What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-08-03 compared with 2022-07-22 · 222 added, 203 removed, 1066 unchanged (29% of the section changed)

25 unchanged sentences

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of May 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended May 31, 2022, of the Company and our report dated July 22, 2022, expressed an unqualified opinion on those financial statements.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended May 31, 2023, of the Company and our report dated August 3, 2023, expressed an unqualified opinion on those financial statements.

Basis for Opinion

16 unchanged sentences

Boston, Massachusetts

July 22, 2022

August 3, 2023

Other Information.

36 unchanged sentences

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of May 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended May 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of May 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated July 22, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of May 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August 3, 2023, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

9 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which it relates.

Inventories – Excess Quantities and Obsolescence — Refer to Notes 1 & 6

12 unchanged sentences

• We held discussions with senior financial and operating management to determine whether any strategic, regulatory, or operational changes in the business were consistent with the projections of future demand that were utilized as the basis for the reserves recorded.

Valuation of Goodwill for the Med Device Reporting Unit - Refer to Notes 1 & 9

At May 31, 2023, the Company's goodwill specific to the Med Device reporting unit was $40 million.

As discussed in Note 1 of the consolidated financial statements, goodwill is not amortized but rather is tested for impairment at least annually or more frequently if impairment indicators arise.

In connection with the Company’s determination that assets held for sale criteria was met as of May 31, 2023 with regard to a portion of its Med Device reporting unit, the Company identified a triggering event requiring further assessment relating to the recoverability of its goodwill and therefore after performing its annual test on its measurement date of April 30, 2023, performed an updated goodwill impairment test as of May 31, 2023.

The Company determined the amount of goodwill attributable to the disposal group and to the portion of the remaining Med Device reporting unit on a relative fair value basis.

The Company recorded a goodwill impairment charge of $14.5 million relating to its Med Device reporting unit for the year ended May 31, 2023.

Auditing the annual goodwill impairment involves significant audit effort, as well as a degree of complexity and auditor judgment due to the estimation required in determining the fair value of the reporting units or components thereof.

In particular, the fair value estimates involve judgmental assumptions including the amount and timing of expected future cash flows from revenue growth rates, EBITA margins, weighting of fair values, and discount rates.

The audit effort involved the use of professionals with specialized skill and knowledge.

How the Critical Audit Matter Was Addressed in the Audit

The primary procedures we performed to address this critical audit matter included:

• We tested the effectiveness of internal controls over the Company’s annual goodwill impairment analysis and its conclusions related to its updated goodwill assessment as of May 31, 2023.

This included controls over management’s review of the revenue growth rates, EBITA margins, weighting of the fair values, and discount rates used in the valuation models.

• We performed risk assessment procedures over the Company’s goodwill impairment analysis, and evaluated the sensitivity of certain business assumptions, including

◦ Revenue growth rates

◦ EBITA margins

◦ Weighting of fair values

◦ Discount rates used in the valuation models

• We considered the historical accuracy of management's estimates and evaluated the forecasts for reasonableness, comparing to historical results and internal communications to management and the Board of Directors, as well as information generated from analyst and industry reports for the Company and certain of its peer companies.

• With the assistance of our fair value specialists, we evaluated the revenue growth rates, EBITA margins, weighting of fair values, and discount rates and reasonableness of the valuation methodology, including testing the underlying source information and the mathematical accuracy of the calculations, and developing a range of independent estimates and comparing to those selected by management.

We considered the existence of contradictory evidence based on consideration of internal communication to management and the Board of Directors, Company press releases, and analysts' reports, as well as any changes within the business.

1 unchanged sentence

Boston, Massachusetts

July 22, 2022

August 3, 2023

We have served as the Company’s auditor since 2016.

57 unchanged sentences

Prepaid expenses and other 4,617 10,824

Current assets held for sale 6,154 —

Total current assets 163,542 143,345

3 unchanged sentences

Other assets 10,676 10,963

Non-current assets held for sale 43,653 —

Total Assets $ 532,637 $ 552,751

21 unchanged sentences

( 5,714 ) ( 5,714 )

Accumulated other comprehensive loss 1,357 3,153

Accumulated other comprehensive income (loss) ( 4,723 ) 1,357

Total Stockholders' Equity 378,296 424,489

6 unchanged sentences

Common Stock Additional

capital Retained

earnings (accumulated deficit) Accumulated

capital Accumulated deficit Accumulated

comprehensive

12 unchanged sentences

Issuance/cancellation of restricted stock units 299,544 ( 1,900 ) ( 1,900 )

Issuance/cancellation of performance share units 59,371 —

Purchase of common stock under Employee Stock Purchase Plan 98,586 2 1,874 1,876

Stock-based compensation 10,692 10,692

Other comprehensive income, net of tax 4,494 4,494

Other comprehensive loss, net of tax ( 1,796 ) ( 1,796 )

Balance at May 31, 2022 39,541,173 $ 380 $ 586,879 $ ( 158,413 ) $ 1,357 ( 370,000 ) $ ( 5,714 ) $ 424,489

16 unchanged sentences

Net loss $ ( 52,442 ) $ ( 26,547 ) $ ( 31,548 )

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization 30,873 29,349 25,916

12 unchanged sentences

Accounts payable, accrued and other liabilities 2,139 3,912 4,876

Net cash (used in) provided by operating activities ( 7,194 ) 24,093 ( 14,554 )

Net cash provided by (used in) operating activities 78 ( 7,194 ) 24,093

Cash flows from investing activities:

5 unchanged sentences

Cash flows from financing activities:

Proceeds from issuance of and borrowings on long-term debt 70,000 — —

Repayment of long-term debt ( 45,000 ) — ( 20,000 )

1 unchanged sentence

Deferred financing costs on long-term debt ( 751 ) — —

Payment of acquisition related contingent consideration — — ( 1,208 )

Proceeds (outlays) from exercise of stock options and employee stock purchase plan 2,683 3,014 ( 759 )

Proceeds from exercise of stock options and employee stock purchase plan 1,171 2,683 3,014

Net cash provided by (used in) financing activities 25,420 7,683 ( 16,986 )

Effect of exchange rate changes on cash and cash equivalents 43 ( 518 ) 330

Decrease in cash and cash equivalents ( 19,336 ) ( 6,274 ) ( 173,206 )

Increase (decrease) in cash and cash equivalents 15,795 ( 19,336 ) ( 6,274 )

Cash and cash equivalents at beginning of year 28,825 48,161 54,435

9 unchanged sentences

Increase (decrease) in accounts payable for purchases of fixed assets $ 124 $ 14 $ ( 139 )

Fair value of contingent consideration for acquisitions — — 14,900

Cash paid during the year for:

26 unchanged sentences

The Company measures and records derivative financial instruments at fair value.

