ango-20250831

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 31, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 0-50761

AngioDynamics, Inc.

(Exact name of registrant as specified in its charter)


Delaware						11-3146460
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

14 Plaza Drive, Latham, New York 12110

(Address of principal executive offices and zip code)

(518) 795-1400

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol

Name of each exchange on which registered

Common Stock, par value $.01

ANGO

NASDAQ Global Select Market

Preferred Stock Purchase Rights

NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act:

None

(Title of Class)

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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the Registrant’s classes of common stock, as of the latest practicable date.


Class						Outstanding as of October 1, 2025
Common Stock, par value $.01						41,199,844

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AngioDynamics, Inc. and Subsidiaries

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		Page
	Part I: Financial Information

Item 1.	Financial Statements

	Consolidated Statements of Operations (unaudited)	3

	Consolidated Statements of Comprehensive Loss (unaudited)	4

	Consolidated Balance Sheets (unaudited)	5

	Consolidated Statements of Cash Flows (unaudited)	6

	Consolidated Statements of Stockholders’ Equity (unaudited)	7

	Notes to Consolidated Financial Statements (unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27

Item 4.	Controls and Procedures	28

	Part II: Other Information

Item 1.	Legal Proceedings	29

Item 1A.	Risk Factors	29

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29

Item 3.	Defaults on Senior Securities	29

Item 4.	Mine Safety Disclosures	29

Item 5.	Other Information	29

Item 6.	Exhibits	30

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PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements.

AngioDynamics, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands of dollars, except per share data)


	Three Months Ended
	Aug 31, 2025		Aug 31, 2024
Net sales	$	75,711	$	67,491
Cost of sales (exclusive of intangible amortization)	33,854		30,767
Gross margin	41,857		36,724
Operating expenses:
Research and development	6,417		6,285
Sales and marketing	28,130		25,605
General and administrative	12,555		10,975
Amortization of intangibles	2,653		2,570

Change in fair value of contingent consideration	—		76
Acquisition, restructuring and other items, net	2,758		4,311
Total operating expenses	52,513		49,822

Operating loss	(10,656)		(13,098)
Other expense:
Interest income (expense), net	(4)		606
Other expense, net	(178)		(173)
Total other income (expense), net	(182)		433
Loss before income tax benefit	(10,838)		(12,665)
Income tax expense	65		133
Net loss	$	(10,903)	$	(12,798)


Loss per share
Basic	$	(0.26)	$	(0.31)
Diluted	$	(0.26)	$	(0.31)






Weighted average shares outstanding
Basic	41,174		40,653
Diluted	41,174		40,653

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

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AngioDynamics, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(unaudited)

(in thousands of dollars)


	Three Months Ended
	Aug 31, 2025		Aug 31, 2024
Net loss	$	(10,903)	$	(12,798)
Other comprehensive income, before tax:

Foreign currency translation gain	2,084		1,098
Other comprehensive income, before tax	2,084		1,098
Income tax expense related to items of other comprehensive loss	—		—
Other comprehensive income, net of tax	2,084		1,098
Total comprehensive loss, net of tax	$	(8,819)	$	(11,700)

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

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AngioDynamics, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands of dollars, except share data)


	Aug 31, 2025		May 31, 2025
Assets
Current assets
Cash and cash equivalents	$	38,762	$	55,893

Accounts receivable, net of allowances of $2,155 and $2,215 respectively	42,643		42,890
Inventories	62,255		62,006


Prepaid expenses and other	12,996		7,535

Total current assets	156,656		168,324
Property, plant and equipment, net	31,066		32,300
Intangible assets, net	68,380		69,116

Other assets	9,540		10,404

Total assets	$	265,642	$	280,144
Liabilities and stockholders' equity
Current liabilities
Accounts payable	$	31,882	$	33,291
Accrued liabilities	27,657		35,518



