UTAH MEDICAL PRODUCTS INC 10-K

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Currency amounts are in thousands except per-share amounts and where noted. TABLE OF CONTENTS Management’s Report on Internal Control Over Financial Reporting 38 Report of Independent Registered Public Accounting Firm (Haynie) on Financial Statements 39 Report of Independent Registered Public Accounting Firm (Nortons) on Financial Statements 41 Consolidated Balance Sheets 43 Consolidated Statements of Income and Comprehensive Income 44 Consolidated Statements of Cash Flow 45 Consolidated Statements of Stockholders’ Equity 46 Notes to Consolidated Financial Statements 47 37 MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The Company's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The Company's internal control over financial reporting includes those policies and procedures that · pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; · provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and · provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. The Company’s management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2025. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013) . Based on its assessment and those criteria, management believes that the Company maintained effective internal control over financial reporting as of December 31, 2025. By: /s/ Kevin L. Cornwell Kevin L. Cornwell Chief Executive Officer By: /s/ Brian L. Koopman Brian L. Koopman Principal Financial Officer 38 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Utah Medical Products, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Utah Medical Products, Inc (the Company) as of December 31, 2025 and 2024, and the related consolidated statements of income and comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We did not audit portions of the consolidated financial statements for Femcare Group Limited, a wholly owned subsidiary. The portions not audited by us include assets of $19,121,662 and $19,723,338 as of December 31, 2025 and 2024, respectively and total revenues of $4,205,594 and $4,500,153 and $4,581,877 for the years ended December 31, 2025, 2024, and 2023, respectively. Those portions of the consolidated financial statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as they relate to the amounts included for Femcare Group Limited, is based solely on the reports of the other auditors. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Evaluation of income taxes 39 Description of the Matter: As discussed in Note 1 to the consolidated financial statements, the Company operates in many parts in the world through its subsidiaries. The Company, or one of its subsidiaries, will file a tax return in the U.S. federal jurisdiction, in the United Kingdom, in Australia, in Ireland, and in Canada. Due to the complexity with dealing in multiple currencies/countries, along with the various tax laws and significant management judgment, we believe the account to be a critical audit matter. How We Addressed the Matter in Our Audit: We evaluated the appropriateness and consistency of management’s methods and assumptions used in the identification, recognition, measurement, and disclosures of its taxes. We performed a walkthrough of the processes and controls over the income tax process. We read and evaluated management’s documentation, including relevant accounting policies and information obtained by management from the outside tax specialists engaged to assist with their taxes. We identified and evaluated the reasonableness of significant assumptions in the provision and evaluated for potential bias. We verified the account balances, reperformed the provision calculation of deferred tax assets and liabilities and verified all tax rates used. /s/ Haynie & Company Salt Lake City, Utah March 27, 2026 We have served as the Company’s auditor since 2018. PCAOB # 457 40 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Utah Medical Products, Inc. Opinion on the Financial Statements We have audited the consolidated balance sheets of Femcare Group Limited (the Company), including its subsidiaries, as of December 31, 2025 and 2024, and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. The accounting policy in respect of revenue is that revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. We identified the assessment of the revenue as a critical audit matter due to its inherent risk of understatement. The primary procedures we performed to address this critical audit matter included the following. We tested certain internal controls over the Company’s process for dispatching goods and raising invoices to customers. We tested a sample of orders during the year to establish that these were dispatched and invoiced. We evaluated the Company’s determination of the recoverability of any unpaid receivables at 31 December 2025. 