What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-01-08 compared with 2023-10-05 · 113 added, 97 removed, 125 unchanged (63% of the section changed)

46 unchanged sentences

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

A summary of these key financial metrics for the three months ended August 31, 2023 compared to the three months ended August 31, 2022 are as follows:

Three months ended August 31, 2023:

A summary of these key financial metrics for the three and six months ended November 30, 2023 compared to the three and six months ended November 30, 2022 are as follows:

Three months ended November 30, 2023:

• Revenue decreased by 7.4% to $79.1 million

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• Gross profit decreased 190 bps to 50.9%

• Med Tech gross profit increased 150 bps to 64.7% and Med Device gross profit decreased 330 bps to 44.2%

• Med Tech gross profit decreased 130 bps to 62.4% and Med Device gross profit decreased 290 bps to 45.5%

• Net loss increased by $20.6 million to $29.0 million

• Loss per share increased by $0.51 to $0.72

Six months ended November 30, 2023:

• Revenue decreased by 5.5% to $157.8 million

• Med Tech growth of 8.3% and Med Device declined by 11.0%

• Gross profit decreased 140 bps to 50.9%

• Med Tech gross profit was consistent at 63.5% and Med Device gross profit decreased 300 bps to 44.9%

• Net income increased by $38.3 million to $16.8 million

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• Cash used in operations increased by $3.4 million to $20.6 million

The decrease in revenue is due to the sale of the dialysis and BioSentry businesses which closed on June 8, 2023 and impacted sales by $7.1 million compared to the prior year.

Our Med Tech revenue, comprised of Auryon, the thrombus management platform and NanoKnife, grew 13.3% in the first quarter of fiscal year 2024.

For the three and six months ended November 30, 2023, the decrease in revenue is due to the sale of the dialysis and BioSentry businesses, which closed on June 8, 2023 and impacted sales by $8.4 million and $16.2 million compared to the same periods in the prior year, respectively.

Our Med Tech revenue, comprised of Auryon, the thrombus management platform and NanoKnife, grew 3.5% in the second quarter of fiscal year 2024.

The growth in Auryon and NanoKnife was partially offset by continued softness in the thrombus management platform.

Our Med Device revenue declined by 10.0% in the first quarter of fiscal year 2024 driven mainly by the sale of the dialysis and BioSentry businesses.

Results of Operations

For the three months ended August 31, 2023, the Company reported net income of $45.9 million, or diluted earnings per share of $1.15, on net sales of $78.7 million, compared with a net loss of $13.0 million, or a loss of $0.33 per diluted share, on net sales of $81.5 million during the same quarter of the prior year.

Our Med Device revenue declined by 11.8% in the second quarter of fiscal year 2024 driven mainly by the sale of the dialysis and BioSentry businesses.

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Results of Operations

For the three months ended November 30, 2023, the Company reported net loss of $29.0 million, or diluted loss per share of $0.72, on net sales of $79.1 million, compared with a net loss of $8.5 million, or a loss of $0.21 per diluted share, on net sales of $85.4 million during the same quarter of the prior year.

For the six months ended November 30, 2023, the Company reported net income of $16.8 million, or diluted earnings per share of $0.42, on net sales of $157.8 million, compared with a net loss of $21.5 million, or a loss of $0.55 per diluted share, on net sales of $167.0 million during the same quarter of the prior year.

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

Three Months Ended

(in thousands) Aug 31, 2023 Aug 31, 2022 $ Change

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2023 Nov 30, 2022 $ Change Nov 30, 2023 Nov 30, 2022 $ Change

Med Tech $ 25,363 $ 24,502 $ 861 $ 51,224 $ 47,318 $ 3,906

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Total $ 79,073 $ 85,429 $ (6,356) $ 157,752 $ 166,966 $ (9,214)

Three Months Ended

(in thousands) Aug 31, 2023 Aug 31, 2022 $ Change

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2023 Nov 30, 2022 $ Change Nov 30, 2023 Nov 30, 2022 $ Change

United States $ 64,002 $ 71,631 $ (7,629) $ 128,401 $ 140,655 $ (12,254)

1 unchanged sentence

Total $ 79,073 $ 85,429 $ (6,356) $ 157,752 $ 166,966 $ (9,214)

For the three months ended August 31, 2023, net sales decreased $2.9 million to $78.7 million compared to the same period in the prior year.

