Business Combination |
3 Months Ended |
|---|---|
Mar. 31, 2026 | |
| Business Combination [Abstract] | |
| Business Combination |
3.
Business Combination
On November 20, 2025, the Company acquired all of the outstanding equity interests of IRRAS Holdings, Inc., or IRRAS, a medical technology company focused on neurocritical care. The total consideration for the acquisition, payable as of closing, was $5.0 million in cash and 1,325,000 shares of the Company’s common stock, subject to certain adjustments including for indebtedness, working capital and the satisfaction of indemnification obligations. As described below, the former equityholders of IRRAS are also eligible for earnout cash payments. Of the total consideration, payable as of closing, (i) the Company paid $5.0 million on behalf of IRRAS directly to third parties to satisfy IRRAS' outstanding liabilities, (ii) the Company paid the former equityholders of IRRAS cash consideration of $0.02 million, and (iii) the Company paid or will pay the former equityholders of IRRAS equity consideration of $17.8 million in the form of 1,319,010 shares of the Company's common stock, subject to adjustment for the satisfaction of indemnification obligations. Of the $17.8 million of equity consideration, up to 0.4 million shares of the Company's common stock remain to be issued, consisting of (i) shares issuable to the extent not applied to satisfy the indemnification obligations of the former equityholders of IRRAS, which shares may be issued, in whole or in part, sixteen months following the closing of the acquisition, subject to the terms of the merger agreement, and (ii) shares that will be issued as soon as practicable following receipt of documentation required to complete the issuances from the parties entitled to such shares. During the three months ended March 31, 2026, the Company issued 7,885 shares of common stock to the former equityholders of IRRAS. The Company also agreed to pay the former equityholders of IRRAS a contingent cash payment equal to 25% of that portion of net sales of IRRAS products that exceeds (a) $13.0 million in 2026, (b) $17.0 million in 2027, and (c) $22.0 million in 2028, in each case, within 90 days after the end of the applicable year. The Company determined that the fair value of the earnout liability is nominal as of the acquisition date of closing and as of March 31, 2026. The acquisition of IRRAS has been accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805, “Business Combinations,” with the Company treated as the accounting acquirer, which requires, among other things, that the assets acquired and liabilities assumed be recognized at their fair value as of the acquisition date. The Company is still finalizing the allocation of the purchase price and changes to this allocation may occur as additional information becomes available related to the valuation of the intangible assets, indemnification claims, and accrued expenses, with such changes recorded as an adjustment to goodwill during the measurement period. The Company has not recorded any measurement period adjustments during the three months ended March 31, 2026. |