41 We also identified the assessment of the valuation of intangible assets as a critical audit matter. Intangible assets are valued at cost and amortised using the straight-line method over the useful economic life of the asset. Goodwill is carried at cost and tested for impairment annually. We identified the valuation of intangible assets and goodwill as a critical audit matter due to their materiality to the financial statements. We reviewed and tested the Company’s calculations in respect of amortisation and evaluated the Company’s determination of the carrying value as at 31 December 2025. NORTONS ASSURANCE LIMITED We have served as the Company’s auditor since 2011. Reading, United Kingdom 27 March 2026 42 UTAH MEDICAL PRODUCTS, INC. CONSOLIDATED BALANCE SHEETS December 31, 2025 and 2024 (In thousands) 2025 2024 ASSETS Current assets: Cash $ 85,756 $ 82,976 Accounts and other receivables, net (note 2) 3,522 4,094 Inventories (note 2) 7,935 8,812 Prepaid expenses and other current assets 529 448 Total current assets 97,742 96,330 Property and equipment, net (notes 4 and 10) 9,908 9,763 Goodwill 14,052 13,580 Other intangible assets (note 2) 55,941 53,772 Other intangible assets - accumulated amortization ( 55,101 ) ( 50,907 ) Other intangible assets - net (note 2) 840 2,865 Total assets $ 122,542 $ 122,538 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 911 $ 696 Accrued expenses (note 2) 1,687 3,061 Total current liabilities 2,598 3,757 Long term lease liability 225 282 Deferred tax liability - intangible assets 114 603 Deferred income taxes (note 7) 337 469 Total liabilities 3,274 5,111 Commitments and contingencies (notes 6 and 12) - - Stockholders' equity: Common stock, $ 0.01 par value; 50,000 shares authorized, issued 3,186 shares in 2025 and 3,335 shares in 2024 32 33 Accumulated other comprehensive loss ( 9,416 ) ( 11,908 ) Additional paid-in capital - - Retained earnings 128,652 129,302 Total stockholders' equity 119,268 117,427 Total liabilities and stockholders' equity $ 122,542 $ 122,538 See accompanying notes to financial statements. 43 UTAH MEDICAL PRODUCTS, INC. CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME Years ended December 31, 2025, 2024 and 2023 (In thousands, except per share amounts) 2025 2024 2023 Sales, net (notes 1, 3, 9 and 11) $ 38,520 $ 40,903 $ 50,224 Cost of goods sold 16,519 16,760 20,186 Gross profit 22,001 24,143 30,038 Operating expense: Sales and marketing 2,051 1,901 1,685 Research and development 668 813 560 General and administrative 7,880 7,835 11,016 Operating income 11,402 13,594 16,777 Other income (expense): Dividend and interest income 2,808 3,367 3,036 Royalty income (note 12) 20 15 20 Other, net ( 120 ) ( 174 ) 256 Income before provision for income taxes 14,110 16,802 20,089 Provision for income taxes (note 7) 2,824 2,928 3,454 Net income $ 11,286 $ 13,874 $ 16,635 Earnings per common share (basic) (note 1): $ 3.48 $ 3.96 $ 4.58 Earnings per common share (diluted) (note 1): $ 3.48 $ 3.96 $ 4.57 Other comprehensive income (loss): Foreign currency translation net of taxes of $ 0 in all periods $ 2,492 $ ( 1,249 ) $ 1,381 Total comprehensive income $ 13,778 $ 12,625 $ 18,016 See accompanying notes to financial statements. 44 UTAH MEDICAL PRODUCTS, INC. CONSOLIDATED STATEMENTS OF CASH FLOW Years Ended December 31, 2025, 2024 and 2023 (In thousands) 2025 2024 2023 Cash flows from operating activities: Net income $ 11,286 $ 13,874 $ 16,635 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 826 730 623 Amortization 2,126 2,065 5,692 Provision for losses on accounts receivable 367 ( 4 ) ( 33 ) Amortization of operating lease assets 56 51 53 Deferred income taxes ( 659 ) ( 359 ) ( 693 ) Stock-based compensation expense 373 256 225 Tax benefit attributable to exercise of stock options - 21 12 (Increase) decrease in: Accounts receivable 338 ( 835 ) 2,270 Other receivables ( 5 ) 54 - Inventories 1,195 587 ( 670 ) Prepaid expenses and other current assets ( 54 ) ( 32 ) 45 Increase (decrease) in: Accounts payable 211 ( 73 ) ( 456 ) Accrued expenses ( 1,368 ) ( 1,504 ) ( 1,422 ) Net cash provided by operating activities 14,692 14,831 22,281 Cash flows from investing activities: Capital expenditures for: Property and equipment ( 371 ) ( 230 ) ( 639 ) Intangible assets - ( 5 ) - Proceeds from the sale of property and equipment - 27 - Net cash (used in) investing activities ( 371 ) ( 208 ) ( 639 ) Cash flows from financing activities: Proceeds from issuance of common stock - options - 390 117 Common stock purchased and retired ( 8,355 ) ( 19,968 ) - Dividends paid ( 3,983 ) ( 4,260 ) ( 4,282 ) Net cash (used in) financing activities ( 12,338 ) ( 23,838 ) ( 4,165 ) Effect of exchange rate changes on cash 797 ( 677 ) 339 Net increase (decrease) in cash and cash equivalents 2,780 ( 9,892 ) 17,816 Cash at beginning of year 82,976 92,868 75,052 Cash at end of year $ 85,756 $ 82,976 $ 92,868 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the year for: Income taxes $ 4,003 $ 4,638 $ 4,827 Interest - - - See accompanying notes to financial statements. 45 UTAH MEDICAL PRODUCTS, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY Years Ended December 31, 2025, 2024 and 2023 (In thousands) Accumulated Additional Other Total Common Stock Paid-in Comprehensive Retained Stockholders' Shares Amount Capital Income Earnings Equity Balance at December 31, 2022 3,628 $ 36 $ 252 $ ( 12,039 ) $ 126,006 $ 114,255 Shares issued upon exercise of employee stock options for cash 2 - 117 - - 117 Stock option compensation expense - - 225 - - 225 Common stock purchased and retired - - - - - - Foreign currency translation adjustment - - - 1,381 - 1,381 Common stock dividends - - - - ( 4,300 ) ( 4,300 ) Net income - - - - 16,635 16,635 Balance at December 31, 2023 3,630 $ 36 $ 594 $ ( 10,658 ) $ 138,341 $ 128,313 Shares issued upon exercise of employee stock options for cash 8 - 390 - - 390 Stock option compensation expense - - 256 - - 256 Common stock purchased and retired ( 302 ) ( 3 ) ( 1,239 ) - ( 18,726 ) ( 19,968 ) Foreign currency translation adjustment - - - ( 1,249 ) - ( 1,249 ) Common stock dividends - - - - ( 4,189 ) ( 4,189 ) Net income - - - - 13,874 13,874 Balance at December 31, 2024 3,335 $ 33 $ - $ ( 11,907 ) $ 129,302 $ 117,428 Shares issued upon exercise of employee stock options for cash - - - - - - Stock option compensation expense - - 373 - - 373 Common stock purchased and retired ( 149 ) ( 1 ) ( 373 ) - ( 7,981 ) ( 8,355 ) Foreign currency translation adjustment - - - 2,492 - 2,492 Common stock dividends - - - - ( 3,955 ) ( 3,955 ) Net income - - - - 11,286 11,286 Balance at December 31, 2025 3,186 $ 32 $ - $ ( 9,416 ) $ 128,652 $ 119,268 See accompanying notes to financial statements. 