Share-based compensation

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

13. Share-based compensation

Components of share-based compensation expense are as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2024		2023		2024		2023
Cost of sales	$	514	$	482	$	1,090	$	953
Sales and marketing		1,436		2,551		3,103		4,800
General and administrative		7,447		9,167		12,995		18,271
Research and development		562		1,046		1,571		2,242
Total	$	9,959	$	13,246	$	18,759	$	26,266


	Three Months Ended June 30,				Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2024		2023		2024		2023
Stock options	$	1,382	$	2,397	$	2,500	$	5,153
Market-based stock options		499		—		826		—
Time-based restricted stock awards and units		6,254		10,235		12,127		20,081
Market-based / performance-based restricted stock units		1,303		113		2,141		113
Stock purchase plan		521		501		1,165		919
Total	$	9,959	$	13,246	$	18,759	$	26,266

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 June 30, 2024, and 2023, the Company issued 0.6 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. During the six months ended June 30, 2024, and 2023, the Company issued 0.9 million and 0.5 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 has appointed several new executives, including a new President and Chief Executive Officer, Chief Financial Officer, Chief People & Business Operations Officer, Chief Legal Officer, President of Global Spine, Chief Investor Relations and Communications Officer, President of Global Operations and Quality, and Chief Human Resources Officer. As inducements to accept employment with the Company, the individuals were awarded grants including, dependent on the individual, (i) market-based and/or time-based stock options, (ii) time-based restricted stock units, (iii) time-based cliff vesting restricted stock units, and (iv) market-based restricted stock units, valued in the aggregate across all award types at approximately $21.4 million.