What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-24 compared with 2025-02-25 · 231 added, 205 removed, 1079 unchanged (29% of the section changed)

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We have audited the accompanying consolidated balance sheets of Merit Medical Systems, Inc.

and subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America (U.S.

and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes and the schedules⁠ listed in the Index at Item 15 (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 24, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.

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Inventories are valued at the lower of cost, at approximate costs determined on a first-in, first-out method, or net realizable value.

The Company reviews inventories on hand and records provisions based on estimated excess, slow moving and

obsolete inventories.

The Company reviews inventories on hand and records provisions based on estimated excess, slow moving and obsolete inventories.

The valuation of inventories includes an assessment of future product demand based on historical sales and raw material usage and product expiration.

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Our audit procedures related to management’s estimate of the valuation of excess, slow moving and obsolete inventories included the following, among others:

● We tested the effectiveness of controls over the provision for estimated excess, slow moving and obsolete inventories.

● We tested the effectiveness of internal controls over the provision for estimated excess, slow moving and obsolete inventories.

● We evaluated management’s ability to accurately estimate the provision for estimated excess, slow moving and obsolete inventories by comparing actual write-downs of inventories to management’s historical estimates.

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● We tested the mathematical accuracy of the Company’s calculation of excess, slow moving and obsolete inventories.

Intangible Assets – EGS and Cook Developed Technology – Refer to Note 3 to the financial statements

Intangible Assets – Biolife Developed Technology – Refer to Note 3 to the financial statements

Critical Audit Matter Description

On July 1, 2024, the Company entered into an asset purchase agreement with Endogastric Solutions, Inc.

(“EGS”) to acquire the assets associated with the EsophyX® Z+ device.

The Company accounted for this acquisition under the acquisition method of accounting for business combinations.

Accordingly, the purchase price was allocated to the tangible and intangibles assets acquired based on their respective fair values, including developed technology intangible assets of $72.8 million.

On November 1, 2024, the Company entered into an asset purchase agreement with Cook Medical Holdings, LLC (“Cook”) to acquire the assets associated with its lead management business.

The Company accounted for this acquisition under the acquisition method of accounting for business combinations.

Accordingly, the purchase price was allocated to the tangible and intangible assets acquired based on their respective fair values, including developed technology intangible assets of $126.1 million.

On May 16, 2025, the Company entered into a merger agreement with Biolife Delaware, L.L.C.

(“Biolife”), to become a wholly-owned subsidiary of the Company.

The Company accounted for this transaction under the acquisition method of accounting for business combinations.

Accordingly, the purchase price was allocate⁠d to the tangible and intangible assets acquired based on their respective fair values, including developed technology intangible assets of $90.5 million.

The determination of the fair value of the developed technology intangible assets required management to make significant estimates and assumptions related to future cash flows and the discount rate.

We identified the valuation of the acquired developed technology intangible assets from EGS and Cook as a critical audit matter because of the significant estimates and assumptions management made to determine the fair value of the acquired developed technology.

We identified the valuation of the acquired developed technology intangible assets from Biolife as a critical audit matter because of the significant estimates and assumptions management made to determine the fair value of the acquired developed technology.

This required a high degree of auditor judgment and an increased extent of effort, including the involvement of our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s forecasts of future cash flows and the discount rate.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the estimates of future cash flows and discount rate for the acquired EGS and Cook developed technology intangible assets included the following, among others:

Our audit procedures related to the estimates of future cash flows and discount rate for the acquired Biolife developed technology intangible assets included the following, among others:

● We tested the effectiveness of internal controls over the valuation of the developed technology intangible assets, including those over estimates of future cash flows and the selection of the discount rate.

● We assessed the reasonableness of management’s estimated cash flows by inquiring of management regarding its processes for developing estimated cash flows and comparing the estimates to historical results achieved by the predecessor, historical results of the Company and other acquisitions completed in recent years, and comparable peer companies.

● We performed sensitivity analyses of the significant assumptions used in the developed technology valuation models to evaluate the change in fair value resulting from changes in the significant assumptions.

● We assessed the reasonableness of management’s estimated cash flows by inquiring of management regarding its processes for developing estimated cash flows and comparing the estimates to historical results achieved by the predecessor, historical results of the Company and other transactions completed in recent years, and comparable peer companies.

● We performed sensitivity analyses of the significant assumptions used in the developed technology valuation model to evaluate the change in fair value resulting from changes in the significant assumptions.

● With the assistance of our fair value specialists, we (1) evaluated the reasonableness of the valuation methodology;

(2) evaluated the reasonableness of the discount rate through comparing the data underlying the determination of the discount rate to independent sources and developed a range of independent estimates and compared those to the discount rates selected by management;

and (3) tested the mathematical accuracy of the discounted cash flow calculations.

● We evaluated whether the estimated revenue growth rates and cash flows were consistent with evidence obtained as part of a retrospective review of actual post-acquisition financial results.

● We evaluated whether the estimated revenue growth rates and cash flows were consistent with evidence obtained as part of a retrospective review of actual post-transaction financial results.

/s/ DELOITTE & TOUCHE LLP

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Deferred income tax liabilities

Long-term income taxes payable

Liabilities related to unrecognized tax benefits

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Interest expense

Other income (expense) — net

Other (expense) income — net

Total other expense — net

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Foreign currency translation adjustment

Income tax benefit (expense)

Income tax (expense) benefit

Total other comprehensive income (loss)

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BALANCE — January 1, 2023

Other comprehensive loss

Other comprehensive income

Stock-based compensation expense

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Shares issued from time-vested restricted stock units

Purchase of capped call option

Shares surrendered in exchange for payment of payroll tax liabilities

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BALANCE — December 31, 2023

Other comprehensive income

Other comprehensive loss

Stock-based compensation expense

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Shares issued from time-vested restricted stock units

Purchase of capped call option

Shares surrendered in exchange for payment of payroll tax liabilities

Shares surrendered in exchange for exercise of stock options

BALANCE — December 31, 2024

Other comprehensive loss

Other comprehensive income

Stock-based compensation expense

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Shares surrendered in exchange for payment of payroll tax liabilities

Shares surrendered in exchange for exercise of stock options

BALANCE — December 31, 2025

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Depreciation and amortization

(Gain) loss on disposition of business

Gain on disposition of business

Loss on sale or abandonment of property and equipment

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Stock-based compensation expense

Changes in operating assets and liabilities, net of acquisitions and divestitures:

Changes in operating assets and liabilities, net of acquisitions:

Trade receivables

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Intangible assets

Proceeds from the sale of property and equipment

Proceeds (payments) from disposition of business

Proceeds from asset and business dispositions

Cash paid for notes receivable and other investments

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Payment of taxes related to an exchange of common stock

Net cash, cash equivalents, and restricted cash (used in) provided by financing activities

Net cash, cash equivalents, and restricted cash provided by (used in) financing activities

Effect of exchange rates on cash, cash equivalents, and restricted cash

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Amounts presented in this report are rounded, while percentages and earnings per share amounts presented are calculated from the underlying amounts.

During the year ended December 31, 2024, we elected to change the presentation of investments in privately held companies within the statements of cash flows to be included within Cash paid for notes receivable and other investments .

Previously, amounts paid to acquire such investments were presented within Cash paid in acquisitions, net of cash acquired .

