What changed in this filing

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Item 1. Financial Statements

2023-01-06 compared with 2022-10-11 · 128 added, 76 removed, 533 unchanged (28% of the section changed)

4 unchanged sentences

(in thousands of dollars, except per share data)

Three Months Ended

Aug 31, 2022 Aug 31, 2021

Three Months Ended Six Months Ended

Nov 30, 2022 Nov 30, 2021 Nov 30, 2022 Nov 30, 2021

Net sales $ 85,429 $ 78,280 $ 166,966 $ 155,251

28 unchanged sentences

(in thousands of dollars)

Three Months Ended

Aug 31, 2022 Aug 31, 2021

Three Months Ended Six Months Ended

Nov 30, 2022 Nov 30, 2021 Nov 30, 2022 Nov 30, 2021

Net loss $ ( 8,486 ) $ ( 8,351 ) $ ( 21,490 ) $ ( 15,323 )

10 unchanged sentences

(in thousands of dollars, except share data)

Aug 31, 2022 May 31, 2022

Nov 30, 2022 May 31, 2022

Current assets

27 unchanged sentences

Common stock, par value $ 0.01 per share, 75,000,000 shares authorized;

39,847,751 and 39,541,173 shares issued and 39,477,751 and 39,171,173 shares outstanding at August 31, 2022 and May 31, 2022, respectively

39,874,144 and 39,541,173 shares issued and 39,504,144 and 39,171,173 shares outstanding at November 30, 2022 and May 31, 2022, respectively

Additional paid-in capital 593,482 586,879

Accumulated deficit ( 179,903 ) ( 158,413 )

Treasury stock, 370,000 shares at August 31, 2022 and May 31, 2022, respectively

Treasury stock, 370,000 shares at November 30, 2022 and May 31, 2022, respectively

( 5,714 ) ( 5,714 )

7 unchanged sentences

(in thousands of dollars)

Three Months Ended

Aug 31, 2022 Aug 31, 2021

Six Months Ended

Nov 30, 2022 Nov 30, 2021

Cash flows from operating activities:

17 unchanged sentences

Additions to property, plant and equipment ( 2,090 ) ( 2,152 )

Acquisition of intangibles ( 540 ) —

Additions to placement and evaluation units ( 3,442 ) ( 7,189 )

8 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents ( 129 ) ( 354 )

Decrease in cash and cash equivalents ( 4,261 ) ( 12,689 )

Increase (decrease) in cash and cash equivalents 1,032 ( 13,870 )

Cash and cash equivalents at beginning of period 28,825 48,161

10 unchanged sentences

comprehensive

income Treasury Stock

income (loss) Treasury Stock

Shares Amount Shares Amount Total

8 unchanged sentences

Balance at August 31, 2022 39,847,751 $ 381 $ 589,984 $ ( 171,417 ) $ 807 ( 370,000 ) $ ( 5,714 ) $ 414,041

Net loss ( 8,486 ) ( 8,486 )

Exercise of stock options 15,000 184 184

Issuance/Cancellation of restricted stock units 11,393 ( 36 ) ( 36 )

Stock-based compensation 3,350 3,350

Other comprehensive loss, net of tax ( 1,095 ) ( 1,095 )

Balance at November 30, 2022 39,874,144 $ 381 $ 593,482 $ ( 179,903 ) $ ( 288 ) ( 370,000 ) $ ( 5,714 ) $ 407,958

Common Stock Additional

12 unchanged sentences

Balance at August 31, 2021 39,390,241 $ 379 $ 576,380 $ ( 138,838 ) $ 3,743 ( 370,000 ) $ ( 5,714 ) $ 435,950

Net loss ( 8,351 ) ( 8,351 )

Exercise of stock options 56,064 1,022 1,022

Issuance/Cancellation of restricted stock units 8,695 ( 83 ) ( 83 )

Purchases of common stock under ESPP 193 3 3

Stock-based compensation 3,008 3,008

Other comprehensive income, net of tax 819 819

Balance at November 30, 2021 39,455,193 $ 379 $ 580,330 $ ( 147,189 ) $ 4,562 ( 370,000 ) $ ( 5,714 ) $ 432,368

The accompanying notes are an integral part of these consolidated financial statements.

