Litigation

On July 7, 2025, we filed patent infringement complaints against Natus Medical Incorporated and related subsidiaries (“Natus”) with the U.S. International Trade Commission (“USITC”) and the U.S. District Court for the District of Delaware (the “District Court”). On August 6, 2025, the USITC instituted an investigation of these claims pursuant to Section 337 of the Tariff Act of 1930 and on August 12, 2025, the District Court stayed the pending patent infringement action until the final determination of the USITC investigation.

Legal fees are expensed in the period in which they are incurred and are included in accrued liabilities. In addition to expenses incurred, as of March 31, 2026, the Company has a commitment to pay $2.9 million in deferred legal fees contingent upon the earlier of settlement or favorable Initial Determination by the Administrative Law Judge related to the Natus patent infringement complaints. The Company records a provision for a liability when management believes that it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. No provision or accrual has been recorded related to the deferred legal fees based on currently available information. As of March 31, 2026, and December 31, 2025, there were no litigation liabilities recorded for the contingent deferred legal fees described above.

Other Matters

On February 20, 2026, a U.S. Supreme Court ruling invalidated tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”). The Company estimates it has paid approximately $1.6 million under the IEEPA tariffs. The ruling did not address potential refunds, creating uncertainty regarding the potential recovery of tariffs previously assessed under that statute. As of March 31, 2026, the Company has not recognized an asset related to the potential refund. The Company will continue to evaluate new information and will recognize the refund when the requirements under ASC 450, Contingencies, have been met.