See Note 4 for further discussion of financial instruments that are carried at fair value on a recurring and nonrecurring basis.

See Note 5, "Fair Value of Financial Instruments" set forth in the Notes to our consolidated financial statements included in this Annual Report on Form 10-K, for further discussion of financial instruments that are carried at fair value on a recurring and nonrecurring basis.

Accounts Receivable

6 unchanged sentences

The standard cost of finished goods and work-in-process inventory is composed of material, labor and manufacturing overhead, which approximates actual cost.

In addition to stating inventory at the lower of cost or net realizable value, we also evaluate inventory each reporting period for excess quantities and obsolescence, establishing reserves when necessary based upon historical experience, assessment of economic conditions and expected

In addition to stating inventory at the

lower of cost or net realizable value, we also evaluate inventory each reporting period for excess quantities and obsolescence, establishing reserves when necessary based upon historical experience, assessment of economic conditions and expected demand.

Once recorded, these reserves are considered permanent adjustments to the carrying value of inventory.

19 unchanged sentences

When testing for impairment of definite-lived intangible assets held for use, the Company groups assets at the lowest level for which cash flows are separately identifiable.

The Company operates as a single asset group.

Prior to the first quarter of fiscal year 2023, the Company managed its operations as one reporting unit.

At the beginning of the first quarter of fiscal year 2023, the Company began to manage its operations as two operating segments and two reporting units, namely Med Tech and Med Device (see Note 18 "Segments and Geographic Information" set forth in the Notes to our consolidated financial statements included in this Annual Report on Form 10-K).

The Company operates as two reporting units and two asset groups.

If a triggering event is deemed to exist, the Company performs an undiscounted operating cash flow analysis to determine if an impairment exists.

1 unchanged sentence

Goodwill and other intangible assets that have indefinite useful lives are not amortized, but rather, are tested for impairment annually or more frequently if impairment indicators arise.

The Company has historically performed its annual goodwill assessment during the third quarter of each year (as of December 31).

During the fourth quarter of fiscal year 2022, the Company decided to change the date of its annual impairment assessment from December 31 to April 30.

The change was made to more closely align the impairment assessment date with the Company's long term planning and forecasting process.

See Note 8, "Goodwill and Intangible Assets" accompanying the consolidated financial statements.

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination.

1 unchanged sentence

Allocated costs were based on respective fair market values at the date of acquisition.

For goodwill, the impairment test requires a comparison of the estimated fair value of the reporting unit to which the goodwill is assigned to the carrying value of the assets and liabilities of that reporting unit.

For goodwill, the impairment test requires a comparison of the estimated fair value of each reporting unit to which the goodwill is assigned to the carrying value of the assets and liabilities of those reporting units.

The determination of reporting units also requires management judgment.

The Company considers whether a reporting unit exists within a reportable segment based on the availability of discrete financial information.

The Company operates as a single operating segment with one reporting unit and consequently evaluates goodwill for impairment based on an evaluation of the fair value of the Company as a whole.

If the carrying value of the reporting unit exceeds the fair value of the reporting unit, the carrying value is reduced to its fair value through an adjustment to the goodwill balance, resulting in an impairment charge.

The Company operates as two operating segments with two reporting units and consequently evaluates goodwill for impairment based on an evaluation of the fair value of each reporting unit.

If the carrying value of the reporting units exceed the fair value, the carrying value is reduced to its fair value through an adjustment to the goodwill balance, resulting in an impairment charge.

As detailed in Note 9, "Goodwill and Intangible Assets" set forth in the Notes to our consolidated financial statements included in this Annual Report on Form 10-K, the Company recorded a goodwill impairment loss of $ 14.5 million for the year ended May 31, 2023 as the fair value of the Med Device reporting unit was less than its carrying value.

Contingent Consideration

3 unchanged sentences

The Company recognizes revenue when it transfers control of promised goods or services to its customers in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods and services.

See Note 3, “Revenue from Contracts with Customers” for further discussion on revenue.

See Note 4, “Revenue from Contracts with Customers” set forth in the Notes to our consolidated financial statements included in this Annual Report on Form 10-K for further discussion on revenue.

Research and Development

27 unchanged sentences

Generally, the changes in the fair value of derivatives accounted for as fair value hedges are recorded in income along with the portions of the changes in the fair value of hedged items that relate to the hedged risks.

Changes in the fair value of derivatives accounted for as cash flow hedges, to the

extent they are effective as hedges, are recorded in accumulated other comprehensive income (loss).

Changes in the fair value of derivatives accounted for as cash flow hedges, to the extent they are effective as hedges, are recorded in accumulated other comprehensive income (loss).

There were no derivative instruments held by the Company as of May 31, 2023 and 2022.

7 unchanged sentences

Recently Issued Accounting Pronouncements - Adopted

There are no recently issued accounting pronouncements that have been adopted.

Recently Issued Accounting Pronouncements - Not Yet Applicable or Adopted

Standard Description Effective Date Effect on the Consolidated Financial Statements

1 unchanged sentence

Disclosures by Business Entities about Government Assistance This ASU increases the transparency of government assistance to include the disclosure of (1) the types of assistance, (2) an entity's accounting for the assistance, and (3) the effect of the assistance on an entity's financial statements.

June 1, 2022 The Company plans to adopt the new standard in the first quarter of fiscal year 2023 and does not expect there to be a material impact to the consolidated financial statements.

