What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-07-30 compared with 2023-08-15 · 491 added, 550 removed, 683 unchanged (60% of the section changed)

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An evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15 (e) under the Securities Exchange Act of 1934) as of May 31, 2024.

Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure the information required to be disclosed in the reports that are filed or submitted under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Based on management’s evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of May 31, 2023, because of the material weaknesses described below.

Management’s Report on Internal Control over Financial Reporting

Based on management’s evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of May 31, 2024, because of the material weaknesses described below.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13-a-15(f) and 15d-15(f).

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Projections of any evaluation of effectiveness for future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

On September 1, 2022, we completed our merger with Neogen Food Safety Corporation, a wholly owned subsidiary of 3M that was created to carve out 3M’s Food Safety Division.

We are in the process of evaluating the existing controls and procedures of 3M's Food Safety Division and integrating it into our internal control over financial reporting.

In accordance with SEC Staff guidance permitting a company to exclude an acquired business from management’s assessment of the effectiveness of internal control over financial reporting for the year in which the acquisition is completed, management has excluded the business that we acquired from our assessment of the effectiveness of internal control over financial reporting as of May 31, 2023.

The business that we acquired in 3M's Food Safety Division represented approximately 82% of the Company’s total assets as of May 31, 2023, 34% of the Company’s revenues and 29% of the Company’s operating income for the year ended May 31, 2023.

Under the supervision of and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we assessed the effectiveness of our internal control over financial reporting as of May 31, 2023, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013).

Under the supervision of and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we assessed the effectiveness of our internal control over financial reporting as of May 31, 2024, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013).

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Management’s assessment of the Company’s internal control over financial reporting identified the following material weaknesses that existed as of May 31, 2023:

We identified a material weakness in internal control related to ineffective information technology general controls (ITGCs) in the areas of user access and change management over certain information technology (IT) systems that support the Company’s financial reporting processes.

Management’s assessment of the Company’s internal control over financial reporting identified the following material weakness that existed as of May 31, 2023.

As of May 31, 2024, management believes our remediation efforts have been effective with respect to this material weakness and that the associated control is now effective as of May 31, 2024:

• A material weakness in internal control related to ineffective operation of management review controls related to the accounting, valuation and purchase price allocation of the Company’s acquisitions and associated goodwill.

Specifically, we did not maintain adequate documentation supporting the precision of the operating effectiveness of certain associated management review controls.

Management’s assessment of the Company’s internal control over financial reporting identified the following material weaknesses that existed as of May 31, 2024.

These material weaknesses also existed as of May 31, 2023.

• We identified a material weakness in internal control related to ineffective information technology general controls (ITGCs) in the areas of user access and change management over certain information technology (IT) systems that support the Company’s financial reporting processes.

Specifically, we did not design and maintain:

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• We identified a material weakness in internal control related to ineffective period-end invoice accrual controls that are designed to ensure the completeness and accuracy of accrued expenses and accrued capital assets.

We identified a material weakness in internal control related to ineffective operation of management review controls related to the accounting, valuation and purchase price allocation of the Company’s acquisitions and associated goodwill.

Specifically, we did not maintain adequate documentation supporting the precision of the operating effectiveness of certain associated management review controls.

These control deficiencies create a reasonable possibility that a material misstatement to the consolidated financial statements will not be prevented or detected on a timely basis, and therefore, we concluded that the deficiencies represent material weaknesses.

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GAAP and fairly present, in all material respects, the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this Form 10-K.

The Company’s independent registered public accounting firm, BDO USA, P.A., which has audited and reported on our consolidated financial statements, issued an attestation report on the effectiveness of the Company’s internal control over financial reporting as of May 31, 2023, which is included in this annual report below.

The Company’s independent registered public accounting firm, BDO USA, P.C., which has audited and reported on our consolidated financial statements, issued an attestation report on the effectiveness of the Company’s internal control over financial reporting as of May 31, 2024, which is included in this annual report below.

Plan of Remediation

Management has been implementing and continues to implement measures designed to ensure that control deficiencies contributing to the material weaknesses are remediated, such that these controls are designed, implemented, and operating effectively.

The Company continues to provide additional training to personnel and put in place additional quality control measures around its processes and the retention and documentation of evidence of control activities.

Management has been implementing and continues to implement measures designed to ensure that control deficiencies contributing to these material weaknesses are remediated, such that these controls are designed, implemented, and operating effectively.

When fully implemented and operational, we believe that these actions will remediate the underlying causes of the material weaknesses and strengthen our internal control over financial reporting.

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Changes in Internal Control over Financial Reporting

Other than the material weaknesses and related remediation efforts described above, and any changes resulting from the business combination described above, no changes in our internal control over financial reporting were identified as having occurred during the quarter ended May 31, 2023 that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.

Other than the material weaknesses and related remediation efforts described above, no changes in our internal control over financial reporting were identified as having occurred during the quarter ended May 31, 2024 that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.

Report of Independent Registered Public Accounting Firm

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Opinion on Internal Control over Financial Reporting

We have audited Neogen Corporation’s (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 (the “COSO criteria”).

We have audited Neogen Corporation’s (the “Company’s”) internal control over financial reporting as of May 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”).

In our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of May 31, 2024, based on the COSO criteria.

We do not express an opinion or any other form of assurance on management’s statements referring to any corrective actions taken by the Company after the date of management’s assessment.

equity, and cash flows for each of the three years in the period ended May 31, 2023, and the related notes and our report dated August 15, 2023 expressed an unqualified opinion thereon.

We do not express an opinion or any other form of assurance on management’s statements referring to any corrective actions taken by the Company after the date of management’s assessment.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of May 31, 2024 and 2023, the related consolidated statements of operations, comprehensive (loss) income, stockholders’ equity, and cash flows for each of the three years in the period ended May 31, 2024, and the related notes (collectively referred to as “the financial statements”) and our report dated July 30, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A, Management’s Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S.

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We believe that our audit provides a reasonable basis for our opinion.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Material weaknesses have been identified and described in management’s assessment.

These material weaknesses related to management’s failure to design and maintain effective controls over financial reporting, specifically related to the following:

(1) information technology general controls in the areas of user access and change management over certain information technology systems that support the Company’s financial reporting processes, (2) period-end invoice accrual controls and (3) management review controls related to the accounting, valuation and purchase price allocation of the Company’s acquisitions and associated goodwill.

These material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2023 consolidated financial statements, and this report does not affect our report dated August 15, 2023 on those consolidated financial statements.

As indicated in the accompanying “Item 9A, Changes in Internal Control over Financial Reporting”, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of 3M’s Food Safety Division, which was acquired on September 1, 2022, and which is included in the consolidated balance sheet of the Company as of May 31, 2023, and the related consolidated statements of income (loss), comprehensive income, stockholders’

equity, and cash flows for the year then ended.

3M’s Food Safety Division constituted 82% of total assets as of May 31, 2023, and 34% and 29% of revenues and operating

income, respectively, for the year then ended.

Management did not assess the effectiveness of internal control over financial reporting of 3M’s Food Safety Division because of the timing of the acquisition which was completed on September 1, 2022.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of 3M’s Food Safety Division.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Material weaknesses were identified regarding management’s failure to design and maintain controls (i) over information technology general controls in the areas of user access and change management over certain information technology systems that support the Company’s financial reporting processes and (ii) period-end invoice accrual controls as described in management’s assessment.

These material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2024 financial statements, and this report does not affect our report dated July 30, 2024 on those financial statements.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ BDO USA, P.A.

/s/ BDO USA, P.C.

Grand Rapids, Michigan

August 15, 2023

OTHER INFORMATION—NONE

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS—NOT APPLICABLE

July 30, 2024

OTHER INFORMATION

During the quarterly period ended May 31, 2024 , no director or officer (as defined in SEC Rule 16a-1(f)) of the Company adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement (as defined in Item 408 of Regulation S-K).

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS—NOT APPLICABLE

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information regarding the Company and certain corporate governance matters appearing under the captions “Proposal 1 —

Election of Directors,”

“Information About the Board and Corporate Governance Matters,”

and “Additional Information-Delinquent Section 16(a) Reports”

is incorporated by reference to Neogen’s 2023 proxy statement to be filed within 120 days of May 31, 2023.

Information regarding the Company, certain corporate governance matters and information about our executive officers appearing under the captions “Proposal 1 — Election of Directors,” “Information About the Board and Corporate Governance Matters,” “Information about our Executive Officers,” and “Additional Information-Delinquent Section 16(a) Reports” is incorporated by reference to Neogen’s 2024 proxy statement to be filed within 120 days of May 31, 2024.

We have adopted a Code of Conduct that applies to our directors, officers, and employees.

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We intend to satisfy the disclosure requirement regarding any amendment to, or a waiver from, a provision of the code of conduct for our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, by posting such information on our website.

Information About Our Officers and Executive Officers

The officers of Neogen serve at the discretion of the Board of Directors.

The names and titles of our officers as of May 31, 2023 are set forth below.

Position with the Company

President & Chief Executive Officer

Donofrio, Ph.D.

Chief Scientific Officer

Chief Operating Officer

Vice President, Americas & Australia/New Zealand

Chief Human Resources Officer

Chief Financial Officer

Vice President, Finance

Rocklin, Ph.D.

Chief Legal & Compliance Officer

Information concerning the officers of Neogen follows:

Adent, age 55, joined Neogen as Chief Executive Officer on July 17, 2017 and was then named President on September 22, 2017.

Prior to joining Neogen, Mr.

Adent served as the Chief Executive Officer of Animal Health International, Inc., formerly known as Lextron, Inc., from 2004 to 2015, also serving as its President during that time.

Animal Health International was sold to Patterson Companies, Inc.

in 2015, and Mr.

Adent served as the Chief Executive Officer of the $3.3 billion Animal Health Division of Patterson Animal Health from that period until his resignation on July 1, 2017.

Adent began his career with management responsibilities for Ralston Purina Company, developing animal feed manufacturing and sales operations in China and the Philippines.

When Ralston Purina spun off that business to Agribrands, he continued his management role in the European division in Spain and Hungary, serving as managing director of the Hungarian operations.

He left Ralston Purina in 2004.

Donofrio, age 50, joined Neogen in February 2016 as Director of Microbiology Research and Development, and was promoted to Director of Food Safety Research and Development in December 2016.

In April 2018, Dr.

Donofrio was named Vice President, Food Safety Research and Development and then named Vice President, Research and Development in September 2018.

Donofrio was named Chief Scientific Officer.

Prior to joining Neogen, he worked for 15 years at NSF International in various positions of increasing responsibility, including Director of Microbiology and Molecular Biology and Director of Applied Research, where he led efforts in grant research and method development with partners in academia, industry and government.

At Neogen, Dr.

Donofrio is responsible for our worldwide research activities.

Jones, age 53, joined Neogen as Chief Commercial Officer on August 17, 2020;

in 2022, he was named Chief Operating Officer.

Prior to joining Neogen, Mr.

Jones served as the President of the Companion Animal Division at Patterson Companies from 2016 to August 2020.

Prior to joining Patterson, Mr.

Jones served as the Head of Business Operations for the North American Merial Animal Health Division of Sanofi.

Jones began his career as a management consultant with the North Highland Company and PriceWaterhouseCoopers, focusing on commercial transformation and strategy projects in the pharmaceutical, healthcare distribution and high-tech industries.

Lilly, age 49, joined Neogen in June 2005 as Market Development Manager for Food Safety.

In June 2009, he moved to the Corporate Development group.

He was named Vice President of Corporate Development in December 2011, responsible for the identification and acquisition of new business opportunities for the Company.

In January 2019, Dr.

Lilly was named Vice President, International Business, responsible for Neogen’s operations outside of the U.S.

In May 2023, Dr.

Lilly was named Vice President, Americas & Australia/New Zealand, with responsibility for all commercial business in those regions.

He also has strategic and operational oversight of our global genomics business.

Prior to joining Neogen, he served in various technical sales and marketing roles at Invitrogen Corporation.

Mann, age 58, joined Neogen in 2017 as Director of Human Resources and was promoted to Senior Director of Human Resources in June 2019.

Mann was named Chief Human Resources Officer, with responsibilities for people-focused programs and initiatives for Neogen’s worldwide employees.

Mann has more than 30 years of experience focused on all aspects of strategic human resources including talent acquisition, compensation and benefits, employee development and employee relations.

Prior to joining Neogen, Ms.

Mann held the positions of Director, Talent Acquisition at Holland, a logistics company, and Director, People Services Consulting at Herman Miller.

Naemura, age 54, joined Neogen in November 2022 as Chief Financial Officer.

Previously, Mr.

Naemura served as the Senior Vice President and Chief Financial Officer of Vontier Corporation from February 2020 until November 2022.

Naemura served as Chief Financial Officer of Gates Industrial Corporation from March 2015 to January 2020.

Prior to his time at Gates Industrial Corporation, Mr.

Naemura served as Vice President of Finance and Group Chief Financial Officer at Danaher Corporation from April 2012 to March 2015, and previously served as Danaher Corporation’s Test & Measurement Communications Platform Chief Financial Officer from January 2009 to April 2012.

Prior to 2009, Mr.

Naemura was employed by Tektronix Corporation from August 2000 to January 2009, including during its acquisition by Danaher Corporation in 2007.

Quinlan, age 60, joined Neogen in January 2011 as Vice President & Chief Financial Officer and was also Corporate Secretary until March 2021.

Quinlan announced his retirement in September 2022 and Mr.

Naemura was subsequently appointed as Chief Financial Officer, beginning in November 2022.

For the remainder of fiscal year 2023, Mr.

