LEMAITRE VASCULAR INC

December 31, 2025

1. Description of Business and Summary of Significant Accounting Policies

Nature of the Business

Unless the context requires otherwise, references to LeMaitre, LeMaitre Vascular, and the Company refer to LeMaitre Vascular, Inc. and its subsidiaries. The Company develops, manufactures, and markets medical devices and implants used primarily in the field of vascular surgery. The Company also derives revenues from the processing and cryopreservation of human tissues for implantation in patients. The Company operates in asingle segment in which its principal product lines include the following: anastomotic clips, biologic vascular and dialysis grafts, biologic vascular and cardiac patches, carotid shunts, embolectomy catheters, occlusion catheters, radiopaque marking tape, synthetic vascular and dialysis grafts, and valvulotomes.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

Cash and cash equivalents are bank deposits and liquid investments with maturities of 90 days or less at the date of purchase held in the Company's operating bank accounts. These amounts are stated at cost, which approximates fair value.

Concentrations of Credit Risk

The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. Credit risk related to cash and cash equivalents are limited based on the creditworthiness of the financial institutions at which these funds are held. The Company maintains cash balances in several banks. Accounts located in the United States are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. Certain account balances exceed the FDIC limit. Cash balances held outside the United States totaled approximately $10.2 million as of December 31, 2025.

Investments

The components of the Company's investments include debt investments, equity investments, and money market investments and are classified as short-term marketable securities. Debt investments are investments with original maturities of greater than three months and primarily include corporate debt securities, U.S. government agency securities, and asset-backed securities that are designated as available-for-sale. Available-for-sale securities are carried at estimated fair value. The Company views its available-for-sale portfolio as available for use in its current operations. Unrealized gains and losses derived by changes in the estimated fair value of available-for-sale securities are recorded in “Unrealized gain (loss) on available-for-sale securities” on the Company's consolidated statements of comprehensive income. Realized gains (losses) from the sale of available-for-sale investments, if any, are determined on a specific identification method, and are recorded in “Investment income” on the Company’s consolidated statements of operations. The costs of securities sold are based on the specific identification method, if applicable. The Company reported the amortization of any premium and accretion of any discount resulting from the purchase of debt securities as a component of investment income.

The Company also reviews its available-for-sale securities on a regular basis to evaluate whether any security in an unrealized loss position has expected credit loss by considering factors such as historical experience, market data, issuer-specific factors, and current economic conditions. Expected credit losses, if any, are recorded in “Other income (loss), net” on the Company’s consolidated statements of operations.

Equity investments include a short duration bond equity fund and a managed income equity fund that are measured at fair value for each reporting period. The managed income equity fund was liquidated in December 2024. Unrealized gains and losses derived by changes in the fair value are recorded in "Other income (loss), net" on the Company's consolidated statement of operations. The unrealized gain related to equity securities still held at December 31, 2025 was $0.5 million. Realized gains and losses are recorded in "Investment income" on the Company's consolidated statement of operations. Certain prior period balances have been reclassified to conform with current period presentation.

Finally, the Company invests inmoney market securities with maturities of 90 days or less at the date of purchase held outside of its operating bank accounts. Realized gains from money market securities are recorded in "Investment income" on the Company's consolidated statement of operations. Additionally, for any investments that distribute a dividend that is reinvested, the dividend gain is recorded in "Investment income" on the Company's consolidated statement of operations.

Revenue Recognition

The Company’s revenue is derived primarily from the sale of disposable or implantable devices used during vascular surgery. The Company sells primarily directly to hospitals and to a lesser extent to international distributors. The Company also derives revenues from the processing and cryopreservation of human tissues for implantation in patients. The Company recognizes revenue when control of promised devices and services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those devices and services. Revenue is recognized at a point in time upon shipment or delivery of products under the provisions of ASU 2014-09, Revenue from Contracts with Customers (Topic 606).

Revenue is recognized when or as a company satisfies a performance obligation by transferring a promised good or service to a customer (which is when the customer obtains control of that good or service). In instances in which shipping and handling activities are performed after a customer takes control of the goods (such as when title passes upon shipment from the Company's dock), the Company made the policy election allowed under Topic 606 to account for these activities as fulfillment costs and not as performance obligations.

The Company generally references customer purchase orders to determine the existence of a contract. Orders that are not accompanied by a purchase order are confirmed with the customer either in writing or verbally. The purchase orders or similar correspondence, once accepted, identify the performance obligations as well as the transaction price, and otherwise outline the rights and obligations of each party. The Company allocates the transaction price of each contract among the performance obligations in accordance with the pricing of each item specified on the purchase order, which is in turn based on standalone selling prices per the Company’s published price lists. In cases where the Company discounts products or provides certain items free of charge, the Company allocates the discount proportionately to all performance obligations, unless the Company can demonstrate that the discount should be allocated entirely to one or more, but not all, of the performance obligations.

The Company records revenue, net of allowances for returns and discounts, fees paid to group purchasing organizations, and any sales and value added taxes required to be invoiced, which the Company has elected to exclude from the measurement of the transaction price as allowed by the standard, at the time of shipment (taking into consideration contractual shipping terms), or in the case of consigned inventory, when it is consumed. Shipment is the point at which control of the product and title passes to the Company’s customers and the Company has a present right to receive payment for the goods.

Below is a disaggregation of the Company’s revenue by major geographic area, which is among the primary categorizations used by management in evaluating financial performance, for the periods indicated (in thousands):

The Company does not carry any contract assets or contract liabilities, as there are generally no unbilled amounts due from customers under contracts for which the Company has partially satisfied performance obligations, or amounts received from customers for which the Company has not satisfied performance obligations. The Company satisfies its performance obligations under revenue contracts within a short time period from receipt of the orders, and payments from customers are typically received within 30 to 60 days of fulfillment of the orders, except in certain geographies such as Italy, Spain, and France, where the payment cycle is customarily longer, but less than 12 months. Accordingly, there is no significant financing component to the Company’s revenue contracts. Additionally, the Company has elected as a policy that incremental costs (such as commissions) incurred to obtain contracts are expensed as incurred, due to the short-term nature of the contracts.

