What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-01-07 compared with 2021-09-30 · 110 added, 83 removed, 107 unchanged (64% of the section changed)

7 unchanged sentences

Investors are cautioned that actual events or results may differ materially from our expectations, expressed or implied.

Factors that may affect our actual results achieved include, without limitation, our ability to develop existing and new products, future actions by FDA or other regulatory agencies, results of pending or future clinical trials, the results of ongoing litigation, overall economic conditions, general market conditions, market acceptance, foreign currency exchange rate fluctuations, the effects on pricing from group purchasing organizations and competition, our ability to integrate purchased businesses and other factors including natural disasters and pandemics (such as the scope, scale and duration of the impact of COVID-19).

Factors that may affect our actual results achieved include, without limitation, our ability to develop existing and new products, future actions by FDA or other regulatory agencies, results of pending or future clinical trials, the results of ongoing litigation, overall economic conditions (including inflation and labor shortages), general market conditions, market acceptance, foreign currency exchange rate fluctuations, the effects on pricing from group purchasing organizations and competition, our ability to integrate purchased businesses and other factors including natural disasters and pandemics (such as the scope, scale and duration of the impact of COVID-19).

Other risks and uncertainties include, but are not limited to, the factors described from time to time in our reports filed with the Securities and Exchange Commission (the "SEC").

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In addition, our growth is impacted by changes within our sector, such as the merging of competitors to gain scale and influence;

changes in the regulatory environment for medical device;

changes in the regulatory environment for medical devices;

and fluctuations in the global economy.

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Expansions of our product offerings are created through internal and external product development, technology licensing and strategic alliances.

We recognize the importance of, and intend to continue to make investments in research and development activities and selective business development opportunities to provide growth opportunities.

We recognize the importance of, and intend to continue to

make investments in research and development activities and selective business development opportunities to provide growth opportunities.

We sell our products in the United States primarily through a direct sales force, and outside the U.S.

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We expect our businesses to grow in both sales and profitability by expanding geographically, penetrating new markets, introducing new products and increasing our presence internationally.

The COVID-19 global pandemic has impacted our business and may pose future risks.

Even with the public health actions that have been taken to reduce the spread of the virus, there may continue to be disruptions with respect to consumer demand, hospital operating procedures and workflow, our ability to continue to manufacture products, the reliability of our supply chain and inflation.

The COVID-19 global pandemic has impacted our business and may continue to pose future risks with the emergence of new variants.

Even with the public health actions that have been taken to reduce the spread of the virus, the market continues to experience disruptions with respect to consumer demand, hospital operating procedures and workflow, trends that may continue.

The Company's ability to manufacture products, the reliability of our supply chain, labor shortages, backlog and inflation (including the cost of raw materials, direct labor and shipping) have impacted our business, trends that may continue.

Accordingly, management continues to evaluate the Company’s liquidity position, communicate with and monitor the actions of our customers and suppliers, and review our near-term financial performance.

In evaluating the operating performance of our business, management focuses on revenue, gross margin, operating income, earnings per share and cash flow from operations.

A summary of these key financial metrics for the three months ended August 31, 2021 compared to the three months ended August 31, 2020 are as follows:

Three months ended August 31, 2021:

A summary of these key financial metrics for the three and six months ended November 30, 2021 compared to the three and six months ended November 30, 2020 are as follows:

Three months ended November 30, 2021:

• Revenue increased by 7.6% to $78.3 million.

• Gross profit increased 120 bps to 52.1%.

• Med Tech growth of 36.4% and Med Device growth of 0.8%.

• Gross profit decreased 340 bps to 51.8%.

• Net loss increased by $4.1 million to $8.4 million.

• Loss per share increased by $0.10 to a loss of $0.21.

Our Med Tech business, comprised of Mechanical Thrombectomy, Auryon and NanoKnife, experienced improved performance during the first quarter of fiscal year 2022 as the number of procedures continued to improve from the COVID-19 impact in the first quarter of the prior year.

In our Med Device business, Vascular Access, excluding the large prior year order in the UK, also improved in the first quarter of fiscal year 2022 compared to the prior year period.

This was partially offset by our Med Device Oncology products, which continued to face pressure from reductions in procedure volumes due to challenges resulting from the COVID-19 pandemic.

New Accounting Pronouncements

Information regarding new accounting pronouncements is included in Note 17 to our consolidated financial statements in this Quarterly Report on Form 10-Q.

