances, civil and criminal penalties, damages, fines, restitution and exclusion from participation in federal and state healthcare programs, including Medicare and Medicaid.

For a more detailed discussion of these laws, see “Item 1.

Business — Government Regulation and Compliance — Other Regulations — Healthcare Fraud and Abuse Laws.”

The sales and marketing practices of our industry have been the subject of increased scrutiny from federal and state government agencies, and we believe that this trend will continue.

Various hospital organizations, medical societies and trade associations are establishing their own practices that may require detailed disclosures of relationships between healthcare professionals and medical device companies or ban or restrict certain marketing and sales practices such as gifts and business meals.

Since these laws, regulations and ultimate enforcement continue to evolve, we cannot predict with certainty, what, if any, impact, changes to them may have on our business or our customers.

Our international operations are subject to the provisions of the U.S.

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Moreover, our failure to comply with domestic or foreign laws could result in various adverse consequences, including possible delay in approval or refusal to approve a product, recalls, seizures, and withdrawal of an approved product from the market.

The sales and marketing practices of our industry have been the subject of increased scrutiny from federal and state government agencies, and we believe that this trend will continue.

Since these laws, regulations and ultimate enforcement continue to evolve, we cannot predict with certainty, what, if any, impact, changes to them may have on our business or our customers.

Our medical device products are subject to reporting requirements and recalls, even after receiving regulatory clearance, approval or certification, which could harm our reputation, business and financial results.

Maintaining compliance with multiple regulators, and multiple centers within the FDA, adds complexity and cost to our manufacturing processes.

Both before and after a device is placed on the market, numerous regulatory requirements apply, which require manufacturers to follow, among other things, design, testing, production, control, documentation and other quality assurance procedures during the manufacturing process;

labeling regulations, which prohibit the promotion of products for unapproved or “off-label” uses and impose other restrictions on labeling;

labeling regulations, which prohibit the promotion of unapproved products or unapproved or “off-label” uses of cleared or approved products and impose other restrictions on labeling;

and medical device reporting regulations that require us to report to FDA or similar governmental bodies in other countries if our products are ineffective or may have caused or contributed to a death or serious injury or malfunction in a way that would be reasonably likely to contribute to death or serious injury if the malfunction were to recur.

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We currently cannot predict with certainty whether we will be able to effectively implement the CMP and realize the benefits contemplated thereby within the anticipated timeframe, or at all.

For more information concerning our remediation efforts, including the implementation of the CMP, and our expectations regarding the Company’s plans to build and operationalize the Braintree manufacturing facility and to transition manufacturing activities from the Boston facility to the Braintree facility and respond to the December 2024 Warning Letter, please see "Item 7.

For more information concerning our remediation efforts, including the status of the implementation of the CMP, and our expectations regarding the Company’s plans to build and operationalize the Braintree manufacturing facility and to transition manufacturing activities from the Boston facility to the Braintree facility and respond to the December 2024 Warning Letter, please see “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - FDA Matters” in this Annual Report on Form 10-K.

Recalls of any of our products may divert managerial and financial resources and have an adverse effect on our financial condition and results of operations and cash flows.

A recall could harm our reputation with customers and consumers which could reduce the sales of our products.

In addition, the FDA or other foreign governmental agencies may implement enforcement actions Any adverse regulatory action, depending on its magnitude, may restrict us from effectively marketing and selling our products and limit our ability to obtain future pre-market clearances or approvals, and could result in a substantial modification to our business practices and operations.

A recall might not only impact our results of operations and financial results but also could harm our reputation with customers and consumers which could reduce the future sales of our products.

In addition, the FDA or other foreign governmental agencies may implement enforcement actions Any adverse regulatory action, depending on its magnitude, may place us under heightened scrutiny by the FDA and other regulators, including more frequent or more extensive inspections and increased monitoring of our quality and compliance activities, may restrict us from effectively marketing and selling our products and subject us to increased requirements for documentation or data in connection

with future submissions or otherwise limit our ability to obtain future pre-market clearances or approvals, and could result in a substantial modification to our business practices and operations.

The adoption of healthcare reform in the U.S.

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These initiatives include price regulation, competitive pricing, coverage and payment policies, comparative effectiveness of therapies, technology assessments and managed-care arrangements.

