Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this filing. The discussion contains forward-looking statements that involve known and unknown risks and uncertainties, including those set forth under Part I, Item 1A.“Risk Factors” of this Form 10-K. The following discussion and analysis do not include certain items related to the year ended December 31, 2023, including year-to-year comparisons between the year ended December 31, 2024 and the year ended December 31, 2023. For a comparison of our results of operations for the fiscal years ended December 31, 2024 and December 31, 2023, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 28, 2025.

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Overview

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, 2025 we reported annual revenues of $441.3 million, increasing 14% over the prior year. Excluding the effects of foreign exchange, revenues increased 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, partially offset by a decrease in revenues from other products and preservation services, and certain limited impacts resulting from the Cybersecurity incident. For the year ended December 31, 2025 we reported a net income of $9.8 million. See the “Results of Operations” section below for additional analysis of the full year 2025 results. See Part I, Item 1, “Business,” for further discussion of our business and activities during 2025.

Critical Accounting Policies

A summary of our significant accounting policies is included in Part II, Item 8, Note 1 of the “Notes to Consolidated Financial Statements.” We believe that the consistent application of these policies enables us to provide users of the financial statements with useful and reliable information about our operating results and financial condition. The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the US, which require us to make estimates and assumptions. The following are accounting policies that we believe are most important to the portrayal of our financial condition and results of operations and may involve a higher degree of judgment and complexity.

Deferred Preservation Costs

Deferred preservation costs include costs of cardiac and vascular tissues available for shipment, tissues currently in active processing, and tissues held in quarantine pending release to implantable status. By federal law, human tissues cannot be bought or sold; therefore, the tissues we preserve are not held as inventory. The costs we incur to procure and process cardiac and vascular tissues are instead accumulated and deferred. Deferred preservation costs are stated at the lower of cost or net realizable value on a first-in, first-out basis and are deferred until revenue is recognized. Upon shipment of tissue to an implanting facility, revenue is recognized, and the related deferred preservation costs are expensed as cost of preservation services. Cost of preservation services also includes, as applicable, lower of cost or net realizable value write-downs and impairments for tissues not deemed to be recoverable, and includes, as incurred, idle facility expense, excessive spoilage, extra freight, and re-handling costs.

The calculation of deferred preservation costs involves judgment and complexity and uses the same principles as inventory costing. Donated human tissue is procured from deceased human donors by organ and tissue procurement organizations (“OPOs”) and tissue banks that provide the tissue to us for processing, preservation, and distribution. Deferred preservation costs consist primarily of the procurement fees charged by the OPOs and tissue banks, direct labor and materials (including salary and fringe benefits, laboratory supplies and expenses, and freight-in charges), and indirect costs (including allocations of costs from support departments and facility allocations). Fixed production overhead costs are allocated based on actual tissue processing levels, to the extent that they are within the range of the facility’s normal capacity.

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 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.

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We regularly evaluate our deferred preservation costs to determine if the costs are appropriately recorded at the lower of cost or net realizable value. We also evaluate our deferred preservation costs for costs not deemed to be recoverable, including tissues not expected to ship prior to the expiration date of their packaging. Lower of cost or net realizable value write-downs are recorded if the tissue processing costs incurred exceed the estimated market value of the tissue services, based on recent average service fees at the time of the evaluation. Impairment write-downs are recorded based on the book value of tissues deemed to be impaired. Actual results may differ from these estimates. Write-downs of deferred preservation costs are expensed as cost of preservation services, and these write-downs are permanent impairments that create a new cost basis, which cannot be restored to its previous levels if our estimates change.

Fair Value Measurements - Contingent Consideration

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.

New Accounting Pronouncements

See Part II, Item 8, Note 1 of “Notes to Consolidated Financial Statements” for further discussion of new accounting standards that have been adopted or are being evaluated for future adoption.

Results of Operations

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

($ in thousands)

Revenues

Products:

(1) 2025 Other revenue includes reduction in revenue from Italian government payback reserves of $2.3 million.

Revenues increased 14% for the year ended December 31, 2025, as compared to the year ended December 31, 2024. The increase in revenues for the year ended December 31, 2025 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 products and preservation services. Excluding the effects of foreign exchange, revenues increased 13% for the year ended December 31, 2025, as compared to the year ended December 31, 2024.

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The following table reconciles revenues to constant currency revenues for the periods presented:

Revenues for the Year Ended December 31, PercentChangeFrom PriorYear

Products:

(2) Reduction in revenue from Italian government payback reserves.

A detailed discussion of the changes in product revenues and preservation services revenues for the year ended December 31, 2025 is presented below.

Products

Revenues from products increased 19% for the year ended December 31, 2025, as compared to the year ended December 31, 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 products. The revenue growth rate for the year ended December 31, 2025 was favorably impacted by decreased revenues in the fourth quarter of 2024 resulting from the 2024 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.

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 year ended December 31, 2025, as compared to the year ended December 31, 2024, 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.

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Aortic Stent Grafts

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 29% for the year ended December 31, 2025, as compared to the year ended December 31, 2024. This increase was primarily due to an increase in volume of units sold.

Constant currency revenues from the sales of aortic stent grafts increased 27% for the year ended December 31, 2025, as compared to the year ended December 31, 2024. Revenues for the year ended December 31, 2025 increased in all geographies, with the most significant increases in Europe, the Middle East, and Africa (collectively, “EMEA”) and North America. The revenue increase in EMEA for the year ended December 31, 2025 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 AMDSTM 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.

For the years ended December 31, 2025 and 2024, the substantial majority of aortic stent graft revenues were generated from geographies outside the US.

On-X Products

The On-X products include the On-X aortic and mitral heart valves and the On-X ascending aortic prosthesis (“AAP”) for heart valve replacement. Revenues from the sales of On-X products include revenues from the distribution of CarbonAid® CO2 diffusion catheters and from the sale of Chord-X® ePTFE sutures for mitral chordal replacement. On-X product revenue also includes revenue generated from pyrolytic carbon coating services for OEM customers.

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

Constant currency revenues from the sales of On-X products increased 21% for the year ended December 31, 2025, as compared to the year ended December 31, 2024. Revenues for the year ended December 31, 2025 increased in all geographies, with the most significant increase in North America and EMEA. The increase in revenues in North America and EMEA for the year ended December 31, 2025 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 direct markets.

Domestic revenues from the sales of On-X products accounted for 61% of total On-X revenues for both the year ended December 31, 2025 and 2024.

Surgical Sealants

Surgical sealants include BioGlue products used as an adjunct to standard methods of achieving hemostasis (such as sutures and staples) in adult patients in open surgical repair of large vessels (such as aorta, femoral, and carotid arteries).

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

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Constant currency revenues from the sales of surgical sealants increased 3% for the year ended December 31, 2025, as compared to the year ended December 31, 2024. The increase in revenues was primarily due to revenue increases in Latin America (“LATAM”) and Asia Pacific (“APAC”). The increase in revenues in LATAM for the year ended December 31, 2025 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.

Domestic revenues from surgical sealants accounted for 46% and 47% of total surgical sealant revenues for the year ended December 31, 2025 and 2024, respectively.

Other

Other revenues are comprised of revenues from PhotoFix and PerClot (as part of the TMSA of the Baxter Transaction described below), and reserves related to the Italian payback measure described below.

Other revenues decreased 12% for the year ended December 31, 2025, as compared to the year ended December 31, 2024.

The decrease in other revenues for the year ended December 31, 2025 was primarily attributable to an unfavorable impact of Italian payback reserves recognized as adjustments to revenue, partially offset by an increase in PhotoFix and PerClot revenues. See Part II, Item 8, Note 11 of the “Notes to Consolidated Financial Statements” for further discussion regarding the Italian payback measure.

Preservation Services

Preservation services include service revenues from processing cardiac and vascular tissues. Our cardiac valves are primarily used in cardiac replacement and reconstruction surgeries, including the Ross procedure, for patients with endocarditis or congenital heart defects. Our cardiac tissues are primarily distributed in domestic markets. The majority of our vascular preservation services revenues are related to shipments of saphenous veins, which are mainly used in peripheral vascular reconstruction surgeries to avoid limb amputations. Competition with synthetic product alternatives and the availability of tissues for processing are key factors affecting revenue volume that can fluctuate from quarter to quarter. Our vascular tissues are primarily distributed in domestic markets.

We continue to evaluate modifications to our tissue processing procedures in an effort to improve tissue processing throughput, reduce costs, and maintain quality across our tissue processing business. Preservation services revenues, particularly revenues for certain high-demand cardiac tissues, can vary from quarter to quarter and year to year due to a variety of factors, including quantity and type of incoming tissues, yields of tissue through the preservation process, timing of receipt of donor information, timing of the release of tissues for implant, demand for certain tissue types due to the number and type of procedures being performed, and pressures from competing products or services.

Revenues from tissue processing decreased 3% for the year ended December 31, 2025, as compared to the year ended December 31, 2024. The decrease in revenues was primarily due to a backlog of tissues to 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 and Preservation Services

Cost of Products

Year Ended December 31,

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

The increase in cost of products for the year ended December 31, 2025 was primarily due to an increase in the volume of all products shipped, as compared to the year ended December 31, 2024.