Results of Operations for the Three Months Ended August 31, 2021 and 2020

For the three months ended August 31, 2021, the Company reported a net loss of $7.0 million, or a loss of $0.18 per diluted share, on net sales of $77.0 million, compared with a net loss of $4.3 million, or a loss of $0.11 per diluted share, on net sales of $70.2 million during the same quarter of the prior year.

Six months ended November 30, 2021:

• Revenue increased by 8.6% to $155.3 million.

• Med Tech growth of 50.0% and Med Device growth of 0.1%.

• Gross profit decreased 110 bps to 52.0%.

• Net loss increased by $6.8 million to $15.3 million.

• Loss per share increased by $0.17 to a loss of $0.39.

• Cash used in operations in creased by $13.0 million to $7.0 million.

In our Med Tech business, comprised of Auryon, the Thrombectomy portfolio and NanoKnife, Auryon and the Thrombectomy portfolio experienced improved performance during the second quarter of fiscal year 2022 as the number of procedures increased.

In our Med Device business, Vascular Access, also improved in the second quarter of fiscal year 2022 compared to the prior year period.

This was partially offset by our Oncology products, which continued to face pressure from reductions in procedure volumes due to challenges resulting from the COVID-19 pandemic.

Results of Operations

For the three months ended November 30, 2021, the Company reported a net loss of $8.4 million, or a loss of $0.21 per diluted share, on net sales of $78.3 million, compared with a net loss of $4.3 million, or a loss of $0.11 per diluted share, on net sales of $72.8 million during the same quarter of the prior year.

For the six months ended November 30, 2021, the Company reported a net loss of $15.3 million, or a loss of $0.39 per diluted share, on net sales of $155.3 million, compared with a net loss of $8.5 million, or a loss of $0.22 per diluted share, on net sales of $143.0 million during the same period of the prior year.

Net sales - Net sales are derived from the sale of products and related freight charges, less discounts, rebates and returns.

The table below summarizes net sales by Med Tech and Med Device:

Three Months Ended

(in thousands) Aug 31, 2021 Aug 31, 2020 % Change

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2021 Nov 30, 2020 % Change Nov 30, 2021 Nov 30, 2020 % Change

Med Tech $ 18,886 $ 13,849 36.4% $ 36,504 $ 24,335 50.0%

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Total $ 78,280 $ 72,770 7.6% $ 155,251 $ 142,986 8.6%

Three Months Ended

(in thousands) Aug 31, 2021 Aug 31, 2020 % Change

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2021 Nov 30, 2020 % Change Nov 30, 2021 Nov 30, 2020 % Change

Net Sales by Global Business Unit

Endovascular Therapies $ 38,058 $ 29,857 27.5%

Therapies $ 39,660 $ 33,900 17.0% $ 77,718 $ 63,757 21.9%

Vascular Access 25,070 23,930 4.8% 50,026 52,035 (3.9)%

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Total $ 78,280 $ 72,770 7.6% $ 155,251 $ 142,986 8.6%

For the three months ended August 31, 2021, net sales increased $6.8 million to $77.0 million compared to the same period in the prior year.

The Med Tech business increased $7.1 million from the first quarter of the prior year.

This growth was driven by Auryon sales which grew $4.8 million compared to the prior year.

The AngioVac business grew $0.7 million as the Company generally continued to see consistent case volumes in AngioVac despite continued COVID-19 challenges.

Additionally, NanoKnife also had improved capital and disposable sales which increased $1.0 and $0.7 million, respectively.

NanoKnife capital growth was in the U.S and Europe while the disposable growth was driven by U.S sales.

The Med Device business net sales decreased $0.4 million from the prior year;

however, excluding the large prior year order in the UK, net sales increased $4.8 million.

This increase was driven by increased case volume compared to the first quarter of the prior year which resulted in increased sales of Core, Venous and BioSentry products of $2.1 million, $0.6 million and $0.4 million, respectively.

Excluding the prior year order in the UK, Midlines, PICCs and Ports increased $2.2 million, with $1.1 million of the increase driven by U.S port sales.

These increases were partially offset by decreased Microwave sales of $0.4 million.

For the three months ended November 30, 2021, net sales increased $5.5 million to $78.3 million compared to the same period in the prior year.

