XML 32 R22.htm IDEA: XBRL DOCUMENT
v3.23.3

COMMITMENTS AND CONTINGENCIES | 9 Months Ended
--- | ---
Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract] |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES In consideration for certain technology, manufacturing, distribution, and selling rights and licenses granted to the Company, the Company has agreed to pay royalties on sales of certain products that it sells. The royalty payments that the Company made under these agreements were not significant for any of the periods presented. In the ordinary course of its business, the Company is involved in, from time to time, various legal actions, including any matters described below, involving product liability, employment, intellectual property and commercial disputes, shareholder related matters, environmental proceedings, tax disputes, and governmental proceedings and investigations, some of which have been settled by the Company. In the opinion of management, such matters are either adequately covered by insurance or otherwise indemnified, or are not expected, individually or in the aggregate, to result in a material, adverse effect on the Company's financial condition. However, it is possible that the Company's results of operations, financial position and cash flows in a particular period could be materially affected by these contingencies. The Company accrues for loss contingencies when it is deemed probable that a loss has been incurred and that loss is estimable. The amounts accrued are based on the full amount of the estimated loss before considering insurance proceeds and do not include an estimate for legal fees expected to be incurred in connection with the loss contingency. The Company consistently accrues legal fees expected to be incurred in connection with loss contingencies as those fees are incurred by outside counsel as a period cost. On September 12, 2023, a securities class action complaint, captioned Pembroke Pines Firefighters & Police Officers Pension Fund v. Integra LifeSciences Holdings Corporation, No. 23-cv-20321 (D.N.J.), was filed by a purported stockholder of the Company in the United States District Court for the District of New Jersey (the “Pembroke Litigation”) against the Company and certain of the Company’s current and former executive officers. The Pembroke Litigation, filed on behalf of a putative class of stockholders who purchased or acquired the Company’s common stock between March 11, 2019 and May 22, 2023, inclusive, alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder, on the basis of purportedly materially false and misleading statements and omissions relating to certain quality systems issues identified by the U.S. Food and Drug Administration at the Company’s Boston, Massachusetts manufacturing facility, the Company’s efforts to remediate those issues, and the Company’s forecasts for certain products in its Tissue Technologies segment. The complaint seeks, among other things, compensatory damages, attorneys’ fees, expert fees, and other costs. The Company believes that it has strong defenses to the allegations in the Pembroke Litigation, as we intend to defend the matter vigorously. Contingent Consideration The Company determined the fair value of contingent consideration during the nine month period ended September 30, 2023 and September 30, 2022 to reflect the change in estimate, additions, payments, transfers and the time value of money during the period. A reconciliation of the opening balances to the closing balances of these Level 3 measurements for the nine months ended September 30, 2023 and September 30, 2022 is as follows (in thousands):
Nine Months Ended September 30, 2023 |  | Contingent Consideration Liability Related to Acquisition of: |  |
| Arkis |  | Location in Financial Statements |  | Derma Sciences |  | ACell |  | Surgical Innovations Associates, Inc. (FN 2) |  | Location in Financial Statements
Balance as of January 1, 2023 |  | $ | 12,895 |  |  |  |  | $ | 230 |  |  | $ | 3,700 |  |  |  |  | 57,600 |  |  |
Change in fair value of contingent consideration liabilities |  | 1,991 |  |  | Research and development |  | 1,887 |  |  | (2,200) |  |  |  |  | 6,600 |  |  | Selling, general and administrative
Balance as of September 30, 2023 |  | 14,886 |  |  |  |  | 2,117 |  |  | 1,500 |  |  |  |  | 64,200 |  |  |
Short-Term |  | $ | 4,373 |  |  |  |  | $ | — |  |  | $ | 503 |  |  |  |  | $ | 13,000 |  |  |
Long-Term |  | 10,513 |  |  |  |  | 2,117 |  |  | 997 |  |  |  |  | 51,200 |  |  |
Total |  | $ | 14,886 |  |  |  |  | $ | 2,117 |  |  | $ | 1,500 |  |  |  |  | $ | 64,200 |  |  |
Nine Months Ended September 30, 2022 |  | Contingent Consideration Liability Related to Acquisition of: |
| Arkis |  | Location in Financial Statements |  | Derma Sciences |  |  |  | ACell Inc. |  |  | Location in Financial Statements
Balance as of January 1, 2022 |  | $ | 15,099 |  |  |  |  | $ | 230 |  |  |  |  | $ | 21,800 |  |  |  |
Change in fair value of contingent consideration liabilities |  | (2,681) |  |  | Research and development |  | — |  |  |  |  | (16,800) |  |  |  | Selling, general and administrative
Balance as of September 30, 2022 |  | $ | 12,418 |  |  |  |  | $ | 230 |  |  |  |  | $ | 5,000 |  |  |  |
Short-Term |  | $ | 2,829 |  |  |  |  | $ | — |  |  |  |  | $ | — |  |  |  |
Long-Term |  | 9,589 |  |  |  |  | 230 |  |  |  |  | 5,000 |  |  |  |
Total |  | $ | 12,418 |  |  |  |  | $ | 230 |  |  |  |  | $ | 5,000 |  |  |  |
Arkis BioSciences Inc. As part of the acquisition of Arkis BioSciences Inc. ("Arkis"), the Company is required to pay the former shareholders of Arkis up to $25.5 million based on the timing of certain development milestones of $10.0 million and commercial sales milestones of $15.5 million, respectively. The Company used a probability weighted income approach to calculate the fair value of the contingent consideration that considered the possible outcomes of scenarios related to each specified milestone. The Company estimated the fair value of the contingent consideration to be $13.1 million at the acquisition date. Derma Sciences, Inc. The Company assumed contingent consideration incurred by Derma Sciences, Inc. ("Derma Sciences") related to its acquisitions of BioD, LLC and the intellectual property related to Medihoney® products. The Company accounted for the contingent liabilities by recording the fair value on the date of the acquisition based on a probability weighted income approach. The Company has already paid $33.3 million related to the aforementioned contingent liabilities. One contingent milestone remains which relates to net sales of Medihoney®™ products exceeding certain amounts defined in the agreement between the Company and Derma Sciences. The potential maximum undiscounted payment amounts to $3.0 million. ACell Inc. As part of the acquisition of ACell ("The Acell Acquisition"), the Company is required to make payments to the former shareholders of ACell up to $50 million based on the achievement by the Company of certain revenue-based performance milestones in 2023 and $50 million 2025. The Company used iterations of the Monte Carlo simulation to calculate the fair value of the contingent consideration that considered the possible outcomes of scenarios related to each specific milestone. The Company estimated the fair value of the contingent consideration to be $23.9 million at the acquisition date. The change in the fair value of the contingent obligation was primarily as a result of changes in the timing and amount of revenue estimates.

X
- References No definition available. + Details
Name: | us-gaap_CommitmentsAndContingenciesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for commitments and contingencies. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 440 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482648/440-10-50-4 Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 450 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//450/tableOfContent Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 954 -SubTopic 440 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480327/954-440-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 440 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482648/440-10-50-4 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 440 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//440/tableOfContent + Details
Name: | us-gaap_CommitmentsAndContingenciesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration