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Item 1. Business

2021-03-05 compared with 2020-03-06 · 432 added, 973 removed, 109 unchanged (93% of the section changed)

IRADIMED CORPORATION (“IRADIMED”,

the “Company”, “we”, “us”, “our”) develops, manufactures, markets and distributes

Magnetic Resonance Imaging (“MRI”) compatible medical devices and accessories and services relating to them.

incorporated in Oklahoma in July 1992 and reincorporated in Delaware in April 2014.

MRidium 3860+ MRI Compatible IV Infusion

We are the only known provider of a non-magnetic

Intravenous (“IV”) infusion pump system that is specifically designed for safe use during MRI procedures.

first to develop an infusion delivery system that largely eliminates many of the dangers and problems present during MRI procedures.

Standard infusion pumps contain magnetic and electronic components which can create radio frequency (“RF”) interference

and are dangerous to operate in the presence of the powerful magnet that drives an MRI system.

Our patented MRidium®

MRI compatible

IV infusion pump system has been designed with a non-magnetic ultrasonic motor, uniquely designed non-ferrous parts and other special

features in order to safely and predictably deliver anesthesia and other IV fluids during various MRI procedures.

Our pump solution

provides a seamless approach that enables accurate, safe and dependable fluid delivery before, during and after an MRI scan, which

is important to critically-ill patients who cannot be removed from their vital medications, and children and infants who must generally

be sedated to remain immobile during an MRI scan.

IV infusion pump system consists of an MRidium®

MRI compatible IV infusion pump, non-magnetic mobile stand, proprietary

disposable IV tubing sets and many of these systems contain additional optional upgrade accessories.

IRadimed 3880 MRI Compatible Patient

Vital Signs Monitoring System

3880 MRI compatible patient vital signs monitoring system has been designed with non-magnetic components and other special

features to safely and accurately monitor a patient’s vital signs during various MRI procedures.

The IRADIMED 3880 system

operates dependably in magnetic fields up to 30,000 gauss, which means it can operate virtually anywhere in the MRI scanner room.

The IRADIMED 3880 has a compact, lightweight design allowing it to travel with the patient from their critical care unit, to the

MRI and back, resulting in increased patient safety through uninterrupted vital signs monitoring and decreasing the amount of time

critically ill patients are away from critical care units.

IRADIMED CORPORATION (“IRADIMED”, the “Company”, “we”, “us”, “our”) develops, manufactures, markets and distributes Magnetic Resonance Imaging (“MRI”) compatible medical devices and accessories and services relating to them.

We were incorporated in Oklahoma in July 1992 and reincorporated in Delaware in April 2014.

MRidium 3860+ MRI Compatible IV Infusion Pump System

We are the only known provider of a non-magnetic Intravenous (“IV”) infusion pump system that is specifically designed for safe use during MRI procedures.

We were the first to develop an infusion delivery system that largely eliminates many of the dangers and problems present during MRI procedures.

Standard infusion pumps contain magnetic and electronic components which can create radio frequency (“RF”) interference and are dangerous to operate in the presence of the powerful magnet that drives an MRI system.

Our patented MRidium® MRI compatible IV infusion pump system has been designed with a non-magnetic ultrasonic motor, uniquely designed non-ferrous parts and other special features to safely and predictably deliver anesthesia and other IV medications or fluids during various MRI procedures.

Our pump solution provides a seamless approach that enables accurate, safe and dependable fluid delivery before, during and after an MRI scan, which is important to critically-ill patients who cannot be removed from their vital or life sustaining medications, and children and infants who must generally be sedated to remain immobile during an MRI scan.

Each IV infusion pump system consists of an MRidium® MRI compatible IV infusion pump, non-magnetic mobile stand, proprietary disposable IV tubing sets and many of these systems contain additional optional upgrade accessories.

IRadimed 3880 MRI Compatible Patient Vital Signs Monitoring System

Our 3880 MRI compatible patient vital signs monitoring system has been designed with non-magnetic components and other special features to safely and accurately monitor a patient’s vital signs during various MRI procedures.

The IRADIMED 3880 system operates dependably in magnetic fields up to 30,000 gauss, which means it can operate virtually anywhere in the MRI scanner room.

The IRADIMED 3880 has a compact, lightweight design allowing it to travel with the patient from their critical care unit, to the MRI and back, resulting in increased patient safety through uninterrupted vital signs monitoring and decreasing the amount of time critically ill patients are away from critical care units.

The features of the IRADIMED 3880 include:

wireless ECG with dynamic

gradient filtering;

wireless SpO2 using Masimo®

wireless ECG with dynamic gradient filtering;

wireless SpO2 using Masimo® algorithms;

non-magnetic respiratory CO2;

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patient temperature, and;

optional advanced multi-gas anesthetic agent unit featuring continuous Minimum Alveolar Concentration

measurements.

The IRADIMED 3880 MRI compatible patient vital signs monitoring system has an easy-to-use design and allows for the

effective communication of patient vital signs information to clinicians.

Our 3880 MRI compatible patient vital signs monitoring

system received FDA 510(k) clearance in October 2017 and is currently available to all domestic and international customers.

With the expanding use of MRI procedures,

both traditional procedures and new intraoperative and interventional procedures, safe and reliable infusion delivery and patient

monitoring in an MRI environment is becoming increasingly important to hospitals and other medical providers.

Our founder, Chief

Technology Officer and Chairman of the Board of Directors, Roger Susi, is a pioneer in the MRI compatible medical device industry,

having invented the first MRI compatible patient monitoring system in 1986 and the first non-magnetic MRI compatible IV infusion

system in 2004.

We sell our products primarily to hospitals

and acute care facilities, both in the United States and internationally.

We currently employ a direct sales strategy in the United

States and as of December 31, 2019, our direct sales force consisted of 29 field sales representatives, supported by 4 regional

sales directors and supplemented by 6 clinical support representatives.

Internationally, we market our products into approximately

50 countries through the use of independent distributors.

As of December 31, 2019, we have sold

approximately 5,515 MRI compatible IV infusion pump systems globally.

In December 2016, we began shipping our 3880 Monitor

in small quantities to certain of our international customers.

In October 2017, we received FDA 510(k) clearance for

our 3880 Monitor and immediately began our selling efforts in the United States.

As of December 31, 2019, we have sold approximately

539 of our 3880 MRI compatible patient vital signs monitoring systems.

generate revenue from the sale of MRI compatible medical devices and accessories, extended warranty agreements, services related

to maintaining our products and the sale of disposable products used with our devices.

In fiscal year 2019, our revenue

was $38.5 million and our income from operations profit was $8.6 million representing an operating profit margin of 22.5 percent.

Refer to the information contained under the caption “Financial Highlights and Outlook”

regarding our outlook for 2020.

optional advanced multi-gas anesthetic agent unit featuring continuous Minimum Alveolar Concentration measurements.

The IRADIMED 3880 MRI compatible patient vital signs monitoring system has an easy-to-use design and allows for the effective communication of patient vital signs information to clinicians.

With the expanding use of MRI procedures, both traditional procedures, and intraoperative and interventional procedures, safe and reliable infusion delivery and patient monitoring in an MRI environment is becoming increasingly important to hospitals and other medical providers.

Our founder, President,Chief Executive Officer, and Chairman of the Board of Directors, Roger Susi, is a pioneer in the MRI compatible medical device industry, having invented the first MRI compatible patient monitoring system in 1986 and the first non-magnetic MRI compatible IV infusion system in 2004.

We sell our products primarily to hospitals and acute care facilities, both in the United States and internationally.

We currently employ a direct sales strategy in the United States and as of December 31, 2020, our direct sales force consisted of 22 field sales representatives, supported by 4 regional sales directors and supplemented by 5 clinical application specialists.

Internationally, we market our products into approximately 77 countries through the use of independent distributors.

As of December 31, 2020, we have sold approximately 5,794 MRI compatible IV infusion pump systems and approximately 794 of our 3880 MRI compatible patient vital signs monitoring systems.

We generate revenue from the sale of MRI compatible medical devices and accessories, extended warranty agreements, services related to maintaining our products and the sale of disposable products used with our devices.

In fiscal year 2020, our revenue was $31.7 million and our loss from operations was $(0.8) million representing an operating profit margin of (2.4) percent.

Refer to the information contained under the caption “Financial Highlights and Outlook” regarding our outlook for 2021.

Our internet website is www.iradimed.com.

We make available on the Investors section of our website, free of charge, our Annual Reports on Form 10-K, Quarterly Reports

on Form 10-Q, Current Reports on Form 8-K and Proxy Statements, and amendments to those reports, as soon as reasonably

practicable after filing such documents with, or furnishing such documents to, the SEC.

We include our website address throughout

this filing for reference only.

We make available on the Investors section of our website, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and Proxy Statements, and amendments to those reports, as soon as reasonably practicable after filing such documents with, or furnishing such documents to, the SEC.

We include our website address throughout this filing for reference only.

The information contained on our website is not incorporated by reference to this report.

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in 1979 where he developed the first MRI compatible patient monitoring system.

Susi served as the President of Invivo

Research Inc.

Susi served as the President of Invivo Research Inc.

from 1979 until 1998, and as its Chairman of the Board of Directors from 1998 until 2000.

leadership, Invivo Research matured from a start-up medical device company into a leading producer of vital signs monitoring

devices used during MRI procedures.

Invivo Research was acquired by Invivo Corporation in 1992, which began trading on the Nasdaq

Stock Exchange in 1994.

Susi served as a Director of Invivo Corporation from 1998 until 2000 and oversaw technical areas

from 2000 to 2004.

Invivo Corporation was acquired by Intermagnetics General Corporation in 2004, which was later acquired by Koninklijke

Philips NV (NYSE:

Susi began exploring the market

for an MRI compatible IV infusion pump while at Invivo.

Invivo subsequently disclaimed any interest in the infusion pump and acknowledged

Susi’s leadership, Invivo Research matured from a start-up medical device company into a leading producer of vital signs monitoring devices used during MRI procedures.

Invivo Research was acquired by Invivo Corporation in 1992, which began trading on the Nasdaq Stock Exchange in 1994.

Susi served as a Director of Invivo Corporation from 1998 until 2000 and oversaw technical areas from 2000 to 2004.

Invivo Corporation was acquired by Intermagnetics General Corporation in 2004, which was later acquired by Koninklijke Philips NV (NYSE:

Susi began exploring the market for an MRI compatible IV infusion pump while at Invivo.

Invivo subsequently disclaimed any interest in the infusion pump and acknowledged that Mr.

Susi was free to pursue the infusion pump development for his own account.

Accordingly, Mr.

Susi began the formal

and detailed development of what subsequently has become our MRidium MRI compatible IV infusion pump system.

This first-generation

MRI compatible IV infusion pump system and its associated proprietary IV tubing sets obtained FDA 510(k) clearance in March 2005

after which we began our sales and marketing efforts.

We commenced international sales through

a network of distributors and in 2006, we signed an exclusive distribution agreement with Mallinckrodt/Tyco Healthcare (now part

of Medtronic plc (NYSE:

MDT)) for domestic and Canadian distribution of our products including the MRidium 3850 MRI compatible

IV infusion pump system (the predecessor to our current 3860+ model).

The exclusive arrangement ended in 2010, allowing us to implement

a direct marketing strategy with our own sales force in the U.S.

In 2009, we introduced our second-generation

MRI compatible IV infusion pump system, the MRidium 3860+ which improved upon the previous 3850 version in a number of areas, including

the addition of blood oxygen saturation monitoring (“SpO2”), and remote wireless monitoring capability.

An SpO2 monitor

can signal when an insufficient level of oxygen is being supplied to the body.

Our MRidium 3860+ is the only MRI compatible IV

infusion pump system on the market today.

In 2014, we began developing our own MRI

compatible patient vital signs monitoring system (“3880 Monitor”).

Through the use of current and new technologies,

and our trade secrets, we believe our 3880 Monitor improves on the design of other MRI compatible vital signs monitors.

Monitor is compact and lightweight, overcoming many of the workflow issues created by other larger and heavier MRI compatible monitors

currently in the market.

Susi began the formal and detailed development of what subsequently has become our MRidium MRI compatible IV infusion pump system.

This first-generation MRI compatible IV infusion pump system and its associated proprietary IV tubing sets obtained FDA 510(k) clearance in March 2005 after which we began our sales and marketing efforts.

We commenced international sales through a network of distributors and in 2006, we signed an exclusive distribution agreement with Mallinckrodt/Tyco Healthcare (now part of Medtronic plc (NYSE:

MDT)) for domestic and Canadian distribution of our products including the MRidium 3850 MRI compatible IV infusion pump system (the predecessor to our current 3860+ model).

The exclusive arrangement ended in 2010, allowing us to implement a direct marketing strategy with our own sales force in the U.S.

In 2009, we introduced our second-generation MRI compatible IV infusion pump system, the MRidium 3860+ which improved upon the previous 3850 version in a number of areas, including the addition of blood oxygen saturation monitoring (“SpO2”), and remote wireless monitoring capability.

An SpO2 monitor can signal when an insufficient level of oxygen is being supplied to the body.

Our MRidium 3860+ is the only MRI compatible IV infusion pump system on the market today.

In 2014, we began developing our own MRI compatible patient vital signs monitoring system (“3880 Monitor”).

Through the use of current and new technologies, and our trade secrets, we believe our 3880 Monitor improves on the design of other MRI compatible vital signs monitors.

Our 3880 Monitor is compact and lightweight, overcoming many of the workflow issues created by other larger and heavier MRI compatible monitors currently in the market.

In December 2016, we made our first shipments of the 3880 Monitor to international customers.

October 2017, we received FDA 510(k) clearance for our 3880 Monitor and immediately began our direct selling efforts

in the United States.

We currently compete in the MRI compatible medical

device market.

Need for MRI Compatible IV Infusion Pumps and

Vital Signs Monitors

MRI is a widely used, non-invasive medical

imaging technique to visualize vital organs, bodily function and to identify blockages, abnormalities and growths.

MRI is generally

considered safer than other scanning techniques that expose the body to radiation.

In October 2017, we received FDA 510(k) clearance for our 3880 Monitor and immediately began our direct selling efforts in the United States.