Customers returning products may be entitled to full or partial credit based on the condition and timing of the return. To be accepted, a returned product must be unopened (if sterile), unadulterated, and undamaged, must have at least 18 months remaining prior to its expiration date, or 12 months for the Company’s hospital customers in Europe, and generally be returned within 30 days of shipment. These return policies apply to sales to both hospitals and distributors. The amount of products returned to the Company, either for exchange or credit, has not been material. Nevertheless, the Company provides for an allowance for future sales returns based on the percentage of 12 months historical returns applied against the Company’s recognized period sales, which requires judgment. The Company’s cost of replacing defective products has not been material and is accounted for at the time of replacement.

Sales Returns and Allowances

The Company maintains a provision for potential returns of defective or damaged products, and invoice adjustments. The Company adjusts the provision using the expected value method based on historical experiences. Increases to the provision reduce revenue and accounts receivable.

Accounts Receivable and Allowance for Credit Losses

The Company’s accounts receivable are with customers based in the United States and internationally. Accounts receivable generally are due within 30 to 60 days of invoice and are stated at amounts due from customers, net of an allowance for credit losses and sales returns, other than in certain European markets where the payment cycle is customarily longer. Opening balance accounts receivable at January 1, 2024 was $25.1 million. The Company performs ongoing credit evaluations of the financial condition of its customers and adjusts credit limits based upon payment history and the current creditworthiness of the customers, as determined by a review of their current credit information. The Company continuously monitors aging reports, collections, and payments from customers, and maintains a provision for estimated credit losses based upon historical experience and any specific customer collection issues the Company identifies.

The Company closely monitors outstanding receivables for potential collection risks, including those that may arise from economic conditions, in both the United States and international economies. The Company’s European sales to government-owned or supported customers such as hospitals, distributors and agents, particularly in Italy, Spain, and France, may be subject to significant payment delays due to government austerity measures impacting funding and payment practices. As of December 31, 2025, the Company’s receivables in Italy, Spain, and France totaled $1.5 million, $1.2 million and $1.7 million, respectively. Receivables balances with certain government-owned hospitals and government-supported customers in these countries can accumulate over a period of time and then subsequently be settled as lump sum payments. While the Company believes its allowance for credit losses in these countries is adequate as of December 31, 2025, if significant changes were to occur in the payment practices of these European governments or if government funding becomes unavailable, the Company may not be able to collect on receivables due to it from these customers and the Company’s write offs of uncollectible amounts may increase.

The Company writes off accounts receivable when they become uncollectible. Such credit losses have historically been within the Company’s expectations and allowances. The allowance for credit losses is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company reviews its allowance for credit losses on a monthly basis and examines all past due balances individually for collectability. The Company records the provision for the allowance for credit losses in general and administrative expenses. The following is a summary of the Company’s allowance for credit losses and sales returns:

Inventory and Other Deferred Costs

Inventory and other deferred costs consists of finished products, work-in-process, raw materials and costs deferred in connection with human tissue cryopreservation services of the Company’s RestoreFlow allograft business. The Company values inventory and other deferred costs at the lower of standard cost (which approximates actual cost on a first-in, first-out basis) and net realizable value. Inventory costs include direct materials, direct labor, and manufacturing overhead. On a quarterly basis, the Company reviews inventory quantities on hand and analyzes the provision for excess and obsolete inventory based primarily on product expiration dating and the Company’s estimated sales forecast, which is based on sales history and anticipated future demand. The Company’s estimates of future product demand may not be accurate, and the Company may understate or overstate the provision required for excess and obsolete inventory. Accordingly, any significant unanticipated changes in demand could have a significant impact on the value of the Company’s inventory and results of operations.

Cloud Computing Arrangements

The Company enters into cloud computing arrangements to support its ERP system. Under ASC 350-40, Intangibles-Goodwill and Other-Internal-Use Software, the Company evaluates each arrangement to determine whether (i) the Company has the contractual right to take possession of the software without significant penalty, and (ii) it is feasible for the Company to run the software on its own or a third-party infrastructure. Since the Company's hosting arrangements do not convey such rights, they are accounted as service contracts.

The Company capitalizes qualifying set-up and implementation costs related to the Company’s cloud computing arrangements. The deferred costs are amortized over the term of the associated cloud computing arrangement on a straight-line basis which is representative of the pattern in which the Company expects to benefit from access to the cloud computing arrangement.

The Company includes capitalized cloud computing implementation costs in prepaid expenses and other current assets and other assets on the consolidated balance sheet. The following is a summary of the Company’s capitalized cloud computing arrangements:

Property and Equipment

The Company states property and equipment at cost, net of accumulated depreciation. The Company computes depreciation over the estimated useful lives of the related assets using straight-line method as follows:

When assets are retired or disposed, the Company eliminates the asset’s original cost and related accumulated depreciation from the accounts and any gain or loss is reflected in the statement of operations. The Company charges maintenance and repairs to operations as incurred.

Contingent Consideration

The Company recognizes contingent consideration for acquisitions at the date of acquisition, based on the fair value at that date, and then remeasured each reporting period, which may result in adjustments to net income.

Goodwill

Goodwill represents the amount of consideration paid in connection with business acquisitions in excess of the fair value of assets acquired and liabilities assumed. The Company evaluates goodwill for impairment annually, or more frequently if indicators of impairment are present or changes in circumstances suggest that an impairment may exist. The Company performs the annual impairment test on the carrying value of goodwill based on the reporting unit annually on December 31. The Company performs an assessment of qualitative factors to determine if it is “more likely than not” that the fair value of the Company’s reporting unit is less than its carrying value as a basis for determining whether it is necessary to perform the quantitative goodwill impairment test. The “more likely than not” threshold is defined as having a likelihood of more than 50 percent. The quantitative goodwill impairment test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company has determined thatno goodwill impairment charges were required for the years ended December 31,2025, 2024, or 2023.

Intangible Assets

Intangible assets consist primarily of customer relationships, purchased developed technology, trademarks, licenses, and non-compete provisions, and are amortized over their estimated useful lives. We generally calculate the fair value of our intangible assets as the present value of estimated future cash flows we expect to generate from the asset using a risk-adjusted discount rate. In determining our estimated future cash flows associated with our intangible assets, we use estimates and assumptions about future revenue contributions, cost structures, and remaining useful lives of the asset. These estimates and assumptions require significant judgment, and actual results may differ from assumed or estimated amounts.

