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Financial Instruments
 3 Months Ended
Mar. 31, 2025
Fair Value Disclosures [Abstract]  
Financial Instruments Financial Instruments
A summary of financial instruments measured at fair value was as follows (in thousands):
March 31, 2025Level 1Level 2Level 3Total
Cash equivalents:
Money market funds$2,214 $— $— $2,214 
Certificates of deposit1,239 — — 1,239 
Endospan Loans— — 9,808 9,808 
Total assets$3,453 $— $9,808 $13,261 
Long-term liabilities:
Contingent consideration$— $— $50,050 $50,050 
Total liabilities$— $— $50,050 $50,050 
December 31, 2024Level 1Level 2Level 3Total
Cash equivalents:
Money market funds$18,182 $— $— $18,182 
Certificates of deposit5,069 — — 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 and certificates of deposit. 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 three months ended March 31, 2025 and 2024.
On September 2, 2020 we entered into a Securities Purchase Agreement to acquire 100% of the outstanding equity interests of Ascyrus Medical LLC (“Ascyrus”). Ascyrus developed the Ascyrus Medical Dissection Stent hybrid prosthesis (“AMDS”), the world’s first aortic arch remodeling device for use in the treatment of acute Type A aortic dissections. As part of the acquisition, we may be required to pay additional consideration in cash of up to $100.0 million to the former shareholders of Ascyrus upon the achievement of certain milestones and the sales-based additional earnout.
The contingent consideration represents the estimated fair value of future potential payments. The fair value of the contingent consideration liability was estimated by discounting to present value the contingent payments expected to be made based on a probability-weighted scenario approach. We applied a discount rate based on our unsecured credit spread and the term commensurate risk-free rate to the additional consideration to be paid, and then applied a risk-based estimate of the probability of achieving each scenario to calculate the fair value of the contingent consideration. This fair value measurement was based on unobservable inputs, including management estimates and assumptions about the future achievement of milestones and future estimate of revenues, and is, therefore, classified as Level 3 within the fair value hierarchy. We used a discount rate of approximately 17% and estimated future achievement of milestone dates between 2025 and 2026 to calculate the fair value of contingent consideration as of March 31, 2025. We remeasure this liability at each reporting date and record changes in the fair value of the contingent consideration in General, administrative, and marketing expenses in the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income. Increases or decreases in the fair value of the contingent consideration liability can result from changes in the passage of time, discount rates, the timing and amount of our revenue estimates, and the timing and expectation of regulatory approvals.
We perform quarterly assessments of the fair value of the contingent consideration and recorded a net fair value gain of $2.8 million and $17.5 million for the three months ended March 31, 2025 and 2024, respectively, in General, administrative, and marketing expenses in the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income. The $17.5 million reduction in the fair value of the liability for the three months ended March 31, 2024 was primarily due to an increase in the credit risk spread resulting from the change in the inputs related to the Credit Facilities issued in the first quarter of 2024, as further discussed in Note 7. The contingent consideration liability reflected in the Condensed Consolidated Balances Sheets was $50.1 million and $52.9 million as of March 31, 2025 and December 31, 2024, respectively.
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, 2024$52,880 
Change in valuation (2,830)
Balance as of March 31, 2025$50,050 
Endospan Loans
Balance as of December 31, 2024$9,535 
Change in valuation 273 
Balance as of March 31, 2025$9,808 
The determination of fair value and the assessment of a measurement’s placement within the hierarchy requires judgment. Level 3 valuations often involve a higher degree of judgment and complexity. Although we believe that the recorded fair values of our financial instruments are appropriate, these fair values may not be reflective of future fair values.