3 unchanged sentences
Additional risks and uncertainties not currently known to UTMD or currently deemed to be immaterial also may materially adversely affect the Company’s business, financial condition and/or operating results.
−Removed: Legislative and/or Executive branch regulatory healthcare intervention in the United States, as embodied in The Patient Protection and Affordable Care Act, the Health Care and Education Reconciliation Act of 2010 and the Coronavirus, Aid, Relief and Economic Security Act, not to mention federal agency rules and regulations as well as state and local legislation and rules, (the “Acts”), have added substantial costs and have led to decreased revenues in the U.S.
−Removed: The voluminous Acts and administrative rules to enforce the Acts, promised efforts to reform the Acts and the ongoing coronavirus pandemic, make the U.S.
−Removed: medical device marketplace unpredictable, particularly for the thousands of small medical device manufacturers including UTMD that do not have the overhead structure that the larger medical device companies can afford.
−Removed: To the extent that the Acts will in the future continue to place additional burdens on small medical device companies in the form of another excise tax on medical device sales, price controls, additional oversight of marketing and sales activities and new reporting requirements, the result is likely to be negative for UTMD’s ability to effectively compete and support continued investments in new product development and marketing of specialty devices in the U.S.
−Removed: Increasing regulatory burdens including premarketing approval delays may result in significant loss of revenue, unpredictable costs and loss of management focus on helping the Company proactively conform with requirements and thrive:
−Removed: Premarketing submission administrative burdens and substantial increases in “user fees” increase product development costs and result in delays to revenues from new or improved devices.
−Removed: The ongoing uncertainties related to BREXIT continue to affect UTMD’s notified body’s ability to function responsively to provide product certifications required to market devices outside the U.S.
−Removed: The growth of Group Purchasing Organizations (GPOs) adds non-productive costs, typically weakens the Company’s marketing and sales efforts and may result in lower revenues:
+Added: Legislative or executive order healthcare reform in the United States , particularly as suggested by leading candidates in a presidential election year, have the potential to render the U.S.
+Added: medical device marketplace unpredictable.
+Added: A fully government-run healthcare system would likely eliminate healthcare consumer choice as well as commercial incentives for innovation.
+Added: Government-mandated shutdowns of “nonessential” medical procedures with the intent of protecting the public from a virus have the potential to substantially reduce demand for UTMD’s medical devices.
+Added: Increasing regulatory burdens, including premarketing approval delays, may result in significant loss of revenue, unpredictable costs and loss of management focus on developing and marketing products that improve the quality of healthcare:
+Added: Thousands of small focused medical device manufacturers including UTMD that do not have the overhead structure that the few large medical device companies can afford are increasingly burdened with bureaucratic and underqualified regulator demands that are not reasonably related to assuring the safety or effectiveness of the devices that they provide.
+Added: Premarketing submission administrative burdens, and substantial “user fees” or notified body review fees, represent a significant non-clinical and/or non-scientific barrier to new product introduction, resulting in lack of investment or delays to revenues from new or improved devices.
+Added: The risks associated with such circumstances relate not only to substantial out-of-pocket costs, including potential litigation in millions of dollars, but also loss of business and a diversion of attention of key employees for an extended period of time from managing their normal responsibilities, particularly in new product development and routine quality assurance activities.
+Added: The dominance of Group Purchasing Organizations (GPOs) adds non-productive costs, typically weakens the Company’s marketing and sales efforts and may result in lower revenues:
GPOs, theoretically acting as bargaining agents for member hospitals, but actually collecting revenues from the companies that they are negotiating with, have made a concerted effort to turn medical devices that convey special patient safety advantages and better health outcomes, like UTMD’s, into undifferentiated commodities.
GPOs have been granted an antitrust exemption by the U.S.
−Removed: Otherwise, their business model based on “kickbacks” would be a violation of law.
−Removed: These bureaucratic entities do not recognize or understand the overall cost of care as it relates to safety and effectiveness of devices, and they create a substantial administrative burden that is primarily related to collection of administrative fees.
+Added: Their business model based on “kickbacks” would be a violation of law in any other industry.
+Added: These bureaucratic entities do not recognize or understand the overall cost of care as it relates to safety and effectiveness of devices, and they create a substantial administrative burden that is primarily driven by collection of administrative fees.
The Company’s business strategy may not be successful in the future:
8 unchanged sentences
UTMD’s devices are frequently used in inherently risky situations to help physicians achieve a more positive outcome than what might otherwise be the case.
−Removed: In any lawsuit where an individual plaintiff suffers permanent physical injury, the possibility of a large award for damages exists whether or not a causal relationship exists.
+Added: In any lawsuit where an individual plaintiff suffered permanent physical injury, the possibility of a large award for damages exists whether or not a causal relationship exists.
The Company’s reliance on third party distributors in some markets may result in less predictable revenues:
−Removed: UTMD’s distributors have varying expertise in marketing and selling specialty medical devices.
+Added: UTMD’s distributors have varying expertise in marketing and distributing specialty medical devices.
They also sell other devices that may result in less focus on the Company’s products.
−Removed: In some countries, notably China, Pakistan and India not subject to similarly rigorous standards, by copying, a distributor of UTMD’s products may eventually become a competitor with a cheaper but lower quality version of UTMD’s devices.
+Added: In some countries, notably China, Pakistan and India not subject to similarly rigorous standards, a distributor of UTMD’s products may eventually become a competitor with a cheaper but lower quality version of UTMD’s devices.
The loss of one or more key employees could negatively affect UTMD performance:
6 unchanged sentences
For the portion of sales to foreign entities made in fixed USD terms, a stronger USD makes the devices more expensive and weakens demand.
−Removed: For the portion invoiced in a foreign currency, not only USD-denominated sales are reduced, but also gross profits may be reduced because finished distributed products and/or U.S.
+Added: For the portion invoiced in a foreign currency, not only USD-denominated sales are reduced, but also gross profits may be reduced because finished distributed devices and/or U.S.
made raw materials and components are likely being purchased in fixed USD.
−Removed: Changing tax burdens related to increased government spending have the potential to significantly negatively affect shareholder returns.
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.