Long-lived Assets

The Company reviews its long-lived assets (primarily property and equipment, intangible assets, and right-of-use assets) subject to depreciation or amortization to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of an asset, a product recall, or an adverse action or assessment by a regulator. If an impairment indicator exists, the Company tests the long-lived asset for recoverability. The Company records impairment losses on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets. The Company measures impairment based on the fair market value of the affected asset using discounted cash flows.

Leases

The Company determines if an arrangement is or contains a lease at contract inception by assessing whether the arrangement contains an identified asset and whether the lessee has the right to control such asset. The Company is required to classify leases as either finance or operating leases and to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months regardless of the lease classification.

The lease classification will determine whether the lease expense is recognized based on an effective interest rate method or on a straight-line basis over the term of the lease. The Company determines the initial classification and measurement of its right-of-use assets and lease liabilities at the lease commencement date and thereafter, if modified.

For its operating leases with a lease term of 12 months or greater, the Company recognized a right-of-use asset and a lease liability on its consolidated balance sheets. The lease liability is determined as the present value of future lease payments using an estimated rate of interest that the Company would have to pay to borrow equivalent funds on a collateralized basis at the lease commencement date. The right-of-use asset is based on the liability adjusted for any prepaid or deferred rent. The lease term at the commencement date is determined by considering whether renewal options and termination options are reasonably assured of exercise.

Operating lease cost for the operating lease is recognized on a straight-line basis over the lease term and is included in operating expenses on the consolidated statements of operations. The Company elected the practical expedients to exclude from its balance sheets recognition of leases having a term of 12 months or less (short-term leases).

Income Taxes

The Company accounts for income taxes under the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred taxes are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. The provision for income taxes includes taxes currently payable and deferred taxes resulting from the tax effects of temporary differences between the financial statement and tax bases of assets and liabilities. The Company maintains valuation allowances where it is more likely than not that all or a portion of a deferred tax asset will not be realized. Changes in the valuation allowances are included in the Company's tax provision in the period of change. In determining whether a valuation allowance is warranted, the Company evaluates factors such as prior earnings history, expected future earnings, carry-back and carry-forward periods, and tax strategies that could potentially enhance the likelihood of the realization of a deferred tax asset.

The Company recognizes, measures, presents, and discloses in its financial statements, uncertain tax positions that it has taken or expects to take on a tax return. The Company recognizes in its financial statements the impact of tax positions that meet a “more likely than not” threshold, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured by the Company based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The Company’s policy is to classify interest and penalties related to unrecognized tax benefits as income tax expense.

Research and Development Expense

The Company expenses research and development costs, principally compensation and related expenses, outside services, professional fees, testing, and supplies, as incurred.

Advertising Costs

The Company expenses advertising costs as incurred and includes them as a component of sales and marketing expense in the accompanying consolidated statements of operations. Advertising costs are as follows:

Stock-based Compensation

The Company recognizes as expense the estimated fair value of stock options to employees determined using the Black-Scholes option pricing model. The Company records share-based compensation charges across the consolidated statement of operations based upon the grantee’s primary function. The Company has elected to recognize the compensation cost of all share-based awards on a straight-line basis over the vesting period of the award. Reversal of expense for forfeited awards due to the termination of an employee are recognized in the period of termination. In periods that the Company grants stock options, fair value assumptions are based on volatility, interest, dividend yield, and expected term over which the stock options will be outstanding. The computation of expected volatility is based on the historical volatility of the Company’s stock. The Company bases the interest rate for periods within the contractual life of the award on the U.S. Treasury risk-free interest rate in effect at the time of grant. Historical data on exercise patterns is the basis for estimating the expected life of an option. The Company calculates the expected annual dividend rate by dividing the Company’s annual dividend, based on the most recent quarterly dividend rate, by the closing price of the Common Stock on the grant date.

The Company also issues restricted stock units (RSUs) and performance-based restricted stock units (PSUs) as additional forms of equity compensation to its employees, officers, and directors, pursuant to its stockholder-approved 2006 Stock Option and Incentive Plan (as subsequently amended and restated, the “2006 Stock Incentive Plan”). RSUs entitle the grantee to an issuance of stock at no cost to the grantee and generally vest over a period of time determined by the Company’s Board of Directors at the time of grant. PSUs granted are based on achievement of the Company’s operating income compared to budgeted operating income as approved by the Company’s Board of Directors. The Company determines the fair market value of the award based on the number of RSUs and PSUs granted and the market value of the Company’s common stock on the grant date. The Company amortizes the fair market value of the award to expense over the period of vesting. Unvested RSUs and PSUs are forfeited and canceled as of the date that employment or service to the Company terminates. RSUs and PSUs are settled in shares of the Company’s common stock upon vesting. The Company typically repurchases common stock upon its employees’ vesting in RSUs and PSUs in order to cover any minimum tax withholding liability as a result of the awards having vested.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the Company’s consolidated financial statements and accompanying notes. The Company is not aware of any specific event or circumstance that would require an update to its accounting estimates or adjustments to the carrying value of its assets and liabilities. The Company’s estimates and assumptions, including those related to credit losses, inventories, intangible assets, sales returns and discounts, share-based compensation, and income taxes, are reviewed on an ongoing basis and updated as appropriate. Actual results could differ from those estimates.

Valuation of Business Combinations

The Company assigns the value of the consideration transferred to acquire a business to the tangible assets and identifiable intangible assets acquired and liabilities assumed on the basis of their fair values at the date of acquisition. The Company assesses the fair value of assets, including intangible assets, using a variety of methods. The Company typically engages an independent appraiser to perform the assessment, so as to measure fair value from the perspective of a market participant.

The Company has accounted for acquisitions using the acquisition method, and the acquired companies’ results have been included in the accompanying consolidated financial statements from their respective dates of acquisition. The Company has recorded acquisition transaction costs in general and administrative expenses and expensed such costs as incurred. The Company bases allocation of the purchase price for acquisitions on estimates of the fair value of the net assets acquired, subject to adjustment upon finalization of the purchase price allocation.