3 unchanged sentences

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Statements of Operations and the Consolidated Statements of Comprehensive Loss for the three months ended August 31, 2022 and 2021, the Consolidated Balance Sheet as of August 31, 2022, the Consolidated Statements of Cash Flows for the three months ended August 31, 2022 and 2021, and the Consolidated Statements of Stockholders’ Equity for the three months ended August 31, 2022 and 2021 have been prepared by the Company and are unaudited.

The Consolidated Statements of Operations and the Consolidated Statements of Comprehensive Loss for the three and six months ended November 30, 2022 and 2021, the Consolidated Balance Sheet as of November 30, 2022, the Consolidated Statements of Cash Flows for the six months ended November 30, 2022 and 2021, and the Consolidated Statements of Stockholders’ Equity for the six months ended November 30, 2022 and 2021 have been prepared by the Company and are unaudited.

The Consolidated Balance Sheet as of May 31, 2022 was derived from audited consolidated financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America.

In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary to state fairly the financial position, changes in stockholders’ equity and comprehensive income, results of operations and cash flows as of and for the period ended August 31, 2022 (and for all periods presented) have been made.

The unaudited interim consolidated financial statements for the three months ended August 31, 2022 and 2021 include the accounts of AngioDynamics, Inc.

In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary to state fairly the financial position, changes in stockholders’ equity and comprehensive income, results of operations and cash flows as of and for the period ended November 30, 2022 (and for all periods presented) have been made.

The unaudited interim consolidated financial statements for the three and six months ended November 30, 2022 and 2021 include the accounts of AngioDynamics, Inc.

and its wholly owned subsidiaries (collectively, the "Company", "we", "our" or "us").

22 unchanged sentences

The following table summarizes net sales by Med Tech, Med Device and by geography:

Three Months Ended August 31, 2022 Three Months Ended August 31, 2021

Three Months Ended November 30, 2022 Three Months Ended November 30, 2021

(in thousands) United States International Total United States International Total

2 unchanged sentences

Total $ 71,631 $ 13,798 $ 85,429 $ 65,350 $ 12,930 $ 78,280

Six Months Ended November 30, 2022

Six Months Ended November 30, 2021

(in thousands) United States International Total United States International Total

Med Tech $ 40,991 $ 6,327 $ 47,318 $ 31,467 $ 5,026 $ 36,493

Med Device 99,664 19,984 119,648 98,347 20,411 118,758

Total $ 140,655 $ 26,311 $ 166,966 $ 129,814 $ 25,437 $ 155,251

Net Product Revenue

The Company's products consist of a wide range of medical, surgical and diagnostic devices used by professional healthcare providers for vascular access, for the treatment of peripheral vascular disease and for use in oncology and surgical settings.

The Company's devices are generally used in minimally invasive, image-guided procedures.

The Company's products are generally used in minimally invasive, image-guided procedures.

Most of the Company's products are intended to be used once and then discarded, or they may be implanted for short or long term use.

19 unchanged sentences

These types of agreements include an embedded operating lease for the right to use the units.

In these arrangements, revenue recognized for the sale of the disposables is not allocated between the disposal revenue and lease revenue due to the insignificant value of the units in relation to the total agreement value.

In these arrangements, revenue recognized for the sale of the disposables is not allocated

between the disposal revenue and lease revenue due to the insignificant value of the units in relation to the total agreement value.

Sales, value add, and other taxes collected on behalf of third parties are excluded from revenue.

13 unchanged sentences

The Company currently estimates product return liabilities using its historical product return information and considers other factors that it believes could significantly impact its expected returns, including product recalls.

During the three months ended August 31, 2022, such product returns were not material.

During the six months ended November 30, 2022, such product returns were not material.

Contract Balances with Customers

4 unchanged sentences

The following table presents changes in the Company’s receivables, contract assets and contract liabilities with customers:

(in thousands) Aug 31, 2022 May 31, 2022

(in thousands) Nov 30, 2022 May 31, 2022

Receivables $ 52,852 $ 52,304

1 unchanged sentence

Contract liabilities $ 522 $ 526

During the three months ended August 31, 2022, the Company had additions to contract liabilities of $ 0.3 million.

