ARTIVION INC
For the period ended Mar 31, 2025. Filed May 6, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 6, 2025
AORT$20.21-20.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0000784199-24-000243
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-06.
0000784199-25-000074
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 121 previous paragraphs and 100 current paragraphs.
46 unchanged; 36 reworded; 18 added; 39 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 11 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
($ in thousands)
Current report
Revenues from the sales of aortic stent grafts increased 14% for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. This increase was primarily due to an increase in the volume of units sold, partially offset by the effect of foreign exchange rates.
Current report
Revenues from the sales of On-X products increased 10% for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. This increase was primarily due to an increase in the volume of units sold in North America and EMEA as well as an increase in average sales price, partially offset by the effect of foreign exchange rates.
Current report
Revenues from tissue processing decreased 23% for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The decrease was primarily due to a backlog of tissues to be released for shipments as a result of the 2024 cybersecurity incident which is expected to improve throughout the remainder of 2025.
Current report
Gross margin increased 1% for the three months ended March 31, 2025, respectively, as compared to the three months ended March 31, 2024.
Current report
General, administrative, and marketing expenses increased 78% for the three months ended March 31, 2025, respectively, as compared to the three months ended March 31, 2024, which includes the impact of the Ascyrus contingent consideration fair value adjustment gain of $2.8 million and $17.5 million for the three months ended March 31, 2025 and 2024, respectively. The remaining general, administrative, and marketing expenses for the three months ended March 31, 2025 increased $9.4 million as a result of $4.5 million of expenses associated with the 2024 cybersecurity incident as well as higher non-cash stock compensation expenses.
Current report
Interest expense was $7.7 million for the three months ended March 31, 2025, as compared to $7.8 million for the three months ended March 31, 2024. Interest expense for the three months ended March 31, 2025 decreased slightly due to lower variable interest rates on our credit facilities.
Current report
Income Tax Expense
Current report
Our effective income tax rate was a benefit of 78% and an expense of 41% for the three months ended March 31, 2025 and 2024, respectively. Our income tax rate was primarily impacted by state income taxes, non-deductible executive compensation, and changes in our valuation allowance against our net deferred tax assets, partially offset by excess tax deductions on stock-based compensation.
Current report
Our primary uses of liquidity include the payment of operating expenses, capital expenditures, servicing of debt and the funding of acquisitions or other collaborative arrangements. Our primary sources of funding are operating cash flows and borrowings under our debt facilities. As of March 31, 2025 we had approximately $320.1 million of total principle indebtedness outstanding.
Current report
On December 23, 2024 in accordance with an Indenture (the “Indenture”) dated June 23, 2020, between Artivion, Inc. (formerly CryoLife, Inc.) and U.S. Bank Trust Company, National Association, as Trustee, relating to our Convertible Senior Notes, we gave notice to the Trustee, the Conversion Agent, and the Holders (each as defined in the Indenture) that we elected to change the “Default Settlement Method” (as defined in the Indenture) for conversions of the Convertible Senior Notes to “Physical Settlement” (as defined in the Indenture). As a result, all conversions after the date of the notice will be settled by delivery of shares of our common stock using Physical Settlement in accordance with the Indenture.
Current report
Cash Flows
Current report
Net cash used in operating activities increased $11.5 million during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, primarily due to professional fees related to the 2024 cybersecurity incident, an increase in liabilities being paid during the quarter that had been delayed at the end of 2024 due to the cybersecurity incident, and a change in the timing of interest payments on our credit facilities executed in January 2024. We expect to continue to incur professional fees in the remainder of 2025 in connection with enhanced ongoing cybersecurity services.
Current report
As of March 31, 2025 there have been no material changes outside of the ordinary course of business with respect to our material cash requirements for our contractual and other obligations as set forth in the table included in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024.
Current report
Off-Balance Sheet Commitments and Arrangements
Current report
As of March 31, 2025 there have been no material changes to our indemnification obligations as disclosed in Part II, Item 8, Note 11– “Commitments and Contingencies” in our Annual Report on Form 10-K for the year ended December 31, 2024. For information concerning contingencies, see Note 8– “Commitments and Contingencies” in Part I, Item 1 of this Form 10-Q.
Current report
Recent Accounting Pronouncements
Current report
For a discussion of recent accounting pronouncements, see Note 1– “Basis of Presentation and Summary of Significant Accounting Policies” in Part I, Item 1 of this Form 10-Q.
Removed paragraphs (39)
Previous report
New Accounting Pronouncements
Previous report
See Note 1 of “Notes to Condensed Consolidated Financial Statements” identified in Part I, Item I of this Form 10-Q for further discussion of new accounting standards that have been adopted.
Previous report
(Tables in thousands, except percentages)
Previous report
Revenues increased 9% and 12% for the three and nine months ended September 30, 2024, respectively, as compared to the three and nine months ended September 30, 2023. The increase in revenues for the three and nine months ended September 30, 2024 was due to an increase in revenues from aortic stent grafts, On-X products, surgical sealants, and preservation services, partially offset by a decrease in revenues from other products.
Previous report
Constant currency revenues increased 10% and 12% for the three and nine months ended September 30, 2024, respectively, as compared to the three and nine months ended September 30, 2023. See “Non-GAAP Measures of Financial Performance” below for further background on our non-GAAP measures.
Previous report
Revenues from the sales of aortic stent grafts increased 12% for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. This increase was primarily due to an increase in the volume of units sold and, to a lesser extent, an increase in average sales prices, partially offset by the effect of foreign exchange rates.
Previous report
Revenues from the sales of aortic stent grafts increased 16% for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. This increase was primarily due to an increase in the volume of units sold and, to a lesser extent, an increase in average sales prices, and the effect of foreign exchange rates.
Previous report
Revenues from the sales of On-X products increased 15% for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. This increase was primarily due to an increase in the volume of units sold and, to a lesser extent, an increase in average sales prices, partially offset by the effect of foreign exchange rates.
Previous report
Revenues from the sales of On-X products increased 14% for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. This increase was primarily due to an increase in the volume of units sold and, to a lesser extent, an increase in average sales prices.
Previous report
Revenues from the sales of surgical sealants increased 9% for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. This increase was primarily due to an increase in the volume of milliliters sold and, to a lesser extent, an increase in average sales prices.
