Acquisitions. On September 2, 2011, we entered into an Asset Purchase Agreement with Ash Access Technology, Inc. ("Ash Access"), an Indiana corporation, and AAT Catheter Technologies, LLC ("AAT"), an Indiana limited liability corporation (collectively "Ash"), to purchase intellectual property rights with respect to various dialysis catheters. We made an initial payment of $5.0 million to Ash in September of 2011. We are obligated to pay an additional $1.0 million upon reaching a certain milestone set forth in the purchase agreement and future royalties based on a percentage of related product sales. The acquisition-date fair value of these contingent liabilities has been included as part of the purchase consideration. Acquisition-related costs during the three and nine-month periods ended September 30, 2011, respectively, which are included in selling, general and administrative expense in the accompanying consolidated statements of operations, were not material. There were no sales or net income related to this acquisition recorded in our consolidated financial statements for the three and nine-month periods ended September 30, 2011. The purchase price was preliminarily allocated as follows (in thousands):



Assets Acquired
Property and equipment	$	73
Intangibles
Developed technology	3,200
Customer lists	300
Goodwill	2,697
Total assets acquired	6,270

Liabilities Assumed
Contingent liabilities	1,270

Net assets acquired	$	5,000

With respect to the assets we acquired from Ash, we intend to amortize developed technology over 15 years and customer lists on an accelerated basis over three years. The total weighted-average amortization period for these acquired intangible assets is nine years. The assets and liabilities related to this acquisition are included in our cardiovascular segment.

Pro forma consolidated financial results for the Ash acquisition discussed above have not been included in our consolidated financial results because we believe their effects would not be material.

The goodwill arising from the Ash acquisition discussed above consists largely of the synergies and economies of scale we hope to achieve from combining the acquired assets with our historical operations (see Note 13). We anticipate that the goodwill recognized from this acquisition will be deductible for income tax purposes.

On June 20, 2011, we entered into an Asset Purchase Agreement to acquire the intellectual property rights to certain vena cava filter technology. We made an initial payment of $1.0 million in June 2011, and we are obligated to pay up to an additional $3.5 million if certain milestones set forth in the purchase agreement are reached related to further research and development activities and regulatory approval of the vena cava filter. On July 18, 2011, we entered into a Technology License Agreement to acquire the intellectual property rights to certain introducer sheath technology. We made an initial payment of $1.0 million in July 2011 and are obligated to pay an additional $1.0 million upon the earlier of the commercialization of the product or the third anniversary of the effective date of the license agreement. The discounted liability of $938,000 has been reflected in our consolidated balance sheet as a long-term liability as of September 30, 2011. These agreements represented asset acquisitions related to research and development projects and not business combinations. A total charge of approximately $2.9 million related to these acquired in-process research and development assets has been included in the accompanying consolidated statements of operations for the three and nine-month periods ended September 30, 2011 since technological feasibility of the underlying research and development projects had not yet been reached and such technology had no future alternative use. The primary basis for determining the technological feasibility of these projects is obtaining regulatory approval to market the underlying products in an applicable geographic region. As of June 30, 2011, we had recorded an increase of $4.5 million in intangible assets and an increase of $3.5 million in other long-term liabilities related to the vena cava filter technology acquisition and the initial $1.0 million payment made in June 2011. Subsequent to the three months ended June 30, 2011, we determined these amounts were recorded in error and corrected the consolidated balance sheet amounts as of September 30, 2011 by recording a corresponding decrease in intangible assets and other long-term liabilities. In addition, the $1.0 million initial payment (approximately $627,000 after tax) was recorded as a charge to acquired in-process research and development assets in the accompanying consolidated statements of operations for the three and nine-month periods ended September 30, 2011. We have concluded that the impact of the error on our consolidated financial statements for the three and six-month periods ended June 30, 2011 is not material, and we do not believe the correction of this error to be material to the consolidated financial statements for the three month period ended September 30, 2011.

On April 6, 2011, we supplemented and amended our Exclusive License, Development and Supply Agreement with Vysera Biomedical Limited (“Vysera”) to include the manufacturing rights for their valve technology. We made an initial payment of $500,000 in April 2011 and a final payment of $500,000 in August of 2011. We have recorded the $1.0 million intangible asset as developed technology for purposes of our consolidated balance sheet and we intend to amortize it over an estimated life of 10 years.

