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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark one)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 0-19961

ORTHOFIX MEDICAL INC.

(Exact name of registrant as specified in its charter)


Delaware		98-1340767
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3451 Plano Parkway, Lewisville, Texas		75056
(Address of principal executive offices)		(Zip Code)

(214) 937-2000

(Registrant's telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large Accelerated filer	☐	Accelerated filer	☒

Non-Accelerated filer	☐	Smaller Reporting Company	☐

		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of May 1, 2026, 40,421,652 shares of common stock were issued and outstanding.

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.10 par value per share	OFIX	Nasdaq Global Select Market

Table of Contents


		Page
PART I	FINANCIAL INFORMATION

Item 1.	Financial Statements	4

	Condensed Consolidated Balance Sheets as of March 31, 2026, and December 31, 2025	4

	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2026, and 2025	5

	Condensed Consolidated Statements of Changes in Shareholders' Equity for the three months ended March 31, 2026, and 2025	6

	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026, and 2025	7

	Notes to the Unaudited Condensed Consolidated Financial Statements	8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28

Item 4.	Controls and Procedures	29

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	30

Item 1A.	Risk Factors	30

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30

Item 3.	Defaults Upon Senior Securities	30

Item 4.	Mine Safety Disclosures	30

Item 5.	Other Information	30

Item 6.	Exhibits	30

SIGNATURES		32

Forward-Looking Statements

This quarterly report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), relating to our business and financial outlook, which are based on our current beliefs, assumptions, expectations, estimates, forecasts, and projections. All statements, other than statements of historical fact, contained in this report, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "projects," "intends," "predicts," "potential," "positioned," "deliver," or "continue" or other comparable terminology. Forward-looking statements include, but are not limited to, statements about:

•

our intentions, beliefs, and expectations regarding our operations, sales, expenses, and future financial performance;

•

our operating results;

•

our plans for future products and enhancements of existing products;

•

anticipated growth and trends in our business;

•

the timing of, and our ability to maintain and obtain, regulatory clearances or approvals;

•

our belief that our cash and cash equivalents, investments, and access to our credit facilities will be sufficient to satisfy our anticipated cash requirements;

•

our expectations regarding our revenues, customers, and distributors;

•

our ability to persuade surgeons to use our products;

•

our ability to attract and retain distributors and/or sales and other personnel;

•

our expectations regarding our costs, suppliers, and manufacturing abilities;

•

our beliefs and expectations regarding our market penetration and expansion efforts;

•

our anticipated trends and challenges in the markets in which we operate; and

•

our expectations and beliefs regarding, and the impact of, investigations, claims, and litigation.

Forward-looking statements are not guarantees of future performance and involve risks, uncertainties, estimates, and assumptions that are difficult to predict. Any or all forward-looking statements that we make may turn out to be wrong (due to inaccurate assumptions that we make or otherwise), and our actual outcomes and results may differ materially from those expressed in forward-looking statements. Potential risks and uncertainties that could cause actual results to differ materially include, but are not limited to, those set forth in Part I, Item 1A under the heading Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2025 ("2025 10-K"); Part II, Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations of the 2025 10-K; and elsewhere throughout the 2025 10-K, and in our reports filed with the U.S. Securities and Exchange Commission (the "SEC") subsequent to the date we filed the 2025 10-K with the SEC. You should not place undue reliance on any forward-looking statements. Further, any forward-looking statement in this report speaks only as of the date hereof, unless it is specifically otherwise stated to be made as of a different date. Except as required by law, we undertake no obligation to update, and expressly disclaim any duty to update, our forward-looking statements, whether as a result of circumstances or events that arise after the date hereof, new information, or otherwise.

Trademarks

Solely for convenience, our trademarks and trade names in this report are referred to without the ® and ™ symbols, but such references should not be construed as any indicator that we will not assert, to the fullest extent under applicable law, our rights thereto.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ORTHOFIX MEDICAL INC.

Condensed Consolidated Balance Sheets


(U.S. Dollars, in thousands, except par value data)	March 31, 2026			December 31, 2025
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	120,278		$	82,025
Restricted cash		592			3,090
Accounts receivable, net of allowances of $8,990 and $8,308, respectively		137,775			135,746
Inventories		177,818			172,319
Prepaid expenses and other current assets		25,057			23,667
Total current assets		461,520			416,847
Property, plant, and equipment, net		125,327			129,399
Intangible assets, net		69,336			72,765
Goodwill		194,934			194,934
Other long-term assets		35,484			36,702
Total assets	$	886,601		$	850,647

Liabilities and shareholders’ equity
Current liabilities
Accounts payable	$	54,686		$	58,392
Current portion of finance lease liability		115			837
Other current liabilities		106,232			111,253
Total current liabilities		161,033			170,482
Long-term debt		221,335			157,391
Long-term portion of finance lease liability		12,937			17,060
Other long-term liabilities		56,110			55,677
Total liabilities		451,415			400,610
Contingencies (Note 7)
Shareholders’ equity
Common shares $0.10 par value; 100,000 shares authorized; 40,382 and 39,834 issued and outstanding as of March 31, 2026, and December 31, 2025, respectively		4,038			3,983
Additional paid-in capital		820,247			813,769
Accumulated deficit		(389,241	)		(368,333	)
Accumulated other comprehensive income		142			618
Total shareholders’ equity		435,186			450,037
Total liabilities and shareholders’ equity	$	886,601		$	850,647