The change in presentation had no material impact on previously reported financial information and comparative periods have been adjusted to reflect this change in presentation.

Use of Estimates in Preparing Financial Statements .

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Inventories .

We value our inventories at the lower of cost, at approximate costs determined on a first-in, first-out method, or net realizable value.

We value our inventories at the lower of cost or net realizable value.

Cost is computed using standard cost which approximates actual cost on a first-in, first-out basis and includes material, labor and manufacturing overhead.

Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.

Inventory costs include material, labor and manufacturing overhead.

We review inventories on hand and record provisions based on estimated excess, slow moving and obsolete inventories, as well as inventories with a carrying value in excess of net realizable value.

The regular and systematic review

of the valuation of inventories includes an assessment of future product demand based on historical sales and raw material usage and product expiration.

The review of the valuation of inventories includes an assessment of future product demand based on historical sales and raw material usage and product expiration.

Goodwill and Intangible Assets .

We test goodwill balances for impairment on an annual basis as of July 1 or whenever impairment indicators arise.

When impairment indicators are identified, we may elect to perform an optional qualitative assessment to determine whether it is more likely than not that the fair value of our reporting units has fallen below their carrying value.

During our annual impairment test, we utilize four reporting units in evaluating goodwill for impairment using a quantitative assessment, which uses a combination of a guideline public company market-based approach and a discounted cash flow income-based approach.

Goodwill represents the difference between the purchase price and the fair value of assets and liabilities acquired in a business combination.

Goodwill is not amortized as the Company reviews goodwill for impairment annually as of July 1 or if events or changes in circumstances indicate the occurrence of a triggering event.

The Company reviews goodwill for impairment by initially considering qualitative factors to determine whether it is necessary to perform a quantitative analysis.

If it is determined that it is more likely than not that the fair value of reporting unit is less than its carrying amount, we perform a quantitative assessment, which uses a combination of a guideline public company market-based approach and a discounted cash flow income-based approach.

The quantitative assessment considers whether the carrying amount of a reporting unit exceeds its fair value, in which case an impairment charge is recorded to the extent the reporting unit’s carrying value exceeds its fair value.

If it is determined that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, it is unnecessary to perform a quantitative analysis.

The Company may elect to bypass the qualitative assessment and proceed directly to performing a quantitative analysis.

Based on the qualitative analysis performed in 2025, the Company determined that there was no goodwill impairment.

Finite-lived intangible assets including developed technology, customer lists, distribution agreements, license agreements, trademarks and patents are subject to amortization.

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We determine the fair value of each asset group based on estimated future cash flows discounted back to their present value using a discount rate that reflects the risk profiles of the underlying activities.

In-process technology intangible assets, which are not subject to amortization until projects reach commercialization, are assessed for impairment at least annually and more frequently if events occur that would indicate a potential reduction in the fair value of the assets below their carrying value.

An impairment charge would be recognized to the extent the carrying amount of the in-process technology exceeded its fair value.

D uring the years ended December 31, 2024 and 2023, we recorded no impairment charges related to our intangible assets.

During the year ended December 31, 2022 , we recorded total impairment charges related to our intangible assets of $ 1.7 million for our divestiture on April 30, 2022 of the STD Pharmaceutical Products Limited (“STD Pharmaceutical”) business acquired in our August 2019 acquisition of Fibrovein Holdings Limited, which pertained to our cardiovascular segment.

The primary indicators of impairment were restructuring activities and uncertainty about future product development and commercialization associated with certain acquired technologies.

D uring the years ended December 31, 2025, 2024 and 2023, we recorded no impairment charges related to our goodwill and intangible assets.

Long-Lived Assets .

We periodically review the carrying amount of our long-lived assets, including property and equipment, intangible assets, and right-of-use operating lease assets, for impairment.

An asset is considered impaired when undiscounted estimated future cash flows are less than the carrying amount of the asset based on the criteria for accounting for the impairment or disposal of long-lived assets under ASC 360, Property, Plant and Equipment .

In the event the carrying amount of such asset is not considered recoverable, the asset is adjusted to its fair value.

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Leasehold improvements are amortized over the lesser of the base term of the lease or estimated life of the leasehold improvements.

Construction-in-process consists of new buildings and various production equipment being constructed internally and externally.

Construction-in-process consists of internal and external costs for new buildings and various production equipment being constructed.

Assets in construction-in-process will commence depreciating once the asset has been placed in service.

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Long-term notes receivable, net

We analyze our investments in privately held companies to determine if they should be accounted for using the equity method based on our ability to exercise significant influence over operating and financial policies of the investment.

Our share of earnings associated with equity method investments is reported within other income (expense) in our consolidated statements of income.

amortization of differences between our investment basis and underlying equity in net assets of the investee, excluding the component representing goodwill;

and impairment, if any, as a component of other income (expense) in our consolidated statements of income.

Such adjustments were not material for the years ended December 31, 2025, 2024 and 2023.

Investments not accounted for under the equity method of accounting are accounted for at cost minus impairment, if applicable, plus or minus changes in valuation resulting from observable transactions for identical or similar investments.

We paid $ 3.8 million, $ 4.0 million, and $ 1.4 million in the acquisition of additional equity investments and have no cumulative impairments or other fair value adjustments associated with our existing investments.

We paid $ 6.6 million, $ 3.8 million, and $ 4.0 million during the years ended December 31, 2025, 2024 and 2023 in the acquisition of additional equity investments and have no cumulative impairments or other fair value adjustments associated with our existing investments.

Refer to Note 15, Fair Value Measurements , for details of impairments of securities previously classified as equity investments.

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In connection with a business combination, any contingent consideration is recorded at fair value on the acquisition date based upon the consideration expected to be transferred in the future.

We re-measure the estimated liability each quarter based upon changes in revenue estimates, changes in the probability of achieving relevant milestones and changes in the

discount rate or expected period of payment.

We re-measure the estimated liability each quarter based upon changes in revenue estimates, changes in the probability of achieving relevant milestones and changes in the discount rate or expected period of payment.

Changes in the estimated fair value are recorded through operating expense in our consolidated statements of income.

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Restructuring.

Restructuring charges consist primarily of termination benefits for employees effected by certain site consolidation and production line optimization transfers related to the company’s transformation initiatives.

We account for involuntary employee termination benefits that represent a one-time benefit in accordance with ASC 420, Exit or Disposal Cost Obligations .

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Stock-Based Compensation .

We recognize the fair value compensation cost relating to stock-based payment transactions in accordance with Accounting Standards Codification (“ASC”) 718, Compensation — Stock Compensation .

We recognize the fair value compensation cost relating to stock-based payment transactions in accordance with ASC 718, Compensation — Stock Compensation .

Under the provisions of ASC 718, stock-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized over the employee’s requisite service period, which is generally the vesting period.

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Recently Adopted Financial Accounting Standards.

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides temporary optional expedients and exceptions in accounting for modifications of contracts that reference the London interbank offered rate (“LIBOR”) or another reference rate expected to be discontinued as a result of reference rate reform.

Entities can elect not to apply certain modification accounting requirements to contracts affected by what the guidance calls “reference rate reform” if certain criteria are met.

An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination.

Also, entities can elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform if certain criteria are met.

In December 2022, the FASB issued ASU 2022-06, Deferral of the Sunset Date of Topic 848 , which defers the sunset date of the guidance in ASC 848 to December 31, 2024.

