What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2020-08-25 compared with 2019-08-27 · 189 added, 168 removed, 476 unchanged (43% of the section changed)

29 unchanged sentences

administered by a respiratory therapist.

However, HFCWO can be self-administered, relieving a caregiver of participation in the

therapy, and eliminating the attendant cost of an in-home care provider.

We believe that HFCWO treatments are cost-effective primarily

because they reduce a patient’s risk of respiratory infections and other secondary complications that are associated with

impaired mucus transport and often result in costly hospital visits and repeated antibiotic use.

1 However, HFCWO can be self-administered, relieving a caregiver of participation

in the therapy, and eliminating the attendant cost of an in-home care provider.

We believe that HFCWO treatments are cost-effective

primarily because they reduce a patient’s risk of respiratory infections and other secondary complications that are associated

with impaired mucus transport and often result in costly hospital visits and repeated antibiotic use.

SmartVest System is designed for patient comfort and ease of use which promotes adherence to prescribed treatment schedules, leading

to improved airway clearance, patient outcomes, a reduction in healthcare utilization and quality of life.

We offer a broad range

of garments, referred to as vests and wraps, in sizes for children and adults that allow for tailored fit.

User-friendly controls

allow patients to administer their daily therapy with minimal or no assistance.

Our direct product support services provide patient

and clinician education, training, and follow-up to ensure the product is integrated into each patient’s daily treatment

to improved airway clearance, patient outcomes and quality of life and a reduction in healthcare utilization.

We offer a broad

range of garments, referred to as vests and wraps, in sizes for children and adults that allow for tailored fit.

User-friendly

controls allow patients to administer their daily therapy with minimal or no assistance.

Our direct product support services provide

patient and clinician education, training, and follow-up to ensure the product is integrated into each patient’s daily treatment

Additionally, our reimbursement department assures we are working on behalf of the patient by processing their physician

11 unchanged sentences

of the foregoing.

1 Nicolini A, et al.

Effectiveness of treatment with high-frequency chest wall oscillation in patients with bronchiectasis.

BMC Pulmonary Medicine .

2000, we have marketed the SmartVest System and its predecessor products to patients suffering from bronchiectasis, cystic fibrosis,

36 unchanged sentences

extending the forces upward and inward in strong but smooth cycles surrounding the chest.

system design with active inflate –

active deflate:

The active inflate –

system design with active inflate – active deflate:

The active inflate –

active deflate mechanism of the SmartVest System provides patients a more comfortable

5 unchanged sentences

designed to resemble an article of clothing.

Quick fit Velcro ®

-like closures

Quick fit Velcro ® -like closures

allow for a secure, comfortable fit without bulky straps and buckles.

2 unchanged sentences

pediatric and adult patients.

Soft Start ®

garment oscillation coverage:

gently fills the garment to acclimate the patient to therapy and minimize “vest

creep.”

All SmartVest garments provide 360°

oscillation coverage, which delivers

Soft Start ® and 360° garment oscillation coverage:

gently fills the garment to acclimate the patient to therapy and minimize “vest

creep.” All SmartVest garments provide 360° oscillation coverage, which delivers

simultaneous treatment to all lobes of the lungs.

1 unchanged sentence

The SmartVest SQL System is 25% smaller, 5db quieter and 30%

lighter than the SmartVest SV2100.

The SmartVest SQL is the lightest and overall quietest

HFCWO generator on the market, weighing less than 16 pounds, making it easier for patients

to use and integrate HFCWO therapy into their daily lives.

lighter than the SmartVest SV2100 System.

The SmartVest SQL is the lightest and overall

quietest HFCWO generator on the market, weighing less than 16 pounds, making it easier

for patients to use and integrate HFCWO therapy into their daily lives.

● Programmable

2 unchanged sentences

operating modes, including ramp, and options for saving, locking and restoring protocols.

Further, an enhanced pause feature allows the physician to program dedicated time(s)

for the patient to clear secretions.