For example, Congress also drafts and introduces, from time to time, legislation that could significantly change the statutory provisions governing the regulation of medical devices.

For example, the OBBBA is projected to decrease federal health care spending by approximately $1.0 trillion by reducing Medicaid spending and enrollment and making changes to federal Medicare spending.

Congress also drafts and introduces, from time to time, legislation that could significantly change the statutory provisions governing the regulation of medical devices.

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

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We received approval in the U.S., the EU, Japan, Taiwan, China, Argentina as well as other countries for the use of New Zealand-sourced tendon in the manufacturing of our products.

If we cannot continue to use or qualify a source of tendon from New Zealand or another country that has never had a case of BSE, we could be prohibited from selling our collagen products in certain countries.

If we cannot continue to use or qualify a

source of tendon from New Zealand or another country that has never had a case of BSE, we could be prohibited from selling our collagen products in certain countries.

We are subject to current and potential future requirements relating to protection of the environment, such as hazardous materials regulations, which may impose significant compliance or other costs on us.

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We may not be able to maintain insurance on acceptable terms or at all.

Our business and operations are subject to risks related to climate change.

The long-term effects of global climate change present both physical risks (from the increased frequency of extreme weather conditions or natural disasters) and transition risks (from regulatory requirements or technology changes).

Such extreme weather conditions could pose physical risks to our facilities and disrupt operation of our supply chain and may impact operational costs.

Concern over global climate change could result in new legal or regulatory requirements designed to mitigate the effects of climate change on the environment.

If such laws or regulations are more stringent than current legal or regulatory requirements, we may experience increased compliance burdens and costs to meet the regulatory obligations and such measures may interrupt our operations or the operations of our suppliers, potentially leading to higher costs, and therefore negatively impact our results of operations.

Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverse effect on our business, financial condition and results of operations and damage our reputation.

There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters.

Additionally, public interest and legislative pressure related to public companies’ ESG practices continue to grow.

While we may create and publish voluntary disclosures regarding ESG matters from time to time, many of the statements in those voluntary disclosures are based on hypothetical expectations and assumptions that may or may not be representative of current or actual risks or events or forecasts of expected risks or events, including the costs associated therewith.

Such expectations and assumptions are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved and the lack of an established single approach to identifying, measuring and reporting on many ESG matters.

In addition, collecting, measuring and reporting environmental data is subject to evolving reporting standards, including the SEC’s climate-related reporting requirements, if such reporting requirements survive pending judicial review, California’s disclosure requirements and similar regulations established by other international regulatory bodies, such as the Corporate Sustainability Reporting Directive in the European Union.

In addition, a number of our customers who are payors or distributors have adopted, or may adopt, procurement policies that include environmental provisions applicable to us.

If we do not adapt to or comply with new regulations, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues, we may incur increased compliance costs, investors may reconsider their capital investment in our Company, and customers may choose to stop purchasing our products, which could have a material adverse effect on our reputation, business or financial condition.

Environmental, social and corporate governance issues, including those related to climate change and sustainability, may have an adverse effect on our business, financial condition and results of operations and damage our reputation.

There continues to be an increasing focus from foreign, federal, state and local regulatory and legislative bodies and certain investors, customers, consumers, employees and other stakeholders concerning environmental policies relating to climate change, regulating greenhouse gas emissions, sustainability, human rights and inclusion matters, and disclosure regarding the foregoing, many of which may be ambiguous, inconsistent, dynamic or conflicting.

We expect to experience or be subject to increased restrictions, transition risks (from regulatory requirements or technology changes), compliance and assurance costs, recurring investments in data gathering and reporting systems, and legal expenses related to such new or changing legal or regulatory requirements, which could increase our operating costs.

In addition, we may still be subject to penalties or potential litigation if such laws and regulations are interpreted or applied in a manner inconsistent with our practices.

Moreover, from time to time we establish and publicly announce environmental, social and governance aspirational goals and commitments.

Implementation of our environmental, social and governance aspirational goals and initiatives involves risks and uncertainties, requires investments, and depends in part on third-party performance or data that is outside of our control.

In addition, some stakeholders may disagree with the Company’s environmental, social and governance aspirational goals, targets or objectives.

If we do not meet, are perceived not to meet, or if stakeholders disagree with, our environmental, social and governance aspirational goals, targets or objectives, we risk negative stakeholder reaction as well as damage to our reputation, reduced demand for our products, inability to attract capital investment from investors, inability to attract and retain employee talent or other negative impacts on our business, operations and financial condition.