The Company’s acquisitions have historically been made at prices above the fair value of the acquired assets, resulting in goodwill due to expectations of synergies of combining the businesses. These synergies include use of the Company’s existing commercial infrastructure to expand sales of the acquired businesses’ products, use of the commercial infrastructure of the acquired businesses to cost-effectively expand sales of the Company’s products, and the elimination of redundant facilities, functions, and staffing.

Commitments and Contingencies

In the normal course of business, the Company is subject to proceedings, lawsuits, and other claims and assessments for matters related to, among other things, patent infringement, business acquisitions, employment, commercial matters and product recalls. The Company assesses the likelihood of any adverse judgments or outcomes to these matters as well as potential ranges of probable losses. The Company makes a determination of the amount of reserves required, if any, for these contingencies after careful analysis of each individual issue. The required reserves may change in the future due to new developments or changes in approach, such as a change in settlement strategy in dealing with each matter. The Company records charges for anticipated losses in connection with litigation and claims against it when the Company concludes a loss is probable and can be reasonably estimated. The Company expenses legal costs associated with loss contingencies as incurred. During the years ended December 31, 2025, 2024, and 2023, the Company was not subject to any material litigation or claims and assessments.

Restructuring

The Company records restructuring expenses incurred in connection with consolidation or relocation of operations, exited business lines, reductions in force, or distributor terminations. The Company bases these restructuring expenses, which reflect the Company’s commitment to a termination or exit plan, on estimates of the expected costs associated with site closure, legal matters, contract terminations, severance payments, or other costs directly related to the restructuring. If the actual cost incurred exceeds the estimated cost, an additional expense to earnings will result. If the actual cost is less than the estimated cost, the Company will recognize a credit to earnings.

On June 30, 2022, we ceased operations at our St. Etienne, France factory. The closure resulted in restructuring expenses of $3.1 million for the year ended December 31, 2022. These expenses consisted primarily of employment termination costs, impairment of fixed assets and inventory, and third party costs. For the year ended December 31, 2023, we recorded additional restructuring expenses of $0.5 million related to the closure. The additional expenses consisted primarily of employment termination, settlement, legal, and other third party costs. There wereno restructuring expenses for the years ended December 31, 2025 and 2024.

Convertible Debt

The Company applies the provisions of ASU 2020-06, which simplify the accounting related to convertible debt instruments by removing major separation models required under current GAAP. Accordingly, the Company does not bifurcate the liability and equity components of the convertible debt on its consolidated balance sheets. The Company’s convertible debt is reflected as a liability on the Company’s consolidated balance sheets, with the initial carrying amount equal to the principal amount of the debt, net of issuance costs. The issuance costs are treated as a debt discount for accounting purposes, which will be amortized into interest expense over the term of the instruments utilizing the effective interest method. The Company accounts for its convertible debt as a single liability with no separate accounting for embedded conversion features.

Employee Retention Credit

On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). One provision within the CARES Act provided an Employee Retention Credit (“ERC”), which allows for employers to claim a refundable tax credit against the employer share of Social Security tax equal to 50% of the qualified wages paid to employees from March 13, 2020 through December 31, 2020. The ERC was subsequently expanded in 2021 for employers to claim a refundable tax credit for 70% of the qualified wages paid to employees from January 1, 2021 through September 30, 2021. In April 2025, the Company filed amended Forms 941-X to claim the expanded ERC totaling $6.3 million of credits for filing periods beginning January 1, 2021, through September 30, 2021.

The Company accounted for the ERC by analogy to International Accounting Standard (“IAS”) 20, Accounting for Government Grants and Disclosure of Government Assistance which permits the recording and presentation of either the gross amount as other income or the netting of the credit against the related expense. In September 2025, the Company received ERC refunds for the claims filed for the periods January 1, 2021, through June 30, 2021, totaling $4.8 million. For the year ended December 31, 2025, the Company recorded a gross benefit of $4.8 million, which represented $4.1 million claimed as a refund and $0.7 million in interest income. The ERC was recognized as a reduction in cost of sales and operating expenses and allocated to the financial statement categories from which the payroll taxes were originally incurred. The Company recorded benefits to cost of sales of $2.7 million, sales and marketing expenses of $0.8 million, general and administrative expenses of $0.3 million, and research and development expenses of $0.3 million, and interest income of $0.7 million. Additionally, the Company has accounted for the contingent fee arrangement with its service provider in connection with the filing of the ERC under ASC 450-20, Contingencies. The Company recorded $0.7 million to general and administrative expenses for professional fees related to the tax credit in the consolidated statements of operations during the year ended December 31, 2025.

On July 4, 2025, President Donald Trump signed the One Big Beautiful Bill Act (“OBBBA”) into law, which is considered the enactment date under GAAP. The OBBBA removed the claims filed by any taxpayer after January 31, 2024, for ERC refunds relating to the period July 1, 2021, through September 30, 2021. The Company’s amended Forms 941-X for the period July 1, 2021, through September 30, 2021, were filed with a credit of $2.2 million. The Company believes that there is not reasonable assurance that any receipt of credits will be obtained for this period and therefore has not recognized any amounts related to the ERC in the accompanying consolidated financial statements.

Net Income Per Share

The Company computes basic net income per common share by dividing the net income by the weighted average number of shares of common stock outstanding for the period. Diluted net income per common share is computed by dividing net income by the weighted average number of shares of common stock outstanding for the period, including potential dilutive common shares assuming the dilutive effect of outstanding stock awards, using the treasury stock method, and outstanding convertible notes, using the if-converted method.

The Company has excluded potential dilutive securities from the computation of diluted earnings per share that would be anti-dilutive to net income per share. The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net income per share attributable to common stockholders for the periods indicated above because including them would have had an anti-dilutive effect:

A reconciliation of the basic and diluted net income per common share computations are as follows:

The Company computed the if-converted method to calculate diluted net income per common share regarding the convertible senior notes, noting there was no dilutive effect on the calculations for the years ended December 31, 2025 and 2024.