46 Utah Medical Products, Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2025, 2024 and 2023 Currency amounts are in thousands except per-share amounts and where noted. Note 1 – Summary of Significant Accounting Policies Organization Utah Medical Products, Inc. with headquarters in Midvale, Utah and its wholly-owned operating subsidiaries, Femcare Limited located in Romsey, Hampshire, England, Femcare Australia Pty Ltd located in Castle Hill, NSW, Australia, Utah Medical Products Canada, Inc. (dba Femcare Canada) located in Mississauga, Ontario, Canada and Utah Medical Products Ltd., which operates a manufacturing facility in Athlone, Ireland, (in the aggregate, the Company) are in the primary business of developing, manufacturing and globally distributing specialized medical devices for the healthcare industry. The Company’s broad range of products includes those used in critical care areas and the labor and delivery departments of hospitals, as well as outpatient clinics and physicians’ offices. Products are sold directly to end-user facilities in the U.S., Ireland, UK, Canada, France and Australia, and through third party distributors in other outside the U.S. (OUS) markets. Domestically, until February 1, 2019, Femcare Ltd had an exclusive U.S. distribution relationship with CooperSurgical, Inc. (CSI) for the Filshie Clip System. UTMD also sells subcontract manufactured components and finished products to over 130 companies in the U.S. for their medical and non-medical products. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although actual results could differ from those estimates, management believes it has considered and disclosed all relevant information in making its estimates that materially affect reported performance and current values. Principles of Consolidation The consolidated financial statements include those of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Cash and Cash Equivalents For purposes of the consolidated statement of cash flows, the Company considers cash on deposit and short-term investments with original maturities of three months or less to be cash and cash equivalents. Concentration of Credit Risk The primary concentration of credit risk consists of trade receivables. In the normal course of business, the Company provides credit terms to its customers. Accordingly, the Company performs ongoing credit evaluations of its customers and maintains allowances for possible losses which, when realized, have been within the range of management's expectations as reflected by its reserves. The Company's customer base consists of hospitals, medical device distributors, physician practices and others directly related to healthcare providers, as well as other manufacturing companies. Although the Company is affected by the well-being of the global healthcare industry, management does not believe significant trade receivable credit risk exists at December 31, 2025 except under an extreme global financial crisis. The Company maintains its cash in bank deposit accounts in addition to Fidelity Investment money market accounts. The Company has not experienced any losses in such accounts and believes it is not exposed to a significant credit risk on cash and cash equivalent balances. 47 Utah Medical Products, Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2025, 2024 and 2023 Note 1 – Summary of Significant Accounting Policies (continued) Accounts Receivable Accounts receivable are amounts due on product sales and are unsecured. Accounts receivable are carried at their estimated collectible amounts. Credit is generally extended on a short-term basis; thus, accounts receivable do not bear interest although a late charge may be applied to such receivables that are past the due date. Accounts receivable are periodically evaluated for collectability based on past credit history of customers and current market conditions. Provisions for losses on accounts receivable are determined on the basis of loss experience, known and inherent risk in the account balance and current economic conditions (see note 2). Inventories Finished products, work-in-process, raw materials and supplies inventories are stated at the lower of cost and net realizable value (NRV) computed on a first-in, first-out method. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation (see note 2). Property and Equipment Property and equipment are stated at cost. Depreciation and amortization are computed using the straight-line method over estimated useful lives as follows: Building and improvements 15 - 40 years Furniture, equipment and tooling 3 - 10 years Long-Lived Assets The Company evaluates its long-lived assets in accordance with Accounting Standards Codification (ASC) 360, “Accounting for the Impairment of Long-Lived Assets.” Long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets and is recorded in the period in which the determination was made. Intangible Assets Costs associated with the acquisition of patents, trademarks, trade names, customer relationships, regulatory approvals & product certifications, license rights and non-compete agreements are capitalized, and are being amortized using the straight-line method over periods ranging from 5 to 20 years. UTMD’s goodwill is tested for impairment annually, in the fourth quarter of each year, in accordance with ASC 350. UTMD also performs impairment tests contemporaneously, if circumstances change that would more than likely reduce the fair value of goodwill below its net book value. If UTMD determines that its goodwill is impaired, a second step is completed to measure the amount of the impairment loss. UTMD does not expect its goodwill to become impaired in the foreseeable future. Estimated future amortization expenses on intangible assets held as of December 31, 2025, using the 2025 year-end 1.3445 USD/GBP and . 