Financial Instruments
A summary of financial instruments measured at fair value was as follows (in thousands):
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| December 31, 2025 | | Level 1 | | Level 2 | | Level 3 | | Total |
| Cash equivalents: | | | | | | | | |
| Money market funds | | $ | 20,725 | | | $ | — | | | $ | — | | | $ | 20,725 | |
| Certificates of deposit | | 1,080 | | | — | | | — | | | 1,080 | |
| Endospan Loans | | — | | | — | | | 19,872 | | | 19,872 | |
| Total assets | | $ | 21,805 | | | $ | — | | | $ | 19,872 | | | $ | 41,677 | |
| | | | | | | | |
| Liabilities: | | | | | | | | |
| Current portion of contingent consideration | | $ | — | | | $ | — | | | $ | 20,690 | | | $ | 20,690 | |
| Non-current contingent consideration | | — | | | — | | | 39,890 | | | 39,890 | |
| Total liabilities | | $ | — | | | $ | — | | | $ | 60,580 | | | $ | 60,580 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2024 | | Level 1 | | Level 2 | | Level 3 | | Total |
| Cash equivalents: | | | | | | | | |
| Money market funds | | $ | 18,182 | | | $ | — | | | $ | — | | | $ | 18,182 | |
| Certificates of deposit | | 5,069 | | | — | | | — | | | 5,069 | |
| Endospan Loans | | — | | | — | | | 9,535 | | | 9,535 | |
| Total assets | | $ | 23,251 | | | $ | — | | | $ | 9,535 | | | $ | 32,786 | |
| | | | | | | | |
| Long-term liabilities: | | | | | | | | |
| Contingent consideration | | $ | — | | | $ | — | | | $ | 52,880 | | | $ | 52,880 | |
| Total liabilities | | $ | — | | | $ | — | | | $ | 52,880 | | | $ | 52,880 | |
We used prices quoted from our investment advisors to determine the Level 1 valuation of our investments in money market funds. The estimated market value of all cash equivalents is equal to cost basis as there were no gross realized gains or losses on cash equivalents for the years ended December 31, 2025, 2024, and 2023.
The fair value of the contingent consideration component of the Ascyrus acquisition and Endospan Loans were updated using Level 3 inputs. Changes in fair value of Level 3 assets and liabilities are listed in the tables below (in thousands):
| | | | | |
| Contingent Consideration |
| Balance as of December 31, 2023 | $ | 63,890 | |
| Change in valuation | (11,010) | |
| Balance as of December 31, 2024 | $ | 52,880 | |
| Change in valuation | 7,700 | |
| Balance as of December 31, 2025 | $ | 60,580 | |
| | | | | |
| Endospan Loans |
| Balance as of December 31, 2023 | $ | — | |
| Initial value of Additional Endospan Loan | 8,912 | |
| Change in valuation | 623 | |
| Balance as of December 31, 2024 | $ | 9,535 | |
| Additional Endospan Loan - Tranche 3 | 8,000 | |
| Change in valuation | 2,337 | |
| Balance as of December 31, 2025 | $ | 19,872 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.