Kensey Nash (KNSY)

The Company accounts for taxes under the provisions of SFAS No. 109, Accounting for Income Taxes, (SFAS 109).

The Company adopted the provisions of FIN 48 on July 1, 2007. In connection with the adoption, the Company recorded a net decrease to retained earnings of $204,615 and reclassified certain previously recognized deferred tax attributes as FIN 48 liabilities. The amount of unrecognized tax benefits at March 31, 2009 was $140,262, of which $140,216 would impact the Company’s tax rate, if recognized. Upon the initial adoption of FIN 48 at July 1, 2007, the Company recorded $18,330 for potential interest and penalties for unrecognized tax benefits. Interest and penalties are included in Interest expense and Other income/expense respectively on the Condensed Consolidated Statements of Income. Additional interest and penalties of ($2,155) and $5,802 were recorded for the three and nine months ended March 31, 2009, respectively. Interest and penalties of $3,553 and $11,115 were recorded for the three and nine months ended March 31, 2008, respectively.

Changes in the Company’s uncertain tax positions for the nine months ended March 31, 2009 were as follows:

The Company and its subsidiaries file U.S. federal and various state income tax returns. The Company is no longer subject to U.S. federal income tax examination for years prior to fiscal 2005 due to the expiration of applicable statutes of limitation. The Company does not expect the total amount of unrecognized tax benefits to change significantly in the next 12 months.

As a result of the October 2008 Congressional approval of an extension of the Research and Experimentation (R&E) Tax Credit, the Company recorded retroactive adjustments to its tax provision during the second fiscal quarter ended December 31, 2008. The Company currently estimates that its effective tax rate for fiscal 2009 will be in a range of approximately 32% to 33%. In the course of estimating the Company’s annual effective tax rate and recording its quarterly income tax provision, the Company considers many factors including its expected earnings, state income tax apportionment, estimated research and development tax credits, non-taxable interest income and other estimates. Material changes in, or differences from, these estimates could have a significant impact on the Company’s effective tax rate.

The Company accounts for taxes under the provisions of SFAS No. 109, Accounting for Income Taxes, (SFAS 109).

The Company adopted the provisions of FIN 48 on July 1, 2007. In connection with the adoption, the Company recorded a net decrease to retained earnings of $204,615 and reclassified certain previously recognized deferred tax attributes as FIN 48 liabilities. The amount of unrecognized tax benefits at December 31, 2008 was $144,805, of which $144,758 would impact the Company’s tax rate, if recognized. Upon the initial adoption of FIN 48 at July 1, 2007, the Company recorded $18,330 for potential interest and penalties for unrecognized tax benefits. Interest and penalties are included in Interest expense and Other income respectively on the Condensed Consolidated Statements of Income. Additional interest and penalties of $3,908 and $7,957 were recorded for the three and six months ended December 31, 2008, respectively. Interest and penalties of $3,208 and $7,562 were recorded for the three and six months ended December 31, 2007, respectively.

Changes in the Company’s uncertain tax positions for the six months ended December 31, 2008 were as follows:

The Company and its subsidiaries file U.S. federal and various state income tax returns. The Company is no longer subject to U.S. federal or Pennsylvania income tax examination for years prior to fiscal 2005 due to the expiration of applicable statutes of limitation. The Company does not expect the total amount of unrecognized tax benefits to change significantly in the next 12 months.

As a result of the October 2008 Congressional approval of an extension of the Research and Experimentation (R&E) Tax Credit, the Company recorded a retroactive adjustment of approximately $123,000 to its tax provision during the quarter ended December 31, 2008. The adjustment reflected the fact that the legislation is retroactive to January 1, 2008 and therefore, reduced the Company’s effective tax rate for the second quarter of fiscal 2009. The Company’s effective tax rate for each of the third and fourth quarters of fiscal 2009 will include the related quarter’s R&E Tax Credit effect on the tax provision.

As of June 30, 2008, the Company had a state net operating loss (NOL) carryforward totaling $60.0 million, which will expire at various times through 2027, and no longer had a federal NOL carryforward. The Company has recorded a full valuation allowance against the state net operating losses of $60.0 million. The Company no longer has a foreign NOL as a result of the sale of its Endovascular business.