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Cost of Preservation Services

Year Ended December 31,

Cost of preservation services increased 10% for the year ended December 31, 2025, as compared to the year ended December 31, 2024. Cost of preservation services included costs for cardiac and vascular tissue preservation services. The increase in cost of preservation services was 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.

Gross Margin

Year Ended December 31,

Gross margin as a percentage of total revenues 64 % 64 %

Gross margin increased 14% for the year ended December 31, 2025, as compared to the year ended December 31, 2024.

The increase in gross margin for the year ended December 31, 2025, as compared to the year ended December 31, 2024 was due to an increase in the volume of all products shipped as well as the increase in the average sales price of certain products and tissues shipped and favorable mix of certain products shipped during 2025. The increase was partially offset by unfavorable cost of certain tissues and products shipped, an unfavorable mix of tissues shipped, and an increase in our reserves related to the Italian payback measure, as compared to the year ended December 31, 2024. Gross margin as a percentage of total revenues was positively impacted by a favorable geography and product mix as well as favorable pricing of certain products shipped, partially offset by an unfavorable mix of tissues shipped and an unfavorable cost of certain products and tissues shipped during the year ended December 31, 2025.

Operating Expenses

General, Administrative, and Marketing Expenses

Year Ended December 31,

General, administrative, and marketing expenses $ 226,491 $ 181,455

General, administrative, and marketing expenses increased 25% for the year ended December 31, 2025, as compared to the year ended December 31, 2024, which includes the impact of the Ascyrus contingent consideration fair value adjustment loss of $7.7 million and gain of $11.0 million for the year ended December 31, 2025 and 2024, respectively. The remaining general, administrative, and marketing expenses for the year ended December 31, 2025 increased $26.3 million as a result of investments in sales and marketing, including expenses associated with the AMDS launch 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, and increased non-cash stock compensation expenses.

Research and Development Expenses

Year Ended December 31,

Research and development expenses $ 30,991 $ 28,452

Research and development expenses as a percentage of total revenues 7 % 7 %

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Research and development expenses increased 9% for the year ended December 31, 2025, as compared to the year ended December 31, 2024. Research and development spending for the year ended December 31, 2025 and 2024 was primarily focused on clinical work to gain regulatory approvals for certain aortic stent grafts.

Gain from Sale of Non-Financial Assets

Gain from sale of non-financial assets for the year ended December 31, 2025 consisted of a net $7.0 million gain as part of the Baxter Transaction based on the expected achievement of Baxter’s certain cumulative worldwide net sales of PerClot. See Part II, Item 8, Note 2 of the “Notes to Consolidated Financial Statements” for further discussion of the Baxter Transaction.

Interest Expense

Interest expense was $26.6 million and $34.3 million for the year ended December 31, 2025 and 2024, respectively. Interest expense for the year ended December 31, 2025 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. See Part II, Item 8, Note 10 of the “Notes to Consolidated Financial Statements” for further discussion of the settlement of the Convertible Senior Notes.

Losses 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 Convertible Senior Notes and credit facilities.

Other (Income) Expense, Net

Other (income) expense, net was $9.5 million of income and $9.9 million of expensefor the year ended December 31, 2025 and 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. 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.

Income Tax Expense

Our effective income tax rate was an expense of 34% and 78% for the year ended December 31, 2025 and 2024, respectively. The decrease in the effective income tax rate for the year ended December 31, 2025 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, higher nondeductible executive compensation, and provision to return adjustments.

Non-GAAP Measures of Financial Performance

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 adjusted 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.

We have provided non-GAAP financial measures in this report as we believe that these figures are helpful in allowing management and investors to more accurately assess the ongoing nature of our operations and measure our performance more consistently across periods. Management uses constant currency revenues internally to assess the operational performance of the Company, as a component in compensation metrics, and as a basis for strategic planning.

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We believe the provided non-GAAP measures are meaningful in addition to the information contained in the US GAAP presentation of financial performance. Investors should consider this non-GAAP information in addition to, and not as a substitute for, financial measures prepared in accordance with US GAAP. In addition, this non-GAAP financial information may not be the same as similar measures presented by other companies.

Seasonality

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.

Historically, we believe the demand for surgical sealants is seasonal, with a decline in demand generally occurring in the third quarter followed by stronger demand in the fourth quarter. We believe that this trend may be due to the summer holiday season in Europe and the US.

Demand for our vascular preservation services has also traditionally been seasonal, with lowest demand generally occurring in the fourth quarter. We believe this trend for vascular preservation services is primarily due to fewer vascular surgeries being scheduled during the winter holiday months.

We do not believe demand for our On-X products, other products, and cardiac preservation services is materially seasonal.

Liquidity and Capital Resources

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 December 31, 2025 we had approximately $220.0 million of total nominal indebtedness outstanding.

Our liquidity as of December 31, 2025 consisted of cash and cash equivalents of $64.9 million, 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 December 31, 2025 approximately 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 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 and may include cash to fund business development activities including obligations pursuant to arrangements with Endopsan and the acquisition of Ascyrus. 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.

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Significant Sources and Uses of Liquidity

Credit Facilities

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 Delayed Draw Term Loan Facility remained undrawn and was terminated on July 2, 2025 as we entered into separate, privately negotiated exchange agreements with the Holders of the Convertible Senior Notes as discussed below.

On September 12, 2025 we entered into a Second Amendment to the credit and guaranty agreement (the “Amendment”), with Ares Management Credit funds, which amends the credit and guaranty agreement dated as of January 18, 2024. The Amendment provides for (i) an extension of the maturity date of the existing term loans (the “Existing Term Loan Facility”) and the existing revolving credit facility (the “Existing Revolving Credit Facility”) under the Credit Agreement by one year to January 18, 2031, (ii) a reduction in the interest rate margin applicable to the Existing Term Loan Facility and the Existing Revolving Credit Facility and (iii) a new $150.0 million secured delayed draw term loan facility (the “New Delayed Draw Term Loan Facility” and, together with the Existing Term Loan Facility, the “Term Loan Facilities”).

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 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 Secured Overnight Financing Rate (“SOFR”) plus applicable margins. As of December 31, 2025 the aggregate interest rate was 8.74% and 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 amended Ares Credit Agreement.

Convertible Senior Notes

On June 18, 2020 we issued $100.0 million aggregate principal amount of 4.25% Convertible Senior Notes with a maturity date of July 1, 2025 (the “Convertible Senior Notes”). In May 2025 we entered into separate, privately negotiated exchange agreements (“Exchange Agreements”) with the Holders of the Convertible Senior Notes. The transactions contemplated by the Exchange Agreements closed on May 28, 2025. Under the terms of the Exchange Agreements, the Holders exchanged an aggregate principal amount of approximately $99.5 million of the Convertible Senior Notes held by the Holders in exchange for an aggregate of 4,334,347 shares of our common stock. In addition, pursuant to the Exchange Agreements, we made a cash payment of approximately $1.7 million to the Holders in respect of accrued and unpaid interest on the exchanged Convertible Senior Notes. The remaining $0.5 million in aggregate principal amount of the Convertible Senior Notes were settled on July 1, 2025 resulting in the issuance of 19,605 shares of our common stock.

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Cash Flows

The following table summarizes cash flows from operating activities, investing activities, and financing activities for the periods indicated (in thousands):

Year Ended December 31,

Cash flows provided by (used in):

Effect of exchange rate changes on cash and cash equivalents 2,324 (1,728)

Increase (decrease) in cash and cash equivalents $ 11,445 $ (5,477)

Operating Activities

Net cash provided by operating activities increased $17.6 million during the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily due to increased profitability, an improvement in cash collections from customers, and a decrease in cash paid for taxes. These increases were partially offset by higher inventories and deferred preservation costs to support the increase in revenues, as well as changes in the timing of interest payments on our credit facilities executed in January 2024.

Investing Activities

Net cash used in investing activities was $42.0 million and $28.2 million for the year ended December 31, 2025 and 2024, respectively. During the year ended December 31, 2025 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 millionproceeds 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.

Financing Activities

Net cash provided by financing activities was $11.3 million and $2.2 million for the year ended December 31, 2025 and 2024, respectively. The current year cash provided by financing activities was primarily due to $13.1 million of proceeds from exercise of stock options and issuances of common stock and $3.1 million of proceeds from financing insurance premiums, partially offset by $2.3 million for principal payments on short-term notes payable and $1.8 million for payment of debt issuance cost.

Scheduled Contractual Obligations and Future Payments

Our long-term debt obligations and interest payments include $220.0 million of scheduled principal payments and $146.1 million in anticipated interest payments related to our Term Loan Facility, Revolving Credit Facility, and new Delayed Draw Term Loan Facility.

We have contingent payment obligations that include up to $100.0 million to be paid to the former shareholders of Ascyrus upon the achievement of certain milestones.

Under the terms of the Baxter Transaction, we made a $1.5 million payment to Starch Medical, Inc. in January 2026 related to PerClot sales milestones. We are required to pay an additional $1.5 million upon Baxter’s achievement of cumulative net sales milestones.