June 1, 2022 The Company adopted the new standard in the first quarter of fiscal year 2023 and it did not have an impact on the Company's consolidated financial statements.

Recently Issued Accounting Pronouncements - Not Yet Applicable or Adopted

Standard Description Effective Date Effect on the Consolidated Financial Statements

ASU 2021-08, Business Combinations (Topic 805):

9 unchanged sentences

The contingent consideration is comprised of revenue milestones and will be accounted for when the contingency is resolved or becomes probable and reasonably estimable.

C3 Wave Tip Location Acquisition

On December 17, 2019, the Company acquired the C3 Wave tip location asset from Medical Components Inc.("MedComp") for an aggregate purchase price of $ 10.0 million with $ 5.0 million of potential future contingent consideration related to technical milestones.

This acquisition filled a gap in the Vascular Access portfolio and supports the Company's strategic plan.

The Company accounted for this acquisition as an asset purchase.

The Company recorded the amount paid at closing as inventory of $ 0.6 million and intangible assets of a trademark of $ 0.9 million and product technology of $ 8.5 million.

The intangible assets will be amortized over 15 years.

The contingent consideration is comprised of technical milestones and will be accounted for when the contingency is resolved or becomes probable and reasonably estimable.

Eximo Acquisition

On October 2, 2019, the Company entered into a share purchase agreement to acquire Eximo Medical, Ltd.

("Eximo"), a pre-commercial stage medical device company with a proprietary 355nm laser atherectomy technology.

The aggregate purchase price of $ 60.7 million included an upfront payment of $ 45.8 million and contingent consideration with an estimated fair value of $ 14.9 million.

This acquisition expanded and complemented the Company’s Endovascular Therapies product portfolio by adding the 355nm laser atherectomy technology (Auryon) which treats Peripheral Artery Disease.

The Company accounted for the Eximo acquisition under the acquisition method of accounting for business combinations.

Accordingly, the cost to acquire the assets was allocated to the underlying net assets in proportion to estimates of their respective fair values.

The excess of the purchase price over the estimated fair value of the net assets acquired was recorded as goodwill.

Goodwill is non-deductible for income tax purposes.

The Company has not disclosed the amount of revenue and earnings for sales of Eximo products since acquisition, nor proforma information, because these amounts are not significant to the Company's financial statements.

Acquisition-related costs associated with the Eximo acquisition, which are included in "acquisition, restructuring and other items, net" in the accompanying Consolidated Statements of Operations, were approximately $ 0.6 million in fiscal year 2020.

The following table summarizes the final aggregate purchase price allocated to the net assets acquired:

(in thousands) Final allocation

Accounts receivable $ 50

Inventory 150

Prepaid and other current assets 54

Long-term deposits 51

Property, plant and equipment 397

Intangible assets:

Product technology 60,300

ASSETS HELD FOR SALE

During the fourth quarter of fiscal year 2023, the Company was in discussions with Merit to sell the dialysis product portfolio and BioSentry tract sealant system biopsy businesses.

This qualified for held for sale accounting and the Company determined that the fair value of the net assets being sold exceeded the carrying value as of May 31, 2023.

The transaction was finalized on June 8, 2023.

The following table summarizes the major classes of assets held for sale:

(in thousands) As of May 31, 2023

Current assets:

Inventories $ 4,154

Prepaid expenses and other 2,000

Total current assets held for sale $ 6,154

Non-current assets:

Property, plant and equipment, net $ 44

Intangible assets, net 17,629

Goodwill 25,980

Total assets acquired $ 72,429

Liabilities assumed

Accounts payable $ 84

Other current liabilities 615

Deferred tax liabilities 11,070

Total liabilities assumed $ 11,769

Net assets acquired $ 60,660

The Company finalized the allocation of the purchase price to the assets acquired and liabilities assumed in the fourth quarter of fiscal year 2020.

The value assigned to the product technology was derived using the multi-period excess earnings method under the income approach.

This approach estimates the excess earnings generated over the lives of the customers that existed as of the acquisition date and discounts such earnings to present value.

The product technology is deemed to have a useful life of fifteen years and will be amortized on a straight-line basis over the useful life.

The goodwill arising from the acquisition consists largely of synergies and economies of scale the Company hopes to achieve from combining the acquired assets with the Company's current operations.

Total non-current assets held for sale $ 43,653

REVENUE FROM CONTRACTS WITH CUSTOMERS

9 unchanged sentences

Disaggregation of Revenue

The following tables summarize net product revenue by Global Business Unit and geography:

The following tables summarize net sales by Med Tech, Med Device and by geography:

Year ended May 31, 2023 Year ended May 31, 2022

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

Endovascular Therapies $ 146,881 $ 14,044 $ 160,925 $ 121,427 $ 13,652 $ 135,079

Vascular Access 82,536 17,657 100,193 81,088 20,222 101,310

Oncology 36,546 18,555 55,101 34,528 20,093 54,621

Med Tech $ 84,332 $ 12,355 $ 96,687 $ 69,939 $ 8,778 $ 78,717

Med Device 198,381 43,684 242,065 196,024 41,478 237,502

Total $ 282,713 $ 56,039 $ 338,752 $ 265,963 $ 50,256 $ 316,219

1 unchanged sentence

(in thousands) United States International Total

Endovascular Therapies $ 98,965 $ 13,741 $ 112,706

Vascular Access 76,768 17,531 94,299

Oncology 32,247 24,905 57,152

Total $ 207,980 $ 56,177 $ 264,157

As the Company has previously announced, the Company is focused on its ongoing transformation from a company with a broad portfolio of largely undifferentiated products to a more focused medical technology company that delivers unique and innovative health care solutions.

The Company believes that this transformation will enable the Company to shift the portfolio from the mature, lower-growth markets where we have competed in the past by investing in technology and products that provide access to larger and faster growing markets.

As such, we believe the growth in the near to mid-term will be driven by our high technology products including Auryon, Thrombectomy (which includes AngioVac, AlphaVac and thrombolytics) and NanoKnife.