Further, an enhanced pause feature allows the physician to program dedicated times for

the patient to clear secretions.

June 2017, we launched the SmartVest SQL with SmartVest Connect ®

2 unchanged sentences

The SmartVest SQL with wireless technology features built-in

cellular connectivity, offering healthcare teams and patients access to treatment information to better collaborate in making

patient-centered care decisions.

SmartVest Connect is available to pediatric and cystic fibrosis patients, and targeted adult

pulmonary clinics using a wirelessly enabled SmartVest SQL system.

We expect to launch SmartVest Connect with Bluetooth™

technology and supporting mobile applications in fiscal 2020.

cellular and Bluetooth™

connectivity (Bluetooth™

launched March 2020), offering healthcare teams and patients access

to treatment information to better collaborate in making patient-centered care decisions.

SmartVest Connect is available to pediatric

and cystic fibrosis patients, and targeted adult pulmonary clinics using a wirelessly enabled SmartVest SQL System.

market the Single Patient Use (“SPU”) SmartVest and SmartVest Wrap ®

5 unchanged sentences

upon discharge.

of the Aerobika ®

Oscillating Positive Expiratory Pressure (“OPEP”) device, a drug-free, hand-held device

with a proprietary pressure-oscillation dynamic that provided intermittent resistance and created positive pressure and oscillations

simultaneously, in the U.S.

home care market, which was effectuated through a distributor agreement with Monaghan Medical Corp.,

was discontinued in November 2018.

estimate the total served U.S.

20 unchanged sentences

reduction in exacerbation rates, hospitalizations, emergency department visits, and antibiotic prescriptions in bronchiectasis

patients using SmartVest.

1-4 Leading in clinical evidence to support SmartVest as a treatment for bronchiectasis patients

will remain a focus in fiscal 2020.

patients using the SmartVest System.

2-5 Leading in clinical evidence to support the SmartVest System as a treatment

for bronchiectasis patients will remain a focus in fiscal 2021.

believe that bronchiectasis is under recognized and underdiagnosed but is experiencing a surge in clinical interest and awareness,

7 unchanged sentences

Bronchiectasis

Research Registry (“BRR”) between 2008 and 2014 also had COPD and 29% (n=515)

also had asthma.

9 unchanged sentences

11 Based on historic growth in prevalence and assuming a constant growth

rate, the estimated number of bronchiectasis diagnoses in 2018 exceeded 470,000.

(2017) projected 4.2 million adults in the United States over 40 years may have bronchiectasis,

suggesting there is a large pool of patients with undiagnosed disease.

studies indicate a wide range of potential prevalence of bronchiectasis patients from a low of 470,000 to as high as 4.2 million

patients in the United States.

We also believe that it is difficult to estimate from these studies which patients will need or

benefit from HFCWO.

BRR indicated 15% of the patients included in the registry were prescribed HFCWO as part of their

treatment plan.

Using that study data, we estimate that, within the diagnosed Medicare population of 470,000, approximately 15%

or 70,000 have been prescribed HFCWO.

We believe that bronchiectasis is underdiagnosed in the U.S.

rate, the estimated number of bronchiectasis diagnoses in Medicare patients in 2019 exceeded

(2017) projected 4.2 million adults in the United States over the age of 40 may have

bronchiectasis, suggesting there is a large pool of patients with undiagnosed disease.

studies indicate a wide range of potential prevalence of bronchiectasis patients in the United States.

We also believe that it

is difficult to estimate from these studies which patients will need or benefit from HFCWO.

BRR indicated 15% of the

patients included in the registry were prescribed HFCWO as part of their treatment plan.

Using that study data, we estimate that,

within the diagnosed Medicare population of 515,000, approximately 15% or 77,000 have been prescribed HFCWO.

We believe that bronchiectasis

is underdiagnosed in the U.S.

based on clinical study evidence.

We also believe that HFCWO is under prescribed for bronchiectasis patients.