We currently compete in the MRI compatible medical device market.

Need for MRI Compatible IV Infusion Pumps and Vital Signs Monitors

MRI is a widely used, non-invasive medical imaging technique to visualize vital organs, bodily function and to identify blockages, abnormalities and growths.

MRI is generally considered safer than other scanning techniques that expose the body to radiation.

This is particularly true for children.

practitioners at hospitals and other medical facilities have been increasingly developing and using MRI for new procedures.

procedures include cardiac stress testing, intraoperative MRI and neurology MRI techniques.

Our MRI compatible products offer a

way to continuously deliver essential IV fluids safely and accurately while also monitoring the vital signs of critically ill or

sedated patients, thereby allowing the expanded use of MRI procedures, better or quicker diagnoses and treatments that may lead

to shorter hospital stays resulting in lower health care costs.

While the benefits and uses of interventional

magnetic resonance (“MR”) are known, there are hazards intrinsic to the MR environment which must be respected.

hazards may be attributed to a powerful static magnetic field, pulsed gradient magnetic fields, and pulsed radio frequency fields.

The MRI suite is a harsh place for medical devices, and safe and proper patient care requires specialty equipment that is specifically

designed and built for the MR environment.

Many of the dangers and problems present in the MR environment can be solved through

use of non-magnetic equipment that have operational safeguards and that maintain performance standards within a harsh magnetic

environment while simultaneously maintaining patient safety.

Designing MRI compatible medical devices that operate safely and effectively

in the MR environment requires overcoming significant technical hurdles.

Intravenous fluids and vital signs monitoring

are needed during MRI procedures for many different reasons.

Infusion pumps provide sedation to patients who are not able to remain

immobile during an MRI scan and a continuous flow of critical medications to seriously ill patients, including those from critical

care departments.

Given the benefits to patient safety, radiology departments performing the scan, anesthesia departments delivering

sedation and critical care specialists responsible for delivering critical medications during MRI procedures often initiate requests

for an MRI compatible IV infusion pump.

Additionally, the Joint Commission on Accreditation of Healthcare Organizations requires

monitoring of a patient’s vital signs while under sedation.

Further, vital signs monitoring is also required when the patient’s

condition prevents them from alerting clinicians when experiencing pain, respiratory problems, cardiac distress or other difficulties

that may arise during an MRI scan.

Standard Infusion Pumps and Other Inadequate

For those medical facilities that do not

currently own an MRI compatible IV infusion pump, there are five general methods that are used to deal with patients undergoing

an MRI who require IV medications during their imaging procedure:

(1) do not offer MRI treatment to patients requiring IV

delivered medications or sedation;

(2) use standard (magnetic) pumps with long IV lines that extend outside the MRI scanner

As such, practitioners at hospitals and other medical facilities have been increasingly developing and using MRI for new procedures.

These procedures include cardiac stress testing, intraoperative MRI and neurology MRI techniques.

Our MRI compatible products offer a way to continuously deliver essential IV fluids safely and accurately while also monitoring the vital signs of critically ill or sedated patients, thereby allowing the expanded use of MRI procedures, better or quicker diagnoses and treatments that may lead to shorter hospital stays resulting in lower health care costs.

While the benefits and uses of interventional magnetic resonance (“MR”) are known, there are hazards intrinsic to the MR environment which must be respected.

These hazards may be attributed to a powerful static magnetic field, pulsed gradient magnetic fields, and pulsed radio frequency fields.

The MRI suite is a harsh place for medical devices, and safe and proper patient care requires specialty equipment that is specifically designed and built for the MR environment.

Many of the dangers and problems present in the MR environment can be solved through use of non-magnetic equipment that have operational safeguards and that maintain performance standards within a harsh magnetic environment while simultaneously maintaining patient safety.

Designing MRI compatible medical devices that operate safely and effectively in the MR environment requires overcoming significant technical hurdles.

Intravenous fluids and vital signs monitoring are needed during MRI procedures for many different reasons.

Infusion pumps provide sedation to patients who are not able to remain immobile during an MRI scan and a continuous flow of critical medications to seriously ill patients, including those from critical care departments.

Given the benefits to patient safety, radiology departments performing the scan, anesthesia departments delivering sedation and critical care specialists responsible for delivering critical medications during MRI procedures often initiate requests for an MRI compatible IV infusion pump.

Additionally, the Joint Commission on Accreditation of Healthcare Organizations requires monitoring of a patient’s vital signs while under sedation.

Further, vital signs monitoring is also required when the patient’s condition prevents them from alerting clinicians when experiencing pain, respiratory problems, cardiac distress or other difficulties that may arise during an MRI scan.

Standard Infusion Pumps and Other Inadequate Alternatives

For those medical facilities that do not currently own an MRI compatible IV infusion pump, there are five general methods that are used to deal with patients undergoing an MRI who require IV medications during their imaging procedure:

(1) do not offer MRI treatment to patients requiring IV delivered medications or sedation;

(2) use standard (magnetic) pumps with long IV lines that extend outside the MRI scanner room;

(3) proceed and accept patients for an MRI procedure but stop the flow of IV fluids during the procedure;

the gravity controlled free drip of IV fluids;

(4) allow the gravity controlled free drip of IV fluids;

and (5) attempt to shield a conventional IV infusion pump.

All of these approaches

have drawbacks, introduce safety risks and may result in deficient patient care.

Use of multiple lengths of extension tubing

can cause infusion inaccuracies, unnecessary waste of costly medications and false alarms or, more seriously, delayed alarms for

equipment issues such as occlusion, especially when low flow rates are being used.

Such makeshift extension sets can also affect

the effectiveness of fluid delivery.

A clinician’s adjustment of dosage and other settings may take longer to reach the patient

due to the over-extended tubing.

Further, there are risks in using a standard

IV infusion pump that is mistakenly believed to be at a safe distance from the MR scanner.

The powerful magnetic fields may cause

metal objects in the MR environment to be drawn with great force into the bore of the MRI system, resulting in potentially deadly

Moreover, an MRI scanner’s gradient magnetic field and RF fields can send electrical currents through cables

and other conductive materials that are near the MRI system and cause the cables to heat, which may result in burns if they come

into contact with the patient or facility staff.

Other problems include devices malfunctioning

if they are not properly designed for use in the harsh MR environment and low-quality MR images due to artifacts caused by RF interference

emitted from ancillary equipment.

To deal with the harsh environment of MR,

some manufacturers have offered a “shielded box”

solution (also known as a Faraday cage) for use with their standard

IV pumps, but the approach has not been widely accepted by customers.

The major problem with this approach is that a highly magnetic

standard IV infusion pump is still being introduced into a hazardous MRI environment which can lead to projectile accidents.

Additionally,

placing a highly magnetic standard IV infusion pump inside a shielded box hinders an operator’s ability to determine the

pump’s status and creates inefficiencies when addressing an alarm or revising a pump’s flow rate.

Moreover, a Faraday

cage with a standard IV infusion pump must be kept approximately 5 to 10 feet from the scanner, which may result in the use of

long IV lines.

By contrast, our MRI compatible IV infusion pump system can be safely placed anywhere in the scanner room including

next to the scanner.

We are not aware of any “shielded box”

installations in use in the U.S.

or any with a FDA 510(k) clearance

and hence, we expect little current competition from this approach in the U.S.

We believe that our MRidium MRI compatible

IV infusion pump system is the first and only product to provide an easy-to-operate, non-magnetic, safe and RF-quiet solution and

hence a truly MRI compatible product.

All of these approaches have drawbacks, introduce safety risks and may result in deficient patient care.

Use of multiple lengths of extension tubing can cause infusion inaccuracies, unnecessary waste of costly medications and false alarms or, more seriously, delayed alarms for equipment issues such as occlusion, especially when low flow rates are being used.

Such makeshift extension sets can also affect the effectiveness of fluid delivery.

A clinician’s adjustment of dosage and other settings may take longer to reach the patient due to the over-extended tubing.

Further, there are risks in using a standard IV infusion pump that is mistakenly believed to be at a safe distance from the MR scanner.

The powerful magnetic fields may cause metal objects in the MR environment to be drawn with great force into the bore of the MRI system, resulting in potentially deadly projectiles.

Moreover, an MRI scanner’s gradient magnetic field and RF fields can send electrical currents through cables and other conductive materials that are near the MRI system and cause the cables to heat, which may result in burns if they come into contact with the patient or facility staff.

Other problems include devices malfunctioning if they are not properly designed for use in the harsh MR environment and low-quality MR images due to artifacts caused by RF interference emitted from ancillary equipment.

To deal with the harsh environment of MR, some manufacturers have offered a “shielded box” solution (also known as a Faraday cage) for use with their standard IV pumps, but the approach has not been widely accepted by customers.

The major problem with this approach is that a highly magnetic standard IV infusion pump is still being introduced into a hazardous MRI environment which can lead to projectile accidents.

Additionally, placing a highly

magnetic standard IV infusion pump inside a shielded box hinders an operator’s ability to determine the pump’s status and creates inefficiencies when addressing an alarm or revising a pump’s flow rate.

Moreover, a Faraday cage with a standard IV infusion pump must be kept approximately 5 to 10 feet from the scanner, which may result in the use of long IV lines.

By contrast, our MRI compatible IV infusion pump system can be safely placed anywhere in the scanner room including next to the scanner.

We are not aware of any “shielded box” installations in use in the U.S.

We believe that our MRidium MRI compatible IV infusion pump system is the first and only product to provide an easy-to-operate, non-magnetic, safe and RF-quiet solution and hence a truly MRI compatible product.

Market Opportunities

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MRI Compatible IV Infusion Pump

We view our MRI compatible IV infusion pump

primarily as a patient safety device.

Accordingly, we do not actively market our IV infusion pump system in countries that we believe

do not have a minimum level of patient safety standards to warrant a device like ours.

We estimate there is the potential for the

sale of approximately 27,400 MRI compatible IV infusion pump systems based on the number of MRI scanners installed globally in

acute care facilities of sufficient sophistication as to be considered supporting favorable market conditions for utilization of

our MRI compatible IV infusion pump system.

Additionally, based on historical sales data and customer purchasing behaviors, we

believe, through the use of our direct U.S.

sales team, there is potential for sales of our MRI compatible IV infusion pump system

within critical care departments of U.S.

hospitals (refer to the section below titled Expansion of Intra-Hospital Use of MRI

Compatible Devices ).

Based on an estimate of the number of critical care departments in the U.S., we believe there is the potential

for the sale of an additional 10,450 of our MRI compatible IV infusion pump systems.

The combination of sales based on the number

of targeted MRI scanners and critical care departments of U.S.

hospitals results in a current global target market of approximately

37,850 of our MRI compatible IV infusion pump systems.

We view our MRI compatible IV infusion pump primarily as a patient safety device.

Accordingly, we do not actively market our IV infusion pump system in countries that we believe do not have a minimum level of patient safety standards to warrant a device like ours.

We estimate there is the potential for the sale of approximately 27,350 MRI compatible IV infusion pump systems based on the number of MRI scanners installed globally in acute care facilities of sufficient sophistication as to be considered supporting favorable market conditions for utilization of our MRI compatible IV infusion pump system.

Additionally, based on historical sales data and customer purchasing behaviors, we believe, through the use of our direct U.S.

sales team, there is potential for sales of our MRI compatible IV infusion pump system within critical care departments of U.S.

hospitals (refer to the section below titled Expansion of Intra-Hospital Use of MRI Compatible Devices ).

Based on an estimate of the number of critical care departments in the U.S., we believe there is the potential for the sale of an additional 10,450 of our MRI compatible IV infusion pump systems.

The combination of sales based on the number of targeted MRI scanners and critical care departments of U.S.

hospitals results in a current global target market of approximately 37,800 of our MRI compatible IV infusion pump systems.

MRI Compatible Patient Vital Signs Monitor

market for MRI compatible multi-parameter vital signs monitors is well-developed and more subject to replacement cycles than new

As with our MRI compatible IV infusion pump, we also consider our MRI compatible multi-parameter vital signs

monitor primarily as a patient safety device.

Accordingly, we do not actively market our MRI vital signs monitor in countries that

we believe do not have a minimum level of patient safety standards to warrant a device like ours.

We estimate there is the potential

for the sale of approximately 27,400 MRI vital signs monitoring systems based on the number of MRI scanners installed globally

in acute care facilities of sufficient sophistication as to be considered supporting favorable market conditions for utilization

of our MRI vital signs monitoring system.

Additionally, based on historical sales data and customer purchasing behaviors, we believe,

through the use of our direct U.S.

sales team, there is potential for sales of our MRI vital signs monitoring system within critical

care departments of U.S.

The market for MRI compatible multi-parameter vital signs monitors is well-developed and more subject to replacement cycles than new adoptions.

As with our MRI compatible IV infusion pump, we also consider our MRI compatible multi-parameter vital signs monitor primarily as a patient safety device.

Accordingly, we do not actively market our MRI vital signs monitor in countries that we believe do not have a minimum level of patient safety standards to warrant a device like ours.

We estimate there is the potential for the sale of approximately 27,350 MRI vital signs monitoring systems based on the number of MRI scanners installed globally in acute care facilities of sufficient sophistication as to be considered supporting favorable market conditions for utilization of our MRI vital signs monitoring system.

Additionally, based on historical sales data and customer purchasing behaviors, we believe, through the use of our direct U.S.

sales team, there is potential for sales of our MRI vital signs monitoring system within critical care departments of U.S.

hospitals (refer to the section below titled Expansion of Intra-Hospital Use of MRI Compatible Devices ).

Based on an estimate the number of critical care departments in the U.S.

and an estimate of the anticipated adoption rate in these

critical care departments, we believe there is potential for the sale of an additional 5,250 of our MRI vital signs monitoring

and an estimate of the anticipated adoption rate in these critical care departments, we believe there is potential for the sale of an additional 5,250 of our MRI vital signs monitoring systems.

The combination of sales based on the number of targeted MRI scanners and critical care departments of U.S.

results in a current global target market of approximately 32,650 of our MRI patient vital signs monitoring systems.