6668 USD/AUD currency exchange rates, is about $ 433 in 2026, $ 12 in 2027, $ 10 in 2028, $ 9 in 2029, and $ 9 in 2030 (see note 2). 48 Utah Medical Products, Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2025, 2024 and 2023 Note 1 – Summary of Significant Accounting Policies (continued) Stock-Based Compensation At December 31, 2025, the Company has stock-based employee compensation plans, which are described more fully in note 8. The Company accounts for stock compensation under ASC 718, Share-Based Payment . This statement requires the Company to recognize compensation cost based on the grant date fair value of options granted to employees and directors. In 2025, the Company recognized $ 373 in stock-based compensation cost compared to $ 255 in 2024 and $ 225 in 2023. Revenue Recognition The Company recognizes revenue at the time of product shipment as UTMD meets its contractual performance obligations to the customer at the time of shipment. Revenue recognized by UTMD is based upon the consideration to which UTMD is entitled from its customers as a result of shipping a physical product, in accordance with the documented arrangements and fixed contracts in which the selling price was fixed prior to the Company’s acceptance of an order. Revenue from service sales, which are immaterial to UTMD, is generally recognized when the service is completed and invoiced. As demonstrated by decades of experience in successful and consistent collections, there is very minor and insignificant uncertainty regarding the collectability of invoiced amounts reasonably within the terms of the Company’s contracts. There are circumstances under which insignificant revenue may be recognized when product is not shipped, which meet the criteria of ASC 606: the Company provides engineering services, for example, design and production of manufacturing tooling that may be used in subsequent UTMD manufacturing of custom components for other companies. This revenue is recognized when UTMD’s performance obligations have been completed according to a fixed contractual agreement. UTMD includes handling fees charged to customers in revenues. Income Taxes The Company accounts for income taxes under ASC 740, “Accounting for Income Taxes,” whereby deferred taxes are computed under the asset and liability method. The Company accounts for deferred taxes under ASC 740, “Accounting for Income Taxes”, which requires that all deferred income taxes are classified as noncurrent in a classified statement of financial position. The TCJA contains a deemed repatriation transition tax (REPAT tax) on accumulated earnings and profits of the Company’s non-U.S. subsidiaries that have not been subject to U.S. tax. The Company has elected to pay its net REPAT tax over eight years. The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, in Utah, in the United Kingdom, in Australia, in Ireland and in Canada. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and any related penalties in income taxes. The Company did not have any tax penalties in 2025, 2024 or 2023. Legal Costs The Company has been involved in lawsuits which are an expected consequence of its operations and in the ordinary course of business. The Company maintains a reserve for legal costs which are probable and estimated based on previous experience and known risk. The reserve for legal costs at December 31, 2025 and 2024 was $ 68 and $ 111 , respectively (see note 2). 49 Utah Medical Products, Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2025, 2024 and 2023 Note 1 – Summary of Significant Accounting Policies (continued) Earnings per Share The computation of basic earnings per common share is based on the weighted average number of shares outstanding during each year. The computation of earnings per common share assuming dilution is based on the weighted average number of shares outstanding during the year plus the weighted average common stock equivalents which would arise from the exercise of stock options outstanding using the treasury stock method and the average market price per share during the year. The shares (in thousands) used in the computation of the Company’s basic and diluted earnings per share are reconciled as follows: 2025 2024 2023 Weighted average number of shares outstanding – basic 3,240 3,503 3,629 Dilutive effect of stock options - - 8 Weighted average number of shares outstanding, assuming dilution 3,240 3,503 3,637 Presentation of Sales and Similar Taxes Sales tax on revenue-producing transactions is recorded as a liability when the sale occurs. UTMD is not required to withhold sales tax on OUS sales, and at least 90% of domestic 2025 sales were to customers who are tax exempt or who are in jurisdictions where UTMD is not required to withhold sales tax. Translation of Foreign Currencies Assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars at the applicable exchange rates at year-end. Net gains or losses resulting from the translation of the Company’s assets and liabilities are reflected as a separate component of stockholders’ equity. A negative translation impact on stockholders’ equity reflects a current relative U.S. Dollar value higher than at the point in time that assets were actually acquired in a foreign currency. A positive