For the six months ended November 30, 2021, net sales increased $12.3 million to $155.3 million compared to the same period in the prior year.

At November 30, 2021, the Company had a backlog of $4.0 million.

The Med Tech business net sales increased $5.0 million and $12.2 million for the three and six months ended November 30, 2021 compared to the same periods in the prior year, respectively.

The change in sales for both periods was primarily driven by:

• Increased Auryon sales of $4.2 million and $9.0 million compared to the same periods in the prior year, respectively;

• Growth in the thrombectomy platform driven by the AngioVac business of $1.2 million and $1.9 million, compared to the same periods in the prior year, respectively, as the Company saw increased case volumes in AngioVac despite continued COVID-19 challenges along with the limited market launch of the AlphaVac product during the second quarter of fiscal year 2022;

• Decreased NanoKnife sales of $0.7 million for the three months ended November 30, 2021 compared to the same period in the prior year and increased NanoKnife sales of $1.0 million for the six months ended November 30, 2021 compared to the same period in the prior year.

The decrease for the three months ended November 30, 2021 was driven by decreased capital sales offset by a $0.2 million increase in disposable sales, mainly in Europe.

For the six months ended November 30, 2021, NanoKnife disposable sales increased $1.0 million, driven by sales in the U.S.

and Europe, with consistent capital sales.

The Med Device business net sales increased $0.5 million and $0.1 million for the three and six months ended November 30, 2021 compared to the same periods in the prior year, respectively.

Excluding the large UK order in the first quarter of the prior year, net sales increased $5.3 million for the six months ended November 30, 2021.

The change in sales for both periods was primarily driven by:

• Increased case volume for the three months ended November 30, 2021 compared to the same period in the prior year which resulted in increased sales of Core and BioSentry products of $0.7 million and $0.1 million, respectively.

PICCs and Port sales also increased $0.9 million and $0.6 million, respectively with the increase in PICCs driven by sales in the U.S.

and Latin America and the increase in Ports driven solely by sales in the U.S.

These increases for the three months ended November 30, 2021 compared to the same period in the prior year were partially offset by decreased Venous, Midline, Radio Frequency A blation, Microwave and Balloon sales of $0.7 million, $0.2 million, $0.5 million, $0.2 million and $0.1 million, respectively;

• Increased case volume for the six months ended November 30, 2021 compared to the same period in the prior year, which resulted in increased sales of Core and BioSentry products of $2.9 million and $0.4 million, respectively.

Port sales also increased $1.9 million, driven primarily by sales in the U.S.

These increases for the six months ended November 30, 2021 compared to the same period in the prior year were partially offset by decreased Venous, Midline, PICCs, Di alysis, Radio Frequency Ablation and Microwave sales of $0.1 million, $2.0 million, $1.6 million, $0.4 million, $0.4 million and $0.6 million, respectively;

• Midlines, PICCs and Ports increased $3.5 million, excluding the prior year order in the UK, for the six months ended November 30, 2021 compared to the prior year period;

• The backlog of $4.0 million at November 30, 2021, which was primarily related to Med Device products.

Gross Profit, Operating expenses, and Other income (expense)

Three Months Ended

(in thousands) Aug 31, 2021 Aug 31, 2020 % Change

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2021 Nov 30, 2020 % Change Nov 30, 2021 Nov 30, 2020 % Change

Gross profit $ 40,555 $ 40,174 0.9 % $ 80,694 $ 75,938 6.3 %

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Gross profit - Gross profit consists of net sales less the cost of goods sold, which includes the costs of materials, products purchased from third parties and sold by us, manufacturing personnel, royalties, freight, business insurance, depreciation of property and equipment and other manufacturing overhead, exclusive of intangible amortization.

Gross profit increased by $4.4 million compared to the prior year.

Gross profit increased by $0.4 million for th e three months ended November 30, 2021 compared to the same period in the prior year.

The change is primarily attributable to the following:

• Sales volume positively impacted gross profit by $4.2 million year over year;

• Sales mix positively impacted gross profit by $0.7 million as a result of increased sales of NanoKnife, Auryon and AngioVac;

• Increased Auryon start up costs related to placed units of $1.0 million negatively impacted gross profit year over year;

• Inflationary costs on raw materials, labor and freight had a negative impact of $1.4 million year over year, partially offset by favorablility in production volume and other initiatives of $1.2 million and $0.4 million, respectively.