We will refer to these high technology products as our Med Tech business and we will refer to the remainder of the portfolio as our Med Device business.

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

Year ended May 31,

(in thousands) 2022 2021 2020

Med Tech $ 46,440 $ 9,291 $ 55,731

3 unchanged sentences

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.

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

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.

The Company sells its products to its distributors and to end users, such as interventional radiologists, interventional cardiologists, vascular surgeons, urologists, interventional and surgical oncologists and critical care nurses.

11 unchanged sentences

Revenue Recognition

Revenue is recognized when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied), which occurs at a point in time, and may be upon shipment from the Company’s manufacturing site or delivery to the customer’s named location, based on the contractual shipping terms of a contract.

In determining whether control has transferred, the Company considers if there is a present right to payment from the customer and when physical possession, legal title and risks and rewards of ownership have transferred to the customer.

2 unchanged sentences

The Company enters into agreements to place placement and evaluation units (“units”) at customer sites, but the Company retains title to the units.

The duration of these agreements are typically a year and the customer has the right to use the unit at no upfront charge in connection with the customer’s ongoing purchase of disposables.

For the duration of these agreements the customer has the right to use the unit at no upfront charge in connection with the customer’s ongoing purchase of disposables.

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.

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

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

Variable Consideration

Revenue from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established for discounts, returns, rebates and allowances that are offered within contracts between the Company and its customers.

contracts between the Company and its customers.

These reserves are based on the amounts earned or to be claimed on the related sales and are classified as a contra asset.

2 unchanged sentences

The Company establishes reserves for such amounts, which is included in accrued expenses in the accompanying Consolidated Balance Sheets.

These rebates and allowances result from performance-based offers that are primarily based on attaining contractually specified sales volumes and administrative fees the Company is required to pay to group purchasing organizations.

These rebates and allowances result from performance-based offers that are primarily based on attaining contractually specified sales volumes.

The Company is also required to pay administrative fees to group purchasing organizations.

Product Returns:

18 unchanged sentences

Costs to Obtain or Fulfill a Customer Contract

Under ASC 606, the Company recognizes an asset for incremental costs of obtaining a contract with a customer if it expects to recover those costs.

Under ASC 606, the Company may recognize an asset for incremental costs of obtaining a contract with a customer if it expects to recover those costs.

The Company’s sales incentive compensation plans qualify for capitalization since these plans are directly related to sales achieved during a period of time.

12 unchanged sentences

• 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.

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

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

The carrying amount of cash and cash equivalents, accounts receivable, and accounts payable approximates fair value due to their immediate or short-term maturities.

11 unchanged sentences

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

There were no transfers in and out of Level 1, 2 and 3 measurements for the years ended May 31, 2022 and 2021.

There were no transfers between Level 1, 2 and 3 for the years ended May 31, 2023 and 2022.

The following tables present the changes in fair value components of Level 3 instruments:

17 unchanged sentences

Contingent consideration is recorded at the estimated fair value of the contingent payments on the acquisition date.

The fair value of the contingent consideration is remeasured at the estimated fair value at each reporting period with the change in fair value recognized as income or expense within change in fair value of contingent consideration in the Consolidated Statements of Income.

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.

9 unchanged sentences

Items Measured at Fair Value on a Nonrecurring Basis

The Company recorded a goodwill impairment charge of $ 14.5 million for the year ended May 31, 2023 to write down the carrying value of the Med Device reporting unit to fair value.

During the fourth quarter of fiscal year 2021, the Company made the decision to abandon the OARtrac product technology and trademark.

40 unchanged sentences

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination.

The Company has historically performed its annual goodwill assessment during the third quarter of each year.

The Company has historically performed its annual goodwill assessment during the third quarter of each fiscal year.

During the fourth quarter of fiscal year 2022, the Company changed its annual impairment assessment date from December 31 to April 30 to more closely align the impairment assessment date with the Company's long term planning and forecasting process.

The Company's annual testing for impairment of goodwill was completed as of December 31, 2021 and April 30, 2022.

The Company operates as a single operating segment with one reporting unit and consequently evaluates goodwill for impairment based on an evaluation of the fair value of the Company as a whole.

The Company determines the fair value of the reporting unit based on the market valuation approach and concluded that it was not more-likely-than-not that the fair value of the Company's reporting unit was less than its carrying value.

Even though the Company determined that there was no goodwill impairment as of December 31, 2021 and April 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 the reporting unit or a significant portion of the reporting unit will be sold or disposed of, would require an interim assessment for the reporting unit prior to the next required annual assessment as of April 30, 2023.

There were no adjustments to goodwill for the years ended May 31, 2022 and May 31, 2021 other than foreign currency translation adjustments.

Prior to the first quarter of fiscal year 2023, the Company managed its operations as one reporting unit.

As a result of this change, goodwill was required to be allocated to each reporting unit and an interim goodwill impairment assessment was performed at the Company and reporting unit levels.

To determine the fair value of the individual reporting units and the entire company as of June 1, 2022, the Company utilized the income approach.

The income approach is based on the projected cash flows discounted to their present value using discount rates, that in the Company's judgment, consider the timing and risk of the forecasted cash flows using internally developed forecasts and assumptions.

Under the income approach, the discount rate used is the average estimated value of a market participant’s cost of capital and debt, derived using customary market metrics.

Other significant assumptions include revenue growth rates, profitability projections, and terminal value growth rates.

The market approach was also considered;

however, the income approach was chosen as the Company determined it is a better representation of both the Med Tech and Med Device reporting units' projected long-term performance.

The fair value of each

reporting unit and the Company as a whole was assessed to determine if there was any impairment.

The Company compared each reporting unit's fair value to the adjusted carrying value to conclude that there was no impairment for either reporting unit or the Company as a whole.

The adjusted carrying value of each reporting unit was used to calculate the Company's book value to compare to its market capitalization at the assessment date.

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.

The Company's annual testing for impairment of goodwill was completed as of April 30, 2023.

To determine the fair value of the two reporting units as of April 30, 2023, the Company utilized the income approach for Med Tech and a combination of the income approach and market approach for Med Device.