By applying approximately 15% HFCWO penetration of

diagnosed Medicare patients to the Weycker clinical study to the estimated 4.2 million prevalence of bronchiectasis in the U.S.,

we derived that the HFCWO opportunity may be 630,000 forecasted units.

We also believe that HFCWO is under prescribed for bronchiectasis

By applying approximately 15% HFCWO penetration of diagnosed Medicare patients to the Weycker clinical study to the

estimated 4.2 million prevalence of bronchiectasis in the U.S., we derived that the HFCWO opportunity may be 630,000 forecasted

(See Figure 1).

11 unchanged sentences

of the disease.

2 Sievert C, et al.

Using High Frequency Chest Wall Oscillation in a Bronchiectasis Patient Population:

1 unchanged sentence

Therapy Journal.

Cost-Effective Analysis of Using High Frequency Chest Wall Oscillation (HFCWO) in Patients with Non-Cystic Fibrosis

Bronchiectasis.

3 Sievert C, et al.

Cost-Effective Analysis of Using High Frequency Chest Wall Oscillation (HFCWO) in Patients with Non-Cystic Fibrosis Bronchiectasis.

Respiratory Therapy Journal.

Incidence of Bronchiectasis-Related Exacerbation Rates After High Frequency Chest Wall Oscillation (HFCWO) Treatment

A Longitudinal Outcome-Based Study.

4 Sievert C, et al.

Incidence of Bronchiectasis-Related Exacerbation Rates After High Frequency Chest Wall Oscillation (HFCWO) Treatment —

Longitudinal Outcome-Based Study.

Respiratory Therapy Journal.

Employment of an algorithm of care including chest physiotherapy results in reduced hospitalizations and stability of

lung function in bronchiectasis.

5 Powner J, et al.

of an algorithm of care including chest physiotherapy results in reduced hospitalizations and stability of lung function in bronchiectasis.

BMC Pulmonary Medicine .

26 unchanged sentences

we market to physicians and health care providers as well as directly to patients.

The vast majority of our revenue comes from

domestic home care sales through a physician referral model.

We have established our own domestic sales force, which we believe

is able to provide superior education, support and training to our customers.

The majority of our revenue comes from domestic

home care sales through a physician referral model.

We have established our own domestic sales force, which we believe is able

to provide superior education, support and training to our customers.

Our direct U.S.

sales force works with physicians

and clinicians, primarily pulmonologists, in defined territories to help them understand our products and services and the value

they provide to their respective patients.

As of June 30, 2019, we had 40 field sales employees, including four regional sales

managers, 34 clinical area managers (“CAMs”) and two clinical educators.

sales force works with physicians and clinicians,

primarily pulmonologists, in defined territories to help them understand our products and services and the value they provide

to their respective patients.

As of June 30, 2020, we had 44 field sales employees, including five regional sales managers, 37

clinical area managers (“CAMs”) and two clinical educators.

We also have developed a network of approximately 250

respiratory therapists and health care professionals across the U.S.

to assist with in-home SmartVest patient training on

a non-exclusive independent contractor basis.

to assist with in-home SmartVest System patient training

on a non-exclusive independent contractor basis.

These independent contractors are credentialed by the National Board for Respiratory

10 unchanged sentences

of the SmartVest System’s differentiated features and benefits.

generate sales leads through multiple channels that include visits to pulmonology clinics and medical centers,

participation in medical conferences, maintenance of industry contacts to increase the visibility and acceptance of our

products by physicians and health care professionals, participation with patient organizations such as the Cystic Fibrosis

Foundation, as well as through patients by word of mouth and traffic to our website and social media channels.

We continue to

evaluate opportunities to offer the SmartVest System through selected Home Medical Equipment (“HME”)

distributors.

We entered into agreements with two HME distributors, one national and one regional, to distribute and sell the

SmartVest system in the United States home care market.

The Company expects to continue its direct sales channel as its

primary homecare revenue source.

Sale of the SmartVest system through HME distributors has begun in targeted geographies in

the first quarter of fiscal 2020.