If we do not retain our key personnel and attract and retain other highly skilled employees, our business could suffer.

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Additionally, in our industry, there is substantial competition for key personnel in the regions in which we operate and plan to expand our business.

Labor shortages and competition for

qualified personnel, particularly as employees are increasingly able to work remotely, could cause disruptions in our business operations.

Labor shortages and competition for qualified personnel, particularly as employees are increasingly able to work remotely, could cause disruptions in our business operations.

Also, facilitating seamless leadership transitions for key positions is a critical factor in sustaining the success of our organization.

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and many foreign jurisdictions.

Taxes could significantly increase due to changes in tax laws or changes in our interpretation of those laws.

For example, several countries, including the United States and other members of the Organization for Economic Cooperation and Development (“OECD”) have reached agreement on a global minimum tax initiative (“Pillar Two”).

Other OECD countries are also actively considering changes to existing tax laws or have proposed new laws to align with the recommendations and guidelines proposed by the OECD, including Pillar Two.

Enactment of such tax laws could increase our tax obligations in countries where we do business or cause us to change the way we operate our business.

Beginning in 2024, Pillar Two is in effect in some of the jurisdictions in which we operate.

The Pillar Two impact on 2024 was immaterial.

However, we cannot provide any assurance that there will not be a material impact to our effective tax rate because of these developments and evolving tax legislation in 2025 and beyond.

Taxes could significantly increase due to changes in tax laws, changes in the interpretation or application of those laws, or differences in how tax authorities enforce those laws.

has not adopted the Organization for Economic Cooperation’s global minimum tax initiative (“Pillar Two”), and as of December 31, 2025, the G7 countries announced an agreement to exempt U.S.

companies from certain elements of the Pillar Two framework.

Although certain proposals could mitigate the impact on U.S.-based multinational companies, there is no assurance such proposals will be enacted, implemented consistently, or sustained.

In addition, Pillar Two remains in effect in other countries, and there is significant uncertainty regarding the implementation of the G7 agreement, the interpretation and consistent application of existing Pillar Two rules, their interaction with national tax laws, and their consistency with current tax treaty obligations.

We cannot provide any assurance that there will not be a material impact to our effective tax rate because of these developments and evolving tax legislation in 2025 and beyond.

Taxes could also significantly increase due to changes in accounting guidance.

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Our debt service obligations will require us to use a portion of our operating cash flow to pay interest and principal on indebtedness instead of for other corporate purposes, including funding future expansion of our business, acquisitions, and ongoing capital expenditures, which could impede our growth.

In addition, the Convertible Senior Notes due 2025 (the “2025 Notes”) will mature in August 2025, unless earlier converted, redeemed, or repurchased.

Our ability to comply with, renegotiate or extend the Company’s debt obligations will depend on various factors, including the accessibility of the capital markets and our operating and financial performance, which, in turn, is subject to prevailing economic conditions and financial, business and other factors beyond our control.

Our Senior Credit Facility (as defined below) has a maturity date of March 24, 2028 (See Note 5.

Debt , to the Notes to Consolidated Financial Statements (Part IV, Item 15 of this Annual Report on Form 10-K) for a discussion of our consolidated external debt, including the Senior Credit Facility).

We may seek to refinance all of our outstanding debt in 2026 and we may not be able to refinance our existing debt on terms acceptable to us or at all.

Any disruptions in our operations, the financial markets, or the overall economy, may adversely affect the availability and cost of credit to us and/or our ability to comply with our existing obligations.

In addition, prevailing interest rates or other factors at the time of refinancing could increase our interest expense.

A refinancing of our indebtedness could also require us to comply with more onerous covenants and further restrict our business operations.

Our inability to refinance our indebtedness or to do so upon attractive terms could materially and adversely affect our business, prospects, results of operations, financial condition and cash flows, and make us vulnerable to adverse industry and general economic conditions.

RISKS RELATED TO OUR INTELLECTUAL PROPERTY

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We are increasingly dependent on sophisticated information technology for our infrastructure and to support business decisions.