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), which requires all public entities, including public entities with a single reportable segment, to provide in interim and annual periods one or more measures of segment profit or loss used by the chief operating decision makerto allocate resources and assess performance. Additionally, the standard requires disclosures of significant segment expenses and other segment items as well as incremental qualitative disclosures. The Company adopted ASU 2023-07 effective December 31, 2024, on a retrospective basis. The adoption of 2023-07 did not change the way that the Company identifies its reportable segments and, as a result, didnot have a material impact on the Company's segment-related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires enhanced income tax disclosures, including specific categories and disaggregation of information in the effective tax rate reconciliation, disaggregated information related to income taxes paid, income or loss from continuing operations before income tax expense or benefit, and income tax expense or benefit from continuing operations. The Company adopted ASU 2023-09 effective December 31, 2025, on a retrospective basis. The adoption of 2023-09 didnot have a material impact on the Company's income tax-related disclosures.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-03), which requires disclosure about the types of costs and expenses included in certain expense captions presented on the income statement. The new disclosure requirements are effective for the Company’s annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently in the process of evaluating the impact of this pronouncement on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-04, Induced Conversions of Convertible Debt Instruments. The new guidance clarifies the assessment of whether a transaction should be accounted for as an induced conversion or extinguishment of convertible debt when changes are made to conversion features as part of an offer to settle the instrument. The guidance is effective for fiscal years beginning after December 15, 2025, with early adoption permitted, and it can be adopted either on a prospective or retrospective basis. The Company is currently in the process of evaluating the impact of this pronouncement on its consolidated financial statements and related disclosures.

In June 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Modification to Receivable and Contract Assets. The new guidance reduced the cost and complexity of applying the current expected credit loss model to current accounts receivable and current contract assets for public business entities through a practical expedient to assume that current conditions as of the balance sheet date will continue for the remaining life of assets. The guidance is effective for fiscal years beginning after December 31, 2025, including interim periods within those annual periods, with early adoption permitted on a prospective basis. The Company is currently in the process of evaluating the impact of this pronouncement on its consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangible-Goodwill and Other- Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The new guidance modernizes the accounting for internal-use software to current development practice, clarifies when to begin capitalizing costs and enhances disclosure requirements. The guidance is effective for fiscal years beginning after December 15, 2027, including interim periods within those annual periods, with early adoption permitted, and it can be adopted either on a prospective or retrospective basis. The Company is currently in the process of evaluating the impact of this pronouncement on its consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvement. The new guidance creates a comprehensive list of required interim disclosures and incorporates a disclosure principle that requires disclosures at interim periods when an event or change that has a material effect on an entity has occurred since the previous year end. The guidance is effective for interim periods within annual fiscal years beginning after December 15, 2027 and it can be adopted either on a prospective or retrospective basis. The Company is currently in the process of evaluating the impact of this pronouncement on its consolidated financial statements and related disclosures.

2. Investments

Investment Components

The components of investments consisted of the following:

Unrealized Losses on Debt Investments

Debt investments with continuous losses for less than 12 months and 12 months or greater and their related fair values consistent of the following:

The Company didnot have unrealized losses on debt investments as of December 31, 2024. Unrealized losses from fixed-income securities are primarily attributed to changes in interest rates. Fair values were determined for each individual security in the investment portfolio. When evaluating an investment for expected credit losses, the Company reviews factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer and any changes thereto, changes in market interest rates, and the Company’s intent to sell, or whether it is more likely than not it will be required to sell, the investment before recovery of the investment’s cost basis. The Company also regularly reviews its investments in an unrealized loss position and evaluates the current expected credit loss by considering factors such as historical experience, market data, issuer-specific factors, and current economic conditions. During the years ended December 31, 2025, 2024 and 2023, the Company didnot recognize any expected credit losses. The Company has no current requirement or intent to sell the securities in an unrealized loss position. The Company expects to recover up to (or beyond) the initial cost of investment forsecurities held. As of December 31, 2025, the debt investments include $1.9 million of accrued interest receivables that are classified as short-term marketable securities. There wasno accrued interest receivable as of December 31, 2024.

Debt Investment Maturities

The following table outlines maturities of our debt investments as of December 31, 2025:

3. Inventory and Other Deferred Costs

Inventory and other deferred costs consisted of the following:

The Company had inventory on consignment at customer sites of $1.6 million and $1.8 million at December 31,2025 and 2024, respectively.

In connection with the Company’s RestoreFlow allograft business, other deferred costs include costs incurred for the preservation of human 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 the Company preserves are not held as inventory, and the costs the Company incurs to procure and process vascular tissues are instead accumulated and deferred. These costs include fixed and variable overhead costs associated with the cryopreservation process, including primarily direct labor costs, tissue recovery fees, inbound freight charges, indirect materials, and facilities costs. The Company expenses general and administrative expenses and selling expenses associated with the provision of these services as incurred.

4. Property and Equipment

Property and equipment consisted of the following:

During the years ended December 31, 2025, 2024, and 2023, the Company wrote off fully depreciated assets with gross values of $0.6 million, $0.9 million, and $7.1 million, respectively.

Depreciation expense was as follows:

5. Other Intangibles

Other intangibles consisted of the following:

Intangible assets consist primarily of customer relationships, purchased developed technology, trademarks, licenses, and non-compete provisions, and are amortized over their estimated useful lives. The weighted-average amortization period for these intangibles as of December 31, 2025, is 7.7 years. The Company includes amortization expense in general and administrative expense as follows:

Estimated amortization expense for each of the next five fiscal years, based upon the intangible assets at December 31,2025, is as follows:

6. Convertible Senior Notes

Convertible senior notes consisted of the following:

On December 19, 2024, the Company issued $172.5 million aggregate principal amount of convertible senior notes due 2030 (the “Convertible Notes”), in a Rule 144A private placement to qualified institutional buyers pursuant to an indenture dated December 19, 2024, by and between the Company and U.S. Bank Trust Company, National Association (the “Indenture”).

The Convertible Notes will mature on February 1, 2030, unless earlier repurchased, redeemed, or converted. The proceeds from the issuance of the Convertible Notes were approximately $167.7 million, net of initial purchaser discounts and other debt issuance costs totaling $4.8 million.