translation impact would result from a U.S. dollar weaker in value than at the point in time foreign assets were acquired. Year-end translation gains or losses of non-functional currency bank account balances, e.g. EUR and AUD balances held by the UK subsidiary, are recognized as non-operating income or expense, as applicable. Income and expense items are translated at the weighted average rate of exchange (based on when transactions actually occurred) during the year. 50 Utah Medical Products, Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2025, 2024 and 2023 Note 2 – Detail of Certain Balance Sheet Accounts December 31, 2025 2024 Accounts and other receivables: Accounts receivable $ 4,035 $ 4,239 Accrued interest and other 2 ( 2 ) Less allowance for doubtful accounts ( 515 ) ( 143 ) Total accounts and other receivables $ 3,522 $ 4,094 Inventories: Finished products $ 1,223 $ 1,913 Work-in-process 1,627 1,414 Raw materials 5,085 5,485 Total inventories $ 7,935 $ 8,812 Goodwill: Balance as of January 1 $ 13,580 $ 13,692 Effect of foreign exchange 472 ( 112 ) Subtractions as a result of impairment - - Total Goodwill as of December 31 $ 14,052 $ 13,580 Other Identifiable Intangible Assets: Patents $ 2,220 $ 2,210 Non-compete agreements 134 125 Trademarks & trade names 9,865 9,205 Customer relationships 9,613 8,952 Distribution agreements 21,000 21,000 Right-of-Use Asset 286 338 Regulatory approvals & product certifications 12,823 11,942 Total Other Identifiable Intangible Assets 55,941 53,772 Accumulated amortization ( 55,101 ) ( 50,907 ) Other Identifiable Intangible Assets, Net $ 840 $ 2,865 Accrued expenses: Income taxes payable (receivable) $ ( 909 ) $ ( 153 ) Payroll and payroll taxes 853 1,148 Reserve for litigation costs 68 111 Other 1,675 1,955 Total accrued expenses $ 1,687 $ 3,061 51 Utah Medical Products, Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2025, 2024 and 2023 Note 3 – Quarterly Results of Operations (Unaudited) Unaudited Quarterly Data for 2025 First Quarter Second Quarter Third Quarter Fourth Quarter Net Sales $ 9,710 $ 9,953 $ 9,812 $ 9,044 Gross Profit 5,538 5,595 5,604 5,264 Net Income 3,041 3,048 2,631 2,565 Earnings Per Common Share (Diluted) 0.92 0.94 0.82 0.80 Unaudited Quarterly Data for 2024 First Quarter Second Quarter Third Quarter Fourth Quarter Net Sales $ 11,340 $ 10,400 $ 10,005 $ 9,157 Gross Profit 6,766 6,253 5,802 5,323 Net Income 3,956 3,453 3,563 2,902 Earnings Per Common Share (Diluted) 1.09 0.98 1.03 0.86 Unaudited Quarterly Data for 2023 First Quarter Second Quarter Third Quarter Fourth Quarter Net Sales $ 12,520 $ 12,866 $ 12,505 $ 12,333 Gross Profit 7,843 7,739 7,359 7,098 Net Income 4,214 4,200 3,935 4,287 Earnings Per Common Share (Diluted) 1.16 1.15 1.08 1.18 Note 4 – Property and Equipment Property and equipment consists of the following: December 31, 2025 2024 Land $ 1,697 $ 1,604 Buildings and improvements 14,385 13,539 Furniture, equipment and tooling 19,055 18,527 Construction-in-progress 110 19 Total 35,247 33,689 Accumulated depreciation ( 25,339 ) ( 23,926 ) Property and equipment, net $ 9,908 $ 9,763 Included in the Company’s consolidated balance sheet are the assets of its manufacturing and administrative facilities in Utah, Canada, England, Australia and Ireland. Property and equipment, by geographic area, are as follows: December 31, 2025 U.S. & Canada England & Australia Ireland Total Land $ 621 $ 673 $ 403 $ 1,697 Buildings and improvements 6,675 3,332 4,378 14,385 Furniture, equipment and tooling 16,033 763 2,259 19,055 Construction-in-progress 109 - 1 110 Total 23,438 4,768 7,041 35,247 Accumulated depreciation ( 19,401 ) ( 1,888 ) ( 4,050 ) ( 25,339 ) Property and equipment, net $ 4,037 $ 2,880 $ 2,991 $ 9,908 52 Utah Medical Products, Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2025, 2024 and 2023 Note 4 – Property and Equipment (continued) December 31, 2024 U.S. & Canada England & Australia Ireland Total Land $ 621 $ 627 $ 356 $ 1,604 Buildings and improvements 6,576 3,101 3,862 13,539 Furniture, equipment and tooling 15,842 710 1,975 18,527 Construction-in-progress 19 - - 19 Total 23,058 4,438 6,193 33,689 Accumulated depreciation ( 18,930 ) ( 1,587 ) ( 3,409 ) ( 23,926 ) Property and equipment, net $ 4,128 $ 2,851 $ 2,784 $ 9,763 Note 5 – Long-term Debt None in 2025 and 2024. Note 6 – Commitments and Contingencies Purchase Obligations The Company has obligations to purchase raw materials for use in its manufacturing operations. The Company has the right to make changes in, among other things, purchase quantities, delivery schedules and order acceptance. Product Liability The Company is self-insured for product liability risk. “Product liability” is an insurance industry term for the cost of legal defense and damages awarded to patients allegedly injured as a result of use of a company’s product. The Company maintains a reserve to cover product liability litigation expenses and possible damages consistent with its experience going back decades. Although product liability litigation expenses at $ 1,355 in 2025, $ 2,139 in 2024 and $ 1,660 in 2023 were high relative to history, they were not material to overall consolidated financial results. The Company absorbs the costs of clinical training and trouble-shooting in its on-going operating expenses. Warranty Reserve The Company’s published warranty is: “UTMD warrants its products to conform in all material respects to all published product specifications in effect on the date of shipment, and to be free from defects in material and workmanship for a period of thirty (30) days for supplies, or twenty-four (24) months for equipment, from date of shipment. During the warranty