What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-03-02 compared with 2022-03-04 · 62 added, 55 removed, 482 unchanged (20% of the section changed)

17 unchanged sentences

invasive and non-invasive blood pressure;

patient temperature, and;

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

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.

6 unchanged sentences

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

In fiscal year 2021, our revenue was $41.8 million and our income from operations was $9.8 million representing an operating profit margin of 23.5 percent.

In fiscal year 2022,

our revenue was $53.3 million and our income from operations was $15.6 million representing an operating profit margin of 29.3 percent.

Refer to the information contained under the caption “Financial Highlights and Outlook” regarding our outlook for 2023.

29 unchanged sentences

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

In 2022, we introduced our ferromagnetic detection device, IRadimed FMD1 3600 with Remote Alarm Logging Unit, (“RALU”).

This is the first ferromagnetic detection device with TruSense threat qualification technology.

This technology predicts an approaching ferrous hazard by uniquely sensing a threat’s speed, trajectory, and Zone IV door status reducing false alarms, all while simultaneously circumventing background magnetic field noise.

We currently compete in the MRI compatible medical device market.

17 unchanged sentences

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;

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 that are candidates for an MRI requiring IV medications or sedation during their imaging procedure:

(1) do not offer MRI treatment to such patients;

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

2 unchanged sentences

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.

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

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.

9 unchanged sentences

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 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.

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

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.

Market Opportunities

1 unchanged sentence

MRI Compatible IV Infusion Pump

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

We view our MRI compatible IV infusion pump primarily as a patient and staff 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.

23 unchanged sentences

These additional call points within the critical care areas of a hospital often result in additional sales into radiology.

Additionally, expanded use of our MRI compatible medical devices could 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.

Additionally, expanded use of our MRI compatible medical devices could 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.

19 unchanged sentences

● Infection risk from running lengthy IV tubing sets with multiple extensions through the wall or under the door;

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

● Risk of inaccurate dose delivery 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;

5 unchanged sentences

Our 3880 Monitor’s compact and lightweight design facilitates the use of multiple monitors to support a single MRI scanner as well as 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.

Because of the transport capabilities that only our small-sized 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.

3 unchanged sentences

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

The recent introduction of our Ferromagnetic Detection system (“FMD”) is an example of this expansion.

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

2 unchanged sentences

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.

While we have not completed an acquisition, we evaluate such opportunities from time to time that might improve our product mix and profitability.

Commercial Strategy

24 unchanged sentences

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 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.

5 unchanged sentences

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.

We currently offer three primary products for sale:

(1) our MRidium 3860+ MRI compatible IV infusion pump system with associated disposable IV tubing sets, (2) our 3880 MRI compatible patient vital signs monitoring system with associated disposable products, and (3) our 3600 FMD1 with RALU ferromagnetic detection device.

MRidium MRI Compatible IV Infusion Pump System

22 unchanged sentences

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.

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.

26 unchanged sentences

Our wireless remote display/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 display/control unit.

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

Utilizing the same user interface and large bright display as the MRidium pump, our wireless remote display/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.

19 unchanged sentences

Our 3880 Monitor has a compact, lightweight design allowing it to travel with the patient from the 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.

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;

invasive blood pressure;

patient temperature, and/or;

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

patient temperature, and/or optional advanced multi-gas anesthetic agent unit featuring continuous Minimum Alveolar Concentration measurements.

The MRI compatible patient vital signs monitoring system also includes:

2 unchanged sentences

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

IRadimed FMD1 with Remote Alarm Logging Unit (RALU)

Our 3600 ferromagnetic detection device, IRadimed FMD1 with Remote Alarm Logging Unit (RALU) is the first ferromagnetic detection device with TruSense threat qualification technology.

Our patent pending TruSense technology predicts an approaching ferrous hazard by uniquely sensing a threat’s speed, trajectory, and Zone IV door status.

with IRadimed’s expertise in Dynamic Signal Processing.

This technology reduces false alarms, all while simultaneously circumventing background magnetic field noise.

The 3600 can be self-installed and does not require drilling, special tools, permits or contractors like traditional FMD systems.

The wireless touchscreen, RALU is unique in the industry and provides a full color visual representation of the MRI door and FMD status.

When an incident occurs, this wireless touchscreen uniquely allows users to quickly and easily log all ferrous items as they enter the MRI Zone IV improving the reporting accuracy hospitals require for accreditation.

Intellectual Property

28 unchanged sentences

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.

At December 31, 2021, 2020 and 2019, our backlog was approximately:

(In millions)

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.

Selling cycles for our devices have varied widely and have historically ranged between three and six months in duration.

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

5 unchanged sentences

These programs include surveys and visits to customer sites.

We enter into agreements with integrated delivery health systems and healthcare supply contracting companies, which are 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.

their member hospitals.

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

15 unchanged sentences

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

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 the on-going global supply chain issues, 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 or these other events, will affect us directly or through our suppliers;

however, we continue to monitor our supply chain regarding these matters.

We continuously monitor our supply chain regarding these matters.

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.

2 unchanged sentences

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

This supply agreement is renewable with written mutual consent of the Company and supplier.

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

33 unchanged sentences

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.

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.

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

GEHC) 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.

2 unchanged sentences

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 continue creating changes to customer buying patterns that vary from the historical trend.

Segment Information and Geographic Data

4 unchanged sentences

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 4.6 percent of revenue in 2021, $1.9 million or 6.0 percent of revenue in 2020 and $1.4 million or 3.7 percent of revenue in 2019.

Our research and development expenses were $2.3 million or 4.3 percent of revenue in 2022 and $1.9 million or 4.6 percent of revenue in 2021.

Human Capital

As of December 31, 2022, we had 123 full-time employees, including 44 in manufacturing and service, 49 in sales, marketing and customer support services, 9 in regulatory affairs and quality assurance, 11 in finance and administration and 10 in research and development.

1 unchanged sentence

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

We endeavor to maintain a workplace that is free from discrimination or harassment on the basis of color, race, sex, national origin, ethnicity, religion, age, disability, sexual orientation, gender identification or expression or any other status protected by applicable law.

We conduct annual training to prevent harassment and discrimination and monitor employee conduct year-round, including by providing employees with access to an anonymous whistleblower hotline to report any violations.

The basis for recruitment, hiring, development, training, compensation, and advancement at the Company is qualifications, performance, skills and experience.

Our employees are fairly compensated, without regard to gender, race and ethnicity, and routinely recognized for outstanding performance and provided with training and professional development opportunities.

Regulatory Matters

4 unchanged sentences

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

All 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.

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.

7 unchanged sentences

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.

The process of obtaining PMA approval is much more costly, lengthy, and uncertain than the 510(k) process.

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

All our current medical devices and related products that are available in the U.S.

were originally cleared through the 510(k) process.

All our current regulated medical devices and related products that are available in the U.S.

were originally cleared through the 510(k) process as required by the FDA.

We cannot be sure that future medical devices or modifications of current medical devices, 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.

Our FMD1 is an example of this as a non-regulated medical device and providing no diagnostic or therapeutic claims.

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.

2 unchanged sentences

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.

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

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

44 unchanged sentences

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.

Only certified medical devices bearing a CE Mark can be sold in the EU and European Free Trade Association (“EFTA”) countries and Türkiye.

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 became 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.

The MDR initially became effective in May 2021, however the MDR transition was recently extended to 2028 for Class IIb non implanted devices.

Regardless our CE Certificates remain valid through May 2024, allowing us to continue shipping our products into the EU.

MDR brings 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.

2 unchanged sentences

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 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.

2 unchanged sentences

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 resulting from 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 remain 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

29 unchanged sentences

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