Previous report
On July 28, 2021 we entered into an asset purchase agreement, TMSA, and other ancillary agreements related to the sale of PerClot, a polysaccharide hemostatic agent used in surgery, to a subsidiary of Baxter International, Inc. (“Baxter”), and an agreement to terminate all of our material agreements with Starch Medical, Inc. (“SMI”) related to PerClot (collectively the “Baxter Transaction”). On May 23, 2023 the US Food and Drug Administration granted Premarket Approval (“PMA”) of PerClot for use to control bleeding in certain open and laparoscopic surgical procedures. Pursuant to the terms of the TMSA of the Baxter Transaction, we transferred the ownership of the PMA to Baxter following approval and began manufacturing and supplying PerClot for Baxter for a period of 21 months, subject to short-term renewal provisions.
Previous report
Revenues from tissue processing increased 11% for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. This increase was primarily due to an increase in average sales prices, and, to a lesser extent, a change in the mix of tissues shipped.
Previous report
The increase in the cost of products for the nine months ended September 30, 2024 was primarily due to an increase in the volume of all products shipped and the cost of certain aortic stent grafts and other products shipped, as compared to the nine months ended September 30, 2023.
Previous report
Gross margin increased 8% and 11% for the three and nine months ended September 30, 2024, respectively, as compared to the three and nine months ended September 30, 2023.
Previous report
The increase in gross margin for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, was due to an increase in the volume and favorable pricing of certain aortic stent grafts, surgical sealants, On-X products, and tissues shipped during the nine months ended September 30, 2024. This increase was partially offset by an increase in the cost of certain aortic stent grafts and certain tissues shipped as well as unfavorable geography mix of On-X products and certain aortic stent grafts shipped during the nine months ended September 30, 2024. Gross margin as a percentage of total revenues decreased for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. Gross margin as a percentage of total revenues was negatively impacted by an increase in the cost of certain aortic stent grafts and certain tissues as well as unfavorable geography mix of On-X products shipped, partially offset by favorable product mix of certain aortic stent grafts shipped and favorable pricing of certain tissues, certain aortic stent grafts, On-X products, and surgical sealants shipped during the nine months ended September 30, 2024.
Previous report
General, administrative, and marketing expenses decreased 2% and 18% for the three and nine months ended September 30, 2024, respectively, as compared to the three and nine months ended September 30, 2023. The decrease in General, administrative, and marketing expenses for the three and nine months ended September 30, 2024 was primarily due to a decrease in business development expense, partially offset by an increase in personnel-related costs.
Previous report
General, administrative, and marketing expenses included $3.4 million of business development expense and $11.9 million of business development income for the three and nine months ended September 30, 2024, respectively, as compared to $6.4 million and $22.5 million of business development expense for the three and nine months ended September 30, 2023, respectively. We incurred $3.5 million of business development expense and $12.2 million of business development income during the three and nine months ended September 30, 2024, respectively, related to the fair value adjustments for the Ascyrus contingent consideration, as compared to $6.2 million and $21.9 million of business development expense during the three and nine months ended September 30, 2023, respectively. The reduction in the fair value for the nine months ended September 30, 2024 was primarily due to an increase in the credit risk spread resulting from the change in the inputs related to the newly issued Credit Facilities further discussed in Part I, Item 1, Note 9 of the “Notes to Condensed Consolidated Financial Statements.”
Previous report
Gain from Sale of Non-Financial Assets
Previous report
Gain from sale of non-financial assets for the nine months ended September 30, 2023 consisted of the net $14.3 million received as part of the Baxter Transaction upon receipt of the PerClot PMA in May 2023.
Previous report
Interest expense was $8.4 million and $24.5 million for the three and nine months ended September 30, 2024, respectively, as compared to $6.6 million and $19.1 million for the three and nine months ended September 30, 2023, respectively. Interest expense for the three and nine months ended September 30, 2024 and 2023 primarily relates to interest on debt. The increase in interest expense for the three and nine months ended September 30, 2024, as compared to the three and nine months ended September 30, 2023, was primarily due to an increase in the interest rate on the Credit Facilities as a result of our debt refinancing in January 2024.
Previous report
Earnings
Previous report
(Table in thousands, except per share data)
Previous report
We incurred a loss before income taxes for the three months ended September 30, 2024 and 2023. We incurred income before income taxes for the nine months ended September 30, 2024, as compared to a loss before income taxes for the nine months ended September 30, 2023. The loss before income taxes for the three months ended September 30, 2024 was impacted by certain operating expenses to support revenue expansion, interest expense related to the Credit Facilities, and expenses related to the fair value adjustment of our financial instruments. The income before income taxes for the nine months ended September 30, 2024 was positively impacted by income related to the fair value adjustments of our financial instruments, partially offset by certain operating expenses to support revenue expansion, debt extinguishment costs, and interest expense related to the Credit Facilities. The loss before income taxes for the three and nine months ended September 30, 2023 was impacted by expenses related to the fair value adjustments of our financial instruments, certain operating expenses to support revenue expansion, and interest expense related to our previously existing credit agreement.
Previous report
Our effective income tax rate was an expense of 81% and 66% for the three and nine months ended September 30, 2024, respectively, as compared to an expense of 4% and 27% for the three and nine months ended September 30, 2023, respectively. The change in the tax rate for the three and nine months ended September 30, 2024 was primarily due to changes in anticipated full year pre-tax operating results, profit mix among jurisdictions, valuation allowance against our net deferred tax assets, non-deductible executive compensation, the foreign derived intangible income deduction, the research and development tax credit, changes in our uncertain tax position liabilities, and tax-effected impact of stock based compensation, as compared to the three and nine months ended September 30, 2023.
Previous report
We incurred a net loss and a diluted loss per common share for the three months ended September 30, 2024 and 2023. Net loss and diluted loss per common share for the three months ended September 30, 2024 was primarily due to loss before income taxes, as discussed above. We incurred net income and diluted income per common share for the nine months ended September 30, 2024, as compared to a net loss and diluted loss per common share for the nine months ended September 30, 2023. Net income and diluted income per common share for the nine months ended September 30, 2024 was primarily due to income before income taxes, as discussed above. Net loss and diluted loss per common share for the nine months ended September 30, 2023 was primarily due to loss before income taxes, as discussed above.