period UTMD shall, at its option, replace any products shown to UTMD's reasonable satisfaction to be defective at no expense to the Purchaser or refund the purchase price.” UTMD maintains a warranty reserve to provide for estimated costs which are likely to occur. The amount of this reserve is adjusted, as required, to reflect its actual experience. Based on its analysis of historical warranty claims and its estimate that existing warranty obligations are immaterial, no warranty reserve was made at December 31, 2025 or December 31, 2024. Litigation The Company has been involved in lawsuits which are an expected consequence of its operations and in the ordinary course of a medical device business. Presently, except for Filshie clip lawsuits, there is no litigation or threatened litigation where UTMD is a defendant. The Company expects that the outcome of the Filshie clip litigation will not be material to overall consolidated financial results. The Company applies its accounting policy to accrue legal costs that can be reasonably estimated. 53 Utah Medical Products, Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2025, 2024 and 2023 Note 7 – Income Taxes Deferred tax assets (liabilities) consist of the following temporary differences: December 31, 2025 2024 2023 Inventory write-downs and differences due to UNICAP $ 254 $ 270 $ 110 Allowance for doubtful accounts 76 29 31 Accrued liabilities and reserves 43 50 90 Depreciation and amortization ( 861 ) ( 1,451 ) ( 1,673 ) Deferred income taxes, net $ ( 488 ) $ ( 1,102 ) $ ( 1,442 ) The components of income tax expense are as follows: Years ended December 31, 2025 2024 2023 Current Federal $ 2,645 $ 2,250 $ 2,298 State 474 504 439 Foreign 319 515 1,338 Total Current 3,438 3,268 4,075 Deferred Federal ( 44 ) 110 ( 190 ) State ( 10 ) 65 ( 45 ) Foreign ( 559 ) ( 516 ) ( 387 ) Total Deferred ( 614 ) ( 340 ) ( 621 ) Total Income Tax Expense $ 2,824 $ 2,928 $ 3,454 Income tax expense differed from amounts computed by applying the statutory federal rate to pretax income as follows: Years ended December 31, 2025 Percent 2024 Percent 2023 Percent Federal income tax expense at the statutory rate $ 2,477 21.00 % $ 2,794 21.00 % $ 2,346 21.00 % State income taxes 428 3.63 % 504 3.79 % 439 3.93 % Foreign income taxes (blended rate) Ireland 602 5.10 % 802 6.03 % 1,070 9.58 % United Kingdom ( 839 ) ( 7.11 )% ( 922 ) ( 6.93 )% ( 353 ) ( 3.16 )% Other Foreign Jurisdictions ( 3 ) ( 0.03 )% 119 0.89 % 233 2.09 % Tax Credits Research and development tax credits ( 15 ) ( 0.13 )% ( 18 ) ( 0.13 )% ( 3 ) ( 0.03 )% Non-taxable or Non-deductible items Tax-exempt income ( 165 ) ( 1.40 )% ( 201 ) ( 1.51 )% ( 195 ) ( 1.75 )% Other 30 0.25 % 31 0.23 % 33 0.29 % Other Adjustments Section 965 Tax 353 2.99 % Other Adjustments ( 43 ) ( 0.37 )% ( 182 ) ( 1.36 )% ( 117 ) ( 1.04 )% Total $ 2,824 23.94 % $ 2,928 22.01 % $ 3,454 30.92 % The domestic and foreign components of income before income tax expense were as follows: Years ended December 31, 2025 2024 2023 Domestic $ 11,798 $ 13,306 $ 11,170 Foreign 2,312 3,496 8,919 Total $ 14,110 $ 16,802 $ 20,089 Note 7 – Income Taxes (continued) Income Taxes Paid (Net of refunds received): Years ended December 31, 2025 2024 2023 Federal $ 2,904 $ 2,937 $ 2,040 State Utah 670 701 556 Other 11 11 12 Foreign Ireland 517 781 1,110 Other 201 248 365 Total $ 4,302 $ 4,678 $ 4,083 54 Utah Medical Products, Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2025, 2024 and 2023 Note 8 – Options The Company has stock option plans which authorize the grant of stock options to eligible employees, directors and other individuals to purchase up to an aggregate of 275 thousand shares of common stock, of which 121 thousand are outstanding as of December 31, 2025. All options granted under the plans are granted at current market value at the date of grant, and may be exercised between six months and ten years following the date of grant. The plans are intended to advance the interest of the Company by attracting and ensuring retention of competent directors, employees and executive personnel, and to provide incentives to those individuals to devote their utmost efforts to the advancement of stockholder value. Changes in stock options were as follows: Shares Price Range (000’s) Per Share 2025 Granted 24 $ 58.10 $ 58.10 Expired or canceled 0.7 77.07 82.60 Exercised - - - Total outstanding at December 31 121 58.10 82.60 Total exercisable at December 31 65 58.10 82.60 2024 Granted 25 $ 64.09 $ 64.09 Expired or canceled 3 49.18 82.60 Exercised 8 49.18 58.50 Total outstanding at December 31 98 58.50 82.60 Total exercisable at December 31 52 58.50 82.60 2023 Granted 19 $ 77.07 $ 77.07 Expired or canceled 0.4 77.05 77.05 Exercised 2 49.18 77.05 Total outstanding at December 31 84 49.18 82.60 Total exercisable at December 31 50 49.18 82.60 For the years ended December 31, 2025, 2024 and 2023, the Company reduced current income taxes payable by $ 0 , $ 20 and $ 12 , respectively, for the income tax benefit attributable to sale by optionees of common stock received upon the exercise of stock options. Stock-Based Compensation In 2025, the Company recognized $ 373 in equity compensation cost, compared to $ 255 in 2024 and $ 225 in 2023. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions: Years ended December 31, 2025 2024 2023 Expected dividend amount per quarter $ 0.3250 $ 0.3150 $ 0.3090 Expected stock price volatility 31.08 % 31.21 % 31.67 % Risk-free interest rate 3.76 % 4.23 % 4.75 % Expected life of options 5.9 years 5.8 years 5.6 years The per share weighted average fair value of options granted during 2025 is $ 16.74 , 2024 is $ 19.77 and in 2023 is $ 25.09 . 