During 2023, we transitioned our interest rate swap agreement to reference the Secured Overnight Financing Rate (“SOFR”) in connection with reference rate reform and adopted certain optional expedients provided in ASU 2020-04 in relation to contract modifications and hedge accounting that allowed us to continue hedge accounting for our interest rate swap cash flow hedge (see Note 9, Derivatives ).

The adoption of this guidance did not have a material impact on our consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about reportable segment’s profit or loss and assets that are currently required annually.

We adopted this ASU on January 1, 2024, and applied the amendments retrospectively to all prior periods presented in our consolidated financial statements (see Note 13, Segment Reporting and Foreign Operations ).

The adoption of this guidance did not have an impact on the company’s consolidated financial position, results of operations or cash flows.

Recently Issued Accounting Standards.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures , which amends Income Taxes (Topic 740) .

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-09, Improvements to Income Tax Disclosures , which amends Income Taxes (Topic 740) .

The FASB issued this update to improve annual basis income tax disclosures related to (1) rate reconciliation, (2) income taxes paid, and (3) other disclosures related to pretax income (or loss) and income tax expense (or benefit) from continuing operations.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2025, with early adoption permitted.

These amendments are to be applied on a prospective basis.

Retrospective application is permitted.

We are currently evaluating the impact this standard will have on our consolidated financial statement disclosures.

We adopted this ASU on January 1, 2025, and applied the amendments retrospectively to all prior periods presented in our consolidated financial statements (see Note 6, Income Taxes).

The adoption of this guidance did not have an impact on our consolidated financial position, results of operations or cash flows.

Recently Issued Accounting Standards.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, which requires a public entity to disclose certain operating expenses disaggregated into categories, such as purchases of inventory, employee compensation, depreciation, and intangible asset amortization on an annual and interim basis.

ASU 2024-03 is effective

for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

The provisions within the update may be applied retrospectively for all periods presented in the financial statements.

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The following table presents sales by operating segment disaggregated based on product category and geographic region for the years ended December 31, 2025, 2024 and 2023 (in thousands).

December 31, 2024

December 31, 2023

December 31, 2022

United States

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Endoscopy Devices

*Commencing January 1, 2025, we reorganized our sales teams and product categories to include revenues from the sale of our spine devices under our OEM product category.

Revenue figures for 2024 and 2023 have been recast to reflect this realignment of our portfolio of spine products, representing approximately $ 22.6 million and $ 22.4 million in revenue, respectively, within the OEM product category to provide comparability between the reported periods.

ACQUISITIONS AND OTHER STRATEGIC TRANSACTIONS

2025 Acquisitions

On November 1, 2024, pursuant to the terms of the Asset Purchase Agreement (the “Cook Purchase Agreement”) dated September 18, 2024 between Merit and Cook Medical Holdings LLC, (“Cook”), we acquired Cook’s lead management business, which is composed of a comprehensive end-to-end portfolio of medical devices and accessories used in lead management procedures for patients who need a pacemaker or an implantable cardioverter-defibrillator lead removed or replaced.

We acquired the portfolio for a purchase price of $ 210 million, plus the assumption of certain liabilities.

On November 3, 2025, we entered into an asset purchase agreement with Pentax of America, Inc., a subsidiary of PENTAX® Medical, Inc.

(“Pentax”), to acquire the C2 CryoBalloon® device and related technology (the “C2 Acquisition”).

The total purchase price consists of a $ 19 million cash payment at closing and potential contingent payments of up to $ 3 million payable in 2026 upon meeting certain milestones relating to the operational transition of the acquired assets.

We accounted for this transaction under the acquisition method of accounting as a business combination.

The sales related to the acquisition have been included in our Cardiovascular segment since the acquisition date and were $ 5.5 million for the year ended December 31, 2024.

It is not practical to separately report earnings related to the acquisition, as we began to immediately integrate the acquisition into the existing operations, sales distribution networks and management structure of our cardiovascular business segment.

Acquisition-related costs associated with the transaction, which were included in selling, general and administrative expenses in the consolidated statements of income were approximately $ 5.4 million.

Our net sales of C2 products since the date of the C2 Acquisition were approximately $ 1.3 million for the year ended December 31, 2025.

Acquisition-related costs associated with the C2 Acquisition, which are included in selling, general and administrative expenses in the accompanying consolidated statements of income, were approximately $ 0.4 million for the year ended December 31, 2025.

The purchase price was preliminarily allocated as follows (in thousands):

Assets Acquired

Property and equipment

Intangible assets

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Customer list

Total net assets acquired

We are amortizing the C2 developed technology intangible assets over 12 years , the trade name intangible assets over 12 years , and the customer list intangible asset on an accelerated basis over 12 years .

We have estimated the weighted average life of the intangible assets acquired from Pentax to be 12 years .

The goodwill consists largely of the synergies expected from combining operations and is expected to be deductible for tax purposes.

The pro forma effects to our consolidated results of operations of the C2 Acquisition are not material in relation to reported sales.

On May 16, 2025, Merit entered into an Agreement and Plan of Merger (the “Biolife Agreement”) by and among, Merit, Biolife, L.L.C., a Florida limited liability company (“FL Biolife”), Biolife Transaction Sub, LLC, a Delaware limited liability company (“Merger Sub”), and Shareholder Representative Services LLC, a Colorado limited liability company.

Promptly following the execution of the Biolife Agreement, FL Biolife converted from a Florida limited liability company to a Delaware limited liability company called Biolife Delaware, L.L.C.

Pursuant to the terms of the Biolife Agreement, on May 20, 2025, Merger Sub merged with and into Biolife, with Biolife continuing as the surviving corporation and a wholly-owned subsidiary of Merit (the “Biolife Merger”).

The purchase consideration consisted of an upfront payment of $ 120 million plus working capital and other adjustments of $ 7.2 million in cash.

Biolife manufactures unique patented hemostatic devices under the brand names StatSeal and WoundSeal.

We accounted for the Biolife Merger as a business combination.

Our net sales of Biolife products since the date of the Biolife Merger were approximately $ 12.4 million for the year ended December 31, 2025.

It is not practical to separately report earnings related to the products acquired in connection with the Biolife Merger, as we cannot split our sales costs related solely to the Biolife products, principally because our sales representatives sell multiple products (including the Biolife products) in our cardiovascular business segment.

Acquisition-related costs associated with the Biolife Merger, which are included in selling, general and administrative expenses in the accompanying consolidated statements of income, were approximately $ 1.9 million for the year ended December 31, 2025.

The purchase price was allocated as follows (in thousands):

Assets Acquired

Cash and cash equivalents

Trade receivables

Prepaid expenses and other current assets

Income tax refund receivables

Property and equipment

Intangible assets

Developed technology

Customer list

Total assets acquired

Liabilities Assumed

Trade payables

Accrued expenses

Deferred income tax liabilities

Liabilities related to unrecognized tax benefits

Other long-term obligations

Total liabilities assumed

Total assets acquired, net of liabilities assumed

Cash acquired

Purchase price, net of cash acquired

We are amortizing the Biolife developed technology intangible assets over 12 years , the trademark intangible assets over 12 years , and the customer list intangible asset on an accelerated basis over 12 years .

