What changed in this filing

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Item 1. Business

2022-03-25 compared with 2021-03-26 · 112 added, 102 removed, 394 unchanged (35% of the section changed)

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(“UTMD” or “the Company”) is in the business of producing high quality cost- effective medical devices that are predominantly differentiated by safety and improved patient outcomes.

Throughout this report, “the Company” refers jointly to Utah Medical Products, Inc.

and all of its subsidiaries.

Success depends on 1) recognizing and responding to needs of clinicians and patients, 2) rapidly designing or acquiring economical solutions that gain premarketing regulatory concurrence, 3) reliably producing devices that meet those clinical needs, and then 4) selling through

a) UTMD's own direct channels into markets where the Company enjoys an established reputation and has a critical mass of sales and support resources, or

b) relationships with other medical companies that have the resources to effectively distribute and support the Company's products.

b) relationship with other medical companies that have the resources to effectively distribute and support the Company's products.

UTMD's success in providing reliable solutions comes from its proven ability to integrate a number of engineering and technical disciplines in electronics, software, mechanical assembly and packaging, instrumentation, plastics processing and materials.

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UTMD's experience is that, in the case of labor-saving devices, the improvement in cost-effectiveness of clinical procedures also leads to an improvement in overall healthcare including lower risk of complications.

UTMD markets a broad range of medical devices used in critical care areas, especially the neonatal intensive care unit (NICU), the labor and delivery (L&D) department and the women’s health center in hospitals, as well as products sold to outpatient clinics and physician's offices.

UTMD markets a broad range of medical devices used in critical care areas, especially the neonatal intensive care unit (NICU), the labor and delivery (L&D) department and the women’s health center in hospitals, as well as medical devices sold to outpatient clinics and physician's offices.

The opportunity to apply solutions to recognized needs results from an excellent core of practicing clinicians who introduce ideas to the Company, and key employees who are both clinical applications savvy and development engineering adept.

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Outside the U.S.

(OUS), devices are sold directly to end-users in Canada, the United Kingdom (UK), France, Ireland, Australia and New Zealand, through other medical device companies and through independent medical products distributors in many other countries.

(OUS), devices are sold directly to end-users in Canada, the United Kingdom (UK), France, Ireland, Australia and New Zealand (NZ), through other medical device companies and through independent medical products distributors in many other countries.

UTMD has representation globally in the major developed countries as well as many underdeveloped countries through more than 220 distributors, 115 of which purchased at least five thousand dollars in UTMD medical devices during 2021.

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In late 2020, UTMD’s Australia subsidiary incorporated a New Zealand subsidiary in order to distribute devices directly to medical facilities in New Zealand.

In 2021, due to BREXIT, Utah Medical Products Ltd in Ireland began distributing devices directly to medical facilities in France in lieu of the UK.

UTMD's corporate headquarters are located at 7043 South 300 West, Midvale, Utah 84047 USA.

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In addition, to help identify the possible onset of fetal hypoxia, correlation of the changes in fetal heart rate (FHR) relative to the frequency and duration of contractions are often electronically monitored.

UTMD’s intrauterine pressure (IUP) catheters provide for clinician choices from a traditional fluid-filled system to INTRAN® PLUS, for over twenty-nine years the most widely accepted transducer-tipped system.

In addition, adjunct toco belts are provided by UTMD.

UTMD’s intrauterine pressure (IUP) catheters provide for clinician choices from a traditional fluid-filled system to INTRAN® PLUS, for over thirty years the most widely accepted transducer-tipped system.

UTMD’s IUP catheters include:

· IUP-075 and UTMD’s other custom fluid-filled clear catheter kits utilize a saline-filled catheter that is placed within the uterine cavity, connected to a separate external reusable or disposable transducer.

This product package, utilizing double lumen catheters, was the traditional mode of intrauterine monitoring prior to the introduction of INTRAN.

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INTRAN I was discontinued in 1995 in favor of the more widely preferred INTRAN PLUS.

· INTRAN PLUS was introduced in 1991.

The INTRAN PLUS catheter combines the transducer tip concept of INTRAN I with a refined tip design, a zeroing switch or button that allows the clinician to reset the reference of the monitor, and a dedicated amniolumen which provides access to the amniotic fluid environment which may be helpful in the diagnosis and intervention of certain fetal conditions.