Our operating and finance lease obligations result from the lease of land and buildings that comprise our corporate headquarters and our various manufacturing facilities; leases related to additional manufacturing, office, and warehouse space; leases on company vehicles; and leases on a variety of office and other equipment.

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Capital Expenditures

Capital expenditures for the year ended December 31, 2025 and 2024 were $39.0 million and $11.2 million, respectively. Capital expenditures in the year ended December 31, 2025 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.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Interest Rate Risk

We have a significant amount of indebtedness with a mix of fixed and variable rates of interest. Floating rate debt carries interest based generally on Secured Overnight Financing Rate (“SOFR”) plus an applicable margin. Increase in interest rates could therefore significantly increase the associated interest payments that we are required to make on this debt. See Part II, Item 8, Note 10 of the “Notes to Consolidated Financial Statements” for a further discussion.

We have assessed our exposure to changes in interest rates by analyzing the sensitivity to our operating results assuming various changes in market interest rates. Assuming a hypothetical increase of one percentage point in interest rates on our variable rate debt portfolio, cash equivalents, and investments as of December 31, 2025, our pre-tax operating results would decrease by an estimated $2.0 million over a twelve-month period.

Foreign Currency Exchange Rate Risk

We have exposure to foreign currency exchange rate fluctuations worldwide resulting from intercompany transactions, other cross currency obligations and certain intercompany loans. Specifically, a portion of our international aortic stent grafts, surgical sealants, On-X products, and other product revenues are denominated in Euros, Brazilian Reals, Polish Zlotys, British Pounds, Canadian Dollars, and Swiss Francs and a portion of our General, administrative, and marketing expenses are denominated in Euros, Brazilian Reals, Polish Zlotys, British Pounds, Canadian Dollars, Swiss Francs, and Singapore Dollars. We manage our foreign currency exchange risk primarily by incurring, to the extent practicable, operating and financing expenses in the local currency in the countries in which we operate. We do not hedge our operating results against currency movement as they are primarily translational in nature.

Assuming a hypothetical 10% adverse change to the foreign currency exchange rates in effect as of December 31, 2025 on our operating results, intercompany trade, and certain intercompany loan and interest balances, our pre-tax operating results would decrease by an estimated $8.0 million over a twelve-month period.

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Item 8. Financial Statements and Supplementary Data.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM – (PCAOB ID:42) 55

CONSOLIDATED BALANCE SHEETS 58

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) 60

CONSOLIDATED STATEMENTS OF CASH FLOWS 61

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY 62

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 63

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Management’s Annual Report on Internal Controls over Financial Reporting

The management of Artivion, Inc. and subsidiaries (“Artivion” or “we”) is responsible for establishing and maintaining adequate internal controls over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Artivion’s internal control system was designed to provide reasonable assurance to Artivion’s management and Board of Directors regarding the preparation and fair presentation of published financial statements.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Artivion management assessed the effectiveness of Artivion’s internal controls over financial reporting as of December 31, 2025. In making this assessment, we used the criteria set forth in the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on this assessment, we have determined that, as of December 31, 2025, our internal controls over financial reporting was effective based on those criteria.

Artivion’s independent registered public accounting firm, Ernst & Young, LLP, has issued an audit report on the effectiveness of Artivion’s internal controls over financial reporting as of December 31, 2025.

Artivion, Inc.

February 18, 2026

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Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Artivion, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Artivion, Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive income (loss), stockholders' equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 18, 2026expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

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Deferred Preservation Costs

/s/ Ernst & Young LLP

We have served as the Company's auditor since 2013.

Atlanta, Georgia

February 18, 2026

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Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Artivion, Inc.

Opinion on Internal Control Over Financial Reporting

We have audited Artivion, Inc. and subsidiaries’ internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Artivion, Inc. and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive income (loss), stockholders' equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and our report dated February 18, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Controls over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Atlanta, Georgia

February 18, 2026

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Artivion, Inc. and Subsidiaries

Consolidated Balance Sheets

In Thousands

December 31,

ASSETS

Current assets:

Operating lease right-of-use assets, net 34,701 39,726

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Artivion, Inc. and Subsidiaries

Consolidated Balance Sheets

In Thousands, Except Par Value

December 31,

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Current portion of contingent consideration 20,690 —

Current maturities of operating leases 4,649 4,489

Current portion of finance lease obligations 726 601

Current portion of long-term debt, net — 195

Non-current maturities of operating leases 34,427 39,988

Deferred compensation liability 9,464 7,977

Non-current finance lease obligations 2,698 2,833

Commitments and contingencies (Note 11)

Stockholders’ equity:

Accumulated other comprehensive loss (2,719) (24,927)

Total liabilities and stockholders’ equity $ 884,796 $ 789,101

See accompanying Notes to Consolidated Financial Statements.

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Artivion, Inc. and Subsidiaries

Consolidated Statements of Operations and Comprehensive Income (Loss)

In Thousands, Except Per Share Data

Year Ended December 31,

Revenues:

Cost of products and preservation services:

Operating expenses:

Gain from sale of non-financial assets (7,000) — (14,250)

Losses on inducement/extinguishment of debt 2,664 3,669 —

Income (loss) per share:

Weighted-average common shares outstanding:

Other comprehensive income (loss):

Foreign currency translation adjustments, net of tax 22,208 (12,917) 9,599

See accompanying Notes to Consolidated Financial Statements.

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Artivion, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

In Thousands

Year Ended December 31,

Net cash flows from operating activities:

Write-down of inventories and deferred preservation costs 4,900 4,434 4,785

Losses on inducement/extinguishment of debt 2,664 3,669 —

Gain on sale of non-financial assets (7,000) — (14,250)

Changes in operating assets and liabilities:

Accounts payable, accrued expenses, and other liabilities 2,183 9,498 4,495

Net cash flows from investing activities:

Proceeds from sale of non-financial assets, net 5,000 — 14,250

Net cash flows used in investing activities (42,041) (28,188) (502)

Net cash flows from financing activities:

Proceeds from issuance of long-term debt — 184,000 —

Proceeds from revolving credit facility — 28,500 —

Proceeds from financing insurance premiums 3,117 — 3,558

Principal payments on short-term notes payable (2,250) (1,027) (2,531)

Redemption and repurchase of stock to cover tax withholdings — — (559)

Net cash flows provided by financing activities 11,282 2,203 865

Effect of exchange rate changes on cash and cash equivalents 2,324 (1,728) 401

See accompanying Notes to Consolidated Financial Statements.

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Artivion, Inc. and Subsidiaries

Consolidated Statements of Stockholders’ Equity

In Thousands

Shares Amount Shares Amount

Other comprehensive income, net of tax — — — — 9,599 — — 9,599

Other comprehensive loss, net of tax — — — — (12,917) — — (12,917)

Other comprehensive income, net of tax — — — — 22,208 — — 22,208

See accompanying Notes to Consolidated Financial Statements.

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Artivion, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

1. Basis of Presentation and Summary of Significant Accounting Policies

Nature of Business

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 (“On-X” 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, ArcevoTM LSA Hybrid Stent Graft System (“Arcevo LSA”), the Ascyrus Medical Dissection Stent (“AMDS”) hybrid prosthesis, the NEXUS ONETM (“NEXUS ONE”), NEXUS DUOTM (“NEXUS DUO”), and the NEXUS TRETM (“NEXUS TRE”) aortic arch stent graft systems (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. Surgical sealants include our BioGlueSurgical 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 in more detail in Note 2 below).

Basis of Presentation and Principles of Consolidation

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The accompanying consolidated financial statements include the accounts of the Company and our wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Foreign Currency Translation and Transactions

Assets and liabilities of international subsidiaries whose functional currency is the local currency are translated at the rate of exchange in effect on the balance sheet date; income and expenses are translated at the average exchange rates throughout the year. The related translation adjustments, including the effects of foreign exchange rate changes on intra-entity foreign currency transactions that are of a long-term investment nature, net of tax, are reflected in Accumulated other comprehensive loss in the stockholders’ equity section of our Consolidated Balance Sheets. Foreign currency exchange rate realized and unrealized gains and losses resulting from transactions are included in Other expense, net in our Consolidated Statements of Operations and Comprehensive Income (Loss) and resulted in a net gain of $7.2 million, a net loss of $5.4 million, and a net gain of $2.1 million for the years ended December 31, 2025, 2024, and 2023, respectively. Currency translation adjustments resulting from intra-entity loans that are of a long-term investment nature, net of tax, are included in Accumulated other comprehensive loss and resulted in a net gain of $13.6 million, a net loss of $8.6 million, and a net gain of $6.6 million for the years ended December 31, 2025, 2024, and 2023, respectively.

Use of Estimates

The preparation of the accompanying consolidated financial statements in conformity with US GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Estimates and assumptions are used when accounting for trade receivables allowances, inventories, deferred preservation costs, acquired assets or businesses, intangible assets, deferred income taxes, valuation of loan receivables and purchase options, commitments and contingencies (including product and tissue processing liability claims, claims incurred but not reported, and amounts recoverable from insurance companies), non-cash compensation, certain accrued liabilities (including accrued procurement fees, income taxes, and financial instruments including contingent consideration), and other items as appropriate.