Quinlan continued to serve the Company as Vice President of Finance and is continuing to work on special projects through the end of the 2023 calendar year.

Prior to his retirement announcement, Mr.

Quinlan was responsible for all internal and external financial reporting for Neogen, and managed the accounting, information technology, corporate purchasing, treasury and investor relations functions.

Quinlan came to Neogen following 19 years at Detrex Corporation (1992-2010), the last eight years serving as Vice President-Finance, CFO and Treasurer.

He was on the audit staff at the public accounting firm Price Waterhouse (now PricewaterhouseCoopers) from 1985-1989.

Rocklin, Ph.D., age 51, joined Neogen in March 2021 as Vice President, General Counsel & Corporate Secretary.

Rocklin was named Chief Legal & Compliance Officer.

In this role, she is responsible for all legal and compliance matters and also leads the regulatory, quality and ESG functions.

Rocklin also serves as the Corporate Secretary.

Prior to joining Neogen, Dr.

Rocklin was Division Vice President, Corporate Law at Corning Incorporated.

In her nearly ten years at Corning, she held multiple leadership positions within Corning’s Law Department, including Director of Law, M&A and Emerging Innovations.

Before Corning, Dr.

Rocklin held leadership positions at Smiths Group plc and was in private practice at the law firm of Foley & Lardner LLP.

We have adopted an insider trading policy governing the purchase, sale, and/or other disposition of our securities by our directors, officers, employees, and other covered persons.

We believe this policy is reasonably designed to promote compliance with insider trading laws, rules, and regulations, and the exchange listing standards applicable to us.

A copy of this policy is filed as Exhibit 19 to this Annual Report on Form 10-K.

EXECUTIVE COMPENSATION

The information required by this Item, and pursuant to Regulation 14A of the Exchange Act, is incorporated by reference from the sections entitled “Compensation Discussion and Analysis”, “Compensation Committee Report”, “Executive Compensation”, “Information About the Board and Corporate Governance Matters-Compensation Committee Interlocks and Insider Participation”, “CEO Pay Ratio”, and “Compensation of Directors”

in the Company’s definitive Proxy Statement to be filed within 120 days of May 31, 2023.

The information required by this Item is incorporated by reference from the sections entitled “Compensation Discussion and Analysis”, “Compensation Committee Report”, “Executive Compensation”, "Compensation Committee Interlocks and Insider Participation”, “CEO Pay Ratio”, “Pay Versus Performance,” and “Compensation of Directors” in the Company’s definitive Proxy Statement to be filed within 120 days of May 31, 2024.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT, AND RELATED STOCKHOLDER MATTERS

The information required by this Item, and pursuant to Regulation 14A of the Exchange Act, is incorporated by reference from the section entitled “Security Ownership of Certain Beneficial Owners, Directors and Management”

in the Company’s definitive Proxy Statement to be filed within 120 days of May 31, 2023.

The information required by this Item is incorporated by reference from the section entitled “Security Ownership of Certain Beneficial Owners, Directors and Management” and “Equity Compensation Plan Information” in the Company’s definitive Proxy Statement to be filed within 120 days of May 31, 2024.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this Item, and pursuant to Regulation 14A of the Exchange Act, is incorporated by reference from the section entitled “Information about the Board and Corporate Governance Matters-Independent Directors,”

“Board Committees”

and “Certain Relationships and Related Party Transactions”

in the Company’s definitive Proxy Statement to be filed within 120 days of May 31, 2023.

The information required by this Item is incorporated by reference from the section entitled “Information about the Board and Corporate Governance Matters-Independent Directors,” “Board Committees” and “Certain Relationships and Related Party Transactions” in the Company’s definitive Proxy Statement to be filed within 120 days of May 31, 2024.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this Item, and pursuant to Regulation 14A of the Exchange Act, is incorporated by reference from the section entitled “Proposal 3 —

Ratification of the Appointment of the Company’s Independent Registered Public Accounting Firm”

in the Company’s definitive Proxy Statement to be filed within 120 days of May 31, 2023.

The information required by this Item is incorporated by reference from the section entitled “Proposal 3 — Ratification of the Appointment of the Company’s Independent Registered Public Accounting Firm” in the Company’s definitive Proxy Statement to be filed within 120 days of May 31, 2024.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

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(a) (3) and (b).

The Exhibits, listed on the accompanying Exhibit Index on page 40, are incorporated herein by reference.

FORM 10-K SUMMARY —

The Exhibits, listed in the Exhibit Index below, are incorporated herein by reference.

FORM 10-K SUMMARY — NONE

Neogen Corporation

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EXHIBIT INDEX

Agreement and Plan of Merger, dated as of December 13, 2021, by and among 3M Company, Neogen Food Safety Corporation, Neogen Corporation and Nova RMT Sub, Inc.

(incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by Neogen Corporation on December 15, 2021).

Separation and Distribution Agreement, dated as of December 13, 2021, by and among 3M Company, Neogen Food Safety Corporation and Neogen Corporation (incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K filed by Neogen Corporation on December 15, 2021).

Amendment No.

1 to the Separation and Distribution Agreement, dated as of August 31, 2022, by and among 3M Company, Neogen Food Safety Corporation and Neogen Corporation (incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K filed by Neogen Corporation on September 1, 2022).

Asset Purchase Agreement, dated as of December 13, 2021, by and between 3M Company and Neogen Corporation (incorporated by reference to Exhibit 2.3 to the Current Report on Form 8-K filed by Neogen Corporation on December 15, 2021).

Certificate of Amendment to Articles of Incorporation filed on October 11, 2010 (incorporated by reference to Exhibit 3.2 filed with the Registrant’s Annual Report on Form 10-K filed on July 30, 2020).

Restated Articles of Incorporation, as amended on November 23, 2011 (incorporated by reference to Exhibit 3.1 filed with the Registrant’s Quarterly Report on Form 10-Q filed December 30, 2011).

Certificate of Amendment to Articles of Incorporation filed on November 20, 2018 (incorporated by reference to Exhibit 3 filed with the Registrant’s Quarterly Report on Form 10-Q filed December 28, 2018).

Article of Incorporation and Bylaws

Restated Articles of Incorporation filed February 14, 2000, as amended on November 23, 2011 (incorporated by reference to Exhibit 3.1 to the Quarterly Report filed December 30, 2011).

Certificate of Amendment to Articles of Incorporation filed on October 11, 2010 (incorporated by reference to Exhibit 3.2 to the Annual Report on Form 10-K filed July 30, 2020).

Certificate of Amendment to Articles of Incorporation of Neogen Corporation filed on March 14, 2022 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by Neogen Corporation on March 17, 2022).

Certificate of Amendment to Articles of Incorporation of Neogen Corporation filed on September 1, 2022 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by Neogen Corporation on September 1, 2022).

By-Laws, as amended (incorporated by reference to Exhibit 3.2 to the Registrant’s Quarterly Report on Form 10-Q filed April 14, 2000).

Amendment to the By-Laws, as amended (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed by Neogen Corporation on September 1, 2022).

Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed October 31, 2023).

Instruments Defining the Rights of Security Holders, Including Indentures

Senior Notes Indenture for 8.625% Senior Notes due 2030, dated as of July 20, 2022, among Neogen Food Safety Corporation, as issuer, the guarantors party thereto from time to time, and U.S.

Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 10.10 to Neogen’s Registration Statement on Form S-4 (Registration No.

333-263667), filed with the SEC on July 27, 2022).

Supplemental Indenture, dated as of September 1, 2022, among Neogen Food Safety Corporation (f/k/a Neogen Food Safety Corporation), as issuer, U.S.

Bank Trust Company, National Association, as trustee, Neogen Corporation and certain of its subsidiaries (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed by Neogen Corporation on September 1, 2022).

Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 10.10 to the Registration Statement on Form S-4 (No.

333-263667), filed July 27, 2022).

Supplemental Indenture, dated as of September 1, 2022, among Neogen Food Safety Corporation, as issuer, U.S.

Description of the Common Stock of Neogen Corporation.

Material Contracts

Agreement and Plan of Merger, dated as of December 13, 2021, by and among 3M Company, Garden SpinCo Corporation, Neogen Corporation, and Nova RMT Sub, Inc.

(incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed December 15, 2021).

Separation and Distribution Agreement, dated as of December 13, 2021, by and among 3M Company, Garden SpinCo Corporation, and Neogen Corporation (incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K filed December 15, 2021).

Amendment No.

1 to the Separation and Distribution Agreement, dated as of August 31, 2022, by and among 3M Company, Garden SpinCo Corporation, and Neogen Corporation (incorporated by reference to Exhibit 2.3 to the Current Report on Form 8-K filed September 1, 2022).

Tax Matters Agreement, dated as of September 1, 2022, by and among 3M Company, Neogen Food Safety Corporation and Neogen Corporation (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by Neogen Corporation on September 1, 2022).

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Real Estate License Agreement, dated as of September 1, 2022, by and among certain subsidiaries of Neogen Corporation, 3M Company and certain of its subsidiaries (incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K filed by Neogen Corporation on September 1, 2022).

Credit Agreement, dated as of June 30, 2022, among Neogen Food Safety Corporation, as borrower, the lenders from time to time party thereto, and JPMorgan Chase Bank, N.A., as administrative agent, and joined thereto as of September 1, 2022 by Neogen Corporation, as a borrower (incorporated by reference to Exhibit 10.9 to Neogen’s Registration Statement on Form S-4 (Registration No.

333-263667), filed with the SEC on July 27, 2022).

Neogen Corporation 2018 Omnibus Incentive Plan (incorporated by reference to Appendix A to the Proxy Statement on Schedule 14A filed August 28, 2018).

Neogen Corporation 2023 Omnibus Incentive Plan (incorporated by reference to Appendix A to the Proxy Statement on Schedule 14A filed September 18, 2023).

Form of Management Stock Option Award Agreement.

Form of Management Restricted Share Unit Award Agreement.

Form of Severance Letter Agreement entered into with executive officers (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed October 31, 2023).

Option Agreement between Neogen Corporation and David H.

Naemura, dated October 26, 2023.

Neogen Corporation Insider Trading Policy

Listing of Subsidiaries

Consent of Independent Registered Public Accounting Firm BDO USA, P.A.

Consent of Independent Registered Public Accounting Firm BDO USA, P.C.

Power of Attorney

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Certification Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Inline XBRL Instance Document

Inline XBRL Taxonomy Extension Schema Document

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Inline XBRL Taxonomy Extension Definition Document

Inline XBRL Taxonomy Extension Label Linkbase Document

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Clawback Policy

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Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

* Exhibits, schedules, and annexes have been omitted pursuant to Item 601(a)(5) of Regulation S-K and will be supplementally provided to the SEC upon request.

(1) Denotes compensatory plan or arrangement

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

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Chief Financial Officer

Chief Accounting Officer

(Principal Executive Officer)

(Principal Financial & Accounting Officer)

August 15, 2023

(Principal Financial Officer)

(Principal Accounting Officer)

July 30, 2024

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.

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(Principal Executive Officer)

August 15, 2023

July 30, 2024

Chief Financial Officer

(Principal Financial & Accounting Officer)

August 15, 2023

(Principal Financial Officer)

July 30, 2024

Chief Accounting Officer

(Principal Accounting Officer)

July 30, 2024

Chairman of the Board of Directors

August 15, 2023

July 30, 2024

Aashima Gupta

August 15, 2023

July 30, 2024

Woteki, Ph.D.

Adent, Attorney-in-fact

August 15, 2023

July 30, 2024

ANNUAL REPORT ON FORM 10-K

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LANSING, MICHIGAN

FORM 10-K—ITEM 15(a)(1) AND (2) AND 15(c)

LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

The following consolidated financial statements of Neogen Corporation and subsidiaries are included below and incorporated in ITEM 8:

Report of Independent Registered Public Accounting Firm, BDO USA, P.A.

Report of Independent Registered Public Accounting Firm, BDO USA, P.C.

, Grand Rapids, MI PCAOB ID# 243

Consolidated Balance Sheets

Consolidated Statements of Income (Loss)

Consolidated Statements of Comprehensive Income

Consolidated Statements of Stockholders’

Consolidated Statements of Operations

Consolidated Statements of Comprehensive (Loss) Income

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Schedules for which provision is made in the applicable accounting regulation of the United States Securities and Exchange Commission are not required under the related instructions or are inapplicable and, therefore, have been omitted.

Report of Indepen dent Registered Public Accounting Firm

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Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Neogen Corporation (the “Company”) as of May 31, 2023 and 2022, the related consolidated statements of income (loss), comprehensive income, stockholders’

equity, and cash flows for each of the three years in the period ended May 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of Neogen Corporation (the “Company”) as of May 31, 2024 and 2023, the related consolidated statements of operations, comprehensive (loss) income, stockholders’ equity, and cash flows for each of the three years in the period ended May 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at May 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended May 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated August 15, 2023 expressed an adverse opinion thereon.

We also have 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, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated July 30, 2024 expressed an adverse opinion thereon.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

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(1) relates to accounts or disclosures that are material to the consolidated 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 consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of the customer relationships intangible asset –

3M Food Safety Division transaction

As described in Note 3 to the consolidated financial statements, on September 1, 2022, the Company completed a transaction combining 3M’s Food Safety Division with Neogen in a Reverse Morris Trust transaction for consideration of approximately $3.2 billion, which resulted in recording of a customer relationships intangible asset valued at $1.17 billion.

Management determined the fair value of the acquired customer relationships intangible asset by applying the multi-period excess earnings method, which involved the use of significant estimates and assumptions related to forecasted revenue growth rate and customer attrition rate.