Service to our providers and patients is additionally a

key component of achieving future sales.

Providers seek companies that are easy to work with, responsive and care for their patients

as an extension of their practices.

generate sales leads through multiple channels that include visits to pulmonology clinics and medical centers, participation in

medical conferences, maintenance of industry contacts to increase the visibility and acceptance of our products by physicians

and health care professionals, participation with patient organizations such as the Cystic Fibrosis Foundation, as well as through

patients by word of mouth and traffic to our website and social media channels.

We continue to evaluate opportunities to offer

the SmartVest System through selected Home Medical Equipment (“HME”) distributors.

We entered into agreements with

four HME distributors, one national and three regional, to distribute and sell the SmartVest System in the United States home

The Company expects to continue its direct sales channel as its primary homecare revenue source.

Sale of the SmartVest

System through HME distributors began in targeted geographies in the first quarter of fiscal 2020 with approximately $430,000

of revenue generated during fiscal 2020.

addition of an HME distribution network would expand our access to physicians and hospitals in certain areas of the United States

21 unchanged sentences

Our principal

distributors are located in the Arab states of the Persian Gulf, Europe, Southeast Asia, and South and Central America.

distributors are located in the Europe, Arab states of the Persian Gulf, Southeast Asia, and South and Central America.

are sold at a fixed contract price with payments made directly from the distributor, rather than being tied to reimbursement rates

3 unchanged sentences

corporate resources on maintaining our current distributors with less emphasis on contracting with new distributors.

Reimbursement

the U.S., individuals who use the SmartVest System generally will rely on third-party payers, including private payers and governmental

Third-Party Reimbursement

the U.S., individuals who use the SmartVest System generally rely on third-party payers, including private payers and governmental

payers such as Medicare and Medicaid, to cover and reimburse all or part of the cost of using the SmartVest System.

19 unchanged sentences

billing code is approximately $12,000.

The allowed amount for state Medicaid programs range from approximately $8,000 to $12,000,

The allowed amount for state Medicaid programs ranges from approximately $8,000 to $12,000,

which is similar to commercial payers.

1 unchanged sentence

the full allowable amount.

Deductions from the allowable amount include co-payments, deductibles and/or maximums on durable medical

Deductions from the allowable amount, such as co-payments, deductibles and/or maximums on durable medical

equipment, decrease the reimbursement received from the third-party payer.

15 unchanged sentences

and the setting in which the procedure is furnished.

and Development

response to the COVID-19 pandemic and the U.S.

federal government’s declaration of a public health emergency, the Centers

for Medicare and Medicaid Services implemented a number of temporary rule changes and waivers to allow prescribers to best treat

patients during the period of the public health emergency.

These waivers are retroactively effective to March 1, 2020.

indications and documentation typically required will not be enforced for respiratory related products including the SmartVest

System (solely with respect to Medicare patients).

The minimum documentation now requires a valid order and documentation of a

respiratory related diagnosis.

Face-to-face and in-person requirements for respiratory devices are being waived during such period,

which is currently scheduled to expire in October 2020.

Research and Development

R&D capabilities consist of full-time engineering staff and several consultants.

3 unchanged sentences

that receive the appropriate product approvals and regulatory clearances around the world.

fiscal 2019 and 2018, we incurred R&D expenses of approximately $583,000 and $251,000, or 1.9% and 0.9% of net revenues, respectively.

As a percentage of sales, we expect spending on R&D expenses to remain relatively consistent during the fiscal year ended

fiscal 2020 and 2019, we incurred R&D expenses of approximately $1,050,000 and $583,000, or 3.2% and 1.9% of net revenues,

respectively.

As a percentage of sales, we expect spending on R&D expenses to increase slightly during the fiscal year ending

June 30, 2021 (“fiscal 2021”) as compared with fiscal 2020 with engineering resources focusing on next generation

product enhancements and other market opportunities, including SmartVest Connect with Bluetooth technology and supporting mobile

applications.

product enhancements.

of June 30, 2020, we held 16 U.S.