On September 10, 2010, we completed our acquisition of BioSphere Medical, Inc. (“BioSphere”) in an all-cash merger transaction valued at approximately $96 million, inclusive of all common equity and Series A Preferred preferences. BioSphere develops and markets embolotherapeutic products for the treatment of uterine fibroids, hypervascularized tumors and arteriovenous malformations. We believe the acquisition of BioSphere gives us a platform technology applicable to multiple therapeutic areas with significant market potential while leveraging existing interventional radiology call points. The gross amount of trade receivables we acquired from BioSphere was approximately $4.6 million, of which $51,000 is expected to be uncollectible. Our consolidated financial statements for the three and nine-month periods ended September 30, 2011 reflect sales subsequent to the acquisition date of approximately $8.0 million and $22.6 million, respectively, related to our BioSphere acquisition. We report sales and operating expenses related to the BioSphere acquisition in our cardiovascular segment. It is not practical to separately report the earnings related to the BioSphere acquisition, as we cannot split out sales costs related to Biosphere’s products, principally because our sales representatives are selling multiple products (including BioSphere products) in the cardiovascular business segment. As of December 31, 2010, the BioSphere purchase price was allocated as follows (in thousands):



Assets Acquired
Marketable securities	$	9,673
Trade receivables	4,529
Inventories	5,694
Other assets	1,340
Property and equipment	546
Deferred income tax assets	16,012
Intangibles
Developed technology	19,000
Customer list	7,900
License agreement	380
Trademark	3,200
Goodwill	34,016
Total assets acquired	102,290

Liabilities Assumed
Accounts payable	322
Accrued expenses	3,617
Deferred income tax liabilities	729
Liabilities related to unrecognized tax benefits	961
Other liabilities	936
Total liabilities assumed	6,565

Net assets acquired, net of cash acquired of $274	$	95,725

For the nine months ended September 30, 2011, the goodwill related to the BioSphere acquisition was decreased by approximately $228,000. The change was primarily due to BioSphere tax adjustments including items related to the BioSphere 2010 income tax return, which was finalized during the third quarter of 2011.

With respect to the BioSphere assets, we intend to amortize developed technology over 15 years, a license agreement over 10 years and customer lists on an accelerated basis over 10 years. While U.S. trademarks can be renewed indefinitely, we currently estimate that we will generate cash flow from the acquired trademarks for a period of 15 years from the acquisition date. The total weighted-average amortization period for these acquired intangible assets is 13.6 years.

In connection with our BioSphere acquisition, we paid approximately $522,000 in long-term debt issuance costs to Wells Fargo Bank (“Wells Fargo”) for our long-term debt (see Note 10). These costs consist primarily of loan origination fees and legal costs that we intend to amortize over five years, which is the contract term of an unsecured Credit Agreement, dated September 10, 2010 (the “Credit Agreement”) with lenders who are or may become party thereto (collectively, the “Lenders”) and Wells Fargo, as administrative agent for the Lenders. We also incurred approximately $86,000 of acquisition-related costs during the nine months ended September 30, 2011, respectively, which are included in selling, general and administrative expense in the accompanying consolidated statements of operations.

During the fourth quarter of 2010, we terminated several exclusive BioSphere sales distributor agreements in European countries where we already had previously established direct sales relationships. In connection with the termination of these agreements, we agreed to purchase customer lists from the terminated distributors. The total purchase price of the customer lists was approximately $1.3 million and was allocated to customer lists. We intend to amortize the customer lists on an accelerated basis over 10 years.

On February 19, 2010, we entered into a manufacturing and technology license agreement with a medical device manufacturer for certain medical products. We made an initial payment of $250,000 in February 2010, a second payment of $250,000 in May 2010, a third payment of $250,000 in November 2010 and a final payment of $250,000 in August of 2011. We have included the $1.0 million intangible asset in license agreements and intend to amortize the asset over an estimated life of 10 years.

The following table summarizes our unaudited consolidated results of operations for the three and nine-month periods ended September 30, 2010, as well as the unaudited pro forma consolidated results of operations as though the BioSphere acquisition had occurred on January 1, 2010 (in thousands, except per common share amounts):



	Three Months Ended						Nine Months Ended
	September 30, 2010						September 30, 2010
	As Reported			Pro Forma			As Reported		Pro Forma
Sales	$	73,172		$	78,966		$	215,552	$	236,179
Net income	(1,973		)	(4,714		)	8,250		2,804
Earnings (loss) per common share:
Basic	(0.06		)	(0.13		)	0.23		0.07
Diluted	(0.06		)	(0.13		)	0.23		0.07

The unaudited pro forma information set forth above is for informational purposes only and should not be considered indicative of actual results that would have been achieved if BioSphere had been acquired at the beginning of 2010, or results that may be obtained in any future period.