Previous report
Net Working Capital
Previous report
As of September 30, 2024 net working capital (current assets of $288.0 million less current liabilities of $152.8 million) was $135.2 million, with a current ratio (current assets divided by current liabilities) of 2 to 1, as compared to net working capital of $222.8 million and a current ratio of 5 to 1 at December 31, 2023. The decrease in current ratio as of September 30, 2024, as compared to December 31, 2023, was primarily due to an increase in current portion of long-term debt. This increase was driven by the reclassification of the Convertible Senior Notes to current liabilities, which are scheduled to mature on July 1, 2025. We may use the proceeds from the Delayed Draw Term Loan Facility, as described in the Significant Sources and Uses of Liquidity section below, to fund the repurchase or repayment of the Convertible Senior Notes.
Previous report
Overall Liquidity and Capital Resources
Previous report
Our primary cash requirements for the nine months ended September 30, 2024 were for the payoff of our previously existing credit agreement, debt issuance costs and interest payments under our Credit Facilities (defined below), interest payments under our Convertible Senior Notes (defined below), general working capital needs, and capital expenditures for facilities and equipment.
Previous report
We paid $6.5 million of debt issuance costs related to the Initial Term Loan Facility which are included in Long-term debt on the Condensed Consolidated Balance Sheets as of September 30, 2024 and amortized, thereafter, over the life of the Initial Term Loan Facility. We paid $3.7 million of debt issuance costs related to the Delayed Draw Term Loan Facility and Revolving Credit Facility which are included in Other long-term assets on the Condensed Consolidated Balance Sheets as of September 30, 2024.
Previous report
We recognized $7.1 million and $19.8 million of interest expense on the Credit Facilities for the three and nine months ended September 30, 2024, respectively, of which $358,000 and $997,000 represent non-cash amortization of debt issuance costs for the three and nine months ended September 30, 2024, respectively. There was approximately $5.7 million of unamortized debt issuance costs related to the Initial Term Loan Facility as of September 30, 2024.
Previous report
The proceeds of the initial borrowings were used along with cash on hand to pay off our previously existing credit agreement, dated as of December 1, 2017, and pay related fees and expenses. As a result of this transaction, we recorded a loss on extinguishment of debt of $3.7 million during the nine months ended September 30, 2024 on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). See Part I, Item 1, Note 9 of the “Notes to Condensed Consolidated Financial Statements” for further discussion of our new Ares Credit Agreement.
Previous report
Holders of the Convertible Senior Notes may convert their notes at their option at any time prior to January 1, 2025 but only under the following circumstances: (i) during any calendar quarter commencing after the calendar quarter ending on September 30, 2020 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (ii) during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; (iii) we give a notice of redemption with respect to any or all of the notes, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (iv) upon the occurrence of specified corporate events. On or after January 1, 2025 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their notes at any time, regardless of the foregoing circumstances.
Previous report
Net cash provided by operating activities was $12.1 million and $8.0 million for the nine months ended September 30, 2024 and 2023, respectively.
Previous report
We use the indirect method to prepare our cash flow statement and, accordingly, the operating cash flows are based on our net income, which is then adjusted to remove non-cash items, items classified as investing and financing cash flows, and changes in operating assets and liabilities from the prior year end. For the nine months ended September 30, 2024 these non-cash items primarily included $17.9 million of depreciation and amortization expenses, $12.2 million of fair value adjustments of financial instruments, $11.5 million of non-cash compensation, $5.9 million of non-cash lease expenses, $4.2 million of deferred income tax changes, $3.7 million of loss on extinguishment of debt, and $2.9 million of write-down of inventories and deferred preservation costs.
Previous report
Our working capital needs, or changes in operating assets and liabilities, also affected cash from operations. For the nine months ended September 30, 2024 these included the unfavorable effect of $5.2 million due to timing differences between the recording of accounts payable, accrued expenses, and other liabilities, and the payment of cash, $4.8 million due to an increase in inventory balances and deferred preservation costs, $4.8 million due to an increase in prepaid expenses and other assets, and the unfavorable effect of $3.4 million due to the timing differences between recording receivables and the receipt of cash.
Previous report
Our short-term debt obligations and interest payments include $100.3 million of scheduled principal payments and $4.3 million in anticipated interest payments related to our Convertible Senior Notes and other governmental loans. Our long-term debt obligations and interest payments include $220.0 million of scheduled principal payments and $112.9 million in anticipated interest payments related to our Initial Term Loan Facility and Revolving Credit Facility.
Previous report
We have contingent payment obligations that include up to $100.0 million to be paid to the former shareholders of Ascyrus upon the achievement of certain milestones. As part of the transaction with Baxter, we may be required to pay up to $3.0 million if certain milestones are met. Pursuant to the Amended and Restated Loan Agreement with Endospan Ltd. (“Endospan”) dated July 1, 2024, we anticipate making the remaining $8.0 million tranche payment subject to Endospan’s achievement of milestones related to its pursuit of regulatory approval for the NEXUS products.
Previous report
Our operating and finance lease obligations result from the lease of land and buildings that comprise our corporate headquarters and our various manufacturing facilities; leases related to additional manufacturing, office, and warehouse space; leases on company vehicles; and leases on a variety of office and other equipment.
Reworded paragraphs (36)
Previous wording
Artivion, Inc. (“Artivion,” the “Company,” “we,” or “us”), is a leader in the manufacturing, processing, and distribution of medical devices and implantable human tissues used in cardiac and vascular surgical procedures for patients with aortic disease. We have four major product families: aortic stent grafts, On-X® mechanical heart valves and related surgical products (“On-X” products), surgical sealants, and implantable cardiac and vascular human tissues. Aortic stent grafts include aortic arch stent grafts, abdominal stent grafts, and synthetic vascular grafts. Aortic arch stent grafts include our E-vita®Open NEO, E-vita Open Plus, the Ascyrus Medical Dissection Stent (“AMDS”) hybrid prosthesis, the NEXUS® endovascular stent graft system (“NEXUS”), the NEXUS DUOTM aortic arch stent graft (“NEXUS DUO”), and E-vita Thoracic 3G products. Abdominal stent grafts include our E-xtra Design Engineering (including Artivex TM), E-nside TM, E-tegra TM, E-ventus TM BX, and E-liac TM products. Surgical sealants include our BioGlue®Surgical Adhesive products (“BioGlue”). In addition to these four major product families, we also sell or distribute PhotoFix® bovine surgical patches (“PhotoFix”). We began to manufacture and supply PerClot® hemostatic powder (“PerClot”) during the second quarter of 2023 (as part of the Transitional Manufacturing and Supply Agreement (“TMSA”) of the Baxter Transaction, described below).