Other current liabilities	8,743		7,388
Total current liabilities	68,282		76,197

Deferred income taxes	4,268		4,073

Other long-term liabilities	14,237		16,904
Total liabilities	86,787		97,174
Commitments and contingencies (Note 14)
Stockholders' equity
Preferred stock, par value $0.01 per share, 5,000,000 shares authorized; no shares issued and outstanding	—		—
Common stock, par value $0.01 per share, 75,000,000 shares authorized; 42,060,629 and 41,607,877 shares issued and 41,446,782 and 40,994,030 shares outstanding at August 31, 2025 and May 31, 2025, respectively	386		385
Additional paid-in capital	625,889		621,186
Accumulated deficit	(440,100)		(429,197)
Treasury stock, 613,847 and 613,847 shares at August 31, 2025 and May 31, 2025, respectively	(7,381)		(7,381)
Accumulated other comprehensive income (loss)	61		(2,023)
Total Stockholders’ Equity	178,855		182,970
Total Liabilities and Stockholders' Equity	$	265,642	$	280,144

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

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AngioDynamics, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands of dollars)


	Three Months Ended
	Aug 31, 2025		Aug 31, 2024
Cash flows from operating activities:
Net loss	$	(10,903)	$	(12,798)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	6,020		6,785
Non-cash lease expense	445		494
Stock based compensation	4,470		3,205


Change in fair value of contingent consideration	—		76

Deferred income taxes	(16)		(339)
Change in accounts receivable allowances	108		270
Fixed and intangible asset impairments and disposals	(27)		20


Other	264		121
Changes in operating assets and liabilities:
Accounts receivable	139		3,784
Inventories	(192)		(4,053)
Prepaid expenses and other	(5,525)		(836)
Accounts payable, accrued and other liabilities	(10,697)		(14,982)
Net cash used in operating activities	(15,914)		(18,253)
Cash flows from investing activities:
Additions to property, plant and equipment	(731)		(1,092)
Additions to placement and evaluation units	(820)		(1,313)





Net cash used in investing activities	(1,551)		(2,405)
Cash flows from financing activities:

Principal payments on financing arrangement	(91)		—



Repurchase of common stock	—		(552)
Proceeds from exercise of stock options and employee stock purchase plan	234		43
Net cash provided by (used in) financing activities	143		(509)
Effect of exchange rate changes on cash and cash equivalents	191		116
Decrease in cash and cash equivalents	(17,131)		(21,051)
Cash and cash equivalents at beginning of period	55,893		76,056
Cash and cash equivalents at end of period	$	38,762	$	55,005

Supplemental disclosure of non-cash investing and financing activities:

Accrual for capital expenditures incurred during the period	$	(94)	$	(32)

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

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AngioDynamics, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited)

(in thousands of dollars, except share data)


	Common Stock			Additional paid in capital		Accumulated deficit		Accumulated other comprehensive income (loss)		Treasury Stock
	Shares	Amount								Shares	Amount		Total
Balance at May 31, 2025	41,607,877	$	385	$	621,186	$	(429,197)	$	(2,023)	(613,847)	$	(7,381)	$	182,970
Net loss						(10,903)							(10,903)

Issuance/Cancellation of restricted stock units	362,859			(478)									(478)

Purchases of common stock under ESPP	89,893	1		711									712
Stock-based compensation				4,470									4,470


Other comprehensive income, net of tax								2,084					2,084
Balance at August 31, 2025	42,060,629	$	386	$	625,889	$	(440,100)	$	61	(613,847)	$	(7,381)	$	178,855


	Common Stock			Additional paid in capital		Accumulated deficit		Accumulated other comprehensive loss		Treasury Stock
	Shares	Amount								Shares	Amount		Total
Balance at May 31, 2024	40,801,597	$	385	$	610,484	$	(395,204)	$	(4,365)	(370,000)	$	(5,714)	$	205,586
Net loss						(12,798)							(12,798)

Issuance/Cancellation of restricted stock units	432,144			(321)									(321)
Issuance/Cancellation of performance share units	60,731			(347)									(347)
Purchases of common stock under ESPP	151,918	2		709									711
Stock-based compensation				3,205									3,205

Common stock repurchased		(1)								(72,141)	$	(551)	(552)
Other comprehensive income, net of tax								1,098					1,098
Balance at August 31, 2024	41,446,390	$	386	$	613,730	$	(408,002)	$	(3,267)	(442,141)	$	(6,265)	$	196,582

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

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AngioDynamics, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Statements of Operations and the Consolidated Statements of Comprehensive Loss for the three months ended August 31, 2025 and 2024, the Consolidated Balance Sheet as of August 31, 2025, the Consolidated Statements of Cash Flows for the three months ended August 31, 2025 and 2024, and the Consolidated Statements of Stockholders’ Equity for the three months ended August 31, 2025 and 2024 have been prepared by the Company and are unaudited. The Consolidated Balance Sheet as of May 31, 2025 was derived from audited consolidated financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary to state fairly the financial position, changes in stockholders’ equity and comprehensive income, results of operations and cash flows as of and for the period ended August 31, 2025 (and for all periods presented) have been made.