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The Company accounts for taxes under the provisions of SFAS No. 109, Accounting for Income Taxes, (SFAS 109).

The Company adopted the provisions of FIN 48 on July 1, 2007. In connection with the adoption, the Company recorded a net decrease to retained earnings of $204,615 and reclassified certain previously recognized deferred tax attributes as FIN 48 liabilities. The amount of unrecognized tax benefits at September 30, 2008 was $170,390 of which $157,667 would impact the Company’s tax rate, if recognized. Upon the initial adoption of FIN 48 at July 1, 2007, the Company recorded $18,330 for potential interest and penalties for unrecognized tax benefits. Interest and penalties are included in interest expense and other expense respectively on the Condensed Consolidated Statements of Income. Additional interest and penalties of $3,908 and $85,771 were recorded for the three months ended September 30, 2008 and 2007, respectively.

Changes in the Company’s uncertain tax positions for the three months ended September 30, 2008 were as follows:

The Company and its subsidiaries file U.S. federal and various state income tax returns. The Company is no longer subject to U.S. federal or Pennsylvania income tax examination for years prior to fiscal 2005 due to the expiration of applicable statutes of limitation. The Company does not expect the total amount of unrecognized tax benefits to change significantly in the next 12 months.

As a result of the October 2008 Congressional approval of an extension of the Research and Experimentation (R&E) Tax Credit, the Company will record retroactive adjustments to its tax provision during its second fiscal quarter ending December 31, 2008. The adjustments will reflect the fact that the legislation is retroactive to January 1, 2008 and therefore, will reduce the Company’s effective tax rate for the second quarter of fiscal 2009. The Company’s effective tax rate for each of the third and fourth quarters of fiscal 2009 will included the related quarter’s R&E Tax Credit effect on the tax provision.

As of June 30, 2008, the Company had a state net operating loss (NOL) carryforward totaling $60.0 million, which will expire through 2027, and no longer had a federal NOL carryforward. The Company has recorded a full valuation allowance against the state net operating losses of $60.0 million. The Company no longer has a foreign NOL as a result of the sale of the endovascular division.

The Company accounts for taxes under the provisions of SFAS No. 109, Accounting for Income Taxes, (SFAS 109).

The Company adopted the provisions of FIN 48 on July 1, 2007. In connection with the adoption, the Company recorded a net decrease to retained earnings of $352,385 and reclassified certain previously recognized deferred tax attributes as FIN 48 liabilities. The amount of unrecognized tax benefits at July 1, 2007 and March 31, 2008 was $333,188 of which $272,942 would impact the Company’s tax rate, if recognized. Upon the initial adoption of FIN 48 at July 1, 2007, the Company recorded $85,771 for potential interest and penalties for unrecognized tax benefits. Interest and penalties are included in interest expense and other expense respectively on the Condensed Consolidated Statements of Income. Additional interest and penalties of $3,553 and $11,115 were recorded for the three and nine months ended March 31, 2008, respectively.

The Company and its subsidiaries file U.S. federal and various state income tax returns. The Company is no longer subject to U.S. federal or Pennsylvania income tax examination for years prior to fiscal 2005 due to the expiration of applicable statutes of limitation. The Company does not expect the total amount of unrecognized tax benefits to change significantly in the next 12 months.

The Company is awaiting Congressional approval extending the Research and Experimentation (R&E) Tax Credit for calendar year 2008 unless and until such time the 2008 R&E Tax Credit extension is approved, the Company can only claim research and development tax credits through December 31, 2007 as a component of its tax provision related to its ongoing performance of qualified research and development. The previously approved Congressional extension of the R&E Tax Credit through December 2007 enabled the Company to record retroactive adjustments to its tax provision during the second quarter ended December 31, 2006.

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As of June 30, 2007, the Company had a federal net operating loss (NOL) carryforward of approximately $2.0 million, and a state NOL totaling $60.0 million, with both expiring by the end of fiscal year 2028. The Company has recorded a full valuation allowance against the state net operating losses of $60.0 million. In addition, the Company had a foreign NOL of $297,022 as of June 30, 2007, which will not expire.

