Enovis Corporation Common Stock

What's Changed

Intangible asset impairment risk clarified, highlighting potential negative impact on operating results if Goodwill value declines. No impairment identified yet, but future risks remain.

Breakdown

Item 1A. Risk Factors

An investment in our common stock involves a high degree of risk. You should carefully consider the risks set forth in Part I. Item 1A. Risk Factors of our 2023 Form 10-K and the other information set forth in this Form 10-Q, and the additional information in the other reports we file with the SEC before making an investment decision. If any of the risks contained in those reports actually occur, our business, results of operation, financial condition, and liquidity could be harmed, the value of our securities could decline, and you could lose all or part of your investment. ~~The~~Except as set forth below, there have been no material changes in the risk factors set forth in Part I. Item 1A. Risk Factors in our 2023 Form 10-K.

The risk factor in our 2023 Form 10-K entitled Any impairment in the value of our intangible assets, including Goodwill, would negatively impact our operating results and total capitalization is replaced in its entirety by the following:

Any impairment in the value of our intangible assets, including Goodwill, would negatively affect our operating results and total capitalization.

Our Total assets reflect substantial intangible assets, primarily Goodwill. The Goodwill results from our acquisitions, representing the excess of cost over the fair value of the net assets we have acquired. We assess annually, or more frequently if an event occurs or circumstances change in the interim that would more likely than not reduce the fair value of the asset below its carrying amount, in order to determine whether there has been impairment in the value of our Goodwill. For example, we determined it was appropriate to perform an interim quantitative impairment assessment of Goodwill due to the existence of a possible impairment indicator as of September 27, 2024 resulting from a decrease in the share price of our common stock and market capitalization. After conducting this assessment, we did not identify an impairment. See Managements Discussion and Analysis of Financial Condition and Results of OperationsCritical Accounting Policies and Estimates in our Quarterly Report on Form 10-Q for the quarterly period ended September 27, 2024.

If future operating performance at either of our reporting units were to fall significantly below current levels, if competing or alternative technologies emerge, if market conditions for an acquired business decline, or if there is a sustained decrease in our market capitalization, among other things, we could incur, under current applicable accounting rules, a non-cash charge to operating earnings for Goodwill impairment. Any determination requiring the write-off of a significant portion of intangible assets would adversely affect our business, financial condition, results of operations and total capitalization, the effect of which could be material.