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

ORTHOFIX MEDICAL INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss


	Three Months Ended March 31,
(Unaudited, U.S. Dollars, in thousands, except per share data)	2026			2025
Net sales	$	196,708		$	193,646
Cost of sales		57,162			72,027
Gross profit		139,546			121,619
Sales, general, and administrative		134,911			132,981
Research and development		15,320			19,766
Acquisition-related amortization, impairment, and remeasurement (Note 11)		3,751			17,745
Operating loss		(14,436	)		(48,873	)
Interest expense, net		(5,664	)		(4,506	)
Other income (expense), net		(734	)		1,246
Loss before income taxes		(20,834	)		(52,133	)
Income tax expense		(74	)		(961	)
Net loss	$	(20,908	)	$	(53,094	)

Net loss per common share:
Basic	$	(0.52	)	$	(1.35	)
Diluted		(0.52	)		(1.35	)
Weighted average number of common shares:
Basic		40,450			39,188
Diluted		40,450			39,188

Other comprehensive income (loss), before tax
Currency translation adjustment		(476	)		1,746
Other comprehensive income (loss), before tax		(476	)		1,746
Income tax expense related to other comprehensive income (loss)		—			—
Other comprehensive income (loss), net of tax		(476	)		1,746
Comprehensive loss	$	(21,384	)	$	(51,348	)

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

ORTHOFIX MEDICAL INC.

Condensed Consolidated Statements of Changes in Shareholders' Equity


(Unaudited, U.S. Dollars, in thousands)	Number of Common Shares Outstanding		Common Shares		Additional Paid-in Capital			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity
At December 31, 2025		39,834	$	3,983	$	813,769		$	(368,333	)	$	618		$	450,037
Net loss		—		—		—			(20,908	)		—			(20,908	)
Other comprehensive loss, net of tax		—		—		—			—			(476	)		(476	)
Share-based compensation expense		—		—		6,533			—			—			6,533
Common shares issued, net		548		55		(55	)		—			—			—
At March 31, 2026		40,382	$	4,038	$	820,247		$	(389,241	)	$	142		$	435,186


(Unaudited, U.S. Dollars, in thousands)	Number of Common Shares Outstanding		Common Shares		Additional Paid-in Capital			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity
At December 31, 2024		38,486	$	3,849	$	779,718		$	(276,141	)		(4,302	)	$	503,124
Net loss		—		—		—			(53,094	)		—			(53,094	)
Other comprehensive income, net of tax		—		—		—			—			1,746			1,746
Share-based compensation expense		—		—		6,469			—			—			6,469
Common shares issued, net		610		61		(12	)		—			—			49
At March 31, 2025		39,096	$	3,910	$	786,175		$	(329,235	)	$	(2,556	)	$	458,294

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

ORTHOFIX MEDICAL INC.

Condensed Consolidated Statements of Cash Flows


	Three Months Ended March 31,
(Unaudited, U.S. Dollars, in thousands)	2026			2025
Cash flows from operating activities
Net loss	$	(20,908	)	$	(53,094	)
Adjustments to reconcile net loss to net cash from operating activities
Depreciation, amortization, and impairment		13,493			34,431
Inventory reserve expenses		2,900			15,301
Amortization of operating lease assets, debt costs, and other assets		1,058			1,251
Provision for expected credit losses		719			1,058
Deferred income taxes		93			445
Share-based compensation expense		6,533			6,469
Loss on disposal of fixed assets		331			25
Change in valuation of investment securities		(16	)		—
Change in fair value of contingent consideration		750			(610	)
Other		(178	)		(1,347	)
Changes in operating assets and liabilities
Accounts receivable		(2,964	)		2,379
Inventories		(8,845	)		693
Prepaid expenses and other current assets		(1,459	)		141
Accounts payable		(4,368	)		(2,493	)
Other current liabilities		(5,221	)		(21,385	)
Other long-term assets and liabilities		472			(1,655	)
Net cash used in operating activities		(17,610	)		(18,391	)
Cash flows from investing activities
Capital expenditures		(10,661	)		(6,736	)
Other investing activities		146			—
Net cash used in investing activities		(10,515	)		(6,736	)
Cash flows from financing activities
Proceeds from issuance of common shares		—			49
Payments related to finance lease obligation		(31	)		(188	)
Proceeds from credit facility		64,025			—
Payment of debt issuance costs and other financing activities		(24	)		(512	)
Net cash provided by (used in) financing activities		63,970			(651	)
Effect of exchange rate changes on cash		(90	)		493
Net change in cash and cash equivalents		35,755			(25,285	)
Cash, cash equivalents, and restricted cash at the beginning of period		85,115			85,738
Cash, cash equivalents, and restricted cash at the end of period	$	120,870		$	60,453