We have estimated the weighted average life of the intangible assets acquired from Biolife to be 12 years .

The goodwill consists largely of the synergies expected from combining operations and is not expected to be deductible for tax purposes.

The pro forma effects to our consolidated results of operations of the Biolife Acquisition are not material in relation to reported sales .

2024 Acquisitions

On November 1, 2024, pursuant to the terms of the Asset Purchase Agreement (the “Cook Purchase Agreement”) dated September 18, 2024 between Merit and Cook Medical Holdings LLC (“Cook”), we acquired Cook’s lead management business, which is composed of a comprehensive end-to-end portfolio of medical devices and accessories used in lead management procedures for patients who need a pacemaker or an implantable cardioverter-defibrillator lead removed or replaced (the “Cook Transaction”).

We acquired the portfolio for a purchase price of $ 210 million, plus the assumption of certain liabilities.

We accounted for this transaction under the acquisition method of accounting as a business combination.

The purchase price was allocated as follows (in thousands):

Assets Acquired

Intangible assets

Developed technology

Customer list

Total assets acquired

Liabilities Assumed

Accrued expenses

Total liabilities assumed

Total net assets acquired

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The goodwill consists largely of the synergies expected from combining operations and is expected to be deductible for income tax purposes.

The pro forma effects on our consolidated results of operations of the Cook acquisition are not material in relation to reported sales and it was deemed impracticable to obtain information to determine earnings associated with the acquired product lines which represent only a small portion of the product lines of a large, consolidated company without standalone financial information .

The pro forma effects on our consolidated results of operations of the Cook Transaction are not material in relation to reported sales and it was deemed impracticable to obtain information to determine earnings associated with the acquired product lines which represent only a small portion of the product lines of a large, consolidated company without standalone financial information .

On July 1, 2024, we entered into an Asset Purchase Agreement (the “EGS Purchase Agreement”) with EndoGastric Solutions, Inc.

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We accounted for the EGS Acquisition under the acquisition method of accounting as a business combination.

The sales related to the EGS Acquisition have been included in our endoscopy segment since the acquisition date and were $ 14.4 million for the year ended December 31, 2024.

It is not practical to separately report earnings related to the EGS Acquisition, as we began to immediately integrate the acquisition into the existing operations, sales distribution networks and management structure of our endoscopy business segment.

Acquisition-related costs associated with the EGS Acquisition, which were included in selling, general

and administrative expenses in the consolidated statements of income were approximately $ 3.4 million.

Acquisition-related costs associated with the EGS Acquisition, which were included in selling, general and administrative expenses in the consolidated statements of income were approximately $ 3.4 million for the year ended December 31, 2024.

The purchase price was allocated as follows (in thousands):

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We accounted for this transaction under the acquisition method of accounting as a business combination.

The sales related to the acquisition have been included in our cardiovascular segment since the acquisition date and were approximately $ 26.9 million and $ 14.4 million for the years ended December 31, 2024 and 2023, respectively.

It is not practical to separately report earnings related to the acquisition, as we began to immediately integrate the acquisition into existing operations, sales distribution networks and management structure of our cardiovascular business segment.

Acquisition-related costs associated with the AngioDynamics acquisition, which are included in selling,

general and administrative expenses in the accompanying consolidated statements of income, were approximately $ 4.9 million for the year ended December 31, 2023.

Acquisition-related costs associated with the AngioDynamics acquisition, which are included in selling, general and administrative expenses in the accompanying consolidated statements of income, were approximately $ 4.9 million for the year ended December 31, 2023.

The purchase price was allocated as follows (in thousands):

Assets Acquired

Prepaid expenses

Prepaid expenses and other current assets

Property and equipment

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We accounted for this transaction under the acquisition method of accounting as a business combination.

The sales and results of operations related to the acquisition have been included in our cardiovascular segment since the acquisition date and were not material.

Acquisition-related costs associated with the Bluegrass acquisition, which are included in selling, general and administrative expenses in the accompanying consolidated statements of income, are not material.

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Food and Drug Administration for Merit to commence commercialization, marketing and sale of the product in the United States.

We have accounted for this

transaction as an asset purchase and recorded $ 1.5 million of acquired in-process research and development expense associated with the upfront payment and completion of the milestone related to the installation of the commercial production winders.

We have accounted for this transaction as an asset purchase and recorded $ 1.5 million of acquired in-process research and development expense associated with the upfront payment and completion of the milestone related to the installation of the commercial production winders.

The final payment will be capitalized as a developed technology intangible asset when paid upon completion of the regulatory approval milestone under the terms of the asset purchase agreement.

The payments are reported within operating expenses because the technological feasibility of the underlying research and development project has not yet been reached and such technology has no identified future alternative use as of the date of acquisition.

2022 Acquisitions

On October 3, 2022, we entered into an asset purchase agreement with BioTrace Medical, Inc., developer of the Tempo® Temporary Pacing Lead device, for a purchase price of $ 2.5 million.

W e are also required to pay a total of six annual royalty payments between 5 % and 10 % of net sales, dependent on net sales goal achievement, u pon achievement of the first device sold in the United States .

We accounted for this transaction as an asset purchase.

We recorded the amount paid upon closing as a developed technology intangible asset, which we are amortizing over 10 years .

On April 30, 2022, we acquired the Restore Endosystems Bifurcated Stent System pursuant to the terms of a unit purchase agreement we executed with all of the members of Restore Endosystems LLC.

Subject to the terms and conditions of the unit purchase agreement, we paid $ 3 million in cash at closing.

We also accrued $ 3.5 million of other long-term obligations, which represents the fair value of two separate $ 2 million payments which are payable no later than two and four years following the closing of the acquisition, respectively, or earlier upon the achievement of specified milestones.

We will impute interest on these liabilities with the passage of time.

We have accounted for this transaction as an asset purchase and recorded $ 6.5 million of acquired in-process research and development expense because the technological feasibility of the underlying research and development project has not yet been reached and such technology has no identified future alternative use as of the date of acquisition.

Inventories at December 31, 2025 and 2024, consisted of the following (in thousands):

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Goodwill balance at December 31

We did not have any goodwill impairments for the years ended December 31, 2025, 2024 and 2023.

Total accumulated goodwill impairment losses aggregated to $ 8.3 million as of December 31, 2025 and 2024.

We did no t have any goodwill impairments for the years ended December 31, 2024, 2023 and 2022.

Other intangible assets at December 31, 2025 and 2024, consisted of the following (in thousands):

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We are closely monitoring developments and evaluating the impact these new rules are anticipated to have on our tax rate, including eligibility to qualify for these safe harbor rules.

Based on the 2024 financial results, we anticipate to meet the safe harbor rules in all jurisdictions and do not anticipate the Pillar 2 laws to have a material impact on our effective tax rate.

Based on the 2025 financial results and safe harbor rules, we currently do not anticipate the Pillar 2 laws to have a material impact on our effective tax rate.

On July 4, 2025, the U.S.

enacted a budget reconciliation package (known as the “One Big Beautiful Bill Act” or “OBBBA”) which includes a broad range of tax provisions affecting businesses.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

The Company has included the impacts of the bill in the consolidated financial statements for the year ended December 31, 2025.

We will continue to evaluate the full impact of these legislative changes as additional guidance and results become available.

For the years ended December 31, 2025, 2024 and 2023, income before income taxes is broken out between U.S.