Research and development expense - Research and development (“R&D”) expense includes internal and external costs to develop new products, enhance existing products, validate new and enhanced products, and manage clinical, regulatory and medical affairs.

R&D expense decreased $1.6 million compared to the prior year.

• Sales volume positively impacted gross profit by $3.3 million;

• Price and mix negatively impacted gross profit by $0.4 million as a result of increased sales of Vascular Access products and decreased sales of NanoKnife capital.

This negative impact was partially offset by increased sales of Auryon and AngioVac products;

• Labor shortages, inflationary costs on raw materials and production volume negatively impacted gross profit by $1.7 million;

• Start-up costs related to Auryon and AlphaVac of $0.8 million, including depreciation on Auryon placement units of $0.4 million, negatively impacted gross profit .

Gross profit increased by $4.8 million for the six months ended November 30, 2021 compared to the same period in the prior year.

The change is primarily attributable to the following:

• R&D project expense decreased $1.0 million year over year primarily due to the timing of certain projects;

• Compensation and benefits expense decreased $0.4 million as a result of open roles.

• Sales volume positively impacted gross profit by $6.9 million;

• Price and mix positively impacted gross profit by $1.3 million as a result of increased sales of Auryon and AngioVac products.

This positive impact was partially offset by increased sales of Vascular Access products;

• Start-up costs related to Auryon and AlphaVac of $1.7 million, including depreciation on Auryon placement units of $0.6 million, negatively impacted gross profit;

• Labor shortages, freight and inflationary costs on raw materials, negatively impacted gross profit by $1.7 million year over year.

R&D expense decreased $1.5 million and $3.1 million for the three and six months ended November 30, 2021 compared to the same period in the prior year, respectively.

The change from each period is primarily attributable to:

• The timing of certain projects, which reduced R&D project expense by $0.7 million and $2.1 million for the three and six months ended November 30, 2021 compared to the same periods in the prior year, respectively;

• Open R&D positions, which resulted in decreased compensation and benefits expense of $0.7 and $1.1 million for the three and six months ended November 30, 2021 compared to the same periods in the prior year, respectively.

Sales and marketing expense - Sales and marketing (“S&M”) expense consists primarily of salaries, commissions, travel and related business expenses, attendance at medical society meetings, product promotions and marketing activities.

S&M expense increased $6.7 million compared to the prior year.

The change is primarily attributable to the following:

• Compensation and benefits expense increased $4.3 million due to additional headcount from the build-out of the Auryon sales and marketing teams;

• Travel and other expenses increased $2.5 million as some COVID-19 restrictions were lifted.

S&M expense increased $3.4 million and $10.2 million for the three and six months ended November 30, 2021 compared to the same period in the prior year, respectively.

The change from each period is primarily attributable to:

• Additional headcount from the build-out of the Auryon sales and marketing teams, which increased compensation and benefits expense by $2.5 million and $6.8 million for the three and six months ended November 30, 2021 compared to the same periods in the prior year, respectively;

• Increased travel, meeting and tradeshow expenses of $1.0 million and $3.2 million for the three and six months ended November 30, 2021 compared to the same period in the prior year, respectively, as some COVID-19 restrictions were lifte d.

General and administrative expense - General and administrative (“G&A”) expense includes executive management, finance, information technology, human resources, business development, legal, and the administrative and professional costs associated with those activities.

G&A expense increased $0.4 million compared to the prior year.

The change is primarily attributable to the following:

• Compensation and benefits expense increased $0.9 million year over year primarily due to increased headcount;

• Outside consultant spend decreased $0.7 million, partially offsetting the foregoing increase.

Three Months Ended

(in thousands) Aug 31, 2021 Aug 31, 2020 $ Change

G&A expense increased $0.5 million and $0.8 million for the three and six months ended November 30, 2021 compared to the same period in the prior year, respectively.

The change from each period is primarily attributable to:

• Additional headcount, which increased compensation and benefits expense by $0.5 million and $1.3 million for the three and six months ended November 30, 2021 compared to the same period in the prior year, respectively;

• Legal expense decreased $1.4 million offset by other outside consultant spend of $0.8 million for the six months ended November 30, 2021 compared to the same period in the prior year.