Under the income approach, the discount rate used is the average estimated value of a market participant’s cost of capital and debt, derived using customary market metrics.

Other significant assumptions include revenue growth rates, profitability projections, and terminal value growth rates.

The market approach estimates fair values based on the determination of appropriate publicly traded market comparison companies and market multiples of revenue and earnings derived from those companies with similar operating and investment characteristics.

The market approach was also considered;

however, the income approach was chosen as the Company determined it is a better representation of the Med Tech reporting units' projected long-term performance.

For Med Device, both the income and market approaches were considered.

The fair value of each reporting unit was assessed to determine if there was any impairment.

The Company compared each reporting unit's fair value to the adjusted carrying value to conclude that there was no impairment for either reporting unit.

Based on the results of this evaluation, there were no adjustments to goodwill for either reporting unit as of April 30, 2023.

The Company concluded that the sale of the dialysis product portfolio and BioSentry tract sealant system biopsy businesses to Merit Medical Systems, Inc.

was a triggering event for the Med Device report unit.

As the Company concluded that this was the sale of a business, goodwill was allocated to the sale based on the relative fair value of the dialysis and BioSentry businesses and is included in assets held for sale as of May 31, 2023.

To determine the fair value of the remaining Med Device reporting unit as of May 31, 2023, the Company utilized the income approach, as it was determined to be a better representation of the remaining Med Device reporting unit's projected long-term performance.

Based on the results of this evaluation, the Company recorded a goodwill impairment charge of $ 14.5 million for the year ended May 31, 2023 to write down the carrying value of the Med Device reporting unit to fair value.

The impairment loss is disclosed separately on the face of the accompanying consolidated statements of operations.

There were no adjustments to goodwill for the Med Tech reporting unit for the year ended May 31, 2023 other than foreign currency translation adjustments.

There were no adjustments to goodwill for the year ended May 31, 2022 other than foreign currency translation adjustments.

Goodwill for each reporting unit is allocated as follows:

Year ended May 31, 2023

(in thousands) Med Tech Med Device Total

Balance June 1, 2022 $ 160,529 $ 40,529 $ 201,058

Goodwill impairment — ( 14,549 ) ( 14,549 )

Assets held for sale — ( 25,980 ) ( 25,980 )

Foreign currency translation adjustments ( 1,291 ) — ( 1,291 )

Balance May 31, 2023 $ 159,238 $ — $ 159,238

Even though the Company determined that there was no goodwill impairment as of April 30, 2023 for the Med Tech reporting unit, 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 the reporting unit or a significant portion of the reporting unit will be sold or disposed of, would require an interim assessment for the reporting unit prior to the next required annual assessment as of April 30, 2024.

Definite Lived Intangible Assets

Definite lived intangible assets consist primarily of product technologies and customer relationships and are amortized over their estimated useful lives, which range between two to eighteen years on a straight-line basis over the expected period of benefit.

Amortization expense was $ 19.5 million, $ 18.1 million and $ 18.1 million for fiscal years 2022, 2021 and 2020, respectively.

There were no impairment charges on definite lived intangible assets for the years ended May 31, 2022 and 2020.

Intangible assets other than goodwill are amortized over their estimated useful lives on a straight-line basis.

Useful lives range from two to eighteen years .

The Company periodically reviews, and adjusts, if necessary, the estimated useful lives of its intangible assets and reviews such assets or asset groups for impairment whenever events or changes in circumstances indicate that the carrying value of the assets or asset groups may not be recoverable.

If an intangible asset or asset group is considered to be impaired, the amount of the impairment will equal the excess of the carrying value over the fair value of the asset.

In connection with the triggering event for the Med Device reporting unit as of May 31, 2023, long-lived assets were tested for impairment.

As a result of the undiscounted cash flow analysis that was performed, there were no impairments identified as of May 31, 2023.

During the fourth quarter of fiscal year 2021, the Company made the decision to abandon the OARtrac product technology and trademark.

This resulted in an impairment charge of $ 14.0 million.

The impairment charge is recorded in "Acquisition, restructuring and other items, net", on the Consolidated Statements of Operations (see Note 18).

The impairment charge is recorded in "Acquisition, restructuring and other items, net", on the Consolidated Statements of Operations (see Note 19 "Acquisition, restructuring and other items, net" as set forth in the Notes to the consolidated financial statements in this Annual Report on Form 10-K).

Intangible assets consisted of the following:

15 unchanged sentences

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

Amortization expense was $ 18.8 million, $ 19.5 million and $ 18.1 million for fiscal years 2023, 2022 and 2021, respectively.

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

42 unchanged sentences

Beginning in 2018, except for the Global Intangible Low-Taxed Income, the Company will no longer record United States federal income tax on its share of the income of its foreign subsidiaries, nor will it record a benefit for foreign tax credits related to that income.

Upon distribution of these earnings in the form of dividends or otherwise, the Company would be subject to

withholding taxes payable, where applicable, to foreign countries, but would have no further federal income tax liability.

Upon distribution of these earnings in the form of dividends or otherwise, the Company would be subject to withholding taxes payable, where applicable, to foreign countries, but would have no further federal income tax liability.

The Company intends to indefinitely reinvest the unremitted foreign earnings of all other subsidiaries as of May 31, 2023, as well as all subsequent earnings generated by all of our foreign subsidiaries.

24 unchanged sentences

Income tax benefit $ ( 1,995 ) $ ( 3,402 ) $ ( 4,504 )

During fiscal year 2020, the Company recorded a goodwill impairment of $ 158.6 million.

The Company has made the tax accounting policy election to first allocate the impairment to the Company’s nondeductible goodwill based on the Company’s pre-impairment nondeductible goodwill balance.

The following table provides a reconciliation of the beginning and ending amount of unrecognized tax benefits:

24 unchanged sentences

Sales and franchise taxes 480 750

Litigation matters — 975

Rebates 469 511

2 unchanged sentences

LONG-TERM DEBT

On June 3, 2019, the Company repaid all amounts outstanding under its then existing credit agreement and entered into a new Credit Agreement with the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and Bank of America, N.A.

and KeyBank National Association, as co-syndication agents.