At August 31, 2023, the Company had a backlog of $3.3 million, an increase of $0.6 million from May 31, 2023.

The Med Tec h segment net sales increased $3.0 million fo r the three months ended August 31, 2023 compared to the same period in the prior year.

The change in sales from the prior year was primarily driven by:

• Increased Auryon sales of $2.3 million;

• Decreased sales of the thrombus management platform of $0.7 million, which was driven by a decrease in AngioVac sales of $0.5 million;

• Increased NanoKnife sales of $1.4 million, which was driven by increased capital and disposable sales both domestically and internationally.

The Me d Device segment net sales decreased $5.9 million for the three months ended August 31, 2023 compared to the same period in the prior year.

The backlog, which primarily impacted sales of Core and Vascular Access products, was $3.3 million, an increase of $0.6 million from May 31, 2023.

The change in sales from the prior year was primarily driven by:

• Decreased sales of dialysis and BioSentry of $5.5 million and $1.6 million, respectively, which was due to the divestiture of these businesses on June 8, 2023;

• Decreased sales of PICCs, Core and Other Oncology and Vascular Access sales of $0.8 million, $0.1 million and $0.5 million, respectively.

These decreases were partially offset by increased sales of Ports, Midlines and Microwave products of $1.5 million, $0.3 million and $1.1 million, respectively.

Three Months Ended

(in thousands) Aug 31, 2023 Aug 31, 2022 $ Change

For the three months ended November 30, 2023, net sales decreased $6.4 million to $79.1 million compared to the same period in the prior year.

For the six months ended November 30, 2023, net sales decreased $9.2 million to $157.8 million compared to the same period in the prior year.

At November 30, 2023, the Company had a backlog of $2.0 million, a decrease of $1.3 million from August 31, 2023.

The Med Tec h segment net sales increased $0.9 million and $3.9 million fo r the three and six months ended November 30, 2023 compared to the same period in the prior year, respectively.

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

• Increased Auryon sales of $1.3 million and $3.6 million compared to the same periods in the prior year, respectively;

• Decreased sales of the thrombus management platform of $0.6 million and $1.3 million compared to the same period in the prior year, respectively.

This was driven by a decrease in AngioVac sales of $0.6 million and $1.2 million compared to the same periods in the prior year, respectively, partially offset by increased AlphaVac sales of $0.3 million and $0.3 million compared to the same periods in the prior year, respectively;

• Increased NanoKnife sales of $0.2 million and $1.6 million compared to the same periods in the prior year, respectively, which was driven by increased capital sales for the three months ended November 30, 2023 and increased capital and disposable sales for the six months ended November 30, 2023.

The Me d Device segment net sales decreased $7.2 million and $13.1 million for the three and six months ended November 30, 2023 compared to the same period in the prior year, respectively.

The backlog, which primarily impacted sales of Core and Vascular Access products, was $2.0 million, a decrease of $1.3 million from August 31, 2023.

The change in sales for the three months ended November 30, 2023 compared to the same period in the prior year was primarily driven by:

• Decreased sales of dialysis and BioSentry products of $6.7 million and $1.8 million, respectively, which was due to the divestiture of these businesses on June 8, 2023;

• Decreased sales of Microwave and Other Oncology and Vascular Access sales of $0.4 million and $0.1 million, respectively.

These decreases were partially offset by increased sales of Core, PICCS and Ports products of $0.4 million, $0.1 million and $0.4 million, respectively.

The change in sales for the six months ended November 30, 2023 compared to the same period in the prior year was primarily driven by:

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• Decreased sales of dialysis and BioSentry products of $12.6 million and $3.6 million, respectively, which was due to the divestiture of these businesses on June 8, 2023;

• Decreased sales of PICCs and Other Oncology and Vascular Access sales of $0.7 million and $0.7 million, respectively.