Current wording
Artivion, Inc. (“Artivion,” the “Company,” “we,” or “us”), is a leader in the manufacturing, processing, and distribution of medical devices and implantable human tissues used in cardiac and vascular surgical procedures for patients with aortic disease. We have four major product families: aortic stent grafts, On-X® mechanical heart valves and related surgical products (“On-X” products), surgical sealants, and implantable cardiac and vascular human tissues. Aortic stent grafts include aortic arch stent grafts, abdominal stent grafts, and synthetic vascular grafts. Aortic arch stent grafts include our E-vita® Open NEO, E-vita Open Plus, AMDSTM, the NEXUS ONETM, NEXUS DUOTM, and NEXUS TRETM aortic arch stent graft systems (the “NEXUS family of products”), and E-vita Thoracic 3G. Abdominal stent grafts include our E-xtra Design Engineering, E-nside TM, Artivex TM, E-tegra TM, E-ventus TM BX, Tuva TMBX, and E-liac TM products. Surgical sealants include BioGlue Surgical Adhesive (“BioGlue”) products. In addition to these four major product families, we sell or distribute PhotoFix bovine surgical patches (“PhotoFix”). We began to manufacture and supply PerClot® hemostatic powder (“PerClot”) during the second quarter of 2023 (as part of our Transitional Manufacturing and Supply Agreement with Baxter International, Inc.).
Previous wording
We reported quarterly revenues of $95.8 million for the three months ended September 30, 2024, a 9% increase from the three months ended September 30, 2023. The increase in revenues for the three months ended September 30, 2024 was due to an increase in revenues from aortic stent grafts, On-X products, surgical sealants, and preservation services, partially offset by a decrease in revenues from other products. Constant currency revenues, as defined below, increased 10% for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023.
Current wording
We reported quarterly revenues of $99.0 million for the three months ended March 31, 2025, a 2% increase from the three months ended March 31, 2024. The increase in revenues for the three months ended March 31, 2025 was due to an increase in revenues from aortic stent grafts, On-X products, surgical sealants, and other products, partially offset by a decrease in revenues from preservation services. Constant currency revenues, as defined below, increased 4% for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024.
Previous wording
See the “Results of Operations” section below for additional analysis of the three and nine months ended September 30, 2024.
Current wording
See the “Results of Operations” section below for additional analysis of the three months ended March 31, 2025.
Previous wording
Revenues from tissue processing increased 2% for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. This increase was primarily due to an increase in average sales prices, partially offset by a decrease in certain tissues shipped.
Current wording
Revenues increased 2% for the three months ended March 31, 2025, respectively, as compared to the three months ended March 31, 2024. The increase in revenues for the three months ended March 31, 2025 was due to an increase in revenues from all products, partially offset by a decrease in revenues from preservation services.
Previous wording
A detailed discussion of the changes in product revenues and preservation services revenues for the three and nine months ended September 30, 2024 is presented below.
Current wording
A detailed discussion of the changes in product revenues and preservation services revenues for the three months ended March 31, 2025 is presented below.
Previous wording
Revenues from products increased 12% for both the three and nine months ended September 30, 2024, as compared to the three and nine months ended September 30, 2023. The increase for the three and nine months ended September 30, 2024 was due to an increase in revenues from aortic stent grafts, On-X products, and surgical sealants, partially offset by a decrease in revenues from other products. A discussion of the changes in product revenues for aortic stent grafts, On-X products, surgical sealants, and other product revenues is presented below.
Current wording
Revenues from products increased 11% for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The increase for the three months ended March 31, 2025 was due to an increase in revenues from all products. A discussion of the changes in product revenues for aortic stent grafts, On-X products, surgical sealants, and other product revenues is presented below.
Previous wording
Sales of certain products through our direct sales force and distributors across Europe and various other countries are denominated in a variety of currencies including Euros, Brazilian Reals, Polish Zlotys, British Pounds, Canadian Dollars, and Swiss Francs with a concentration denominated in Euros. Each currency is subject to exchange rate fluctuations. For the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, the US Dollar strengthened in comparison to major currencies, resulting in revenue decreases when these foreign currency denominated transactions were translated into US Dollars. For the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, the US Dollar weakened in comparison to major currencies, resulting in revenue increases when these foreign currency denominated transactions were translated into US Dollars. Future changes in these exchange rates could have a material, adverse effect on our revenues denominated in these currencies. Additionally, our sales to many distributors around the world are denominated in US Dollars, and although these sales are not directly impacted by currency exchange rates, we believe that some of our distributors may delay or reduce purchases of products in US Dollars depending on the relative price of these goods in their local currencies.
Current wording
Sales of certain products through our direct sales force and distributors across Europe and various other countries are denominated in a variety of currencies including Euros, Brazilian Reals, Polish Zlotys, British Pounds, Canadian Dollars, and Swiss Francs with a concentration denominated in Euros. Each currency is subject to exchange rate fluctuations. For the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, the US Dollar strengthenedin comparison to major currencies, resulting in revenue decreases when these foreign currency denominated transactions were translated into US Dollars. Future changes in these exchange rates could have a material, adverse effect on our revenues denominated in these currencies. Additionally, our sales to many distributors around the world are denominated in US Dollars, and although these sales are not directly impacted by currency exchange rates, we believe that some of our distributors may delay or reduce purchases of products in US Dollars depending on the relative price of these goods in their local currencies.
Previous wording
Aortic stent grafts include aortic arch stent grafts, abdominal stent grafts, synthetic vascular grafts, and original equipment manufacturing (“OEM”) aortic stent graft products. Aortic arch stent grafts include E-vita Open NEO, E-vita Open Plus, AMDS, the NEXUS Products, E-vita Thoracic 3G, and Artivex products. Abdominal stent grafts include E-xtra Design Engineering, E-nside, E-tegra, E-ventus BX, and E-liac products. Aortic stent grafts are used in endovascular and open vascular surgery for the treatment of complex aortic arch, thoracic, and abdominal aortic diseases. Our aortic stent grafts are primarily distributed in international markets.
Current wording
Aortic stent grafts include aortic arch stent grafts, abdominal stent grafts, and synthetic vascular grafts, and original equipment manufacturing (“OEM”) aortic stent graft products. Aortic arch stent grafts include our E-vita Open NEO, E-vita Open Plus, AMDS, the NEXUS family of products, and E-vita Thoracic 3G products. Abdominal stent grafts include our E-xtra Design Engineering, E-nside, Artivex, E-tegra, E-ventus BX, Tuva BX, and E-liac products. Aortic stent grafts are used in endovascular and open vascular surgery for the treatment of complex aortic arch, thoracic, and abdominal aortic diseases. Our aortic stent grafts are primarily distributed in international markets.