The Credit Agreement provides for a $ 125.0 million secured revolving credit facility (the “Revolving Facility”), which includes an uncommitted expansion feature that allows the Company to increase the total revolving commitments and/or add new tranches of term loans in an aggregate amount not to exceed $ 75.0 million.

The proceeds may be used to refinance certain existing indebtedness of the Company and its subsidiaries, to finance the working capital needs, and for general corporate purposes (including permitted acquisitions), of the Company and its subsidiaries.

On August 30, 2022, the Company repaid all amounts outstanding under its then existing credit agreement and entered into a new Credit Agreement (the "Credit Agreement") with its lenders, JPMorgan Chase Bank, N.A., as Administrative Agent, sole bookrunner, and sole lead arranger, and Bank of America, N.A.

and KeyBank National Association, as Syndication Agents.

The Credit Agreement provides for a $ 75.0 million secured revolving credit facility (the "Revolving Facility") and a $ 30.0 million delayed draw term loan (the "Delayed Draw Term Loan"), and also includes an uncommitted expansion feature that allows the Company to increase the total revolving commitments and/or add new tranches of term loans in an aggregate amount not to exceed $ 75.0 million.

Each exercise of such expansion feature must be drawn in $ 5.0 million increments.

The proceeds of the Revolving Facility may be used for general corporate purposes, including permitted acquisitions.

The proceeds of the Delayed Draw Term Loan may be used for general corporate purposes, including primarily to finance the manufacturing costs of the Auryon laser capital equipment.

The Credit Agreement has a five-year maturity.

Interest on the Revolving Facility is based, at the Company’s option, on either a base rate of LIBOR or alternate base rate, plus an applicable margin tied to the Company’s total leverage ratio and having ranges between 0.25 % and 0.75 % for base rate loans and between 1.25 % and 1.75 % for LIBOR loans.

After default, the interest rate may be increased by 2.0 %.

The Revolving Facility also carries a commitment fee of 0.20 % to 0.25 % per annum on the unused portion.

The Company's obligations under the Revolving Facility are unconditionally guaranteed, jointly and severally, by the Company's material direct and indirect domestic subsidiaries (the “Guarantors”).

All obligations of the Company and the Guarantors under the Revolving Facility are secured by first priority security interests in substantially all of the assets of the Company and the Guarantors.

Interest on the Revolving Facility and Delayed Draw Term Loan will be based, at the Company's option, on a rate equal to (i) the Secured Overnight Financing Rate ("SOFR") plus 0.10 % (subject to a floor of 0 %), or (ii) if the Company elects to treat a borrowing as an ABR Borrowing, an alternate base rate based on SOFR, plus, in each case, an applicable margin of 1.25 %, 1.50 % or 1.75 %, depending on the leverage ratio.

If any amounts are not paid when due, such overdue amounts will bear interest at an amount generally equal to 2.0 % plus the existing loan rate.

The Credit Agreement also carries a commitment fee in the case of the Revolving Facility, and a ticking fee, in the case of the Delayed Draw Term Loans of 0.20 % to 0.25 % per annum on the unused portion.

The Company's obligations under the Credit Agreement are unconditionally guaranteed, jointly and severally, by the Company's material direct and indirect domestic subsidiaries (the “Guarantors”).

All obligations of the Company and the Guarantors under the Credit Agreement are secured by first priority security interests in substantially all of the assets of the Company and the Guarantors.

The Credit Agreement includes customary representations, warranties and covenants, and acceleration, indemnity and events of default provisions, including, among other things, two quarterly financial covenants as follows:

1 unchanged sentence

• Fixed charge coverage ratio of consolidated EBITDA minus consolidated capital expenditures* to consolidated interest expense* paid or payable in cash plus scheduled principal payments in respect of indebtedness under the Credit Agreement of not less than 1.25 to 1.00.

* 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 June 6, 2019.

As of May 31, 2022 there was $ 25.0 million outstanding on the Revolving Facility.

As of May 31, 2023 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 May 31, 2023 applicable to each was 6.73 %.

As of May 31, 2023 and May 31, 2022, the carrying value of long-term debt approximated its fair market value.

The interest rate on the Revolving Facility at May 31, 2022 was 2.31 %.

(in thousands) May 31, 2023

Revolving Facility $ 25,000

Delayed Draw Term Loan 25,000

unamortized debit issuance costs ( 182 )

Total long-term debt $ 49,818

The Company was in compliance with the Credit Agreement covenants as of May 31, 2023.

On June 8, 2023, AngioDynamics used a portion of the consideration received from the sale of the dialysis and BioSentry businesses to repay all amounts owed under AngioDynamics’ existing Credit Agreement, and as a result, the Credit Agreement was extinguished.

Pursuant to the terms of the Credit Agreement, AngioDynamics had the option to repay this facility prior to the maturity date without penalty.

RETIREMENT PLANS

16 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.

A total of 2.4 million shares of common stock have been reserved for issuance 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 May 31, 2023, there remained approximately 2.9 million shares available for future grants 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”).

The adoption of the 2020 Plan did not impact the administration of equity awards issued under the 2004 Plan but following the adoption of the 2020 Plan, equity award grants are no longer made under the 2004 Plan.

As of May 31, 2022, there remained approximately 1.5 million shares available for granting under the 2020 Plan.

The following table summarizes information about stock option activity for the fiscal year ended May 31, 2023:

80 unchanged sentences

During the years ended May 31, 2017, 2019 and 2021, an additional 500,000 , 1,000,000 and 500,000 shares of the Company's common stock, respectively, were reserved for issuance under the Stock Purchase Plan.

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.

The Company uses the Black-Scholes option-pricing model to calculate the purchase date fair value of the shares issued under the Stock Purchase Plan and recognize expense related to shares purchased ratably over the offering period.