4 unchanged sentences

pressure pulse delivery to a human in support of airway clearance.

One of our foreign patents will expire during fiscal 2020.

One of our U.S.

patents will expire during fiscal 2021.

generally pursue patent protection for patentable subject matter in our proprietary devices in foreign countries that we have

identified as key markets for our products.

These markets include the European Union, Canada, Japan, and other countries.

These markets include the European Union, Japan, and other countries.

also have received ten U.S.

13 unchanged sentences

established inventory levels for critical components and finished goods to assure continuity of supply.

Product Warranties

provide a warranty on the SmartVest System that covers the cost of replacement parts and labor, or a new SmartVest System in the

2 unchanged sentences

and Canada, we provide a lifetime warranty to the individual patient for whom the SmartVest System is prescribed.

For sales to institutions within the U.S., and for all international sales, except Canadian home care, we provide a three-year

For sales to institutions and HME distributors within the U.S., and for all international sales, except Canadian home care, we

provide a three-year warranty.

original HFCWO technology was licensed to American Biosystems, Inc.

(now Advanced Respiratory, Inc.

(“ARI”), part

of Hill-Rom Holdings, Inc.), which, until the introduction of our original MedPulse Respiratory Vest System ®

2000, was the only manufacturer of a product with HFCWO technology cleared for market by the FDA (ARI’s The Vest ®

(now part of Hill-Rom Holdings, Inc.), which, until the introduction

of our original MedPulse Respiratory Vest System ®

in 2000, was the only manufacturer of a product with HFCWO technology

cleared for market by the FDA (HillRom’s The Vest ®

Airway Clearance System).

ARI has also received FDA 510(k) clearance for the Monarch™

Airway Clearance System, a mobile

device that uses pulmonary oscillating discs.

Respiratory Technologies, Inc., doing business as RespirTech, received FDA clearance

to market their HFCWO product, the inCourage ®

Airway Clearance Therapy.

In August 2017, Royal Phillips acquired

Both ARI and RespirTech employ a direct-to-patient model, and recently Royal Phillips announced plans to offer its

HFCWO device through selected HME distributors.

HillRom has also received FDA

510(k) clearance for the Monarch ®

Airway Clearance System, a mobile device that uses pulmonary oscillating

Respiratory Technologies, Inc.

(now RespirTech, part of Koninklijke Phillips N.V.) received FDA clearance to market their

HFCWO product, the inCourage ®

Airway Clearance Therapy in 2005.

Both HillRom and RespirTech employ a direct-to-patient

model, and recently Royal Phillips announced plans to offer its HFCWO device through selected HME distributors.

AffloVest ®

19 unchanged sentences

and controlled for the duration of treatment.

Governmental Regulation

Medicare and Medicaid

government and private sector initiatives in the U.S.

9 unchanged sentences

have created an increasing level of price sensitivity among our customers.

Medical Equipment Licensing

Home Medical Equipment

we do not fall under competitive bidding for Medicare, we often must satisfy the same licensing requirements as other DME providers

5 unchanged sentences

business with any patients in the state or to be a provider for the state Medicaid program, a DME provider must have an in-state

In addition to Minnesota, our corporate headquarters, we have a licensed in-state presence in four other states.

presence requirements are different from state to state, but generally require a physical location that is staffed and open during

regular business hours.

In addition to Minnesota, the location of our corporate headquarters, we have a licensed in-state presence in four other

In-state presence requirements vary from state to state, but generally require a physical location that is staffed and

open during regular business hours.

We are licensed to do business in all states except for Hawaii.

Product Regulations

medical devices are subject to regulation by numerous government agencies, including the FDA and comparable foreign regulatory

5 unchanged sentences

addition to the clearances and approvals discussed below, we obtained ISO 13485 certification in January 2005 and receive annual

certification of our compliance with ISO quality standards.

certification of our compliance to the current ISO quality standards.