Expansion of Intra-Hospital Use of MRI Compatible

Historically, we marketed our MRI compatible

IV infusion pump system primarily to the MRI departments of U.S.

We believe, however, based on feedback and successes

from certain customers, that there is potential for expanded deployment of our MRI compatible IV infusion pumps and MRI compatible

monitors within the Intensive Care Unit (“ICU”), Emergency Room (“ER”), and other critical care departments

hospitals results in a current global target market of approximately 32,600 of our MRI patient vital signs monitoring systems.

Expansion of Intra-Hospital Use of MRI Compatible Devices

Historically, we marketed our MRI compatible devices primarily to the MRI departments of U.S.

We believe, however, based on feedback and historical successes selling our devices, that there is potential for expanded deployment of our MRI compatible IV infusion pumps and MRI compatible monitors within the Intensive Care Unit (“ICU”), Emergency Room (“ER”), and other critical care departments within U.S.

hospitals where there is a high probability that MRI procedures will need to be performed on these patients.

use of our MRI compatible medical devices would serve as a type of transport package and allow for consistent and uninterrupted

administration of IV fluids and monitoring of vital signs, allowing for easier and safer intra-hospital transport of patients to

and from the MRI scanner.

It is often necessary for a patient in a

critical care department of the hospital who is connected to a standard vital signs monitor and a standard IV infusion pump that

is delivering critical medications to be quickly moved to the MRI facility for immediate imaging.

The presence of our MRI compatible

medical devices in those critical care departments enables the orderly and rapid transfer between those standard medical devices

to our 3880 Monitor and MRidium MRI compatible IV infusion pump in the critical care department prior to transporting the patient

Seriously ill patients are generally at higher risk when they are away from the resources of critical care departments,

and efficient transfers to MRI compatible devices while the patient is in the critical care environment minimizes the time the

patient spends away from the critical care department.

We believe there is a higher occurrence

of equipment-related adverse events during the intra-hospital transport of critically ill patients.

We therefore believe that placing

our MRI compatible devices in critical care departments could reduce patient adverse events associated with vital signs monitors

and IV pump transfers typically performed within MRI departments.

Some hospitals have begun to use MRI during

surgical procedures.

Neurosurgical interventions have been at the forefront of this development in image-guided surgery, followed

by otolaryngological procedures.

As MR-guided intervention during surgery has been deployed, the degree of complexity in supplemental

devices has increased markedly.

Much of the effort required for successful implementation of intraoperative MRI has been in development

and testing of anesthesia equipment, patient monitoring devices, infusion pumps and surgical instruments and accessories, all of

which need to be MRI compatible if used near the MRI scanner.

Intraoperative MRI is expanding demand for our MRI compatible devices

from the MRI suite to the surgical suite of the hospital.

Expanded use of our MRI compatible medical devices would serve as a type of transport package and allow for consistent and uninterrupted administration of IV fluids and monitoring of vital signs, allowing for easier and safer intra-hospital transport of patients to and from the MRI scanner.

It is often necessary for a patient in a critical care department of the hospital who is connected to a standard vital signs monitor and a standard IV infusion pump that is delivering critical medications to be quickly moved to the MRI facility for immediate imaging.

The presence of our MRI compatible medical devices in those critical care departments enables the orderly and rapid transfer between those standard medical devices to our 3880 Monitor and MRidium MRI compatible IV infusion pump in the critical care department prior to transporting the patient for an MRI.

Seriously ill patients are generally at higher risk when they are away from the resources of critical care departments, and efficient transfers to MRI compatible devices while the patient is in the critical care environment minimizes the time the patient spends away from the critical care department.

We believe there is a higher occurrence of equipment-related adverse events during the intra-hospital transport of critically ill patients.

We therefore believe that placing our MRI compatible devices in critical care departments could reduce patient adverse events associated with vital signs monitors and IV pump transfers typically performed within MRI departments.

Some hospitals use MRI during surgical procedures.

Neurosurgical interventions have been at the forefront of this development in image-guided surgery, followed by otolaryngological procedures.

As MR-guided intervention during surgery has been deployed, the degree of complexity in supplemental devices has increased markedly.

Much of the effort required for successful implementation of intraoperative MRI has been in development and testing of anesthesia equipment, patient monitoring devices, infusion pumps and surgical instruments and accessories, all of which need to be MRI compatible if used near the MRI scanner.

Intraoperative MRI is expanding demand for our MRI compatible devices from the MRI suite to the surgical suite of the hospital.

Company Objective

Our objective is to become the leader in

providing safe and effective care for all patients undergoing MRI procedures through the development and commercialization of a

portfolio of MRI compatible products, accessories and related services.

By increasing the safety parameters of equipment operating

within the harsh magnetic environment of the MRI scanner room, we hope to enable hospitals and other healthcare providers to offer

the MRI diagnostic procedures patients require.

We believe our current products increase the safety of performing MRI diagnostics

for patients by minimizing potential complications with IV infusions and vital signs monitoring.

We seek to grow our business by, among other

Driving market awareness of our MRI compatible

IV infusion pump and the safety risks associated with using conventional IV pumps with long IV lines

We believe that the largest potential market

for our MRI compatible IV infusion pumps is the segment of the market that is currently using workaround solutions.

Such solutions

include using conventional pumps outside the MRI scanner room and attaching multiple extension lines of IV tubing sets through

the wall or under the door into the MRI scanner room to reach the patient.

This practice of makeshift setups is fraught with risks

to the patient and unnecessary costs and inefficiencies.

Our objective is to become the leader in providing safe and effective care for all patients undergoing MRI procedures through the development and commercialization of a portfolio of MRI compatible products, accessories and related services.

By increasing the safety parameters of equipment operating within the harsh magnetic environment of the MRI scanner room, we hope to enable hospitals and other healthcare providers to offer the MRI diagnostic procedures patients require.

We believe our current products increase the safety of performing MRI diagnostics for patients by minimizing potential complications with IV infusions and vital signs monitoring.

We seek to grow our business by, among other things:

Driving market awareness of our MRI compatible IV infusion pump and the safety risks associated with using conventional IV pumps with long IV lines

We believe that the largest potential market for our MRI compatible IV infusion pumps is the segment of the market that is currently using workaround solutions.

Such solutions include using conventional pumps outside the MRI scanner room and attaching multiple extension lines of IV tubing sets through the wall or under the door into the MRI scanner room to reach the patient.

This practice of makeshift setups is fraught with risks to the patient and unnecessary costs and inefficiencies.

These risks and inefficiencies include:

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● Risk of inaccuracy from using a conventional IV infusion pump with multiple extension lines;

Potential medication occlusion and lengthy alarm notification delays due to multiple extension lines, posing great risks to

patients on critical medications;

Excess medication costs due to the disposal of multiple extension IV tubing sets filled with unused medication at the end of

the procedure;

● Potential medication occlusion and lengthy alarm notification delays due to multiple extension lines, posing great risks to patients on critical medications;

● Excess medication costs due to the disposal of multiple extension IV tubing sets filled with unused medication at the end of the procedure;

● Lost productivity and MRI scanning time due to the lengthy set up time required for multiple extension lines.

We believe that increased market awareness

and education will be required for potential customers to appreciate the value for patients and the hospital of an efficient and

patient-safe MRI environment which includes MRI compatible IV infusion pumps.

Driving market awareness of our MRI compatible

patient vital signs monitoring system

believe our 3880 MRI compatible patient vital signs monitoring system creates customer value by resolving significant workflow

issues through the additional utilization that is not possible with other MRI monitors.

Our 3880 Monitor’s compact and lightweight

design facilitates the transportation of patients from their critical care unit, to the MRI and back, resulting in increased patient

safety through uninterrupted vital signs monitoring and decreasing the amount of time critically ill patients are away from critical

Because of the transport capabilities that only our 3880 Monitor offers, we believe multiple departments within a hospital

will be interested in purchasing our device.

Other MRI monitors are too large and heavy for use in patient transport scenarios

are therefore typically only located in the MRI departments of hospitals.

We began marketing our 3880 Monitor internationally in

December 2016 and received U.S.

FDA 510(k) clearance in October 2017.

Upon receipt of FDA 510(k) clearance,

we immediately began marketing the 3880 Monitor to domestic customers.

Continuing to innovate with MRI compatible patient

care products

Our management team collectively has more

than 100 years of experience developing and commercializing MRI compatible products.

We have entrenched relationships with several

of the industry’s top thought leaders and we have, and will continue to, closely collaborate with them to build upon IRADIMED’s

innovative MRI compatible technologies.

We intend to leverage this experience and collaboration to innovate and commercialize other

technologically advanced MRI compatible patient care products.

When reasonably available, acquiring synergistic

MRI patient care companies, products or technology licenses to accelerate our product development and leverage our existing sales

We have an experienced team of engineering

and operations managers committed to improving on existing MRI patient care designs through our internal development efforts and

the acquisition of technologies and intellectual property of others.

We have a developing direct sales organization in the U.S.

and a team of experienced international distributors that we believe can effectively go to market with additional MRI compatible

patient care products.

While we have not completed an acquisition, we continue to analyze such opportunities to improve our product

mix and profitability.

We believe that increased market awareness and education will be required for potential customers to appreciate the value for patients and the hospital of an efficient and patient-safe MRI environment which includes MRI compatible IV infusion pumps.

Driving market awareness of our MRI compatible patient vital signs monitoring system

We believe our 3880 MRI compatible patient vital signs monitoring system creates customer value by resolving significant workflow issues through the additional utilization achievable with our MRI monitor that is not possible with other MRI monitors.

Our 3880 Monitor’s compact and lightweight design facilitates the transportation of patients from their critical care unit, to the MRI and back, resulting in increased patient safety through uninterrupted vital signs monitoring and decreasing the amount of time critically ill patients are away from critical care units.

Because of the transport capabilities that only our 3880 Monitor offers, we believe multiple departments within a hospital will be interested in purchasing our device.

Other MRI monitors are too large and heavy for use in patient transport scenarios are therefore typically only located in the MRI departments of hospitals.

Continuing to innovate with MRI compatible patient care products

Our management team has a significant amount of experience developing and commercializing MRI compatible products.

We have entrenched relationships with several of the industry’s top thought leaders and we have, and will continue to, closely collaborate with them to build upon IRADIMED’s innovative MRI compatible technologies.

We intend to leverage this experience and collaboration to innovate and commercialize other technologically advanced MRI compatible patient care products.

When reasonably available, acquiring synergistic MRI patient care companies, products or technology licenses to accelerate our product development and leverage our existing sales organization

We have an experienced team of engineering and operations managers committed to improving on existing MRI patient care designs through our internal development efforts and the possible acquisition of technologies and intellectual property of others.

We have a direct sales organization in the U.S.

and a team of experienced international distributors that we believe can effectively go to market with additional MRI compatible patient care products.

While we have not completed an acquisition, we continue to analyze such opportunities to improve our product mix and profitability.

Commercial Strategy

We believe that the MRI compatible IV infusion

pump market continues to have growth potential given the low rate of market penetration, and we aim to drive increased awareness,

adoption and utilization of our MRI compatible products by:

We believe that the MRI compatible IV infusion pump market continues to have growth potential given the low rate of market penetration, and we aim to drive increased awareness, adoption and utilization of our MRI compatible products by:

Continued development of our MRI-focused U.S.

sales force and our international sales efforts

We believe the most meaningful aspect of

our commercialization strategy in the U.S.

is the continued development of our direct sales force.

Since there is no current direct

competitor for an MRI compatible IV infusion pump, our focus is on expanding the market through better education on the advantages

to patients, clinicians and hospitals of our infusion pump solution and the shortcomings of current workaround practices.

Additionally,

with the launch of our 3880 Monitor, we focus on educating customers on the total workflow benefits our devices offer and how our

devices increase patient safety through their combined transport capabilities.

Since 2011, our U.S.

sales team has grown

from 1 field sales representative and 1 clinical support representative to a team of 29 direct field sales representatives, 4 regional

sales directors and 6 clinical support representatives.

As business progress dictates, we intend to continue to add to our specialized,

MRI product-focused sales team, including clinical support representatives.

We believe that we can significantly increase sales

of our MRI compatible medical devices by also calling on critical care departments, which may help influence hospitals’

We believe that this strategy is likely expanding the number of acute care facilities using our MRI compatible products

and increasing the average number of MRI compatible IV infusion pumps and monitors per MRI scanner.

Internationally, our focus is to continue

working with our distributors in key target markets, such as Europe and Asia, to expand the business and augment our market penetration

During 2020, and as business progress dictates, we plan to continue the expansion of our internal capacity to serve high

potential markets by adding dedicated resources located outside the U.S.

direct sales force and our international sales efforts

We believe the most meaningful aspect of our commercialization strategy in the U.S.

is the continued development of the market through driving awareness and education by our direct sales force.

Since there is no current direct competitor for an MRI compatible IV infusion pump, our focus is on expanding the market through better education on the advantages to patients, clinicians and hospitals of our infusion pump solution and the shortcomings of current workaround practices.

Additionally, with our 3880 Monitor, we focus on educating customers on the total workflow benefits our devices offer and how our devices increase patient safety through their combined transport capabilities.

As business progress dictates, we intend to add to our specialized, MRI product-focused direct sales team, including our supporting clinical application specialists.We believe that we can significantly increase sales of our MRI compatible medical devices by continuing to call on critical care departments, which may help influence hospitals’ purchasing decisions.

We believe that this strategy is likely expanding the number of acute care facilities using our MRI compatible products and increasing the average number of MRI compatible IV infusion pumps and monitors per MRI scanner.

Internationally, our focus is to continue working with our distributors in key target markets, such as Europe and Asia, to expand the business and augment our market penetration rates.

As business progress dictates, we plan to expand our internal capacity to serve high potential markets by adding dedicated resources located outside the U.S.

to oversee our relationships at the local level.

Supporting commercial efforts with evidence-based

We focus our sales team on educating customers

on the safety and efficiency benefits of using our MRI compatible products.

To assist in the education process, we have developed

materials that document the risks and additional costs associated with using a workaround solution of running long lines from conventional

IV pumps outside the MRI scanner room.