55 Utah Medical Products, Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2025, 2024 and 2023 Note 8 – Options (continued) All UTMD options vest over a four-year service period. At December 31, 2025 there was $ 1,014 total unrecognized compensation expense related to non-vested stock options under the plans. A $ 442 portion of the cost is expected to be recognized over the next twelve months , and the remaining $ 572 recognized over the next 4 years. Expected dividend amounts were estimated based on the actual cash dividend rate at the time the options were granted and an estimate of future dividends based on past dividend rate changes as well as management’s expectations of future dividend rates over the expected holding period of the options. Expected volatility is based on UTMD’s historical volatility over recent periods of time and trends in that volatility, giving weight to more recent periods. Risk free interest rates were estimated based on actual U.S. Treasury Securities Interest rates as reported by the Federal Reserve Bank for periods of time equivalent to the holding periods estimated for the options on the dates the options were granted. Expected term of options were estimated based on historical holding periods for similar options previously granted by UTMD to employees and directors. The following table summarizes information about stock options outstanding at December 31, 2025: Options Outstanding Options Exercisable Weighted Average Remaining Weighted Weighted Range of Actual Contractual Average Average Exercise Number Life Exercise Number Exercise Prices Outstanding (Years) Price Exercisable Price $ 58.10 - 64.09 53,375 8.54 $ 60.90 11,125 $ 61.59 74.64 - 77.07 47,810 5.36 76.60 38,660 76.48 82.60 - 82.60 19,900 6.78 82.60 14,925 82.60 $ 58.10 - 82.60 121,085 6.99 $ 70.66 64,710 $ 75.33 2025 2024 2023 Intrinsic Value of Stock Options Exercised $ - $ 77 $ 31 Intrinsic Value of Stock Options Outstanding - - 814 Note 9 – Geographic Information The Company had sales in the following geographic areas based on the customer’s country of domicile: 2025 2024 2023 United States $ 22,761 $ 23,873 $ 30,413 Europe 7,928 8,705 8,918 Other 7,831 8,325 10,893 Note 10 – Long-lived Assets by Geographic Area The Company’s long-lived assets by geographic area were as follows: 2025 2024 2023 United States $ 10,972 $ 11,124 $ 11,462 England 9,979 11,445 13,838 Ireland 3,022 2,827 2,963 Australia 296 290 336 Canada 531 523 589 56 Utah Medical Products, Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2025, 2024 and 2023 Note 11 – Revenues by Product Category and Geographic Region Global revenues by product category: 2025 2024 2023 Obstetrics $ 3,998 $ 4,260 $ 4,592 Gynecology/ Electrosurgery/ Urology 19,719 20,707 22,300 Neonatal 8,010 6,869 6,863 Blood Pressure Monitoring and Accessories 6,793 9,067 16,469 Total: $ 38,520 $ 40,903 $ 50,224 Included in the Global revenues (above) were OUS revenues by product category: 2025 2024 2023 Obstetrics $ 764 $ 821 $ 1,041 Gynecology/ Electrosurgery/ Urology 9,973 11,390 11,992 Neonatal 1,591 1,523 1,678 Blood Pressure Monitoring and Accessories 3,430 3,724 7,309 Total: $ 15,758 $ 17,458 $ 22,020 Note 12 - Product Sale and Purchase Commitments The Company has had license agreements for the rights to develop and market certain products or technologies owned by unrelated parties. The confidential terms of such agreements are unique and varied, depending on many factors relating to the value and stage of development of the technology licensed. Royalties on future product sales are a normal component of such agreements and are included in the Company’s cost of goods sold on an ongoing basis. In 2025, 2024 and 2023, UTMD received royalties of $ 20 , $ 15 and $ 20 , respectively, for the use of intellectual property. UTMD had $ 4,340 in operating lease and purchase commitments as of December 31, 2025 . Note 13 – Employee Benefit Plans The Company sponsors a contributory 401(k) savings plan for U.S. employees, and contributory retirement plans for Ireland, UK, Australia and Canada employees. The Company’s matching contribution is determined annually by the board of directors. Company contributions were approximately $ 211 , $ 209 and $ 184 for the years ended December 31, 2025, 2024 and 2023, respectively. 57 Utah Medical Products, Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2025, 2024 and 2023 Note 14 – Leases UTMD has operating leases for a portion of its parking lot at its Midvale facility and an automobile at its Ireland facility. The remaining lease term on the parking lot is less than 6 years, and on the automobile is 18 months. There are no options to extend or terminate the leases. The parking lot lease contains a provision that requires an adjustment every five years to the lease payment based on the change in the Consumer Price Index. This adjustment occurred in 2021 requiring an increase of $ 87 to the value of the right-of-use asset and lease liabilities. UTMD has no other leases yet to commence. As neither lease contains implicit rates, UTMD’s incremental borrowing rate, based on information available at adoption date, was used to determine the present value of the leases. Operating lease costs for the years ended December 31, 2025, 2024, and 2023 were $ 67 , $ 66 , and $ 65 , respectively. Supplemental balance sheet information related to operating leases was as follows ( in thousands ): As of December 31, 2025 Operating lease right-of-use assets $ 286 Operating lease liabilities, current (included in Accrued Expenses) 60 Operating lease liabilities, long-term 226 Total operating lease liabilities $ 286 Maturities of operating lease liabilities at