This was offset by $ 0.2 million in revenue that was recognized during the three months ended August 31, 2022.

During the six months ended November 30, 2022, the Company had additions to contract liabilities of $ 0.5 million.

This was offset by $ 0.5 million in revenue that was recognized during the six months ended November 30, 2022.

Costs to Obtain or Fulfill a Customer Contract

7 unchanged sentences

Inventories consisted of the following:

(in thousands) Aug 31, 2022 May 31, 2022

(in thousands) Nov 30, 2022 May 31, 2022

Raw materials $ 33,732 $ 28,251

5 unchanged sentences

Based on these assumptions, the Company estimates the amount of obsolete, expiring and slow-moving inventory.

The total inventory reserve at August 31, 2022 and May 31, 2022 was $ 3.8 million and $ 3.7 million, respectively.

The total inventory reserve at November 30, 2022 and May 31, 2022 was $ 3.9 million and $ 3.7 million, respectively.

GOODWILL AND INTANGIBLE ASSETS

17 unchanged sentences

Based on the results of this evaluation, there were no adjustments to goodwill for either reporting unit or the Company as a whole as of August 31, 2022.

Even though the Company determined that there was no goodwill impairment at August 31, 2022, the future occurrence of a potential indicator of impairment, such as a significant adverse change in legal, regulatory, business or economic conditions or a more-likely-than-not expectation that one of the reporting units or a significant portion of either of the reporting units will be sold or disposed of, would require an interim assessment for the reporting units prior to the next required annual assessment as of April 30, 2023.

There were no adjustments to goodwill for the six months ended November 30, 2022 other than foreign currency translation adjustments.

Even though the Company determined that there was no goodwill impairment at November 30, 2022, the future occurrence of a potential indicator of impairment, such as a significant adverse change in legal, regulatory, business or economic conditions or a more-likely-than-not expectation that one of the reporting units or a significant portion of either of the reporting units will be sold or disposed of, would require an interim assessment for the reporting units prior to the next required annual assessment as of April 30, 2023.

Goodwill for each reporting unit is allocated as follows:

Three Months Ended Aug 31, 2022

Six Months Ended Nov 30, 2022

(in thousands) Med Tech Med Device Total

2 unchanged sentences

Balance, August 31, 2022 $ 160,509 $ 40,529 $ 201,038

Foreign currency translation adjustments ( 283 ) — ( 283 )

Balance, November 30, 2022

$ 160,226 $ 40,529 $ 200,755

There were no adjustments to goodwill for the three months ended August 31, 2022 other than foreign currency translation adjustments.

There were no adjustments to goodwill for the six months ended November 30, 2022 other than foreign currency translation adjustments.

Definite Lived Intangible Assets

16 unchanged sentences

$ 314,369 $ ( 161,989 ) $ 152,380

Amortization expense for the three months ended August 31, 2022 and 2021 was $ 4.8 million and $ 4.8 million, respectively.

Amortization expense for the three months ended November 30, 2022 and 2021 was $ 4.8 million and $ 4.9 million, respectively.

Amortization expense for the six months ended November 30, 2022 and 2021 was $ 9.6 million and $ 9.7 million, respectively.

Expected future amortization expense related to the intangible assets for each of the following fiscal years is as follows:

4 unchanged sentences

Accrued liabilities consisted of the following:

(in thousands) Aug 31, 2022 May 31, 2022

(in thousands) Nov 30, 2022 May 31, 2022

Payroll and related expenses $ 10,185 $ 20,232

23 unchanged sentences

* The definitions of consolidated total indebtedness, consolidated EBITDA, consolidated capital expenditures and consolidated interest expense are specifically defined in the Credit Agreement included as an exhibit to Form 8-K filed on August 31, 2022.

As of August 31, 2022, there was $ 25.0 million outstanding on the Revolving Facility and $ 25.0 million outstanding on the Delayed Draw Term Loan and the interest rate at August 31, 2022 applicable to each was 4.06 %.

As of August 31, 2022 and May 31, 2022, the carrying value of long-term debt approximated its fair market value.