The Company accounts for taxes under the provisions of SFAS No. 109, Accounting for Income Taxes, (SFAS 109).

The Company adopted the provisions of FIN 48 on July 1, 2007. In connection with the adoption, the Company recorded a net decrease to retained earnings of $352,385 and reclassified certain previously recognized deferred tax attributes as FIN 48 liabilities. The amount of unrecognized tax benefits at July 1, 2007 and December 31, 2007 was $333,188 of which $272,942 would impact the Company’s tax rate, if recognized. Upon the initial adoption of FIN 48 at July 1, 2007, the Company recorded $85,771 for potential interest and penalties for unrecognized tax benefits. Interest and penalties are included in interest expense and other expense respectively on the Condensed Consolidated Statements of Income. Additional interest and penalties of $3,208 and $7,562 were recorded for interest and penalties during the three and six months ended December 31, 2007, respectively.

The Company and its subsidiaries file U.S. federal and various state income tax returns. The Company is no longer subject to U.S. federal or Pennsylvania income tax examination for years prior to fiscal 2004 due to the expiration of applicable statutes of limitation. The Company does not expect the total amount of unrecognized tax benefits to change significantly in the next 12 months.

The Company is awaiting Congressional approval extending the Research and Experimentation (R&E) Tax Credit for calendar year 2008. Until such time the 2008 R&E Tax Credit extension is approved, the Company can only claim research and development tax credits through December 31, 2007 as a component of its tax provision related to its ongoing performance of qualified research and development. The previously approved Congressional extension of the R&E Tax Credit through December 2007 enabled the Company to record retroactive adjustments to its tax provision during the second quarter ended December 31, 2006.

As of June 30, 2007, the Company had a federal net operating loss (NOL) carryforward of approximately $2.0 million, and a state NOL totaling $60.0 million, which will expire by the end of its fiscal year 2028. The Company has recorded a full valuation allowance against the state net operating losses of $60.0 million. In addition, the Company had a foreign NOL of $297,022 as of June 30, 2007, which will not expire.

The Company accounts for taxes under the provisions of SFAS No. 109, Accounting for Income Taxes, (SFAS 109).

The Company adopted the provisions of FIN 48 on July 1, 2007. In connection with the adoption, the Company recorded a net decrease to retained earnings of $352,385 and reclassified certain previously recognized deferred tax attributes as FIN 48 liabilities. The amount of unrecognized tax benefits at July 1, 2007 and September 30, 2007 was $333,188 of which $272,942 would impact the Company’s tax rate, if recognized.

The Company and its subsidiaries file U.S. federal and various state income tax returns. The Company is no longer subject to U.S. federal or Pennsylvania income tax examination for years prior to fiscal 2004 due to the expiration of applicable statutes of limitation.

The Company does not expect the total amount of unrecognized tax benefits to significantly change in the next twelve months.

The Company recognizes potential interest and penalties for unrecognized tax benefits in interest expense and other expense respectively, and accordingly, upon initial adoption at July 1, 2007 has recorded $85,771 for the payment of interest and penalties and during the three months ended September 30, 2007, the Company recognized $4,354 in potential interest associated with uncertain tax positions.

As a result of Congressional approval of an extension of the Research and Experimentation (R&E) Tax Credit, the Company recorded retroactive adjustments to its tax provision during the second quarter ended December 31, 2006. The Company continues to record research and development tax credits as a component of its current tax provision related to its ongoing performance of qualified research and development. The Company anticipates its effective tax rate for its 2008 fiscal year to be approximately 31%, including the R&E effect on the tax provision.

As of June 30, 2007, the Company had a federal net operating loss (NOL) carryforward of approximately $2.0 million, and a state NOL totaling $60.0 million, which will expire by the end of its fiscal year 2028. The Company has recorded a full valuation allowance against the state net operating losses of $60.0 million. In addition, the Company had a foreign NOL of $297,022 as of June 30, 2007, which will not expire.

The Company accounts for taxes under the provisions of SFAS No. 109, Accounting for Income Taxes, (SFAS 109).