These decreases were partially offset by increased sales of Core, Midlines, Ports and Microwave products of $0.3 million, $0.3 million, $2.0 million and $0.7 million, respectively.

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2023 Nov 30, 2022 $ Change Nov 30, 2023 Nov 30, 2022 $ Change

Med Tech $ 15,816 $ 15,614 $ 202 $ 32,543 $ 30,043 $ 2,500

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Gross profit % of sales 50.9 % 52.8 % 50.9 % 52.3 %

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

Total Company gross profit decreased by $2.2 million for the three months ended August 31, 2023 compared to the same period in the prior year.

The change from the prior year was primarily driven by:

• The sale of the dialysis and BioSentry businesses, which negatively impacted gross profit by $4.2 million;

• Sales volume, which positively impacted gross profit by $2.2 million;

• Production volume, price and other incentives which positively impacted gross profit by $1.5 million;

• Sales mix, which negatively impacted gross profit by $0.8 million;

• Inflationary costs on raw materials, labor shortages and freight costs, which negatively impacted gross profit by $0.4 million;

• Incremental depreciation on placement units of $0.4 million.

The Med Tech segment gross profit increased by $2.3 million for the three months ended August 31, 2023 compared to the same period in the prior year.

The change from the prior year was primarily driven by:

• Sales volume, which positively impacted gross profit by $2.1 million;

• Price and other incentives which positively impacted gross profit by $1.2 million;

• Sales mix, which negatively impacted gross profit by $0.6 million;

• Inflationary costs on raw materials, labor shortages and freight costs, which negatively impacted gross profit by $0.1 million;

• Incremental depreciation on placement units of $0.2 million.

The Med Device segment gross profit decreased by $4.5 million for the three months ended August 31, 2023 compared to the same period in the prior year.

The change from the prior year was primarily driven by:

• The sale of the dialysis and BioSentry businesses, which negatively impacted gross profit by $4.2 million;

• Sales volume, which positively impacted gross profit by $0.5 million;

• Production volume and price, which positively impacted gross profit by $0.4 million;

• Sales mix, which negatively impacted gross profit by $0.7 million;

• Inflationary costs on raw materials, labor shortages and freight costs, which negatively impacted gross profit by $0.3 million;

• Incremental depreciation on placement units of $0.1 million.

Total Company gross profit decreased by $4.8 million and $7.1 million for the three and six months ended November 30, 2023 compared to the same period in the prior year, respectively.

The change for both periods was primarily driven by:

• The sale of the dialysis and BioSentry businesses, which negatively impacted gross profit by $5.3 million and $9.4 million, respectively;

• Sales volume, which positively impacted gross profit by $1.5 million and $3.7 million, respectively;

• Production volume, price and other incentives which positively impacted gross profit by $0.1 million and $1.0 million, respectively;

• Sales mix, which negatively impacted gross profit by $0.5 million and $1.0 million, respectively;

• Inflationary costs on raw materials, labor shortages and freight costs, which negatively impacted gross profit by $0.5 million and $0.9 million, respectively;

• Incremental depreciation on placement units of $0.3 million and $0.6 million, respectively.

The Med Tech segment gross profit increased by $0.2 million and $2.5 million for the three and six months ended November 30, 2023 compared to the same period in the prior year, respectively.

The change for both periods was primarily driven by:

• Sales volume, which positively impacted gross profit by $0.7 million and $2.8 million, respectively;

• Price and other incentives which positively impacted gross profit by $0.2 million and $0.9 million, respectively;

• Sales mix, which negatively impacted gross profit by $0.5 million and $0.9 million, respectively;

• Incremental depreciation on placement units of $0.2 million and $0.4 million, respectively.

The Med Device segment gross profit decreased by $5.0 million and $9.6 million for the three and six months ended November 30, 2023 compared to the same period in the prior year, respectively.