The Convertible Notes bear interest at a rate of 2.50% per year and interest is payable semiannually in arrears on August 1 and February 1 of each year. For the year ended December 31, 2025, the Company paid $2.7 million in interest payments. The Company did not make interest payments for the year ended December 31, 2024. The initial conversion rate was 8.3521 shares of common stock per $1,000 principal amount of the Convertible Notes, which represents an initial conversion price of approximately $119.73 per share of common stock and a premium of approximately 30% over the closing price of the Company’s common stock on December 16, 2024. In connection with the most recent payment made by the Company on December 4, 2025 of a quarterly cash dividend of $0.20 per share (an increase from the quarterly dividend amount of $0.16 per share as of the time of issuance of the Convertible Notes), the conversion rate of the Convertible Notes was increased to 8.3676 shares of common stock per $1,000 principal amount of the Convertible Notes, which represents a conversion price of approximately $119.51 per share of common stock. A similar adjustment to the conversion rate will be made by the Company upon payment of the quarterly cash dividend of$0.25 on March 26, 2026, and upon payment of subsequent quarterly dividends in excess of $0.16 per share. The conversion rate and conversion price are subject to customary adjustments upon the occurrence of certain events as described in the Indenture.

Noteholders may convert all or a portion of their Convertible Notes at their option only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2025, if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during thefive consecutive business days immediately after anyfive consecutive trading day period in which the trading price per $1,000 principal amount of Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on the Company’s common stock, as described in the Indenture; (4) if the Company calls (or is deemed to have called) any Convertible Notes for redemption; and (5) at any time from, and including, August 1, 2029, until the close of business on the second scheduled trading day immediately before the maturity date. The Company has the right to elect to settle conversions either in cash, shares of its common stock, or in a combination of cash and shares of its common stock.

Additional interest of up to 0.5% per annum is payable if the Company fails to timely file required documents or reports with the SEC or the Convertible Notes become not freely tradable (as defined in the Indenture). The Company determined that the higher interest payments required in certain circumstances were embedded derivatives that should be bifurcated and accounted for at fair value. The Company assessed the value of the embedded derivativesand determined it was de minimis.

Prior to February 5, 2028, the Convertible Notes will not be redeemable. On or after February 5, 2028 until the 40 th trading day immediately before the maturity date, the Company may redeem for cash all or any portion of the Convertible Notes (subject to the partial redemption limitation set forth in the Indenture), at its option, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption. In addition, calling any Convertible Note for redemption will constitute a “Make-Whole Fundamental Change” (as defined in the Indenture) with respect to that Convertible Note, in which case the conversion rate applicable to the conversion of that Convertible Note will be increased in certain circumstances if it is converted after it is called for redemption.

The Company accounts for the Convertible Notes as a single liability in accordance with ASC 470-20 as the Company concluded that embedded conversion features within the Convertible Notes do not meet the requirements for bifurcation. Initial purchaser discounts and other debt issuance costs related to the Convertible Notes totaling $4.8 million were recorded by the Company as a debt discount. The debt discount is reflected as a reduction of the carrying value of the Convertible Notes on the Company’s consolidated balance sheets and is being accreted to interest expense over the term of the Convertible Notes using the effective interest method. During the year ended December 31,2025, the Company recognized $4.3 million in interest expense related to the 2.50% cash coupon of the Convertible Notes and $0.9 million of amortization expense of the debt issuance costs. During the year end December 31, 2024, the Company recognized $0.1 million in interest expense related to the 2.50% cash coupon of the Convertible Notes and $0.1 million of amortization expense of the debt issuance costs, As of December 31, 2025, the estimated fair value of the Convertible Notes was $172.3 million compared to $178.6 million as of December 31, 2024. The fair value was determined based on the quoted price of the last trade of the Convertible Notes prior to the end of the reporting period in an inactive market, which is considered as Level 2 in the fair value hierarchy.

7. Accrued Expenses and Other Long-term Liabilities

Accrued expenses consist of the following:

Other long-term liabilities consist of the following:

8. Commitments

Leases

The Company determines if an arrangement is a lease at inception of the contract. The Company has operating leases for buildings, primarily for office space, manufacturing and distribution, as well as automobiles and printing equipment. As of December 31,2025, the Company had the following building and facility leases capitalized on the balance sheet:

Operating lease right-of-use ("ROU") assets and operating lease liabilities are recognized based on the present value of the future lease minimum payments over the lease term at commencement date. Many of the lease agreements contain renewal or termination clauses that are factored into the determination of the lease term if it is reasonably certain that these options would be exercised. The Company recognizes lease expense for these leases on a straight-line basis over the lease term.

None of the Company’s noncancelable lease payments include non-lease components such as maintenance contracts. The Company generally reimburses the landlord for direct operating costs associated with the leased space. The Company has no subleases, and there are no residual value guarantees associated with, or restrictive covenants imposed by, any of its leases. The Company held no assets under finance leases as of December 31, 2025. The Company elected the package of practical expedients that allow it to omit leases with initial terms of 12 months or less from its balance sheet, which the Company expenses on a straight-line basis over the life of the lease.

The interest rate implicit in lease agreements is typically not readily determinable, and as such the Company used the incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The incremental borrowing rate is defined as the interest the Company would pay to borrow on a collateralized basis.

Additional information with respect to the Company’s leases is as follows:

As of December 31,2025, the minimum noncancelable operating lease rental commitments with initial or remaining terms of more than one year are as follows:

In June 2025, the Company executed a new building lease agreement in Billerica, Massachusetts for U.S. distribution. The 34,400 square foot building lease commenced on January 1, 2026, with a primary term through December 31, 2032. The Company has the option to renew the primary term of the lease for one additional 24-month period.

9. Income Taxes

Income before income taxes is as follows:

Certain of the Company’s foreign subsidiaries are included in the Company’s U.S. tax return as branches but are included as foreign for purposes of the table above.

The provision (benefit) for income taxes is as follows:

Reconciliation of the U.S. federal statutory rate to the Company's effective tax rate is as follows:

(1)During the year ended December 31, 2025, state taxes in California, New Jersey, New York, Illinois, Pennsylvania, Florida, Georgia, and Tennessee comprised greater than 50% of the tax effect in this category. During the year ended December 31, 2024, state taxes in California, New York, Pennsylvania, Florida, Illinois, Louisiana, New Jersey, Georgia, and Alabama comprised greater than 50% of the tax effect in this category. During the year ended December 31, 2023, state taxes in California, New York State, New Jersey, Pennsylvania, Florida, Illinois, Georgia, and Texas comprised greater than 50% of the tax effect in this category.