21 unchanged sentences

(in thousands) Balance Sheet Location May 31, 2023 May 31, 2022

Operating lease ROU asset Other assets $ 6,974 $ 9,382

Operating lease ROU assets Other assets $ 5,113 $ 6,974

Current operating lease liabilities Other current liabilities 1,922 2,560

23 unchanged sentences

$ 2,694 $ 2,802

The following table presents supplemental cash flow and other information related to leases for the year ended May 31, 2022 and 2021:

The following table presents supplemental cash flow and other information related to leases:

(in thousands) May 31, 2023 May 31, 2022

27 unchanged sentences

Thereafter, the case was transferred from the District of Utah to the United States District Court for the District of Delaware (“District of Delaware”).

A scheduling order was entered on March 23, 2021.

On July 22, 2021, in another case against a different defendant, the District of Utah invalidated multiple claims of the ‘302, ‘022, and ‘615 Patents under 35 USC §101, including claims asserted against the Company.

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.

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.

Previously, the Company had filed a Motion for Leave to Amend its Answer and Counterclaims on April 14, 2021.

This motion sought to add counterclaims for infringement of U.S.

and 10,632,295, as well as a counterclaim of inequitable conduct.

On November 5, 2021, the Company notified the District of Delaware that the Utah decision was certified for appeal to the Court of Appeals for the Federal Circuit.

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.

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

On December 27, 2021, the District of Delaware stayed the case pending the Federal Circuit's resolution of Bard's appeal from the Utah Decision.

On February 17, 2023, the Federal Circuit Reversed-in-Part, Vacated-in-Part, and Remanded the Utah Decision.

The District of Delaware lifted the stay on February 28, 2023 and held a status conference on March 23, 2023.

A scheduling order has been entered, and a jury trial is currently scheduled for April 29, 2024.

The Company has not recorded an expense related to the outcome of this litigation because it is not yet possible to determine if a potential loss is probable nor reasonably estimable.

4 unchanged sentences

At the close of Bard’s case, the Court granted the Company's oral motion for judgment as a matter of law as well as its motions for summary judgment on the grounds that the asserted patents are invalid, ineligible, not infringed and not willfully infringed.

On May 10, 2019, the Company filed a motion for attorney fees and non-taxable expenses under 35 USC Sec.

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 and was not determined by the jury.

On Jun e 1, 2023, following post-trial briefing, the Court issued its decision on the Company’s Renewed Judgement as a Matter of Law.

The Court held the asserted patent claims were invalid as anticipated, indefinite, ineligible, and not willfully infringed.

The Court entered Judgment the same day in favor of the Company.

Bard has filed a Notice of Appeal to the Federal Circuit.

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

2 unchanged sentences

8,025,639, 9,603,992 and 9,603,993.

On May 20, 2021, the Company filed a Motion to Dismiss Bard’s claims with respect to the ’992 and ’993 patents.

On July 22, 2021, the Company submitted the Utah court’s decision invalidating claims of the related ‘302, ‘022, and ‘615 Patents as supplemental authority in support of its Motion to Dismiss.

The parties agreed to submit supplemental briefing to address the Utah court’s decision.

Bard submitted its brief on August 12, 2021, and the Company submitted its reply on September 2, 2021.

On December 21, 2021, the District of Delaware stayed the case pending the Federal Circuit's resolution of Bard's appeal of the Utah decision invalidating multiple claims of the ‘302, ‘022, and ‘615 patents under 35 USC §101.

On December 27, 2021, the District of Delaware stayed the case pending the Federal Circuit's resolution of Bard's appeal of the Utah decision invalidating

multiple claims of the ‘302, ‘022, and ‘615 patents under 35 USC §101.

Following the Federal Circuit’s decision on appeal, the District of Delaware lifted the stay on February 28, 2023, and held a scheduling conference on March 23, 2023.

A scheduling order has been entered, and a jury trial is currently scheduled for June 9, 2025.

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

The Company has not recorded an expense related to the outcome of this litigation because it is not yet possible to determine if a potential loss is probable nor reasonably estimable.

AngioDynamics, Inc.

On May 30, 2017, the Company commenced an action in the United States District Court for the Northern District of New York entitled AngioDynamics, Inc.

and Bard Access Systems, Inc.

In this action, the Company alleges that Bard has illegally tied the sales of its tip location systems to the sales of its PICCs.

The Company alleges that this practice violates the federal antitrust laws and has had, and continues to have, an anti-competitive effect in the market for PICCs.

The Company seeks both monetary damages and injunctive relief.

Bard moved to dismiss on September 8, 2017.

On August 6, 2018 the court denied Bard’s motion in its entirety.

Bard made a motion for summary judgment which was denied in its entirety in a decision issued by the Court on May 5, 2021.

Bard also raised a series of challenges targeted at one of AngioDynamics’ expert witnesses, which the Court denied in part and granted in part in decisions on May 5, 2021 and June 11, 2021.

More recently, Bard raised another challenge to AngioDynamic's damages expert, which the Court denied in full on July 8, 2022 at which time the Court also issued rulings on all other pre-trial motions filed to date.

Discovery is complete and the next court hearing is scheduled for August 25, 2022.

As a result of an extension requested by Bard, the trial is now scheduled to commence on September 19, 2022.

We have not undertaken an assessment of the potential loss exposure, if any, but note that there are no claims pending against the Company in connection with this litigation.

Merz North America Settlement

On May 16, 2019, Merz North America, Inc.

(“Merz”) commenced an action in the United States District Court for the Southern District of New York entitled Merz North America, Inc.

AngioDynamics, Inc.

In this action, Merz alleged breach of contract against AngioDynamics based on a March 1, 2016 Distribution Agreement.

On June 28, 2019, AngioDynamics reached a settlement with Merz.

AngioDynamics made a lump-sum payment of $ 2.5 million to Merz in return for dismissal of the case with prejudice during the first quarter of fiscal year 2020.

The case was subsequently dismissed.

SEGMENTS AND GEOGRAPHIC INFORMATION

Segment information

The Company considers 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.

The Company's chief operating decision maker, the President and Chief Executive Officer (CEO), evaluates the various global product portfolios on a net sales basis to among, other items, allocate resources and assess performance utilizing numerous metrics and breakouts of the data including Global Business Unit, Med Tech, Med Device and geography.