The change for both periods was primarily driven by:

• The sale of the dialysis and BioSentry businesses, which negatively impacted gross profit by $5.3 million and $9.4 million, respectively;

• Sales volume, which positively impacted gross profit by $0.8 million and $1.3 million, respectively;

• Production volume and price, which negatively impacted gross profit by $0.1 million for the three months ended November 30, 2023 compared to the same period in the prior year, and which positively impacted gross profit by $0.1 million for the six months ended November 30, 2023 compared to the same period in the prior year;

• Sales mix, which negatively impacted gross profit by $0.1 million and $0.8 million, respectively;

• Inflationary costs on raw materials, labor shortages and freight costs, which negatively impacted gross profit by $0.5 million and $0.8 million, respectively;

• Incremental depreciation on placement units of $0.1 million and $0.1 million, respectively.

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Operating Expenses and Other Income (Expense)

Three Months Ended

(in thousands) Aug 31, 2023 Aug 31, 2022 $ Change

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2023 Nov 30, 2022 $ Change Nov 30, 2023 Nov 30, 2022 $ Change

Research and development $ 8,658 $ 6,838 $ 1,820 $ 16,599 $ 15,171 $ 1,428

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

R& D expense decreased $0.4 million for t he three months ended August 31, 2023 compared to the same period in the prior year.

The change from the prior year was primarily driven by:

• The timing of certain projects and clinical spend associated with the ongoing clinical trials, which decreased R&D expense by $0.6 million;

• Compensation and benefits expenses, which increased $0.2 million.

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R& D expense increased $1.8 million and $1.4 million for t he three and six months ended November 30, 2023 compared to the same period in the prior year, respectively.

The change for both periods was primarily driven by:

• The timing of certain projects and clinical spend associated with the ongoing clinical trials, which increased R&D expense by $1.6 million and $1.0 million, respectively;

• Compensation and benefits expenses, which increased $0.2 million and $0.6 million, respectively.

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

S&M expense increased $0.8 million for t he three months ended August 31, 2023 compared to the same period in the prior year.

The change from the prior year was primarily driven by:

• Compensation and benefits expense, which increased by $1.4 million;

• Trade show expenses, which increased $0.3 million.

This was partially offset by travel and other selling expenses, which decreased $0.8 million.

S&M expense decreased $0.5 million and increased $0.3 million for t he three and six months ended November 30, 2023 compared to the same period in the prior year.

The change for both periods was primarily driven by:

• Compensation and benefits expense, which increased by $0.7 million and $2.1 million, respectively;

• Trade show expenses, which increased $0.1 million and $0.2 million, respectively.

This was partially offset by travel and other selling expenses, which decreased $1.2 million and $1.9 million, respectively.

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

G&A e xpense increased $0.8 million for th e three months ended August 31, 2023 compared to the same period in the prior year.

The change from the prior year was primarily driven by:

• Compensation and benefits expenses, which increased $0.9 million.

This increase was primarily driven by a change in the vesting of equity grants to members of the Board from a one-year vest period to immediate vesting which resulted in additional expense of $1.1 million in the first quarter of fiscal year 2024;

• Other outside consultant spend for legal and IT, which increased $0.1 million.

This was partially offset by decreased travel expenses of $0.2 million.

Three Months Ended

(in thousands) Aug 31, 2023 Aug 31, 2022 $ Change

G&A e xpense decreased $1.5 million and $0.8 million for th e three and six months ended November 30, 2023 compared to the same period in the prior year.

The change for both periods was primarily driven by:

• Compensation and benefits expenses, which decreased $1.4 million and $0.5 million, respectively.

The decrease for the six months ended November 30, 2023 was partially offset by a change in the vesting of equity grants to members of the Board from a one-year vest period to immediate vesting which resulted in additional expense of $1.1 million in the first quarter of fiscal year 2024;

• Other outside consultant spend for legal and IT, which decreased $0.2 million and $0.1 million, respectively along with decreased travel expenses of $0.1 million and $0.3 million, respectively.

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2023 Nov 30, 2022 $ Change Nov 30, 2023 Nov 30, 2022 $ Change

Amortization of intangibles $ 3,562 $ 4,808 $ (1,246) $ 7,187 $ 9,645 $ (2,458)

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Other expense, net $ 502 $ (936) $ 1,438 $ 333 $ (1,492) $ 1,825

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

• Amortization expense decreased $1.2 million for the three months ended August 31, 2023 compared to the same period in the prior year due to the intangible assets that were included in the sale of the dialysis and BioSentry businesses.