The Company has reviewed the tax positions taken, or to be taken, in its tax returns for all tax years currently open to examination by a taxing authority. As of December 31, 2025, the gross amount of unrecognized tax benefits exclusive of interest and penalties was $0.4 million, which may increase within the year ending December 31, 2026. The Company remains subject to examination until the statute of limitations expires for each remaining respective tax jurisdiction. The statute of limitations will be open with respect to these tax positions through 2031. A reconciliation of the beginning and ending amount of the Company’s unrecognized tax benefits is as follows:

Deferred taxes were attributable to the following temporary differences:

In 2025, the Company increased its valuation allowance by less than $0.1 million mainly attributable to Australian net operating loss carry forwards and Massachusetts credit carryforwards. In 2024, the Company decreased its valuation allowance by $0.1 million mainly attributable to Australian net operating loss carry forwards and Massachusetts credit carryforwards.

As of December 31, 2025, the Company has a valuation allowance of $1.7 million for deferred tax assets primarily related to Australian net operating loss and capital loss carry forwards and Massachusetts tax credit carry forwards that are not expected to be realized. The valuation allowance against the Company’s deferred tax assets may require adjustment in the future based on changes in the mix of temporary differences, changes in tax laws, and operating performance.

Realization of the Company’s deferred tax assets is dependent on the Company generating sufficient taxable income in future periods. Although the Company believes it is more likely than not that future taxable income will be sufficient to allow it to recover substantially all of the value of its deferred tax assets remaining after the Company applies the valuation allowances, realization is not assured and future events could cause the Company to change its judgment. In the event that actual results differ from the Company’s estimates, or the Company adjusts these estimates in the future periods, further adjustments to the Company’s valuation allowance may be recorded, which could materially impact its financial position and net income (loss) in the period of the adjustment.

As of December 31, 2025, the Company had net operating loss carryforwards in Australia of $0.9 million that do not expire, in France of $1.2 million that do not expire, in Spain of $0.3 million that do not expire, in Norway of $0.1 million that do not expire, and in China of $0.2 million that expire in two years. The Company has a capital loss carryforward in Australia of $1.5 million that does not expire. The Company also has state tax credit carryforwards of approximately $1.7 million that are available to reduce future tax liabilities, which begin to expire in 2030, or can be carried forward indefinitely.

In December 2018, the Company reevaluated its international operations and as a result, is no longer indefinitely reinvested with respect to undistributed earnings from its German and Australian subsidiaries. There was no material deferred tax expense recorded for foreign and state tax costs associated with the future remittance of these undistributed earnings. The Company remains permanently reinvested with respect to undistributed earnings from its other foreign subsidiaries. The Company has determined that it is not practicable to estimate the amount of deferred tax liability, if any, with respect to these permanently reinvested undistributed earnings.

The Company has been notified of an income tax audit in France and does not expect any material liability that may result from this audit.

As of December 31,2025, the Company remains subject to examination in our most significant tax jurisdictions as follows:

Supplemental disclosures of cash flow information are as follows:

10. Stockholders’ Equity

Authorized Shares

The Company’s second amended and restated certificate of incorporation, as amended (the “Certificate of Incorporation”), authorizes the issuance of up to 37,000,000 shares of common stock and up to 3,000,000 shares of undesignated preferred stock.

Under the terms of the Certificate of Incorporation, the Company’s board of directors is authorized to issue shares of the preferred stock in one or more series without stockholder approval. The Company’s board of directors has the discretion to determine the rights, preferences, privileges, and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges, and liquidation preferences, of each series of preferred stock. Currently, the Company has no shares of preferred stock outstanding.

Stock Award Plans

In May 2006 the Company approved the 2006 Stock Incentive Plan, which became effective upon the Company’s initial public offering, and which has been subsequently amended. The maximum number of shares of common stock reserved and available for issuance under the 2006 Stock Incentive Plan is the sum of (i)6,500,000 shares, and (ii) such number of shares as equals that number of stock options or awards returned to the Company’s 1997 Stock Option Plan, 1998 Stock Option Plan, 2000 Stock Option Plan, and 2004 Stock Option Plan, each as amended and in effect from time to time (following the original effective date of the 2006 Stock Incentive Option and Incentive Plan), resulting from the expiration, cancellation, or termination of stock options or awards under those plans. The 2006 Stock Incentive Plan allows for the granting of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock units (“RSUs”), performance-based RSUs (“PSUs”), unrestricted stock awards, and deferred stock awards to the Company’s officers, employees, directors, and consultants. Incentive stock options are required to be issued at not less than fair market value at the date of the grant and generally vest over four orfive years. The Company’s board of directors determines the term of the options but in no event will exceedten years from date of grant. In connection with the adoption of the 2006 Stock Incentive Plan, no further option grants were permitted under any previous stock option plans. The Company may satisfy awards upon exercise of stock options, RSUs, or PSUs with either newly issued shares or treasury shares.

A total of 8,118,003 shares are currently authorized for grant under the 2006 Stock Incentive Plan, of which 886,363 remain available for grant as of December 31,2025.

The Company has computed the fair value of employee stock options granted each year using the following weighted average assumptions:

A summary of option activity as of December 31,2025, and for the three years then ended is presented below:

Cash received from stock options exercised during the years ended December 31, 2025, 2024, and 2023, was $6.8 million, $6.4 million, and $6.2 million, respectively.

Restricted Stock Units and Performance-based Restricted Stock Units

The Company bases the fair value of RSU awards with time-based vesting on the intrinsic value of the awards at the date of grant.

The Company also issues PSUs, which are RSU awards with vesting based on performance conditions. PSUs awarded vest based on our achievement of operating income relative to the Company’s target operating income. The Company bases the fair values of PSUs on the intrinsic values of the awards at the date of grant.