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Deferred expense (benefit):

Total deferred benefit

Total deferred expense (benefit)

Total income tax expense

1 unchanged sentence

Computed federal income tax expense at applicable statutory rate of 21 %

State income tax expense

Tax effect of international items

Uncertain tax positions

Deferred compensation insurance assets

Stock-based compensation

Valuation allowance

Remeasurement of state deferred taxes

Non-deductible expenses

Remeasurement of contingent consideration liabilities

Other — including the effect of graduated rates

Domestic Federal

Research and development tax credits

Nontaxable or nondeductible expenses

Share-based payment awards

Section 162(m) limitation

Effects of cross-border tax laws

Global intangible low-taxed income, net of related foreign tax credits

Foreign-derived intangible income

Subpart F income, net of related foreign tax credits

Changes in valuation allowance

Other adjustments

State and local income tax expense (1)

Foreign tax effects

Changes in unrecognized tax benefits

Total income tax expense

(1) For the year ended December 31, 2025 , California, Minnesota, Massachusetts, New York and New Jersey taxes make up the majority (greater than 50 percent) of the tax effect in this category.

For the year ended December 31, 2024 , California, Minnesota, New Jersey, Massachusetts, Pennsylvania and New York make up the majority of the tax effect in this category.

For the year ended December 31, 2023 , Minnesota, California, New Jersey and New York make up the majority of the tax effect in this category.

Deferred income tax assets and liabilities at December 31, 2025 and 2024, consisted of the following temporary differences and carry-forward items (in thousands):

December 31, 2025

December 31, 2024

Deferred income tax assets:

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Valuation allowance

Net deferred income tax liabilities

Net deferred income tax (liabilities) assets

Deferred income tax assets

Deferred income tax liabilities

Net deferred income tax liabilities

Net deferred income tax (liabilities) assets

Deferred tax assets and liabilities are netted on the balance sheet by separate tax jurisdictions.

1 unchanged sentence

The valuation allowance is primarily related to state credit carryforwards, non-US net operating loss carryforwards, and capital loss carryforwards for which we believe it is more likely than not that the deferred tax assets will not be realized.

The valuation allowance increased by $ 0.4 million during the year ended December 31, 2024, increased by $ 0.2 million during the year ended December 31, 2023, and increased by $ 2.7 million during the year ended December 31, 2022.

As of December 31, 2024, we had U.S federal net operating loss carryforwards of $ 19.8 million, which were generated by Cianna Medical, DFINE Inc., and Biosphere Medical, Inc., prior to our acquisition of these companies.

The valuation allowance did not materially change during the year ended December 31, 2025, increased by $ 0.4 million during the year ended December 31, 2024, and increased by $ 0.2 million during the year ended December 31, 2023.

As of December 31, 2025, we had U.S federal net operating loss carryforwards of $ 15.9 million, which were generated by Cianna Medical, DFINE Inc., Biosphere Medical, Inc., and Biolife LLC, prior to our acquisition of these companies.

These net operating loss carryforwards are subject to annual limitations under Internal Revenue Code Section 382.

8 unchanged sentences

Consequently, we have recorded tax expense of $ 0.3 million, $ 0.7 million and $ 0.4 million for foreign withholding taxes on unremitted foreign earnings during the years ended December 31, 2025, 2024 and 2023, respectively.

Additionally, for the year ended December 31, 2022, a tax benefit

of $ 4.3 million was recorded with respect to the restructuring of our foreign entities and the associated change in foreign withholding taxes on the unremitted foreign earnings.

We are subject to income taxes in the U.S.

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We account for interest and penalties for unrecognized tax benefits as part of our income tax provision.

During the years ended December 31, 2024, 2023 and 2022, our liability for unrecognized tax benefit was increased (decreased) for interest and penalties by $( 52,000 ), $( 46,000 ), and $ 14,000 , respectively.

We estimate it is reasonably possible that within the next 12 months the total liability for unrecognized tax benefits may increase, including expirations related to statutes of limitation, up to $ 0.1 million.

During the years ended December 31, 2025, 2024 and 2023, our liability for unrecognized tax benefit was increased (decreased) for interest and penalties by $ 0.1 million, $( 0.1 ) million, and $( 0.1 ) million, respectively.

A reconciliation of the beginning and ending amount of liabilities associated with uncertain tax benefits for the years ended December 31, 2025, 2024 and 2023, consisted of the following (in thousands):

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The tabular roll-forward ending balance does not include interest and penalties related to unrecognized tax benefits.

Income taxes paid for the years ended December 31, 2025, 2024 and 2023, consisted of the following (in thousands):

Total income taxes paid

* The amount of income taxes paid during the year does not meet the 5% disaggregation threshold.

ACCRUED EXPENSES

Accrued expenses at December 31, 2025 and 2024, consisted of the following (in thousands):

December 31, 2025

December 31, 2024

Payroll and related liabilities

5 unchanged sentences

Principal balances outstanding under our long-term debt obligations as of December 31, 2025 and 2024, consisted of the following (in thousands):

December 31, 2025

December 31, 2024

Convertible notes

33 unchanged sentences

As of December 31, 2025, we had no outstanding borrowings and issued letter of credit guarantees of $ 2.8 million under the Amended Fourth A&R Credit Agreement, with available borrowings of approximately $ 697 million, based on the leverage ratio required pursuant to the Amended Fourth A&R Credit Agreement.

As of December 31, 2023, we had outstanding borrowings of $ 99.1 million with a fixed rate of 3.39 % with respect to $ 75 million of the principal amount, as a result of an interest rate swap (see Note 9, Derivatives ) and a variable floating rate of 7.21 % on $ 24.1 million, in addition, we had issued letter of credit guarantees of $ 2.7 million under the Amended Fourth A&R Credit Agreement.

As of December 31, 2024, we had no outstanding borrowings and issued letter of credit guarantees of $ 2.9 million under the Amended Fourth A&R Credit Agreement.

Convertible Notes

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(3) Upon the occurrence of a Fundamental Change, as set forth in the indenture governing the Convertible Notes;

(4) During any

calendar quarter (and only during such calendar quarter) beginning after March 31, 2024, if, the last reported sale price per share of the Company’s common stock exceeds 130 % of the applicable conversion price on each applicable trading day for at least 20 trading days (whether or not consecutive) in the period of the 30 consecutive trading day period ending on, and including, the last trading day of the immediately preceding calendar quarter;

(4) During any calendar quarter (and only during such calendar quarter) beginning after March 31, 2024, if, the last reported sale price per share of the Company’s common stock exceeds 130 % of the applicable conversion price on each applicable trading day for at least 20 trading days (whether or not consecutive) in the period of the 30 consecutive trading day period ending on, and including, the last trading day of the immediately preceding calendar quarter;

or (5) Prior to the related redemption date if the Company calls any Convertible Notes for redemption.

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In December 2023, in connection with the pricing of the Convertible Notes, Merit entered into privately negotiated capped call transactions (“Capped Call Transactions”) with certain of the initial purchasers and/or their respective affiliates and certain other financial institutions.