We are also continuing the development of and enhancing our materials documenting the benefits

of uninterrupted vital signs monitoring that allows for easy transfer of critically ill patients from ICU or ER to the MRI scanner

room and back.

We believe this kind of evidence-based documentation will help us provide widespread education to the clinicians

that are driving clinical practice.

We also believe that documented evidence will serve to inform the quality and risk management

leaders in these organizations, which in turn may help drive the overall adoption of our MRI compatible products.

Providing best in class customer service

and user experience

We believe that the expectations of our

customers for service and a superior user experience have risen with the advancement of technology.

Once a customer purchases our

products, it is imperative that they receive first-class clinical education and support to encourage usage of our products.

devote a significant amount of time and training to ensure that this educational experience is a success.

This training is performed

most commonly by our sales staff and is augmented by our clinical support representatives;

however, we intend to hire more clinical

support specialists to strengthen our initial training experience and increase ongoing customer support.

We believe that a positive

user experience is critical to driving increased rates of utilization of our products.

Supporting commercial efforts with evidence-based information

We focus our sales team on educating customers on the safety and efficiency benefits of using our MRI compatible products.

To assist in the education process, we have developed materials that document the risks and additional costs associated with using a workaround solution of running long lines from conventional IV pumps outside the MRI scanner room.

We are also continuing the development of and enhancing our materials documenting the benefits of uninterrupted vital signs monitoring that allows for easy transfer of critically ill patients from critical care to the MRI scanner room and back.

We believe this kind of evidence-based documentation will help us provide widespread education to the clinicians that are driving clinical practice.

We also believe that documented evidence will serve to inform the quality and risk management leaders in these organizations, which in turn may help drive the overall adoption of our MRI compatible products.

Providing best in class customer service and user experience

We believe that the expectations of our customers for service and a superior user experience have risen with the advancement of technology.

Once a customer purchases our products, it is imperative that they receive first-class clinical education and support to encourage usage of our products.

We devote a significant amount of time and training to ensure that this educational experience is a success.

This training is performed most commonly by our sales staff and is augmented by our clinical application specialists;

however, we intend to hire more clinical application specialists to strengthen our initial training experience and increase ongoing customer support.

We believe that a positive user experience is critical to driving increased rates of utilization of our products.

Typical MRI Scanner Room

The following diagram is representation

of an aerial view of a typical MRI scanner room with a top-of-the-line 3T magnet.

The gauss-lines illustrate the distance from

the magnet where various types of medical devices can safely operate.

Our 3880 MRI compatible patient vital signs monitor is the

only MRI monitor that can operate safely and reliably in very close proximity to the bore of the powerful magnet used to operate

the MRI (area shown in red).

Additionally, our MRidium MRI compatible IV infusion pump is the only pump on the market approved

to operate safely and reliably near the patient (area shown in blue).

All other pumps must be placed at a distance from the MRI

scanner, which may include being outside of the scanner room entirely.

We currently offer two primary products

(1) our MRidium 3860+ MRI compatible IV infusion pump system with associated disposable IV tubing sets, and (2) our

3880 MRI compatible patient vital signs monitoring system with associated disposable products.

The following diagram is representation of an aerial view of a typical MRI scanner room with a typical three Tesla magnet.

The gauss-lines illustrate the distance from the magnet where various types of medical devices can safely operate.

Our 3880 MRI compatible patient vital signs monitor is the only MRI monitor that can operate safely and reliably in very close proximity to the bore of the powerful magnet used to operate the MRI (area shown in red).

Additionally, our MRidium MRI compatible IV infusion pump is the only pump on the market approved to operate safely and reliably near the patient (area shown in blue).

All other pumps must be placed at a distance from the MRI scanner, which may include being outside of the scanner room entirely.

We currently offer two primary products for sale:

(1) our MRidium 3860+ MRI compatible IV infusion pump system with associated disposable IV tubing sets, and (2) our 3880 MRI compatible patient vital signs monitoring system with associated disposable products.

MRidium MRI Compatible IV Infusion Pump System

The patented MRidium MRI compatible IV infusion

pump system is based upon a non-magnetic, ultrasonic motor and other uniquely designed non-ferrous parts in order to provide accurate

and dependable fluid delivery to patients undergoing an MRI procedure.

Our MRidium MRI compatible IV infusion pump system has been

designed to offer numerous advantages to hospitals, clinicians and patients.

MRidium’s strengths include the following:

The patented MRidium MRI compatible IV infusion pump system is based upon a non-magnetic, ultrasonic motor and other uniquely designed non-ferrous parts in order to provide accurate and dependable fluid delivery to patients undergoing an MRI procedure.

Our MRidium MRI compatible IV infusion pump system has been designed to offer numerous advantages to hospitals, clinicians and patients.

MRidium’s strengths include the following:

● The only non-magnetic MRI compatible IV infusion pump system specifically designed and built to operate inside the MR environment.

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● Able to operate virtually anywhere in the MRI scanner room;

approved for use in the presence of 0.2T to 3T magnets and fully

operational up to the 10,000 gauss-line.

Available with a Dose Error Reduction System (“DERS”) to reduce the risk of medication errors and simplify clinician

Available with a wireless remote display/control providing clinicians and technicians control and visibility from outside of

the MRI scanner room.

Available with an add-on channel allowing for the easy addition of a second IV line for patients requiring multiple IV medications

at a low incremental cost to the hospital.

Available with a built-in SpO2 monitor using Masimo SET®

technology and a specially designed fiber optic SpO2 sensor allowing

one device to monitor oxygen saturation levels while safely providing IV infusion during an MRI procedure.

Our MRI compatible IV infusion pump system

includes the 3860+ MRI compatible IV infusion pump, proprietary single-use IV tubing sets, a non-magnetic pole and a lithium battery.

In addition, we offer optional upgrade systems including the 3861 Side Car, 3865 Remote Display/Control, DERS and an SpO2 monitor

as discussed below.

approved for use in the presence of 0.2T to 3T magnets and fully operational up to the 10,000 gauss-line.

● Available with a Dose Error Reduction System (“DERS”) to reduce the risk of medication errors and simplify clinician monitoring.

● Available with a wireless remote display/control providing clinicians and technicians control and visibility from outside of the MRI scanner room.

● Available with an add-on channel (3861 Side Car Module) allowing for the easy addition of a second IV line for patients requiring multiple IV medications at a low incremental cost to the hospital.

● Available with a built-in SpO2 monitor using Masimo SET® technology and a specially designed fiber optic SpO2 sensor allowing one device to monitor oxygen saturation levels while safely providing IV infusion during an MRI procedure.

Our MRI compatible IV infusion pump system includes the 3860+ MRI compatible IV infusion pump, proprietary single-use IV tubing sets, a non-magnetic pole and a lithium battery.

In addition, we offer optional upgrade systems including the 3861 Side Car, 3865 Remote Display/Control, DERS and an SpO2 monitor as discussed below.

MRidium 3860+ MRI Compatible IV Infusion Pump

The MRidium 3860+ MRI compatible IV infusion

pump was introduced in 2009 and improved upon the performance and features of our first generation MRidium 3850 MRI compatible

IV infusion pump.

The MRidium 3860+ pump system can operate dependably in the presence of 0.2T to 3T magnets and is fully operational

up to the 10,000 gauss-line.

This means our MRidium 3860+ is highly versatile and can operate virtually anywhere in the MRI scanner

room, including close to the MRI scanner.

The MRidium 3860+ MRI compatible IV infusion pump system has a 10-key numeric input keypad

making our system easy to accurately program and operate.

Our pumping range of 0.1 mL per hour to 1,400 mL per hour provides a

broad range of fluid flow control.

Our broad range of infusion rates support differing patient needs including low levels for pediatric

sedation, mid-levels for continued IV infusion of medications to critically ill patients and high levels in the event of emergency

Our MRidium 3860+ MRI compatible IV infusion pump system offers a dose rate calculator, bolus dose programming, full

alarm settings, and a rechargeable battery with a 12-hour life.

The MRidium 3860+ MRI compatible IV infusion pump was introduced in 2009 and improved upon the performance and features of our first generation MRidium 3850 MRI compatible IV infusion pump.

The MRidium 3860+ pump system can operate dependably in the presence of 0.2T to 3T magnets and is fully operational up to the 10,000 gauss-line.

This means our MRidium 3860+ is highly versatile and can operate virtually anywhere in the MRI scanner room, including close to the MRI scanner.

The MRidium 3860+ MRI compatible IV infusion pump system has a 10-key numeric input keypad making our system easy to accurately program and operate.

Our pumping range of 0.1 mL per hour to 1,400 mL per hour provides a broad range of fluid flow control.

Our broad range of infusion rates support differing patient needs including low levels for pediatric sedation, mid-levels for continued IV infusion of medications to critically ill patients and high levels in the event of emergency situations.

Our MRidium 3860+ MRI compatible IV infusion pump system offers a dose rate calculator, bolus dose programming, full alarm settings, and a rechargeable battery with a 12-hour life.

MRidium 3860+ IV Tubing Sets

The MRidium 3860+ MRI compatible IV infusion

pump system utilizes proprietary fluid delivery tubing sets, each known as an “IV tubing set.”

Each use of our MRI

compatible IV infusion pump requires a disposable IV tubing set.

We offer a variety of IV tubing sets for varying infusion scenarios

and these include our standard “spike”

infusion set, syringe adapter infusion set and extension infusion set.

of our IV tubing sets is latex-free and DEHP-free.

The MRidium 3860+ MRI compatible IV infusion pump system utilizes proprietary fluid delivery tubing sets, each known as an “IV tubing set.” Each use of our MRI compatible IV infusion pump requires a disposable IV tubing set.

We offer a variety of IV tubing sets for varying infusion scenarios and these include our standard “spike” infusion set, syringe adapter infusion set and extension infusion set.

Each of our IV tubing sets is latex-free and DEHP-free.

● MRidium 1056 Standard Infusion Set.

Our standard “spike”

infusion set features the ability to accurately

deliver liquids from either a bottle or IV bag.

The 1056 standard infusion set contains two needle-free injection ports and is

typically used when starting a new infusion from a bottle or bag.

Our standard “spike” infusion set features the ability to accurately deliver liquids from either a bottle or IV bag.

The 1056 standard infusion set contains two needle-free injection ports and is typically used when starting a new infusion from a bottle or bag.

● MRidium 1057 Syringe Adapter Infusion Set.

Our syringe adapter IV set enables users to provide accurate delivery of

IV fluids directly from standard syringes.

The 1057 vented syringe adapter set benefits from a low priming volume of 4 ml, which

minimizes inefficient waste of medication.

This product is most commonly used for cardiac medications, anesthesia, and pediatric

drug delivery.

Our syringe adapter IV set enables users to provide accurate delivery of IV fluids directly from standard syringes.

The 1057 vented syringe adapter set benefits from a low priming volume of 4 ml, which minimizes inefficient waste of medication.

This product is most commonly used for cardiac medications, anesthesia, and pediatric drug delivery.

● MRidium 1058 Extension Infusion Set.

Our extension infusion set allows users to transfer a patient on a non-MRI infusion

pump to our MRidium MRI compatible IV infusion pump.

The user simply disconnects the existing IV tubing at the patient site and

connects and primes the MRidium extension set to the existing IV tubing.

Once removed from the conventional infusion pump and connected

to our MRidium MRI compatible IV infusion pump, the user can program the pump and begin the infusion.

The 1058 extension set includes

one needle-free injection port and is typically used to provide uninterrupted critical medications to a severely ill patient during

an MRI procedure.

We offer a fully functional and weighted

non-magnetic IV pole that is designed for mobility within the hospital and the MRI scanner room.

The IV pole can support two MRidium

3860+ MRI compatible IV infusion pumps, each with a 3861 Side Car Pump Module.

The IV pole is 66 inches (1.68 meters) high, stabilized

with a wide pole radius and mobilized with five casters designed to roll easily during transport.

The IV pole is equipped with

four hooks for holding fluid bags.

Our extension infusion set allows users to transfer a patient on a non-MRI infusion pump to our MRidium MRI compatible IV infusion pump.

The user simply disconnects the existing IV tubing at the patient site and connects and primes the MRidium extension set to the existing IV tubing.

Once removed from the conventional infusion pump and connected to our MRidium MRI compatible IV infusion pump, the user can program the pump and begin the infusion.

The 1058 extension set includes one needle-free injection port and is typically used to provide uninterrupted critical medications to a severely ill patient during an MRI procedure.

We offer a fully functional and weighted non-magnetic IV pole that is designed for mobility within the hospital and the MRI scanner room.

The IV pole can support two MRidium 3860+ MRI compatible IV infusion pumps, each with a 3861 Side Car Pump Module.

The IV pole is 66 inches (1.68 meters) high, stabilized with a wide pole radius and mobilized with five casters designed to roll easily during transport.

The IV pole is equipped with four hooks for holding fluid bags.

Optional Features

Our 3860+ MRI compatible IV infusion pump

system gives customers the ability to adapt their systems to meet their specific needs.

In addition to our standard product features,

we also offer system upgrades which include a modular add-on second IV channel through our 3861 Side Car, a wireless remote control/display,

DERS and an imbedded SpO2 monitor.

We also offer rechargeable lithium polymer battery packs which have 12-hour life when not connected

to an electrical outlet.

Our 3860+ MRI compatible IV infusion pump system gives customers the ability to adapt their systems to meet their specific needs.

In addition to our standard product features, we also offer system upgrades which include a modular add-on second IV channel through our 3861 Side Car, a wireless remote control/display, DERS and an imbedded SpO2 monitor.

We also offer rechargeable lithium polymer battery packs which have 12-hour life when not connected to an electrical outlet.

3861 Side Car Pump Module

Our Side Car Pump Module can be attached

to our 3860+ MRidium MRI compatible IV infusion pump to provide a second channel for infusion delivery.

This flexible option allows

hospitals to convert their single-channel infusion pump into a dual-channel system designed to deliver both large and small volume

fluids in the MRI scanner room.

The side car is fully functional with our 3865 MRidium Wireless Remote, allowing clinicians the

ability to control both channels with one remote control unit outside of the MRI scanner room.