Our information systems require an ongoing commitment of significant resources to maintain, protect, and enhance existing systems and develop new systems to keep pace with continuing changes in information processing technology, evolving systems and regulatory standards, the increasing expectations regarding protection of patient, customer, and employee information, and changing customer patterns.

information, and changing customer patterns.

An experienced third party maintains the enterprise business system used to support our transaction processing, accounting and financial reporting, and supply chain and manufacturing processes.

Any significant breakdown, intrusion, interruption, corruption, or destruction of these systems, as well as any other cybersecurity incident, could have a material, adverse effect on our business.

Third parties may attempt to compromise our systems and may obtain data relating to patients, proprietary or other sensitive information.

We may face increased cybersecurity risks due to our reliance on internet technology and the number of our

employees who are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities.

If we, or third parties on whom we rely, fail to maintain or protect our information systems and data integrity effectively, we could lose existing customers, have difficulty attracting new customers, suffer backlash from negative public relations, have regulatory sanctions or penalties imposed, have increases in operating expenses, incur expenses or lose revenues as a result of a data privacy incident (including from class action settlements or awards), or suffer other adverse consequences.

We have programs, processes (including ongoing improvements) and technologies in place to prevent, detect, contain, respond to and mitigate security related threats and potential incidents.

A cybersecurity incident may also result in improper use of our information systems, unauthorized access, use, disclosure, modification or destruction of information, defective products, production downtimes and operational disruptions.

Cybersecurity incidents may involve social engineering/phishing, cyber-attacks (including ransomware, malware attacks, unauthorized access attempts, and denial of service and other unintentional intrusions or malicious cyber-attacks), cyber extortion or other fraudulent schemes, or attempts to exploit vulnerabilities and may result in a compromise of our information systems, including unauthorized access to data relating to patients, proprietary or other sensitive information.

We may face increased cybersecurity risks due to our reliance on internet technology and the number of our employees who are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities.

If we, or third parties on whom we rely, fail to maintain or protect our information systems and data effectively, we could lose existing customers, have difficulty attracting new customers, suffer backlash from negative public relations, experience increased regulatory scrutiny or have regulatory sanctions or penalties imposed, have increases in operating expenses, incur expenses or lose revenues as a result of a data privacy incident (including from class action settlements or awards), or suffer other adverse consequences (including from litigation, class action settlements, or awards), have increased cybersecurity protection and insurance costs, miss reporting deadlines, or suffer other adverse consequences.

For example, a vulnerability affecting a third-party provider’s enterprise software we use was exploited in a threat actor campaign that affected numerous of the third-party provider’s customers.

As a result, we have an ongoing investigation to assess the nature and scope of any impacted Company data.

Several putative class action lawsuits also have been filed relating to this incident, including against us, and additional litigation, regulatory inquiries, or claims may arise and we cannot predict the ultimate outcome, scope or impact of this matter.

We have programs, processes (including ongoing improvements) and technologies in place to prevent, detect, contain, respond to and mitigate cybersecurity related threats and potential incidents.

Because the techniques used to obtain unauthorized access or interrupt services change frequently and can be difficult to detect, anticipating, identifying or preventing these threats or mitigating them if and when they occur, may be challenging.

And as increased regulatory compliance for cybersecurity protocols and disclosures are required or expected by regulatory authorities, there is no guarantee that the increased amount of resources, both time and expense, will not adversely affect our business, or that a court or regulator will agree that the measures we have put in place are reasonable, appropriate, or adequate.

Further, adoption of artificial intelligence (“AI”) tools by us or by third parties may pose new cybersecurity challenges.

Threat actors may use AI tools to automate and enhance cybersecurity attacks against us.

We use software and platforms designed to detect such cybersecurity threats but these threats could become more sophisticated and harder to detect and counteract, which may pose significant risks to our data security and systems.

We are also dependent on third party vendors to supply and/or support certain aspects of our information technology systems which may contain defects in design or manufacture or other problems that could result in system disruption or unexpectedly compromise the information security of our own systems.

In addition, as we grow in part through new acquisitions we may face risks due to implementation, modification, or remediation of controls, procedures, and policies relating to data privacy and cybersecurity at the acquired business that may or may not have been identified as part of due diligence or encounter issues as part of integration.

We continue to consolidate and integrate the number of systems we operate, and to upgrade and expand our information system capabilities for stable and secure business operations.