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Revenue Recognition

Contracts with Customers

We routinely enter into contracts with customers that include general commercial terms and conditions, notification requirements for price increases, shipping terms and, in most cases, prices for the products and services that we offer. These agreements, however, do not obligate us to provide goods or services to the customer, and there is no consideration promised to us at the onset of these arrangements. For customers without separate agreements, we have a standard list price established by geography and by currency for all products and services, and our invoices contain standard terms and conditions that are applicable to those customers where a separate agreement is not controlling. Our performance obligations are established when a customer submits a purchase order notification (in writing, electronically or verbally) for goods and services, and we accept the order. We identify performance obligations as the delivery of the requested product or service in appropriate quantities and to the location specified in the customer’s contract and/or purchase order. We generally recognize revenue upon the satisfaction of these criteria when control of the product or service has been transferred to the customer at which time we have an unconditional right to receive payment. Our prices are fixed and are not affected by contingent events that could impact the transaction price. We do not offer price concessions and do not accept payment that is less than the price stated when we accept the purchase order. We do not have any material performance obligations where we are acting as an agent for another entity.

Revenues for products, including: aortic stent grafts, surgical sealants, On-X products, and other medical devices, are typically recognized at the time the product is shipped, at which time the title passes to the customer, and there are no further performance obligations. Revenues from consignment inventory are recognized when we receive a notification of implantation. We recognize revenues for preservation services when tissue is shipped to the customer.

Significant Judgments

There are no significant judgments associated with the satisfaction of our performance obligations. We generally satisfy performance obligations upon shipment of the product or service obligation to the customer. This is consistent with the time in which the customer obtains control of the product or service. Performance obligations are also generally settled quickly after the purchase order acceptance, therefore, the value of unsatisfied performance obligations at the end of any reporting period is immaterial.

We consider variable consideration in establishing the transaction price. Forms of variable consideration potentially applicable to our arrangements include sales returns, rebates, volume-based bonuses, and prompt pay discounts. We use historical information along with an analysis of the expected value to properly calculate and to consider the need to constrain estimates of variable consideration. Such amounts are included as a reduction to revenue in the periods in which the related revenue is recognized and adjusted in future periods as necessary.

Commissions and Contract Costs

Sales commissions are earned upon completion of each performance obligation, and therefore, are expensed when incurred. These costs are included in General, administrative, and marketing expenses in the Consolidated Statements of Operations and Comprehensive Income (Loss). We generally do not incur incremental charges associated with securing agreements with customers which would require capitalization and recovery over the life of the agreement.

Practical Expedients

Our payment terms for sales direct to customers are substantially less than the one-year collection period that falls within the practical expedient in the determination of whether a significant financing component exists.

Shipping and Handling Charges

Fees charged to customers for shipping and handling of products and tissues are included in Product and preservation service revenues. The costs for shipping and handling of products and tissues are included as a component of Cost of products and cost of preservation services.

Taxes Collected from Customers

Taxes collected on the value of transaction revenue are excluded from Revenues and Cost of products and preservation services and are included in Accrued expenses until remitted to governmental authorities.

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Advertising Costs

The costs to develop, produce, and communicate our advertising are expensed as incurred and are reflected as General, administrative, and marketing expenses. The total amount of advertising costs included in our Consolidated Statements of Operations and Comprehensive Income (Loss) was $2.0 million, $1.7 million, and $1.9 million for the years ended December 31, 2025, 2024, and 2023, respectively.

Stock-Based Compensation

We have stock option and stock incentive plans for employees and non-employee directors that provide for grants of restricted stock awards (“RSA”s), restricted stock units (“RSU”s), performance stock units (“PSU”s), and options to purchase shares of our common stock at exercise prices generally equal to the fair values of such stock at the dates of grant. We also maintain a stockholder approved Employee Stock Purchase Plan (the “ESPP”) for the benefit of our employees. The ESPP allows eligible employees the right to purchase common stock on a regular basis at the lower of 85% of the market price at the beginning or end of each offering period. The RSAs, RSUs, PSUs, and stock options typically vest over a one to three-year period. The stock options typically expire within seven years of the grant date.

We value our RSAs, RSUs, and PSUs based on the stock price on the date of grant. We expense the related compensation cost of RSAs and RSUs using the straight-line method over the vesting period. We expense the related compensation cost of PSUs based on the number of shares expected to be issued, if achievement of the performance component is probable, using a straight-line method over each vesting tranche of the award which results in accelerated recognition of expenses. The amount of compensation costs expensed related to PSUs is adjusted as needed if we deem that achievement of the performance component is no longer probable or if our expectation of the number of shares to be issued changes. We use a Black-Scholes model to value our stock option grants and expense the related compensation cost using the straight-line method over the vesting period. The fair value of our ESPP options is also determined using a Black-Scholes model and is expensed over the vesting period.

The fair value of stock options and ESPP options is determined on the grant date using assumptions for the expected term, volatility, dividend yield, and the risk-free interest rate. The expected term is primarily based on the contractual term of the option and our data related to historic exercise and post-vesting forfeiture patterns, which is adjusted based on our expectations of future results. Our anticipated volatility level is primarily based on the historic volatility of our common stock, and adjusted based on our expectations of future volatility, for the life of the option or option group. Our model includes a zero-dividend yield assumption and we do not anticipate paying dividends in the future. The risk-free interest rate is based on recent US Treasury note auction results with a similar life to that of the option. Our model does not include a discount for post-vesting restrictions, as we have not issued awards with such restrictions.

The period expense for our stock compensation is determined based on the valuations discussed above and forfeitures are accounted for in the period awards are incurred.

Income (Loss) Per Common Share

Income (loss) per common share is computed using the two-class method, which requires us to include unvested RSAs that contain non-forfeitable rights to dividends (whether paid or unpaid) as participating securities in the income per common share calculation.

Under the two-class method, net income is allocated to the weighted-average number of common shares outstanding during the period and the weighted-average participating securities outstanding during the period. The portion of net income that is allocated to the participating securities is excluded from basic and dilutive net income per common share. Diluted net income per share is computed using the weighted-average number of common shares outstanding plus the dilutive effects of outstanding stock options and awards and other dilutive instruments as appropriate.

Financial Instruments

Our financial instruments include cash equivalents, accounts receivable, notes receivable, accounts payable, and debt obligations. The carrying values of financial assets and liabilities, such as receivables and accounts payable, approximate their fair value due to their short-term duration, and the carrying value of debt obligations approximate their fair value as they contain variable interest rates that approximate market values. Other financial instruments are recorded as discussed in the sections below.

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Fair Value Measurements

We record certain financial instruments, including cash equivalents, at fair value on a recurring basis. We may make an irrevocable election to measure other financial instruments at fair value on an instrument-by-instrument basis. Fair value financial instruments are recorded in accordance with the fair value measurement framework.

We also measure certain assets and liabilities at fair value on a non-recurring basis. These non-recurring valuations include evaluating assets such as certain financial assets, long-lived assets, and indefinite lived intangible assets for impairment, allocating value to assets in an acquired asset group, applying accounting for business combinations, and the initial recognition of liabilities such as contingent consideration. We use the fair value measurement framework to value these assets and liabilities and report these fair values in the periods in which they are recorded or written down.

The fair value measurement framework includes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair values in their broad levels. These levels from highest to lowest priority are as follows:

•Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities;

•Level 2: Quoted prices in active markets for similar assets or liabilities or observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and

•Level 3: Unobservable inputs or valuation techniques that are used when little or no market data is available.

The determination of fair value and the assessment of a measurement’s placement within the hierarchy requires judgment. Level 3 valuations often involve a higher degree of judgment and complexity. Level 3 valuations may require the use of various cost, market, or income valuation methodologies applied to our unobservable estimates and assumptions. Our assumptions could vary depending on the asset or liability value and the valuation method used. Such assumptions could include: estimates of prices, earnings, costs, actions of market participants, market factors, or the weighting of various valuation methods. We may also engage external advisors to assist in determining fair value as appropriate.

Although we believe that the recorded fair values of our financial instruments are appropriate, these fair values may not be indicative of future fair values.

Fair Value Measurements - Contingent Consideration

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. This fair value measurement is 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. See Notes 3 and 5for further discussion.

Fair Value Measurements - Loan Receivables

We elect to account for certain loan receivables under the fair value option on a recurring basis, resulting in increases and decreases in the fair value of such loans being recorded to Other expense, net for each reporting period. This fair value measurement is based on unobservable inputs, including management estimates and assumptions about the probability of future achievement of milestones, and is, therefore, classified as Level 3 within the fair value hierarchy. See Notes 4 and 5 for further discussion.

Cash and Cash Equivalents

Cash and cash equivalents consist primarily of highly liquid investments at the time of acquisition. The carrying value of cash equivalents approximates fair value. We maintain depository accounts with certain financial institutions. Although these depository accounts may exceed government insured depository limits, we have evaluated the credit worthiness of these applicable financial institutions and determined the risk of material financial loss due to the exposure of such credit risk to be minimal.