(in thousands) Aug 31, 2022

As of November 30, 2022, there was $ 25.0 million outstanding on the Revolving Facility and $ 25.0 million outstanding on the Delayed Draw Term Loan and the interest rate at November 30, 2022 applicable to each was 5.59 %.

As of November 30, 2022 and May 31, 2022, the carrying value of long-term debt approximated its fair market value.

(in thousands) Nov 30, 2022

Revolving Facility $ 25,000

4 unchanged sentences

The Company provides for income taxes at the end of each interim period based on the estimated effective tax rate for the full fiscal year adjusted for any discrete events, which are recorded in the period that they occur.

The estimated annual effective tax rate prior to discrete items was 5.5 % as of the first quarter of fiscal year 2023, as compared to 10.6 % for the same period in fiscal year 2022.

The estimated annual effective tax rate prior to discrete items was 5.8 % as of the second quarter of fiscal year 2023, as compared to 12.3 % for the same period in fiscal year 2022.

In fiscal year 2023, the Company’s effective tax rate differs from the U.S.

4 unchanged sentences

Based on the review of all available evidence, the Company determined that it has not yet attained a sustained level of profitability and the objectively verifiable negative evidence outweighed the positive evidence.

Therefore, the Company has provided a valuation allowance on its federal and state net operating loss carryforwards, federal and state R&D credit carryforwards and other net deferred tax assets that have a limited life and are not supportable by the naked credit deferred tax liability sourced income as of August 31, 2022.

The Company will continue to assess the level of the valuation allowance required.

3 unchanged sentences

The 2020 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance share units, performance shares and other incentive awards to the Company's employees, directors and other service providers.

As of August 31, 2022, there was a maximum of 0.8 million shares of common stock available for future grant under the 2020 Plan.

On November 3, 2022 the Company's shareholders approved an amendment to the 2020 Plan to increase the reserve of shares of common stock available for future grants by 1,950,000 shares.

As of November 30, 2022, there was a maximum of 2.8 million shares of common stock available for future grant under the 2020 Plan.

Prior to the adoption of the 2020 Plan, equity awards were issued under the 2004 Stock and Incentive Award Plan (the “2004 Plan”).

1 unchanged sentence

The Company also has an employee stock purchase plan.

As of August 31, 2022, there was a maximum of 2.3 million shares of common stock available for future grant under the employee stock purchase plan.

For the three months ended August 31, 2022 and 2021, share-based compensation expense was $ 3.0 million and $ 2.4 million, respectively.

During the three months ended August 31, 2022 and 2021, the Company granted stock options and restricted stock units under the 2020 Plan to certain employees and members of the Board of Directors.

On November 3, 2022 the Company's shareholders approved an amendment to the employee stock purchase plan to increase the reserve of shares of common stock available for future grants by 1,000,000 shares.

As of November 30, 2022, there was a maximum of 3.3 million shares of common stock available for future grant under the employee stock purchase plan.

For the three months ended November 30, 2022 and 2021, share-based compensation expense was $ 3.4 million and $ 3.0 million, respectively.

For the six months ended November 30, 2022 and 2021, share-based compensation expense was $ 6.4 million and $ 5.4 million, respectively.

During the six months ended November 30, 2022 and 2021, the Company granted stock options and restricted stock units under the 2020 Plan to certain employees and members of the Board of Directors.

Stock option awards are valued using the Black-Scholes option-pricing model and then amortized on a straight-line basis over the requisite service period of the award.

Restricted stock unit awards are valued based on the closing trading value of the Company’s common stock on the date of grant and then amortized on a straight-line basis over the requisite service period of the award.

During the three months ended August 31, 2022 and 2021, the Company granted performance share units under the 2020 Plan to certain employees.

During the six months ended November 30, 2022 and 2021, the Company granted performance share units under the 2020 Plan to certain employees.

The awards may be earned by achieving performance levels over the requisite service period.

1 unchanged sentence

The fair value of these awards is based on a Monte Carlo simulation model.

As of August 31, 2022, there was $ 27.1 million of unrecognized compensation expense related to share-based payment arrangements.