Despite our implementation of controls to protect our systems and information, we remain vulnerable to cybersecurity incidents such as theft, misplaced, lost or corrupted data, employee errors and/or malfeasance (including misappropriation by departing employees), ransomware, and evolving attacks such as with the assistance of the use of AI tools or involving open source software vulnerabilities, that could potentially lead to the compromising of sensitive, confidential or personal data or information, improper use of our systems, software solutions or networks, unauthorized access, use, disclosure, modification or destruction of information, defective products, production downtimes and operational disruptions.

In addition, a cybersecurity incident could result in other negative consequences, including damage to our reputation or competitiveness, remediation or increased protection costs, litigation or regulatory action.

Failure to comply with laws relating to the confidentiality of sensitive personal information or standards related to the transmission of electronic health data, may require us to make significant changes to our products, or incur penalties or other liabilities .

State, federal and foreign laws, such as HIPAA, Section 5 of the FTC Act, or the California Consumer Privacy Act, as amended by the CCPA, and other similar state laws regulate the confidentiality of personal information, including sensitive information and the circumstances under which such information may be released.

We continue to consolidate and integrate the number of information systems we operate, and to upgrade and expand our information system capabilities for stable and secure business operations.

While we have obtained cybersecurity insurance, there are no assurances that the coverage would be adequate in relation to any incurred losses.

Moreover, as cyber attacks increase in frequency and magnitude, we may be unable to obtain cybersecurity insurance in amounts and on terms we view as adequate for our operations in the future.

Failure to comply with laws relating to the confidentiality of sensitive personal information or standards related to the transmission of electronic health data, including in international jurisdictions, may require us to make significant changes to our products, or incur penalties or other liabilities .

State, federal and foreign laws, such as HIPAA, Section 5 of the FTC Act, or the California Consumer Privacy Act and other similar state laws regulate the confidentiality of personal information, including sensitive information and the circumstances under which such information may be released.

These measures may govern the disclosure and use of personal and patient medical record information and may require users of such information to implement specified security measures and to notify individuals in the event of privacy and cybersecurity incidents.

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These standards also continue to evolve and are often unclear and difficult to apply.

We have incurred and expect that we will continue to incur costs implementing additional security measures to protect against new or enhanced data security or privacy threats, or to comply with current and new federal, state and international laws governing data privacy and cybersecurity which are continuously being enacted and proposed.

We have incurred and expect that we will continue to incur costs implementing additional

security measures to protect against new or enhanced data security or privacy threats, or to comply with current and new federal, state and international laws governing data privacy and cybersecurity which are frequently being enacted and proposed.

Moreover, as a result of the broad scale release and availability of AI technologies such as generative AI, there is a global trend towards more regulation (e.g., the EU AI Act and AI laws passed in U.S.

states) to ensure the ethical use, privacy, and security of AI and the data that it processes.

states) designed to ensure the ethical use, privacy, and security of AI and the data that it processes.

Compliance with such laws will likely be an increasing and substantial cost in the future.

Outside the U.S., we are also impacted by privacy and data security requirements at the international, national and regional level, and on an industry specific basis.

More privacy and cybersecurity laws and regulations are being adopted and enforced, with the potential for financial penalties.

The EU GDPR, including as implemented in the UK, applies across the EU and includes, among other things, a requirement for prompt notice of data breaches to data subjects and supervisory authorities in certain circumstances as well as requirements prior to transferring personal data to other jurisdictions.

The GDPR also requires companies processing personal data of individuals in the EU to comply with EU data protection rules.

The GDPR, and its United Kingdom equivalent, is also influential for a growing number of jurisdictions who have adopted, or contemplated adoption, of similar data protection laws.

Failure to maintain the confidentiality of personal data in accordance with the applicable regulatory requirements, or to abide by electronic health data transmission standards, could expose us to breach of contract claims, regulatory fines and penalties, litigation expenses, costs for remediation and harm to our reputation.

Business – Government Regulation and Compliance – Other Regulations – Data Privacy and Cybersecurity Laws and Regulations.” Failure to maintain the confidentiality of personal data in accordance with the applicable regulatory requirements, or to abide by electronic health data transmission standards, could expose us to breach of contract claims, regulatory fines and penalties, (which may be significant in EU or other non-US jurisdictions), litigation expenses, costs for remediation and harm to our reputation.

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

What changed 10-K

Item 1A. Risk Factors