Share-based compensation

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

13. Share-based compensation

Components of share-based compensation expense are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(Unaudited, U.S. Dollars, in thousands)	2023		2022		2023		2022
Cost of sales	$	463	$	195	$	1,416	$	611
Sales and marketing		2,092		948		6,892		2,929
General and administrative		2,832		3,285		21,103		9,461
Research and development		887		301		3,129		520
Total	$	6,274	$	4,729	$	32,540	$	13,521


	Three Months Ended September 30,				Nine Months Ended September 30,
(Unaudited, U.S. Dollars, in thousands)	2023		2022		2023		2022
Stock options	$	1,429	$	294	$	6,582	$	858
Time-based restricted stock awards and units		4,263		2,467		24,344		7,047
Market-based / performance-based restricted stock units		54		1,626		167		4,567
Stock purchase plan		528		342		1,447		1,049
Total	$	6,274	$	4,729	$	32,540	$	13,521

Pursuant to the Merger Agreement, the equity awards of SeaSpine (including stock options and restricted stock units) outstanding as of immediately prior to the closing of the Merger were converted into equity awards denominated in shares of Orthofix common stock. The Company issued options to purchase 1.9 million shares of Orthofix common stock and 0.5 million shares of time-based vesting restricted stock in connection with the conversion of such awards. The estimated fair value of the portion of the SeaSpine equity awards for which the required service period had been completed at the time of the closing of the Merger was treated as purchase consideration. The remaining estimated fair value is recorded as compensation expense over the remainder of the service period associated with the awards.

During the three months ended September 30, 2023, and 2022, the Company issued 16,411 and 7,057 shares, respectively, of common stock related to stock purchase plan issuances, stock option exercises, and the vesting of restricted stock awards and units. During the nine months ended September 30, 2023, and 2022, the Company issued 0.5 million and 0.2 million shares, respectively, of common stock related to stock purchase plan issuances, stock option exercises, and the vesting of restricted stock awards and units.

On September 12, 2023, the Company announced the termination of the Company's former Chief Executive Officer, former Chief Financial Officer, and former Chief Legal Officer. This change in leadership resulted in a recognized benefit of $1.1 million and $0.1 million for the three and nine months ended September 30, 2023, related to the forfeiture of outstanding equity grants, net of any incremental share-based compensation expense related to interim leaders appointed to these roles.