AORT 10-K & 10-Q changes, risk factors and insider trading

•Potential adverse consequences from unexpected global regulatory or tariff and trade developments.

As an example of this risk, via a Ministerial Decree of July 6, 2022, published September 15, 2022, the Italian government stated that the spending ceiling for medical devices at the national and regional levels had been exceeded, requiring medical device companies to pay back alleged overpayments the government claims companies received between 2015 and 2018. Ultimately, we were subject to an immaterial payment obligation following the conclusion of judicial challenges, in August 2025, the Italian parliament agreed to a 75% reduction in the amounts due for the 2015–2018 period. The Italian government is currently assessing the amounts due for the 2019–2024 period, and while there are ongoing challenges and negotiations between us, industry, US government representatives,industry and the Italiangovernment government.regarding these amounts, our potential repayment exposure for the entire 2019–2025 period is estimated at approximately $2.3 million, which is reflected in accrued expenses in the Consolidated Balance Sheets as of December 31, 2025.

Our operations and performance have been, and may continue to be, impacted by regional and global geopolitical conditions, domestic and foreign trade and monetary policies, and other factors beyond our control, such as Russia’s war with Ukraine and instability in the Middle East. To date, sanctions and other disruptions in the Eastern European region have not materially impacted our business or ability to supply products to Russia, Belarus, Ukraine, and the region generally; however, continuation or escalation of the wars in Ukraine or instability in the Middle East, and in particular Iran, or increased export controls or additional sanctions imposed on or by impacted countries, their allies, or related entities could adversely affect our financial performance. Although we do not have any direct operations in Russia, Ukraine, Israel, Gaza, or Syria, the NEXUS family of products are solely manufactured by Endospan in Herzliya, Israel. Although weWe have not experienced any material disruption of supply from Endospan,Endospan; however, it is difficult to predict the ultimate course of these conflicts and we may face business operations and supply chain disruptions as a result, including disruptions related to shortages of materials and finished goods, higher costs of materials and freight, freight delays, increased energy costs or energy shortages, travel disruptions, currency fluctuation, and disruptions to banking systems or capital markets.

The market for our products and services is competitive and affected by new product introductions and activities of other industry participants, including the introduction of novel products and therapies aimed at unrelated disease states or even overall patient health. In addition, such products and therapies like GLP-1 drugs, which we believe have or will have little to no actual impact on demand for our products, can lead to investor and customer confusion, can change investor focus, and can impact the perceived demand for our products, which may affect our stock price even if actual demand for our products is unaffected. We face intense competition in virtually all of our product lines.lines, Afrom, significantamong percentage of market revenues from competitive products are generated byothers, Baxter, Ethicon (a Johnson & Johnson Company), Medtronic, Abbott Laboratories, Edwards Lifesciences, C.R. Bard (a subsidiary of Becton, Dickinson and Company),Company, Integra Life Sciences, LifeNet,LifeNet Health, Corcym, Anteris Technologies, Elutia (formerly Aziyo Biologics), Cook Medical, Gore & Associates, Terumo, LeMaitre Vascular, Maquet, Pfizer, BioCer Entwicklungs-GmbH, and BioCerGrena Entwicklungs-GmbH.Limited. Several of our competitors enjoy competitive advantages over us, including:

Our established and early-stage competitors may have advantages over us in terms of cost structure, pricing, back-office automation, product development, marketing, supply chain, and sourcing, andand, if we are unable to compete effectively, our financial results will be adversely affected.

As an example of this risk, in January 2025, the Center for Biologics Evaluation and Research (“CBER”) of the FDA issued two “final” guidance documents directed at the reduction of the risk of transmission of tuberculousis (Mtb) in processed human tissue (the “Guidances”), which is already exceedingly low. In May 2025, the “final” Guidances were withdrawn and re-issued as drafts, with a public comment period that ended in July 2025. We and a number of other parties filed comments, the vast majority of which sought substantial modifications of the Guidances. We believe these Guidances, if implemented as written, could significantly reduce the supply of safe implantable human tissue without simultaneously reducing the risk of Mtb transmission.transmission sufficient to offset the harm to patients caused by reduced safe-tissue supply. Although some industry advocates and health care practitioners have expressed strong opposition to these new Guidances, and theira implementationnumber hasof beenthem pausedsubmitted untilcomments atregarding leastthe MayGuidances 2025,during the recent comment period, if and how they may ultimately be implemented and enforced, and how they may actually impact the availability of our donated tissue, remains to be seen and is difficult to predict.

•We may be unable to obtain approval to commercialize BioGlue in certain non-US countries as fast as our competitors do or at all. We also may not be able to capitalize on new BioGlue approvals, including for new indications, in non-US countries; BioGlue contains a bovine blood protein. Animal-based products are subject to increased scrutiny from the public and regulators, who may seek to impose additional regulations, regulatory hurdles or product bans in certain countries on such products; and

•BioGlue contains a bovine blood protein. Animal-based products are subject to increased scrutiny from the public and regulators, who may seek to impose additional regulations, regulatory hurdles or product bans in certain countries on such products; BioGlue is a mature product and other companies may use the inventions disclosed in expired BioGlue patents to develop and make competing products.

As an example of this risk, our regulatory approval for BioGlue in China took significantly longer and required significant additional investment, at least in part, due to BioGlue’s animal of origin components. Although we received approval to market BioGlue in China during the third quarter of 2024, we dodid not expectrecognize any revenue until at least the second halfquarter of 2025.

Our aortic stent graft systems consist of two main product components: the stent graft and the delivery system. The stent graft is manufactured from several different raw materials that are manufactured internally or at various external suppliers, including single suppliers. The delivery systems we manufacture are comprised of several different raw materials and subassemblies.subassemblies, some of which are sourced from external suppliers, including single suppliers. Our internal manufacturing processes include machining of plastic parts, suturing of stent grafts, processing of Nitinol, and weaving of textiles. Our conventional polyester grafts consist of two main product components: polyester fabric and collagen coating. The polyester fabric is woven from a few different yarns that are supplied by an external supplier. The collagen suspension we manufacture is comprised of a collagenous tissue that is supplied by a single supplier. The conventional ePTFE grafts we manufacture are comprised of various raw materials supplied by several suppliers. For some products the ePTFE grafts are heparin coated. For these products, the heparin suspension we manufacture is comprised of a heparin solution that is also supplied by an external supplier.

As an example of this risk, we fully impaired the value of our original securities purchase option agreement with Endospan (“Endospan Option”) in the fourth quarter of 2021 and fully wrote-down the value of our loan to Endospan in the second quarter of 2023, primarily driven by a decrease in forecasted operating results. Although the Endospan Option and our loan to Endospan were partially written back up to fair value in the third quarter of 2024,2024 and subsequent quarters, similar impairments, and other potential risks like those mentioned above, may adversely affect the market value of our common stock.

•Drive adoption of the NEXUS family of products and AMDS in the EuropeanUS, European, and other markets, including our ability to manage the substantial product training, implant support, and proctoring requirements for NEXUS procedures;

Additionally, our ability to realize the anticipated business opportunities, growth prospects, synergies, and other benefits of our 2019 Endospan transaction depends on a number of additional factors including Endospan’s ability to: (a) comply with the Endospan Loan and other debt obligations, and avoid an event of default; (b) successfully commercialize the NEXUS family of products, raise capitalcapital, and drive adoption in markets in and outside of Europe; (c) meet demand for the NEXUS family of products; (d) meet quality and regulatory requirements for the NEXUS family of products; (e) manage any intellectual property risks and uncertainties associated with the NEXUS family of products; (f) obtain FDA approval of the NEXUS family of products; (g) remain as a going concern; and (h) develop the NEXUS family of products, and other product improvements to meet competitive threats and physician demand. As an example of this risk, the forecasted operating results related to NEXUS ONE decreased, resulting in an impairment to the carrying value of the Endospan Option, and a full write-down of the value of our original loan to Endospan, reflecting decreased expectations with respect to the anticipated benefits of the Endospan transaction. Similarly, our ability to realize the anticipated benefits of the Baxter Transaction depends on factors beyond our control, including Baxter'sBaxter’s performance against Baxter'sBaxter’s originally anticipated demand.

We have experienced, and expect to continue to be subject to the risk of, cybersecurity threats and incidents. For example, we experienced a previously-disclosed cyber-attackcybersecurity incident in the fourth quarter of 2024 that temporarily disrupted our business operations, including our ERP systems, and had an impact on revenue, manufacturing, order processing, shipping, and other corporate operations (the “Cybersecurity Incident”).operations. Our claims for reimbursement with our insurer remain outstanding and we continue to incur expenses in connection with improving our global infrastructure and cybersecurity posture,posture. additionally,Additionally, we remain subject to other risks and uncertainties as a result of the incident, including those related to scrap, inventory levels, and timely shipping releases, as well as the potential to incur additional expenses.

Our business could be impacted by environmental, social,workforce, and governancegovernance-related matters.

Governments,Certain governments, investors, customers, employees and other stakeholders are continuing to focus on areas of corporate responsibility, and particularlyincluding matters related to environmental,environmental social,impacts, workforce practices, and governance (“ESG”)and factors.risk Stakeholdersoversight. In some cases, stakeholders are looking to companies that demonstrate strong ESGperformance andin sustainabilitythese practicesareas as anbeing indicatorbetter ofpositioned for long-term resilience. However, there is an increasing number of state-level and federal legislation, executive orders, and other backlash against such matters that may conflict with other regulatory requirements or our various stakeholders’ expectations. Keeping up with and meeting these sometimes contradictory and evolving expectations can be difficult and expensive, and may disrupt our businessbusiness, and may divert the attention of our management. We may be unable to make the investments inrelated ESGto programsenvironmental, thatworkforce, or governance initiatives at the same level as our competitors with greater financial resources are able to makeresources, or we may be challenged by governmental authorities if we choose to make such investments. Failure to meet the expectations of investors, other stakeholders, or certain governmental authorities in these areas may damage our reputation, impact employee retention, impact the willingness of our customers to do business with us, or otherwise impact our financial results and stock price.

•Our Existing CE Marks: TheIn the past, the extended timeline for the MDR transition has resulted in certain MDD-based CE Marks expiring prior to the completion of the transition.transition; Ourhowever, MDD-basedwe CE Mark for BioGlue expired in December 2021, and for Chord-X in September 2022. We have since beenwere able to successfully renew thesuch CE Mark for BioGlue and Chord-XMarks under the MDR;

•Our Notified Bodies: The combination of the increased regulatory framework under the MDR and the UK’s exit from the European Union have both had an impact on notified bodies. The MDR has significantly increased the workload on existing notified bodies and as a result, many have elected to leave the space, including our Notified Body in the UK, LRQA. AlthoughWe wehave werebeen able to transition our LRQA-issued certification for BioGlue and PhotoFix to a new notified body, DEKRA, we are still in the process of transitioning the LRQA-issue certification for PhotoFixDEKRA; and

As an example of this risk, in September 2022 we halted the PROACT Xa clinical trial based on the recommendation of the trial’s Data and Safety Monitoring Board (“DSMB”) due to insufficient evidence to support non-inferiority of apixaban to warfarin for valve thrombosis and thromboembolism. Similarly, in November 2023 we announced that we were no longer pursuing a labeling change for our On-X mitral valve in connection with our PROACT Mitral trial due to additional investments that would be required to do so. Finally, although we recentlyhave received regulatory approval to market BioGlue in China, it was only after a significantly longer and more expensive regulatory approval process than likely could reasonably have been anticipated when the program began.

We cannot give assurance that regulatory agencies will clear or approve these products and services or indications, or any new products and services or new indications, on a timely basis, if ever, or that the products and services or new indications will adequately meet the requirements of the market or achieve market acceptance. Pre- and post-market clinical studies may also be delayed or halted due to many factors beyond our control.control, including, for example, reductions in FDA staff that may affect the agency’s response time.

Some of our products, including certain On-X products, are sterilized using EtO, primarily by third-partythird-party, large-scale EtO facilities. In addition, some of our suppliers use, or rely upon third parties to use, EtO to sterilize some of our product components. Concerns about the release of EtO into the environment at unsafe levels have led to increased activism and lobbying as well as various regulatory enforcement activities against EtO facilities, including closures and temporary closures, lawsuits against EtO service providers, and proposals increasing regulations related to EtO. The number of EtO facilities in the US is limited, and any permanent or temporary closures or disruption to their operations for any reason could delay, impede, or prevent our ability to commercialize our products.

The per-and polyfluoroalkyl substances (“PFAS”) are used in a wide variety of consumer and industrial products, including medical devices and product packaging. PFAS have been subject to increasing global regulations, and in some cases bans, by the Environmental Protection Agency and numerous states. These requirements impose a high compliance burden, and further regulation of PFAS-containing products is expected. Although we have yet to experience any material impact from this activity or identify any of our products materially impacted by PFAS-related regulation, the ultimate impact and associated cost of current and future rulemaking cannot be predicted at this time.

The transitionpolicies toof athe newcurrent presidential administration in the US bringscontinues to bring several potential risks that could impact our business operations and financial performance. Changes in policy regarding international trade, including import and export regulation and international trade agreements, along with resulting volatility, could negatively impact our business. The US has imposed tariffs and export controls on certain goods and products imported from abroad, which has resulted in retaliatory tariffs. Additional tariffs imposed by the US on a broader range of imports, or further retaliatory trade measures taken by other countries in response, could result in an increase in supply chain costs that we may not be able to offset or that otherwise adversely impact our results of operations. In addition, political tensions between the US and certain other countries have escalated in recent years between and among these countries.years. Changes in foreign policy and the imposition of new sanctions could impact our ability to distribute products in certain regions. This could limit our market reach and affect our revenue streams. The new administration may introduce regulatory changes that could impact the speed to market and our ability to obtain timely reviews for our products. This could delay clinical trials and product launches, impact the regulatory status of current products or services, or affect our competitive position. Changes in tax policy, including changes to corporate tax rates or changes in tax incentives that we currently benefit from, could also negatively impact our results of operations and financial condition.

The new administration has already taken numerous steps impactingthat have impacted federal spending and the federal workforce. Policies relating to reductions in spending, reductions in staff, and mandated return-to-office policies, could impact the capabilities of regulatory agencies which could affect the timeliness and efficiency of regulatory reviews and approvals that are critical to our operations. Regulatory focus, particularly with respect to sustainability matters, may change, reducing or changing regulations relating to ethylene oxide (EtO), per- and polyfluoroalkyl substances (PFAs),PFAS, or other sustainability initiatives, potentially requiring us to make additional expenditures to comply with new regulations, or abandon programs we have already invested in.

In response to perceived increases in healthcare costs in recent years, there have been, and continue to be, proposals by the governmental authorities, third-party payors, and elected office holders and candidates to impact public health, control healthcare costs and, more generally, to reform the healthcare systems. These changes may impact costs and reimbursement, as well as potential changes to the regulatory environment and healthcare generally. Many US healthcare laws, including the Affordable Care Act and the Federal Food, Drug, and Cosmetics Act, are complex, subject to change particularly during a change in administrations,change, and dependent on interpretation and enforcement decisions from government agencies with broad discretion. Changes in regulations, federal funding or staffing at administrative agencies like the FDA may impact, for example, the speed at which we are able to obtain regulatory approvals,reviews and approvals. In addition, changes in the focus of those administrative agencies may result in the repeal of applicable regulations or guidance or impact us in other ways we can notcannot anticipate. This could delay clinical trials and product launches, impact the regulatory status of current products or services, or affect our competitive position. The impact of this uncertainty on us, our customers, or the specific services and relationships we have with our customers is not always clear. Our failure to accurately anticipate accurately these changes, or our failure to comply with changes to legal and regulatory frameworks, could create liability for us, result in adverse publicity and negatively affect our business, results of operations, and financial condition.

Our products and processed tissues allegedly have caused, and may in the future cause, injury or result in other serious complications that may result in product or other liability claims from our customers or their patients. If our products are defectively designed, manufactured, or labeled, or contain inadequate warnings, defective components, or are misused, or are used contrary to our warnings, instructions, and approved indications, we may become subject to costly litigation that can have unpredictable and sometimespotentially extreme outcomes.

We are subject to an increasing number of federal, state, and foreign laws and regulations to address topics relating to data privacy, sustainability, and artificial intelligence. These regulations, some of which can be enforced by private parties or governmental entities, have been or are being promulgated and are constantly evolving and becoming increasingly complex and rigorous. These laws and regulations may include new compliance or disclosure requirements which increases our operating costs and requires significant management investment. Many of these laws and regulations, includingincluding, but not limited to, the European Union’s General Data Protection Regulation (“GDPR”) also include significant penalties for noncompliance. Although our practices, policies, and procedures are intended to comply with relevant laws and regulations, there can be no assurance that regulatory or enforcement authorities will view our arrangements as being in compliance, or that one or more of our employees or agents will not disregard aspects of our compliance programs. Any resulting government enforcement activities may be costly, result in negative publicity, or subject us to significant penalties.

Our indebtedness could adversely affect our ability to raise additional capital to fund operations and execute our strategic plan,plan and limit our ability to react to changes in the economy or our industry.

Artivion, Inc. (“Artivion,” the “Company,” “we,” or “us”), is a leader in the manufacturing, processing, and distribution of medical devices and implantable human tissues used in cardiac and vascular surgical procedures for patients with aortic disease. We have four major product families: aortic stent grafts, On-X mechanical heart valves and related surgical products, surgical sealants, and implantable cardiac and vascular human tissues. Aortic stent grafts include aortic arch stent grafts, abdominal stent grafts, and synthetic vascular grafts. Aortic arch stent grafts include our E-vita Open NEO, E-vita Open Plus, Arcevo LSA, AMDS, NEXUS ONE, NEXUS DUO, and NEXUS TRE, and E-vita Thoracic 3G products. Abdominal stent grafts include our E-xtra Design Engineering, E-nside, Artivex, E-tegra, E-ventus BX, Tuva™ BX, and E-liac products. Surgical sealants include BioGlue Surgical Adhesive (“BioGlue”) products. In addition to these four major product families, we sell or distribute PhotoFix bovine surgical patches (“PhotoFix”) and CardioGenesis cardiac laser therapy (prior to our abandonment of that business as of June 2023). We began to manufacture and supply PerClot® hemostatic powder (“PerClot”) during the second quarter of 2023 (as part of the Transitional Manufacturing and Supply Agreement (“TMSA”) of the Baxter Transaction, described below).

For the year ended December 31, 20242025 we reported annual revenues of $388.5$441.3 million, increasing 10%14% over the prior year. Excluding the effects of foreign exchange, revenues increased 9%13% over the prior year. The increase in revenues was due to increases in revenues from aortic stent grafts, On-X products, and surgical sealants, and preservation services, partially offset by a decrease in revenues from other products and preservation services, and certain limited impacts resulting from the Cybersecurity Incident.incident. For the year ended December 31, 20242025 we reported a net lossincome of $13.4$9.8 million. See the “Results of Operations” section below for additional analysis of the full year 20242025 results. See Part I, Item 1, “Business,” for further discussion of our business and activities during 2024.2025.

These costs are then allocated among the tissues processed during the period based on cost drivers, such as the number of donors or number of tissues processed. We apply a yield estimate to all tissues in process and in quarantine to estimate the portion of tissues that will ultimately become implantable. We estimate quarantine and in process yields based on our historical yield experience with similar tissues and re-evaluate these estimates periodically. Actual yields could differ significantly from our estimates, which could result in a change in tissues available for shipment and could increase or decrease the balance of deferred preservation costs. These changes could result in additional cost of preservation services expense or could increase per tissue preservation costs, which would impact gross margins on tissue preservation services in future periods.

Contingent consideration represents a recurring fair value estimate of potential future payments. The fair value of the contingent consideration liability is estimated by discounting to present value the contingent payments expected to be made based on a probability-weighted scenario approach. A discount rate is applied based on our unsecured credit spread and the term commensurate risk-free rate to the additional consideration to be paid, and then we apply a risk-based estimate of the probability of achieving each scenario to calculate the fair value of the contingent consideration. We used a discount rate of approximately 16% and estimated future achievement of milestone dates between 2025 and 2026 to calculate the fair value of contingent consideration as of December 31, 2025. This fair value measurement was based on unobservable inputs, including management estimates and assumptions about the future achievement of milestones and future estimate of revenues, and is, therefore, classified as Level 3 within the fair value hierarchy.

Revenues increased 10%14% for the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023.2024. The increase in revenues for the year ended December 31, 20242025 was due to an increase in revenues from aortic stent grafts, On-X products, and surgical sealants, and preservation services, partially offset by a decrease in revenues from other products.products and preservation services. Excluding the effects of foreign exchange, revenues increased 9%13% for the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023.2024.

Revenues from products increased 11%19% for the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023.2024. The increase was due to an increase in revenues from aortic stent grafts, On-X products, and surgical sealants, partially offset by a decrease in revenues from other productsproducts. andThe certainrevenue limitedgrowth impactsrate for the year ended December 31, 2025 was favorably impacted by decreased revenues in the fourth quarter of 2024 resulting from the Cybersecurity2024 Incident.cybersecurity incident. A discussion of the changes in product revenues for aortic stent grafts, On-X products, surgical sealants, and other product revenues is presented below.

Aortic stent grafts include aortic arch stent grafts, abdominal stent grafts, synthetic vascular grafts, and original equipment manufacturing (“OEM”) aortic stent graft products. Aortic arch stent grafts include our E-vita Open NEO, E-vita Open Plus, Arcevo LSA, AMDS, the NEXUS family of products, and E-vita Thoracic 3G products. Abdominal stent grafts include our E-xtra Design Engineering, E-nside, Artivex, E-tegra, E-ventus BX, Tuva™ BX, and E-liac products. Aortic stent grafts are used in endovascular and open vascular surgery for the treatment of complex aortic arch, thoracic, and abdominal aortic diseases. Our aortic stent grafts are primarily distributed in international markets.

Revenues from the sales of aortic stent grafts increased 15%29% for the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023.2024. This increase was primarily due to a change in the volume and mix of units sold, and to a lesser extent, an increase in average sales prices, and the effectvolume of foreignunits exchange rates.sold.

Constant currency revenues from the sales of aortic stent grafts increased 13%27% for the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023.2024. Revenues for the year ended December 31, 20242025 increased primarilyin all geographies, with the most significant increases in Europe, the Middle East, and Africa (collectively, “EMEA”) and, to a lesser extent, in Latin America and AsiaNorth Pacific (“APAC”).America. The revenue increase in EMEA for the year ended December 31, 20242025 was primarily due to an increase in volume of higher priced products within the aortic stent graft product line in direct (to hospitals) markets. The revenue increase in North America for year ended December 31, 2025 was primarily due to sales of AMDS as a result of humanitarian device exemption (“HDE”) granted by the FDA in December 2024 for use of the AMDS™ Hybrid Prosthesis in acute DeBakey Type I dissections in the presence of malperfusion. The HDE allows for, subject to certain restrictions, commercial distribution of AMDS in the United States (“US”) prior to the approval of a Premarket Approval Application, which we currently anticipate receiving in 2026 allowing for full commercial distribution of AMDS in the US.