The unaudited interim consolidated financial statements for the three months ended August 31, 2025 and 2024 include the accounts of AngioDynamics, Inc. and its wholly owned subsidiaries (collectively, the "Company", "we", "our" or "us"). All intercompany balances and transactions have been eliminated.

2. REVENUE FROM CONTRACTS WITH CUSTOMERS

Revenue Recognition

Under ASC 606, Revenue from Contracts with Customers, revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.

The Company has one primary revenue stream which is the sales of its products.

Disaggregation of Revenue

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


	Three Months Ended August 31, 2025						Three Months Ended August 31, 2024
(in thousands)	United States		International		Total		United States		International		Total
Net sales
Med Tech	$	31,374	$	3,887	$	35,261	$	24,889	$	3,080	$	27,969
Med Device	35,082		5,368		40,450		34,592		4,930		39,522
Total	$	66,456	$	9,255	$	75,711	$	59,481	$	8,010	$	67,491

Net Product Revenue

The Company's products consist of medical technology products focused on restoring healthy blood flow in the body's vascular system, expanding cancer treatment options and improving quality of life for patients. The Company's products are generally used in minimally invasive, image-guided procedures. Most of the Company's products are intended to be used once and then discarded, or they may be implanted for short or long term use. The Company sells its products to its distributors and to end users, such as interventional radiologists, interventional cardiologists, vascular surgeons, urologists, interventional and surgical oncologists and critical care nurses.

Contracts and Performance Obligations

The Company contracts with its customers based on customer purchase orders, which in many cases are governed by master purchasing agreements. The Company’s contracts with customers are generally for product only, and do not include other performance obligations such as services or other material rights. As part of its assessment of each contract, the Company evaluates certain factors including the customer’s ability to pay (or credit risk). For each contract, the Company considers the promise to transfer products, each of which is distinct, to be the identified performance obligations.

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Transaction Price and Allocation to Performance Obligations

Transaction prices of products are typically based on contracted rates. Product revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products to a customer, net of any variable consideration as described below.

If a contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products underlying each performance obligation. The Company has standard pricing for its products and determines standalone selling prices based on the price at which the performance obligation is sold separately.

Revenue Recognition

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

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

The Company typically invoices customers upon satisfaction of identified performance obligations. As the Company’s standard payment terms are 30 to 90 days from invoicing, the Company does not provide any significant financing to its customers.

The Company enters into agreements to place placement and evaluation units (“units”) at customer sites, but the Company retains title to the units. For the duration of these agreements the customer has the right to use the unit at no upfront charge in connection with the customer’s ongoing purchase of disposables. These types of agreements include an embedded operating lease for the right to use the units. In these arrangements, revenue recognized for the sale of the disposables is not allocated between the disposable revenue and lease revenue due to the insignificant value of the units in relation to the total agreement value.

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

Variable Consideration

Reserves: Revenue from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established for discounts, product returns, rebates and allowances that are offered within contracts between the Company and its customers. The Company generally offers customers a limited right of return. Product returns after 30 days must be pre-approved by the Company and customers may be subject to a 20% restocking charge. To be accepted, a returned product must be unadulterated, undamaged and have at least twelve months remaining prior to its expiration date. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized. The Company currently estimates product return liabilities using its historical product return information and considers other factors that it believes could significantly impact its expected returns, including product recalls. Discounts and product returns are based on amounts earned or to be claimed on the related sales and are classified as a contra asset. During the three months ended August 31, 2025 and 2024, such product returns were not material. The Company provides certain customers with rebates and allowances that are explicitly stated in the Company’s contracts and are recorded as a reduction of revenue in the period the related product revenue is recognized. The Company establishes reserves for such amounts, which is included in "Accrued liabilities" in the accompanying Consolidated Balance Sheets. These rebates and allowances result from performance-based offers that are primarily based on attaining contractually specified sales volumes. The Company is also required to pay administrative fees to group purchasing organizations.