A summary of the Company’s RSU activity (excluding PSUs) as of December 31,2025, and for the three years then ended is presented below:

The number of RSUs vested includes the shares that the Company withheld on behalf of employees to satisfy minimum statutory tax withholding requirements. The fair values of the RSUs that vested during 2025, 2024, and 2023 were $3.9 million, $4.9 million, and $2.7 million, respectively.

The Company repurchases shares of its common stock in order to cover any minimum tax withholding liability associated with RSU vestings. A summary of such repurchases is as follows:

A summary of the Company’s PSU activity as of December 31,2025, and for the three years then ended is presented below:

The number of PSUs vested includes the shares that the Company withheld on behalf of employees to satisfy minimum statutory tax withholding requirements. The fair values of the PSUs that vested during 2025 and 2024 were $1.9 million and $1.2 million, respectively.

The Company repurchases shares of its common stock in order to cover any minimum tax withholding liability associated with PSU vestings. There were no repurchases of PSUs prior to 2024. A summary of such repurchases in is as follows:

Stock-based Compensation

The components of stock-based compensation expense included in the consolidated statements of operations were as follows:

Stock-based compensation is included in our statements of operations as follows:

The Company expects to record the unamortized portion of share-based compensation expense of $20.4 million for existing stock options, RSUs, and PSUs outstanding as of December 31,2025, over a weighted-average period of 2.1 years.

Stock Repurchase Plans

On February 19, 2026, the Company’s board of directors authorized the repurchase of up to$100.0 million of the Company’s common stock through transactions on the open market, in privately negotiated purchases or otherwise until February 18, 2027. The repurchase program may be suspended or discontinued at any time. To date the Company hasnot made any repurchases under this program.

In February 2011, the Company’s board of directors approved a policy for the payment of quarterly cash dividends on its common stock. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the board of directors on a quarterly basis. The dividend activity for the periods presented is as follows:

On February 19, 2026, the Company’s board of directors approved a quarterly cash dividend on its common stock of$0.25 per share payable on March 26, 2026, to stockholders of record at the close of business on March 12, 2026.

11. Profit-Sharing Plan

The Company offers a 401(k) profit-sharing plan (the “401(k) Plan”) covering eligible U.S. employees to make tax-deferred contributions, a portion of which are matched by the Company. The Company may also make discretionary profit sharing contributions to the 401(k) Plan in an amount determined by its board of directors. In 2023 and 2024, the Company's contributions vested ratably oversix years of employment and amounted to approximately $0.8 million in each year. On September 1, 2025, the Company adjusted its vesting schedule fromsix years of employment tothree years of employment, whereas 0% vesting for one year or less of service,50% vesting after two years of service, and 100% vesting after three years of service. The Company's contributions in 2025 were $1.0 million.

12. Segment and Geographic Information

The Company regularly reviews its segment financial information and the approach used by the chief operating decision maker (“CODM”), the Chief Executive Officer, to evaluate performance and allocate resources. The Company considers the business to be asingle operating segment engaged in the development, manufacturing, and marketing of medical devices and implants, as well as the processing and cryopreservation of human tissues for implantation in patients, all used primarily in the field of vascular surgery.

The CODM assesses performance for its single operating segment and decides how to allocate resources based on net income that also is reported on the consolidated statements of operations. The measure of segment assets is reported on the consolidated balance sheets as total consolidated assets. The accounting policies of the segment are the same as those described in "Description of Business and Summary of Significant Accounting Policies" (see Note 1).

The CODM uses net income to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits into the single operating segment or into other parts of the entity, such as for acquisitions, dividend payments, and/or short-term marketable security investments. Net income is also used to monitor budget versus actual results, which is used in assessing performance of the segment and in establishing management’s compensation.

In addition to total segment net income, the CODM’s quarterly reporting package includes several highlighted expense categories that the CODM considers key strategic drivers of the Company’s long-term profitability. The following is the Company’s operating segment reconciliation of net income, including significant segment expenses:

• Refer to the consolidated statements of operations for the components of other income and expense and related amounts.

Most of the Company’s revenues are generated in the United States, Germany, the United Kingdom, other European countries, and Canada. Substantially all of the Company’s assets are located in the United States and Germany. Net sales to unaffiliated customers based on customer location by country were as follows:

Long-term assets by country, including property and equipment, net and right-of-use leased assets were as follows:

13. Fair Value Measurements

The fair value accounting guidance requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:

•

Level 1 — Quoted prices in active markets for identical assets or liabilities.

•

Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

•

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs.

Level 1 assets being measured at fair value on a recurring basis as of December 31, 2025 included the Company’s money market investments and a short-duration bond equity fund and classified as short-term marketable securities.

The Company uses Level 2 fair value measurements for its Convertible Notes, which are carried at the face value less unamortized debt discount and issuance costs on the consolidated balance sheets. The fair value of the Convertible Notes is presented at each reporting period for disclosure purposes only (see Note 6). Additionally, the Company uses Level 2 fair value measurements for its debt investments that are designated as available-for-sale and classified as short-term marketable securities (see Note 2).

Several of the Company’s prior acquisition-related assets and liabilities have been measured using Level 3 techniques. During 2020 the Company recorded a contingent liability associated with its acquisition of the bovine carotid graft business from Artegraft. The agreement required the Company to make potential additional payments to Artegraft of up to $17.5 million, depending on the achievement of certain unit sales milestones during the first three calendar years following the acquisition through December 31, 2023. As of December 31, 2023, there were no unit sales milestones achieved during the earn-out period, and therefore the Company reduced the remaining liability tozero.

In 2019, the Company recorded contingent liabilities associated with its acquisition of the Anteris biologic patch business. In January 2025, the Company received the MDR CE mark approval of CardioCel and VascuCel, which allows the Company to distribute their Burlington manufactured products to EU markets. As of December 31, 2024, the fair value of the CE Mark Contingency reflected the total holdback due to Anteris of $1.4 million. The payment to Anteris was made in the first quarter of 2025. No further liabilities exist for the Company as of December 31, 2025.

The following table provides a roll-forward of the fair value of these liabilities, as determined by Level 3 unobservable inputs:

14. Accumulated Other Comprehensive Income (Loss)

Changes to the Company’s accumulated other comprehensive loss consisted primarily of foreign currency translation and unrealized losses on short-term marketable securities for the years ended December 31, 2025, 2024, and 2023.