Revenues from the sales of On-X products increased 13%21% for the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023.2024. This increase was primarily due to an increase in the volume of units sold and,as towell a lesser extent,as an increase in average sales prices.

Constant currency revenues from the sales of On-X products increased 13%21% for the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023.2024. Revenues for the year ended December 31, 20242025 increased in all geographies, with the most significant increase in North America.America and EMEA. The increase in revenues in North America forand the year ended December 31, 2024 was impacted by recent gains in the market share. On-X OEM sales accounted for less than 1% of product revenuesEMEA for the year ended December 31, 20242025 was impacted by gains in market share. The increase in revenues from EMEA for the year ended December 31, 2025 was primarily due to an increase in unit sales in both indirect and 2023.direct markets.

Domestic revenues from the sales of On-X products accounted for 61% and 60% of total On-X revenues for both the year ended December 31, 20242025 and 2023, respectively.2024.

Revenues from the sales of surgical sealants increased 9%4% for the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023.2024. This increase was primarily due to an increase in average sales prices as well as an increase in the volume of milliliters sold and, to a lesser extent, an increase in average sales prices.sold.

Constant currency revenues from the sales of surgical sealants increased 9%3% for the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023.2024. The increase in revenues was primarily due to revenue increases in EMEA,Latin NorthAmerica America,(“LATAM”) and LatinAsia America,Pacific with the most significant increase in EMEA.(“APAC”). The increase in revenues in EMEALATAM for the year ended December 31, 20242025 was primarily due to an increase in unit sales in indirect and direct markets. The increase in revenues in LATAM and APAC for the year ended December 31, 2025 were partially offset by a revenue decrease in EMEA, which was primarily due to a decrease in unit sales in direct markets. Constant currency revenues from the sales of surgical sealants in North America were flat for the year ended December 31, 2025, as compared to the year ended December 31, 2024.

Other revenues are comprised of revenues from PhotoFix and PerClot (as part of the TMSA of the Baxter Transaction described below), and CardioGenesisreserves cardiac laser therapy (priorrelated to ourthe abandonmentItalian ofpayback thatmeasure businessdescribed as of June 2023).below.

Revenues from tissue processing increaseddecreased 6%3% for the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023.2024. The increasedecrease in revenues was primarily due to ana increasebacklog inof averagetissues salesto prices.be released for shipments as a result of the 2024 cybersecurity incident. The tissue backlog released during the second and third quarters of 2025 and tissue shipments have returned to normal levels.

Cost of products increased 17%13% for the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023.2024. Cost of products for the year ended December 31, 20242025 and 20232024 included costs related to aortic stent grafts, On-X,On-X products, surgical sealants, and other products.

Cost of preservation services remainedincreased flat10% for the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023.2024. Cost of preservation services included costs for cardiac and vascular tissue preservation services. CostThe increase in cost of preservation services forwas primarily due to an increase in the cost of tissues shipped, partially offset by a decrease in the volume of tissues shipped, as compared to the year ended December 31, 2024 was negatively impacted by an increase in cost of certain tissues shipped, offset by a decrease in volume of certain tissues shipped.2024.

The increase in gross margin for the year ended December 31, 2024,2025, as compared to the year ended December 31, 20232024 was due to an increase in the volume of all products shipped as well as favorablethe pricingincrease in the average sales price of certain aortic stent grafts, surgical sealants, On-X products,products and tissues shipped and favorable mix of certain products shipped during 2024.2025. ThisThe increase was partially offset by an increase in theunfavorable cost of certain aortictissues stentand grafts,products includingshipped, an idle capacity charge resulting from the cybersecurity incident that occurred in the fourth quarter of 2024, and certain tissues shipped as well as unfavorable geography mix of On-Xtissues productsshipped, and certainan aorticincrease stentin graftsour shippedreserves duringrelated to the Italian payback measure, as compared to the year ended December 31, 2024. Gross margin as a percentage of total revenues decreased for the year ended December 31, 2024, as compared to the year ended December 31, 2023. Gross margin as a percentage of total revenues was negativelypositively impacted by ana increasefavorable ingeography theand costproduct mix as well as favorable pricing of certain aortic stent grafts, largely due to an idle capacity charge resulting from the fourth quarter cybersecurity incident, and other products, unfavorable geography mix of On-X products shipped, partially offset by favorablean pricingunfavorable mix of tissues shipped and an unfavorable cost of certain tissues, favorable product mix of certain aortic stent grafts,products and On-X productstissues shipped during the year ended December 31, 2024.2025.

General, administrative, and marketing expenses decreasedincreased 13%25% for the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023,2024, which includes the impact of the Ascyrus contingent consideration fair value adjustment loss of $7.7 million and gain of $11.0 million and loss of $23.5 million for the year ended December 31, 20242025 and 2023,2024, respectively. The remaining general, administrative, and marketing expenses for the year ended December 31, 20242025 increased $7.0$26.3 million as a result of higher personnel-related expenses due to an increaseinvestments in headcountsales and $2.6marketing, million ofincluding expenses associated with the fourthAMDS quarterlaunch in the US, investments in information technology, including $3.5 million of expenses, net of insurance recoveries of $3.2 million, associated with the 2024 cybersecurity incident.incident, and increased non-cash stock compensation expenses.

Research and development expenses decreasedincreased 1%9% for the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023.2024. Research and development spending for the year ended December 31, 20242025 and 20232024 was primarily focused on clinical work to gain regulatory approvals for certain aortic stent grafts, and, to a lesser extent, On-X products.grafts.

Gain from sale of non-financial assets for the year ended December 31, 20232025 consisted of thea net $14.3$7.0 million receivedgain as part of the Baxter Transaction uponbased receipton the expected achievement of Baxter’s certain cumulative worldwide net sales of PerClot. See Part II, Item 8, Note 2 of the PerClot“Notes PMAto inConsolidated MayFinancial 2023.Statements” for further discussion of the Baxter Transaction.

Interest expense was $34.3$26.6 million and $25.3$34.3 million for the year ended December 31, 20242025 and 2023,2024, respectively. The increase in interestInterest expense for the year ended December 31, 2024,2025 as compared to the year ended December 31, 2023, wasdecreased primarily due to anlower increase in thevariable interest rates and higher unused commitment fees on our new credit facilities and reduced interest expense as a result of ourthe debt refinancing in January 2024 as well as an increase in non-cash amortizationsettlement of debtthe discountsConvertible andSenior debtNotes. issuanceSee costs.Part II, Item 8, Note 10 of the “Notes to Consolidated Financial Statements” for further discussion of the settlement of the Convertible Senior Notes.

LossLosses on Inducement/Extinguishment of Debt

During the year ended December 31, 2025 we recorded a loss on inducement of convertible debt of $2.7 million in connection with the settlement of our Convertible Senior Notes. During the year ended December 31, 2024 we recorded a loss on extinguishment of debt of $3.7 million in connection with the extinguishment of our previously existing credit facilities. See Part II, Item 8, Note 10 of the “Notes to Consolidated Financial Statements” for further discussion of our newConvertible Senior Notes and credit facilities.

