INVESTMENTS IN VARIABLE INTEREST ENTITIES

6 Months Ended

Jun. 30, 2025

Variable Interest Entities [Abstract]

INVESTMENTS IN VARIABLE INTEREST ENTITIES

6. INVESTMENTS IN VARIABLE INTEREST ENTITIES

The Company reviews its investments in other entities to determine whether the Company is the primary beneficiary of a VIE. The Company would be the primary beneficiary of the VIE, and would be required to

consolidate the VIE, if it has the power to direct the significant activities of the entity and the obligation to absorb losses or receive benefits from the entity that may be significant to the VIE. The Company's maximum loss exposure to VIEs, prior to the exercise of options to acquire the entities, is limited to its investment in the VIEs, which include equity investments, options to acquire, and promissory notes.

Consolidated VIEs

In February 2023, the Company acquired a majority equity interest in a medical technology company pursuant to a preferred stock purchase agreement, and amended and restated a previous option agreement to acquire the remaining equity interest. Edwards concluded that it is the primary beneficiary and consolidated the VIE. The total assets and liabilities of the Company's consolidated VIE were $242.8 million and $23.3 million, respectively, as of June 30, 2025, and were $252.3 million and $24.3 million, respectively, as of December 31, 2024. The assets of the VIE can only be used to settle obligations of the VIE and general creditors have no recourse to the Company.

Unconsolidated VIEs

Edwards has relationships with various VIEs that it does not consolidate as Edwards lacks the power to direct the activities that significantly impact the economic success of these entities.

In July 2024, the Company entered into an Agreement and Plan of Merger (“the Agreement”) to acquire JenaValve Technology, Inc. (“JenaValve”). Concurrently, the Company entered into a Promissory Note agreement (the “Promissory Note”) to loan JenaValve up to $75.0 million. The Promissory Note includes an automatic funding extension clause whereby the Company will continue to fund up to an additional $30.0 million through January 23, 2026, provided that the Agreement remains in effect and has not been terminated or expired. As of June 30, 2025 and December 31, 2024, the Company had advanced $52.5 million and $15.0 million, respectively, under the Promissory Note (included in Other Assets on the consolidated condensed balance sheets). In July 2025, the Company advanced an additional $7.5 million under the Promissory Note. The Agreement includes certain termination clauses under which, if the Agreement is terminated under specified circumstances, the Company will be required to forgive the outstanding Promissory Note as of the termination date and invest in a $45.0 million convertible promissory note as a termination loan.

In August 2022, the Company entered into an option agreement with a medical device company. Under the option agreement, the Company paid $47.1 million for an option to acquire the medical device company, which was included in Other Assets on the consolidated balance sheets as of December 31, 2024. In June 2025, the Company decided not to exercise its option to acquire the medical device company due to slower than anticipated progress by the medical device company toward achieving commercialization of the product. As a result, the Company recognized a $47.1 million loss on impairment, included in Loss on impairment on the consolidated condensed statement of operations. In July 2025, the Company entered into a simple agreement for future equity where it is required to invest $10.0 million in the medical device company’s stock.

In April 2021, the Company entered into a promissory note agreement, a preferred stock purchase agreement, and an option agreement with a privately-held medical device company (the “Investee”). The secured promissory note provides for borrowings up to $45.0 million. In April 2025, the Company invested an additional $1.8 million in the Investee's preferred equity securities and $4.0 million for the option to acquire the Investee. At both June 30, 2025 and December 31, 2024, the Company had advanced a total of $45.0 million under the promissory note (included in Other Assets). As of June 30, 2025 and December 31, 2024, the Company had invested $44.6 million and $42.8 million, respectively, in the Investee's preferred equity securities (included in Long-term Investments) and had paid $24.9 million and $20.9 million, respectively, for an option to acquire the Investee (included in Other Assets). Pursuant to the agreements, the Company may be required to invest up to an additional $1.2 million in the Investee's preferred equity securities and up to an additional $2.6 million for the option to acquire the Investee.

In December 2024, the Company entered into an option agreement and an amended preferred stock purchase agreement with a medical technology company. The Company had previously made an investment in preferred equity securities of the medical technology company under a prior preferred stock purchase agreement in 2021. Under the agreements, the Company paid $30.0 million in December 2024 for an option to acquire the medical technology company. The Company had invested $20.0 million in the preferred equity securities as of December 31, 2024. In addition, in May 2025, under the terms of the agreements, the Company paid an additional $10.0 million for the option and invested $15.0 million in the medical technology company’s preferred equity securities upon the medical technology company’s achievement of a pre-defined milestone. The Company also agreed to loan the

medical technology company up to $40.0 million upon the medical technology company's achievement of certain milestones. As of June 30, 2025 and December 31, 2024, the Company had invested $35.0 million and $20.0 million, respectively, in the medical technology company's preferred equity securities (included in Long-term Investments), and $40.0 million and $30.0 million, respectively, in the option to acquire the medical technology company (included in Other Assets).

In February 2019, the Company entered into a warrant agreement with a medical device company and paid $35.0 million for an option to acquire the medical device company. In June 2022, the Company entered into a convertible promissory note with the medical device company. Under the convertible promissory note agreement, the Company agreed to loan the medical device company up to $47.5 million. During the three months ended June 30, 2025, the Company entered into a new convertible promissory note agreement to loan the medical device company up to $30.0 million and amended its warrant agreement to provide the Company with the option to extend the warrant right period for consideration of $16.5 million. As of June 30, 2025 and December 31, 2024, the Company had advanced $77.5 million and $47.5 million, respectively, under the promissory notes (included in Other Assets). The $35.0 million for the option was included in Other Assets as of both June 30, 2025 and December 31, 2024.

In June 2025, the Company entered into a preferred share purchase agreement with a medical solutions company, under which the Company invested $30.0 million in the medical solutions company's preferred equity securities (included in Long-term Investments).

In addition, Edwards has made equity investments through the NMTC program in limited liability companies that are considered VIEs. For more information, see Note 5.