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Supplemental Cash Flow Information

Supplemental cash flow information is as follows (in thousands):

Year Ended December 31,

Cash paid during the year for:

Non-cash investing and financing activities:

Operating lease liabilities settled in purchase of leased buildings 3,776 — —

Accrued capital expenditures 1,800 — —

Accounts Receivable and Allowances

Our accounts receivable are primarily from hospitals and distributors that either use or distribute our products and tissues. We assess the likelihood of collection based on a number of factors, including past transaction history and the credit worthiness of the customer, as well as the potential increased risks related to international customers and large distributors. We determine the allowance for uncollectible accounts based upon specific reserves for known collection issues, as well as a non-specific reserve based upon historical aging trends. We charge off uncollectible amounts against the reserve in the period in which we determine they are uncollectible. Our accounts receivable balances are reported net of allowances of $1.9 million and $1.6 million as of December 31, 2025 and 2024, respectively.

Inventories

Inventories are comprised of finished goods for our product lines including: aortic stent grafts; surgical sealants; On-X products; other medical devices; work-in-process; and raw materials. Inventories for finished goods are valued at the lower of cost or net realizable value on a first-in, first-out basis and raw materials are valued on a moving average cost basis. Typically, upon shipment or upon notification of implant of a medical device on consignment, revenue is recognized, and the related inventory costs are expensed as cost of products. Cost of products also includes, as applicable, lower of cost or net realizable value of write-downs and impairments for products not deemed to be recoverable and, as incurred, idle facility expense, excessive spoilage, extra freight, and re-handling costs.

Inventory costs for manufactured products consist primarily of direct labor and materials (including salary and fringe benefits, raw materials, and supplies) and indirect costs (including allocations of costs from departments that support manufacturing activities and facility allocations). The allocation of fixed production overhead costs is based on actual production levels, to the extent that they are within the range of the facility’s normal capacity. Inventory costs for products purchased for resale or manufactured under contract consist primarily of the purchase cost, freight-in charges, and indirect costs as appropriate.

We regularly evaluate our inventory to determine if the costs are appropriately recorded at the lower of cost or net realizable value. We also evaluate our inventory for costs not deemed to be recoverable, including inventory not expected to ship prior to its expiration. Lower of cost or net realizable value write-downs are recorded if the book value exceeds the estimated net realizable value of the inventories, based on recent sales prices at the time of the evaluation. Impairment write-downs are recorded based on the book value of inventory deemed to be impaired. Actual results may differ from these estimates. Write-downs of inventories are expensed as Cost of products, and these write-downs are permanent impairments that create a new cost basis, which cannot be restored to its previous levels if our estimates change. Write-downs to our inventories totaled $3.3 million, $3.8 million, and $4.4 million for the years ended December 31, 2025, 2024, and 2023, respectively.

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Deferred Preservation Costs

Deferred preservation costs include costs of cardiac and vascular tissues available for shipment, tissues currently in active processing, and tissues held in quarantine pending release to implantable status. By federal law, human tissues cannot be bought or sold; therefore, the tissues we preserve are not held as inventory. The costs we incur to procure and process cardiac and vascular tissues are instead accumulated and deferred. Deferred preservation costs are stated at the lower of cost or net realizable value on a first-in, first-out basis and are deferred until revenue is recognized. Upon shipment of tissue to an implanting facility, revenue is recognized, and the related deferred preservation costs are expensed as cost of preservation services. Cost of preservation services also includes, as applicable, lower of cost or net realizable value write-downs and impairments for tissues not deemed to be recoverable, and includes, as incurred, excessive spoilage, extra freight, and re-handling costs.

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.

Property and Equipment, net

Property and equipment, net is stated at cost less depreciation. Depreciation expense is recorded over the estimated useful lives of the assets, generally three to forty years, on a straight-line basis. Leasehold improvements are depreciated on a straight-line basis over the remaining lease term at the time the assets are capitalized or the estimated useful lives of the assets, whichever is shorter.

In September 2025 we entered into agreements to purchase three office and manufacturing buildings in Austin, Texas for aggregate cash consideration of approximately $20.3 million. The first transaction relates to the purchase of two office buildings currently leased and occupied by the Company, comprising approximately 75,000 square feet of manufacturing, administrative, laboratory, warehouse, and office space that support our On-X manufacturing operations, together with the underlying land and certain appliances and equipment. The second transaction relates to the purchase of an adjacent building comprising approximately 87,000 square feet, together with the underlying land and certain appliances and equipment, which is intended to support future capacity expansion. Upon closing of the transactions in December 2025, the acquired properties were capitalized as property, plant and equipment.

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Property and equipment, net consists of the following (in thousands)

December 31,

Building and building improvements 19,935 —

Depreciation expense was as follows (in thousands):

Year Ended December 31,

Goodwill and Other Intangible Assets

Our intangible assets consist of goodwill, acquired technology, customer lists and relationships, patents, and other intangible assets, as discussed in Note 7. Our goodwill is attributable to a segment or segments of our business, as appropriate, as the related acquired business that generated the goodwill is integrated into our operations.

We evaluate goodwill and other indefinite lived intangible assets for impairment on an annual basis during the fourth quarter of the year, and, if necessary, during interim periods if factors indicate that an impairment review is warranted. As of October 31, 2025 and 2024 our indefinite lived intangible assets consisted of goodwill, in-process research and development, and acquired procurement contracts and agreements. We performed a qualitative analysis of our indefinite lived intangible assets as of October 31, 2025 and determined that the fair value of the asset groups and the fair value of the reporting unit more likely than not exceeded their associated carrying values and were, therefore, not impaired. No impairment indicators were identified from the date of our annual assessment through December 31, 2025.

Our definite lived intangible assets consist of acquired technologies, customer lists and relationships, patents, and other intangible assets. We amortize our definite lived intangible assets over their expected useful lives using the straight-line method, which we believe approximates the period of economic benefits of the related assets. Our indefinite lived intangible assets do not amortize but are instead subject to periodic impairment testing as discussed below.

Impairments of Long and Indefinite Lived Intangible Assets

We assess the potential impairment of our: (i) net property and equipment, (ii) amortizing intangible long-lived assets to be held and used and (iii) operating lease right-of-use assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors that could trigger an impairment review include, but are not limited to, the following:

•Significant underperformance relative to expected historical or projected future operating results;

•Significant negative industry or economic trends;

•Significant decline in our stock price for a sustained period; or

•Significant decline in our market capitalization relative to net book value.

If we determine that an impairment review is necessary, we will evaluate the assets or asset groups by comparing their carrying values to the sum of the undiscounted future cash flows expected to result from their use and eventual disposition. If the carrying values exceed the future cash flows, then the asset or asset group is considered impaired, and we will write down the value of the asset or asset group to its concluded fair value. We determined that no impairments existed for the years ended December 31, 2025, 2024, and 2023.

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Accrued Procurement Fees

Donated tissue is procured from deceased human donors by OPOs and tissue banks that provide the tissue to us for processing, preservation, and distribution. We reimburse the OPOs and tissue banks for their costs to recover the tissue and include these costs as part of deferred preservation costs, as discussed above. We accrue estimated procurement fees due to the OPOs and tissue banks at the time tissues are received based on contractual agreements between us and the OPOs and tissue banks.

Leases

We have operating and finance lease obligations resulting from the lease of land and buildings that comprise our corporate headquarters and various manufacturing facilities; leases related to additional manufacturing, office, and warehouse space; leases on vehicles; and leases on certain office and other equipment, as discussed in Note 9. Certain of our leases contain escalation clauses, rent concessions, and renewal options for additional periods.

We exercise judgment in the determination of whether a financial arrangement includes a lease and in determining the appropriate discount rates to be applied to leases based on our general collateralized credit standing and the geographical market considerations impacting lease rates across all locations. When available, we use the implicit discount rate in the lease contract to discount lease payments to present value. If an implicit discount rate is not available in the lease contract, we use our incremental borrowing rate. We elected the package of practical expedients that allow us to omit leases with initial terms of 12 months or less from our balance sheet, which are expensed on a straight-line basis over the life of the lease. We have elected not to separate lease and non-lease components for future leases.

Our leases do not include terms or conditions which would result in variable lease payments other than for small office equipment leases with an additional charge for usage volume. These incremental payments are excluded from our calculation of lease liability and the related right-of-use asset. We do not include option terms in the determination of lease liabilities and the related right-of-use assets unless we determine at lease commencement that the exercise of the option is reasonably certain. Our leases do not contain residual value guarantee provisions or other restrictions or financial covenant provisions.

Debt Discounts and Debt Issuance Costs

Direct costs incurred in connection with the issuance of debt and debt discounts are deferred and amortized to interest expense over the term of the debt. Debt issuance costs and debt discounts associated with term loans and convertible debt are amortized to Interest expense using the effective interest method and are reflected as reductions of the loan balances in the Consolidated Balance Sheets. Debt issuance costs and debt discounts associated with revolving credit facilities are amortized to Interest expense on a straight-line basis and are reflected as a component of Other long-term assets in the Consolidated Balance Sheets.

Liability Claims

In the normal course of business, we are made aware of adverse events involving our products and tissues. Future adverse events could ultimately give rise to a lawsuit against us, and liability claims may be asserted against us in the future based on past events that we are not aware of at the present time. We maintain claims-made insurance policies to mitigate our financial exposure to product and tissue processing liability claims. Claims-made insurance policies generally cover only those asserted claims and incidents that are reported to the insurance carrier while the policy is in effect. Thus, a claims-made policy does not generally represent a transfer of risk for claims and incidents that have been incurred but not reported to the insurance carrier during the policy period. Any punitive damage components of claims are uninsured.

