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Acquisition of Endospan
 9 Months Ended
Sep. 30, 2026
Business Combination [Abstract]  
Acquisition of Endospan 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
In June 2026 the FDA approved the PMA application for the AMDS Hybrid Prosthesis for use in patients with acute DeBakey Type I aortic dissections with clinical or radiographic malperfusion, satisfying the related regulatory milestone and triggering the associated $25.0 million contingent payment, which was paid in July 2026. Of the $25.0 million contingent payment, $13.3 million was classified as an operating cash outflow and $11.7 million was classified as a financing cash outflow in the Condensed Consolidated Statement of Cash Flows.
Following the $25.0 million PMA milestone payment made in July 2026, we may be required to pay additional consideration up to $75.0 million to the former shareholders of Ascyrus upon the achievement of certain milestones and the sales-based additional earnout described above.
The contingent consideration represents the estimated fair value of potential future payments. The fair value of the contingent consideration liability was estimated by discounting expected contingent payments to present value 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 considered the probability of achieving the applicable contingent payment milestones and sales-based earnout to calculate the fair value of the contingent consideration. As of September 30, 2026, management expects the maximum sales-based earnout of $75.0 million to be achieved and estimated the fair value of the remaining contingent consideration by discounting the expected payment to present value. This fair value measurement was based on unobservable inputs, including management estimates and assumptions about future revenues and the timing of expected payments, and is, therefore, classified as Level 3 within the fair value hierarchy. We used a discount rate of approximately 17% to calculate the fair value of contingent consideration as of September 30, 2026. 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 Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income. 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 our contingent consideration liabilities. We recorded net fair value losses related to Ascyrus of $1.1 million and $10.8 million for the three and nine months ended September 30, 2026, respectively, as compared to net fair value losses of $2.6 million and $2.4 million for the three and nine months ended September 30, 2025, respectively. These amounts were recognized in General, administrative, and marketing expenses in the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income. The $10.8 million net fair value loss recognized during the nine months ended September 30, 2026 was primarily attributable to the increase in the probability of achieving the PMA approval milestone to 100% upon receipt of FDA approval in June 2026 and the passage of time.
As of September 30, 2026 the contingent consideration liabilities related to AMDS totaled $46.4 million, all of which were classified as non-current contingent consideration. During July 2026, we paid $25.0 million related to the PMA approval milestone achieved in June 2026, which reduced the contingent consideration liabilities. As of December 31, 2025 the contingent consideration liabilities totaled $60.6 million.
Acquisition of Endospan
Overview

On May 18, 2026 (the “Acquisition Date”), we acquired 100% of the outstanding securities of Endospan Ltd. (“Endospan”) from its securityholders (the “Endospan Acquisition”). The Endospan Acquisition was completed through the exercise of our purchase option pursuant to the Securities Purchase Option Agreement, dated September 11, 2019, as amended on July 1, 2024, January 9, 2026, and May 17, 2026 (the “Agreement”). Endospan designs, develops, manufactures, and commercializes the NEXUS™ family of aortic arch stent graft systems. The Endospan Acquisition expands our aortic arch product portfolio and provides us with ownership of the NEXUS platform and related product-development pipeline.

We accounted for the Endospan Acquisition as a business combination using the acquisition method of accounting in accordance with ASC 805, Business Combinations. The Agreement provided for a base purchase price of $175.0 million, payable in cash and subject to adjustments for working capital, indebtedness, cash, transaction expenses, and other specified items. The acquisition-date fair value of total consideration transferred was $174.0 million, as summarized below. At closing, we paid approximately $131.3 million in cash in connection with the Endospan Acquisition. This amount included $10.2 million of transaction bonuses, as further discussed below. The remaining $121.0 million consisted of $106.8 million of cash consideration and $14.2 million paid to settle Endospan debt obligations. Following a $0.2 million measurement period adjustment, which remained unpaid as of September 30, 2026, total cash consideration increased to $107.0 million.

Endospan’s former securityholders are also entitled to receive contingent consideration of up to $200.0 million based on 2.5 times the increase in worldwide revenue from sales of NEXUS™ products during the 12-month period ending approximately two years after the Acquisition Date compared with the 12-month period leading up to the Acquisition Date. Any amount payable will be determined following the second anniversary of the Acquisition Date and paid in accordance with the Agreement. The contingent consideration had an initial acquisition-date fair value of $21.8 million, including a $4.4 million measurement period adjustment as described below, and increased to $24.7 million as of September 30, 2026. The liability was included in Non-current contingent consideration in the Condensed Consolidated Balance Sheets. See Note 5 – “Financial Instruments” for additional information regarding the valuation of the contingent consideration.
We incurred acquisition transaction, diligence, and integration costs of $2.0 million and $14.5 million during the three and nine months ended September 30, 2026, respectively, including $10.2 million of transaction bonuses recognized during the nine months ended September 30, 2026 in connection with the Endospan Acquisition. These costs were accounted for separately from the business combination, expensed as incurred, and included in General, administrative, and marketing expenses and Research and development expenses in the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income.