As of November 30, 2022, there was $ 24.4 million of unrecognized compensation expense related to share-based payment arrangements.

These costs are expected to be recognized over a weighted-average period of approximately two years .

5 unchanged sentences

The following table reconciles basic to diluted weighted-average shares outstanding:

Three Months Ended

(in thousands) Aug 31, 2022 Aug 31, 2021

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2022 Nov 30, 2021 Nov 30, 2022 Nov 30, 2021

Basic 39,490 39,053 39,394 38,893

4 unchanged sentences

Segment information

The Company regularly reviews its segments and the approach used by the chief operating decision maker and management to evaluate performance and allocate resources.

The Company regularly reviews its segments and the approach used by the chief operating decision maker, the President and Chief Executive Officer ("CEO"), and management to evaluate performance and allocate resources.

Prior to the first quarter of fiscal year 2023, the Company considered the business to be a single operating segment engaged in the development, manufacture and sale of medical devices for vascular access, peripheral vascular disease and oncology on a global basis.

Commencing with the first quarter of fiscal year 2023, the Company began to manage its operations through two segments, Med Tech and Med Device to align with the transformation from a company with a broad portfolio of largely undifferentiated products to a more focused medical technology company.

The Company's chief operating decision maker, the President and Chief Executive Officer (CEO), evaluates these two segments based on net sales and gross margin to, among other items, allocate resources and assess performance.

The Company's chief operating decision maker evaluates these two segments based on net sales and gross margin to, among other items, allocate resources and assess performance.

Executives reporting to the CEO include those responsible for commercial operations, manufacturing operations, regulatory and quality and certain corporate functions.

2 unchanged sentences

therefore, the CEO does not review any asset information by operating segment and, accordingly, asset information is not reported or evaluated by operating segment.

Total assets were $ 557.7 million as of August 31, 2022.

Total assets were $ 558.2 million as of November 30, 2022.

The table below summarizes net sales and gross margin by Med Tech and Med Device including prior periods during which the Company considered the business to be a single operating segment, in order to conform to the current period presentation:

Three Months Ended

(in thousands) Aug 31, 2022 Aug 31, 2021

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2022 Nov 30, 2021 Nov 30, 2022 Nov 30, 2021

Med Tech Net Sales $ 24,502 $ 18,886 $ 47,318 $ 36,493

9 unchanged sentences

The table below summarizes net sales by geographic area based on external customer location:

Three Months Ended

(in thousands) Aug 31, 2022 Aug 31, 2021

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2022 Nov 30, 2021 Nov 30, 2022 Nov 30, 2021

United States $ 71,631 $ 65,350 $ 140,655 $ 129,814

1 unchanged sentence

Total $ 85,429 $ 78,280 $ 166,966 $ 155,251

As of August 31, 2022 and 2021, international sales as a percentage of total net sales were 15.3 % and 16.2 %, respectively.

For the three months ended November 30, 2022 and 2021, international sales as a percentage of total net sales were 16.2 % and 16.5 %, respectively.

For the six months ended November 30, 2022 and 2021, international sales as a percentage of total net sales were 15.8 % and 16.4 %, respectively.

Sales to any one country outside the U.S., as determined by shipment destination, did not comprise a material portion of net sales in any of the last three fiscal years.

7 unchanged sentences

• Level 2 - Inputs to the valuation methodology are other observable inputs, including quoted market prices for similar assets or liabilities and market-corroborated inputs.

• Level 3 - Inputs to the valuation methodology are unobservable inputs based on management’s best estimate of inputs market participants would use in pricing the asset or liability at the measurement date, including assumptions about risk.

• Level 3 - Inputs to the valuation methodology are significant unobservable inputs based on management’s best estimate of inputs market participants would use in pricing the asset or liability at the measurement date, including assumptions about risk.

The Company's financial instruments include cash and cash equivalents, accounts receivable, accounts payable and contingent consideration.

3 unchanged sentences

Fair Value Measurements using inputs considered as:

Fair Value at Aug 31, 2022

Fair Value at Nov 30, 2022

(in thousands) Level 1 Level 2 Level 3

8 unchanged sentences

Total Financial Liabilities $ — $ — $ 16,948 $ 16,948

There were no transfers between Level 1, 2 and 3 for the three months ended August 31, 2022 and 2021.