We identified the valuation of the customer relationship intangible asset from the 3M Food Safety Division transaction as a critical audit matter.

The principal considerations for this determination are the significant judgments and assumptions made by management when determining the fair value of the customer relationships intangible asset, specifically the forecasted revenue growth rate and customer attrition rate.

Auditing these elements involved especially subjective auditor judgment due to the nature and extent of audit effort required to address these matters, including the extent of specialized skills or knowledge needed.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated 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.

Goodwill Impairment Assessment – Food Safety Reporting Unit

As described in Notes 1 and 5 to the consolidated financial statements, the Company’s goodwill balance was $2.135 billion at May 31, 2024, of which $2.054 billion is allocated to the Company’s Food Safety reporting unit and $0.081 billion to the Animal Safety reporting unit.

Management reviews the carrying amounts of goodwill annually at the reporting unit level, or when indications of impairment exist, to determine if goodwill may be impaired.

Goodwill is tested for impairment annually in the fourth quarter of the Company’s fiscal year.

The Company estimates the fair value of its reporting units using a combination of discounted cash flows and market-based approaches.

As disclosed by management, the discounted cash flows approach is based on the reporting unit’s forecasted cash flows, including forecasted revenue growth rates and gross margins assumptions, that are discounted to present value using the reporting unit’s weighted average cost of capital (“WACC”) as the discount rate.

The Company recognized no impairment during the year ended May 31, 2024.

We identified the Goodwill Impairment Assessment related to the Food Safety reporting unit as a critical audit matter.

Specifically, the determination of fair value of goodwill requires management to make assumptions used in the discounted cash flows approach including the assumptions of forecasted revenue growth rates, gross margins, and the discount rate.

Auditing management’s assumptions used in calculation of the fair value of goodwill involved especially challenging and subjective auditor judgment, including the extent of specialized knowledge or skill needed.

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

Utilizing personnel with specialized knowledge and skills in valuation to assist in (i) evaluating management’s process for estimating the fair value of the customer relationship intangible asset, and (ii) evaluating the methodology used and the reasonableness of the attrition rate.

Evaluating the reliability of the underlying data provided by management.

Evaluating the reasonableness of the significant assumptions related to the forecasted revenue growth rate by (i) analyzing the current and past performance of the former 3M Food Safety Division, (ii) evaluating the consistency with external market and industry data, and (iii) comparing the consistency with evidence obtained in other areas of the audit.

/s/ BDO USA, P.A.

We have served as the Company’s auditor since 2014.

Evaluating the reasonableness of the forecasted revenue growth rates used by management by:

(i) obtaining an understanding of the estimation process and data used by management, (ii) comparing the forecasted revenue growth rates to historical operating performance and (iii) evaluating the forecasted revenue growth rates for consistency with external peer company financial data and other industry information.

Evaluating the reasonableness of the gross margins by comparing to historical operating performance.

Utilizing personnel with specialized knowledge and skill in valuation to assist in evaluating the reasonableness of the discount rate.

/s/ BDO USA, P.C.

We have served as the Company’s auditor since 2014.

Grand Rapids, Michigan

August 15, 2023

July 30, 2024

Neogen Corporation

Consolidated Bala nce Sheets –

(in thousands)

Consolidated Bala nce Sheets

(in thousands, except shares)

See accompanying notes to consolidated financial statements.

Current Assets

Cash and cash equivalents

Marketable securities

Marketable securities, amortized cost of $ 325 and $ 83,549

Accounts receivable, net

Inventory, net

Prepaid expenses and other current assets

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Less accumulated depreciation

Net Property and Equipment

Right of use assets

Other non-amortizable intangible assets

Amortizable intangible assets, net

Property and Equipment, net

Right of use assets (note 4)

Goodwill (note 5)

Other non-amortizable intangible assets (note 5)

Amortizable intangible assets, net (note 5)

Other non-current assets

Total Other Assets

See accompanying notes to consolidated financial statements.

Neogen Corporation

Consolidated Balance Sheets –

Liabilities and Stockholders’

(in thousands, except shares and per share)

Liabilities and Stockholders’

Liabilities and Stockholders’ Equity

Current Liabilities

Current portion of finance lease

Accounts payable

Accrued compensation

Income tax payable

Income tax payable (note 9)

Accrued interest

Deferred revenue

Other accruals

Other current liabilities

Total Current Liabilities

Deferred Income Tax Liability

Non-Current Debt

Deferred Income Tax Liability (note 9)

Non-Current Debt (note 7)

Other Non-Current Liabilities

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Commitments and Contingencies (note 10)

Stockholders’

Preferred stock, $ 1.00 par value —

shares authorized 100,000 ;

Stockholders’ Equity

Preferred stock, $ 1.00 par value — shares authorized 100,000 ;

and outstanding

Common stock, $ 0.16 par value —

shares authorized 315,000,000 ;

Common stock, $ 0.16 par value — shares authorized 315,000,000 ;

216,614,407 and 216,245,501 shares issued and outstanding at May 31, 2024 and 2023, respectively

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Retained earnings

Total Stockholders’

Total Liabilities and Stockholders’

See accompanying notes to consolidated financial statements.

Total Stockholders’ Equity

Total Liabilities and Stockholders’ Equity

Neogen Corporation

Consolidated S tatements of Income (Loss)

(in thousands, except per share)

Consolidated S tatements of Operations

(in thousands, except shares)

Year Ended May 31,

Product revenues, net

Service revenues, net

Total Revenues, net

Product revenues

Service revenues

Total Revenues

Cost of Revenues

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Cost of service revenues

Total Cost of Revenues

Cost of Revenues

Operating Expenses

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(Loss) Income Before Taxes

Provision for Income Taxes

Income Tax (Benefit) Expense

Net (Loss) Income

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Neogen Corporation

Consolidated St atements of Comprehensive Income (Loss)

Consolidated St atements of Comprehensive (Loss) Income

(in thousands)

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Net (Loss) Income

Other comprehensive (loss) income:

Other comprehensive income (loss):

Foreign currency translations

Unrealized gain (loss) on marketable securities, net of tax of $ 293 , $ 389 , and ($ 728 )

Unrealized loss on derivative instruments, net of tax of $( 644 )

Other comprehensive (loss) income, net of tax:

Comprehensive (loss) income

Unrealized gain (loss) on derivative instruments, net of tax of $ 1,232 and ($ 644 )

Other comprehensive income (loss), net of tax:

Total comprehensive (loss) income

See accompanying notes to consolidated financial statements.

Neogen Corporation

Consolidated Stat ements of Stockholders’

(in thousands, except shares)

Comprehensive

Income (Loss)

Consolidated Stat ements of Stockholders’ Equity

(in thousands, except share amounts)

Balance, June 1, 2021

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Issuance of shares under employee stock purchase plan

Issuance of shares for Megazyme acquisition

Net income for 2021

Other comprehensive income

Other comprehensive loss

Balance, May 31, 2022

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Issuance of shares under employee stock purchase plan

Net income for 2022

Issuance of shares for 3M transaction

Other comprehensive loss

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Issuance of shares under employee stock purchase plan

Issuance of shares for 3M transaction

Net loss for 2023

Other comprehensive loss

Other comprehensive income

Balance, May 31, 2024

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Year Ended May 31,

Cash Flows From Operating Activities

Cash Flows provided by Operating Activities

Net (loss) income

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Impairment of discontinued product lines

Loss on sale of minority interest and investment

(Gain) loss on sale of minority interest

Deferred income taxes

Share-based compensation

Gain on disposal of property and equipment

Loss (gain) on disposal of property and equipment

Amortization of debt issuance costs

Right of use asset amortization

Changes in operating assets and liabilities, net of business acquisitions:

Accounts receivable

Accounts receivable, net

Prepaid expenses and other assets

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Changes in other non-current assets and non-current liabilities

Net Cash From Operating Activities

Cash Flows From (For) Investing Activities

Net Cash provided by Operating Activities

Cash Flows (used for) provided by Investing Activities

Purchase of property, equipment and other non-current intangible assets

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Purchase of marketable securities

Proceeds from the sale of property and equipment

Business acquisitions, net of working capital adjustments and cash acquired

Net Cash From (For) Investing Activities

Cash Flows (For) From Financing Activities

Business acquisitions, net of cash acquired

Proceeds from the sale of property and equipment and other

Net Cash (used for) provided by Investing Activities

Cash Flows provided by (used for) Financing Activities

Exercise of stock options and issuance of employee stock purchase plan shares

Debt issuance costs paid

Repayment of debt

Payment of contingent consideration

Net Cash (For) From Financing Activities

Debt issuance costs paid and other

Net Cash provided by (used for) Financing Activities

Effects of Foreign Exchange Rate on Cash

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NEOGEN CORPORATION

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands except per share and share amounts)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands)

Summary of Significant Accounting Policies

Description of Business

Neogen Corporation and subsidiaries ("Neogen," "we," "our," or the "Company") develop, manufacture and market a diverse line of products and services dedicated to food and animal safety.

Our Food Safety segment consists primarily of diagnostic test kits and complementary products (e.g., culture media) sold to food producers and processors to detect dangerous and/or unintended substances in human food and animal feed, such as foodborne pathogens, spoilage organisms, natural toxins, food allergens, genetic modifications, ruminant by-products, meat speciation, drug residues, pesticide residues and general sanitation concerns.

The majority of the diagnostic test kits are disposable, single-use, immunoassay and DNA detection products that rely on proprietary antibodies and RNA and DNA testing methodologies to produce rapid and accurate test results.

Our expanding line of food safety products also includes genomics-based diagnostic technology, and advanced software systems that help testers to objectively analyze and store their results and perform analysis on the results from multiple locations over extended periods.

Neogen’s Animal Safety segment is engaged in the development, manufacture, marketing and distribution of veterinary instruments, pharmaceuticals, vaccines, topicals, parasiticides, diagnostic products, rodent control products, cleaners, disinfectants, insect control products and genomics testing services for the worldwide animal safety market.

The majority of these consumable products are marketed through veterinarians, retailers, livestock producers and animal health product distributors.

Our line of drug detection products is sold worldwide for the detection of abused and therapeutic drugs in animals and animal products, and has expanded into the workplace and human forensic markets.

Our Animal Safety segment is engaged in the development, manufacture, marketing and distribution of veterinary instruments, pharmaceuticals, vaccines, topicals, parasiticides, diagnostic products, rodent control products, cleaners, disinfectants, insect control products and genomics testing services for the worldwide animal safety market.

Basis of Consolidation

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We translate our non-U.S.

operations’

assets and liabilities denominated in foreign currencies into U.S.

operations’ assets and liabilities denominated in foreign currencies into U.S.

dollars at current rates of exchange as of the balance sheet date and income and expense items at the average exchange rate for the reporting period.

Translation adjustments resulting from exchange rate fluctuations are recorded in other comprehensive income (loss).

Gains or losses from foreign currency transactions are included in other income (expense) on our consolidated statement of income.

Recently Adopted Accounting Standards

Acquired contract assets and liabilities in a business combination

On June 1, 2023, the Company adopted ASU 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which amended ASC 805 to require an acquirer to, at the date of acquisition, recognize and measure contract assets and contract liabilities acquired in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606) as if the entity had originated the contracts.

Adoption of this standard did not have a material impact on its consolidated financial statements and related disclosures.

Reference Rate Reform

On September 1, 2022, the Company adopted Accounting Standards Codification Topic 848, Reference Rate Reform (Topic 848), which provided temporary optional expedients to applying the reference rate reform guidance to contracts that reference LIBOR or another reference rate expected to be discontinued.

Under Topic 848, contract modifications resulting from the transition to a new reference rate may be accounted for as a continuation of the existing contract.

The Company now uses the Secured Overnight Financing Rate (SOFR).

Adoption of this standard did not have a material impact on its consolidated financial statements and related disclosures.

Translation adjustments resulting from exchange rate fluctuations are recorded in other comprehensive (loss) income.

As of May 31, 2024 and 2023 , the amounts recorded within accumulated other comprehensive loss were foreign currency translation adjustment losses of $ 31,885 and $ 30,285 , respectively.

Gains or losses from foreign currency transactions are included in other (expense) income on our consolidated statements of operations.

During fiscal year 2024, 2023 and 2022 , the Company incurred $ 5,184, $ 5,322 and $ 40 of foreign currency losses.

New Accounting Pronouncements Not Yet Adopted

Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which modifies the disclosure and presentation requirements of reportable segments.

The amendments in the update require the disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit and loss.

The amendments also require disclosure of all other segment items by reportable segment and a description of its composition.

Additionally, the amendments require disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.

This update is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company is currently evaluating the impact that this guidance will have on the presentation of its consolidated financial statements and accompanying notes.

Income Taxes (Topic 740):

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax rate reconciliation table and disclosures regarding cash taxes paid both in the U.S.

and in foreign jurisdictions.

The update will be effective for annual periods beginning after December 15, 2024.

The Company is currently evaluating the impact that this guidance will have on the presentation of its consolidated financial statements and accompanying notes.

Accounting Policies

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These securities are classified as available for sale.

Changes in fair value are monitored and recorded on a monthly basis and are recorded in other comprehensive income (loss).

Changes in fair value are monitored and recorded on a monthly basis and are recorded in other comprehensive (loss) income.

In the event of a downgrade in credit quality subsequent to purchase, the marketable securities investment is evaluated to determine the appropriate action to take to minimize the overall risk to our marketable securities portfolio.

If fair value is less than its amortized cost basis, then the Company evaluates whether the decline is the result of a credit loss, in which case an impairment is recorded through an allowance for credit losses.

As of May 31, 2024 and 2023 , there were no recorded allowance for credit losses related to the marketable securities.