Components of cash, cash equivalents, and restricted cash at the end of period
Cash and cash equivalents	$	120,278		$	57,953
Restricted cash		592			2,500
Cash, cash equivalents, and restricted cash at the end of period	$	120,870		$	60,453

Noncash investing activities - Accrued purchases of capital expenditures	$	13,524		$	5,618
Noncash investing activities - Purchase of intangible assets		—			40

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

ORTHOFIX MEDICAL INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

1. Business and basis of presentation

Description of the Business

Orthofix Medical Inc. (the "Company" or "Orthofix") is a global medical technology company dedicated to advancing healing and restoring mobility for patients with complex musculoskeletal conditions. Headquartered in Lewisville, Texas, the Company delivers technology-enabled solutions that support improved clinical outcomes and more efficient care across the continuum. Orthofix offers a focused and differentiated portfolio spanning spinal implants, therapeutic solutions, limb reconstruction systems, biologics and enabling technologies, including the 7D FLASH Navigation System.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Pursuant to these rules and regulations, certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair statement have been included. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company's 2025 Form 10-K. Operating results for the three months ended March 31, 2026, are not necessarily indicative of the results that may be expected for other interim periods or the year ending December 31, 2026.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company evaluates its estimates, including those related to revenue recognition; contractual allowances; allowances for expected credit losses; inventories; valuation of intangible assets; goodwill; fair value measurements, including contingent consideration; litigation and contingent liabilities; tax matters; and share-based compensation. Actual results could differ from these estimates.

2. Recently adopted accounting standards and recently issued accounting pronouncements

Recently Issued Accounting Pronouncements


Topic	Description of Guidance	Effective Date	Status of Company's Evaluation
Disclosure Improvements - Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative (Accounting Standard Update "ASU" 2023-06)	Adds interim and annual disclosure requirements to a variety of subtopics in the Accounting Standards Codification, including those focusing on accounting changes, earnings per share, debt, and repurchase agreements. The guidance will be applied prospectively. The effective date will be the date when the SEC's removal of the related disclosure requirement becomes effective, with early adoption prohibited.	Various	The Company is currently evaluating the impact this ASU may have on its consolidated financial statements.
Disaggregation of Income Statement Expenses (ASU 2024-03)	Improves financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to the financial statements at interim and annual reporting periods. The amendments are to be applied prospectively to financial statements issued for reporting periods after the effective date or retrospectively to all prior periods presented in the financial statements.	January 1, 2027	The Company is currently evaluating the impact this ASU may have on its consolidated financial statements.
Targeted Improvements to the Accounting for Internal-Use Software (ASU 2025-06)	Aligns the accounting for internal-use software with how software is developed to increase the operability of the recognition and capitalization of internal-use software costs in accordance with Subtopic 350-40. Early adoption is permitted as of the beginning of an annual reporting period. The guidance is to be applied prospectively to new software costs incurred as of the beginning of the adoption period for all projects, including in-process projects.	January 1, 2028	The Company is currently evaluating the impact this ASU may have on its consolidated financial statements.
Narrow-Scope Requirements for Interim Reporting (ASU 2025-11)	Clarifies interim disclosure requirements and applicability of Topic 270, Interim Reporting for events since the end of the last annual reporting period that have a material impact on the entity. Early adoption is permitted and the amendments are to be applied prospectively or retrospectively to any or all periods presented in the financial statements.	January 1, 2028	The Company is currently evaluating the impact this ASU may have on its consolidated financial statements.

Other recently issued ASUs, excluding those ASUs which have already been disclosed as adopted or described above, were assessed and determined not applicable, or are expected to have minimal impact on the Company's condensed consolidated financial statements.

3. Inventories

Inventories were as follows:


(U.S. Dollars, in thousands)	March 31, 2026		December 31, 2025
	(Unaudited)
Raw materials	$	24,882	$	22,865
Work-in-process		65,194		63,255
Finished products		87,742		86,199
Inventories	$	177,818	$	172,319

4. Leases

A summary of the Company's lease portfolio as of March 31, 2026, and December 31, 2025, is presented in the table below:


(U.S. Dollars, in thousands)	Classification	March 31, 2026		December 31, 2025
		(Unaudited)
Assets
Operating leases	Other long-term assets	$	21,571	$	22,279
Finance leases	Property, plant, and equipment, net		9,460		14,442
Total lease assets		$	31,031	$	36,721

Liabilities
Current
Operating leases	Other current liabilities	$	3,108	$	3,147
Finance leases	Current portion of finance lease liability		115		837
Long-term
Operating leases	Other long-term liabilities		24,760		25,413
Finance leases	Long-term portion of finance lease liability		12,937		17,060
Total lease liabilities		$	40,920	$	46,457

Supplemental cash flow information related to leases was as follows:


	Three Months Ended March 31,
(Unaudited, U.S. Dollars, in thousands)	2026		2025
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	2,206	$	2,371
Operating cash flows from finance leases		364		200
Financing cash flows from finance leases		31		188
ROU assets obtained in exchange for lease obligations
Operating leases		87		231
Finance leases		—		—

5. Long-term debt

The carrying values of the Company's outstanding debt obligations as of March 31, 2026, and December 31, 2025, were as follows:


(U.S. Dollars, in thousands)	March 31, 2026			December 31, 2025
	(Unaudited)
Outstanding Term Loans
Principal amount	$	225,000		$	160,000
Unamortized original debt discount		(2,630	)		(1,839	)
Unamortized debt issuance costs and lenders fees		(1,035	)		(770	)
Total indebtedness from outstanding term loans	$	221,335		$	157,391

Current portion of long-term debt	$	—		$	—
Long-term debt		221,335			157,391
Total indebtedness outstanding	$	221,335		$	157,391

On November 7, 2024, the Company, as borrower, and its U.S. subsidiaries entered into a $275.0 million secured credit agreement (the "Credit Agreement") with Oxford Finance LLC, as administrative agent and as collateral agent ("Oxford") and certain lenders party thereto, including Oxford, K2 HealthVentures LLC, and HSBC Ventures USA Inc. The Credit Agreement provides for a $160.0 million senior secured term loan (the "Initial Term Loan") and a $65.0 million senior secured delayed draw term loan facility (the "Term B Loan"). In addition, at Oxford's discretion, an additional $50.0 million of draw capacity is available through January 1, 2029 (the "Term C Loan" and, collectively with the Term B Loan and the Initial Term Loan, the "Credit Facilities").

On January 15, 2026, the Company borrowed $65.0 million via the Term B Loan to provide capital flexibility ahead of the expiration of the tranche. The Credit Facilities, to the extent ultimately drawn, will each mature in November 2029, following an interest-only payment period ending December 2028, and monthly amortization of principal and accrued interest between January 2029 and November 2029. The Credit Agreement contains financial covenants requiring the Company to maintain (i) a minimum level of liquidity at all times and (ii) a maximum total debt-to-EBITDA leverage ratio (measured on a quarterly basis) during the term of the facility. As of March 31, 2026, the Company was in compliance with all required financial covenants.

As of March 31, 2026, the Company had no borrowings on its available lines of credit in Italy, which provide up to an aggregate amount of €5.5 million ($6.4 million).

6. Fair value measurements and investments

The fair value measurements of the Company's financial assets and liabilities measured on a recurring basis were as follows:


	March 31, 2026								December 31, 2025
(U.S. Dollars, in thousands)	Level 1		Level 2		Level 3		Total		Total
							(Unaudited)
Liabilities
Lattus Contingent Consideration	$	—	$	—	$	8,680	$	8,680	$	7,930
Deferred compensation plan		—		1,634		—		1,634		1,720
Total	$	—	$	1,634	$	8,680	$	10,314	$	9,650

Lattus Contingent Consideration

In connection with the merger with SeaSpine Holdings Corporation ("SeaSpine") in 2023 (the "Merger"), the Company assumed a contingent consideration obligation under a purchase agreement between SeaSpine and Lattus Spine LLC ("Lattus") executed in December 2022. Under the terms of this agreement, the Company may be required to make installment payments to Lattus (the "Lattus Contingent Consideration") at certain dates based on future net sales of certain products (the "Lateral Products").

The estimated fair value of the Lattus Contingent Consideration is determined using a Monte Carlo simulation and a discounted cash flow model requiring significant inputs which are not observable in the market. The significant inputs include assumptions related to the estimated future sales of Lateral Products, revenue risk-adjusted discount rates, revenue volatility, and discount rates matched

to the timing of payments. The following table provides a reconciliation of the beginning and ending balances for the Lattus Contingent Consideration measured at estimated fair value using significant unobservable inputs (Level 3):


(Unaudited, U.S. Dollars, in thousands)	2026		2025
Lattus Contingent Consideration estimated fair value at January 1	$	7,930	$	15,400
Change in fair value recognized in acquisition-related amortization, impairment, and remeasurement		750		(610	)
Lattus Contingent Consideration estimated fair value at March 31	$	8,680	$	14,790

The estimated fair value of the Lattus Contingent Consideration as of March 31, 2026, was $8.7 million; however, the actual amount ultimately paid could be higher or lower. As of March 31, 2026, the Company classified the remaining Lattus Contingent Consideration of $4.7 million and $4.0 million within other current liabilities and other long-term liabilities, respectively.

The following table provides quantitative information related to certain key assumptions utilized within the valuation as of March 31, 2026:


(Unaudited, U.S. Dollars, in thousands)	Fair Value as of March 31, 2026		Unobservable inputs	Estimate
Lattus Contingent Consideration	$	8,680	Counterparty discount rates		13.0	%
			Revenue risk-adjusted discount rates	6.4% - 6.5%

7. Commitments and Contingencies

Arbitration claims with former executives

In September 2023, the Company's Board of Directors (the "Board") terminated the employment of Keith Valentine, John Bostjancic, and Patrick Keran, who had served respectively as the Company’s President and Chief Executive Officer, Chief Financial Officer, and Chief Legal Officer (collectively, the "Former Executives"). The Board’s decision followed an investigation conducted by independent outside legal counsel and directed and overseen by a committee of certain of the Company’s independent directors. At the time of termination, the Company notified each of the Former Executives that their respective terminations of employment were being made for "Cause," as such term is defined in applicable employment-related agreements (including each executive’s respective Change in Control and Severance Agreement, dated June 19, 2023 (the "CIC and Severance Agreements"). The Former Executives subsequently made claims against the Company in arbitration in the State of California, asserting breach of contract because each of them was entitled to the severance payments and other equity-based rights that would be owed to them if their respective termination had been made "without Cause" under the CIC and Severance Agreements, and further asserting damages for purported defamation, false light invasion of privacy, and deceit, as well as indemnification and advancement for attorneys’ fees.