FDA Requirements

have received clearance from the FDA to market our products, including the SmartVest System.

10 unchanged sentences

may conduct periodic inspections to determine compliance with both the FDA’s Quality System Regulation (“QSR”)

requirements and/or current medical device reporting regulations.

Product approvals by the FDA can be withdrawn due to failure

to comply with regulatory standards or the occurrence of unforeseen problems following initial market clearance.

The failure to

comply with regulatory standards or the discovery of previously unknown problems with a product or manufacturer could result in

fines, delays or suspensions of regulatory clearances, seizures or recalls of products (with the attendant expenses), the banning

of a particular device, an order to replace or refund the cost of any device previously manufactured or distributed, operating

restrictions and criminal prosecution, as well as decreased sales as a result of negative publicity and product liability claims.

requirements and current medical device reporting regulations.

Product approvals by the FDA can be withdrawn due to failure to

comply with regulatory standards or the occurrence of unforeseen problems following initial market clearance.

The failure to comply

with regulatory standards or the discovery of previously unknown problems with a product or manufacturer could result in fines,

delays or suspensions of regulatory clearances, seizures or recalls of products (with the attendant expenses), the banning of

a particular device, an order to replace or refund the cost of any device previously manufactured or distributed, operating restrictions

and criminal prosecution, as well as decreased sales as a result of negative publicity and product liability claims.

must register annually with the FDA as a device manufacturer and, as a result, are subject to periodic FDA inspection for compliance

11 unchanged sentences

and others also can initiate litigation relating to advertising and /or marketing claims.

If the FDA determines that our promotional

or training materials constitute promotion of an unapproved or uncleared claim of use, we may need to modify our training or promotional

materials or be subject to regulatory or enforcement actions that may result in civil fines or criminal penalties.

Other federal,

state or foreign enforcement authorities might take action if they determine that our promotional or training materials constitute

promotion of an unapproved use, which could result in significant fines or penalties.

If the FDA were to determine our promotional

or training materials constitute promotion of an unapproved or uncleared claim of use, it is possible we would need to modify

our training or promotional materials or be subject to regulatory or enforcement actions that could result in civil fines or criminal

Other federal, state or foreign enforcement authorities could also take similar action if they were to determine that

our promotional or training materials constitute promotion of an unapproved use, which could result in significant fines or penalties.

Union and Other Regions

8 unchanged sentences

We have maintained our CE marking in good standing since originally receiving it and most recently

renewed it in January 2015.

We also require all of our distributors in the European Union and other regions to comply with their

home country regulations in our distributor agreements.

2010 Healthcare Reform Legislation, medical device excise tax and Federal Physician Payments Sunshine Act

healthcare reform legislation (“PPACA”), was enacted into law in March 2010.

The PPACA imposes a 2.3% excise tax on

certain domestic sales of medical devices by manufacturers.

To the extent that third-party payers and institutions will not absorb

increased costs represented by the tax because of reimbursement or contract limitations, we are not able to offset the tax with

increased revenue.

with the third quarter of our fiscal year ended June 30, 2016, we realized a positive impact to operating profit with the adoption

of the recent Consolidated Appropriations Act, 2016, which includes a two-year moratorium on the medical device excise tax effective

as of January 1, 2016.

renewed it in February 2020.

We are currently working on updates to our quality system to comply with the European Union Medical

Device Regulation by May 2021.

We also require all of our distributors in the European Union and other regions to comply with

their home country regulations in our distributor agreements.

The 2010 Healthcare Reform

Legislation, medical device excise tax and Federal Physician Payments Sunshine Act

PPACA was enacted into law in March 2010.

The PPACA imposes a 2.3% excise tax on certain domestic sales of medical devices by

manufacturers.

To the extent that third-party payers and institutions will not absorb increased costs represented by the tax because

of reimbursement or contract limitations, we are not able to offset the tax with increased revenue.