Previous wording
Constant currency revenues from the sales of aortic stent grafts increased 13% and 15% for the three and nine months ended September 30, 2024, respectively, as compared to the three and nine months ended September 30, 2023. Revenues for the three and nine months ended September 30, 2024 increased primarily in Europe, the Middle East, and Africa (collectively, “EMEA”) and, to a lesser extent, in Latin America and Asia Pacific (“APAC”). The revenue increase in EMEA for the three and nine months ended September 30, 2024 was primarily due to an increase in buying patterns in direct (to hospitals) markets.
Current wording
Constant currency revenues from the sales of aortic stent grafts increased 19% for the three months ended March 31, 2025, respectively, as compared to the three months ended March 31, 2024. Revenues for the three months ended March 31, 2025 increased in all geographies, with the most significant increase in Europe, the Middle East, and Africa (collectively, “EMEA”). The revenue increase in EMEA for the three months ended March 31, 2025 was primarily due to an increase in volume of higher priced products within the aortic stent graft product line in direct (to hospitals) markets.
Previous wording
On-X products include the On-X aortic and mitral heart valves and the On-X ascending aortic prosthesis (“AAP”) for heart valve replacement. Revenues from the sales of On-X products include revenues from the distribution of CarbonAid® CO 2 diffusion catheters and from the sale of Chord-X® ePTFE sutures for mitral chordal replacement. On-X products revenue also includes revenue generated from pyrolytic carbon coating services for OEM customers.
Current wording
The On-X products include the On-X aortic and mitral heart valves and the On-X ascending aortic prosthesis (“AAP”) for heart valve replacement. Revenues from the sales of On-X products include revenues from the distribution of CarbonAid® CO 2 diffusion catheters and from the sale of Chord-X® ePTFE sutures for mitral chordal replacement. On-X product revenue also includes revenue generated from pyrolytic carbon coating services for OEM customers.
Previous wording
Constant currency revenues from the sales of On-X products increased 15% and 14% for the three and nine months ended September 30, 2024, respectively, as compared to the three and nine months ended September 30, 2023. Revenues for the three months ended September 30, 2024 increased primarily in North America, EMEA, and APAC, with the most significant increase in North America. Revenues for the nine months ended September 30, 2024 increased in all geographies, with the most significant increase in North America. The increase in revenues in North America for the three and nine months ended September 30, 2024 was impacted by recent gains in the market share.
Current wording
Constant currency revenues from the sales of On-X products increased 11% for the three months ended March 31, 2025, respectively, as compared to the three months ended March 31, 2024. Revenues for the three months ended March 31, 2025 increased primarily in North America and EMEA, partially offset by a decrease in Asia Pacific (“APAC”). The increase in revenues in North America for the three months ended March 31, 2025 was impacted by recent gains in the market share. The increase in revenues from EMEA for the three months ended March 31, 2025 was primarily due to an increase in unit sales in indirect markets. The decrease in revenues in APAC for the three months ended March 31, 2025 was primarily due to a decrease in unit sales as a result of customer buying patterns.
Previous wording
Domestic revenues from the sales of On-X products accounted for 59% and 60% of total On-X revenues for the three and nine months ended September 30, 2024, respectively, as compared to 61% and 60% of total On-X revenues for the three and nine months ended September 30, 2023, respectively.
Current wording
Domestic revenues from the sales of On-X products accounted for 65% of total On-X revenues for the three months ended March 31, 2025, as compared to 62% for the three months ended March 31, 2024.
Previous wording
Revenues from the sales of surgical sealants increased 14% for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. This increase was primarily due to an increase in the volume of milliliters sold and, to a lesser extent, an increase in average sales prices.
Current wording
Revenues from the sales of surgical sealants increased 7% for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. This increase was primarily due to an increase in the volume of milliliters sold and, to a lesser extent, an increase in average sales prices, partially offset by the effect of foreign exchange rates.
Previous wording
Constant currency revenues from the sales of surgical sealants increased 14% and 9% for the three and nine months ended September 30, 2024, respectively, as compared to the three and nine months ended September 30, 2023. The increase in revenues for the three months ended September 30, 2024 was due to revenue increases in all geographies, with the most significant increase in APAC. The increase in revenues in APAC for the three months ended September 30, 2024 was impacted by customer buying patterns in certain markets. The increase in revenues for the nine months ended September 30, 2024 was due to revenue increases in all geographies, with the most significant increase in EMEA. The increase in revenues in EMEA for the nine months ended September 30, 2024 was primarily due to an increase in buying patterns in direct markets.
Current wording
Constant currency revenues from the sales of surgical sealants increased 9% for the three months ended March 31, 2025, respectively, as compared to the three months ended March 31, 2024. The increase in revenues for the three months ended March 31, 2025 was due to revenue increases in all geographies, with the most significant increase in LATAM. The increase in revenues in LATAM for the three months ended March 31, 2025 was primarily due to an increase in unit sales in indirect markets.
Previous wording
Domestic revenues from the sales of surgical sealants accounted for 44% and 47% of total surgical sealant revenues for the three and nine months ended September 30, 2024, respectively, as compared to 48% and 49% of total surgical sealant revenues for the three and nine months ended September 30, 2023, respectively.
Current wording
Domestic revenues from the sales of surgical sealants accounted for 49% of total surgical sealant revenues for the three months ended March 31, 2025, as compared to 51% of total surgical sealant revenues for the three months ended March 31, 2024.
Previous wording
Other revenues are comprised of revenues from PhotoFix and PerClot (as part of the TMSA of the Baxter Transaction described below).
Current wording
Other revenues are comprised of revenues from PhotoFix and PerClot.
Previous wording
Other revenues decreased 17% and 16% for the three and nine months ended September 30, 2024, respectively, as compared to the three and nine months ended September 30, 2023. The decrease in other revenues for the three and nine months ended September 30, 2024 was primarily due to a decrease in PerClot product revenues as a result of timing of shipments.
Current wording
Other revenues increased 7% for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The increase in other revenues for the three months ended March 31, 2025 was primarily due to an increase in PhotoFix product revenues.