On January 26, 2026, the arbitrator in Mr. Valentine’s matter issued a decision denying Mr. Valentine’s defamation, false light invasion of privacy, and deceit claims, and his indemnification of fees claim. Based on the evidence presented during the arbitration process, the arbitrator found that Mr. Valentine’s conduct met the legal definition of "acts of moral turpitude" and that the public statements that the Company made about Mr. Valentine in a press release and filings with the SEC subsequent to the termination of his employment were true. Although Mr. Valentine’s conduct was found to meet the legal definition of "acts of moral turpitude" for purposes of his defamation and other tort claims, and although engaging in "material acts of moral turpitude" would constitute "Cause" under the CIC and Severance Agreement, the arbitrator maintained his preliminary decision issued on October 2, 2025, finding that (i) Mr. Valentine’s conduct prior to his entry into the CIC and Severance Agreement on June 19, 2023 could not be considered for purposes of determining whether "Cause" existed under such agreement, and (ii) his conduct between that date and his termination of employment on September 11, 2023, did not amount to "Cause". As a result, the arbitrator issued an interim award to Mr. Valentine for breach of contract damages in the amount of $11.8 million, finding such amount to be equivalent to the severance and equity-based rights that Mr. Valentine would have received in a "without Cause" termination. The arbitrator also awarded accrued interest, at the pre-judgment interest rate of 10% under California law. On April 22, 2026, the Company made a

payment in satisfaction of the arbitrator’s interim award plus accrued interest, in the amount of $14.8 million. The arbitrator’s final order confirming the interim award and determining attorneys’ fees payable, is expected in the second quarter of 2026.

On April 15, 2026, Mr. Keran’s arbitration claims were settled for $4.25 million. On April 22, 2026, the Company and Mr. Bostjancic entered into a settlement agreement covering all of Mr. Bostjancic’s claims, in the amount of $4.25 million. As of March 31, 2026, the Company had accrued $23.3 million related to the arbitration matters with the Former Executives.

In addition to the Former Executives’ arbitration claims, in September 2024, Messrs. Valentine, Bostjancic and Keran filed an action in California State Court against former director and interim CEO Catherine Burzik and current director Wayne Burris, seeking relief for, among other things, alleged defamation, false light invasion of privacy, intentional misrepresentation, false promise, and tortious interference with contract. Mr. Bostjancic has agreed to dismiss his claims in this action in connection with his settlement agreement. The Company disagrees with the allegations contained in the action against Ms. Burzik and Mr. Burris and will continue vigorously defending the asserted claims. The Company currently cannot reasonably estimate a possible loss, or range of loss, that may arise from the action.

Securities class action complaints

On August 21, 2024, a securities class action complaint captioned Bernal v. Orthofix Medical Inc., et al., Case No. 24-cv-00690, was filed in the United States District Court for the Eastern District of Texas (the "Bernal Complaint"). The plaintiff, a purported Company shareholder, alleges through the complaint violations of Sections 10(b) and 20(a) of the Exchange Act, and SEC Rule 10b-5 promulgated thereunder, and names as defendants the Company and the following former Company directors and officers: Jon Serbousek (former director and former President and Chief Executive Officer), Keith Valentine (former director and former President and Chief Executive Officer), John Bostjancic (former Chief Financial Officer), and Patrick Keran (former Chief Legal Officer). The complaint alleges that the Company made, and the named former directors and officers caused the Company to make, materially false and misleading statements between October 11, 2022, and September 12, 2023, that, according to the complaint, falsely assured the market of Messrs. Valentine, Bostjancic, and Keran's respective commitments to, among other things, ethical and legal standards and corporate responsibility.