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2021 Nov 30, 2020 $ Change Nov 30, 2021 Nov 30, 2020 $ Change

Amortization of intangibles $ 4,889 $ 4,593 $ 296 $ 9,710 $ 9,546 $ 164

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Amortization of intangibles - Represents the amount of amortization expense that was taken on intangibles assets held by the Company.

• Amortization expense decreased $0.1 million from the prior year due to assets that became fully amortized in fiscal year 2021 along with the write-off of the OARtrac intangible asset in the fourth quarter of fiscal year 2021.

This was partially offset by amortization relating to the Camaro intangible asset addition of $3.9 million in the first quarter of fiscal year 2022.

• Amortization expense increased $0.3 million and $0.2 million, respectively, for the three and six months ended November 30, 2021 compared to the prior year periods.

The increase is due to amortization relating to the Camaro intangible asset addition of $3.9 million in the first quarter of fiscal year 2022, partially offset by assets that became fully amortized in fiscal year 2021.

Change in fair value of contingent consideration - Represents changes in contingent consideration driven by changes to estimated future payments on earn-out liabilities created through acquisitions and amortization of present value discounts on long-term contingent consideration.

• The change in the fair value is related to the Eximo contingent consideration.

• The change in the fair value for the three and six months ended November 30, 2021 is related to the Eximo contingent consideration.

Acquisition, restructuring and other items, net - Represents costs associated with mergers and acquisitions, restructuring expenses, legal costs that are related to litigation that is not in the ordinary course of business, legal settlements and other one-time items.

Acquisition, restructuring and other items, net, increased by $1.1 million compared to the prior year.

The change is primarily attributable to the following:

• Legal expense, related to litigation that is outside of the normal course of business, of $2.1 million was recorded in the first quarter of fiscal year 2022 compared to $0.8 million in the prior year;

• In the first quarter of fiscal year 2021, and as a result of the sale of the Fluid Management business, the Company incurred $0.3 million of expense to move manufacturing facilities and the Company received $0.4 million from Medline Industries, Inc.

as part of the TSA agreement.

These activities were completed during fiscal year 2021;

• Other expenses of $0.4 million in the first quarter of fiscal year 2022 compared to $0.6 million in the prior year consisted mainly of severance associated with organizational changes.

Acquisition, restructuring and other items, net, increased by $1.1 million and $2.2 million for the three and six months ended November 30, 2021, respectively, compared to the same period in the prior year.

The change from each period is primarily attributable to:

• Legal expense, re lated to litigation that is outside of the normal course of business, which increased $0.9 million and $2.2 million, respectively, for the three and six months ended November 30, 2021 compared to the same period in the prior year, respectively.

Other income (expense), net - Other expenses include interest expense, foreign currency impacts, bank fees, and amortization of deferred financing costs.

• The increase in other expense from the prior year of $0.8 million is primarily due to unrealized foreign currency losses of $0.9 million.

• The change in other expense of $0.2 million and $0.7 million for the three and six months ended November 30, 2021 compared to the same period in the prior year, respectively, is primarily due to unrealized foreign currency fluctuations of $0.1 million and $0.8 million, respectively.

Income Tax Benefit

Three Months Ended

(in thousands) Aug 31, 2021 Aug 31, 2020

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2021 Nov 30, 2020 Nov 30, 2021 Nov 30, 2020

Income tax benefit $ (0.5) $ (0.9) $ (2.1) $ (1.5)

Effective tax rate including discrete items 5.8 % 17.5 % 12.3 % 14.5 %

Our effective tax rate including discrete items for the three-month periods ended August 31, 2021 and 2020 was 19.0% and 11.3%, respectively.

Our effective tax rate including discrete items for the three-month periods ended November 30, 2021 and 2020 was 5.8% and 17.5%, respectively.

Our effective tax rate including discrete items for the six-month periods ended November 30, 2021 and 2020 was 12.3% and 14.5%, respectively.

In fiscal year 2022, the Company’s effective tax rate differs from the U.S.

statutory rate primarily due to the impact of the valuation allowance, foreign taxes, and other non-deductible permanent items (such as non-deductible meals and entertainment, Section 162(m) excess compensation and non-deductible share-based compensation).

The estimated annual effective tax rate, however, prior to discrete items was 10.6% in the first quarter of fiscal year 2022, as compared to 14.2% for the same period in fiscal year 2021.

Liquidity and Capital Resources

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We are closely monitoring receivables and payables.