Other (Income) Expense, Net

Other (income) expense, net was $9.5 million of income and $9.9 million andof $3.1 millionexpense for the year ended December 31, 20242025 and 2023,2024, respectively. Other income (expense), net for the year ended December 31, 2025 primarily included a net $7.2 million gain from realized and unrealized effects of foreign currency gains and losses and a $2.3 million gain associated with fair value adjustments to loans issued pursuant to our Endospan agreements. Other (income) expense, net for the year ended December 31, 2024 primarily included a net $5.4 million loss from realized and unrealized effects of foreign currency gains and losses and a $4.5 million loss associated with fair value adjustments to loans issued pursuant to our Endospan agreements. Other expense, net for the year ended December 31, 2023 primarily included a $5.0 million loss associated with fair value adjustments to loans issued pursuant to our Endospan agreements, partially offset by a $2.1 million gain from realized and unrealized effects of foreign currency gains and losses. See Part II, Item 8, Note 4 - “Agreements with Endospan” of the “Notes to Consolidated Financial Statements” for further information on our agreements with Endospan.

Our effective income tax rate was an expense of 78%34% and 42%78% for the year ended December 31, 20242025 and 2023,2024, respectively. The increasedecrease in the effective income tax rate for the year ended December 31, 20242025 was primarily due to a decrease in valuation allowance resulting from the enactment of the One Big, Beautiful Bill Act and favorable changes to tax rates in certain jurisdictions, partially offset by changes in the jurisdictional mix of our earnings and valuation allowance,earnings, higher nondeductible executive compensation, state taxes and provision to return adjustments.

To supplement our Consolidated Financial Statements presented in accordance with US GAAP, we use constant currency revenues, which is a non-GAAP financial measure. We define constant currency revenues as revenues minusadjusted for the exchange rate effect. We define exchange rate effect as the year-over-year impact of foreign currency movements using current period foreign currency rates applied to prior period transactional currency amounts.

Historically, we believe the demand for most of our aortic stent grafts is seasonal, with a decline in demand generally occurring in the third quarter primarily due to the summer holiday season in Europe.

Our liquidity as of December 31, 20242025 consisted of cash and cash equivalents of $53.5$64.9 million, unused commitments of $30.0 million under a revolving credit facilityfacility, and unused commitments of $100.0$150.0 million on the new delayed draw term loan facility (see “Credit Facilities” below). As of December 31, 20242025 approximately 48%34% of our cash and cash equivalents were held in foreign jurisdictions. Our practice is to maintain sufficient liquidity through cash from operations and our revolving credit facility to mitigate the impacts of any adverse financial market conditions on our operations. We believe that cash generated from operations, together with amounts available under theour revolvingCredit creditFacilities, facilityas defined below, will be sufficient to meet working capital requirements and anticipated capital expenditures, and other strategic uses of cash, if any, and debt payments, if any, over the next twelve months.

On January 18, 2024 we entered into a credit and guaranty agreement with Ares Management Credit funds (the “Ares Credit Agreement”) for $350.0 million of senior secured, interest-only, credit facilities, consisting of a $190.0 million secured term loan facility (the “Term Loan Facility”), a $100.0 million secured delayed draw term loan facility (the “Delayed Draw Term Loan Facility” and, together with the Term Loan Facility, the “Term Loan Facilities”) and a $60.0 million “senior-priority” secured revolving credit facility with a priority claim ahead of the other secured facilities (the “Revolving Credit Facility” and, together with the Term Loan Facilities, the “Credit Facilities”). Upon closing, we borrowed $190.0 million under the Term Loan Facility and $30.0 million under the Revolving Credit Facility. The proceeds of the initial borrowings were used along with cash on hand to pay off our previously existing credit agreement and pay related fees and expenses. The $100.0 million of undrawn availability under the Delayed Draw Term Loan Facility remained undrawn and was establishedterminated solelyon toJuly make2, funds2025 availableas inwe entered into separate, privately negotiated exchange agreements with the event of a repurchase or repaymentHolders of the Convertible Senior Notes onas ordiscussed prior to a scheduled maturity date of July 1, 2025 (see below).below.

The final scheduled maturity date of the Credit Facilities is January 18, 2030.2031. There are no scheduled repayments of principal required to be made prior to the final maturity date. We have the right to prepay loans under the Ares Credit Agreement in whole or in part at any time, subject to certain premium payment requirements. Amounts repaid in respect of loans under the Term Loan Facilities may not be reborrowed. The Credit Facilities currently bear interest at the Adjusted Term Secured Overnight Financing Rate (“Adjusted Term SOFR”) plus applicable margins. As of December 31, 20242025 the aggregate interest rate was 11.09%8.74% and 8.59%7.49% per annum for the Term Loan Facilities and Revolving Credit Facility, respectively. See Part II, Item 8, Note 10 of the “Notes to Consolidated Financial Statements” for further discussion of our newamended Ares Credit Agreement.

Net cash provided by operating activities increased $3.4$17.6 million during the year ended December 31, 20242025 compared to the year ended December 31, 2023,2024, primarily due to increased profitability, an increaseimprovement in cash collections resultingfrom fromcustomers, and a 10% increasedecrease in revenues,cash paid for taxes. These increases were partially offset by higher personnel-related costs associated with an increase in headcount, an increase in cash paid for taxes,inventories and higher inventory purchases and increaseddeferred preservation costs relatedto tosupport the increase in revenues.revenues, as well as changes in the timing of interest payments on our credit facilities executed in January 2024.

Net cash used in investing activities was $28.2$42.0 million and $0.5$28.2 million for the year ended December 31, 20242025 and 2023,2024, respectively. During the year ended December 31, 20242025 cash flows used in investing activities primarily included $39.0 million of cash used for capital expenditures, as discussed below, and $8.0 million for the funding of loans made pursuant to the Endospan agreements, partially offset by $5.0 million proceeds from the sale of non-financial assets. Cash flows used in investing activities during the year ended December 31, 2024 included $11.2 million of cash used for capital expenditures and $17.0 million for the funding of loans made pursuant to the Endospan agreements. Cash flows used in investing activities during the year ended December 31, 2023 included $9.8 million of cash used for capital expenditures and $5.0 million for the funding of loans made pursuant to the Endospan agreements, which were partially offset by $14.3 million of proceeds received as part of the Baxter transaction from the sale of non-financial assets.

Net cash provided by financing activities was $2.2$11.3 million and $0.9$2.2 million for the year ended December 31, 20242025 and 2023,2024, respectively. The current year cash provided by financing activities was primarily due to $5.7$13.1 million of proceeds from exercise of stock options and issuances of common stock and $0.7$3.1 million of net proceeds receivedfrom onfinancing ourinsurance new credit facilities after repaying and extinguishing all obligations on our old credit facilities, all of which werepremiums, partially offset by payments of $2.5$2.3 million for debtprincipal issuancepayments costson short-term notes payable and $1.0$1.8 million for repaymentspayment of short-termdebt notesissuance payable.cost.

Our long-term debt obligations and interest payments include $320.0$220.0 million of scheduled principal payments and $119.2$146.1 million in anticipated interest payments related to our Initial Term Loan Facility, Revolving Credit Facility, and Convertiblenew SeniorDelayed Notes.Draw WhileTerm interestLoan payments will be settled in cash, we plan to settle the $100.0 million principal outstanding on our Convertible Senior Notes due July 1, 2025 by issuing shares of our common stock.Facility.

Capital expenditures for the year ended December 31, 20242025 and 20232024 were $11.2$39.0 million and $9.8$11.2 million, respectively. Capital expenditures in the year ended December 31, 20242025 were primarily related to $20.3 million for the acquisition of buildings in Austin, Texas supporting our On-X manufacturing operations and future capacity expansion, as well as routine purchases of computer software, manufacturing and tissue processing equipment, computer equipment, and leasehold improvements needed to support our business and computer equipment.business.