This evaluation included a review of the credit quality of the issuers, the financial health of the underlying securities, and the economic environment.

The unrealized losses on our marketable securities are primarily related to market fluctuations in the interest rates.

As of May 31, 2023, the expected duration of all unrealized losses was less than 12 months.

Where there is an intention or a requirement to sell an impaired available-for-sale debt security, the entire impairment is recognized in earnings with a corresponding adjustment to the amortized cost basis of the security.

The primary objective of management’s short-term investment activity is to preserve capital for the purpose of funding current operations, capital expenditures and business acquisitions.

Short-term investments are not entered into for trading or speculative purposes.

These securities are recorded at fair value based on recent trades or pricing models and therefore meet the Level 2 criteria.

Interest income on these investments is recorded within other (expense) income on the consolidated statements of income (loss).

Interest income on these investments is recorded within other (expense) income on the consolidated statements of operations.

Marketable Securities as of May 31, 2024 and 2023 are listed below by classification and remaining maturities.

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The Company operates on a global basis and is exposed to the risk that its financial condition, results of operations and cash flows could be adversely affected by changes in foreign currency exchange rates and changes in interest rates.

To reduce the potential effects of foreign currency exchange rate movements on net earnings, the Company enters into derivative financial instruments in the form of foreign currency exchange forward contracts with major financial institutions and have also entered into interest rate swap contracts as a hedge against changes in interest rates.

To reduce the potential effects of foreign currency exchange rate movements on net earnings, the Company enters into derivative financial instruments in the form of foreign currency exchange forward contracts with a major financial institution and has also entered into interest rate swap contracts as a hedge against increases in interest rates.

Management settles its foreign currency forward contracts monthly with its one counterparty.

There are no collateral or margin requirements as part of these forward contracts.

The Company has established policies and procedures for risk assessment and the approval, reporting and monitoring of derivative financial instrument activities.

On the date the derivative is established, the Company designates the derivative as either a fair value hedge, a cash flow hedge or a net investment hedge in accordance with its established policy.

For the Company's interest rate swap derivative, the Company designated it as a cash flow hedge in accordance with its established policy.

Each reporting period, derivatives are recorded at fair value in other current assets, other assets, accrued liabilities and other long-term liabilities.

The change in fair value is recorded in accumulated other comprehensive income (loss), and amounts are reclassified into earnings on the consolidated statement of income (loss) when transactions are realized.

Derivatives that are not determined to be effective hedges are adjusted to fair value with a corresponding adjustment to earnings.

The change in fair value is recorded in accumulated other comprehensive (loss) income, and amounts are reclassified into interest expense on the consolidated statements of operations when transactions are realized.

Derivatives that are not designated as hedges are adjusted to fair value with a corresponding adjustment to other (expense) income.

The Company does not enter into derivative financial instruments for trading or speculative purposes.

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Considerable judgment is often involved in making such estimates, and the use of different assumptions could result in different conclusions.

The most significant estimates include our evaluation of goodwill impairment, deferred taxes, intangible assets acquired, and fair value measurements.

Management believes its assumptions and estimates are reasonable and appropriate.

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Financial instruments which potentially subject Neogen to concentrations of credit risk consist principally of accounts receivable.

Management attempts to minimize credit risk by reviewing customers’

credit histories before extending credit and by monitoring credit exposure on a regular basis.

Management attempts to minimize credit risk by reviewing customers’ credit histories before extending credit and by monitoring credit exposure on a regular basis.

Collateral or other security is generally not required for accounts receivable.

As of May 31, 2024, 2023 and 2022, accounts receivable, net was $ 173,005, $ 153,253 and $ 99,674 , respectively, on the consolidated balance sheets.

We maintain an allowance for customer accounts that reduces receivables to amounts that are expected to be collected.

In estimating the allowance for credit losses, management considers relevant information about past events, current conditions and reasonable and supportable forecasts that affect the collectability of financial assets.

Once a receivable balance has been determined to be uncollectible, generally after all collection efforts have been exhausted, that

amount is charged against the allowance for credit losses.

No customer accounted for more than 10 % of accounts receivable May 31, 2023 or 2022 , respectively.

Once a receivable balance has been determined to be uncollectible, generally after all collection efforts have been exhausted, that amount is charged against the allowance for credit losses.

The provision is recorded within

operating expenses on the consolidated statements of operations.

No customer accounted for more than 10 % of accounts receivable as of May 31, 2024 or 2023 , respectively.

The activity in the allowance for credit losses was as follows:

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Finished goods

The Company’s inventories are analyzed for slow moving, expired and obsolete items on a quarterly basis and the valuation allowance is adjusted as required within cost of revenues expense.

The valuation allowance for inventory was $ 6,270 and $ 4,050 at May 31, 2023 and 2022 , respectively.

Inventory reserve

Inventory, net

The Company’s inventories are analyzed for slow moving, expired and obsolete items on a quarterly basis and the inventory reserve is adjusted as required within cost of revenues.

Property and Equipment

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Expenditures for major improvements are capitalized while repairs and maintenance are charged to expense as incurred.

Depreciation is provided on the straight-line method over the estimated useful lives of the respective assets, which are generally seven to 39 years for buildings and improvements, and three to 10 years for furniture, fixtures, computers, leasehold improvements, and machinery and equipment.

Depreciation is provided on the straight line method over the estimated useful lives of the respective assets, which are generally seven to 39 years for buildings and improvements, and three to 10 years for furniture, fixtures, computers and machinery and equipment.

Leasehold improvements are amortized over the expected life of the asset or term of the lease, whichever is shorter.

Depreciation expense was $ 21,771 , $ 17,292 and $ 14,094 in fiscal years 2024, 2023, and 2022, respectively.

During the quarter ended May 31, 2024, the Company reclassified $ 13,684 of capitalized cloud computing software costs from property and equipment.

$ 13,140 of this total was reclassified to prepaid expenses and other current assets, with the remaining $ 544 recognized as incremental amortization within general and administrative expense in the consolidated statements of operations.

Goodwill and Other Intangible Assets

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Under the goodwill guidance, management determined that each of its segments represents a reporting unit.

Other intangible assets include customer relationships, trademarks, licenses, trade names, covenants not-to-compete and patents.

Other intangible assets include customer relationships, trademarks, licenses, trade names, developed technology, covenants not-to-compete and patents.

Customer relationships intangibles are amortized on either an accelerated or straight line basis, reflecting the pattern in which the economic benefits are consumed, while all other amortizable intangibles are amortized on a straight line basis.

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Management reviews the carrying amounts of goodwill annually at the reporting unit level, or when indications of impairment exist, to determine if goodwill may be impaired.

Goodwill is tested for impairment annually in the fourth quarter.

Management also reviews the carrying amounts of non-amortizable intangible assets annually, or when indications of impairment exist, to determine if such assets may be impaired.

These are tested for impairment annually in the fourth quarter.

EBITDA multiples of peer companies, such assets are reduced to their estimated fair value and a charge is recorded to operations.

Amortizable intangible assets are tested for impairment when indications of impairment exist.

Goodwill and indefinite-lived intangibles are tested for impairment annually in the fourth quarter of our fiscal year.

During management's annual test or when there are indicators of impairment, if the carrying amounts of these assets are deemed to be less than fair value based upon a discounted cash flow analysis and comparison to comparable EBITDA multiples of peer companies, such assets are reduced to their estimated fair value and a charge is recorded to operations.

Amortizable other intangible assets are tested for impairment when indications of impairment exist.

If the carrying amounts of these assets are deemed to be less than fair value based upon a discounted cash flow analysis, such assets are reduced to their estimated fair value and a charge is recorded to operations.

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The carrying value of a long-lived asset is considered impaired when the anticipated separately identifiable undiscounted cash flows over the remaining useful life of the asset are less than the carrying value of the asset.

In such an event, fair value is determined using discounted cash flows, and if lower than the carrying value, impairment is recognized through a charge to operations.

No impairments of long-lived assets were identified during the years ended May 31, 2023, 2022 and 2021 , respectively.

E quity Compensation Plans

At May 31, 2023, the Company had stock option plans which are described more fully in Note 5 to the consolidated financial statements.

We measure stock-based compensation at the grant date, based on the estimated fair value of the award, and recognize the cost (net of estimated forfeitures) as compensation expense on a straight-line basis over the requisite service period.

Our stock-based compensation expense is reflected in general and administrative expense in our consolidated statements of income (loss).

In such an event, fair value is determined using undiscounted cash flows, and if lower than the carrying value, impairment is recognized through a charge to operations.

Equity Compensation Plans

At May 31, 2024, the Company had stock award plans which are described more fully in Note 8 to the consolidated financial statements.

We measure stock-based compensation at the grant date, based on the estimated fair value of the award, and recognize the cost as compensation expense on a straight line basis over the requisite service period and reverse compensation expense due to forfeitures as they occur.

Our stock-based compensation expense is reflected in general and administrative expense in our consolidated statements of operations.

Research and Development Costs

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Advertising costs are expensed within sales and marketing as incurred and totaled $ 3,301 , $ 2,548 and $ 2,018 in fiscal years 2024, 2023 and 2022 , respectively.

Net (Loss) Income per Share

Basic net (loss) income per share is based on the weighted average number of common shares outstanding during each year.

Diluted (loss) earnings per share is based on the weighted average number of common shares and dilutive potential common shares outstanding.

Our dilutive potential common shares outstanding during the years result from dilutive stock options and restricted stock units.

The following table presents the net (loss) income per share calculations:

Year ended May 31

Numerator for basic and diluted net (loss) income per share —

Net (Loss) Income

Denominator for basic net (loss) income per share —

Weighted average shares

Effect of dilutive stock options and restricted stock units

Denominator for diluted net (loss) income per share

Net (loss) income attributable per share

Due to the net loss in fiscal 2023, the dilutive stock options and RSUs are anti-dilutive.

At May 31, 2023 and May 31, 2022 , 148,000 and 383,000 shares, respectively, were excluded from the calculation of diluted net (loss) income per share, because the inclusion of such securities in the calculation would have been anti-dilutive.

At May 31, 2021, no potential shares were excluded from the computation.

The Company recognizes in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term.

The Company recognizes, in the consolidated balance sheets, a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term.

We recognized all leases with terms greater than 12 months in duration on our consolidated balance sheets as right-of-use assets and lease liabilities .

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Current and non-current lease liabilities are recorded in other accruals within current liabilities and other non-current liabilities, respectively, on our consolidated balance sheets.

We lease various manufacturing, laboratory, warehousing and distribution facilities, administrative and sales offices, equipment and vehicles under operating leases.

We evaluate our contracts to determine if an arrangement is a lease at inception and classify it as a finance or operating lease.

Currently, all of our leases are classified as operating leases.

Leased assets and corresponding liabilities are recognized based on the present value of the lease payments over the lease term.

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• The determination of the discount rate used in a lease is our incremental borrowing rate that is based on our estimate of what we would normally pay to borrow on a fully collateralized and amortized basis over a similar term an amount equal to the lease payments.

Supplemental balance sheet information related to operating leases was as follows:

Year ended May 31

Rights of use - assets

Lease liabilities - current

Lease liabilities - non-current

The weighted average remaining lease term and weighted average discount rate were as follows:

Year ended May 31

Weighted average remaining lease term

Weighted average discount rate

Operating lease expenses are classified as cost of revenues or operating expenses on the consolidated statements of income (loss).

The components of lease expense were as follows:

Year ended May 31

Operating leases

Short term leases

Total lease expense

Cash paid for amounts included in the measurement of lease liabilities for operating leases included in cash flows from operations on the statement of cash flows was approximately $ 2,139 , $ 1,407 , and $ 1,397 for the years ended May 31, 2023, 2022 and 2021 , respectively.

Non-cash additions to right-of-use assets obtained from new operating lease liabilities were $ 11,192 for the year ended May 31, 2023.

Maturities of operating lease liabilities as of May 31, 2023 are as follows:

Years ending May 31,

2029 and thereafter

Total lease payments

imputed interest

Total lease liabilities

Revenue Recognition

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• Recognition of revenue when or as the Company satisfies the performance obligations.

Essentially all of Neogen’s revenue is generated through contracts with its customers.

Neogen’s revenue is generated through contracts with its customers.

A performance obligation is a promise in a contract to transfer a product or service to a customer.

We generally recognized revenue at a point in time when all of our performance obligations under the terms of a contract are satisfied.

We generally recognize revenue at a point in time when all of our performance obligations under the terms of a contract are satisfied.

Revenue is recognized upon transfer of control of promised products or services in an amount that reflects the consideration we expect to receive in exchange for those products or services.

The collectability of consideration on the contract is reasonably assured before revenue is recognized.

To the extent that customer payment has been received before all recognition criteria are met, these revenues are initially deferred in other accruals on the balance sheet and the revenue is recognized in the period that all recognition criteria have been met.

Certain agreements with customers include discounts or rebates on the sale of products and services applied retrospectively, such as volume rebates achieved by purchasing a specified purchase threshold of goods and services.

To the extent that customer payment has been received before all recognition criteria are met, these revenues are initially deferred in current liabilities on the consolidated balance sheets and the revenue is recognized in the period that all recognition criteria have been met.

We account for these discounts as variable consideration and estimate the likelihood of a customer meeting the threshold in order to determine the transaction price using the most predictive approach.

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Variable consideration reduces the amount of revenue that is recognized.

Rebate obligations related to customer incentive programs are recorded in accrued liabilities.

Rebate obligations related to customer incentive programs are recorded in other current liabilities on the consolidated balance sheets.

The rebate estimates are adjusted at the end of each applicable measurement period based on information currently available.