The additional delivery line has

all of the same features and benefits as the 3860+ MRidium MRI compatible IV infusion pump, as described above.

Our Side Car Pump Module can be attached to our 3860+ MRidium MRI compatible IV infusion pump to provide a second channel for infusion delivery.

This flexible option allows hospitals to convert their single-channel infusion pump into a dual-channel system designed to deliver both large and small volume fluids in the MRI scanner room.

The side car is fully functional with our 3865 MRidium Wireless Remote, allowing clinicians the ability to control both channels with one remote control unit outside of the MRI scanner room.

The additional delivery line has all of the same features and benefits as the 3860+ MRidium MRI compatible IV infusion pump, as described above.

3865 MRidium Wireless Remote Display/Control

Our wireless remote control unit allows

for complete control and monitoring of the MRidium MRI compatible IV infusion pump system from the control room (outside of the

MRI scanner room).

The 3865 MRidium Wireless Remote relays all commands and displays information bi-directionally between

the MRI compatible IV infusion pump and the remote control unit.

Utilizing the same user interface and large bright display as

the MRidium pump, our wireless remote control unit permits clinicians to adjust all pump parameters, including SpO2 monitoring

parameters, rates, dose, volume, pump run/stop, alarms (adjust or reset), as well as real-time titration.

Our remote control unit

utilizes a proven MRI compatible 2.4 GHz frequency hopping spread spectrum radio technology for artifact-free operation that does

not disturb the MRI imaging process.

Clinicians may also use the remote control unit to adjust a second pump channel when used

in combination with our Side Car unit discussed above.

Our 3865 MRidium Wireless Remote also functions as a battery charger for

our MRidium battery pack.

Dose Error Reduction System (“DERS”)

Our DERS software for use with our MRidium

3860+ MRI compatible IV infusion pump system incorporates the latest dosing safety features for patients.

The DERS system enables

users to create a unique drug library and establish nominal values and limits for dose and concentration for specified infusion

With DERS, patient safety and user convenience are supported by user-programmed infusion hard limits (maximum and minimum)

and soft limits (high and low limits that require user confirmation to exceed).

The dose applied via DERS is displayed and can

be adjusted directly on the running screen at any time during the infusion.

The memory card port allows for easy archiving and

updating of the drug library.

Our wireless remote control unit allows for complete control and monitoring of the MRidium MRI compatible IV infusion pump system from the control room (outside of the MRI scanner room).

The 3865 MRidium Wireless Remote relays all commands and displays information bi-directionally between the MRI compatible IV infusion pump and the remote control unit.

Utilizing the same user interface and large bright display as the MRidium pump, our wireless remote control unit permits clinicians to adjust all pump parameters, including SpO2 monitoring parameters, rates, dose, volume, pump run/stop, alarms (adjust or reset), as well as real-time titration.

Our remote control unit utilizes a proven MRI compatible 2.4 GHz frequency hopping spread spectrum radio technology for artifact-free operation that does not disturb the MRI imaging process.

Clinicians may also use the remote control unit to adjust a second pump

channel when used in combination with our Side Car unit discussed above.

Our 3865 MRidium Wireless Remote also functions as a battery charger for our MRidium battery pack.

Dose Error Reduction System (“DERS”)

Our DERS software for use with our MRidium 3860+ MRI compatible IV infusion pump system incorporates the latest dosing safety features for patients.

The DERS system enables users to create a unique drug library and establish nominal values and limits for dose and concentration for specified infusion protocols.

With DERS, patient safety and user convenience are supported by user-programmed infusion hard limits (maximum and minimum) and soft limits (high and low limits that require user confirmation to exceed).

The dose applied via DERS is displayed and can be adjusted directly on the running screen at any time during the infusion.

The memory card port allows for easy archiving and updating of the drug library.

SpO2 Monitoring with Sensor and Accessories

Our MRidium 3860+ MRI compatible IV infusion

pump system also offers state-of-the-art Masimo SET®

capability providing a unique ability to have SpO2 monitoring

and IV delivery combined in one unit.

This feature offers users the ability to start sedations outside of the MRI scanner room,

transport to the scanner, and then back to recovery without having to discontinue SpO2 monitoring of the patient.

our fiber optic MRI SpO2 sensor and accessories provide a safe connection between the patient and our MRI compatible IV infusion

This fiber optic-based SpO2 sensor delivers outstanding performance while avoiding potentially hazardous heating or image

artifact during MRI scans.

The method of patient attachment uses a medical-grade silicone rubber sensor grip that allows easy and

convenient attachment to the patient’s hand or foot, and accommodates pediatric, adult, and infant patients with various

We believe our MRidium 3860+ MRI compatible

IV infusion pump system and its customizable features comprehensively and uniquely address the needs of MRI departments within

hospitals and other medical facilities.

MRI Compatible Patient Vital Signs Monitoring

3880 Monitor has been designed with non-magnetic components and other special features in order to safely and accurately

monitor a patient’s vital signs during various MRI procedures.

The 3880 Monitor system operates dependably in magnetic fields

up to 30,000 gauss, which means it can operate virtually anywhere in the MRI scanner room (see above diagram).

3880 Monitor has a compact, lightweight design allowing it to travel with the patient from their critical care unit, to the MRI

and back, resulting in increased patient safety through uninterrupted vital signs monitoring and decreasing the amount of time

critically ill patients are away from critical care units.

The basic configuration of the 3880 Monitor

includes wireless ECG with dynamic gradient filtering;

wireless SpO2 using Masimo®

algorithms, and non-invasive blood pressure.

Our MRidium 3860+ MRI compatible IV infusion pump system also offers state-of-the-art Masimo SET® SpO2™ capability providing a unique ability to have SpO2 monitoring and IV delivery combined in one unit.

This feature offers users the ability to start sedations outside of the MRI scanner room, transport to the scanner, and then back to recovery without having to discontinue SpO2 monitoring of the patient.

In addition, our fiber optic MRI SpO2 sensor and accessories provide a safe connection between the patient and our MRI compatible IV infusion pumps.

This fiber optic-based SpO2 sensor delivers outstanding performance while avoiding potentially hazardous heating or image artifact during MRI scans.

The method of patient attachment uses a medical-grade silicone rubber sensor grip that allows easy and convenient attachment to the patient’s hand or foot, and accommodates pediatric, adult, and infant patients with various size grips.

We believe our MRidium 3860+ MRI compatible IV infusion pump system and its customizable features comprehensively and uniquely address the needs of MRI departments within hospitals and other medical facilities.

MRI Compatible Patient Vital Signs Monitoring System

Our 3880 Monitor has been designed with non-magnetic components and other special features in order to safely and accurately monitor a patient’s vital signs during various MRI procedures.

The 3880 Monitor system is fully operational in magnetic fields up to 30,000 gauss, which means it can operate virtually anywhere in the MRI scanner room (see above diagram).

Our 3880 Monitor has a compact, lightweight design allowing it to travel with the patient from their critical care unit, to the MRI and back, resulting in increased patient safety through uninterrupted vital signs monitoring and decreasing the amount of time critically ill patients are away from critical care units.

The basic configuration of the 3880 Monitor includes wireless ECG with dynamic gradient filtering;

wireless SpO2 using Masimo® algorithms, and non-invasive blood pressure.

Optional features include all or a combination of non-magnetic respiratory CO2;

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optional advanced multi-gas anesthetic agent unit featuring continuous Minimum Alveolar Concentration measurements.

The MRI compatible patient vital signs monitoring

system also includes:

The MRI compatible patient vital signs monitoring system also includes:

(1) an extended range remote tablet that allows for remote monitoring from outside the MRI scanner room;

(2) a base station control center that facilitates printing, wireless communications between the remote tablet and the monitor,

and acts as a battery charger for the remote tablet, and;

(3) wireless ECG, SpO2 and invasive blood pressure pods that facilitate

the respective monitoring modalities.

We are also currently working on interoperability features that will be offered in the future.

(2) a base station control center that facilitates printing, wireless communications between the remote tablet and the monitor, and acts as a battery charger for the remote tablet, and;

(3) wireless ECG, SpO2 and invasive blood pressure pods that facilitate the respective monitoring modalities.

Intellectual Property

We protect our proprietary technology through

a combination of patents, trade secrets and confidentiality agreements.

During the development of our products, our founder, Roger

Susi, obtained a number of patents regarding our MRI compatible IV infusion pump and related systems.

Susi has irrevocably

assigned these patents to us.

We consider our patents important but do not believe our future success is materially dependent upon

We protect our proprietary technology through a combination of patents, trade secrets and confidentiality agreements.

During the development of our products, our founder, Roger Susi, obtained a number of patents regarding our MRI compatible IV infusion pump and related systems.

Susi has irrevocably assigned these patents to us.

We consider our patents important but do not believe our future success is materially dependent upon patents.

We have 14 issued U.S.

patents and 4 issued

foreign patents with remaining lives that range from 3 to 14 years.

patents and 4 issued foreign patents with remaining lives that range from 2 to 13 years.

We also have a number of U.S.

patent applications pending.

These patents and patent applications relate to several of our products, including our MRI compatible IV infusion pump system and

its components and our MRI compatible patient vital signs monitoring system.

We intend to file patent applications with respect

to future patentable developments and improvements when we believe that such protection is in our best interest.

We also rely on trade secrets, copyright

and other laws and on confidentiality agreements to protect our technology, but we believe that neither our patents nor other legal

rights will necessarily prevent third parties from developing or using similar or related technology to compete against our products.

Moreover, our technology may be viewed as improvements or adaptations of known MRI infusion or monitoring technology, which might

be duplicated or discovered through our patents, reverse engineering or both.

These patents and patent applications relate to several of our products, including our MRI compatible IV infusion pump system and its components and our MRI compatible patient vital signs monitoring system.

We intend to file patent applications with respect to future patentable developments and improvements when we believe that such protection is in our best interest.

We also rely on trade secrets, copyright and other laws and on confidentiality agreements to protect our technology, but we believe that neither our patents nor other legal rights will necessarily prevent third parties from developing or using similar or related technology to compete against our products.

Moreover, our technology may be viewed as improvements or adaptations of known MRI infusion or monitoring technology, which might be duplicated or discovered through our patents, reverse engineering or both.

Sales and Marketing

We sell our MRI compatible products through

our direct sales force in the U.S.

We sell our MRI compatible products through our direct sales force in the U.S.

and independent distributors internationally.

In the U.S., we sell our products through our

29 direct field sales representatives, 4 regional sales directors and 6 clinical support representatives.

We have distribution

agreements for our products with independent distributors selling our products internationally.

We have developed an experienced

team of international distributors that have a strong MRI/radiology product portfolio and focus.

Our international distributors

are managed by our international sales team.

The percentage of total revenue generated

by geographic region was as follows:

In the U.S., we sell our products through our 22 direct field sales representatives, 4 regional sales directors and 5 clinical application specialists.

We have distribution agreements for our products with independent distributors selling our products internationally.

We have developed an experienced team of international distributors that have a strong MRI/radiology product portfolio and focus.

Our international distributors are managed by our international sales team.

The percentage of total revenue generated by geographic region was as follows:

Percent of Revenue

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International

The percentage of total revenue generated

by product type was as follows:

The percentage of total revenue generated by product type was as follows:

Percent of Revenue

Years Ended December 31,

Disposables, services and other

Disposable, service and other

Amortization of extended warranty agreements

We define backlog as of a particular date

to mean firm purchase orders from customers for which we have not yet fulfilled.

As part of our commitment to customer service,

our goal is to ship products to meet the customers’

requested shipment dates.

Our backlog is occasionally subject to cancellation

or rescheduling by the customer on short notice with little or no penalty.

Because of the uncertainty of order cancellations or

rescheduling, we do not believe our backlog as of any particular date is indicative of actual sales for any future period and,

therefore, should not be used as a measure of future revenue.

For the years ended December 31, 2019,

2018 and 2017, backlog was approximately:

We define backlog as of a particular date to mean firm purchase orders from customers for which we have not yet fulfilled.

As part of our commitment to customer service, our goal is to ship products to meet the customers’ requested shipment dates.

Our backlog is occasionally subject to cancellation or rescheduling by the customer on short notice with little or no penalty.

Because of the uncertainty of order cancellations or rescheduling, we do not believe our backlog as of any particular date is indicative of actual sales for any future period and, therefore, should not be used as a measure of future revenue.

For the years ended December 31, 2020, 2019 and 2018, backlog was approximately:

Years ended December 31,

(In millions)

Historical selling cycles for our devices

have varied widely and are typically three to six months in duration.

The principal customers for our MRI compatible

products include hospitals and acute care facilities.

The key decision maker in a purchase varies on the hospital department making

the purchase.

We serve these customers through our sales and service specialists and believe that our specialists are well-positioned

to build upon these customer relationships.

We communicate with our customers on a regular basis in an attempt to understand potential

issues or concerns as well as to improve our products and services in response to their needs.

Product orders and inquiries are

handled by trained service representatives who communicate with customers after equipment shipments, installations and service

repair calls.

We have implemented various other programs which enable us to assess our customers’

These programs include

surveys and visits to customer sites.

We enter into agreements with healthcare

supply contracting companies, commonly referred to as Group Purchasing Organizations (“GPOs”) in the U.S., which enable

us to sell and distribute our products to their member hospitals.

GPOs negotiate volume purchase prices for hospitals, group practices,

and other clinics that are members of a GPO.

Selling cycles for our devices have varied widely and have historically ranged between three and six months in duration with more recent trends lengthening beyond this historical range due to the COVID-19 pandemic.

The principal customers for our MRI compatible products include hospitals and acute care facilities.

The key decision maker in a purchase varies on the hospital department making the purchase.

We serve these customers through our sales and service specialists and believe that our specialists are well-positioned to build upon these customer relationships.

We communicate with our customers on a regular basis in an attempt to understand potential issues or concerns as well as to improve our products and services in response to their needs.

Product orders and inquiries are handled by trained service representatives who communicate with customers after equipment shipments, installations and service repair calls.

We have implemented various other programs which enable us to assess our customers’ needs.

These programs include surveys and visits to customer sites.