We accrue our estimate of unreported product and tissue processing liability claims as a component of Other long-term liabilities and record the related recoverable insurance amounts as a component of Other long-term assets. The amounts recorded represent our estimate of the probable losses and anticipated recoveries for unreported claims related to products sold and services performed prior to the balance sheet date.

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Legal Contingencies

We accrue losses from a legal contingency when the loss is both probable and reasonably estimable. The accuracy of our estimates of losses for legal contingencies is limited by uncertainties surrounding litigation. Therefore, actual results may differ significantly from the amounts accrued, if any. We accrue for legal contingencies as a component of Accrued expenses and/or Other long-term liabilities in our Consolidated Balance Sheets. Gains from legal contingencies are recorded when the contingency is resolved.

Uncertain Tax Positions

We periodically assess our uncertain tax positions and recognize tax benefits if they are “more-likely-than-not” to be upheld upon review by the appropriate taxing authority. We measure the tax benefit by determining the maximum amount that has a “greater than 50 percent likelihood” of ultimately being realized. We reverse previously accrued liabilities for uncertain tax positions when audits are concluded, statutes expire, administrative practices dictate that a liability is no longer warranted, or in other circumstances, as deemed necessary. These assessments can be complex, and we often obtain assistance from external advisors to make these assessments. We recognize interest and penalties related to uncertain tax positions in interest expense, net in our Consolidated Statements of Operations and Comprehensive Income (Loss). See Note 8 for further discussion of our liabilities for uncertain tax positions.

Deferred Income Taxes

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and tax return purposes. We assess the recoverability of our deferred tax assets and provide a valuation allowance against our deferred tax assets when, as a result of this analysis, we believe it is more likely than not that some portion or all of our deferred tax assets will not be realized.

Assessing the recoverability of deferred tax assets involves judgment and complexity including the consideration of prudent and feasible tax planning. Estimates and judgments used in the determination of the need for a valuation allowance and in calculating the amount of a needed valuation allowance include, but are not limited to, the following:

•The ability to carry back deferred tax asset attributes to a prior tax year;

•Timing of the anticipated reversal of book/tax temporary differences;

•Projected future operating results;

•Anticipated future state tax apportionment;

•Timing and amounts of anticipated future taxable income;

•Evaluation of statutory limits regarding usage of certain tax assets; and

•Evaluation of the statutory periods over which certain tax assets can be utilized.

Significant changes in the factors above, or other factors, could affect our ability to use our deferred tax assets. Such changes could have a material, adverse impact on our profitability, financial position, and cash flows. We will continue to assess the recoverability of our deferred tax assets, as necessary, when we experience changes that could materially affect our prior determination of the recoverability of our deferred tax assets.

New Accounting Pronouncements

Recently Adopted

In December 2023 the FASB issued ASU 2023-09, Income Taxes Topic 740 - Improvements to Income Tax Disclosures. This amendment is expected to enhance the transparency and decision usefulness of income tax disclosures by requiring public business entities, on an annual basis, to disclose specific categories in the rate reconciliation, additional information for reconciling items that meet a quantitative threshold and certain information about income taxes paid. This revised guidance is effective for financial statements issued for fiscal years beginning after December 15, 2024. We adopted ASU 2023-09 on a prospective basis in fiscal year 2025. See Note 8 for further discussion regarding the rate reconciliation and income taxes paid disclosures.

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In November 2024 the FASB issued ASU No. 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. This amendment clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. This ASU is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. We early adopted ASU 2024-04 as of June 30, 2025 on a prospective basis, as part of the settlement of the Convertible Senior Notes. See Note 10 for further discussion regarding the settlement of the Convertible Senior Notes.

Not Yet Effective

In September 2025 the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the accounting for internal-use software costs under Subtopic 350-40. The amendments remove references to prescriptive and sequential software development stages and clarify when entities begin capitalizing internal-use software costs. The updated standard is effective for financial statements issued for fiscal years beginning after December 15, 2027. We are currently evaluating the impacts of the new standard.

In July 2025 the FASB issued ASU No. 2025-05 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient for estimating expected credit losses on current accounts receivable and current contract assets arising from transactions accounted for under Topic 606 – Revenue from Contracts with Customers. Under this practical expedient, entities may assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. The updated standard is effective for financial statements issued for fiscal years beginning after December 15, 2025. We are currently evaluating the impacts of the new standard.

In November 2024 the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses to improve the disclosures about a public business entity’s expenses for more detailed information about the types of expenses in commonly presented expense captions such as cost of sales; selling, general, and administrative expenses; and research and development. The updated accounting guidance, among other things, requires quantitative disclosures for employee compensation, selling expenses, and purchases of inventory. The updated guidance is effective for financial statements issued for fiscal years beginning after December 15, 2026. We are currently evaluating the impacts of the new standard.

2. Sale of PerClot

Overview

On July 28, 2021 we entered into an asset purchase agreement, Transitional Manufacturing and Supply Agreement (“TMSA”), and other ancillary agreements related to the sale of PerClot®, a polysaccharide hemostatic agent used in surgery (“PerClot”), to a subsidiary of Baxter International, Inc. (“Baxter”) and an agreement to terminate all of our material agreements with Starch Medical, Inc. (“SMI”) related to PerClot (collectively the “Baxter Transaction”). Under the terms of the Baxter Transaction, Baxter will pay an aggregate of up to $54.5 million in consideration (we will receive up to $41.0 million and SMI will receive up to $13.5 million), consisting of (i) $25.0 million we received at closing, of which $6.0 million was paid to SMI; (ii) $18.8 million upon our receipt of Premarket Approval (“PMA”) from the US Food and Drug Administration (the “FDA”) for PerClot and our transfer of the PMA to Baxter, of which $4.5 million was paid to SMI; and (iii) up to $10.0 million upon Baxter’s achievement of certain cumulative worldwide net sales of PerClot prior to December 31, 2026 and December 31, 2027, of which up to $3.0 million would be payable to SMI. In addition, at the conclusion of our manufacturing and supply services for Baxter, Baxter will pay $0.8 million upon transfer of our PerClot manufacturing equipment. Under the terms of the Baxter Transaction, we will continue to provide to Baxter certain transition services relating to the sale of SMI PerClot outside of the US. Within the terms of the TMSA, we will manufacture and supply PerClot for Baxter post PMA for a contractual period. The TMSA has been extended for an additional 24-month term and will expire in February 2027.

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PerClot PMA

On May 23, 2023 the FDA granted PMA of PerClot for use to control bleeding in certain open and laparoscopic surgical procedures. Pursuant to the terms of the TMSA of the Baxter Transaction, we transferred the ownership of the PMA to Baxter following approval. In May 2023 we received a payment of $18.8 million from Baxter, of which $4.5 million was paid to SMI. As a result, we recorded a pre-tax gain of $14.3 million as the assets were previously derecognized upon closing of the Baxter Transaction in fiscal year 2021, which was included as Gain from sale of non-financial assets within the Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2024.

Following receipt of the PMA, under the terms of the TMSA, we began manufacturing and supplying PerClot for Baxter and recorded $3.5 million and $3.3 million of PerClot revenues in the Consolidated Statements of Operations and Comprehensive Income (Loss) during the year ended December 31, 2025 and 2024, respectively.

We accounted for the TMSA in accordance with the provision of ASU 2016-02, Leases Topic 842 (“ASC 842”) by bifurcating the lease and non-lease components and recognizing each component based on ASC 842 and ASU 2014-09, Revenue from Contracts with Customers Topic 606. The amount of lease revenue was $0.4 million and $0.5 million for the year ended December 31, 2025 and 2024, respectively.

PerClot Sales Milestone

During the second half of 2025, upon Baxter’s achievement of certain cumulative worldwide net sales of PerClot, we recorded a pre-tax gain of $7.0 million included as Gain from sale of non-financial assets within the Consolidated Statements of Operations and Comprehensive Income (Loss) for the year ended December 31, 2025. The gain is comprised of a cash payment of $5.0 million from Baxter,a receivable of $5.0 million due from Baxter, and a payable of $3.0 million due to SMI. The receivable and payable are reflected in Other receivables and Other current liabilities, respectively, in the Consolidated Balance Sheets as of December 31, 2025.

3. Acquisition of Ascyrus

Overview

On September 2, 2020 we entered into a Securities Purchase Agreement (the “Ascyrus Agreement”) to acquire 100% of the outstanding equity interests of Ascyrus Medical LLC (“Ascyrus”). Ascyrus developed the AMDS, the world’s first aortic arch remodeling device for use in the treatment of acute Type A aortic dissections.