Contract Balances with Customers

A receivable is generally recognized in the period the Company ships the product. Payment terms on invoiced amounts are based on contractual terms with each customer and generally coincide with revenue recognition. Accordingly, the Company does not have any contract assets associated with the future right to invoice its customers. In some cases, if control of the product has not yet transferred to the customer or the timing of the payments made by the customer precedes the Company’s fulfillment of the performance obligation, the Company recognizes a contract liability that is included in deferred revenue in "Accrued liabilities" in the accompanying Consolidated Balance Sheets.

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


(in thousands)	Aug 31, 2025		May 31, 2025
Receivables	$	42,643	$	42,890
Contract assets	$	—	$	—
Contract liabilities	$	320	$	277

During the three months ended August 31, 2025, the Company had additions to contract liabilities of $0.1 million. This was offset by $0.1 million in revenue that was recognized during the three months ended August 31, 2025.

Costs to Obtain or Fulfill a Customer Contract

Under ASC 606, the Company may recognize an asset for incremental costs of obtaining a contract with a customer if it expects to recover those costs. The Company’s sales incentive compensation plans qualify for capitalization since these plans are directly related to sales achieved during a period of time. However, the Company has elected the practical expedient under ASC 340-40-25-4 to expense the costs as they are incurred within selling and marketing expenses since the amortization period is less than one year.

The Company accounts for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. Shipping and handling costs, associated with the distribution of finished products to customers, are recorded in costs of goods sold and are recognized when the related finished product is shipped to the customer. Amounts charged to customers for shipping and handling are recorded in net sales.

3. INVENTORIES

Inventories are stated at lower of cost and net realizable value (using the first-in, first-out method). Inventories consisted of the following:


(in thousands)	Aug 31, 2025		May 31, 2025
Raw materials	$	25,928	$	27,497
Work in process	9,404		7,509
Finished goods	26,923		27,000
Inventories	$	62,255	$	62,006

The Company periodically reviews inventory for both obsolescence and loss of value. The Company makes assumptions about the future demand for and market value of the inventory. Based on these assumptions, the Company estimates the amount of obsolete, expiring and slow-moving inventory. The total inventory reserve at August 31, 2025 and May 31, 2025 was $4.6 million and $4.4 million, respectively.

4. INTANGIBLE ASSETS

Definite Lived Intangible Assets

Intangible assets are amortized over their estimated useful lives on a straight-line basis. Useful lives range from two to eighteen years. The Company periodically reviews, and adjusts, if necessary, the estimated useful lives of its intangible assets and reviews such assets or asset groups for impairment whenever events or changes in circumstances indicate that the carrying value of the assets or asset groups may not be recoverable. If an intangible asset or asset group is considered to be impaired, the amount of the impairment will equal the excess of the carrying value over the fair value of the asset.

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Intangible assets consisted of the following:


	Aug 31, 2025
(in thousands)	Gross carrying value		Accumulated amortization		Net carrying value
Product technologies	$	181,785	$	(116,374)	$	65,411
Customer relationships	7,749		(4,915)		2,834
Trademarks	2,100		(2,095)		5
Licenses	3,837		(3,707)		130


	$	195,471	$	(127,091)	$	68,380


	May 31, 2025
(in thousands)	Gross carrying value		Accumulated amortization		Net carrying value
Product technologies	$	178,673	$	(112,657)	$	66,016
Customer relationships	7,749		(4,802)		2,947
Trademarks	2,100		(2,081)		19
Licenses	3,837		(3,703)		134


	$	192,359	$	(123,243)	$	69,116

Amortization expense for the three months ended August 31, 2025 and 2024 was $2.7 million and $2.6 million, respectively.