We enter into agreements with healthcare supply contracting companies, commonly referred to as Group Purchasing Organizations (“GPOs”) in the U.S., which enable us to sell and distribute our products to their member hospitals.

GPOs negotiate volume purchase prices for hospitals, group practices, and other clinics that are members of a GPO.

Our agreements with GPOs typically include the following provisions:

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● Payment of administrative fees by us to the GPO, based on purchases of our products by group members.

Under these agreements, we are required

to pay the GPOs a fee of three percent of the sales of our products to members of the GPO.

Our current GPO contracts effectively

give us the ability to sell to more than 95 percent of all U.S.

hospitals and acute care facilities.

Under these agreements, we are required to pay the GPOs a fee of three percent of the sales of our products to members of the GPO.

Manufacturing and Suppliers

We assemble our products in our facility

in Winter Springs, Florida, from components and sub-assemblies purchased from outside suppliers.

We perform final assembly, testing

and packaging to control quality and manufacturing efficiency.

We purchase components and sub-assemblies from qualified suppliers

that are subject to our stringent quality specifications and inspections by us.

We conduct quality audits of our key suppliers,

several of which are experienced in the supply of components to manufacturers of finished medical devices or disposables for use

with these medical devices.

We assemble our products in our facility in Winter Springs, Florida, from components and sub-assemblies purchased from outside suppliers.

We perform final assembly, testing and packaging to control quality and manufacturing efficiency.

We purchase components and sub-assemblies from qualified suppliers that are subject to our stringent quality specifications and inspections by us.

We conduct quality audits of our key suppliers, several of which are experienced in the supply of components to manufacturers of finished medical devices or disposables for use with these medical devices.

Our historical track record of producing MRI compatible products has been good;

however, there can

be no assurance that this trend will continue or that we will be able to produce sufficient units to reach our expected revenue

growth rates.

Some of the raw materials and parts that

are critical to the production and operation of our products are sourced from single suppliers and some components we or our suppliers

utilize are from Chinese manufacturers.

however, there can be no assurance that this trend will continue or that we will be able to produce sufficient units to reach our expected revenue growth rates.

Some of the raw materials and parts that are critical to the production and operation of our products are sourced from single suppliers and some components we or our suppliers utilize are from Chinese manufacturers.

We have never encountered a significant supply interruption from any sole supplier;

the operations of our third-party suppliers could be disrupted by conditions unrelated to our business operations or that are beyond

our control, including but not limited to international trade restrictions and conditions related to COVID-19 (commonly referred

to as coronavirus) or other epidemics.

We are unsure whether an extended period of general supplier disruption caused by COVID-19

will affect us directly or through our suppliers;

however, we are monitoring our supply chain regarding the matter.

maintain no less than a three-month supply of raw materials and parts that are sourced from sole suppliers and make efforts to

identify additional suppliers who may be able to provide such raw materials or parts.

For example, the non-magnetic, ultrasonic

motor which drives our MRI compatible IV infusion pump is sole sourced from a major multinational Japanese manufacturing company

with whom we have an excellent long-term relationship.

however, the operations of our third-party suppliers could be disrupted by conditions unrelated to our business operations or that are beyond our control, including but not limited to international trade restrictions, excessive demand creating shortages of available supply, and conditions related to COVID-19 or other epidemics.

We are unsure whether an extended period of general supplier disruption caused by COVID-19 will affect us directly or through our suppliers;

however, we continue to monitor our supply chain regarding the matter.

We typically maintain no less than a three-month supply of raw materials and parts that are sourced from sole suppliers and make efforts to identify additional suppliers who may be able to provide such raw materials or parts.

For example, the non-magnetic, ultrasonic motor which drives our MRI compatible IV infusion pump is sole sourced from a major multinational Japanese manufacturing company with whom we have an excellent long-term relationship.

This company has exclusively provided us with these motors since 2005.

exclusive supply agreement with this company was renewed in March 2019 and extends through February 25, 2024.

We place significant emphasis on providing

quality products and services to our customers.

Quality management and oversight play an essential role in understanding and meeting

customer requirements, effectively resolving quality issues and improving our products and services.

We have a network of quality

systems throughout our facilities that relate to the design, development, assembly, packaging, sterilization, handling, distribution

and labeling of our products.

To assess and facilitate compliance with

applicable requirements, we periodically review our quality systems to determine their effectiveness and identify areas for improvement.

We also conduct compliance training programs

for our sales and marketing personnel and perform assessments of our suppliers of raw materials, components and finished goods.

In addition, we conduct quality management reviews designed to inform management of key issues that may affect the quality of our

From time to time, we may determine that products manufactured or marketed by us do not meet our specifications, published

standards or regulatory requirements.

When a quality issue is identified, we investigate the issue and seek to take appropriate

corrective action, such as withdrawal of the product from the market, correction of the product at the customer location, notice

to the customer of revised labeling or a combination of these or other corrective actions.

In January 2007, we received ISO 13485

certification and met the requirements under the European Medical Device Directive to use the CE Mark, thereby allowing us to continue

to market our products in the European Community.

In January 2018 we underwent an audit to update our ISO 13485:2016 and Medical

Device Single Audit Program certifications and received our certificates in November 2018.

These certificates will need renewal

again in January 2022.

The medical products industry is generally

characterized by intense competition and extensive research and development.

The market for medical products is subject to rapid

change due to an increasingly competitive, cost-conscious environment and to government programs intended to reduce the cost of

medical care.

Many manufacturers and distributors of medical equipment are large, well-established companies whose resources, reputations

and ability to leverage existing customer relationships might give them a competitive advantage over us.

We believe that a company’s

reputation for producing accurate, reliable and technologically-advanced products, references from users, features (speed, safety,

ease of use, patient convenience and range of applicability), product effectiveness and price are the principal competitive factors

in the medical products industry.

Our SpO2 products, which measure blood oxygen

saturation and included in our MRI compatible IV infusion pump and our MRI compatible vital signs monitor, also compete indirectly

with many other methods currently used to measure blood oxygen levels or the effects of low blood oxygen levels.

MRidium MRI Compatible IV Infusion

We do not believe there is currently any

direct competition for our MRI compatible IV infusion pump system.

Historically, our only direct competitor in the MRI compatible

IV infusion pump market, Bayer Radiology, formerly MEDRAD, Inc., announced during 2013 its decision to remove its competing

Continuum pump system from the market, and discontinued support throughout the world in June 2015 due to ongoing regulatory

As a result, we believe that our MRidium 3860+ MRI compatible IV infusion pump is the only true MRI compatible IV infusion

pump available today.

The medical device and IV infusion market

is highly regulated and is typically one of the areas that the FDA scrutinizes closely for new market introductions.

this, the FDA 510(k) clearance process for new infusion pumps is usually long and requires significant testing and documentation.

This long development timeline coupled with the low market penetration to date may discourage new competitors from undertaking

a complex project like building an MRI compatible IV infusion pump.

We believe that the market for MRI compatible IV infusion pump

products is in relatively early stages of development and may become highly competitive if, and when, the market develops further.

Outside of the U.S., we also compete with

manufacturers of “shielded box”

solutions that are intended to permit use of conventional IV pumps inside the MRI scanner

Our exclusive supply agreement with this company was renewed in March 2019 and extends through February 25, 2024.

We place significant emphasis on providing quality products and services to our customers.

Quality management and oversight play an essential role in understanding and meeting customer requirements, effectively resolving quality issues and improving our products and services.

We have a network of quality systems throughout our facilities that relate to the design, development, assembly, packaging, sterilization, handling, distribution and labeling of our products.

To assess and facilitate compliance with applicable requirements, we periodically review our quality systems to determine their effectiveness and identify areas for improvement.

We also conduct compliance training programs for our sales and marketing personnel and perform assessments of our suppliers of raw materials, components and finished goods.

In addition, we conduct quality management reviews designed to inform management of key issues that may affect the quality of our products.

From time to time, we may determine that products manufactured or marketed by us do not meet our specifications, published standards or regulatory requirements.

When a quality issue is identified, we investigate the issue and seek to take appropriate corrective action, such as withdrawal of the product from the market, correction of the product at the customer location, notice to the customer of revised labeling or a combination of these or other corrective actions.

In January 2007, we received ISO 13485 certification and met the requirements under the European Medical Device Directive to use the CE Mark, thereby allowing us to continue to market our products in the European Community.

In January 2018 we underwent an audit to update our ISO 13485:2016 and Medical Device Single Audit Program certifications and received our certificates in November 2018.

These certificates will need renewal again in January 2022.

The medical products industry is generally characterized by intense competition and extensive research and development.

The market for medical products is subject to rapid change due to an increasingly competitive, cost-conscious environment and to government programs intended to reduce the cost of medical care.

Many manufacturers and distributors of medical equipment are large, well-established companies whose resources, reputations and ability to leverage existing customer relationships might give them a competitive advantage over us.

We believe that a company’s reputation for producing accurate, reliable and technologically-advanced products, references from users, features (speed, safety, ease of use, patient convenience and range of applicability), product effectiveness and price are the principal competitive factors in the medical products industry.

Our SpO2 products, which measure blood oxygen saturation and included in our MRI compatible IV infusion pump and our MRI compatible vital signs monitor, also compete indirectly with many other methods currently used to measure blood oxygen levels or the effects of low blood oxygen levels.

MRidium MRI Compatible IV Infusion Pump System

We do not believe there is currently any direct competition for our MRI compatible IV infusion pump system.

Historically, our only direct competitor in the MRI compatible IV infusion pump market, Bayer Radiology, formerly MEDRAD, Inc., announced during 2013 its decision to remove its competing Continuum pump system from the market, and discontinued support throughout the world in June 2015 due to ongoing regulatory issues.

As a result, we believe that our MRidium 3860+ MRI compatible IV infusion pump is the only true MRI compatible IV infusion pump available today.

The medical device and IV infusion market is highly regulated and is typically one of the areas that the FDA scrutinizes closely for new market introductions.

Because of this, the FDA 510(k) clearance process for new infusion pumps is usually long and requires significant testing and documentation.

This long development timeline coupled with the low market penetration to date may discourage new competitors from undertaking a complex project like building an MRI compatible IV infusion pump.

We believe that the market for MRI compatible IV infusion pump products is in relatively early stages of development and may become highly competitive if, and when, the market develops further.

We also compete with manufacturers of “shielded box” solutions that are intended to permit use of conventional IV pumps inside the MRI scanner room.

The providers of shielded boxes include B.

Braun, Fresenius Kabi, MIPM Mammendorfer Institut für Physik und Medizin

Another potential competitor may be CareFusion

Corporation (now part of Becton, Dickinson and Company (NYSE:

CareFusion is a major medical device manufacturer that has

a dominant position in the conventional IV infusion pump market and made an investment in Caesarea Medical Electronics (“CME”)

in December 2013.

CME manufactured Bayer Radiology’s Continuum Pump System, which was withdrawn from the U.S.

CME markets this pump in international markets as MR compatible.

In addition, B.

Braun may seek to obtain FDA clearance

for its SpaceStation MRI Trolley, currently only available outside the U.S., which allows traditional B.

Braun IV infusion pumps

to be used in the MR environment.

Many of our potential customers opt not

to purchase our MRI compatible IV infusion pump systems and instead use makeshift workarounds, such as placing conventional IV

infusion devices outside of the MRI scanning room and utilizing extension tubing to reach the patient.

To this extent, we are in

competition with conventional IV infusion pump manufacturers and distributors.

There are many manufacturers of conventional

IV infusion pump devices, and if any of these manufacturers, or other potential competitors, decide to enter into the MRI compatible

IV infusion pump market, they may have competitive advantages over us.

Many of these potential competitors have established reputations,

customer relationships and marketing, distribution and service networks.

In addition, they have substantially longer histories

in the medical products industry, larger product lines and greater financial, technical, manufacturing, management, and research

and development budgets.

Many of these potential competitors may have long-term product supply relationships with our potential

MRI Compatible Patient Vital Signs

Monitoring System

are several manufacturers that have developed competing MRI compatible vital signs monitoring systems that are currently on the

We believe the dominant competitor with a market-leading position in MRI compatible vital signs monitoring is Invivo Research, Inc.,

which was founded by Roger Susi, our founder, Chief Technology Officer and Chairman of the Board of Directors.

Invivo is now owned

by Koninklijke Philips NV (NYSE:

large and well-known companies such as General Electric (NYSE:

GE) and Schiller AG, also have competing products as do other smaller

privately held companies.

Each of these manufacturers have competitive advantages over us as they may have established customer

relationships, product supply agreements, longer histories in the MRI monitoring market and several have greater financial, technical,

manufacturing, management, and research and development budgets.

Additionally, our 3880 MRI compatible patient vital signs monitor

is new to the market, which may result in customers being reluctant to switch from other well-known and established MRI compatible

monitoring systems to ours.

Braun, Fresenius Kabi, MIPM Mammendorfer Institut für Physik und Medizin and Arcomed.

Many of our potential customers opt not to purchase our MRI compatible IV infusion pump systems and instead use makeshift workarounds, such as placing conventional IV infusion devices outside of the MRI scanning room and utilizing extension tubing to reach the patient.

To this extent, we are in competition with conventional IV infusion pump manufacturers and distributors.

There are many manufacturers of conventional IV infusion pump devices, and if any of these manufacturers, or other potential competitors, decide to enter into the MRI compatible IV infusion pump market, they may have competitive advantages over us.

Many of these potential competitors have established reputations, customer relationships and marketing, distribution and service networks.

In addition, they have substantially longer histories in the medical products industry, larger product lines and greater financial, technical, manufacturing, management, and research and development budgets.

Many of these potential competitors may have long-term product supply relationships with our potential customers.

MRI Compatible Patient Vital Signs Monitoring System

There are several manufacturers that have developed competing MRI compatible vital signs monitoring systems that are currently on the market.

We believe the dominant competitor with a market-leading position in MRI compatible vital signs monitoring is Invivo Research, Inc., which was founded by Roger Susi, our founder, President, Chief Executive Officer, and Chairman of the Board of Directors.

Invivo is now owned by Koninklijke Philips NV (NYSE:

Other large and well-known companies such as General Electric (NYSE:

GE) and Schiller AG, also have competing products as do other smaller privately held companies.