Our operations and performance have been, and may continue to be, impacted by regional and global geopolitical conditions, domestic and foreign trade and monetary policies, and other factors beyond our control, such as Russia’s war with Ukraine and the ongoing Iranian conflict in the Middle East. To date, sanctions and other disruptions in the Eastern European region have not materially impacted our business or ability to supply products to Russia, Belarus, Ukraine, and the region generally; however, continuation or escalation of the wars in Ukraine or instability in the Middle East, and in particular the ongoing conflict in Iran, or increased export controls or additional sanctions imposed on or by impacted countries, their allies, or related entities could adversely affect our financial performance. Although currently we do not have any direct operations in Russia, Ukraine, Israel, Gaza, or Syria, on May 7,18, 2026, we electedcompleted toour exercisepreviously announced acquisition of Endospan, and the option to acquire Endospan pursuant to the Endospan Option Amendment, theacquired NEXUS family of products are solely manufactured by Endospan in Herzliya, Israel. We have not experienced any material disruption of NEXUS supply from Endospan related to the war in Iran; however, it is difficult to predict the ultimate course of these conflicts and we may face business operations and supply chain disruptions as a result, including disruptions related to shortages of materials and finished goods, higher costs of materials and freight, freight delays, increased energy costs or energy shortages, travel disruptions, currency fluctuation, and disruptions to banking systems or capital markets.

We have threefour internal manufacturing facilities: Austin, Texas for On-X products, Hechingen, Germany for internally manufactured aortic stent grafts, Herzliya, Israel for the NEXUS family of products, and Kennesaw, Georgia for all other products and services. Certain aortic stent graft assemblies are manufactured for us by a contract manufacturer in Slovakia. The AMDS product is solely manufactured by a supplier in Charlotte, North Carolina, and the NEXUS family of products are solely manufactured by Endospan in Herzliya, Israel.Carolina. If one of these suppliers or facilities ceases operations temporarily or permanently, for any reason including a pandemic, war, work stoppage, cybersecurity incident, infrastructure or equipment malfunction, or a natural disaster, our business could be substantially disrupted.

Our business and future operating results depend in significant part upon the continued contributions of our specialized workforce, including key personnel, qualified personnel with medical device and tissue processing experience, and senior management with experience in the medical device or tissue processing space, some of whom would be difficult to replace. Our business and future operating results, including production at our manufacturing and tissue processing facilities, also depend in significant part on our ability to attract and retain qualified management, operations, processing, marketing, sales, and support personnel. Our primary facilities are in Kennesaw, Georgia; Austin, Texas; Hechingen, Germany; and Hechingen,Herzliya, Germany,Israel, where the supply of qualified medical device and tissue processing and other personnel is limited, competition for such personnel is significant, and we cannot ensure that we will be successful in attracting or retaining them. We face risks if we lose any key employees to other employers or due to severe illness, death, or retirement, if any of our key employees fail to perform adequately, or if we are unable to attract and retain skilled employees. Competition for talent and worker shortages at all levels have impacted supply chains and distribution channels and our ability to attract and retain the specialized workforce necessary for our business and operations.

Additionally, our ability to realize the anticipated business opportunities, growth prospects, synergies, and other benefits of our 2019 Endospan transactionacquisition depends on a number of additional factors including Endospan’sour ability to: (a) comply with the Endospan Loan and other debt obligations, and avoid an event of default; (b) successfully commercialize the NEXUS family of products, raise capital, and drive adoption in markets in and outside of Europe; (cb) meet demand for the NEXUS family of products; (dc) meet quality and regulatory requirements for the NEXUS family of products; (ed) manage any intellectual property risks and uncertainties associated with the NEXUS family of products; (fe) obtain FDA approval of the NEXUS family of products; (g) remain as a going concern; and (hf) develop the NEXUS family of products, and other product improvements to meet competitive threats and physician demand. As an example of this risk, the forecasted operating results related to NEXUS ONE decreased, resulting in an impairment to the carrying value of the Endospan Option, and a full write-down of the value of our original loan to Endospan, reflecting decreased expectations with respect to the anticipated benefits of the Endospan transaction. Similarly, our ability to realize the anticipated benefits of the Baxter Transaction depends on factors beyond our control, including Baxter’s performance against Baxter’s originally anticipated demand.

Our relationships with physicians, hospitals, government officials, healthcare providers, and others are subject to scrutiny under various US and international bribery, anti-kickback, false claims, privacy, transparency, and similar laws, often referred to collectively as “healthcare compliance laws.” Healthcare compliance laws are broad, sometimes ambiguous, counterintuitive, complex, and subject to change and changing interpretations. Our global expansion into higher-risk regions andregions, Russia’s ongoing war with Ukraine andUkraine, the instabilityongoing ofIranian conflict in the Middle East, and the current and future sanctions imposed on Russia and others as a result may exacerbate these risks. See also Part I, Item 1A, “Risk Factors – Business and Economic Risks - We are subject to a variety of risks due to our international operations and continued global expansion.” Possible sanctions for violation of these healthcare compliance laws include fines, civil and criminal penalties, exclusion from government healthcare programs, and despite our compliance efforts, we face the risk of an enforcement activity or a finding of a violation of these laws.

We are subject to an increasing number of federal, state, and foreign laws and regulations to address topics relating to data privacy, sustainability, and artificial intelligence. These regulations, some of which can be enforced by private parties or governmental entities, have been or are being promulgated and are constantly evolving and becoming increasingly complex and rigorous. These laws and regulations may include new compliance or disclosure requirements which increasesincrease our operating costs and requiresrequire significant management investment. Many of these laws and regulations, including, but not limited to, the European Union’s General Data Protection Regulation (“GDPR”) also include significant penalties for noncompliance. Although our practices, policies, and procedures are intended to comply with relevant laws and regulations, there can be no assurance that regulatory or enforcement authorities will view our arrangements as being in compliance, or that one or more of our employees or agents will not disregard aspects of our compliance programs. Any resulting government enforcement activities may be costly, result in negative publicity, or subject us to significant penalties.

We reported quarterly revenues of $116.3$125.8 million for the three months ended MarchJune 31,30, 2026, an 18%11% increase from the three months ended MarchJune 31,30, 2025. The increase in revenues for the three months ended MarchJune 31,30, 2026 was due to an increase in revenues from aorticall stentproducts grafts,and preservation services,services On-Xother products, andthan surgical sealants, partiallywhich offsetremained byrelatively a decrease in revenues from other products.flat. Constant currency revenues, as defined below, increased 12%9% for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025.

See the “Results of Operations” section below for additional analysis of the three and six months ended MarchJune 31,30, 2026.

Revenues increased 18%11% and 14% for the three and six months ended MarchJune 31,30, 2026, respectively, as compared to the three and six months ended MarchJune 31,30, 2025. The increase in revenues for the three months ended MarchJune 31,30, 2026 was primarily due to an increase in revenues from aortic stent grafts and On-X products, and to a lesser extent, preservation services and other products. The increase in revenues for the six months ended June 30, 2026 was primarily due to an increase in revenues from aortic stent grafts, preservation services, On-X products, and surgicalpreservation sealants,services, partiallyand offset byto a decreaselesser inextent, revenuessurgical fromsealants and other products.

A detailed discussion of the changes in product revenues and preservation services revenues for the three and six months ended MarchJune 31,30, 2026 is presented below.

Revenues from products increased 16%14% and 15% for the three and six months ended MarchJune 31,30, 2026, respectively, as compared to the three and six months ended MarchJune 31,30, 2025. The increase for the three months ended MarchJune 31,30, 2026 was primarily due to an increase in revenues from aortic stent grafts,grafts and On-X products, and surgical sealants, partially offset byto a decreaselesser extent, other products. The increase for the six months ended June 30, 2026 was primarily due to an increase in revenues from other products. A discussion of the changes in product revenues for aortic stent grafts,grafts and On-X products, and to a lesser extent, surgical sealants,sealants and other product revenues is presented below.products.