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


(in thousands)
Remainder of 2026	$	7,837
2027	10,419
2028	10,370
2029	10,272
2030	10,259
2031 and thereafter	19,223
	$	68,380

5. ACCRUED LIABILITIES

Accrued liabilities consisted of the following:


(in thousands)	Aug 31, 2025		May 31, 2025
Payroll and related expenses	$	13,539	$	20,397
Outside services	4,588		3,143
Research and development	1,418		1,459
Royalties	1,457		2,642
Sales and franchise taxes	545		531
Deferred warranties	292		374
Transaction service agreement payable	674		2,241
Rebates	468		446
Accrued freight	575		575
Accrued severance	887		800

Other	3,214		2,910

	$	27,657	$	35,518

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6. LONG-TERM DEBT

On May 28, 2025, the Company entered into a new Credit Agreement (the “Credit Agreement”) with its subsidiary RITA Medical Systems, LLC (“RITA” and, together with the Company, the “Loan Parties”), the lenders party thereto and JPMorgan Chase Bank, N.A., individually and as administrative agent, issuing bank and swingline lender.

The Credit Agreement provides for a $25.0 million secured revolving credit facility (the "Revolving Facility"), which is subject to a borrowing base comprised of certain working capital assets of the Company. Additionally, until such time as the Company has demonstrated a fixed charge coverage ratio greater than 1.10 to 1.00, the Revolving Facility will be further reduced by $5,000,000 (such period, the “Availability Block Period”). To the extent requested by the Company, and subject to certain customary limitations, the lenders will make revolving loan advances to the Company and the issuing bank will issue letters of credit for the account of the Company, in each case in an aggregate amount not exceeding the availability under the Revolving Facility. Issuances of letters of credit under the Revolving Facility shall further be limited by an issuance cap, which at the closing date was set at $2,000,000. The proceeds of the Revolving Facility may be used for working capital and for general corporate needs of AngioDynamics and its subsidiaries.

The Credit Agreement has a two-year maturity. Interest on the Revolving Facility will be based, at the Company's option, on a rate equal to (i) the Secured Overnight Financing Rate ("SOFR") plus 0.1% (subject to a floor of 0%) ("Adjusted Term SOFR"), or (ii) the alternate base rate (subject to a floor of 0%) ("ABR"), and in each case with a margin for Adjusted Term SOFR loans of 2.0% and for ABR loans of 1.0%. The Revolving Facility will also carry a commitment fee of 0.2% per annum on the unused portion. The Revolving Facility contains customary benchmark replacement and rate fallback provisions.

The Company's obligations under the Credit Agreement are unconditionally guaranteed, jointly and severally, by the Company's material direct and indirect domestic subsidiaries (the “Guarantors”). The sole Guarantor as at the closing date is RITA. All obligations of the Company and the Guarantors under the Revolving Facility are secured by first priority security interests in substantially all of the assets of the Loan Parties and the Guarantors.

The Credit Agreement includes customary representations, warranties and covenants, and acceleration, indemnity and events of default provisions, including, among other things, a financial covenant which requires the Company to maintain, as of the end of each calendar month commencing after the end of the Availability Block Period, a fixed charge coverage ratio of EBITDA* minus unfinanced capital expenditures to consolidated interest expense paid or payable in cash plus scheduled principal payments in respect of indebtedness under the Credit Agreement of not less than 1.05 to 1.00.

* The definitions of total indebtedness, EBITDA, capital expenditures and interest expense are specifically defined in the Credit Agreement included as an exhibit to Form 8-K filed on May 28, 2025.

As of August 31, 2025 there were no amounts outstanding on the Revolving Facility. As of August 31, 2025, the carrying value of long-term debt approximated its fair market value.

7. INCOME TAXES

The Company provides for income taxes at the end of each interim period based on the estimated effective tax rate for the full fiscal year adjusted for any discrete events, which are recorded in the period that they occur. The estimated annual effective tax rate prior to discrete items was (0.6)% as of the first quarter of fiscal year 2026, as compared to 1.8% for the same period in fiscal year 2025. In fiscal year 2026, the Company’s effective tax rate differs from the U.S. statutory rate primarily due to the impact of the valuation allowance, foreign taxes, and other non-deductible permanent items (such as non-deductible meals and entertainment, Section 162(m) excess compensation and non-deductible share-based compensation).

The Company regularly assesses its ability to realize its deferred tax assets. Assessing the realization of deferred tax assets requires significant management judgment. In determining whether its deferred tax assets are more likely than not realizable, the Company evaluated all available positive and negative evidence, and weighted the evidence based on its objectivity.