There were no transfers between Level 1, 2 and 3 for the three and six months ended November 30, 2022 and 2021.

The table below presents the changes in fair value components of Level 3 instruments:

Three Months Ended Aug 31, 2022

Three Months Ended Nov 30, 2022

(in thousands) Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

Balance, August 31, 2022 $ 17,158

Change in present value of contingent consideration (1)

Currency gain from remeasurement 28

Balance, November 30, 2022

Six Months Ended Nov 30, 2022

(in thousands) Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

Balance, May 31, 2022 $ 16,948

1 unchanged sentence

Currency gain from remeasurement 27

Balance, August 31, 2022

Balance, November 30, 2022

(1) Change in the fair value of contingent consideration is included in earnings and comprised of changes in estimated earn out payments based on projections of Company performance and amortization of the present value discount.

5 unchanged sentences

The Company measures the initial liability and remeasures the liability on a recurring basis using Level 3 inputs as defined under authoritative guidance for fair value measurements, which is determined using a discounted cash flow model applied to projected net sales, using probabilities of achieving projected net sales and projected payment dates.

Projected net sales are based on internal projections and extensive analysis of the target market and the sales potential.

Projected net

sales are based on internal projections and extensive analysis of the target market and the sales potential.

Increases or decreases in any valuation inputs in isolation may result in a significantly lower or higher fair value measurement in the future.

The recurring Level 3 fair value measurements of the contingent consideration liabilities include the following significant unobservable inputs as of August 31, 2022:

The recurring Level 3 fair value measurements of the contingent consideration liabilities include the following significant unobservable inputs as of November 30, 2022:

(in thousands) Fair Value Valuation Technique Unobservable Input Range

2 unchanged sentences

Projected fiscal year of payment 2023 - 2025

At August 31, 2022, the amount of undiscounted future contingent consideration that the Company expects to pay as a result of all completed acquisitions is approximately $ 20.0 million.

At November 30, 2022, the amount of undiscounted future contingent consideration that the Company expects to pay as a result of all completed acquisitions is approximately $ 20.0 million.

The milestones, including revenue projections and technical milestones associated with the contingent consideration, must be reached in future periods ranging from fiscal years 2023 to 2029 in order for the associated consideration to be paid.

5 unchanged sentences

The following table presents supplemental balance sheet information related to leases:

(in thousands) Balance Sheet Location Aug 31, 2022 May 31, 2022

(in thousands) Balance Sheet Location Nov 30, 2022 May 31, 2022

Operating lease ROU asset Other assets $ 5,748 $ 6,974

8 unchanged sentences

The maturities of the lease liabilities for each of the following fiscal years is:

(in thousands) Aug 31, 2022

(in thousands) Nov 30, 2022

Remainder of 2023 $ 1,392

5 unchanged sentences

Long-term lease obligations $ 3,490

During the three months ended August 31, 2022 and 2021, the Company recognized $ 0.7 million and $ 0.7 million of operating lease expense, respectively, which includes immaterial short-term leases.

During the three months ended November 30, 2022 and 2021, the Company recognized $ 0.7 million and $ 0.7 million of operating lease expense, respectively, which includes immaterial short-term leases.

During the six months ended November 20, 2022 and 2021, the Company recognized $ 1.4 million and $ 1.4 million of operating leases expense, respectively, which includes immaterial short-term leases.

The expenses on the Consolidated Statement of Operations were classified as follows:

Three Months Ended

(in thousands) Aug 31, 2022

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2022

Nov 30, 2021 Nov 30, 2022

Cost of sales $ 221 $ 218 $ 440 $ 437

2 unchanged sentences

General and administrative 365 434 725 764

The following table presents supplemental cash flow and other information related to leases for the three months ended:

(in thousands) Aug 31, 2022 Aug 31, 2021

$ 680 $ 743 $ 1,350 $ 1,430

The following table presents supplemental cash flow and other information related to leases for the six months ended:

(in thousands) Nov 30, 2022 Nov 30, 2021

Cash paid for amounts included in the measurement of lease liabilities

18 unchanged sentences

Following the Utah court’s decision, the Company filed a Motion for Judgment on the Pleadings based on collateral estoppel on August 9, 2021.