• Amortization expense decreased $1.2 million and $2.5 million for the three and six months ended November 30, 2023 compared to the same period in the prior year, respectively, due to the intangible assets that were included in the sale of the dialysis and BioSentry businesses.

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

• The change in the fair value for the three months ended August 31, 2023 is related to the Eximo contingent consideration.

• The change in the fair value for the three and six months ended November 30, 2023 is related to the Eximo contingent consideration.

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

Acquisition, restructuring and other item s, net, decreased by $2.4 million for the three months ended August 31, 2023, compared to the same period in the prior year.

The change from the prior year was primarily driven by:

• Manufacturing relocation expense related to the move of certain manufacturing lines to Costa Rica, which increased $0.5 million;

Acquisition, restructuring and other item s, net, increased by $3.1 million and $0.8 million for the three and six months ended November 30, 2023, compared to the same period in the prior year, respectively.

The change for both periods was primarily driven by:

• Legal expense, re lated to litigation that is outside of the normal course of business, which increased $2.9 million and $2.9 million, respectively;

• Mergers and acquisition expense, which increased $0.3 million and $0.3 million, respectively;

• Manufacturing relocation expense related to the move of certain manufacturing lines from Queensbury, New York to a third party, which increased $0.1 million and $0.5 million, respectively;

• A transition services agreement that was entered into as a result of the sale of the dialysis and BioSentry businesses.

The Company invoiced Merit Medical Systems, Inc.

$0.2 million in the first quarter of fiscal year 2024;

$0.2 million and $0.3 million for the three and six months ended November 30, 2023, respectively ;

• The payment to the Israeli Innovation Authority of $3.5 million related to grant funds that were provided to Eximo to develop the Auryon laser prior to the acquisition in the second quarter of fiscal year 2020.

These grant funds were fully repaid in the first quarter of fiscal year 2023 to satisfy the obligation which was otherwise being paid as a royalty based on a percentage of sales;

• $0.9 million of deferred financing fees that were written-off in conjunction with the sale of the Dialysis and BioSentry businesses and concurrent extinguishment of the debt.

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• $0.9 million of deferred financing fees that were written-off in conjunction with the sale of the Dialysis and BioSentry businesses and concurrent extinguishment of the debt for the six months ended November 30, 2023, compared to the same period in the prior year.

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

• The change in other expe nse of $0.4 million for the three months ended August 31, 2023, compared to the same period in the prior year, is primarily due to decreased interest expense of $0.3 million, increased interest income of $0.2 million and unrealized foreign currency fluctuations of $0.1 million.

Income Tax Benefit

Three Months Ended

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

• The change in other expe nse of $1.4 million and $1.8 million for the three and six months ended November 30, 2023, compared to the same period in the prior year, respectively, is primarily due to decreased interest expense of $0.6 million and $0.9 million, respectively, increased interest income of $0.5 million and $0.7 million, respectively and unrealized foreign currency fluctuations of $0.3 million and $0.1 million, respectively.

Income Tax Benefit

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2023 Nov 30, 2022 Nov 30, 2023 Nov 30, 2022

Income tax benefit (expense) $ 16.4 $ (0.6) $ 5.4 $ (1.4)

Effective tax rate including discrete items (130.2) % 6.2 % 24.3 % 6.2 %

Our effective tax rate including discrete items for the three months ended August 31, 2023 and 2022 was (31.6)% and 6.2%, respectively.

Our effective tax rate including discrete items for the three months ended November 30, 2023 and 2022 was (130.2)% and 6.2%, respectively.

Our effective tax rate including discrete items for the six months ended November 30, 2023 and 2022 was 24.3% and 6.2%, respectively.

In fiscal year 2024, the Company’s effective tax rate differs from the U.S.

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

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Liquidity and Capital Resources

We regularly review our liquidity and anticipated capital requirements and we believe that our current cash on hand provides sufficient liquidity to meet our anticipated needs for capital for at least the next 12 months.

