Significant accounting policies

12 Months Ended

Dec. 31, 2024

2. Significant accounting policies

The preparation of financial statements in conformity with United States generally accepted accounting principles ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates these estimates, including those related to contractual allowances, allowances for expected credit losses, inventories, valuation of intangible assets, goodwill, fair value measurements (including fair value measurements associated with business combinations and/or asset acquisitions), litigation and contingent liabilities, income taxes, and share-based compensation. Estimates are based on historical experience, future expectations, and

other relevant assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The following is a discussion of accounting policies and methods used in the consolidated financial statements that are not presented within other footnotes.

Market risk

In the ordinary course of business, the Company is exposed to the impact of changes in interest rates and foreign currency fluctuations. The Company’s objective is to limit the impact of such movements on earnings and cash flows. In order to achieve this objective, the Company seeks to balance its non-U.S. Dollar denominated income and expenditures.

The financial statements for operations outside the U.S. are generally maintained in each subsidiary's respective local currency. All foreign currency denominated balance sheet accounts, except shareholders’ equity, are translated to U.S. Dollars at year end exchange rates, and revenue and expense items are translated at average exchange rates prevailing during the year. Gains and losses resulting from the translation of foreign currency are recorded in the accumulated other comprehensive income (loss) component of shareholders’ equity. Transactional foreign currency gains and losses, including those generated from intercompany operations, are included in other income (expense), net and was a loss of $4.4 million, a gain of $1.6 million, and a loss of $3.3 million for the years ended December 31, 2024, 2023, and 2022, respectively.

Financial instruments and concentration of credit risk

Financial instruments that could subject the Company to a concentration of credit risk consist primarily of cash, cash equivalents, and accounts receivable. Generally, cash is held at large financial institutions. The Company performs ongoing credit evaluations of customers, generally does not require collateral, and maintains a reserve for expected credit losses. The Company believes that a concentration of credit risk related to accounts receivable is limited because customers are geographically dispersed and end users are diversified.

Cash, cash equivalents, and restricted cash

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

In November 2023, following the termination of the Second Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A., as Administrative Agent, and certain lender parties thereto, Bank of America required collateral of approximately $4.7 million of the Company’s cash as a banking service obligation, which was classified as restricted cash as of December 31, 2023. In March 2024, the Company entered into a Security Agreement with Bank of America to reduce the required collateral to $2.5 million.

Investing activities that did not result in cash receipts or cash payments during the years ended December 31, 2024, 2023, and 2022 consisted of the following, which were not included within cash from investing activities in the Company’s consolidated statements of cash flows:


(U.S. Dollars, in thousands)	2024			2023		2022
Supplemental disclosure of cash flow information:
Noncash investing activities:
Changes in accrued purchases of property, plant, and equipment	$	(3,040	)	$	—	$	—
Intangible assets acquired in asset acquisitions		—			—		2,000

Research and development costs, including collaborative arrangements

Expenditures for research and development are expensed as incurred. Expenditures related to the Company’s collaborative arrangement with MTF Biologics ("MTF") are expensed based on the terms of the related agreement. The Company recognized $0.3 million, $0.8 million, and less than $0.1 million in research and development expense for the years ended December 31, 2024, 2023, and 2022, respectively, related to this arrangement.