On September 6, 2024, a securities class action complaint captioned O'Hara v. Orthofix Medical Inc., et al., Case No. 24-cv-01593, was filed in the United States District Court for the Southern District of California (the "O'Hara Complaint"). The plaintiff, a purported former shareholder of SeaSpine at the time of the Merger, alleges through the complaint violations of Sections 11, 12 and 15 of the Securities Act, and names most of the same defendants as the Bernal Complaint, as well as certain additional current and/or former Company directors and officers. The complaint makes similar assertions to the Bernal complaint, and alleges that the Company's registration statement on Form S-4 filed in 2022 in connection with the Merger, as well as related written and oral offering materials, contained untrue statements of material fact and material omissions, including, among other things, with respect to the effectiveness of the Company's internal controls. On November 26, 2024, the O'Hara Complaint was transferred to the Eastern District of Texas, and on December 11, 2024, the O'Hara Complaint was consolidated with the Bernal Complaint. On April 17, 2025, the plaintiffs filed an amended complaint in the consolidated action, captioned In re Orthofix Medical Inc. Securities Litigation, with substantially the same allegations contained in the Bernal Complaint and the O'Hara Complaint. The consolidated case is captioned In re Orthofix Medical Inc. Securities Litigation, Case No. 24-cv-00690 and is pending in the Eastern District of Texas. The Company and the individual defendants moved to dismiss the amended complaint on May 15, 2025. On March 9, 2026, the Court granted defendants’ motion to dismiss the plaintiffs’ claims under the Exchange Act (but not those under the Securities Act), finding that (i) all but one of the Company’s statements at issue were immaterial as a matter of law, and (ii) no statements caused loss. The Court provided the plaintiffs with leave to amend their complaint to address pleading deficiencies, and plaintiffs filed an amended complaint on April 8, 2026.

On October 28, 2024, a derivative shareholder complaint was filed against certain of the Company's current and former officers and directors alleging derivative liability for the allegations made in the two complaints noted above. On December 18, 2024, a second derivative shareholder complaint was filed with the same allegations made in the first derivative shareholder complaint. On March 21, 2025, the two derivative shareholder complaints were consolidated into one case.

The Company disagrees with the legal claims asserted in these complaints and is vigorously defending them. Due in part to the preliminary nature of these three matters, the Company currently cannot reasonably estimate a possible loss, or range of loss, that may arise from the respective complaints.

Commitments

As a result of the Merger, the Company became party to agreements with certain distributor partners that provide the Company with an option to purchase, and an option for those partners to require the Company to purchase, the distribution business of those partners at specified future dates. At such time, the Company or distributor may (in certain cases, subject to satisfying certain

conditions) submit written notice to the other of its intention to exercise its rights and initiate or require the purchase. Upon receipt of the written notice, the Company and the distributor will work in good faith to consummate the purchase, provided that the distributor meets the required conditions of such purchase option. Under certain of these agreements, the purchase price would be paid in shares of the Company's common stock, whereas for others, the purchase price can be paid in cash or shares, at the Company's option. Based on the closing price of the Company's common stock as of March 31, 2026, assuming the options under all the relevant agreements were exercised, the estimated total number of shares the Company would issue under these agreements was approximately 0.4 million shares for agreements that must be settled in shares of the Company's stock. The Company has received notification from one such distributor, who has notified the Company of its decision to exercise its buyout option. The Company is currently in negotiations with this distributor with respect to the conditions of a potential acquisition, the consummation of which may be deferred to a future date.

Italian Medical Device Payback (IMDP)

In 2015, the Italian Parliament introduced rules for entities that supply goods and services to the Italian National Healthcare System. A key provision of the law is a 'payback' measure, requiring medical device companies in Italy to make payments to the Italian government if medical device expenditures exceed regional maximum ceilings. Companies are required to make payments equal to a percentage of expenditures exceeding maximum regional caps.

In the third quarter of 2022, the Italian Ministry of Health provided guidelines to the Italian regions and provinces on seeking payback of expenditure overruns relating to the 2015 through 2018 calendar years. Since receiving the guidelines, several regions and provinces have requested payment from affected medical device companies, including the Company. The Company has taken legal action to dispute the legality of such measures. In July 2024, the Italian Constitutional Court issued two judgments following public hearings on the matter held in May 2024. These judgments (i) declared the payback system itself as constitutionally legitimate and (ii) extended previously communicated reductions in the payback liability for certain fiscal years to all medical device companies, regardless of whether or not they had waived their legal claims on the matter.

The Company accounts for the estimated cost of the IMDP as sales, general, and administrative expense and periodically reassesses the liability based upon current facts and circumstances. As a result, the Company recorded expenses of $0.4 million and $0.3 million for the three months ended March 31, 2026, and 2025, respectively. As of March 31, 2026, the Company has accrued $10.8 million related to the IMDP, which it has classified within other long-term liabilities; however, the actual liability could be higher or lower than the amount accrued once all legal proceedings are resolved and upon further clarification of the IMDP by the Italian authorities.

8. Accumulated other comprehensive income (loss)

The components of and changes in accumulated other comprehensive income (loss) were as follows:


(Unaudited, U.S. Dollars, in thousands)	Currency Translation Adjustments			Neo Medical Convertible Loan			Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2025	$	846		$	(228	)	$	618
Other comprehensive loss		(476	)		—			(476	)
Income taxes		—			—			—
Balance at March 31, 2026	$	370		$	(228	)	$	142

9. Revenue recognition and accounts receivable

Revenue Recognition

The Company has two reporting segments: Global Spine and Global Limb Reconstruction. Within the Global Spine reporting segment, there are two product categories: (i) Therapeutic Solutions (formerly Bone Growth Therapies), and (ii) Spinal Implants, Biologics, and Enabling Technologies.