The Capped Call Transactions cover, subject to customary anti-dilution adjustments, the number of shares of Merit’s common stock initially underlying the Convertible Notes and are generally expected to reduce potential dilution to Merit’s common stock upon any conversion of Convertible Notes and/or offset any cash payments Merit is required to make in excess of the principal amount of converted Convertible Notes, as the case may be, with such reduction and/or offset subject to a cap, based on a cap price initially equal to approximately $ 114.68 per share of Merit’s common stock, subject to certain adjustments under the terms of the Capped Call Transactions.

of Merit’s common stock, subject to certain adjustments under the terms of the Capped Call Transactions.

The cost of the Capped Call Transactions was approximately $ 66.5 million.

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Changes in the fair value of derivatives not designated as hedging instruments are recorded in earnings throughout the term of the derivative.

Derivatives Designated as Cash Flow Hedges

On December 23, 2019, we entered into a pay-fixed, receive-variable interest rate swap with a notional amount of $ 75 million with Wells Fargo.

In June 2023, certain terms under the agreement were amended to reflect the transition from LIBOR to SOFR, an alternative reference rate.

Under the interest rate swap agreement we fixed the one-month SOFR rate on that portion of our borrowings under the Amended Fourth A&R Credit Agreement at 1.64 % for the period from June 1, 2023 to July 31, 2024.

The variable portion of the interest rate swap is tied to the one-month SOFR rate (the benchmark interest rate).

On a monthly basis, the interest rates under both the interest rate swap and the underlying debt reset, the swap is settled with the counterparty, and interest is paid.

At December 31, 2024, we held no interest rate swap qualifying as cash flow hedges.

At December 31, 2023, our interest rate swap qualified as a cash flow hedge.

The fair value of our interest rate swap at December 31, 2023 was an asset of $ 1.5 million, partially offset by $ 0.4 million in deferred taxes.

Interest Rate Risk.

In December 2019, we entered into a pay-fixed, receive-variable interest rate swap with a notional amount of $ 75 million with Wells Fargo wherein we fixed the one-month SOFR rate on that portion of our borrowings under the Amended Fourth A&R Credit Agreement.

The term of the interest rate swap expired on July 31, 2024.

Foreign Currency Risk .

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December 31, 2024

Interest rate swap

Prepaid expenses and other assets

Foreign currency forward contracts

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Derivative instruments designated as cash flow hedges had the following effects, before income taxes, on other comprehensive income ("OCI") in our consolidated statements of comprehensive income and consolidated balance sheets (in thousands):

Amount of Gain

Amount of Gain/(Loss)

Recognized in OCI

Year Ended December 31,

Derivative instrument

5 unchanged sentences

Reclassified from AOCI

Year Ended December 31,

Location in statements of income

4 unchanged sentences

The following gains/(losses) from these derivative instruments were recognized in our consolidated statements of income for the years presented (in thousands):

Year ended December 31,

Derivative Instrument

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In the ordinary course of business, we are involved in various claims and litigation matters.

T hese proceedings, actions and claims may involve product liability, intellectual property, contract disputes, employment, governmental inquiries or other matters, including the matter described below.

These proceedings, actions and claims may involve product liability, intellectual property, contract disputes, employment, governmental inquiries or other matters, including the matter described below.

These matters generally involve inherent uncertainties and often require prolonged periods of time to resolve.

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Legal costs for these matters, such as outside counsel fees and expenses, are charged to expense in the period incurred.

Commencing in January 2022, we have received requests from the Division of Enforcement of the U.S.

Commencing in January 2022, we received requests from the Division of Enforcement of the U.S.

Securities and Exchange Commission (“SEC”) seeking the voluntary production of information relating to the business activities of Merit’s subsidiary in China, including interactions with hospitals and health care officials in China (the “SEC Inquiry”).

We are cooperating with the requests, investigating the matter and are in discussions with the SEC Staff regarding a potential resolution to the matter.

Currently, we are unable to predict the scope, timing, significance or outcome of the SEC Inquiry or estimate a reasonably possible loss or range of loss associated with the matter.

It is possible that the ultimate resolution of the SEC Inquiry, if resolved in a manner unfavorable to us, may be materially adverse to our business, financial position, results of operations or liquidity.

In management's opinion, based on its examination of these matters, its experience to date and discussion with counsel, other than the SEC Inquiry, we are not currently involved in any legal proceedings which, individually or in the aggregate, could have a material adverse effect on our financial position, results of operations or cash flows.

We cooperated with the requests and investigated the matter.

During the quarter ended September 30, 2025, the SEC’s Division of Enforcement notified us that they had concluded the SEC Inquiry and were not recommending enforcement action against us.

In management's opinion, based on its examination of these matters, its experience to date and discussions with counsel, we are not currently involved in any legal proceedings which, individually or in the aggregate, could have a material adverse effect on our financial position, results of operations or cash flows.

Our management regularly assesses the risks of legal proceedings in which we are involved, and management’s view of these matters may change in the future .

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2006 Long-Term Incentive Plan (the "2006 Incentive Plan").

The 2018 Incentive Plan provides for the granting of stock options, stock appreciation rights, restricted stock, stock units (including restricted stock units) and performance awards (including performance stock units).

Options may be granted to directors, officers, outside consultants and key employees and may be granted upon such terms and such conditions as the Compensation Committee of our Board of Directors determines.

Options typically vest on an annual

basis over a three to five-year life with a contractual life of seven years .

As of December 31, 2024, approximately 3,026,000 shares remained available to be issued under the 2018 Incentive Plan.

The 2018 Incentive Plan provides for the granting of several types of incentive awards (collectively, “Plan Awards”), including stock options, stock appreciation rights, restricted stock, stock units (including restricted stock units) and performance awards (including performance stock units).

Plan Awards may be granted to directors, officers, outside consultants and key employees and may be granted upon such terms and such conditions as the Compensation Committee of our Board of Directors determines.

Stock options typically vest on an annual basis over a three to five-year life with a contractual life of seven years .

Restricted stock units typically vest on an annual basis over one to four years .

Performance stock units vest at the end of the applicable performance measurement period, which is typically a three -year period.

As of December 31, 2025, approximately 1.9 million shares remained available to be issued under the 2018 Incentive Plan.

2006 Long-Term Incentive Plan .

1 unchanged sentence

As of December 31, 2025, the 2006 Incentive Plan was no longer being used for new equity award grants.

However, as of December 31, 2024, options granted under this plan were still outstanding, vesting, and being exercised and will continue to be outstanding until the vesting periods end and the terms of the equity awards expire.

During the year ended December 31, 2025, all remaining options granted under this plan were exercised and as such, no equity awards associated with the plan remained outstanding as of December 31, 2025.

Employee Stock Purchase Plan .

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Nonqualified stock options

Restricted stock units

Total cost of sales

Research and development

Nonqualified stock options

Restricted stock units

Total research and development

Selling, general and administrative

3 unchanged sentences

Cash-settled performance-based awards

Cash-settled restricted stock units

Total selling, general and administrative

4 unchanged sentences

As of December 31, 2025, the total remaining unrecognized compensation cost related to non-vested stock options, net of expected forfeitures, was $ 4.4 million and is expected to be recognized over a weighted average period of 1.2 years.

In applying the Black-Scholes methodology to the option grants, the fair value of our stock-based awards granted was estimated using the following assumptions for the years ended December 31, 2023 and 2022:

In applying the Black-Scholes methodology to the option grants, the fair value of our stock-based awards granted was estimated using the following assumptions for the year ended December 31, 2023:

Risk-free interest rate

3.6 % - 4.8 %

1.4 % - 4.3 %

Expected option term

2 unchanged sentences

39.6 % - 47.1 %

46.2 % - 47.5 %

The average risk-free interest rate is determined using the U.S.