Each of these manufacturers have competitive advantages over us as they may have established customer relationships, product supply agreements, longer histories in the MRI monitoring market and several have greater financial, technical, manufacturing, management, and research and development budgets.

Additionally, our 3880 MRI compatible patient vital signs monitor is newer to the market relative to these other companies, which may result in customers being reluctant to switch from other well-known and established MRI compatible monitoring systems to ours.

Our business is seasonal.

Our third quarter

sales have typically been lower, compared to other fiscal quarters, principally because the fiscal quarter coincides with the summer

vacation season, in the U.S., Europe and Japan.

Our third quarter sales have typically been lower, compared to other fiscal quarters, principally because the fiscal quarter coincides with the summer vacation season, in the U.S., Europe and Japan.

Additionally, COVID-19 may create changes to customer buying patterns that vary from the historical trend.

Segment Information and Geographic Data

Our business operates as one reportable

Financial information about geographic areas is presented in Notes 2 and 4 in the Notes to Financial Statements of this

Annual Report on Form 10-K.

Our business operates as one reportable segment.

Financial information about geographic areas is presented in Notes 2 and 4 in the Notes to Financial Statements of this Annual Report on Form 10-K.

Research and Development

Our research and development efforts focus

on developing innovative products by utilizing our established core competencies in MRI compatible technologies and feedback from

strategic relationships with hospitals, acute medical facilities and medical equipment manufacturers for new product ideas.

research and development efforts are driven by the leadership of our founder, Roger Susi, assisted by engineers and technical professionals

with significant experience in product design.

Our research and development expenses were

$1.4 million or 3.7 percent of revenue in 2019, $1.5 million or 5.0 percent of revenue in 2018 and $1.7 million or 7.5 percent

of revenue in 2017.

As of December 31, 2019, we had 114

full-time employees, including 35 in manufacturing and service, 49 in sales, marketing and customer support services, 10 in regulatory

affairs and quality assurance, 12 in finance and administration and 8 in research and development.

No employees are represented

by a labor union.

Our research and development efforts focus on developing innovative products by utilizing our established core competencies in MRI compatible technologies and feedback from strategic relationships with hospitals, acute medical facilities and medical equipment manufacturers for new product ideas.

Our research and development efforts are driven by the leadership of our founder, Roger Susi, assisted by engineers and technical professionals with significant experience in product design.

Our research and development expenses were $1.9 million or 6.0 percent of revenue in 2020, $1.4 million or 3.7 percent of revenue in 2019 and $1.5 million or 5.0 percent of revenue in 2018.

As of December 31, 2020, we had 110 full-time employees, including 32 in manufacturing and service, 43 in sales, marketing and customer support services, 15 in regulatory affairs and quality assurance, 11 in finance and

administration and 9 in research and development.

No employees are represented by a labor union.

We have not experienced any work stoppages and consider our relations with our employees to be good.

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Governmental Regulation and Other Matters

Our medical device products are subject

to extensive, complex and increasing oversight and regulation by the FDA, and other domestic and foreign governmental authorities.

Our manufacturing facility, and those of our suppliers, are subject to periodic inspections to verify compliance with current FDA

and other governmental regulatory requirements.

If it were determined that we were not in compliance with these laws and regulations,

we could be subject to criminal or civil liability, or both, and other material adverse effects.

We have compliance programs in

place to support and monitor compliance with these laws and regulations.

All of our products and facilities and those of our suppliers

are subject to drug and medical device laws and regulations promulgated by the FDA and national and supranational regulatory authorities

outside the U.S., including, for example, Health Canada’s Health Products and Foods Branch, the U.K.’s Medicines and

Healthcare Products Regulatory Agency, and Australia’s Therapeutic Goods Agency.

These authorities regulate a range of activities

including, among other matters, manufacturing, post-marketing studies in humans, advertising and promotion, product labeling, post-marketing

surveillance and adverse event reporting.

Regulation of Medical Devices in the United

The development, manufacture, sale and distribution

of our medical device products are subject to comprehensive governmental regulation.

Most notably, all of our medical devices sold

in the United States are subject to the Food, Drug, and Cosmetic Act of 1938, as amended (“FDC Act”), as implemented

and enforced by the FDA.

Our medical device products are subject to extensive, complex and increasing oversight and regulation by the FDA, and other domestic and foreign governmental authorities.

Our manufacturing facility, and those of our suppliers, are subject to periodic inspections to verify compliance with current FDA and other governmental regulatory requirements.

If it were determined that we were not in compliance with these laws and regulations, we could be subject to criminal or civil liability, or both, and other material adverse effects.

We have compliance programs in place to support and monitor compliance with these laws and regulations.

All of our products and facilities and those of our suppliers are subject to drug and medical device laws and regulations promulgated by the FDA and national and supranational regulatory authorities outside the U.S., including, for example, Health Canada’s Health Products and Foods Branch, the U.K.’s Medicines and Healthcare Products Regulatory Agency, and Australia’s Therapeutic Goods Agency.

These authorities regulate a range of activities including, among other matters, manufacturing, post-marketing studies in humans, advertising and promotion, product labeling, post-marketing surveillance and adverse event reporting.

Regulation of Medical Devices in the United States

The development, manufacture, sale and distribution of our medical device products are subject to comprehensive governmental regulation.

Most notably, all of our medical devices sold in the United States are subject to the Food, Drug, and Cosmetic Act of 1938, as amended (“FDC Act”), as implemented and enforced by the FDA.

The FDA, and in some cases other government agencies, such as the U.S.

Federal Communications Commission

(“FCC”), administer requirements covering the design, testing, safety, effectiveness, manufacturing, labeling, promotion

and advertising, distribution and post-market surveillance of our products.

Unless an exemption applies, each medical

device that we market must first receive either premarket notification clearance (by making what is commonly called “a 510(k) submission”)

or premarket approval (by filing a premarket approval application (“PMA”) from the FDA pursuant to the FDC Act.

addition, certain modifications made to marketed devices also may require 510(k) clearance or approval of a PMA supplement.

The FDA’s 510(k) clearance process varies in length and can extend beyond twelve months.

The process of obtaining PMA

approval is much more costly, lengthy and uncertain.

Federal Communications Commission (“FCC”), administer requirements covering the design, testing, safety, effectiveness, manufacturing, labeling, promotion and advertising, distribution and post-market surveillance of our products.

Unless an exemption applies, each medical device that we market must first receive either premarket notification clearance (by making what is commonly called “a 510(k) submission”) or premarket approval (by filing a premarket approval application (“PMA”) from the FDA pursuant to the FDC Act.

In addition, certain modifications made to marketed devices also may require 510(k) clearance or approval of a PMA supplement.

The FDA’s 510(k) clearance process varies in length and can extend beyond twelve months.

The process of obtaining PMA approval is much more costly, lengthy and uncertain.

It generally takes from two to three years or even longer.

All of our current

products that are available in the U.S.

All of our current products that are available in the U.S.

were originally cleared through the 510(k) process.

We cannot be sure that future

products or modifications of current products, will qualify for the 510(k) pathway or whether 510(k) clearance or PMA

approval will be obtained for any future product that we propose to market.

In December 2014, the FDA issued guidance

entitled “Infusion Pumps Total Product Life Cycle.”

This guidance established substantial additional pre-market requirements

for new and modified infusion pumps.

Through this guidance, the FDA indicated more data demonstrating product safety will be required

for future 510(k) submissions for infusion pumps, including the potential for more clinical and human factors data.

of this guidance is likely to result in a more time consuming and costly process to obtain regulatory clearance to market infusion

In addition, new requirements beyond the 2014 guidance document could result in longer delays for the clearance of new products,

modification of existing infusion pump products or remediation of existing products in the market.

Future delays in the receipt

of, or failure to obtain, approvals could result in delayed or no realization of product revenues.

After a device is placed on the market,

numerous regulatory requirements continue to apply.

We cannot be sure that future products or modifications of current products, will qualify for the 510(k) pathway or whether 510(k) clearance or PMA approval will be obtained for any future product that we propose to market.

In December 2014, the FDA issued guidance entitled “Infusion Pumps Total Product Life Cycle.” This guidance established substantial additional pre-market requirements for new and modified infusion pumps.

Through this guidance, the FDA indicated more data demonstrating product safety will be required for future 510(k) submissions for infusion pumps, including the potential for more clinical and human factors data.

The impact of this guidance is likely to result in a more time consuming and costly process to obtain regulatory clearance to market infusion pumps.

In addition, new requirements beyond the 2014 guidance document could result in longer delays for the clearance of new products, modification of existing infusion pump products or remediation of existing products in the market.

Future delays in the receipt of, or failure to obtain, approvals could result in delayed or no realization of product revenues.

After a device is placed on the market, numerous regulatory requirements continue to apply.

Those regulatory requirements include the following:

product listing and establishment

registration;

adherence to the Quality System Regulation (“QSR”), which requires stringent design, testing, control,

documentation and other quality assurance procedures;

labeling requirements and FDA prohibitions against the promotion of off-label

uses or indications;

product listing and establishment registration;

adherence to the Quality System Regulation (“QSR”), which requires stringent design, testing, control, documentation and other quality assurance procedures;

labeling requirements and FDA prohibitions against the promotion of off-label uses or indications;

adverse event reporting;

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post-market surveillance requirements;

the FDA’s recall authority, whereby it can ask for, or require, the recall of products

from the market;

the FDA’s recall authority, whereby it can ask for, or require, the recall of products from the market;

and requirements relating to voluntary corrections or removals.

All aspects of our manufacturing and distribution

of regulated products and those of our suppliers are subject to substantial governmental oversight.

Facilities used for the production,

packaging, labeling, storage and distribution of medical devices must be registered with the FDA and other regulatory authorities.

All manufacturing activities for these products must be conducted in compliance with current good manufacturing practices (“cGMPs”).

Our manufacturing facilities and those of our suppliers are subject to periodic, routine and for-cause inspections to verify compliance

If, upon inspection, the FDA or another regulatory agency finds that a manufacturer has failed to comply with cGMPs,

it could institute a wide variety of enforcement actions, ranging from a public warning letter to more severe sanctions, such as

product recalls or seizures, monetary sanctions, consent decrees, injunctions to halt manufacturing and distributing products,

civil or criminal sanctions, refusal to grant clearances or approvals or delays in granting such clearances or approvals, import

detentions of products made outside of the United States, restrictions on operations or withdrawal or suspension of existing approvals.

The FDA also has the authority to request repair, replacement or refund of the cost of any medical device manufactured or distributed

All aspects of our manufacturing and distribution of regulated products and those of our suppliers are subject to substantial governmental oversight.

Facilities used for the production, packaging, labeling, storage and distribution of

medical devices must be registered with the FDA and other regulatory authorities.

All manufacturing activities for these products must be conducted in compliance with current good manufacturing practices (“cGMPs”).

Our manufacturing facilities and those of our suppliers are subject to periodic, routine and for-cause inspections to verify compliance with cGMPs.

If, upon inspection, the FDA or another regulatory agency finds that a manufacturer has failed to comply with cGMPs, it could institute a wide variety of enforcement actions, ranging from a public warning letter to more severe sanctions, such as product recalls or seizures, monetary sanctions, consent decrees, injunctions to halt manufacturing and distributing products, civil or criminal sanctions, refusal to grant clearances or approvals or delays in granting such clearances or approvals, import detentions of products made outside of the United States, restrictions on operations or withdrawal or suspension of existing approvals.

The FDA also has the authority to request repair, replacement or refund of the cost of any medical device manufactured or distributed by us.

These actions could result in, among other things, substantial modifications to our business practices and operations;

total or partial shutdown of production in one or more facilities while we or our suppliers remedy the alleged violation;

the inability

to obtain future pre-market clearances or approvals;

a total or partial shutdown of production in one or more facilities while we or our suppliers remedy the alleged violation;

the inability to obtain future pre-market clearances or approvals;

and withdrawals or suspensions of current products from the market.

these events could disrupt our business and have a material adverse effect on our revenues, profitability and financial condition.

Close-Out of FDA Warning Letter

As announced on October 8, 2019, we

received a close-out letter from the FDA with respect to the FDA warning letter previously received in August 2014.

this warning letter following a routine inspection of our prior facility between April 7 and April 16, 2014.

The close-out

letter confirmed that all issues cited in the August 2014 warning letter have been resolved.

Product Recalls and Software Updates

We have made substantial investments in

quality systems and we will continue to make improvements to our products and systems to further reduce potential issues related

to patient safety and avoid recalls in the future.

Any of these events could disrupt our business and have a material adverse effect on our revenues, profitability and financial condition.

Product Recalls

We have made substantial investments in quality systems and we will continue to make improvements to our products and systems to further reduce potential issues related to patient safety and avoid recalls in the future.

Product quality plays a critical role in our success.

While we believe that

we have made significant improvements to our product quality and overall quality systems, further quality concerns, whether real

or perceived, could adversely affect our results.

Conversely, improving quality can be a competitive advantage and improve our

For more information about risks related to these matters, see the section captioned “

Defects or failures associated

with our products and/or our quality control systems could lead to the filing of adverse event reports, recalls or safety alerts

and negative publicity and could subject us to regulatory actions”

in the “Risk Factors”

3860+ Software Field Update.

We are fielding updated software for our MRidium 3860+ IV infusion pump to existing customers.

We have accrued for all expected expenses related to this action and believe these expenses will not be significant to our operations

or financial results.

While we believe that we have made significant improvements to our product quality and overall quality systems, further quality concerns, whether real or perceived, could adversely affect our results.

Conversely, improving quality can be a competitive advantage and improve our results.

For more information about risks related to these matters, see the section captioned “ Defects or failures associated with our products and/or our quality control systems could lead to the filing of adverse event reports, recalls or safety alerts and negative publicity and could subject us to regulatory actions” in the “Risk Factors” section.

Healthcare Fraud and Abuse Laws

As a manufacturer and distributor of medical

devices to hospitals and other healthcare providers, we and our customers are subject to laws which apply to Medicare, Medicaid,

and other federal and state healthcare programs in the U.S.