The tables below presents net sales by product category and reporting segment:


	Three Months Ended March 31,
(Unaudited, U.S. Dollars, in thousands)	2026		2025		Change
Therapeutic Solutions	$	57,774	$	55,050		4.9	%
Spinal Implants, Biologics, and Enabling Technologies		106,078		108,786		-2.5	%
Global Spine		163,852		163,836		0.0	%
Global Limb Reconstruction		32,856		29,810		10.2	%
Net sales	$	196,708	$	193,646		1.6	%

Product Sales and Marketing Service Fees

The table below presents product sales and marketing service fees, which are both components of net sales:


	Three Months Ended March 31,
(Unaudited, U.S. Dollars, in thousands)	2026		2025
Product sales	$	186,116	$	181,633
Marketing service fees		10,592		12,013
Net sales	$	196,708	$	193,646

Marketing service fees are received from MTF Biologics ("MTF") based on total sales of biologic tissues and relate solely to the Biologics product category within the Global Spine reporting segment, whereas product sales primarily consist of the sale of Therapeutic Solutions, Spinal Implants, non-MTF sourced Biologics, Enabling Technologies, and Global Limb Reconstruction products. As MTF is the single supplier for certain allografts in the Company's Biologics portfolio, which are derived from deceased donors for their bone grafts and living donors for their amnion grafts, any event or circumstance that would impact MTF's continued access to donors or the Company's ability to market these tissues may adversely impact the Company's financial results.

Accounts receivable and related allowances

The following table provides a detail of changes in the Company's allowance for expected credit losses for the three months ended March 31, 2026, and 2025:


	Three Months Ended March 31,
(Unaudited, U.S. Dollars, in thousands)	2026			2025
Allowance for expected credit losses beginning balance	$	8,308		$	7,418
Current period provision for expected credit losses		719			1,058
Write-offs charged against the allowance and other		(5	)		(11	)
Effect of changes in foreign exchange rates		(32	)		137
Allowance for expected credit losses ending balance	$	8,990		$	8,602

10. Business segment information

The Company's operations are managed through two reporting segments: Global Spine and Global Limb Reconstruction. These reporting segments represent the operating segments for which the President and Chief Executive Officer, who is also the Chief Operating Decision Maker (CODM), reviews financial information and makes resource allocation decisions among businesses. The primary metric used by the CODM in managing the Company is adjusted earnings before interest, tax, depreciation, and amortization ("adjusted EBITDA", a non-GAAP financial measure). Adjusted EBITDA represents earnings before interest income (expense), income taxes, depreciation and amortization, and excludes the impact of share-based compensation and long-term incentive plan expense; gains and losses related to changes in foreign exchange rates; charges related to the Merger and other strategic investments; restructuring costs and impairments related to the discontinuation of the M6 product lines; acquisition-related fair value adjustments; gains and/or losses on investments; litigation and investigation charges; and refunds associated with the Employee Retention Credit established by the Coronavirus Aid, Relief, and Economic Security Act.

Corporate activities are comprised of operating expenses not directly identifiable within the two reporting segments, such as human resources, finance, legal, and information technology functions. The Company neither discretely allocates assets, other than goodwill, to its operating segments nor evaluates the operating segments using discrete asset information.

Global Spine

The Global Spine reporting segment offers two primary product categories: (i) Therapeutic Solutions and (ii) Spinal Implants, Biologics, and Enabling Technologies.

The Therapeutic Solutions product category manufactures, distributes, and provides support services for market-leading bone growth stimulation devices that enhance bone fusion. These Class II medical devices with special controls are indicated as an adjunctive, noninvasive treatment to improve fusion success rates in the cervical and lumbar spine as well as a therapeutic treatment for non-spinal, appendicular fractures, treating both fresh or nonunion fractures. These products are sold almost exclusively in the U.S., using distributors and direct sales representatives to provide these devices to healthcare providers and their patients.

Spinal Implants, Biologics, and Enabling Technologies is comprised of (i) a broad portfolio of spine fixation implant products used in surgical procedures of the spine, (ii) one of the most comprehensive biologics portfolios in both the demineralized bone matrix and cellular allograft market segments, and (iii) image-guided surgical solutions to facilitate degenerative, minimally invasive, and complex surgical procedures. Spinal Implants, Biologics, and Enabling Technologies products are sold through a network of distributors and sales representatives to hospitals and healthcare providers on a global basis for Spinal Implants and Enabling Technologies, and primarily within the U.S. for Biologics.

Global Limb Reconstruction

The Global Limb Reconstruction reporting segment offers products and solutions for the underserved limb reconstruction market that encompasses four pillars: deformity correction, limb lengthening, complex fracture management, and limb preservation. This reporting segment specializes in the design, development, and marketing of external and internal fixation limb reconstruction products that are coupled with enabling digital technologies to serve the complete patient treatment pathway. The Company sells these products worldwide through a global network of distributors and sales representatives to hospitals, healthcare organizations, and healthcare providers.