3 unchanged sentences

We recognize compensation expense for options on a straight-line basis over the service period, which corresponds to the vesting period.

During the years ended December 31, 2023 and 2022, approximately 444,000 and 251,000 nonqualified stock option grants were made, respectively, for a total fair value of $ 13.1 million and $ 6.3 million.

The Company did no t grant any options during the year ended December 31, 2024.

During the year ended December 31, 2023, approximately 444,000 nonqualified stock option grants were made for a total fair value of $ 13.1 million.

The Company did no t grant any options during the years ended December 31, 2025 and 2024.

The table below presents information related to stock option activity for the years ended December 31, 2025, 2024 and 2023 (in thousands):

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Ending vested and expected to vest

The weighted average grant-date fair value of options granted during the years ended December 31, 2023 and 2022 was $ 29.58 and $ 24.98 , respectively.

Stock-Settled Performance-Based Restricted Stock Units (“PSUs”) and Time-Vested Restricted Stock Units (“RSUs”)

The weighted average grant-date fair value of options granted during the year ended December 31, 2023 was $ 29.58 .

Stock-Settled Performance-Based Restricted Stock Units (“PSUs”)

We have outstanding PSUs which vest at the end of three-year performance periods.

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At the end of the performance period, cumulative expense is calculated based on the actual financial performance metrics attained.

We have granted RSUs to our employees and non-employee directors, which are subject to continued service through the vesting date, which is between one to four years from the date of grant.

Restricted Stock Units (“RSUs”)

We have granted RSUs to our employees and non-employee directors, which are subject to continued service through the vesting date, with employee RSUs generally vesting between three to four years and non-employee director RSUs vesting one year form the date of grant.

The expense recognized for RSUs is equal to the closing stock price on the date of grant, which is recognized over the vesting period.

5 unchanged sentences

Beginning nonvested balance

rTSR adjustment

Nonvested balance at December 31

(1) Based on the maximum payout, excluding the impact of the rTSR multiplier.

The actual number of shares which vest is determined based on the satisfaction of performance conditions and the application of an rTSR multiplier between 75 % and 125 % .

The actual number of shares which vest is determined based on of performance conditions and the application of an rTSR multiplier between 75 % and 125 % .

(2) Represents the application of an rTSR multiplier of 125 % to awards vested in 2025 based on the performance of our common stock and the terms of the awards.

The following table summarizes PSUs and RSUs granted during the years ended December 31, 2025, 2024 and 2023 (units and shares in thousands):

28 unchanged sentences

These awards entitle him to a target cash payment based upon our relative shareholder return as compared to the rTSR and achievement of specified performance metrics, as defined in the award agreements.

Awards with target cash incentives totaling $ 3.3 million were forfeited during the year ended December 31, 2025.

During the years ended December 31, 2025, 2024 and 2023, we granted additional performance stock units to certain employees that provide for settlement in cash upon our achievement of specified financial metrics.

1 unchanged sentence

Compensation expense is recognized for the cash payment probable of being awarded based on the performance metrics.

The potential maximum payout of these liability awards is 250 % of the target cash incentive, resulting in a total potential maximum payout of $ 4.7 million, $ 4.3 million and $ 2.5 million for liability awards granted during the years ended December 31, 2024, 2023 and 2022, respectively.

The potential maximum payout of these liability awards is 250 % of the target cash incentive, resulting in a total potential maximum payout of $ 0.4 million, $ 0.5 million and $ 4.6 million for outstanding liability awards granted during the years ended December 31, 2025, 2024 and 2023, respectively.

Settlement generally occurs at the end of three-year performance periods based upon the same performance metrics and vesting period as our performance stock units.

2 unchanged sentences

As of December 31, 2025, our recorded liabilities associated with these awards was $ 3.9 million, and we had remaining unrecognized compensation cost related to cash-settled performance-based share-based awards of $ 0.3 million, which is expected to be recognized over a weighted average period of 1.6 years.

During 2024, 2023 and 2022, we paid $ 1.3 million, $ 1.7 million and $ 0.8 million, respectively, in connection with liability awards, and no awards were forfeited.

During 2025, 2024 and 2023, we paid $ 2.5 million, $ 1.3 million and $ 1.7 million, respectively, in connection with liability awards.

SEGMENT REPORTING AND FOREIGN OPERATIONS

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During the years ended December 31, 2025, 2024 and 2023, we had international sales of $ 606.4 million, $ 555.7 million and $ 530.4 million, respectively, or 40.0 %, 41.0 % and 42.2 %, respectively, of net sales.

Our largest international markets include China, Japan, Germany, France and the United Kingdom, with China representing our most significant international sales market with sales of $ 149.8 million, $ 147.3 million, and $ 149.3 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Our largest international markets include China, Japan, Germany, France and the United Kingdom.

International sales are attributed based on location of the customer receiving the product.

Our long-lived assets (which are comprised of our net property and equipment) by geographic area at December 31, 2025, 2024 and 2023, consisted of the following (in thousands):

United States

Other foreign countries

Financial information relating to our reportable operating segments and reconciliations to the consolidated totals for the years ended December 31, 2024, 2023 and 2022, are as follows (in thousands):

December 31, 2025

1 unchanged sentence

December 31, 2023

United States

Other foreign countries

Financial information relating to our reportable operating segments and reconciliations to the consolidated totals for the years ended December 31, 2025, 2024 and 2023, are as follows (in thousands):

Cardiovascular

12 unchanged sentences

(2) Cost of sales other for all segments include amortization expense associated with our developed technology and license agreement intangible assets, freight and handling associated with shipments to customers, provisions based on estimated excess, slow moving and obsolete inventories, manufacturing and price variances, and royalties.

(3) Other operating expenses include impairment charges, contingent consideration (benefit expense) related to the changes in fair value of contingent payments associated with acquisitions, acquired in-process research and development expense, and certain legal settlements.

Cardiovascular

(3) Other operating expenses include impairment charges, contingent consideration expense related to the changes in fair value of contingent payments associated with acquisitions, and acquired in-process research and development expense.

Total depreciation and amortization by operating segment for the years ended December 31, 2025, 2024 and 2023, consisted of the following (in thousands):

Cardiovascular

EMPLOYEE BENEFIT PLANS

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Money market funds (1)

Marketable securities (2)

United States treasury debt securities (2)

Foreign currency contract assets, current and long-term (3)

8 unchanged sentences

December 31, 2024

Money market funds (1)

Marketable securities (5)

Interest rate contract asset, current (3)

Foreign currency contract assets, current and long-term (3)

3 unchanged sentences

The fund is recorded as cash equivalents in the consolidated balance sheets.

(2) Our marketable securities, which consist entirely of available-for-sale equity securities, are valued using market prices in active markets.

Level 1 instrument valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets.

(3) The fair value of the interest rate contract is determined using Level 2 fair value inputs and is recorded as prepaid and other current assets or other long-term assets in the consolidated balance sheets.

(2) The fair value of U.S.

treasury debt securities are determined using quoted prices for identical assets in active markets and is recorded as cash and cash equivalents in the consolidated balance sheets.