We recorded preliminary goodwill of $94.7 million, of which none is expected to be deductible for income tax purposes. Goodwill represents the excess of the consideration transferred over the fair value of the identifiable net assets acquired and primarily reflects expected synergies from the Endospan Acquisition and the value of the assembled workforce. The entire balance of acquired goodwill was assigned to our Medical Devices segment. During the three months ended September 30, 2026, measurement-period adjustments decreased preliminary goodwill by approximately $4.5 million, primarily reflecting revisions to the acquisition-date fair values of contingent consideration and identifiable intangible assets and adjustments to the consideration transferred and other net assets acquired. In addition, the acquisition-date fair values of contingent consideration and identifiable intangible assets remain preliminary as we complete our valuation analyses and related review procedures. The preliminary purchase price allocation is based on information available as of September 30, 2026 and remains subject to adjustment, primarily related to other closing adjustments and income tax matters. The measurement period will not exceed one year from the Acquisition Date, as additional information about facts and circumstances existing at the Acquisition Date becomes available. Measurement-period adjustments will be recognized as if the accounting had been completed at the Acquisition Date, including the related effect on depreciation, amortization, and other income-statement amounts.
The preliminary purchase consideration allocated as of the Acquisition Date consisted of the following (in thousands):
Consideration
     Cash consideration$107,042 
     Debt obligations settled in cash by Artivion14,206 
     Noncash settlement of preexisting relationships and Endospan Option (1)
31,000 
     Contingent consideration 21,782 
          Fair value of total consideration transferred $174,030 
Purchase Price Allocation
     Cash and cash equivalents $4,363 
     Intangible assets, net 72,400 
     Net other assets/liabilities acquired 2,601 
     Goodwill 94,666 
          Net assets acquired$174,030 
(1) Represents amounts included in consideration transferred in connection with the settlement or exercise of preexisting contractual relationships between Artivion and Endospan, consisting of the acquisition-date fair value of the effective settlement of the Endospan Loans ($24.9 million) and the Buyer Deposits ($3.0 million), and the carrying amount of the Endospan Option ($3.1 million) upon exercise. See “Settlement of Preexisting Relationships and Endospan Option” below.

Identifiable Intangible Assets

The following table presents details of the identifiable intangible assets recognized in connection with the Endospan Acquisition (in thousands, except estimated useful life):

Identifiable Intangible AssetsFair ValueEstimated Useful Life (Years)
Developed technology$31,800 10.0
Trade name1,700 15.0
In-process research and development (“IPR&D”)38,900 Indefinite
Total identifiable intangible assets$72,400 
The weighted-average amortization period for the acquired amortizable intangible assets was approximately 10.3 years. The IPR&D asset is considered indefinite-lived and is not amortized until the underlying project is completed or abandoned.

Fair Value Measurements

The acquisition-date fair values of the identifiable intangible assets were estimated using income-based valuation techniques. Significant assumptions included forecasted revenues and operating results, expected commercialization and regulatory timelines, estimated useful lives, and discount rates. The acquisition-date fair value of the contingent consideration was estimated using a Monte Carlo simulation based primarily on forecasted NEXUS™ revenues, revenue volatility, discount rates, credit risk, and the expected timing of payment.

These fair value measurements were based on significant unobservable inputs and were classified as Level 3 measurements. See Note 5 – “Financial Instruments” for additional information regarding the subsequent measurement of contingent consideration.
Settlement of Preexisting Relationships and Endospan Option

Artivion and Endospan entered into a loan agreement (the “Endospan Loan”), dated September 11, 2019, by which Artivion funded Endospan a secured loan of $15.0 million and also an amendment to the Endospan Loan, dated July 1, 2024, by which we funded Endospan additional secured loans of $25.0 million (the “Additional Endospan Loan” and, together with the Endospan Loan, the “Endospan Loans”). We elected the fair value option for recording the Endospan Loans. Immediately before the effective settlement of the Endospan Loans, we recognized a settlement gain of $4.5 million in Other expense (income), net in the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income to adjust the Endospan Loans to their acquisition-date fair value and included the $24.9 million fair value of the Endospan Loans as part of the fair value of the total consideration transferred.

Before the Endospan Acquisition, we had prepaid $3.0 million in advance deposits relating to certain purchase orders with Endospan. In connection with the settlement of this preexisting contractual relationship, the fair value of the settled relationship, which approximated its carrying amount, was included as part of the fair value of the total consideration transferred, and no settlement gain or loss was recognized.

In connection with the Agreement, we had recognized the value of the option right (“Endospan Option”) of $3.1 million, which was reflected in Other current assets in the Condensed Consolidated Balance Sheets. In connection with the exercise of the option to effect the Endospan Acquisition, the carrying amount of the Endospan Option was included as part of the fair value of the total consideration transferred, and no gain or loss was recognized.

Accordingly, the amounts associated with the Endospan Loans, advance deposits, and Endospan Option were included in the calculation of consideration transferred but were not recognized as acquired assets because they represented the settlement or exercise of preexisting contractual relationships accounted for separately from the business combination.