The following table presents adjusted EBITDA, the primary metric used in managing the Company, by reporting segment:


	Three Months Ended March 31, 2026
(Unaudited, U.S. Dollars, in thousands)	Global Spine		Global Limb Reconstruction			Total
Segment revenues	$	163,852	$	32,856		$	196,708
Less:
Non-GAAP Cost of sales		42,842		14,615			57,457
Non-GAAP Sales, general, and administrative		98,021		20,201			118,222
Non-GAAP Research and development		11,397		2,999			14,396
Other segment expenses		259		938			1,197
Add:
Non-GAAP Depreciation, amortization, and share-based compensation expense		9,068		3,228			12,296
Segment Adjusted EBITDA	$	20,401	$	(2,669	)	$	17,732

Reconciling items:
Corporate operating expenses						$	8,038
Interest expense, net							5,664
Depreciation and amortization							13,493
Share-based compensation and long-term incentive plan expense							6,638
Foreign exchange impact							900
SeaSpine merger-related costs							(69	)
Restructuring costs and impairments related to M6 product lines							253
Strategic investments							950
Acquisition-related fair value adjustments							750
Interest and loss on investments							(16	)
Litigation and investigation costs							2,916
Employee Retention Credit							(951	)
Loss before income taxes						$	(20,834	)


	Three Months Ended March 31, 2025
(Unaudited, U.S. Dollars, in thousands)	Global Spine		Global Limb Reconstruction			Total
Segment Revenues	$	163,836	$	29,810		$	193,646
Less:
Non-GAAP Cost of sales		44,587		11,871			56,458
Non-GAAP Sales, general, and administrative		92,538		17,920			110,458
Non-GAAP Research and development		11,623		2,853			14,476
Other segment expenses (benefits)		4,444		(175	)		4,269
Add:
Non-GAAP Depreciation, amortization, and share-based compensation expense		8,872		2,632			11,504
Segment Adjusted EBITDA	$	19,516	$	(27	)	$	19,489

Reconciling items:
Corporate operating expenses						$	8,058
Interest expense, net							4,506
Depreciation and amortization							34,431
Share-based compensation and long-term incentive plan expense							6,469
Foreign exchange impact							(1,044	)
SeaSpine merger-related costs							1,130
Restructuring costs and impairments related to M6 product lines							12,126
Strategic investments							3,514
Acquisition-related fair value adjustments							(610	)
Interest and loss on investments							—
Litigation and investigation costs							3,042
Employee Retention Credit							—
Loss before income taxes						$	(52,133	)

The following table presents depreciation, amortization, and impairment by reporting segment:


	Three Months Ended March 31,
(Unaudited, U.S. Dollars, in thousands)	2026		2025
Global Spine	$	10,218	$	31,902
Global Limb Reconstruction		2,778		1,936
Corporate		497		593
Total	$	13,493	$	34,431

Geographical information

The table below presents net sales by geographic destination for each reporting segment and for the consolidated Company:


	Three Months Ended March 31,
(Unaudited, U.S. Dollars, in thousands)	2026		2025
Global Spine
U.S.	$	152,417	$	152,703
International		11,435		11,133
Total Global Spine		163,852		163,836

Global Limb Reconstruction
U.S.		8,911		8,978
International		23,945		20,832
Total Global Limb Reconstruction		32,856		29,810

Consolidated
U.S.		161,328		161,681
International		35,380		31,965
Net sales	$	196,708	$	193,646

The following data includes net sales by geographic area:


	Three Months Ended March 31,
(Unaudited, U.S. Dollars, in thousands)	2026		2025
U.S.	$	161,328	$	161,681
Italy		5,903		5,053
France		2,632		2,625
United Kingdom		3,873		3,037
Germany		2,170		2,208
Brazil		1,034		1,135
Others		19,768		17,907
Net Sales	$	196,708	$	193,646

The following data includes property, plant, and equipment by geographic area:


(U.S. Dollars, in thousands)	March 31, 2026		December 31, 2025
	(Unaudited)
U.S.	$	111,035	$	114,483
Italy		9,596		9,893
Germany		1,165		1,360
Others		3,531		3,663
Total	$	125,327	$	129,399

11. Acquisition-related amortization, impairment, and remeasurement

Acquisition-related amortization, impairment, and remeasurement consists of (i) amortization and impairment related to intangible assets acquired through business combinations or asset acquisitions and (ii) remeasurement of any related contingent consideration arrangements. Components of acquisition-related amortization, impairment, and remeasurement are as follows:


	Three Months Ended March 31,
(Unaudited, U.S. Dollars, in thousands)	2026		2025
Amortization and impairment of acquired intangibles	$	3,001	$	18,355
Changes in fair value of contingent consideration		750		(610	)
Total	$	3,751	$	17,745

12. Share-based compensation

Components of share-based compensation expense are as follows:


	Three Months Ended March 31,
(Unaudited, U.S. Dollars, in thousands)	2026		2025
Cost of sales	$	331	$	461
Sales, general, and administrative		5,858		5,649
Research and development		344		359
Total	$	6,533	$	6,469


	Three Months Ended March 31,
(Unaudited, U.S. Dollars, in thousands)	2026		2025
Stock options	$	1,231	$	869
Market-based stock options		187		646
Time-based restricted stock units		2,885		2,994
Market-based / performance-based restricted stock units		1,794		1,420
Stock purchase plan		436		540
Total	$	6,533	$	6,469

Orthofix Medical Inc. 10-Q