Our cash and cash equivalents totaled $57.6 million as of August 31, 2023, compared with $44.6 million as of May 31, 2023.

As of August 31, 2023 there was no outstanding debt as the Credit Agreement was extinguished in connection with the Divestiture (see Note 7 "Long-Term Debt" set forth in the Notes to our consolidated financial statements included in this Quarterly Report on Form 10-Q).

Our cash and cash equivalents totaled $60.9 million as of November 30, 2023, compared with $44.6 million as of May 31, 2023.

As of November 30, 2023 there was no outstanding debt as the Credit Agreement was extinguished in connection with the Divestiture (see Note 7 "Long-Term Debt" set forth in the Notes to our consolidated financial statements included in this Quarterly Report on Form 10-Q).

As of May 31, 2023, total debt outstanding related to the Credit Agreement was $50.0 million.

The fair value of contingent consideration liability as of August 31, 2023 and May 31, 2023, was $9.2 million and $19.3 million, respectively.

The fair value of contingent consideration liability as of November 30, 2023 and May 31, 2023, was $9.4 million and $19.3 million, respectively.

The table below summarizes our cash flows:

Three Months Ended

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

Six Months Ended

(in thousands) Nov 30, 2023 Nov 30, 2022

Cash provided by (used in):

4 unchanged sentences

Net change in cash and cash equivalents $ 16,276 $ 1,032

During the quarters ended August 31, 2023 and 2022, cash flows consisted of the following:

During the quarters ended November 30, 2023 and 2022, cash flows consisted of the following:

Cash used in operating activities

Three months ended August 31, 2023 and 2022:

Six months ended November 30, 2023 and 2022:

• Net income of $16.8 million and a net loss of $21.5 million, respectively, plus the non-cash items, primarily driven by depreciation and amortization and stock based compensation, along with the changes in working capital below, contributed to cash used in operations of $20.6 million and $17.2 million, respectively, for these periods.

• For the period ended August 31, 2023, working capital was unfavorably impacted by decreased accounts payable, accrued liabilities and other liabilities of $16.5 million, along with increased in ventory and prepaid expenses of $4.6 million and $4.2 million, respectively.

• For the period ended November 30, 2023, working capital was unfavorably impacted by decreased accounts payable, accrued liabilities and other liabilities of $1.0 million, along with increased in ventory and prepaid expenses of $8.8 million and $5.0 million, respectively.

This was partially offset by decreased accounts rec eivable of $0.7 million .

• For the period ended August 31, 2022, working capital was unfavorably impacted by decreased accounts payable, accrued liabilities and other liabilities of $9.0 million, along with increased receivables, inventory and prepaid expenses of $1.4 million, $6.2 million and $5.7 million, respectively.

• For the period ended November 30, 2022, working capital was unfavorably impacted by decreased accounts payable, accrued liabilities and other liabilities of $2.8 million, along with increased receivables, inventory and prepaid expenses of $1.0 million, $11.8 million and $3.9 million, respectively.

Cash provided by (used in) investing activities

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Three months ended August 31, 2023 and 2022:

Six months ended November 30, 2023 and 2022:

• $1.3 million and $2.1 million, respectively, of cash was used for fixed asset additions;

2 unchanged sentences

• $0.5 million of cash was used for the acquisition of an exclusive license in the first quarter of fiscal year 2023.

Cash provided by financing activities

Three months ended August 31, 2023 and 2022:

Cash (used in) provided by financing activities

Six months ended November 30, 2023 and 2022:

• $50.0 million repayment of the Credit Agreement in connection with the completion of the dialysis and BioSentry divestiture in the first quarter of fiscal year 2024;

3 unchanged sentences

• $0.1 million and $0.2 million, respectively, of proceeds from stock option and ESPP activity.

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On June 8, 2023 and in connection with the completion of the dialysis and BioSentry divestiture, the Company repaid all amounts outstanding under its existing Credit Agreement, and as a result, the Credit Agreement was extinguished.

6 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 2. Management’s Discussion and Analysis