Under the terms of the Ascyrus Agreement, we will pay an aggregate of up to $200.0 million in consideration, consisting of: (i) a cash payment of approximately $60.0 million and the issuance of $20.0 million in shares of Artivion common stock, in each case, that were delivered at the closing of the acquisition, (ii) a cash payment of $10.0 million and the issuance of $10.0 million in shares of Artivion common stock upon FDA approval of the Investigational Device Exemption (“IDE”) application for the AMDS in 2021, (iii) if the FDA approves PMA application submitted for the AMDS, a cash payment of $25.0 million, (iv) if regulatory approval of the AMDS is obtained in Japan on or before June 30, 2027, a cash payment of $10.0 million, (v) if regulatory approval of the AMDS is obtained in China on or before June 30, 2027, a cash payment of $10.0 million and (vi) a potential additional consideration cash payment capped at $55.0 million (or up to $65.0 million to $75.0 million if the Japanese or Chinese approvals are not secured on or before June 30, 2027 and those approval milestone payments are added to the potential additional consideration cash payment cap) calculated as two times the incremental worldwide sales of the AMDS (or any other acquired technology or derivatives of such acquired technology) outside of the European Union during the three-year period following the date the FDA approves a PMA application submitted for the AMDS.

Accounting for the Transaction

As part of the acquisition, we may be required to pay additional consideration up to $100.0 million to the former shareholders of Ascyrus upon the achievement of certain milestones and the sales-based additional earnout described above. On September 2, 2020 the fair value of the total potential purchase consideration of $200.0 million included the total purchase consideration, as well as the contingent consideration liability discussed below. Our allocation of the purchase consideration was allocated to Ascyrus’s tangible and identifiable intangible assets acquired and liabilities assumed, based on their estimated fair values as of September 2, 2020.

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The contingent consideration represents the estimated fair value of future potential payments. The fair value of the contingent consideration liability was estimated by discounting to present value the contingent payments expected to be made based on a probability-weighted scenario approach. We applied a discount rate based on our unsecured credit spread and the term commensurate risk-free rate to the additional consideration to be paid, and then applied a risk-based estimate of the probability of achieving each scenario to calculate the fair value of the contingent consideration. 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 presented in Note 5. 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. We remeasure this liability at each reporting date and record changes in the fair value of the contingent consideration in General, administrative, and marketing expenses in the Consolidated Statements of Operations and Comprehensive Income (Loss). Increases or decreases in the fair value of the contingent consideration liability can result from changes in the passage of time, discount rates, the timing and amount of our revenue estimates, and the timing and expectation of regulatory approvals.

We perform quarterly assessments of the fair value of the contingent consideration and recorded a net fair value loss of $7.7 million and a net fair value gain of $11.0 million for the year ended December 31, 2025 and 2024, respectively, in General, administrative, and marketing expenses in the Consolidated Statements of Operations and Comprehensive Income (Loss). The $7.7 million increase in the fair value of liability for the year ended December 31, 2025 was primarily due to the passage of time and a higher assumed probability of PMA approval. The $11.0 million reduction in the fair value of liability for the year ended December 31, 2024 was primarily due to an increase in the credit risk spread resulting from the change in the inputs related to the newly issued Credit Facilities in the first quarter of 2024, as further discussed in Note 10. The contingent consideration liability reflected in the Consolidated Balances Sheets as of December 31, 2025 was $60.6 million, of which $20.7 million was included in current liabilities. The $20.7 million represents the fair value of the $25.0 million contingent payment associated with FDA approval of the PMA application, which is expected to be achieved in mid-2026. The contingent consideration liability reflected in the Consolidated Balance Sheets as of December 31, 2024 was $52.9 million.

In December 2021 the FDA approved our IDE application for AMDS. Upon the approval, we funded a cash payment of $10.0 million and issued $10.0 million in shares of Artivion common stock pursuant to the Ascyrus Agreement.

In December 2024 the FDA granted a Humanitarian Device Exemption (“HDE”) for use of the AMDSTM Hybrid Prosthesis in acute DeBakey Type I dissections in the presence of malperfusion. The HDE allows for commercial distribution of AMDS in the US prior to anticipated approval of a Premarket Approval (“PMA”) Application which we continue to pursue and anticipate receiving in mid-2026.

4. Agreements with Endospan

On September 11, 2019 Artivion’s wholly owned subsidiary, JOTEC, entered into an exclusive distribution agreement (“Endospan Distribution Agreement”) with Endospan Ltd. (“Endospan”), an Israeli corporation, pursuant to which JOTEC obtained exclusive distribution rights for NEXUS ONE, and under subsequent amendments, the NEXUS DUO and NEXUS TRE (collectively the “NEXUS family of products”) and accessories in certain countries in Europe in exchange for a fixed distribution fee of $9.0 million paid in September 2019 which has been reflected in “Other intangibles, net” in our Consolidated Balance Sheets. We also entered into a loan agreement to provide Endospan a secured loan of up to $15.0 million (“Endospan Loan”).

We also entered into a securities purchase option agreement (“Endospan Option”) with Endospan for $1.0 million paid in September 2019. The Endospan Option Agreement prior to amendment described below provided Artivion the option to purchase all the outstanding securities of Endospan from Endospan’s securityholders at the time of acquisition, or the option to acquire all of Endospan’s assets, in each case, for a price between $350.0 and $450.0 million before, or within a certain period of time after FDA approval of NEXUS, with such option expiring if not exercised within 90 days after receiving notice that Endospan has received approval from the FDA for NEXUS.

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On July 1, 2024 Artivion and Endospan entered into an amendment to the Endospan Option (“Endospan Option Amendment”) which amended the terms of the previously existing Endospan Option. Under the terms of the Endospan Option Amendment, the price to acquire all of Endospan’s outstanding securities from Endospan’s securityholders at the time of acquisition, or the option to acquire all of Endospan’s assets under the Endospan Option was reduced from $250.0 million to $175.0 million, resulting in an upfront acquisition purchase price of $135.0 million, inclusive of the loan off-set. There is no longer a minimum earnout payment of $100.0 million and the maximum earnout payment of $200.0 million remains the same. We also agreed to fund Endospan additional secured loans of up to $25.0 million (“Additional Endospan Loan” and together with the Endospan Loan, the “Endospan Loans”).

Variable Interest Entity Assessment

We consolidate the results of a variable interest entity (“VIE”) when it is determined that we are the primary beneficiary. Based on our initial evaluation of Endospan and the related agreements with Endospan, we determined that Endospan is a VIE. Although the arrangement with Endospan resulted in our holding a variable interest, it did not empower us to direct those activities of Endospan that most significantly impact the VIE economic performance. Therefore, we are not the primary beneficiary, and we have not consolidated Endospan into our financial results. We evaluated Endospan for VIE classification as of December 31, 2025, 2024, and 2023 and determined that Endospan meets the criteria of a non-consolidating VIE.

Valuation

The agreements with Endospan were entered into concurrently and had certain terms that are interrelated. In our evaluation of the initial relative fair value of each of the Endospan agreements to determine the amount to record, we utilized discounted cash flows to estimate the fair market value for the Endospan Loan and for the Endospan Distribution Agreement. We estimated the fair value of the Endospan Option utilizing a Monte Carlo simulation model. Inputs in our valuation of the Endospan agreements included cash payments and anticipated payments based on the executed agreements with Endospan, projected discounted cash flows in connection with the Endospan transaction, our expected internal rate of return and discount rates, and our assessed probability and timing of receipt of certification of certain approvals and milestones in obtaining FDA approval.

Endospan Option

Utilizing a Monte Carlo simulation model, we determined that the fair value of the Endospan Option in 2019 was $4.9 million. As a result of a decrease in forecasted operating results, we fully impaired the value of the Endospan Option primarily during the fourth quarter of December 31, 2021.

Due to the revised terms in the Endospan Option Amendment in July 2024, we performed another fair value measurement utilizing a Monte Carlo simulation model and revalued the Endospan Option. We determined that the fair value of the Endospan Option was $3.1 million. The Endospan Option was valued at $3.1 million as of December 31, 2025 and 2024, which is reflected in Other current assets in our Consolidated Balance Sheet as of December 31, 2025 and Other long-term assets in the Consolidated Balance Sheets as of December 31, 2024.

Endospan Loans

Artivion and Endospan entered into the Endospan Loan, dated September 11, 2019, in which Artivion agreed to provide Endospan a secured loan of up to $15.0 million to be funded in three tranches of $5.0 million each in 2019, 2020, and 2023, respectively.

We elected the fair value option for recording the Endospan Loan. We assess the fair value of the Endospan Loan based on quantitative and qualitative characteristics, and adjust the amount recorded to its current fair market value at each reporting period. We performed an assessment of the fair value of the Endospan Loan and determined that the fair value of the first two tranches decreased and had no value as of December 31, 2021. In 2023 we funded the $5.0 million third tranche payment and determined that the loan continued to have no fair value. Consequently, we recorded an expense of $5.0 million during the year ended December 31, 2023. After entering into an amendment to the Endospan Loan in July 2024 (the “Endospan Loan Amendment”), we determined that the Endospan Loan had a fair value of $0.8 million and $0.3 millionas of December 31, 2025 and 2024, respectively.