One such law, the Anti-kickback Statute, prohibits the solicitation,

offer, payment or receipt of remuneration in return for referral or purchase, or in return for the recommending or arranging for

the referral or purchase, of products covered by the programs.

The Anti-kickback Statute provides a number of exceptions or “safe

harbors”

for particular types of transactions.

While we generally do not file claims for reimbursement from government payers,

federal government has asserted theories of liability against manufacturers under the Federal False Claims Act, which

prohibits the submission of false claims to Medicare, Medicaid, and other state and federal programs.

Many states have similar

fraud and abuse laws which may apply to us.

Violations of these fraud and abuse-related laws are punishable by criminal or civil

sanctions, including substantial fines, imprisonment and exclusion from participation in healthcare programs such as Medicare and

Medicaid and health programs outside the United States.

We have developed and implemented business practices and processes to train

our personnel to perform their duties in compliance with healthcare fraud and abuse laws.

While we conduct informal oversight to

detect and prevent these types of fraud and abuse, we lack formal written policies and procedures at this time.

If we were unable

to document and implement the controls and procedures required in a timely manner or otherwise violate such laws, we might suffer

adverse regulatory consequences or face criminal sanctions, which could harm our operations, financial reporting or financial results.

Regulation of Medical Devices Outside of the

United States

Medical device laws also are in effect in

many of the non-U.S.

As a manufacturer and distributor of medical devices to hospitals and other healthcare providers, we and our customers are subject to laws which apply to Medicare, Medicaid, and other federal and state healthcare programs in the U.S.

One such law, the Anti-kickback Statute, prohibits the solicitation, offer, payment or receipt of remuneration in return for referral or purchase, or in return for the recommending or arranging for the referral or purchase, of products covered by the programs.

The Anti-kickback Statute provides a number of exceptions or “safe harbors” for particular types of transactions.

While we generally do not file claims for reimbursement from government payers, the U.S.

federal government has asserted theories of liability against manufacturers under the Federal False Claims Act, which prohibits the submission of false claims to Medicare, Medicaid, and other state and federal programs.

Many states have similar fraud and abuse laws which may apply to us.

Violations of these fraud and abuse-related laws are punishable by criminal or civil sanctions, including substantial fines, imprisonment and exclusion from participation in healthcare programs such as Medicare and Medicaid and health programs outside the United States.

We have developed and implemented business practices and processes to train our personnel to perform their duties in compliance with healthcare fraud and abuse laws.

While we conduct informal oversight to detect and prevent these types of fraud and abuse, we lack formal written policies and procedures at this time.

If we were unable to document and implement the controls and procedures required in a timely manner or otherwise violate such laws, we might suffer adverse regulatory consequences or face criminal sanctions, which could harm our operations, financial reporting or financial results.

Regulation of Medical Devices Outside of the United States

Medical device laws also are in effect in many of the non-U.S.

markets in which we do business.

These laws range from comprehensive device approval requirements for some

or all of our products to requests for product data or certifications.

Inspection of and controls over manufacturing, as well as

monitoring of device-related adverse events, also are components of most of these regulatory systems.

Most of our business is subject

to varying degrees of governmental regulation in the countries in which we operate, and the general trend is toward increasingly

stringent regulation balanced with a goal of optimizing international harmonization.

For example, the European Union (“EU”),

which currently relies on independent third parties, (called “Notified Bodies”) rather than governmental authorities

to review and certify medium and high-risk medical devices, is moving to more governmental oversight of medical devices.

the regulatory requirements for a broad spectrum of medical devices are covered in three European Medical Device Directives (adopted

in the 1990’s) with which manufacturers must comply in order to receive a CE Certificate of Conformity (“CE Mark”)

from a Notified Body.

Only certified medical devices bearing a CE Mark can be sold in the EU and European Free Trade Association

(“EFTA”) countries and Turkey.

These laws range from comprehensive device approval requirements for some or all of our products to requests for product data or certifications.

Inspection of and controls over manufacturing, as well as monitoring of device-related adverse events, also are components of most of these regulatory systems.

Most of our business is subject to varying degrees of governmental regulation in the countries in which we operate, and the general trend is toward increasingly stringent regulation balanced with a goal of optimizing international harmonization.

For example, the European Union (“EU”), which currently relies on independent third parties, (called “Notified Bodies”) rather than governmental authorities to review and certify medium and high-risk medical devices, is moving to more governmental oversight of medical devices.

Currently, the regulatory requirements for a broad spectrum of medical devices are covered in three European

Medical Device Directives (adopted in the 1990’s) with which manufacturers must comply in order to receive a CE Certificate of Conformity (“CE Mark”) from a Notified Body.

Only certified medical devices bearing a CE Mark can be sold in the EU and European Free Trade Association (“EFTA”) countries and Turkey.

EFTA includes Iceland, Norway, Principality of Liechtenstein and Switzerland.

In May 2017, the European Union (the

"EU") implemented a new regulatory scheme for medical devices under the Medical Device Regulation ("MDR").

The MDR becomes fully effective in 2020 and will bring significant new requirements for many medical devices, including enhanced

requirements for clinical evidence and documentation, increased focus on device identification and traceability, new definitions

and registration of economic operators throughout the distribution chain, and additional post-market surveillance and vigilance.

Compliance with the MDR will require re-certification of our products to the enhanced standards and may result in substantial additional

In May 2017, the European Union (the "EU") implemented a new regulatory scheme for medical devices under the Medical Device Regulation ("MDR").

The MDR becomes effective in May 2021, however our CE Certificates are valid through May 2024, allowing us to continue shipping our products into the EU after the effective date of the MDR.

MDR will bring significant new requirements for many medical devices, including enhanced requirements for clinical evidence and documentation, increased focus on device identification and traceability, new definitions and registration of economic operators throughout the distribution chain, and additional post-market surveillance and vigilance.

Compliance with the MDR will require re-certification of our products to the enhanced standards and may result in substantial additional expense.

If these measures are unable to be taken, it may no longer be possible to place such devices on the EU market.

Additionally,

we may lose our current quality system certification due to ISO Registrar difficulties as European authorities increase regulatory

pressure or increased scrutiny resulting from MDR.

The loss of the quality system certification may prevent product shipments to

the EU and to other foreign markets, such as Canada, which could significantly lower our revenues from foreign sales while we take

remedial measures.

The EU has enacted legislation restricting

the use of hazardous substances in electronic equipment (Directive 2011/65/EU, referred to as “RoHS 2”), such as our

Additionally, we may lose our current quality system certification due to ISO Registrar difficulties as European authorities increase regulatory pressure or increased scrutiny resulting from MDR.

The loss of the quality system certification may prevent product shipments to the EU and to other foreign markets, such as Canada, which could significantly lower our revenues from foreign sales while we take remedial measures.

The EU has enacted legislation restricting the use of hazardous substances in electronic equipment (Directive 2011/65/EU, referred to as “RoHS 2”), such as our devices.

The application of RoHS 2 to medical devices became effective as of July 22, 2014.

Our products are compliant with

If we are unable to remain compliant with RoHS 2, there may be an interruption of sales to the EU, which could significantly

lower our revenues from foreign sales while we take remedial measures.

Additionally, on June 23, 2016, the

electorate in the United Kingdom voted in favor of leaving the EU, commonly referred to as “Brexit.”

The United Kingdom

officially withdrew from the EU on January 31, 2020.

This referendum has created political and economic uncertainty that could

persist for years, particularly in the United Kingdom and the EU, as many of the details of the separation have yet to be addressed.

Since a significant portion of the regulatory framework in the United Kingdom is derived from EU directives and regulations, the

referendum could materially impact the regulatory regime with respect to our products in the United Kingdom or the EU.

in obtaining, or an inability to obtain, any device certifications, product marketing approvals, or other regulatory authorizations

as a result of Brexit or otherwise, could prevent us from commercializing our products in the United Kingdom and/or the EU and

affect our operations and financial results.

The ultimate effects of Brexit are uncertain

and will depend on any agreements the United Kingdom makes to retain access to EU markets either during a transitional period or

more permanently.

Brexit could adversely affect European and worldwide economic and market conditions and could contribute to instability

in global financial and foreign exchange markets.

Uncertainty over the terms of the United Kingdom’s departure from the EU

could harm our business and financial results.

In addition, other EU member countries may consider referendums regarding their

EU membership.

Any of these effects of Brexit, and others we cannot anticipate, could adversely affect our business, results of

operations and financial condition.

Our products are compliant with RoHS 2.

If we are unable to remain compliant with RoHS 2, there may be an interruption of sales to the EU, which could significantly lower our revenues from foreign sales while we take remedial measures.

Additionally, on June 23, 2016, the electorate in the United Kingdom voted in favor of leaving the EU, commonly referred to as “Brexit.” The United Kingdom officially withdrew from the EU on January 31, 2020.

This referendum has created political and economic uncertainty that could persist for years, particularly in the United Kingdom and the EU, as many of the details of the separation have yet to be addressed.

Since a significant portion of the regulatory framework in the United Kingdom is derived from EU directives and regulations, the referendum could materially impact the regulatory regime with respect to our products in the United Kingdom or the EU.

Any delay in obtaining, or an inability to obtain, any device certifications, product marketing approvals, or other regulatory authorizations as a result of Brexit or otherwise, could prevent us from commercializing our products in the United Kingdom and/or the EU and affect our operations and financial results.

The ultimate effects of Brexit are uncertain and will depend on any agreements the United Kingdom makes to retain access to EU markets either during a transitional period or more permanently.

Brexit could adversely affect European and worldwide economic and market conditions and could contribute to instability in global financial and foreign exchange markets.

Uncertainty over the terms of the United Kingdom’s departure from the EU could harm our business and financial results.

In addition, other EU member countries may consider referendums regarding their EU membership.

Any of these effects of Brexit, and others we cannot anticipate, could adversely affect our business, results of operations and financial condition.

Anti-Bribery Laws

Our global activities are subject to the

Our global activities are subject to the U.S.

Foreign Corrupt Practices Act, the U.K.

Bribery Act, and other countries’

anti-bribery laws that have been enacted in

support of the Organization for Economic Cooperation and Development’s Anti-bribery Convention.

These laws generally prohibit

companies and their intermediaries from making improper payments to non-U.S.

government officials with the intent to inappropriately

gain a business advantage.

Bribery Act, and other countries’ anti-bribery laws that have been enacted in support of the Organization for Economic Cooperation and Development’s Anti-bribery Convention.

These laws generally prohibit companies and their intermediaries from making improper payments to non-U.S.

government officials with the intent to inappropriately gain a business advantage.

They also require companies to maintain accurate books and records and internal financial controls.

Bribery Act also prohibits commercial bribery and makes it a crime for a company to fail to prevent bribery.

have the burden of proving that they have adequate procedures in place to prevent bribery.

The enforcement of such laws in the

and elsewhere has increased dramatically in the past few years, and authorities have indicated that the pharmaceutical and

medical device industry is a significant focus for enforcement efforts.

Because of the predominance of government-sponsored

healthcare systems around the world, many of our customer relationships outside of the United States are with governmental entities.

Our policies mandate strict compliance with the anti-bribery laws.

We operate in many parts of the world that have experienced

governmental corruption to some degree, and in certain circumstances strict compliance with anti-bribery laws may conflict with

local customs and practices.

Companies have the burden of proving that they have adequate procedures in place to prevent bribery.

The enforcement of such laws in the U.S.

and elsewhere has increased dramatically in the past few years, and authorities have indicated that the pharmaceutical and medical device industry is a significant focus for enforcement efforts.

Because of the predominance of government-sponsored healthcare systems around the world, many of our customer relationships outside of the United States are with governmental entities.

Our policies mandate strict

compliance with the anti-bribery laws.

We operate in many parts of the world that have experienced governmental corruption to some degree, and in certain circumstances strict compliance with anti-bribery laws may conflict with local customs and practices.

Transparency Laws in the U.S.

and Other Countries

There are numerous requirements imposed

by states in the U.S.

There are numerous requirements imposed by states in the U.S.

on the interaction of pharmaceutical and medical device companies with physicians.

For example, several states

and the District of Columbia either require the tracking and reporting of specific types of interactions with healthcare professionals

or restrict such interactions.

A similar requirement was imposed at the federal level under the “sunshine”

of Patient Protection and Affordable Care Act, (the “Sunshine Provisions”), to track and report payments and “transfers

of value”

physicians or teaching hospitals by manufacturers of medical products that are available for reimbursement

by a federal insurer.

We are also subject to a variety of other

laws, directives and regulations in and outside of the U.S., including those related to the following:

For example, several states and the District of Columbia either require the tracking and reporting of specific types of interactions with healthcare professionals or restrict such interactions.

A similar requirement was imposed at the federal level under the “sunshine” provision of Patient Protection and Affordable Care Act, (the “Sunshine Provisions”), to track and report payments and “transfers of value” to U.S.

physicians or teaching hospitals by manufacturers of medical products that are available for reimbursement by a federal insurer.

We are also subject to a variety of other laws, directives and regulations in and outside of the U.S., including those related to the following:

● environmental laws and regulations;

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Occupational Safety and Health Act, which sets forth requirements for workplace conditions;

California’s Proposition 65, which sets forth a list of substances that are deemed by the State of California to pose

a risk of carcinogenicity or birth defects;

● California’s Proposition 65, which sets forth a list of substances that are deemed by the State of California to pose a risk of carcinogenicity or birth defects;

● various customs, export control, anti-boycott and trade embargo laws and regulations administered by U.S.

and foreign government

agencies, including the U.S.

Customs and Border Protection, the Bureau of Industry and Security, the Department of Commerce and

the Office of Foreign Assets Control Treasury Department, as well as others.

Despite our training and compliance program,

our internal control policies and procedures may not always protect us from reckless or criminal acts committed by our employees

or agents in violation of any of these laws.

and foreign government agencies, including the U.S.

Customs and Border Protection, the Bureau of Industry and Security, the Department of Commerce and the Office of Foreign Assets Control Treasury Department, as well as others.

Despite our training and compliance program, our internal control policies and procedures may not always protect us from reckless or criminal acts committed by our employees or agents in violation of any of these laws.

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