The performance obligations in Neogen’s contracts are generally satisfied well within one year of contract inception.

In such cases, management has elected the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component.

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We account for shipping and handling for products as a fulfillment activity when goods are shipped.

Shipping and handling costs that are charged to and reimbursed

by the customer are recognized as revenues, while the related expenses incurred by Neogen are recorded in sales and marketing expense.

Shipping and handling costs that are charged to and reimbursed by the customer are recognized as revenues, while the related expenses incurred by Neogen are recorded in sales and marketing expense.

These expenses totaled $ 25,290 , $ 18,513 , and $ 17,482 in fiscal years 2024, 2023 and 2022 , respectively.

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While these situations are infrequent, due to immateriality of the amount, warranty claims are recorded in the period incurred.

The Company derives revenue from two primary sources —

product revenue and service revenue.

Business Combinations

The Company utilizes the acquisition method of accounting for business combinations.

This method requires, among other things, that results of operations of acquired companies are included in the Company's results of operations beginning on the respective acquisition dates and that assets acquired and liabilities assumed are recognized at fair value as of the acquisition date.

Valuation specialists are used to develop and evaluate the appropriateness of the fair value estimates, often utilizing cash flow projections and other related valuation techniques.

The fair value of assets acquired and liabilities assumed in certain cases may be subject to revision based on the final determination of fair value during a period of time not to exceed 12 months from the acquisition date.

Legal costs, due diligence costs, business valuation costs and all other business acquisition costs are expensed when incurred.

Loss Contingencies

Various legal actions, proceedings, and claims (generally, “matters”) are pending or may be instituted or asserted against the Company.

The Company accrues for matters when losses are deemed probable and reasonably estimable.

However, the ultimate resolutions of these matters are inherently unpredictable and could require payment substantially in excess of the amounts that have been accrued or disclosed.

Any resulting adjustments, which could be material, are recorded in the period the adjustments are identified.

Revenue Recognition

The Company derives revenue from two primary sources — product revenue and service revenue.

Product revenue consists primarily of shipments of:

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• Rodent control products, disinfectants and insect control products to assist in the control of rodents, insects and disease in and around agricultural, food production and other facilities.

Revenue for Neogen’s products are recognized and invoiced when the product is shipped to the customer.

Revenues for Neogen’s products are recognized and invoiced when the product is shipped to the customer.

Service revenue consists primarily of:

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• Other commercial laboratory services.

Revenues for Neogen’s genomics and commercial laboratory services are recognized and invoiced when the applicable laboratory service is performed and the results are conveyed to the customer.

Payment terms for products and services are generally 30 to 60 days .

The Company has no contract assets.

Contract liabilities represent deposits made by customers before the satisfaction of performance obligation(s) and recognition of revenue.

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These customer deposits are listed as Deferred revenue on the consolidated balance sheets.

As of May 31, 2022 , deferred revenue was $ 5,460 within the consolidated balance sheets.

During fiscal year 2024 and 2023 , the Company recorded additions of $ 13,267 and $ 11,046 to deferred revenue, respectively.

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Changes in the balances relate primarily to sales of the Company's genomics services.

On September 1, 2022, Neogen closed on a Reverse Morris Trust transaction to combine with 3M’s Food Safety business.

Similar to Neogen, 3M’s former Food Safety business sells diagnostic test kits, dehydrated culture media, and related products used by food producers and processors to detect foodborne bacteria, allergens and levels of general sanitation.

Revenue for these products are recognized and invoiced when the product is shipped to the customer.

These products are currently manufactured, invoiced and distributed by 3M on behalf of, and as directed by Neogen to its customers under a number of transition service contracts.

On September 1, 2022, Neogen closed on a Reverse Morris Trust transaction to combine with 3M’s Food Safety business.

Similar to Neogen, 3M’s former Food Safety business sells diagnostic test kits, dehydrated culture media and related products used by food producers and processors to detect foodborne bacteria, allergens and levels of general sanitation.

Revenues for these products are recognized and invoiced when the product is shipped to the customer.

These products were manufactured, invoiced and distributed by 3M on behalf of, and as directed by, Neogen to its customers under a number of transition service contracts.

The Company has completed the exit of distribution and back office-related service contracts and currently only has a contract manufacturing agreement in place with 3M for certain products.

The following table presents disaggregated revenue by major product and service categories for the years ended May 31, 2024, 2023 and 2022:

Natural Toxins, Allergens & Drug Residues

Year Ended May 31,

Natural Toxins & Allergens

Bacterial & General Sanitation

Culture Media & Other

Indicator Testing, Culture Media & Other

Rodent Control, Insect Control & Disinfectants

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Total Revenue

Net (Loss) Income Per Share

Basic net (loss) income per share is based on the weighted average number of common shares outstanding during each year.

Diluted (loss) earnings per share is based on the weighted average number of common shares and dilutive potential common shares outstanding.

Our dilutive potential common shares outstanding during the years result from dilutive stock options and restricted stock units ("RSUs").

The following table presents the net (loss) income per share calculations:

Year Ended May 31,

Numerator for basic and diluted net (loss) income per share — Net (Loss) Income

Denominator for basic net (loss) income per share — Weighted average shares

Effect of dilutive stock options and restricted stock units

Denominator for diluted net (loss) income per share

Net (loss) income attributable per share

Due to the net loss in fiscal 2024 and 2023, the stock options and RSUs are anti-dilutive.

At May 31, 2024 and May 31, 2023 , approximately 332,025 and 147,671 shares, respectively, were excluded from the calculation of diluted net (loss) income per share, because the inclusion of such securities in the calculation would have been anti-dilutive.

We lease various manufacturing, laboratory, warehousing and distribution facilities, administrative and sales offices, equipment and vehicles under operating and finance leases.

Supplemental balance sheet information related to operating and finance leases was as follows:

Year Ended May 31,

Rights of use - non-current assets

Lease liabilities - other current liabilities

Lease liabilities - non-current liabilities

Property and equipment

Current portion of finance lease

The weighted average remaining lease term and weighted average discount rate were as follows:

Year Ended May 31,

Operating Leases

Weighted average remaining lease term

Weighted average discount rate

Financing Lease

Weighted average remaining lease term

Weighted average discount rate

Operating lease expenses are classified as cost of revenues or operating expenses on the consolidated statements of operations.

The components of lease expense were as follows:

Year ended May 31,

Operating leases

Short term leases

Financing lease expense:

Amortization of asset

Interest on lease liability

Total lease expense

Supplemental cash flow information is as follows:

Year Ended May 31,

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows for operating leases

Operating cash flows for finance leases

Financing cash flows for finance leases

Non-cash assets obtained in exchange for lease obligations:

Operating leases

Finance leases

Future lease payments as of May 31, 2024 are as follows:

Years ending May 31,

2030 and thereafter

Total lease payments

imputed interest

Total lease liabilities

Goodwill and Other Intangible Assets

Management completed the annual impairment analysis of goodwill using a third-party quantitative assessment as of the first day of the fourth quarter of fiscal year 2023.

The fair value of each reporting unit was determined and compared to the carrying value.

Management completed the annual impairment analysis of goodwill using a third-party quantitative and qualitative assessment as of the first day of the fourth quarter of fiscal year 2024.

The Animal Safety reporting unit was tested by utilizing a qualitative assessment.

The fair value of the Food Safety reporting unit was determined and compared to the carrying value.

The inputs to the fair value are defined in the fair value hierarchy as Level 3 inputs.

If the carrying value had exceeded the fair value, an impairment charge would have been recorded based on that difference.

The annual impairment analysis resulted in no impairment for 2023.

Management completed the annual impairment analysis of goodwill using a qualitative approach during fiscal year 2022, which resulted in no impairment charges.

The annual impairment analysis resulted in no impairment for 2024 and 2023.

Under the quantitative approach, fair value of the reporting unit is estimated based on a combination of an income-based approach consisting of a discounted cash flows analysis and the use of a market-based approach consisting of pricing multiples derived from an analysis of comparable public companies multiplied against historical and/or anticipated financial metrics of the reporting unit.

Management develops its discounted cash flows analysis based on information available as of the date of our assessment, using assumptions such as forecasted revenue growth rates and gross margin assumptions that are discounted to present value.

Management typically assigns more weight to the income-based valuation method.

Management also evaluates the fair value estimates of the reporting units in the context of the Company’s total enterprise market value.

The following table summarizes goodwill by reportable segment:

Animal Safety

Balance, May 31, 2022

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Balance, May 31, 2023

Acquisitions (1)

Foreign currency translation and other

Balance, May 31, 2024

(1) Animal Safety acquisitions represents portion of FSD transaction recorded at Neogen Australasia .

Other Intangible Assets

As of May 31, 2023 , non-amortizable intangible assets included licenses of $ 569 , trademarks of $ 12,522 and other intangibles of $ 1,224 .

During fiscal year 2023, the Company recorded an impairment of $ 1,000 to its non-amortizable trademarks related to discontinued product lines.

As of May 31, 2022 , non-amortizable intangible assets included licenses of $ 569 , trademarks of $ 13,604 and other intangibles of $ 1,224 .

Management completed the annual impairment analysis of intangible assets with indefinite lives using a qualitative assessment for fiscal year 2023 and a quantitative assessment for fiscal year 2022.

Other than the impairment in fiscal year 2023 related to the discrete trademarks discussed above, management determined that recorded amounts were not impaired and that no impairment charges were necessary.

Amortizable intangible assets consisted of the following and are included in amortizable intangible assets within the consolidated balance sheets:

Intangible Assets

Definite-lived intangible assets consisted of the following and are included in amortizable intangible assets within the consolidated balance sheets:

Covenants not to compete

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Balance, May 31, 2023

During fiscal year 2023, the Company recorded an impairment of $ 2,109 to its amortizable licenses related to discontinued product lines.

Amortization expense for intangibles totaled $ 94,946 , $ 71,085 , and $ 9,600 in fiscal years 2024, 2023, and 2022 , respectively.

The estimated amortization expense for each of the five succeeding fiscal years is as follows:

$ 93,200 in 2024, $ 92,900 in 2025, $ 92,300 in 2026, $ 91,700 in 2027, $ 90,900 in 2028 and $ 1,129,987 thereafter.

The amortizable intangible assets' useful lives are 2 to 20 years for licenses, 3 to 10 years for covenants not to compete, 5 to 25 years for patents, 9 to 20 years for customer relationships, 10 to 25 years for trade names and trademarks, 10 to 20 years for developed technology and 5 to 15 years for other product and service-related intangibles.

During fiscal year 2024 and 2023, the Company recorded an impairment of $ 556 and $ 2,109 , respectively, to its amortizable licenses related to discontinued product lines.

Estimated approximate amortization expense for the next five fiscal years and thereafter is as follows:

2025—$ 96,000 , 2026—$ 96,000 , 2027—$ 95,000 , 2028—$ 95,000 , 2029—$ 91,000 and thereafter—$ 1,039,000 .

If actual market conditions or the Company’s performance are less favorable than those projected by management, or if events occur or circumstances change that would reduce the fair value of the Company’s goodwill or intangible assets below the amount reflected in the balance sheet, the Company may be required to conduct an interim test and possibly recognize impairment charges on its goodwill or intangible assets, which could be material, in future periods.

The amortizable intangible assets' useful lives are as follows:

Useful Lives Range

Covenants not to compete

Customer relationships intangibles

Trade names and trademarks

10 - 25 years

Developed technology

10 - 20 years

Other product and service-related intangibles

All definite-lived intangibles are amortized on a straight line basis with the exception of definite-lived customer relationships intangibles and product and service-related intangibles, which are amortized on either a straight line or an accelerated basis.

The weighted average remaining amortization period for intangibles was 18 years as of May 31, 2023 and eight years as of May 31, 2022.

As of May 31, 2023 , non-amortizable intangible assets included licenses of $ 569 , trademarks of $ 12,522 and other intangibles of $ 1,224 .

During fiscal year 2023, the Company recorded an impairment of $ 1,000 to its non-amortizable trademarks related to discontinued product lines.

This impairment was recorded in the Company's Food Safety segment within operating expenses.

Management completed the annual impairment analysis of intangible assets with indefinite lives using a qualitative assessment for fiscal year 2023 .

Other than the impairment in fiscal year 2023 related to the discrete trademarks discussed above, management determined that other recorded amounts were not impaired and that no additional impairment charges were necessary.

In fiscal year 2024, the non-amortizable intangible assets were reclassified to definite-lived intangible assets.

In conjunction with the reclassification, management completed an impairment analysis of the intangible assets using a qualitative assessment and determined that recorded amounts were not impaired.

Business Combinations

The Consolidated Statements of Income (Loss) reflect the results of operations for business acquisitions since the respective dates of purchase.

The consolidated statements of operations reflect the results of operations for business acquisitions since the respective dates of purchase.

All are accounted for using the acquisition method.

Goodwill recognized in the acquisitions described below relates primarily to enhancing the Company’s strategic platform for the expansion of available product offerings.

In July 2020, the Company acquired the U.S.

(including territories) rights to Elanco’s StandGuard Pour-on for horn fly and lice control in beef cattle, and related assets.

Consideration for the purchase was $ 2,351 in cash, all paid at closing.

The final purchase price allocation, based upon the fair value of these assets determined using the income approach, included inventory of $ 51 and intangible assets of $ 2,300 .

Sales are reported within the Animal Safety segment.

In December 2020, the Company acquired all of the stock of Megazyme, Ltd, an Ireland-based company, and its wholly-owned subsidiaries, U.S.-based Megazyme, Inc.

and Ireland-based Megazyme IP.