Our cash and cash equivalents totaled $35.5 million as of August 31, 2021, compared with $48.2 million as of May 31, 2021.

As of August 31, 2021 and May 31, 2021, total debt outstanding related to the Revolving Facility was $25.0 million and $20.0 million, respectively.

The fair value of contingent consideration liability as of August 31, 2021 and May 31, 2021, was $15.9 million and $15.7 million, respectively.

Our cash and cash equivalents totaled $34.3 million as of November 30, 2021, compared with $48.2 million as of May 31, 2021.

As of November 30, 2021 and May 31, 2021, total debt outstanding related to the Revolving Facility was $25.0 million and $20.0 million, respectively.

The fair value of contingent consideration liability as of November 30, 2021 and May 31, 2021, was $16.5 million and $15.7 million, respectively.

The table below summarizes our cash flows:

Three Months Ended

(in thousands) Aug 31, 2021 Aug 31, 2020

Six Months Ended

(in thousands) Nov 30, 2021 Nov 30, 2020

Cash provided by (used in):

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Cash flows consisted of the following:

Cash used in operating activities

Three months ended August 31, 2021 and 2020:

• Net loss of $7.0 million and $4.3 million for the period ended August 31, 2021 and 2020, respectively, plus the non-cash items, primarily driven by depreciation and amortization and stock based compensation, along with the changes

in working capital below, contributed to cash used in operations of $8.9 million and $5.4 million, respectively, for these periods.

• For the period ended August 31, 2021, working capital was negatively impacted by decreased accounts payable, accrued liabilities and other liabilities of $6.3 million, mainly driven by the payment of annual incentive compensation in the first quarter.

• For the period ended August 31, 2020, working capital was negatively impacted by increased accounts receivable of $2.7 million and decreased accounts payable, accrued liabilities and other liabilities of $10.1 million.

Cash provided by (used in) operating activities

Six months ended November 30, 2021 and 2020:

• Net loss of $15.3 million and $8.5 million for the period ended November 30, 2021 and 2020, respectively, plus the non-cash items, primarily driven by depreciation and amortization and stock based compensation, along with the

changes in working capital below, contributed to cash used in operations of $7.0 million and cash provided by operations of $6.0 million, respectively, for these periods.

• For the period ended November 30, 2021, working capital was negatively impacted by decreased accounts payable, accrued liabilities and other liabilities of $4.5 million, mainly driven by the payment of annual incentive compensation in the first quarter along with increased accounts rec eivable of $2.9 million.

• For the period ended November 30, 2020, working capital was negatively impacted by increased accounts receivable of $2.3 million and decreased accounts payable, accrued liabilities and other liabilities of $3.8 million.

Inventory had a favorable impact on working capital of $10.5 million.

Cash used in investing activities

Three months ended August 31, 2021 and 2020:

Six months ended November 30, 2021 and 2020:

• $2.2 million and $3.2 million, respectively, of cash was used for fixed asset additions;

• $4.5 million of cash was used for Auryon placement and evaluation unit additions in the first quarter of fiscal year 2022;

• $7.2 million of cash was used for Auryon placement and evaluation unit additions in fiscal year 2022;

• $3.6 million of cash was used for the QX Medical asset acquisition in the first quarter of fiscal year 2022.

Cash provided by financing activities

Three months ended August 31, 2021 and 2020:

Six months ended November 30, 2021 and 2020:

• $5.0 million draw on the revolver in the first quarter of fiscal year 2022 for the QX Medical asset acquisition;

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The amount that we can borrow under our Credit Agreement is directly based on our leverage ratio.

The interest rate on the Revolving Facility at August 31, 2021 was 1.34%.

The Company was in compliance with the Credit Agreement covenants as of August 31, 2021.

The interest rate on the Revolving Facility at November 30, 2021 was 1.34%.

The Company was in compliance with the Credit Agreement covenants as of November 30, 2021.

In the first quarter of fiscal year 2022, the Company made a $5.0 million draw on the Revolving Facility in conjunction with the QX Medical asset acquisition.

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If we seek to make acquisitions of other businesses or technologies in the future for cash, we may require external financing.

New Accounting Pronouncements

Information regarding new accounting pronouncements is included in Note 17 to our consolidated financial statements in this Quarterly Report on Form 10-Q.

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-Q

Item 2. Management’s Discussion and Analysis