May 22, 2018, we concluded an examination with the Internal Revenue Service (“IRS”) related to federal medical device

excise taxes paid on revenue associated with our sales of the SmartVest during our tax periods ended June 30, 2014 through December

As a result, it was determined the SmartVest was eligible for the retail exemption from the medical device excise tax,

resulting in the IRS agreeing to a refund of approximately $406,000.

This refund was recognized in fiscal 2018 results and full

payment was received in July 2018.

Furthermore, we expect we will be exempt from the medical device tax after the conclusion of

the current two-year medical device tax moratorium, which is scheduled to end on December 31, 2019.

excise taxes paid on revenue associated with our sales of the SmartVest System during our tax periods ended June 30, 2014 through

December 31, 2015.

As a result, it was determined the SmartVest System was eligible for the retail exemption from the medical

device excise tax.

December 20, 2019, the medical device excise tax described above was permanently repealed.

Physician Payments Sunshine Act

Federal Physician Payments Sunshine Act (Section 6002 of the PPACA) (the “Sunshine Act”) was adopted on February 1,

2013, to create transparency for the financial relationship between medical device companies and physicians and/or teaching hospitals.

2013, to create transparency for the financial relationship between medical device companies and physicians and teaching hospitals.

The Sunshine Act requires all manufacturers of drugs and medical devices to annually report to the CMS any payments or any other

6 unchanged sentences

and annual management and reporting by us.

and Abuse Laws

Fraud and Abuse Laws

health care laws apply to the marketing of our products and when we or our customers submit claims for items or services that

30 unchanged sentences

privacy and security standards that govern the use and disclosure of protected electronic health information by “covered

entities”, which include healthcare providers, health plans and healthcare clearinghouses.

entities,”

which include healthcare providers, health plans and healthcare clearinghouses.

Because we provide our products

22 unchanged sentences

of June 30, 2020, we had 120 employees.

Twelve of our employees were respiratory therapists licensed by appropriate state professional

Thirteen of our employees were respiratory therapists licensed by appropriate state professional

organizations, including all the employees in our Patient Services Department.

We also retain approximately 250 respiratory therapists

and health care professionals on a non-exclusive independent contractor basis to provide training to our customers in the U.S.

We also had approximately 250 respiratory therapists

and health care professionals retained on a non-exclusive, independent contractor basis to provide training to our customers in

None of our employees are covered by a collective bargaining agreement.

We believe our relations with our employees are good.

We believe our relations with our employees are

Internet address is www.smartvest.com.

1 unchanged sentence

on Form 10-Q, Current Reports on Form 8-K, and, if applicable, amendments to those reports, as soon as reasonably practicable

after we electronically file these materials with, or furnish them to, the Securities and Exchange Commission.

Reports of beneficial

ownership filed by our directors and executive officers pursuant to Section 16(a) of the Exchange Act are also available on our

We are not including the information contained on our website as part of, or incorporating it by reference into, this

Annual Report on Form 10-K.

after we electronically file these materials with, or furnish them to, the SEC.

Reports of beneficial ownership filed by our directors

and executive officers pursuant to Section 16(a) of the Exchange Act are also available on our website.

We are not including the

information contained on our website as part of, or incorporating it by reference into, this Annual Report on Form 10-K.

also maintains an Internet site that contains our reports, proxy and information statements, and other information we file or

furnish with the SEC, available at www.sec.gov.

a smaller reporting company, we are not required to provide disclosure pursuant to this item.

1 unchanged sentence

a smaller reporting company, we are not required to provide disclosure pursuant to this item.

own our principal headquarters and manufacturing facilities, consisting of approximately 37,000 square feet, which are located

on an approximately 2.3-acre parcel in New Prague, Minnesota.

We believe that our facilities are satisfactory for our long-term

growth plans.

may be party to legal actions, proceedings, or claims in the ordinary course of business.

We are not aware of any actual or threatened

litigation that would have a material adverse effect on our financial condition or results of operations.

Safety Disclosures.

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 1. Business