Megazyme is a manufacturer and supplier of diagnostic assay kits and enzymes to measure dietary fiber, complex carbohydrates and enzymes in food and beverages as well as animal feeds.

Consideration for the purchase was net cash of $ 39,800 paid at closing, $ 8,600 of cash placed in escrow payable to the former owner in two installments in two and four years, $ 4,900 of stock issued at closing, and up to $ 2,500 of contingent consideration, payable in two installments over the next year, based upon an excess net sales formula.

The final purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included accounts receivable of $ 1,376 , inventory of $ 5,595 , net property, plant and equipment of $ 12,599 , prepayments of $ 69 , other current liabilities of $ 1,815 , contingent consideration accrual of $ 2,458 , non-current liabilities of $ 319 , non-current deferred tax liabilities of $ 3,306 , intangible assets of $ 22,945 and the remainder to goodwill (non-deductible for tax purposes).

In the year subsequent to the acquisition, payments of $ 2,349 were made to the former owner.

In the second year after the acquisition, the first escrow installment payment was also made.

The Irish companies continue to operate in Bray, Ireland, reporting within the Food Safety segment and are managed through Neogen’s Scotland operation.

The Company’s U.S.

business is now managed by our Lansing-based Food Safety team.

Goodwill recognized in the acquisitions described below relates primarily to enhancing the Company’s strategic platform for the expansion of available product offerings.

CAPInnoVet, Inc.

In September 2021, the Company acquired all of the stock of CAPInnoVet, Inc., a companion animal health business that provides pet medications to the veterinary market.

This acquisition provided entry into the retail parasiticide market and enhanced the Company’s presence in companion animal markets.

Consideration for the purchase was net cash of $ 17,900 paid at closing.

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The final purchase allocation, based upon the fair value of these assets and liabilities determined using the income approach, included accounts receivable of $ 308 , inventory of $ 531 , prepayments of $ 296 , accounts payable of $ 120 , other current liabilities of $ 84 , non-current liabilities of $ 6,500 , intangible assets of $ 19,200 and the remainder to goodwill (deductible for tax purposes).

Upon revaluation of the contingent liability during the third quarter of fiscal year 2023, the Company recognized a gain of $ 300 on the performance milestone liability, recorded within other income.

Upon revaluation of the contingent liability throughout fiscal year 2024 and 2023, the Company recognized a loss of $ 300 and a gain of $ 300 , respectively, on the performance milestone liability, recorded within other expense.

The business is operated from our location in Lexington, KY, reporting within the Animal Safety segment.

In November 2021, the Company acquired all of the stock of Delf (U.K.) Ltd., a United Kingdom-based manufacturer and supplier of animal hygiene and industrial cleaning products, and Abbott Analytical Ltd., a related service provider.

This acquisition expanded the Company’s line of dairy hygiene products and enhances our cleaner and disinfectant product portfolio.

Consideration for the purchase was net cash of $ 9,500 paid at closing.

The final purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included accounts receivable of $ 1,059 , inventory of $ 972 , net property, plant and equipment of $ 152 , prepayments of $ 31 , accounts payable of $ 497 , other current liabilities of $ 378 , non-current deferred tax liabilities of $ 780 , intangible assets of $ 3,100 and the remainder to goodwill (non-deductible for tax purposes).

The companies continue to operate from their current location in Liverpool, England, reporting within the Food Safety segment and are managed through Neogen’s Scotland operation.

Genetic Veterinary Sciences, Inc.

In December 2021, the Company acquired all of the stock of Genetic Veterinary Sciences, Inc., a companion animal genetic testing business providing genetic information for dogs, cats and birds to animal owners, breeders and veterinarians.

This acquisition further will expand the Company’s presence in the companion animal market.

This acquisition further expanded the Company’s presence in the companion animal market.

Consideration for the purchase was $ 11,300 in net cash.

T he final purchase price allocation, based upon the fair value of these assets and liabilities

determined using the income approach, included accounts receivable of $ 38 , net inventory of $ 292 , net property, plant and equipment of $ 399 , prepayments of $ 54 , accounts payable of $ 325 , unearned revenue of $ 1,900 , other current liabilities of $ 321 , intangible assets of $ 5,500 and the remainder to goodwill (deductible for tax purposes).

The business is operated from its current location in Spokane, Washington, reporting within the Animal Safety segment.

T he final purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included accounts receivable of $ 38 , net inventory of $ 292 , net property, plant and equipment of $ 399 , prepayments of $ 54 , accounts payable of $ 325 , unearned revenue of $ 1,900 , other current liabilities of $ 321 , intangible assets of $ 5,500 and the remainder to goodwill (deductible for tax purposes).

The business is operated from the Company's location in Lincoln, Nebraska, reporting within the Animal Safety segment.

Since completion of initial estimates in the second quarter of fiscal year 2022, the Company has recorded insignificant measurement period adjustments, which resulted in a decrease to the base purchase price.

Thai-Neo Biotech Co., Ltd.

On July 1, 2022, the Company acquired all of the stock of Thai-Neo Biotech Co., Ltd., a longstanding distributor of Neogen’s food safety products to Thailand and Southeast Asia.

This acquisition gives Neogen a direct sales presence in Thailand.

Consideration for the purchase was $ 1,581 in net cash, with $ 1,310 paid at closing, $ 37 paid on November 29, 2022 as a working capital adjustment and $ 234 payable on October 1, 2023.

Consideration for the purchase was $ 1,581 in net cash, with $ 1,310 paid at closing, $ 37 paid on November 29, 2022 as a working capital adjustment and $ 234 paid on October 1, 2023.

The final purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included intangible assets of $ 620 (with an estimated life of 10 years).

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The purchase price consideration was $ 24,067 , which included $ 9,004 held in escrow.

Subsequent to May 31, 2023, $ 8,000 of the escrow balance was released to Corvium, Inc.

in July 2023.

In the first quarter of fiscal 2024, $ 8,000 of the escrow balance was released to Corvium, Inc.

In the third quarter of fiscal 2024, the remaining escrow balance was released to Corvium, Inc.

This transaction is a business combination and was accounted for using the acquisition method.

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As a result, the Company has recorded contingent liabilities of $ 930 as part of the opening balance sheet within other non-current liabilities, as shown below.

In the fourth quarter of fiscal 2023, the Company recorded adjustments to intangible assets of $ 3,820 and contingent liability of $ 1,070 , which decreased the balances, based on a third-party advisor's valuation work and fair value estimates.

Goodwill, which is fully deductible for tax purposes, includes value associated with profits earned from data management solutions that can be offered to existing custom ers and the expertise and reputation of the assembled workforce.

In fiscal year 2024, the first milestone period occurred, resulting in no performance milestone payment.

In the first quarter of fiscal 2024, the Company recorded an increase to intangible assets of $ 100 , based on finalization of a third-party advisor's valuation work and fair value estimates.

Goodwill, which is fully deductible for tax purposes, includes value associated with profits earned from data management solutions that can be offered to existing customers and the expertise and reputation of the assembled workforce.

These values are Level 3 fair value measurements.

Our estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date).

While we believe that these preliminary estimates provide a reasonable basis for estimating the fair value of the assets acquired and liabilities assumed, we will continue to evaluate available information prior to finalization of the amounts.

The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the fair value of intangible assets.

Due to the Company's acquisition of Corvium, Inc., it recorded a loss of $ 1,500 during fiscal year 2023 on dissolution of its minority interest in that company.

The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the date of acquisition:

The final purchase price allocation, based upon the fair value of these assets acquired and liabilities assumed, which was determined using the income approach, is summarized in the following table:

Prepaids and other current assets

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3M Food Safety Transaction

On September 1, 2022, Neogen, 3M Company (“3M”), and Neogen Food Safety Corporation (“Neogen Food Safety Corporation”), a subsidiary created to carve out 3M’s Food Safety Division (“3M FSD”, “FSD”), closed on the transaction combining 3M’s FSD with Neogen in a Reverse Morris Trust transaction and Neogen Food Safety Corporation became a wholly owned subsidiary of Neogen (“FSD transaction”).

On September 1, 2022, Neogen, 3M and Neogen Food Safety Corporation, formerly named Garden SpinCo, a subsidiary created to carve out 3M’s FSD, closed on a transaction combining 3M’s FSD with Neogen in a Reverse Morris Trust transaction and Neogen Food Safety Corporation became a wholly owned subsidiary of Neogen (“FSD transaction”).

Immediately following the FSD transaction, pre-merger Neogen Food Safety Corporation stockholders owned, in the aggregate, approximately 50.1 % of the issued and outstanding shares of Neogen common stock and pre-merger Neogen shareholders owned, in the aggregate, approximately 49.9 % of the issued and outstanding shares of Neogen common stock.

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It offers a broad range of food safety testing products that support multiple industries within food and beverage, helping producers to prevent and protect consumers from foodborne illnesses.

The business has a broad global presence with products used in more than 60 countries and a diversified revenue base of more than 100,000 end-user customers.

The combination of Neogen and the 3M FSD creates a leading innovator with an enhanced geographic footprint, innovative product offerings, digitization capabilities, and financial flexibility to capitalize on robust growth trends in sustainability, food safety, and supply chain integrity.

The acquired Food Safety business continues to primarily operate in facilities in Minnesota and the United Kingdom ("U.K."), and is being managed overall in Michigan, reporting within the Food Safety segment.

The purchase price consideration for the 3M FSD was $ 3.2 billion, net of customary purchase price adjustments and transaction costs, which consisted of 108,269,946 shares of Neogen common stock issued on closing with a fair value of $ 2.2 billion and cash consideration of $ 1 billion, funded by the additional financing secured by the Company.

See Note 4 "Long-Term Debt" for further detail on the debt incurred.

During the fiscal year ended May 31, 2023 , the Company recorded adjustments to its preliminary allocation of the purchase consideration to assets acquired and liabilities assumed based on initial fair value estimates and is subject to continuing management analysis, with assistance from third-party valuation advisors.

In the fourth quarter of fiscal 2023, Inventory and Property, plant and equipment amounts were finalized.

The excess of the purchase price over the fair value of the net tangible assets and identifiable intangible assets of $ 1.97 billion was recorded as goodwill, of which $ 1.92 billion is non-deductible for tax purposes.

The purchase price consideration for the 3M FSD was $ 3.2 billion, net of customary purchase price adjustments and transaction costs, which consisted of 108,269,946 shares of Neogen common stock issued on closing with a fair value of $ 2.2 billion and non-cash consideration of $ 1 billion, funded by the additional financing obtained by Garden SpinCo and assumed by the Company as part of the transaction.

"Long-Term Debt" for further detail on the debt incurred.

In the first quarter of fiscal 2024, the Company recorded adjustments to goodwill and intangible assets, based on third-party advisor's valuation work and fair value estimates, resulting in an increase to goodwill and a decrease to the intangible assets balance.

The Company also recorded adjustments to deferred tax liabilities, which increased the balance, based on finalization of entity income tax provisions.

Goodwill includes value associated with profits earned from market and expansion capabilities, expected synergies from integration and streamlining operational activities, the expertise and reputation of the assembled workforce and other intangible assets that do not qualify for separate recognition.

These values are Level 3 fair value measurements.

The preliminary fair values of net tangible assets and intangible assets acquired were based on preliminary valuations, and our estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date).

The primary areas of the preliminary purchase price allocation that are not yet finalized relate to deferred income tax liabilities.

The fair values of the assets acquired and liabilities assumed are based on our preliminary estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques.

While we believe that these preliminary estimates provide a reasonable basis for estimating the

fair value of the assets acquired and liabilities assumed, we will continue to evaluate available information prior to finalization of the amounts.

The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the date of acquisition:

The final purchase price allocation, based upon the fair value of these assets acquired and liabilities assumed, which was determined using the income approach, is summarized in the following table:

Cash and cash equivalents

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Valuation specialists were used to develop and evaluate the appropriateness of the multi-period excess earnings method, the Company's discount rates, attrition rate and fair value estimates using its cash flow projections.

During the twelve months ended May 31, 2023, transaction fees and integration costs of $ 58,175 were expensed.

In the twelve months ended May 31, 2022, acquisition related costs of $ 25,581 were expensed.

These costs are included in general and administrative expenses in the Company’s consolidated statements of income (loss).

The operating results of the FSD have been included in the Company’s consolidated statements of income (loss) since the acquisition date.

In fiscal year 2023, the FSD’s total revenue was $ 279,541 and operating loss was approximately $ 28,200 .

The operating loss includes $ 58,175 of transaction fees and integration expenses, $ 60,872 of amortization expense for acquired intangible assets and a $ 3,245 charge to cost of goods sold related to the step up to fair value on acquired inventory.

The following table presents unaudited pro forma information as if the merger with the 3M FSD business had occurred on June 1, 2021 and had been combined with the results reported in our consolidated statements of income (loss) for all periods presented:

Year Ended May 31,

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The unaudited pro forma information is presented for informational purposes only and is not indicative of the results that would have been achieved if the merger had taken place at such time.

The unaudited pro forma information presented

above includes adjustments primarily for amortization charges for acquired intangible assets and certain acquisition-related expenses for legal and professional fees.

The unaudited pro forma information presented above includes adjustments primarily for amortization charges for acquired intangible assets and certain acquisition-related expenses for legal and professional fees.

In connection with the acquisition of the 3M FSD, the Company and 3M entered into several transition service agreements, including manufacturing, distribution and certain back-office support, that have been accounted for separately from the acquisition of assets and assumption of liabilities in the business combination.

3M periodically remits amounts charged to customers on our behalf and charges us for the associated cost of goods sold and transition service fees.