Based on the review of all available evidence, the Company determined that it has not yet attained a sustained level of profitability and the objectively verifiable negative evidence outweighed the positive evidence. Therefore, the Company has provided a valuation allowance on its federal and state net operating loss carryforwards, federal and state Research and Development ("R&D") credit carryforwards and other net deferred tax assets as of August 31, 2025. The Company will continue to assess the level of the valuation allowance required. If sufficient positive evidence exists in future periods to support a release of some or all of the valuation allowance, such a release would likely have a material impact on the Company’s results of operations.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, making permanent certain provisions of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest

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expense limitation. In accordance with ASC 740, the Company has recognized the effects of the new tax law in the period of enactment. As the Company maintains a full valuation allowance on its U.S. deferred tax assets, the legislation does not have a material impact on our consolidated financial statements for the quarter ended August 31, 2025.

8. SHARE-BASED COMPENSATION

On October 13, 2020, the Company's shareholders approved the 2020 Stock and Incentive Award Plan (the “2020 Plan”). The 2020 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance share units, performance shares and other incentive awards to the Company's employees, directors and other service providers. On November 12, 2024 the Company's shareholders approved an amendment to the 2020 Plan to increase the reserve of shares of common stock available for future grants by 3.2 million shares. As of August 31, 2025, there was a maximum of 2.5 million shares of common stock available for future grant under the 2020 Plan.

Prior to the adoption of the 2020 Plan, equity awards were issued under the 2004 Stock and Incentive Award Plan (the “2004 Plan”). The adoption of the 2020 Plan did not impact the administration of equity awards issued under the 2004 Plan but following the adoption of the 2020 Plan, equity award grants are no longer made under the 2004 Plan.

The Company also has an employee stock purchase plan. As of August 31, 2025, there was a maximum of 2.5 million shares of common stock available for future grant under the employee stock purchase plan.

For the three months ended August 31, 2025 and 2024, share-based compensation expense was $4.5 million and $3.2 million, respectively.

During the three months ended August 31, 2025 and 2024, the Company granted stock options and restricted stock units under the 2020 Plan to certain employees and members of the Board of Directors. Stock option awards are valued using the Black-Scholes option-pricing model and then amortized on a straight-line basis over the requisite service period of the award. Generally, restricted stock unit awards are valued based on the closing trading value of the Company’s common stock on the date of grant and then amortized on a straight-line basis over the requisite service period of the award. In July 2023, the Board of Directors approved a change in terms of restricted stock units granted to non-employee directors to provide for immediate vesting upon grant of the award.

During the three months ended August 31, 2025 and 2024, the Company granted performance share units under the 2020 Plan to certain employees. The awards may be earned by achieving performance levels over the requisite service period. The performance criteria are based on achieving certain performance targets and the total shareholder return (“TSR”) of the Company’s common stock relative to the TSR of the common stock of a pre-defined industry peer-group. The fair value of these awards is based on a Monte Carlo simulation model.

As of August 31, 2025, there was $28.4 million of unrecognized compensation expense related to share-based payment arrangements. These costs are expected to be recognized over a weighted-average period of approximately three years. The Company has sufficient shares to satisfy expected share-based payment arrangements.

9. EQUITY

On July 16, 2024, the Board of Directors approved a share repurchase program (the "Repurchase Program") under which they authorized the Company the option to repurchase up to $15.0 million of its outstanding common stock. The timing and amount of any share repurchases under the authorization will be determined by management within certain parameters and based on market conditions and other considerations. There were no shares repurchased during the first quarter of fiscal year 2026. During the first quarter of fiscal year 2025, the Company repurchased 72,141 shares of common stock in the open market at an aggregate cost of $0.5 million under the Repurchase Program. As of August 31, 2025, $13.3 million remained available for repurchase under the Repurchase Program.

10. EARNINGS PER SHARE

Basic earnings per share is based on the weighted average number of common shares outstanding without consideration of potential common stock. Diluted earnings per share includes the dilutive effect of potential common stock consisting of stock options, restricted stock units and performance stock units, provided that the inclusion of such securities is not anti-dilutive. In periods with a net loss, stock options and restricted stock units are not included in the computation of diluted loss per share as the impact would be anti-dilutive.

Table of Content

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

Three Months Ended

(in thousands)

Aug 31, 2025

Aug 31, 2024

Basic

41,174

40,653

Effect of

SEC Form 10-Q filed by AngioDynamics Inc.