Share-based compensation

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

13. Share-based compensation

Components of share-based compensation expense are as follows:


	Three Months Ended March 31,
(Unaudited, U.S. Dollars, in thousands)	2024		2023
Cost of sales	$	576	$	471
Sales and marketing		1,667		2,249
General and administrative		5,548		9,104
Research and development		1,009		1,196
Total	$	8,800	$	13,020


	Three Months Ended March 31,
(Unaudited, U.S. Dollars, in thousands)	2024		2023
Stock options	$	1,118	$	2,756
Market-based stock options		327		—
Time-based restricted stock awards and units		5,873		9,846
Market-based / performance-based restricted stock units		838		—
Stock purchase plan		644		418
Total	$	8,800	$	13,020

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 March 31, 2024, and 2023, the Company issued 0.2 million and 0.3 million shares, respectively, of common stock related to stock purchase plan issuances, stock option exercises, and the vesting of restricted stock awards and units.

Inducement plans

During 2024, the Company appointed a new President and Chief Executive Officer, Chief Financial Officer, Chief People & Business Operations Officer, and Chief Legal Officer. As an inducement to accept employment with the Company, the individuals were awarded grants of (i) stock options, (ii) time-based restricted stock units, (iii) time-based cliff vesting restricted stock units, and (iv) performance stock units, valued in the aggregate across all award types at approximately $14.9 million.