Additionally, 3M is reimbursing the Company for a portion of its SAP implementation costs.

As of May 31, 2023 , a receivable from 3M of $ 12,365 was included in prepaid expenses and other current assets in the Company’s consolidated balance sheets.

The Company has completed the exit of distribution and back office-related service contracts and currently only has a contract manufacturing agreement in place for Petrifilm ® products;

the initial term of which expires in September 2026.

Long-Term Debt

The Company’s long-term debt consists of the following:

Total long-term debt

The Company’s long-term debt consists of the following:

Finance Lease

Total debt and finance lease

Current portion

Total non-current debt

Unamortized debt issuance costs

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The Company had a financing agreement with a bank providing for a $ 15,000 unsecured revolving line of credit, which originally expired on November 30, 2023 , but was replaced by the five-year senior secured revolving facility as part of the Credit Facilities described below.

There were no advances against the line of credit during fiscal 2022 and there were no advances in fiscal 2023 before the line of credit was extinguished.

There were no advances against the line of credit during fiscal 2023 before the line of credit was extinguished.

Interest on any borrowings under that agreement was at LIBOR plus 100 basis points .

Financial covenants included maintaining specified levels of tangible net worth, debt service coverage, and funded debt to EBITDA, each of which the Company was in compliance with during the period the line of credit was available.

As of May 31, 2022, the Company had no outstanding debt.

In connection with the acquisition of 3M’s Food Safety business as described more fully in Note 8, Neogen incurred financing through Neogen Food Safety Corporation as follows:

Credit Facilities

On June 30, 2022, Neogen Food Safety Corporation entered into a credit agreement consisting of a five-year senior secured term loan facility (“term loan facility”) in the amount of $ 650,000 and a five-year senior secured revolving facility (“revolving facility”) in the amount of $ 150,000 (collectively, the “Credit Facilities”) to fund the FSD transaction.

The term loan facility was drawn on August 31, 2022, to fund the closing of the FSD transaction on September 1, 2022 while the revolving facility was undrawn and continues to be undrawn as of May 31, 2024.

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During the twelve months ended May 31, 2024 , the interest rates ranged from 7.42 % to 7.68 % per annum.

The term loan facility matures on June 30, 2027 and the revolving facility matures at the earlier of June 30, 2027 and the termination of the revolving commitments.

The Company paid $ 60,000 of the term loan facility’s principal in September 2022 and an additional $ 40,000 of the term loan facility's principal in December 2022, in order to decrease the outstanding debt balance.

The term loan facility matures on June 30, 2027 and the revolving facility

matures at the earlier of June 30, 2027 or the termination of the revolving commitments.

In accordance with the prepayment feature, the Company paid $ 100,000 of the term loan facility’s principal in fiscal year 2023.

The term loan facility contains an optional prepayment feature at the discretion of the Company.

The Company determined that the prepayment feature did not meet the definition of an embedded derivative and does not require bifurcation from the host liability and, accordingly, has accounted for the entire instrument at amortized cost.

In November 2022, the Company entered into an interest rate swap agreement, whereby interest on $ 250,000 of the total $ 550,000 principal balance is paid at a fixed rate.

"Fair Value and Derivatives" for further detail on the interest rate swap agreement.

The Company can draw any amount under the revolving facility up to the $ 150,000 limit, with the amount to be repaid on the termination date of the revolving commitments.

Debt issuance costs of $ 2,361 were incurred related to the revolving facility.

These costs are being amortized as interest expense in the consolidated statements of (loss) income over the contractual life of the revolving facility using the straight line method.

Amortization of the deferred debt issuance costs for the revolving facility was $ 366 during the twelve months ended May 31, 2023 .

Debt issuance costs of $ 489 were recorded in Prepaid expenses and other current assets and $ 1,506 were recorded in Other non-current assets on the consolidated balance sheet as of May 31, 2023 .

The Company must pay an annual commitment fee ranging from 0.20 % and 0.35 % on the unused portion of the Revolving Credit Facility, paid quarterly.

As of May 31, 2023 , the commitment fee was 0.35 % and $ 473 was recorded as interest expense in the consolidated statements of income (loss) during the twelve months ended May 31, 2023.

Accrued interest payable on the term loan as of May 31, 2023 was $ 164 .

The Company incurred $ 10,232 in total debt issuance costs on the term loan which is recorded as an offset to the term loan facility and amortized over the contractual life of the loan to interest expense using the straight line method.

The amortization of deferred debt issuance costs of $ 1,588 and interest expense of $ 27,254 (excluding swap credit of $ 577 ) for the term loan was included in the consolidated statements of income (loss) during the twelve months ended May 31, 2023.

The Company has a $ 150,000 revolving credit facility with any amount outstanding to be repaid on or before the termination date of the revolving commitments.

In fiscal year 2023, debt issuance costs of $ 2,361 were incurred related to the revolving facility.

These costs are being amortized as interest expense in the consolidated statements of operations over the contractual life of the revolving facility using the straight line method.

Amortization of the deferred debt issuance costs for the revolving facility was $ 489 and $ 366 during the twelve months ended May 31, 2024 and 2023, respectively.

As of May 31, 2024 and May 31, 2023 , the Company had $ 1,506 and $ 1,995 , respectively, of unamortized debt issuance costs.

The Company must pay an annual commitment fee ranging from 0.20 % and 0.35 % on the unused portion of the revolving facility, paid quarterly.

As of May 31, 2024 , the commitment fee was 0.35 %.

During the twelve months ended May 31, 2024 and 2023 , $ 501 and $ 473 was recorded as interest expense in the consolidated statements of operations.

There was no accrued interest payable on the term loan as of May 31, 2024 .

In fiscal year 2023, the Company incurred $ 10,232 in total debt issuance costs on the term loan which is recorded as an offset to the term loan facility and amortized over the contractual life of the loan to interest expense using the straight line method.

The amortization of deferred debt issuance costs of $ 2,117 and interest expense of $ 42,152 (excluding swap credit of $ 3,002 ) for the term loan was included in the consolidated statements of operations during the twelve months ended May 31, 2024 .

The amortization of deferred debt issuance costs of $ 1,588 and interest expense of $ 27,254 (excluding swap credit of $ 577 ) for the term loan was included in the consolidated statements of operations during the twelve months ended May 31, 2023.

As of May 31, 2024 and May 31, 2023 , the Company had $ 6,527 and $ 8,644 , respectively, of unamortized debt issuance costs.

Financial covenants include maintaining specified levels of funded debt to EBITDA, and debt service coverage.

As of May 31, 2024, the Company was in compliance with its debt covenants.

On July 20, 2022, Neogen Food Safety Corporation closed on an offering of $ 350,000 aggregate principal amount of 8.625 % senior notes due 2030 (the “Notes”) in a private placement at par.

The Notes were initially issued by Neogen Food Safety Corporation to 3M and were transferred and delivered by 3M to the selling securityholder in the offering, in satisfaction of certain of 3M’s existing debt.

On July 20, 2022, Neogen Food Safety Corporation closed on an offering of $ 350,000 aggregate principal amount of 8.625 % senior notes due 2030 (the “Notes”) in a private placement at par.

Upon closing of the FSD transaction on September 1, 2022, the Notes became guaranteed on a senior unsecured basis by the Company and certain wholly-owned domestic subsidiaries of the Company.

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This amount was included in current liabilities on the consolidated balance sheets.

The Company incurred total debt issuance costs of $ 6,683 , which is recorded as an offset to the Notes and amortized over the contractual life of the Notes to interest expense using the straight line method.

The amortization of deferred debt issuance costs of $ 766 and interest expense of $ 26,079 for the Notes was included in the consolidated statements of income (loss) during the twelve months ended May 31, 2023.

There are no required principal payments on the Term Loan or the Senior Notes through fiscal year 2026, due to $ 100,000 in prepayments made on the Term Loan in fiscal 2023.

The expected maturities associated with the Company’s outstanding debt as of May 31, 2023, were as follows:

Equity Compensation Plans

The Company’s long-term incentive plans allow for the grant of various types of share-based awards to officers, directors and other key employees of the Company.

Incentive and non-qualified options to purchase shares of common stock have been granted under the terms of the 2018 Omnibus Incentive Plan.

These options are granted at an exercise price of the closing price of the common stock on the date of grant.

In fiscal year 2023, the Company incurred total debt issuance costs of $ 6,683 , which is recorded as an offset to the Notes and amortized over the contractual life of the Notes to interest expense using the straight line method.

The amortization of deferred debt issuance costs of $ 835 and interest expense of $ 30,188 for the Notes was included in the consolidated statements of operations during the twelve months ended May 31, 2024 .

The amortization of deferred debt issuance costs of $ 766 and interest expense of $ 26,079 for the Notes was included in the consolidated statements of operations during the twelve months ended May 31, 2023.

As of May 31, 2024 and May 31, 2023 , the Company had $ 5,082 and $ 5,917 , respectively, of unamortized debt issuance costs.

There are no required principal payments on the term loan facility or the Notes through fiscal year 2026, due to $ 100,000 in prepayments made on the term loan facility in fiscal 2023.

The weighted average interest rate on the Company's long-term

debt was 7.71 % as of May 31, 2024 .

The expected maturities associated with the Company’s outstanding debt as of May 31, 2024, were as follows:

Finance Lease

The finance lease is a building lease that is classified within property and equipment and the current portion of debt on the consolidated balance sheets as of May 31, 2024 .

The Company intends to elect the purchase option within the lease agreement prior to the end of the lease term.

Equity Compensation Plans and Other Incentive Compensation

The Company’s long-term incentive plans allow for the grant of various types of share-based awards to officers, directors and other key employees of the Company.

Incentive and non-qualified options to purchase shares of common stock have been granted under the terms of the 2018 and 2023 Omnibus Incentive Plans.

These options are granted at an exercise price equal to the closing price of the common stock on the date of grant.

Options vest ratably over three and five year periods and the contractual terms are generally five , seven or ten years .

The Company grants restricted stock units (RSUs) under the terms of the 2018 Omnibus Incentive Plan, which vest ratably over three and five year periods.

The fair value of the options was estimated at the date of the grant using the Black-Scholes option pricing model.

The Company granted restricted stock units (RSUs) under the terms of the 2018 and 2023 Omnibus Incentive Plans, which vest ratably over three and five year periods.

The fair value of the RSUs is determined based on the closing price of the common stock on the date of grant.

Remaining shares available for grant under share-based compensation plans were 2,871,000 , 5,386,000 , and 6,355,000 at May 31, 2023, 2022, and 2021, respectively.

Remaining shares available for grant under share-based compensation plans were 16,778,458 at May 31, 2024 , 2,871,000 at May 31, 2023 , and 5,386,000 at May 31, 2022.

Compensation expense related to share-based awards was $ 13,768 , $ 10,177 , and $ 7,154 in fiscal years 2024, 2023 and 2022, respectively.

(options in thousands)

(option amounts in thousands)

Weighted-Average Exercise Price

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Options Exercisable

(options in thousands)

(option amounts in thousands)

Contractual Life

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The risk-free interest rate for periods within the expected life of options granted is based on the United States Treasury yield curve in effect at the time of grant.

Expected stock price volatility is based on historical volatility of the Company’s stock.

The expected option life, representing the period of time that options granted are expected to be outstanding, is based on historical option exercise and employee termination data.

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Restricted Stock Units

The RSUs are expensed straight-line over the remaining weighted-average period of 2.7 years.

The remaining weighted-average period for the Company's outstanding RSUs is 2.1 years.

On May 31, 2024 , there was $ 12,292 in unamortized compensation cost related to non-vested RSUs.

The fair value of restricted stock units vested during fiscal years 2024, 2023 and 2022 was $ 3,835 , $ 820 and $ 1,032 , respectively.

There were no RSUs that vested during fiscal year 2021.

(RSU Grants in thousands)

(RSU amounts in thousands)

Weighted Average Grant Date Fair Value

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As of May 31, 2024 , common stock totaling 746,513 of the 1,000,000 authorized shares remained reserved for issuance under the plan.

Defined Contribution Benefit Plan and Bonus Compensation

The Company maintains a defined contribution 401(k) benefit plan covering substantially all domestic employees.

Employees are permitted to defer compensation up to IRS limits, with Neogen matching 100 % of the first 3% of deferred compensation and 50 % of the next 2% of deferred compensation.

Neogen’s expense under this plan was $ 3,368 , $ 2,439 , and $ 1,834 in fiscal years 2024, 2023 and 2022, respectively.

The Company also offers an annual bonus opportunity to certain employees, as an additional component of their compensation.

Amounts are determined based on company performance and employee performance.

The bonus amounts earned during fiscal year 2024 will be paid to employees in the first quarter of fiscal 2025.

As of May 31, 2024 and 2023 , the Company had an accrued bonus of $ 8,056 and $ 8,734 , respectively, recorded within accrued compensation on the consolidated balance sheets.

Income before income taxes by source consists of the following amounts:

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Total Deferred

Provision for Income Taxes

Income tax (benefit) expense

The reconciliation of income taxes computed at the U.S.

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Research expenditures deduction

Income Tax Expense

Income tax (benefit) expense

Foreign tax credits, primarily offsetting taxes associated with Subpart F and GILTI income, were $ 7,124 , $ 5,324 , and $ 1,747 in fiscal years 2024, 2023, and 2022 , respectively.

The Company’s research and development credits were $ 1,385 , $ 780 , and $ 545 in fiscal years 2023, 2022, and 2021, respectively.

The Company’s research and development credits were $ 615 , $ 1,385 , and $ 780 in fiscal years 2024, 2023, and 2022, respectively.

Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

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Net deferred income tax liabilities

Net deferred income tax assets (jurisdictional)

Net deferred income tax assets (jurisdictional) - other non-current assets

Net deferred income tax liabilities (jurisdictional)

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2025 to Indefinite

Valuation allowances against certain deferred tax assets are established based on management’s determination of a more likely than not standard that the tax benefits will not be realized.

Management evaluates all available evidence, both positive and negative, when determining the need for a valuation allowance.

Valuation allowances related to net operating losses are primarily evaluated based on evidence (or lack thereof) of historical and future earnings.

Valuation allowances related to long-lived assets primarily are evaluated based on management’s tax planning and intentions for underlying assets.

We are subject to income taxes in the U.S.

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The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate.

The Company’s policy is to recognize both accrued interest expense and penalties related to unrecognized tax benefits in income tax expense.

The amount of interest and penalties included in the unrecognized tax benefits reserve was $ 246 at May 31, 2024 , $ 145 at May 31, 2023 , and $ 69 at May 31, 2022.

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The Company is no longer subject to examination by the Internal Revenue Service for fiscal year 2020 and preceding years.

As of May 31, 2023, the Company has approximately $ 153 million of undistributed earnings in its foreign subsidiaries.

Approximately $ 41 million of these earnings are no longer considered permanently reinvested.

The incremental tax cost to repatriate these earnings to the US is immaterial.

The Company has not provided deferred taxes on approximately $ 112 million of undistributed earnings from non-U.S.

As of May 31, 2024, the Company has approximately $ 221,707 of undistributed earnings in its foreign subsidiaries.

Approximately $ 88,746 of these earnings are no longer considered permanently reinvested.

The incremental tax cost to repatriate these earnings to the US is insignificant.

The Company has not provided deferred taxes on approximately $ 132,961 of undistributed earnings from non-U.S.

subsidiaries as of May 31, 2024 which are indefinitely reinvested in operations.

Based on historical experience, as well as management’s future plans, earnings from these subsidiaries will continue to be re-invested indefinitely for future expansion and working capital needs.

On an annual basis, we evaluate the current business environment and whether any new events or other external changes might require future evaluation of the decision to indefinitely re-invest these foreign earnings.

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Commitments and Contingencies

The Company is involved in environmental remediation and monitoring activities at its Randolph, Wisconsin manufacturing facility and accrues for related costs when such costs are determined to be probable and estimable.

The Company is involved in environmental remediation and monitoring activities at its Randolph, Wisconsin manufacturing facility and accrues for related costs, including legal costs, when such costs are determined to be probable and estimable.

The Company currently utilizes a pump and treat remediation strategy, which includes semi-annual monitoring and reporting, consulting, and maintenance of monitoring wells.

We expense these annual costs of remediation, which have ranged from $ 63 to $ 131 per year over the past five years.

The Company’s estimated remaining liability for these costs was $ 916 at both May 31, 2023 and 2022 , measured on an undiscounted basis over an estimated period of 15 years.

We expense these annual costs of remediation, which have ranged from approximately $ 60 to $ 130 per year over the past five years.

The Company’s estimated remaining liability for these costs was $ 916 at both May 31, 2024 and 2023 , measured on an undiscounted basis over an estimated period of 15 years.

In fiscal 2019, the Company performed an updated Corrective Measures Study on the site, per a request from the Wisconsin Department of Natural Resources ("WDNR"), and is currently working with the WDNR regarding potential alternative remediation strategies going forward.

The Company believes that the current pump and treat strategy is appropriate for the site.

However, the Company initiated a pilot study in fiscal 2022 which chemical reagents were injected into the ground in an attempt to reduce on-site contamination.

The study will run over a two year period, with a majority of expenses incurred in fiscal 2022.

Testing and treatment costs of $ 85 were incurred in fiscal 2023.

At this time, the outcome of the pilot study is unknown, but a change in the current remediation strategy, depending on the alternative selected, could result in an increase in future costs and ultimately, an increase in the currently recorded liability, with an offsetting charge to operations in the period recorded.

The Company has recorded $ 100 as a current liability , and the remaining $ 816 is recorded in other non-current liabilities in the consolidated balance sheet as of May 31, 2023.

In fiscal 2022, in collaboration with the WDNR, the Company initiated an in-situ chemical remediation pilot study, which ran over a two-year period.

The results of this study were submitted to the WDNR as part of our standard annual report.

If the WDNR were to require a change from the current pump and treat remediation strategy, this change could result in an increase in future costs and, ultimately, an increase in the currently recorded liability, with an offsetting charge to operations in the period recorded.

The Company has recorded $ 100 in other current liabilities , and the remaining $ 816 is recorded in other non-current liabilities in the consolidated balance sheet as of May 31, 2024 and 2023.

In the third quarter of fiscal year 2024, the Company received $ 1,265 of business interruption insurance proceeds relating to fire damage that occurred in the fourth quarter of fiscal year 2023 at one of our Animal Safety lab facilities.

The proceeds were recorded within Cost of Revenues in the consolidated statements of operations.

The Company previously disclosed an ongoing investigation by the U.S.

Treasury Department’s Office of Foreign Assets Control (OFAC) regarding activities or transactions involving parties located in Iran.

In fiscal year 2020, the Company recorded a charge to other (expense) income and recorded a reserve of $ 600 to provide for potential fines or penalties on this matter.

On March 28, 2023, the Company received a Cautionary Letter from OFAC concluding its investigation without civil monetary penalty or other enforcement action.

In the fourth quarter of fiscal year 2023 , the Company received a Cautionary Letter from OFAC concluding its investigation without civil monetary penalty or other enforcement action.

As the investigation is effectively resolved, the Company reversed a $ 600 accrual in the fourth quarter of 2023.

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Future minimum royalty payments are as follows:

2024—$ 112 , 2025—$ 109 , 2026—$ 84 , 2027—$ 84 , and 2028—$ 67 .

2025—$ 294 , 2026—$ 329 , 2027—$ 354 , 2028—$ 562 , and 2029—$ 60 .

The Company is subject to certain legal and other proceedings in the normal course of business that, in the opinion of management, are not expected to have a material effect on its future results of operations or financial position.

Defined Contribution Benefit Plan

The Company maintains a defined contribution 401(k) benefit plan covering substantially all domestic employees.

Employees are permitted to defer compensation up to IRS limits, with Neogen matching 100 % of the first 3% of deferred compensation and 50 % of the next 2% of deferred compensation.

Neogen’s expense under this plan was $ 2,439 , $ 1,834 , and $ 1,204 in fiscal years 2023, 2022, and 2021 , respectively.

Fair Value and Derivatives

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Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The carrying amounts of the Company’s financial instruments other than cash equivalents and marketable securities, which include accounts receivable and accounts payable, approximate fair value based on either their short maturity or current terms for similar instruments.

Items Measured at Fair Value on a Recurring Basis

We forecast our net exposure in various receivables and payables to fluctuations in the value of various currencies, and have entered into a number of foreign currency forward contracts each month to mitigate that exposure.

The Company has marketable securities held by banks or broker-dealers consisting of commercial paper and corporate bonds.

These securities are recorded at fair value based on recent trades or pricing models and therefore meet the Level 2 criteria.

For further information, refer to Note 1.

"Summary of Significant Accounting Policies".

The Company forecasts its net exposure in various receivables and payables to fluctuations in the value of various currencies, and has entered into a number of foreign currency forward contracts each month to mitigate that exposure.

These contracts are recorded net at fair value on our consolidated balance sheets, classified as Level 2 in the fair value hierarchy.

Gains and losses from these foreign currency forward contracts are recognized in other income in our consolidated statements of income (loss).

The notional amount of forward contracts in place was $ 15,500 and $ 4,424 as of May 31, 2023 and 2022, respectively, and consisted of hedges of transactions up to June 2023.

Gains and losses from these foreign currency forward contracts are recognized in other (expense) income in our consolidated statements of operations.

The notional amount of forward contracts in place was $ 70,315 and $ 15,500 as of May 31, 2024 and 2023, respectively, and consisted of foreign currency hedges of transactions up to July 2024.

Fair Value of Derivatives Not Designated as Hedging Instruments

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Foreign currency forward contracts, net

Other receivable (Other accruals)

Prepaid expenses and other current assets (Other current liabilities)

We record the fair value of our interest rate swaps on a recurring basis using Level 2 observable market inputs for similar assets or liabilities in active markets.

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Balance Sheet Location

Interest rate swaps –

Interest rate swaps – current

Other current assets

Interest rate swaps –

Other non-current liabilities

Interest rate swaps – non-current

Other non-current assets (liabilities)

Items Measured at Fair Value on a Nonrecurring Basis

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As these nonrecurring fair value measurements are generally determined using unobservable inputs, these fair value measurements are classified within Level 3 of the fair value hierarchy.

For further information see Note 2 "Goodwill and Other Intangible Assets" and Note 3 “Business Combinations”.

For further information see Note 5.

"Goodwill and Other Intangible Assets" and Note 6 “Business Combinations”.

Items Not Carried at Fair Value

Fair values of the Company’s Term Loan and Senior Notes were as follows:

Aggregate fair value

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Derivatives Not Designated as Hedging Instruments

The location and amount of gains from derivatives not designated as hedging instruments in our consolidated statements of income (loss) were as follows:

The location and amount of gains from derivatives not designated as hedging instruments in our consolidated statements of operations were as follows:

Location in statements

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Derivatives Designated as Hedging Instruments

In November 2022, we entered into a receive-variable, pay-fixed interest rate swap agreement with an initial $ 250,000 notional value, which is designated as a cash flow hedge.

In November 2022, we entered into a receive-variable, pay-fixed interest rate swap agreement with a $ 250,000 notional value, which is designated as a cash flow hedge.

This agreement fixed a portion of the variable interest due on our term loan facility, with an effective date of December 2, 2022 and a maturity date of June 30, 2027 .

Under the terms of the agreement, we pay a fixed interest rate of 4.215 % plus an applicable margin ranging between 150 to 225 basis points and receive a variable rate of interest based on term SOFR from the counterparty, which is reset according to the duration of the SOFR term.

The fair value of the interest rate swap as of May 31, 2023 was a net liability of $ 2,683 .

The Company expects to reclassify a $ 2,087 gain of accumulated other comprehensive income into earnings in the next 12 months.

The following table summarizes the other comprehensive income (loss) before reclassifications of derivative gains and losses:

Other Comprehensive Income (Loss) Before Reclassifications During

The fair value of the interest rate swap as of May 31, 2024 was a net asset of $ 2,452 .

The Company expects to reclassify a $ 1,689 gain of accumulated other comprehensive (loss) income into earnings in the next 12 months.

As of May 31, 2024 and 2023 , the amounts recorded in accumulated other comprehensive (loss) income were $ 1,864 and ($ 2,039 ), respectively.

The following table summarizes the other comprehensive (loss) income before reclassifications of derivative gains and losses:

Other Comprehensive Income (Loss) Before Reclassifications

Year Ended May 31,

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Interest rate swaps

The following table summarizes the reclassification of derivative gains and losses into net income from accumulated other comprehensive income (loss):

Gain (Loss) Reclassified During

Location of Gain (Loss)

The following table summarizes the reclassification of derivative gains and losses into net (loss) income from accumulated other comprehensive (loss) income:

Gain (Loss) Reclassified

Location of Gain

Year Ended May 31,

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Additionally, the Animal Safety segment produces and markets rodent control products, disinfectants and insect control products to assist in the control of rodents, insects and disease in and around agricultural, food production and other facilities.

Neogen’s international operations in the United Kingdom, Mexico, Guatemala, Brazil, Argentina, Uruguay, Chile, China and India originally focused on the sales and marketing of our food safety products, and each of these units reports through the Food Safety segment.

In recent years, these operations have expanded to offer the Company’s complete line of products and services, including those usually associated with the Animal Safety segment such as cleaners, disinfectants, rodent control products, insect control products, veterinary instruments and genomics services.

Many of our international operations originally focused on the Company’s food safety products, and each of these units reports through the Food Safety segment.

These additional products and services are managed and directed by existing management and are reported through the Food Safety segment.

Neogen’s operation in Australia originally focused on providing genomics services and sales of animal safety products and reports through the Animal Safety segment.

This operation has expanded to offer our complete line of products and services, including those usually associated with the Food Safety segment.

These additional products are managed and directed by existing management at Neogen Australasia and report through the Animal Safety segment.

Neogen’s operation in Australia originally focused on providing genomics services and sales of animal safety products and reports through the Animal Safety segment.

With the acquisition of Cell BioSciences in February 2020, this operation expanded to offer our complete line of products and services, including those usually associated with the Food Safety segment.

These additional products are managed and directed by existing management at Neogen Australasia and reports through the Animal Safety segment.

While Neogen was operating under a distribution services agreement with 3M, all revenue of 3M FSD products were reported through the Food Safety segment.

Since the review of 3M FSD revenue occurs on a global scale, revenue of these products occurring in Australia and New Zealand will continue to report through the Food Safety segment, despite now occurring at Neogen Australasia.

The accounting policies of each of the segments are the same as those described in Note 1.

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Eliminations (1)

Product revenues, net to external customers

Service revenues, net to external customers

Total revenues to external customers

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Expenditures for long-lived assets

Product revenues, net to external customers

Service revenues, net to external customers

Total revenues to external customers

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Expenditures for long-lived assets

Product revenues, net to external customers

Service revenues, net to external customers

Total revenues to external customers

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Also includes the elimination of intersegment transactions.

Revenue is determined by location of the end customer.

The following table presents the Company’s revenue disaggregated by geographical location.

Year Ended May 31,

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United Kingdom

Total Property, Plant, and Equipment

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