Previous wording
Preservation services include external service revenues from processing cardiac and vascular tissues. Our cardiac valves are primarily used in cardiac replacement and reconstruction surgeries, including the Ross procedure, for patients with endocarditis or congenital heart defects. The majority of our vascular preservation services revenues are related to shipments of saphenous veins, which are mainly used in peripheral vascular reconstruction surgeries to avoid limb amputations. Competition with synthetic product alternatives and the availability of tissues for processing are key factors affecting revenue volume that can fluctuate from quarter to quarter. Our cardiac and vascular tissues are primarily distributed in domestic markets.
Current wording
Preservation services include service revenues from processing cardiac and vascular tissues. Our cardiac valves are primarily used in cardiac replacement and reconstruction surgeries, including the Ross procedure, for patients with endocarditis or congenital heart defects. Our cardiac tissues are primarily distributed in domestic markets. The majority of our vascular preservation services revenues are related to shipments of saphenous veins, which are mainly used in peripheral vascular reconstruction surgeries to avoid limb amputations. Competition with synthetic product alternatives and the availability of tissues for processing are key factors affecting revenue volume that can fluctuate from quarter to quarter. Our vascular tissues are primarily distributed in domestic markets.
Previous wording
We continue to evaluate modifications to our tissue processing procedures in an effort to improve tissue processing throughput, reduce costs, and maintain quality across our tissue processing business. Preservation services revenues, particularly revenues for certain high-demand cardiac tissues, can vary from quarter-to-quarter and year-to-year due to a variety of factors, including quantity and type of incoming tissues, yields of tissue through the preservation process, timing of receipt of donor information, timing of the release of tissues for implant, demand for certain tissue types due to the number and type of procedures being performed, and pressures from competing products or services.
Current wording
We continue to evaluate modifications to our tissue processing procedures in an effort to improve tissue processing throughput and yields, reduce costs, and maintain quality across our tissue processing business. Preservation services revenues, particularly revenues for certain high-demand cardiac tissues, can vary from quarter to quarter and year to year due to a variety of factors, including quantity and type of incoming tissues, yields of tissue through the preservation process, timing of receipt of donor information, timing of the release of tissues for implant, demand for certain tissue types due to the number and type of procedures being performed, and pressures from competing products or services.
Previous wording
Cost of products increased 13% and 17% for the three and nine months ended September 30, 2024, respectively, as compared to the three and nine months ended September 30, 2023. Cost of products for the three and nine months ended September 30, 2024 and 2023 included costs related to aortic stent grafts, On-X products, surgical sealants, and other products.
Current wording
Cost of products increased 6% for the three months ended March 31, 2025, respectively, as compared to the three months ended March 31, 2024. Cost of products for the three months ended March 31, 2025 and 2024 included costs related to aortic stent grafts, On-X products, surgical sealants, and other products.
Previous wording
The increase in the cost of products for the three months ended September 30, 2024 was primarily due to an increase in the volume of all products shipped as well as an increase in the cost of certain aortic stent grafts shipped, as compared to the three months ended September 30, 2023.
Current wording
The increase in cost of products for the three months ended March 31, 2025 was primarily due to an increase in the volume of all products shipped, as compared to the three months ended March 31, 2024.
Previous wording
Cost of preservation services increased 3% and 4% for the three and nine months ended September 30, 2024, respectively, as compared to the three and nine months ended September 30, 2023. Cost of preservation services included costs for cardiac and vascular tissue preservation services.
Current wording
Cost of preservation services decreased 6% for the three months ended March 31, 2025, respectively, as compared to the three months ended March 31, 2024. Cost of preservation services included costs for cardiac and vascular tissue preservation services.
Previous wording
Cost of preservation services for the three and nine months ended September 30, 2024 was impacted by an increase in the cost of certain tissues shipped, partially offset by a decrease in the volume of certain tissues shipped as compared to the three and nine months ended September 30, 2023.
Current wording
The decrease in cost of preservation services for the three months ended March 31, 2025 was primarily due to a decrease in the volume of tissues shipped, partially offset by an increase in cost of tissues shipped, as compared to the three months ended March 31, 2024.
Previous wording
The increase in gross margin for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, was due to an increase in the volume and favorable pricing of surgical sealants, On-X products, certain aortic stent grafts, and tissues shipped during the three months ended September 30, 2024. The gross margin for the three months ended September 30, 2024 was also favorably impacted by a reduction in the cost of On-X products and surgical sealants shipped. This increase was partially offset by an increase in the cost of certain aortic stent grafts and tissues shipped as well as unfavorable geography mix of On-X products during the three months ended September 30, 2024. Gross margin as a percentage of total revenues was flat for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. Gross margin as a percentage of total revenues was positively impacted by favorable product mix of On-X products shipped and favorable pricing of certain tissues shipped, surgical sealants, and On-X products shipped, offset by unfavorable geography mix of On-X products and an increase in the cost of certain aortic stent grafts and tissues shipped during the three months ended September 30, 2024.
Current wording
The increase in gross margin for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, was primarily due to an increase in the volume of all products shipped and the increase in the average sales price of certain products shipped for the three months ended March 31, 2025. The increase was partially offset by a decrease in the volume of tissues shipped, unfavorable cost of tissues shipped, and the unfavorable effect of foreign currency, as compared to the three months ended March 31, 2024. Gross margin as a percentage of total revenues decreased for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. Gross margin as a percentage of total revenues was negatively impacted by an unfavorable mix and cost of tissues shipped, partially offset by favorable product mix of certain products shipped including aortic stent grafts and BioGlue as well as a favorable pricing of certain products during the three months ended March 31, 2025.
Previous wording
Research and development expenses increased 3% for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. Research and development expenses were flat for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. Research and development spending for the three and nine months ended September 30, 2024 was primarily focused on clinical work to gain regulatory approvals for certain aortic stent grafts.
Current wording
Research and development expenses decreased 3% for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. Research and development spending for the three months ended March 31, 2025 was primarily focused on clinical work to gain regulatory approvals for certain aortic stent grafts, and, to a lesser extent, On-X products.
Previous wording
During the nine months ended September 30, 2024 we recorded a loss on extinguishment of debt of $3.7 million in connection with the extinguishment of our previously existing term loan. See Part I, Item 1, Note 9 of the “Notes to Condensed Consolidated Financial Statements” for further discussion of our new credit and guaranty agreement.
Current wording
During the three months ended March 31, 2024 we recorded a loss on extinguishment of debt of $3.7 million in connection with the extinguishment of our previously existing credit facilities. See Part I, Item 1, Note 7 of the “Notes to Condensed Consolidated Financial Statements” for further discussion of our new credit facilities.