Sales of certain products through our direct sales force and distributors across Europe and various other countries are denominated in a variety of currencies including Euros, Brazilian Reals, Polish Zlotys, British Pounds, Canadian Dollars, and Swiss Francs with a concentration denominated in Euros. Each currency is subject to exchange rate fluctuations. For the three and six months ended MarchJune 31,30, 2026, as compared to the three and six months ended MarchJune 31,30, 2025, the US Dollar weakened in comparison to major currencies, resulting in revenue increases when these foreign currency denominated transactions were translated into US Dollars. Future changes in these exchange rates could have a material, adverse effect on our revenues denominated in these currencies. Additionally, our sales to many distributors around the world are denominated in US Dollars, and although these sales are not directly impacted by currency exchange rates, we believe that some of our distributors may delay or reduce purchases of products in US Dollars depending on the relative price of these goods in their local currencies.

Revenues from the sales of aortic stent grafts increased 21%16% and 19% for the three and six months ended MarchJune 31,30, 2026, respectively, as compared to the three and six months ended MarchJune 31,30, 2025. ThisThese increaseincreases waswere primarily due to an increase in the volume of higher priced units sold, and to a lesser extent, the favorable effect of foreign exchange rates, as well as an increase in average sales prices.rates.

Constant currency revenues from the sales of aortic stent grafts increased 10%12% and 11% for the three and six months ended MarchJune 31,30, 2026, respectively, as compared to the three and six months ended MarchJune 31,30, 2025. RevenuesThese increases for the three and six months ended MarchJune 31,30, 2026 increasedwere primarily due to revenue increases in North America, and Europe, the Middle East, and Africa (collectively, “EMEA”), partially offset by a decrease in Asia Pacific (“APAC”) and LatinNorth America (“LATAM”).America. The revenue increases in EMEA for the three and six months ended June 30, 2026 were primarily due to an increase in volume of products sold within the aortic stent graft product line in direct (to hospitals) markets. The revenue increases in North America for the three and six months ended MarchJune 31,30, 2026 waswere primarily due to an increase in sales of AMDS, reflecting increased adoption following the grant of a humanitarian device exemption (“HDE”) by the FDA in December 2024 for use of the AMDS™ Hybrid Prosthesis in acute DeBakey Type I dissections in the presence of malperfusion. The HDE allowsallowed for, subject to certain restrictions, commercial distribution of AMDS in the United States (“US”) prior to the approval of a Premarket Approval Application, which we currently anticipate receivingreceived in 2026June 2026, allowing for full commercial distribution of AMDS in the US. The revenue increase in EMEAincreases for the threesix months ended MarchJune 31,30, 2026 waswere partially offset by revenue decreases in Asia Pacific (“APAC”) and Latin America (“LATAM”), primarily due to an increase in volume of higher priced products within the aortic stent graft product line in direct (to hospitals) markets. The decrease in revenues in APAC and LATAM for the three months ended March 31, 2026 was impacted by customer buying patterns in certain markets.

For the three and six months ended MarchJune 31,30, 2026 and 2025, the substantial majority of aortic stent graft revenues were generated from geographies outside the US.

Revenues from the sales of On-X products increased 20%19% for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025. This increase was primarily due to higher average sales prices and an increase in the volume of units sold and an increase in average sales prices.sold.

Constant currency revenuesRevenues from the sales of On-X products increased 17%20% for the threesix months ended MarchJune 31,30, 2026, as compared to the threesix months ended MarchJune 31,30, 2025. TheThis increase in revenues for the three months ended March 31, 2026 was primarily due to growth in North America, EMEA, and APAC, reflecting gains in market share. The increase in revenues from EMEA for the three months ended March 31, 2026 was primarily due to an increase in unitthe volume of units sold and an increase in average sales in direct markets.prices.

Domestic revenues from the sales of On-X products accounted for 62%58% and 65%60% of total On-X revenues for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to 61% and 63% for the three and six months ended June 30, 2025, respectively.

Revenues from the sales of surgical sealants increasedwere 4%flat for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025. This increase was2025, primarily due to a decrease in the volume of milliliters sold, offset by favorable foreign exchange rates and, to a lesser extent, an increase in average sales prices.

Domestic revenues from the sales of surgical sealants accounted for 50%45% and 49%48% of total surgical sealant revenues for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to 48% for both the three and 2025,six respectively.months ended June 30, 2025.

Other revenues decreasedincreased 9%35% and 14% for the three and six months ended MarchJune 31,30, 2026, respectively, as compared to the three and six months ended MarchJune 31,30, 2025. The decreaseincrease was primarily due to aan decreaseincrease in PerClot product revenues resulting from thean timingincrease in volume of shipments.units sold.

Revenues from tissue processing increased 23%1% for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025. The increase was primarily due to an increase in average sales prices, partially offset by a decrease in the volume of higher priced tissues shippedshipped. asShipment wellvolumes as an increase in average sales prices. Revenues forduring the three months ended MarchJune 31,30, 2025 werebenefited adverselyfrom affectedthe byrelease of a backlog of tissues resulting from the 2024 cybersecurity incident.incident, which started to release during the second quarter of 2025.

Cost of products increased 18%20% and 19% for the three and six months ended MarchJune 31,30, 2026, respectively, as compared to the three and six months ended MarchJune 31,30, 2025. Cost of products for the three and six months ended MarchJune 31,30, 2026 and 2025 included costs related to aortic stent grafts, On-X products, surgical sealants, and other products.

The increase in total cost of products for the three months ended MarchJune 31,30, 2026 was primarily due to an increase in the unit costvolume of certain aortic stent grafts and On-X products shipped, and an increase in the volume of On-X products and certain aortic stent grafts shipped, as compared to the three months ended MarchJune 31,30, 2025.

Cost of preservation services increaseddecreased 10%3% for the three months ended MarchJune 31,30, 2026,2026 as compared to the three months ended MarchJune 31,30, 2025. Cost of preservation services increased 3% for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. Cost of preservation services included costs for cardiac and vascular tissue preservation services.

The increasedecrease in total cost of preservation services for the three months ended MarchJune 31,30, 2026 was primarily due to ana increasedecrease in the unit cost and volume of certain tissues shipped, as compared to the three months ended MarchJune 31,30, 2025.

Gross margin increased 19%10% and 14% for the three and six months ended MarchJune 31,30, 2026, respectively, as compared to the three and six months ended MarchJune 31,30, 2025.

The increase in gross margin for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025, was primarily due to ahigher favorableaverage mixselling ofprices for certain products and tissues shipped, an increase in the average sales price of certain products and tissues shipped, a favorable effect of foreign exchange rates, and an increase in volume of certain products shipped, and tissuesfavorable shippedforeign currency effects for the three months ended MarchJune 31,30, 2026. The increase was partially offset by unfavorable cost of certain products shipped, as compared to the three months ended MarchJune 31,30, 2025. Gross margin as a percentage of total revenues increaseddecreased for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025. Gross margin as a percentage of total revenues was positivelynegatively impacted by aan favorableunfavorable productgeographic mix and favorableunfavorable pricingcosts of certain products and tissues shipped, partially offset by unfavorablefavorable costspricing of certain products shippedshipped, during the three months ended MarchJune 31,30, 2026.

General, administrative, and marketing expenses increased 11%38% for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025, which includes the impact of the Ascyrus contingent consideration fair value adjustment loss of $1.7$8.0 million and gain of $2.8$2.6 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The remaining general, administrative, and marketing expenses for the three months ended MarchJune 31,30, 2026 increased $1.5$16.8 million, primarily due to $11.7 million of Endospan acquisition transaction costs, of which $10.2 million related to transaction bonuses for Endospan employees associated with the Endospan acquisition, as awell result ofas investments in sales and marketing, asand wellincreased asnon-cash investmentsstock incompensation information technology, partially offset by $1.5 million in net cyber insurance recoveries received.expenses.

Research and development expenses increased 31%28% and 30% for the three and six months ended MarchJune 31,30, 2026, respectively, as compared to the three and six months ended MarchJune 31,30, 2025. Research and development spending for the three and six months ended MarchJune 31,30, 2026 was primarily focused on clinical work to gain regulatory approvals for certain aortic stent grafts.