(3) The fair value of the foreign currency contract assets (including those designated as hedging instruments and those not designated as hedging instruments) is determined using Level 2 fair value inputs and is recorded as prepaid and other assets or other long-term assets in the consolidated balance sheets.

(4) The fair value of the foreign currency contract liabilities (including those designated as hedging instruments and those not designated as hedging instruments) is determined using Level 2 fair value inputs and is recorded as accrued expenses or other long-term obligations in the consolidated balance sheets.

(5) Our marketable securities, which consist entirely of available-for-sale equity securities, are valued using market prices in active markets.

Level 1 instrument valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets.

Certain of our business combinations involve the potential for the payment of future contingent consideration, generally based on a percentage of future product sales or upon attaining specified future revenue or other milestones.

Contingent consideration liabilities are re-measured to fair value at each reporting period, with the change in fair value recognized within operating expenses in the accompanying consolidated statements of income.

We measure the initial liability and re-measure the liability on a recurring basis using Level 3 inputs as defined under authoritative guidance for fair value

measurements.

We measure the initial liability and re-measure the liability on a recurring basis using Level 3 inputs as defined under authoritative guidance for fair value measurements.

Changes in the fair value of our contingent consideration liabilities during the years ended December 31, 2025 and 2024, consisted of the following (in thousands):

Beginning balance

Contingent consideration liability recorded as the result of acquisitions

Contingent consideration expense

7 unchanged sentences

Fair value at

Contingent consideration

Contingent consideration liability

Unobservable inputs

2 unchanged sentences

Discount rate

14.0 % - 16.0 %

Projected year of payments

3 unchanged sentences

Projected year of payments

Regulatory approval contingent liability

Acquisition-related milestone contingent liability

Scenario-based method

Discount rate

4.7 % - 4.8 %

Probability of milestone payment

Projected year of payment

95.0 % - 100.0 %

Projected year of payments

(1) Unobservable inputs were weighted by the relative fair value of the instruments.

1 unchanged sentence

Fair value at

Contingent consideration

Contingent consideration liability

Unobservable inputs

26 unchanged sentences

During 2023, we made the final contingent payment to Cianna Medical Shareholders, including $ 0.9 million paid to the former Merit director who is a former Cianna Medical shareholder .

During the year ended December 31, 2022, we made contingent payments of approximately $ 1.6 million to the former director .

Fair Value of Other Financial Instruments

6 unchanged sentences

All of our nonrecurring valuations use significant unobservable inputs and therefore fall under Level 3 of the fair value hierarchy.

Intangible Assets.

During the years ended December 31, 2024, 2023 and 2022, we had losses of $ 0.0 million, $ 0.0 million and $ 1.7 million, respectively, related to certain acquired intangible assets (see Note 1 Organization and Summary of Significant Accounting Policies ).

Equity Investments, Purchase Options and Notes Receivable.

During the year ended December 31, 2023, we recorded impairment charges of $ 0.3 million associated with our previously held equity investment in Bluegrass in connection with the Bluegrass asset acquisition completed on May 4, 2023 (see Note 3 Acquisitions and Other Strategic Transactions ).

During the year ended December 31, 2022, we recognized $ 0.5 million of impairment expense related to our equity method investment in XableCath, as business ceased operations.

We had no such losses during the year ended December 31, 2024.

We had no such losses during the years ended December 31, 2025 and 2024.

Our equity investments in privately held companies were $ 28.7 million and $ 22.8 million at December 31, 2025 and 2024, respectively, which are included within other long-term assets in our consolidated balance sheets.

2 unchanged sentences

Current Expected Credit Losses

Our outstanding long-term notes receivable, including accrued interest and our allowance for current expected credit losses, were $ 9.4 million and $ 3.2 million, as of December 31, 2024 and 2023, respectively.

Our outstanding notes receivable, including accrued interest and our allowance for current expected credit losses, were $ 21.6 million and $ 9.4 million, as of December 31, 2025 and 2024, respectively.

As of December 31, 2025 and 2024, we had an allowance for current expected credit losses of $ 2.6 million and $ 1.4 million, respectively, associated with these notes receivable.

9 unchanged sentences

BALANCE — January 1, 2023

Other comprehensive income (loss)

Other comprehensive income

Reclassifications to:

1 unchanged sentence

Interest expense

Net other comprehensive income (loss)

Net other comprehensive (loss) income

BALANCE — December 31, 2023

Other comprehensive income

Other comprehensive income (loss)

Reclassifications to:

3 unchanged sentences

BALANCE — December 31, 2024

Other comprehensive income (loss)

Other comprehensive income

Reclassifications to:

Cost of sales

Interest expense

Net other comprehensive income (loss)

Net other comprehensive (loss) income

BALANCE — December 31, 2025

2 unchanged sentences

A number of our lease agreements contain options to renew at our discretion for periods of up to 15 years and options to terminate the leases within one year .

The lease term used to calculate ROU assets and lease liabilities includes renewal and termination options that are deemed reasonably certain to be exercised.

The lease term used to calculate right-of-use assets and lease liabilities includes renewal and termination options that are deemed reasonably certain to be exercised.

Lease agreements with lease and non-lease components are generally accounted for as a single lease component.

We do not have any bargain purchase options in our leases.

For leases with an initial term of one year or less, we do not record a ROU asset or lease liability on our consolidated balance sheet.

Substantially all of the ROU assets and lease liabilities as of December 31, 2024 recorded on our consolidated balance sheet are related to our cardiovascular segment.

For leases with an initial term of one year or less, we do not record a right-of-use asset or lease liability on our consolidated balance sheet.

From time to time, we enter into agreements to sublease a portion of our facilities to third parties.

3 unchanged sentences

The following was included in our consolidated balance sheet as of December 31, 2025 and 2024 (in thousands):

ROU operating lease assets

December 31, 2025

December 31, 2024

Right-of-use operating lease assets

Short-term operating lease liabilities

18 unchanged sentences

As of December 31, 2025, 2024 and 2023, our lease agreements had the following remaining lease term and discount rates:

December 31, 2025

December 31, 2024

December 31, 2023

Weighted average remaining lease term

5 unchanged sentences

Imputed interest

SUBSEQUENT EVENTS

On January 31, 2026, Merit and Health Line International Corporation (“HL”) entered into an Asset Purchase Agreement (the “HL Purchase Agreement”), pursuant to which Merit agreed to sell certain assets relating to the Dual Cap® product line to HL for a purchase price of $ 28 million(the “Purchase Price” and such transaction, the “HL Transaction”).

Merit and HL closed the HL Transaction on February 17, 2026.

Pursuant to the terms of the HL Purchase Agreement, at the closing, HL (i) paid Merit $ 25.5 million of the Purchase Price and (ii) held back the remaining $ 2.5 million of the Purchase Price for a period of 18 months following closing as security (with a right of offset) for breaches of Merit’s representations and warranties and certain other obligations under the HL Purchase Agreement.

In order to facilitate the transition of the DualCap® business from Merit to HL, at the closing of the HL Transaction, Merit and HL entered into, among other agreements, a contract manufacturing agreement and a transition and distribution services agreement, pursuant to which Merit is obligated to perform certain manufacturing, transition and distribution services to HL for a period of up to 24 months after the closing.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data