Previous wording
Other (income) expense, net was $2.4 million of income and $6,000 of expense for the three and nine months ended September 30, 2024, respectively, as compared to other expense, net of $1.9 million and $5.2 million for the three and nine months ended September 30, 2023, respectively. Other (income) expense, net for the three and nine months ended September 30, 2024 primarily included the realized and unrealized effects of foreign currency gains and losses. Other expense, net for the nine months ended September 30, 2023 primarily included a $5.0 million expense related to a payment to Endospan for achievement of certain milestones related to the NEXUS products.
Current wording
Other (income) expense, net was $3.1 million of income for the three months ended March 31, 2025, as compared to $1.4 million of expense for the three months ended March 31, 2024. Other (income) expense, net for the three months ended March 31, 2025 primarily included a net $2.9 million gain from realized and unrealized effects of foreign currency gains and losses and a $0.3 million gain associated with fair value adjustments to loans issued pursuant to our Endospan agreements. Other expense, net for the three months ended March 31, 2024 primarily included a net $1.4 million loss from realized and unrealized effects of foreign currency gains and losses.
Previous wording
As of September 30, 2024 approximately 38% of our cash and cash equivalents were held in foreign jurisdictions.
Current wording
Our liquidity as of March 31, 2025 consisted of cash and cash equivalents of $37.7 million, unused commitments of $30.0 million under a revolving credit facility and unused commitments of $100.0 million on delayed draw term loan facility (see “Credit Facilities” below). As of March 31, 2025 approximately 57% of our cash and cash equivalents were held in foreign jurisdictions. Our practice is to maintain sufficient liquidity through cash from operations and our revolving credit facility to mitigate the impacts of any adverse financial market conditions on our operations. We believe that cash generated from operations, together with amounts available under our Term Loan Facilities, as defined below, will be sufficient to meet working capital requirements and anticipated capital expenditures, and other strategic uses of cash, if any, and debt payments, if any, over the next twelve months.
Previous wording
We believe our cash from operations and existing cash and cash equivalents will enable us to meet our current operational liquidity needs for at least the next twelve months. Our future cash requirements are expected to include interest payments under our Initial Term Loan Facility, Revolving Credit Facility, and Convertible Senior Notes (as those are described in “Significant Sources and Uses of Liquidity” section below), expenditures for clinical trials, research and development expenditures, general working capital needs, capital expenditures, and other corporate purposes, and may include cash to fund business development activities including obligations in the agreements related to the acquisition of Ascyrus. These items may have a significant effect on our future cash flows during the next twelve months. Subject to the terms of our Initial Term Loan Agreement, we may seek additional borrowing capacity or financing, pursuant to our current or any future shelf registration statement, for general corporate purposes, or to fund other future cash requirements. If we undertake any further significant business development activity, we may need to finance such activities by obtaining additional debt financing or using a registration statement to sell equity securities. There can be no assurance that we will be able to obtain any additional debt or equity financing at the time needed or that such financing will be available on terms that are favorable or acceptable to us.
Current wording
Our future cash requirements are expected to include interest payments under our credit facilities, expenditures for clinical trials, research and development expenditures, general working capital needs, capital expenditures, other corporate purposes and may include cash to fund business development activities including obligations pursuant to arrangements with Endopsan and the acquisition of Ascyrus. These items may have a significant effect on our future cash flows during the next twelve months. Subject to the terms of our credit facilities, we may seek additional borrowing capacity or financing, pursuant to our current or any future shelf registration statement, for general corporate purposes or to fund other future cash requirements. If we undertake any further significant business development activity, we may need to finance such activities by obtaining additional debt financing or using a registration statement to sell equity securities. There can be no assurance that we will be able to obtain any additional debt or equity financing at the time needed or that such financing will be available on terms that are favorable or acceptable to us.
Previous wording
On January 18, 2024 we entered into a credit and guaranty agreement with Ares Management Credit funds (the “Ares Credit Agreement”) for $350.0 million of senior secured, interest-only, credit facilities, consisting of a $190.0 million secured term loan facility (the “Initial Term Loan Facility”), a $100.0 million secured delayed draw term loan facility(the “Delayed Draw Term Loan Facility” and, together with the Initial Term Loan Facility, the “Term Loan Facilities”) and a $60.0 million “senior-priority” secured revolving credit facility with a priority claim ahead of the other secured facilities (the “Revolving Credit Facility” and, together with the Term Loan Facilities, the “Credit Facilities”). Upon closing, we borrowed $190.0 million under the Initial Term Loan Facility and $30.0 million under the Revolving Credit Facility. The $100.0 million of undrawn availability under the Delayed Draw Term Loan Facility can be used solely to fund the repurchase or repayment of the Convertible Senior Notes on or prior to scheduled maturity date of July 1, 2025.
Current wording
On January 18, 2024 we entered into a credit and guaranty agreement with Ares Management Credit funds (the “Ares Credit Agreement”) for $350.0 million of senior secured, interest-only, credit facilities, consisting of a $190.0 million secured term loan facility (the “Term Loan Facility”), a $100.0 million secured delayed draw term loan facility(the “Delayed Draw Term Loan Facility” and, together with the Term Loan Facility, the “Term Loan Facilities”) and a $60.0 million “senior-priority” secured revolving credit facility with a priority claim ahead of the other secured facilities (the “Revolving Credit Facility” and, together with the Term Loan Facilities, the “Credit Facilities”). Upon closing, we borrowed $190.0 million under the Term Loan Facility and $30.0 million under the Revolving Credit Facility. The proceeds of the initial borrowings were used along with cash on hand to pay off our previously existing credit agreement and pay related fees and expenses. The $100.0 million of undrawn availability under the Delayed Draw Term Loan Facility was established solely to make funds available in the event of a repurchase or repayment of the Convertible Senior Notes on or prior to a scheduled maturity date of July 1, 2025 (see below).