Interest expense was $5.4$7.3 million and $7.7$12.6 million for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to $7.3 million and $14.9 million for the three and six months ended June 30, 2025, respectively. Interest expense for the threesix months ended MarchJune 31,30, 2026 decreased primarily due to lower variable interest rates on our credit facilities and reduced interest expense as a result of the settlement of the Convertible Senior Notes.Notes, partially offset by interest incurred on the New Delayed Draw Term Loan borrowed in May 2026. See Part I, Item 1, Note 89 of the “Notes to Condensed Consolidated Financial Statements” for further discussion of the settlement of the Convertible Senior Notes.Notes and the borrowing under the New Delayed Draw Term Loan.

Other Expense (Income), Net

Other expense (income), net was $0.3$3.6 million ofand expense$3.3 million for the three and $3.1six months ended June 30, 2026, respectively, as compared to $5.0 million and $8.0 million of income for the three and six months ended MarchJune 31, 2026 and30, 2025, respectively. Other expense (income), net forFor the three months ended MarchJune 31,30, 20262026, other income primarily included a $4.3 million gain from fair value adjustments to loans issued in connection with our acquisition of Endospan, partially offset by a net $0.8$0.7 million loss from realized and unrealized effects of foreign currency gains and losses,losses. partiallyOther offsetincome byfor the six months ended June 30, 2026 primarily included a $0.5$4.8 million gain associated with fair value adjustments to loans issued pursuantin toconnection with our Endospanacquisition agreements.of OtherEndospan, expensepartially (income),offset net for the three months ended March 31, 2025 primarily includedby a net $2.9$1.6 million gainloss from realized and unrealized effects of foreign currency gains and losses and a $0.3 million gain associated with fair value adjustments to loans issued pursuant to our Endospan agreements.losses.

On July 4, 2025 the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S.US. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax frameworkframework, and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We have reflected the impact of the enactment in our results for the three and six months ended MarchJune 31,30, 2026.

Our primary uses of liquidity include the payment of operating expenses, capital expenditures, servicing of debt and the funding of acquisitions or other collaborative arrangements. Our primary sources of funding are operating cash flows and borrowings under our debt facilities. As of MarchJune 31,30, 2026 we had approximately $220.0$370.0 million of total principal indebtedness outstanding.

Our liquidity as of MarchJune 31,30, 2026 consisted of cash and cash equivalents of $55.8$77.3 million,million and unused commitments of $30.0 million under a revolving credit facility, and unused commitments of $150.0 million on the new delayed draw term loan facility (see “Credit Facilities” below). As of MarchJune 31,30, 2026 approximately 33%28% of our cash and cash equivalents were held in foreign jurisdictions. Our practice is to maintain sufficient liquidity through cash from operations and our revolving credit facility to mitigate the impacts of any adverse financial market conditions on our operations. We believe that cash generated from operations, together with amounts available under our Credit Facilities, as defined below, will be sufficient to meet working capital requirements and anticipated capital expenditures, and other strategic uses of cash, if any, and debt payments, if any, over the next twelve months.

Our future cash requirements are expected to include interest payments under our credit facilities, expenditures for clinical trials, research and development expenditures, general working capital needs, capital expenditures, other corporate purposes, obligations pursuant to the exercise of the Endospan purchase option, and may include cash to fund other business development activities including obligations pursuant to the acquisition of Ascyrus and Endospan. In July 2026, following receipt of FDA approval of the premarket approval application for the AMDS, we made a contingent payment of $25.0 million under the Ascyrus Agreement. These items may have a significant effect on our future cash flows during the next twelve months. Subject to the terms of our credit facilities, we may seek additional borrowing capacity or financing, pursuant to our current or any future shelf registration statement, for general corporate purposes or to fund other future cash requirements. If we undertake any further significant business development activity, we may need to finance such activities by obtaining additional debt financing or using a registration statement to sell equity securities. There can be no assurance that we will be able to obtain any additional debt or equity financing at the time needed or that such financing will be available on terms that are favorable or acceptable to us.

In May 2026,2026 in connection with our electionacquisition toof exercise the Endospan Option,Endospan, we borrowed $150.0 million under the New Delayed Draw Term Loan Facility, as further described below. The proceeds of whichborrowings $135.0 million will bewere used in part to fund the upfront purchase price for the acquisition of Endospan. See Part I, Item 1, Note 34 – “AgreementsAcquisition withof Endospan” for further discussion of the Endospan Option acquisition.Acquisition.

The final scheduled maturity date of the Credit Facilities is January 18, 2031. There are no scheduled repayments of principal required to be made prior to the final maturity date. We have the right to prepay loans under the Credit Agreement in whole or in part at any time, subject to certain premium payment requirements. Amounts repaid in respect of loans under the Term Loan Facilities may not be reborrowed. The Credit Facilities currently bear interest at the Secured Overnight Financing Rate (“SOFR”) plus applicable margins. As of MarchJune 31,30, 2026 the aggregatestated interest raterates was 8.41% and 7.16% per annum foron the Term Loan Facility andFacility, Revolving Credit Facility, and New Delayed Draw Term Loan Facility were 8.44%, 7.19%, and 8.40%, respectively. See Part I, Item 1, Note 89 of the “Notes to Condensed Consolidated Financial Statements” for further discussion of our new Ares Credit Agreement.

Net cash providedused byin operating activities increaseddecreased $18.1by $1.8 million during the threesix months ended MarchJune 31,30, 2026, as compared to the threesix months ended MarchJune 31,30, 2025, primarily due to increased profitability,as an increase in cash collected from customers,customers and the favorable impact of lower costs and insurance recoveries associated with the 2024 cybersecurity incident. These favorable impactsincident were partially offset by transaction and integration expenditures associated with our acquisition of Endospan, the $10.2 million payment for transaction bonuses for Endospan employees associated with the Endospan acquisition, and an increase in inventories and deferred preservation costs to support therevenue increase in revenues.growth.

Net cash used in investing activities was $10.5$139.9 million and $3.6$6.9 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. During the threesix months ended MarchJune 31,30, 2026 cash flows used in investing activities included $8.0$116.7 million of payments related to the acquisition of Endospan, net of cash acquired, $18.8 million of cash used for capital expenditures, $3.0 million of payments under the Endospan agreements, and $1.5 million payment related to sale of PerClot, and $1.0 million payment for Endospan agreements.PerClot.

Net cash provided by financing activities was $0.5$152.9 million and $3.9$6.5 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. The current year cash provided by financing activities was primarily due to $1.3$148.9 million of proceeds received on the New Delayed Draw Term Loan Facility, $3.2 million of proceeds from financing insurance premiums, $2.6 million of proceeds from the exercise of stock options and issuances of common stock, partially offset by $0.6$1.4 million for principal payments on short-term notes payable.

AsOther ofthan Marchthe 31,borrowing, 2026related anticipated interest payments, contingent payment obligations, and payment described above, there have been no material changes outside of the ordinary course of business with respect to our material cash requirements for our contractual and other obligations as set forth in the table included in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025.

Capital expenditures were $8.0$18.8 million and $3.6$6.9 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. Capital expenditures for the threesix months ended MarchJune 31,30, 2026 were primarily related to computer software development, purchases of manufacturing and tissue processing equipment, leasehold improvements, and computer equipment to support our business.

As of MarchJune 31,30, 2026 there have been no material changes to our indemnification obligations as disclosed in Part II, Item 8, Note 11 – “Commitments and Contingencies” in our Annual Report on Form 10-K for the year ended December 31, 2025. For information concerning contingencies, see Note 910 – “Commitments and Contingencies” in Part I, Item 1 of this Form 10-Q.