December 31, 2025 were as follows ( in thousands ): As of December 31, 2025 2026 (less imputed interest) $ 60 2027 (less imputed interest) 56 2028 (less imputed interest) 45 2029 (less imputed interest) 46 2030 (less imputed interest) 47 Thereafter (less imputed interest) 32 Total lease payments $ 307 Less: imputed interest ( 21 ) Total lease liabilities $ 286 The following table provides information on the lease terms and discount rates: Weighted-average remaining lease term (in years) 5.1 Weighted-average discount rate 4.1 % Note 15 - Distribution Agreement Purchase UTMD completed the purchase of exclusive U.S. distribution rights for the Filshie Clip System from CooperSurgical, Inc. (CSI) on February 1, 2019, after which CSI no longer had the right to sell the Filshie Clip System and UTMD distributed the Filshie Clip System directly to clinical facilities in the U.S. The $ 21,000 purchase price represented an identifiable intangible asset which was straight-line amortized and recognized as part of G&A expenses over the 4.75 year remaining life of the prior CSI distribution agreement with Femcare. The agreement became fully amortized in 4 th quarter 2023. As part of the agreement, UTMD also purchased the remaining CSI inventory for approximately $2,100. 58 Utah Medical Products, Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2025, 2024 and 2023 Note 16 - Earnings Per Share Basic earnings per share is calculated by dividing net income attributable to the common stockholders of the company by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by assuming the exercise of stock options at the closing price of stock at the end of 2025. The following table reconciles the numerator and the denominator used to calculate basic and diluted earnings per share: 2025 2024 2023 Numerator (in thousands) Net income 11,286 13,874 16,635 Denominator Weighted average shares, basic 3,240 3,503 3,629 Dilutive effect of stock options - - 8 Diluted shares 3,240 3,503 3,637 Earnings per share, basic 3.48 3.96 4.58 Earnings per share, diluted 3.48 3.96 4.57 Note 17 – Segment Information The Company operates as one operating segment. The Company’s chief operating decision maker (“CODM”) is its chief executive officer, who reviews financial information presented on a consolidated basis. The CODM uses consolidated gross profit margin, operating margin, and net income to assess financial performance and allocate resources. These financial metrics are used by the CODM to make key operating decisions such as the allocation of budget between cost of sales, sales and marketing, research and development, and general and administrative expenses. The following table presents selected financial information with respect to the Company’s single operating segment for the years ended December 31, 2025, 2024 and 2023: Year Ended December 31, 2025 2024 2023 Revenues 38,520 40,903 50,224 Less: Standard cost of sales 13,829 13,406 17,400 Other cost of sales 2,690 3,353 2,786 Gross Profit 22,001 24,143 30,038 Gross Profit Margin 57.1 % 59.0 % 59.8 % Sales & Marketing 2,051 1,901 1,685 Research & Development 668 813 560 Litigation Fees 1,355 2,139 1,660 Amortization 2,126 2,065 5,692 Other General & Administrative 4,399 3,631 3,664 Operating Income 11,402 13,594 16,777 Operating Income Margin 29.6 % 33.2 % 33.4 % Other Income Interest income 2,808 3,367 3,036 Other income (expense) ( 100 ) ( 159 ) 276 Income before income taxes 14,110 16,802 20,089 Provision for income taxes 2,824 2,928 3,454 Net Income 11,286 13,874 16,635 See the consolidated financial statements for other financial information regarding the Company’s operating segment. 59 Utah Medical Products, Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2025, 2024 and 2023 Note 18 – Recent Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , requiring public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis. The Company adopted ASU 2023-07 during the year ended December 31, 2024. See Note 17 Segment Information in the accompanying notes to the consolidated financial statements for further detail. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-09 effective January 1, 2025 and elected to apply the new disclosure requirements retrospectively to all periods presented. Accordingly, prior-year income tax disclosures have been updated to conform to the new guidance. See Note 7. In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03. In September 2025, the FASB issued ASU 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software”. This ASU clarifies and modernizes the accounting for costs related to internal-use software by removing references to prescriptive and sequential software development states and clarifies the threshold entities apply to begin capitalizing costs. Additionally, this ASU specifies that the disclosures in Subtopic 360-10, Property, Plant and Equipment - Overall, are required for all capitalized internal-use software costs, regardless of how those costs are presented in the financial statements. This ASU is effective for fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the impact of adopting ASU 2025-06. Note 19 – Subsequent Events The Company evaluated its December 31, 2025 financial statements for subsequent events through the date the financial statements were issued. The Company is not aware of any subsequent events which would require recognition or disclosure in the financial statements. After December 31, 2025 through March 24, 2026, the Company made additional repurchases of 1,196 shares of its stock in the open market for $67, at an average price of $55.88 per share. 60 ITEM 9 – CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.