Previous wording
The final scheduled maturity date of the Credit Facilities is January 18, 2030. There are no scheduled repayments of principal required to be made prior to the final maturity date. We have the right to prepay loans under the Ares Credit Agreement in whole or in part at any time, provided that any prepayment of loans under the Term Loan Facilities (or loans under the Revolving Credit Facility to the extent of reducing the balance of outstanding loans below $30.0 million) will be subject to a prepayment premium of 5.00% if the prepayment occurs prior to January 18, 2025 and 1.00% if the prepayment occurs thereafter and prior to January 18, 2026. Amounts repaid in respect of loans under the Initial Term Loan Facilities may not be reborrowed. Amounts repaid in respect of loans under the Revolving Credit Facility may be reborrowed. Loans under the Term Loan Facilities bear interest, at our option, at a floating annual rate equal to either the base rate plus a margin of 5.50% or the Adjusted Term Secured Overnight Financing Rate (“Adjusted Term SOFR”) plus a margin of 6.50%; beginning with the second fiscal quarter of 2025, the margin may step down to 5.25% and 6.25%, respectively, based on our total net leverage ratio at such time. Loans under the Revolving Credit Facility bear interest, at our option, at a floating annual rate equal to either the base rate plus a margin of 3.00% or the Adjusted Term SOFR plus a margin of 4.00%. In addition, we will be required to pay fees of 0.50% per annum on the daily unused amount of the Revolving Credit Facility and 1.00% per annum on the daily unused amount of the Delayed Draw Term Loan Facility.
Current wording
The final scheduled maturity date of the Credit Facilities is January 18, 2030. There are no scheduled repayments of principal required to be made prior to the final maturity date. We have the right to prepay loans under the Ares Credit Agreement in whole or in part at any time, subject to certain premium payment requirements. Amounts repaid in respect of loans under the Term Loan Facilities may not be reborrowed. The Credit Facilities currently bear interest at the Adjusted Term Secured Overnight Financing Rate (“Adjusted Term SOFR”) plus applicable margins. As of March 31, 2025 the aggregate interest rate was 10.81% and 8.31% per annum for the Term Loan Facilities and Revolving Credit Facility, respectively. See Part I, Item 1, Note 7 of the “Notes to Consolidated Financial Statements” for further discussion of our new Ares Credit Agreement.
Previous wording
On June 18, 2020 we issued $100.0 million aggregate principal amount of 4.25% Convertible Senior Notes with a maturity date of July 1, 2025 (the “Convertible Senior Notes”). The Convertible Senior Notes may be settled in cash, stock, or a combination thereof, solely at our discretion. The initial conversion rate of the Convertible Senior Notes is 42.6203 shares per $1,000 principal amount, which is equivalent to a conversion price of approximately $23.46 per share, subject to adjustments. We use the if-converted method for assumed conversion of the Convertible Senior Notes for the diluted earnings per share calculation. The fair value and the effective interest rate of the Convertible Senior Notes as of September 30, 2024 was approximately $125.4 million and 5.05%, respectively. The fair value was based on market prices observable for similar instruments and is considered Level 2 in the fair value hierarchy.
Current wording
On June 18, 2020 we issued $100.0 million aggregate principal amount of 4.25% Convertible Senior Notes with a maturity date of July 1, 2025 (the “Convertible Senior Notes”). The Convertible Senior Notes may be settled in cash, stock, or a combination thereof, solely at our discretion. The initial conversion rate of the Convertible Senior Notes is 42.6203 shares per $1,000 principal amount, which is equivalent to a conversion price of approximately $23.46 per share, subject to adjustments. We use the if-converted method for assumed conversion of the Convertible Senior Notes for the diluted earnings per share calculation. On or after January 1, 2025 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their notes at any time.
Previous wording
We became eligible to redeem the Convertible Senior Notes beginning on July 5, 2023, following the expiration of their non-redemption period. We are able to redeem the Convertible Senior Notes in whole or in part, at our option, if the last reported sale price per share of our 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 we provide notice of redemption. We may redeem for cash all or part of the Convertible Senior Notes at a redemption price equal to 100% of the principal amount of the redeemable Convertible Senior Notes, plus accrued and unpaid interest to, but excluding, the redemption date. No principal payments are due on the Convertible Senior Notes prior to the scheduled maturity date on July 1, 2025. As discussed above we are able to use the $100.0 million of undrawn availability under the Delayed Draw Term Loan Facility to fund the repurchase or repayment of the Convertible Senior Notes. Other than restrictions relating to certain fundamental changes and consolidations, mergers or asset sales and customary anti-dilution adjustments, the Convertible Senior Notes do not contain any financial covenants and do not restrict us from conducting significant restructuring transactions or issuing or repurchasing any of our other securities. As of September 30, 2024 and December 31, 2023 we are not aware of any current events or market conditions that would allow holders to convert the Convertible Senior Notes.
Current wording
We became eligible to redeem the Convertible Senior Notes beginning on July 5, 2023, following the expiration of their non-redemption period. We are able to redeem the Convertible Senior Notes in whole or in part, at our option, if the last reported sale price per share of our 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 we provide notice of redemption.
Previous wording
Net cash used in investing activities was $16.8 million for the nine months ended September 30, 2024, as compared to net cash provided by investing activities of $2.2 million for the nine months ended September 30, 2023. During the nine months ended September 30, 2024 cash flows used in investing activities included $9.8 million of cash used for capital expenditures and a $7.0 million payment related to the Endospan Loan Amendment.
Current wording
Net cash used in investing activities was $3.6 million for both the three months ended March 31, 2025 and 2024. During the three months ended March 31, 2025 cash flows used in investing activities included $3.6 million of cash used for capital expenditures.
Previous wording
Net cash provided by financing activities was $2.0 million and $2.5 million for the nine months ended September 30, 2024 and 2023, respectively. The current year cash provided by financing activities was primarily due to $190.0 million of proceeds from the Initial Term Loan Facility, $30.0 million of proceeds from the Revolving Credit Facility, and $5.3 million of proceeds from the exercise of stock options and issuances of common stock, partially offset by $211.8 million for the repayment of debt, $10.0 million for the payment of debt issuance costs, and $1.0 million for the payments of short-term notes payable.
Current wording
Net cash provided by financing activities was $3.9 million and $0.7 million for the three months ended March 31, 2025 and 2024, respectively. The current year cash provided by financing activities was primarily due to $4.2 million of proceeds from the exercise of stock options and issuances of common stock, partially offset by $0.1 million for the repayment of debt.
Previous wording
Capital expenditures were $9.8 million and $7.1 million for the nine months ended September 30, 2024 and 2023, respectively. Capital expenditures for the nine months ended September 30, 2024 were primarily related to routine purchases of computer software, manufacturing and tissue processing equipment, leasehold improvements, and computer equipment needed to support our business.
Current wording
Capital expenditures were $3.6 million for both the three months ended March 31, 2025 and 2024. Capital expenditures for the three months ended March 31, 2025 were primarily related to routine purchases of manufacturing and tissue processing equipment, computer software, computer equipment, and leasehold improvements to support our business.