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 CEO 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.

The CEO evaluates profitability, investment and cash flow metrics on a consolidated global basis due to shared infrastructure and resources.

The table below summarizes net sales by Global Business Unit:

Year ended May 31,

(in thousands) 2022 2021 2020

Net sales by Product Category

Endovascular Therapies $ 160,925 $ 135,079 $ 112,706

Vascular Access 100,193 101,310 94,299

Oncology/Surgery 55,101 54,621 57,152

Total $ 316,219 $ 291,010 $ 264,157

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

The CEO evaluates all other elements of profitability, investment and cash flow metrics on a consolidated global basis due to shared infrastructure and resources.

The Company manages its assets on a total company basis, not by operating segment;

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 $ 532.6 million as of May 31, 2023.

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:

Year ended May 31,

(in thousands) 2023 2022 2021

Med Tech $ 78,717 $ 55,731 $ 41,019

Med Device 237,502 235,279 223,138

Total $ 316,219 $ 291,010 $ 264,157

Med Tech Net Sales $ 96,687 $ 78,717 $ 55,731

Gross Profit $ 61,966 $ 52,584 $ 39,544

Gross Margin 64.1 % 66.8 % 71.0 %

Med Device Net Sales $ 242,065 $ 237,502 $ 235,279

Gross Profit $ 112,280 $ 113,148 $ 117,244

Gross Margin 46.4 % 47.6 % 49.8 %

Total Net Sales $ 338,752 $ 316,219 $ 291,010

Gross Profit $ 174,246 $ 165,732 $ 156,788

Gross Margin 51.4 % 52.4 % 53.9 %

Geographic information

20 unchanged sentences

Intangible and other asset impairment (5)

Israeli Innovation Authority prepayment (6)

Manufacturing Relocation (7)

7 unchanged sentences

This resulted in an impairment charge of $ 14.0 million.

(6) I n the first quarter of fiscal year 2023, a $ 3.5 million payment was made to the Israeli Innovation Authority to fully satisfy the obligation related to grant funds that were provided to Eximo for development of the Auryon laser prior to the acquisition in the second quarter of fiscal year 2020.

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

Included in legal for fiscal year 2021 is a $ 1.0 million settlement expense.

Included in legal for fiscal year 2020 is a settlement received for the Biolitec litigation of $ 0.5 million.

The settlement received partially offset legal expenses paid related to the settlement proceedings.

4 unchanged sentences

Other comprehensive income, net of tax ( 1,796 )

Net other comprehensive income $ 4,494

Net other comprehensive loss $ ( 1,796 )

Balance at May 31, 2022 $ 1,357

2 unchanged sentences

Balance at May 31, 2023 $ ( 4,723 )

SUBSEQUENT EVENTS

On June 8, 2023, the Company entered into an asset purchase agreement (the "Asset Purchase Agreement") with Merit Medical Systems, Inc.

pursuant to which Merit acquired the dialysis product portfolio and BioSentry tract sealant system biopsy businesses for $ 100.0 million in cash.

The Company and Merit entered into various agreements to facilitate the transition to Merit, including a Transactions Services Agreement and Contract Manufacturing Agreement.

The Company determined that the sale of the businesses did not constitute a strategic shift that had a major effect on the Company’s operations or financial results and as a result, this transaction will not be classified as discontinued operations.

On June 8, 2023, AngioDynamics used a portion of the consideration received in connection with the Transaction to repay all amounts owed under AngioDynamics’ existing Credit Agreement, dated as of August 30, 2022, with the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, Bank of America, N.A.

and KeyBank National Association, as co-syndication agents, and JPMorgan Chase Bank N.A., as sole bookrunner and sole lead arranger, and as a result, the Credit Agreement was extinguished.

Pursuant to the terms of the Credit Agreement, AngioDynamics had the option to repay this facility prior to the maturity date without penalty.

AngioDynamics, Inc.

19 unchanged sentences

8-K 2.1 April 18, 2019

2.4 Asset Purchase Agreement dated as of June 8, 2023 by and between AngioDynamics, Inc.

and Merit Medical Systems, Inc.

8-K 2.4 June 14, 2023

3.1.1 Amended and Restated Certificate of Incorporation.

4 unchanged sentences

8-K 10.1 October 21, 2015

10.1 Credit Agreement, dated as of June 3, 2019, by and among AngioDynamics, Inc., the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, Bank of America, N.A.

and Keybank National Association as co-syndication agents.

8-K 10.1 June 6, 2019

10.1.3 AngioDynamics, Inc.

80 unchanged sentences

14 Code of Ethics.

8-K 14 May 21, 2006

10-K 14 October 1, 2021

21 Subsidiaries

14 unchanged sentences

ANGIODYNAMICS, INC.

July 22, 2022 By:

August 3, 2023 By:

/ S / H OWARD W.

1 unchanged sentence

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

July 22, 2022 / S / H OWARD W.

August 3, 2023 / S / H OWARD W.

Chairman of the Board, Director

July 22, 2022 / S / J AMES C.

August 3, 2023 / S / J AMES C.

President, Chief Executive Officer

(Principal Executive Officer)

July 22, 2022 / S / S TEPHEN A.

August 3, 2023 / S / S TEPHEN A.

Executive Vice President, Chief Financial Officer,

(Principal Financial and Accounting Officer)

July 22, 2022 / S / W ESLEY E.

August 3, 2023 / S / W ESLEY E.

J OHNSON , J R .

Johnson, Jr.,

July 22, 2022 / S / D ENNIS S.

July 22, 2022 / S / J AN S.

July 22, 2022 / S / E ILEEN O.

July 22, 2022 / S / K AREN A.

July 22, 2022 / S / M ICHAEL E.

August 3, 2023 / S / D ENNIS S.

August 3, 2023 / S / J AN S.

August 3, 2023 / S / E ILEEN O.

August 3, 2023 / S / K AREN A.

August 3, 2023 / S / M ICHAEL E.

August 3, 2023 / S / LORINDA A.

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-K

Item 9A. Controls and Procedures