As a result of the recent Congressional approval of an extension of the Research and Experimentation (R&E) Tax Credit, the Company recorded retroactive adjustments to its tax provision during the second quarter ended December 31, 2006. The adjustments reflect that the legislation is retroactive to January 1, 2006, and therefore significantly reduced the Company’s effective tax rate to 22% for the second quarter of fiscal 2007. The Company anticipates its effective tax rate for its 2007 fiscal year to be approximately 28%, including the R&E effect on the tax provision.

As of March 31, 2007, the Company had net operating loss (NOL) carryforwards for state tax purposes totaling $54.5 million, which will expire by the end of its fiscal year 2027. The Company has recorded a full valuation against the state net operating losses of $54.5 million. In addition, the Company had a foreign NOL of $302,000 as of March 31, 2007, which will not expire.

The Company accounts for taxes under the provisions of SFAS No. 109, Accounting for Income Taxes, (SFAS 109).

As a result of the recent Congressional approval of an extension of the Research and Experimentation (R&E) Tax Credit, the Company recorded retroactive adjustments to its tax provision during the second

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quarter ended December 31, 2006. The adjustments reflect that the legislation is retroactive to January 1, 2006, and therefore significantly reduced the Company’s effective tax rate to 22% for the second quarter. The Company anticipates its effective tax rate for the remainder of the fiscal year to be approximately 30%, including the current period’s R&E effect on the tax provision.

As of December 31, 2006, the Company had net operating loss (NOL) carryforwards for state tax purposes totaling $54.5 million, which will expire by the end of its fiscal year 2027. The Company has recorded a full valuation against the state net operating losses of $54.5 million. In addition, the Company had a foreign NOL of $307,000 as of December 31, 2006, which will not expire.

The Company accounts for taxes under the provisions of SFAS No. 109, Accounting for Income Taxes, (SFAS 109).

As of September 30, 2006, the Company had net operating loss (NOL) carryforwards for state tax purposes totaling $40.0 million, which will expire by the end of its fiscal year 2027. In addition, the Company had a foreign NOL of $311,000 as of September 30, 2006, which will not expire.

As of March 31, 2006, the Company had net operating loss (NOL) carryforwards for state tax purposes totaling $20.0 million, which will expire by the end of its fiscal year 2024. In addition, the Company had a foreign NOL of $313,000 at March 31, 2006, which will not expire.

During the fourth quarter of fiscal 2003, the Company performed a retrospective research and development tax credit study for fiscal years 1993 through 2003. The Company recorded the majority of the

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retrospective tax credit resulting from this study ($1.5 million) in the fourth quarter of fiscal 2003 and the remainder during the first quarter of fiscal 2004. The Company continues to record research and development tax credits as a component of its current tax provision related to its ongoing performance of qualified research and development.

As of December 31, 2005, the Company had net operating loss (NOL) carryforwards for state tax purposes totaling $20.0 million, which will expire by the end of its fiscal year 2024. In addition, the Company had a foreign NOL of $314,000 at December 31, 2005, which will not expire.

During the fourth quarter of fiscal 2003, the Company performed a retrospective research and development tax credit study for fiscal years 1993 through 2003. The Company recorded the majority of the retrospective tax credit resulting from this study ($1.5 million) in the fourth quarter of fiscal 2003 and the remainder during the first quarter of fiscal 2004. The Company continues to record research and development tax credits as a component of its current tax provision related to its ongoing performance of qualified research and development.

As of September 30, 2005, the Company had net operating loss (NOL) carryforwards for state tax purposes totaling $20.0 million, which will expire by the end of its fiscal year 2024. In addition, the Company had a foreign NOL of $315,000 at September 30, 2005, which will not expire.

During the fourth quarter of fiscal 2003, the Company performed a retrospective research and development tax credit study for fiscal years 1993 through 2003. The Company recorded the majority of the retrospective tax credit resulting from this study ($1.5 million) in the fourth quarter of fiscal 2003 and the remainder during the first quarter of fiscal 2004. The Company continues to record research and development tax credits as a component of its current tax provision related to its ongoing performance of qualified research and development.