The Company provided funding and certain development services to v2vmedtech, inc. (“v2vmedtech”) in exchange for equity in v2vmedtech. The services included engineering, clinical, regulatory, and executive management resources, excluding medical and chief medical officer services, in connection with v2vmedtech’s development of an innovative heart valve repair device utilizing a transcatheter edge-to-edge repair method for a minimally invasive treatment of mitral and tricuspid valve regurgitation.

 

On April 28, 2026, the Company, through a wholly owned subsidiary, notified v2vmedtech that it had elected to discontinue further development contributions under the Contribution and Stock Purchase Agreement dated April 18, 2023. As a result of this election, the Company paid v2vmedtech a contractual break fee of $0.4 million and subsequently had no further obligation to fund development activities. Following payment of the break fee, the related development agreement (the “Development Agreement”) terminated.

 

Following termination of the Development Agreement, the Company reassessed its consolidation conclusions relating to v2vmedtech under ASC 810. As part of this reassessment, the Company considered the termination of its funding obligations, the cessation of executive management involvement, and changes in the operational activities of v2vmedtech. Individuals appointed by the Company no longer occupy the Chief Executive Officer or Chief Financial Officer positions of v2vmedtech, and the Company is no longer responsible for the day-to-day management of its operations.

 

Based on this reassessment, the Company concluded that v2vmedtech no longer meets the definition of a variable interest entity. The Company subsequently assessed whether it maintained a controlling financial interest in v2vmedtech under the voting interest entity model of ASC 810. Although the Company owns approximately 30% of the outstanding voting interests of v2vmedtech, as of June 30, 2026 it retained the right to appoint two of the three members of the v2vmedtech board of directors. The v2vmedtech board of directors is responsible for directing the business and affairs of v2vmedtech. The Company concluded that it continues to have a controlling financial interest in v2vmedtech at balance date and therefore continues to consolidate v2vmedtech in its consolidated financial statements. The Company reassesses its consolidation conclusion whenever facts and circumstances indicate that a change in control may have occurred.