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As a part of the Endospan Loan Amendment, Artivion agreed to fund the Additional Endospan Loan up to $25.0 million. The Additional Endospan Loan is contracted to be funded in three tranches of $7.0 million, $10.0 million, and $8.0 million, subject to Endospan’s achievement of milestones related to its pursuit of regulatory approval for NEXUS ONE that are specified in the Endospan Loan Amendment. The first two tranches totaling $17.0 million were funded during the year ended December 31, 2024. The third tranche of $8.0 million was funded in November 2025. We performed a fair value assessment of the Additional Endospan Loan and determined that the fair value was $19.1 million and $9.2 millionas of December 31, 2025 and 2024, respectively, which is reflected in Other current assets in the Consolidated Balance Sheets as of December 31, 2025 and Other long-term assets in the Consolidated Balance Sheets as of December 31, 2024.

Distribution Agreement

The Endospan Distribution Agreement, reflected in Other intangibles, net in the Consolidated Balance Sheets and amortized on a straight-line basis, was $1.8 million as of December 31, 2023 and was fully amortized as of December 31, 2024.

5. Financial Instruments

A summary of financial instruments measured at fair value was as follows (in thousands):

December 31, 2025 Level 1 Level 2 Level 3 Total

Cash equivalents:

Liabilities:

Current portion of contingent consideration $ — $ — $ 20,690 $ 20,690

Non-current contingent consideration — — 39,890 39,890

December 31, 2024 Level 1 Level 2 Level 3 Total

Cash equivalents:

Long-term liabilities:

We used prices quoted from our investment advisors to determine the Level 1 valuation of our investments in money market funds. The estimated market value of all cash equivalents is equal to cost basis as there were no gross realized gains or losses on cash equivalents for the years ended December 31, 2025, 2024, and 2023.

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The fair value of the contingent consideration component of the Ascyrus acquisition and Endospan Loans were updated using Level 3 inputs. Changes in fair value of Level 3 assets and liabilities are listed in the tables below (in thousands):

Contingent Consideration

Change in valuation (11,010)

Change in valuation 7,700

Endospan Loans

Balance as of December 31, 2023 $ —

Initial value of Additional Endospan Loan 8,912

Change in valuation 623

Additional Endospan Loan - Tranche 3 8,000

Change in valuation 2,337

6. Inventories and Deferred Preservation Costs

Inventories consist of the following (in thousands):

December 31,

Deferred preservation costs consist of the following (in thousands):

December 31,

To facilitate product usage, we maintain consignment inventory of our On-X heart valves at domestic hospital locations and On-X heart valves, aortic stent grafts, and AMDS products at international hospital locations. We retain title and control over this consignment inventory until we receive a notification of implantation, at which time we invoice the hospital and recognize revenue. As of December 31, 2025 we had $14.9 million in consignment inventory, with approximately 33% in domestic locations and 67% in foreign locations. As of December 31, 2024 we had $12.2 million in consignment inventory, with approximately 39% in domestic locations and 61% in foreign locations.

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7. Goodwill and Other Intangible Assets

Indefinite Lived Intangible Assets

The carrying values of our indefinite lived intangible assets were as follows (in thousands):

December 31,

Procurement contracts and agreements 2,013 2,013

We monitor the phases of development of our acquired in-process research and development projects, including the risks associated with further development and the amount and timing of benefits expected to be derived from the completed projects. Incremental costs associated with development are charged to expense as incurred. Capitalized costs are amortized over the estimated useful life of the developed asset once completed. Our in-process research and development projects are reviewed for impairment annually, or more frequently, if events or changes in circumstances indicate that the asset might be impaired. We evaluate our goodwill and indefinite lived intangible assets for impairment on an annual basis during the fourth quarter of the year, and, if necessary, during interim periods if factors indicate that an impairment review is warranted. We did not record any impairment of indefinite lived intangible assets, including goodwill, during the years ended December 31, 2025, 2024, and 2023. In-process research and development, procurement contracts and agreements are included in Other intangibles, net in the Consolidated Balance Sheets as of December 31, 2025 and 2024.

Based on our experience with similar agreements, we believe that our acquired procurement contracts and agreements have indefinite useful lives, as we expect to continue to renew these contracts for the foreseeable future.

Changes in the carrying value of our goodwill, all of which was related to our Medical Devices segment, was as follows (in thousands):

Year Ended December 31,

Definite Lived Intangible Assets

The definite lived intangible assets balance includes balances related to acquired technology, customer relationships, distribution and manufacturing rights and know-how, patents, and other definite lived intangible assets. The major intangible asset classes consist of the following (in thousands, except weighted average useful life):

Other intangibles:

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Other intangibles:

Distribution and manufacturing rights and know-how 9,033 9,033 — 5.0

Amortization Expense

Amortization expense recorded in General, administrative, and marketing expenses in our Consolidated Statements of Operations and Comprehensive Income (Loss) was as follows (in thousands):

Year Ended December 31,

The estimated future amortization expense of intangible assets with definite lives as of December 31, 2025 for the next five years is as follows (in thousands):

8. Income Taxes

Income Tax Expense

Income (loss) before income taxes consisted of the following (in thousands):

Year Ended December 31,

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Income tax expense consists of the following (in thousands):

Year Ended December 31,

Current:

Deferred:

Tax Payment Summary

Income taxes paid, net of refunds, consists of the following (in thousands):

Year ended December 31,

Foreign

Total income taxes paid, net of refunds $ 2,543

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Effective Tax Rate Reconciliation

Based on prospective adoption of ASU 2023-09, the following table represents a reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory US federal income tax rate to income before income taxes after the adoption of ASU 2023-09 for the year ended December 31, 2025.

($ in thousands)

Amount Percentage

Income tax expense at statutory rate $ 3,104 21.0%

State and local income taxes, net of federal (national) benefit 57 0.4%

Foreign tax effects

Germany

Other foreign jurisdictions 876 5.9%

Effect of changes in tax laws or rates enacted in the current period — —%

Effect of cross-border tax laws (195) (1.3) %

Tax credits

Research and development credits (855) (5.8)%

Changes in valuation allowances (2,986) (20.2)%

Nontaxable or nondeductible items

Debt conversion cost 559 3.8%

Other

Tax accrual adjustments 1,083 7.3%

Intercompany elimination tax effects 599 4.1%

Changes in unrecognized tax benefits 137 0.9%

Total income tax expense $ 5,012 33.9%

(1) Amount includes $(4.2) million of windfall tax deductions, $5.6 million of compensation limited by Section 162(m), and $0.4 million of shortfalls and other non-deductible compensation

The states and local jurisdictions that contribute to the majority (greater than 50%) of the tax effect in this category include California, Georgia, Pennsylvania, Texas, and Wisconsin.

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The following table presents a reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory US federal income tax rate to loss before income taxes in accordance with the requirements prior to ASU 2023-09 for the years ended December 31, 2024 and 2023 (in thousands):

Year Ended December 31,

Income tax benefit at statutory rate $ (1,578) $ (4,533)

Increase (reduction) in income taxes resulting from:

Nondeductible executive compensation 1,432 989

State income taxes, net of federal benefit 936 281

Provision to return adjustments 536 (937)

Research and development credit (425) (800)

Nondeductible entertainment expenses 201 262

Foreign derived intangible income deduction (60) (501)

Net change in uncertain tax positions (56) 652

Deferred Taxes

The tax effects of temporary differences which give rise to deferred tax assets and liabilities are as follows (in thousands):

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December 31,

Deferred tax assets:

Inventory and deferred preservation costs write-downs — 2,441

Total deferred tax assets, net $ 6,680 $ 9,259

Deferred tax liabilities:

Total deferred tax liabilities, net $ (23,107) $ (19,115)

We regularly assess the realizability of deferred tax assets and establish valuation allowances if it is more likely than not that some or all deferred tax assets will not be realized. The following table reflects changes in the valuation allowance (in thousands):

Year Ended December 31,

Currency translation and other 107 (263) (155)

As of December 31, 2025 and 2024 we maintained a net deferred tax liability of $23.1 million and $19.1 million, respectively. As of December 31, 2025 and 2024 we maintained valuation allowances against our deferred tax assets of $36.6 million and $32.6 million, respectively, primarily related to net operating loss carryforwards and disallowed excess interest carryforwards.

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As of December 31, 2025 we had $4.6 million of federal net operating loss carryforwards related to prior acquisitions for which we have a full valuation allowance against and will fully expire at the end of 2032, $16.8 million of state net operating loss carryforwards, the majority of which will expire in 2026 and are offset by valuation allowance, $9.9 million of foreign net operating loss carryforwards, all of which is offset by a valuation allowance and have an indefinite carryforward period, and $0.6 million in research and development tax credit carryforwards, the majority of which will expire in 2032. We also generated a federal net operating loss of $3.8 million in the current year, which is fully offset by valuation allowance. The federal net operating loss carries forward indefinitely.

As of December 31, 2025 we had a deferred tax asset of $9.9 million of disallowed interest expense deduction carryforwards. This deferred tax asset can be carried forward indefinitely. This rule disallows interest expense to the extent it exceeds 30% of adjusted taxable income. For the years ended December 31, 2025 and 2024 our interest deduction was limited to $22.3 million and $18.5 million, respectively.

Reinvestment of Unremitted Earnings

AORT US Equity

AORT · 10-K · period ended 2025-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

AORT US Equity☆

AORT · 10-K · period ended 2025-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

AORT US Equity