Bard filed its opposition brief on September 2, 2021 and the Company filed a reply on September 9, 2021.

Bard filed its opposition brief on September 2, 2021 and the

Company filed a reply on September 9, 2021.

Following a hearing on the Motion for Judgment on the Pleadings on December 21, 2021, the District of Delaware stayed the case pending the Federal Circuit's resolution of Bard's appeal from the Utah Decision.

4 unchanged sentences

Contemporaneously, the Company withdrew its Motion for Leave to Amend its Answer and Counterclaims without prejudice to refile.

Bard filed its Opening Appellate Brief in its appeal at the Federal Circuit on December 8, 2021, and the appeal remains pending.

Oral argument has been scheduled for February 10, 2023, and the appeal remains pending.

The Company believes these claims are without merit and intends to defend them vigorously.

7 unchanged sentences

Bard appealed the judgment to the Federal Circuit and on November 10, 2020, the Federal Circuit reversed the judgment in part with respect to Section 101 (subject matter eligibility), and vacated and remanded the trial court’s invalidity and non-infringement judgments.

The Company filed a combined Petition

for rehearing and rehearing en banc on December 10, 2020, which was denied on January 15, 2021.

The Federal Circuit issued its mandate on January 22, 2021.

On March 15, 2021, the District of Delaware entered an order requiring the parties to submit status reports and denied as moot the Company’s motion for attorney’s fees and expenses.

The parties agreed to schedule trial the week of May 9, 2022, which was subsequently rescheduled for the week of November 14, 2022.

Following remand from the Federal Circuit, a jury trial commenced in the District of Delaware beginning November 14, 2022.

On November 22, 2022, a jury entered a verdict finding that certain of the Company’s implantable port products infringe certain claims of U.S.

patents held by Bard.

The issue of damages was bifurcated by the Court during trial, was not determined by the jury and will be subject to a separate proceeding.

The Company strongly disagrees with the claims and the verdict.

The issues presented to the jury do not comprise all of the issues to be determined in the case.

Equitable issues and patent eligibility issues remain to be decided by the judge, and damages remain to be decided by a jury.

The Company believes it has meritorious defenses and positions with respect to the matters remaining to be decided and the jury decision, and intends to vigorously pursue all available remedies and defenses, including post-trial motions and appeals.

The parties proposed a post-trial briefing schedule with opening briefs to be filed January 20, 2023.

The Company maintains its belief that Bard’s claims are without merit.

18 unchanged sentences

Acquisition, restructuring and other items, net, consisted of:

Three Months Ended

(in thousands) Aug 31, 2022 Aug 31, 2021

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2022 Nov 30, 2021 Nov 30, 2022 Nov 30, 2021

$ 2,422 $ 2,072 $ 4,285 $ 4,156

Mergers and acquisitions (2)

Manufacturing relocation (3)

602 59 738 59

Israeli Innovation Authority prepayment (4)

Other 35 63 73 419

Total $ 3,059 $ 2,253 $ 8,640 $ 4,693

(1) Legal expenses related to litigation that is outside the normal course of business.

(2) Legal and due diligence expenses related to mergers and acquisitions.

(3) Expenses to relocate certain manufacturing lines from Queensbury, NY to Costa Rica.

2 unchanged sentences

Changes in each component of accumulated other comprehensive income, net of tax, are as follows:

Three Months Ended Aug 31, 2022

Three Months Ended Nov 30, 2022

(in thousands) Foreign currency translation income

Balance at August 31, 2022 $ 807

Other comprehensive loss, net of tax ( 1,095 )

Net other comprehensive loss $ ( 1,095 )

Balance at November 30, 2022

Six Months Ended Nov 30, 2022

(in thousands) Foreign currency translation income

Balance at May 31, 2022 $ 1,357

1 unchanged sentence

Net other comprehensive loss $ ( 1,645 )

Balance at August 31, 2022

Balance at November 30, 2022

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

12 unchanged sentences

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 1. Financial Statements