In 1996, a viewport enhancement which allows physicians to observe amniotic fluid in a closed system was added to INTRAN PLUS.

In 1997, UTMD introduced several variations to allow user preferences in tip size, zero switch/button location and amniotic fluid visualization.

· INTRAN PLUS, introduced in 1991, combines the transducer tip concept of INTRAN I with a refined tip design, a zeroing switch or button that allows the clinician to reset the reference of the monitor, and a dedicated amniolumen which provides access to the amniotic fluid environment which may be helpful in the diagnosis and intervention of certain fetal conditions.

Subsequent enhancements to INTRAN PLUS included a viewport which allows physicians to observe amniotic fluid in a closed system along with alternative configurations for user preferences in tip size, zero switch/button location and amniotic fluid visualization.

In addition, adjunct tocodynamometer belts are provided by UTMD.

Abcorp toco belts and straps for fetal monitoring by an external tocodynamometer are provided in latex-free form in several configurations.

UTMD extended the product line to include Bari-Belts™ and Bari-Bands™, a series of abdominal belts designed specifically for bariatric patients and bands to accommodate patients of all shapes and sizes.

UTMD markets tocodynamometer belts, catheters and accessories, but does not market electronic monitors, the capital equipment that processes the electrical signals.

In addition to products currently offered, UTMD continues to investigate the feasibility of tools that enhance fetal monitoring techniques.

Vacuum-Assisted Delivery Systems (VAD).

UTMD continues to investigate the feasibility of tools that enhance fetal monitoring techniques.

Specialized Labor & Delivery Tools.

BT-CATH® is a patented uterine balloon tamponade catheter for controlling severe postpartum hemorrhage.

Its benefits include the ease of rapid deployment and ability to monitor further bleeding after the tamponade has been placed.

The CVX-RIPE™ catheter is designed to mechanically improve the favorability of the cervix of pregnant patients at term gestation, for whom induction of labor is medically indicated.

CVX-Ripe utilizes two adjacent conical silicone balloons, similar to the shape of an hourglass.

This design is intended to allow the clinician to gently apply internal pressure to the cervical canal, as well as both the internal and external os, to reduce the time needed to allow induction as well as the total time to achieve a successful vaginal delivery.

AROM-COT™ is a finger cover with a prong designed to rupture maternal membranes with less patient pain and anxiety.

MUC-X is an aspiration device used immediately after birth to clear neonatal respiratory passages and reduce exposure to potential infections.

CORDGUARD® is a device which unifies the multiple steps of clamping the neonate’s cord close to the umbilicus, severing the cord without splattering blood, drawing a clean cord blood sample and assisting in the removal of the placenta.

CORDGUARD’s sharpless, closed system reduces the risk of exposure to potentially infected blood, and consequently reduces the high cost of exposure treatment under OSHA and CDC guidelines.

In addition, CORDGUARD facilitates obtaining neonatal blood that is otherwise hard to obtain safely and cleanly.

Vacuum-Assisted Delivery (VAD) Systems.

UTMD’s VAD Systems include CMI® soft silicone bell-shaped birthing cups and reusable hand-held vacuum pumps which are the safest products available for use in vacuum-assisted operative deliveries.

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Operative vaginal deliveries using forceps or vacuum-assisted delivery systems provide knowledgeable physicians with a trial vaginal operative delivery prior to a more invasive C-section intervention.

Although there are risks associated with vaginal operative deliveries which may currently represent 3-4% of all U.S.

Although there are risks associated with vaginal operative deliveries which may currently represent about 3% of all U.S.

hospital births, the procedures are generally regarded as safer long term for the mother, and at least as safe for the fetus, as abdominal (Cesarean) delivery in comparable clinical situations.

UTMD’s bell-shaped soft silicone TENDER TOUCH® cups enjoy a significantly lower reported complication rate compared to other vacuum cup designs, as evidenced by the FDA Medical Device Reporting System (MAUDE) which publicly lists serious injuries reported by hospitals using specific brand names of products.

Other Labor & Delivery Tools.

AROM-COT™ is a finger cover with a prong designed to rupture maternal membranes with less patient pain and anxiety.

MUC-X is an aspiration device used immediately after birth to clear neonatal respiratory passages and reduce exposure to potential infections.

CORDGUARD® is a product which unifies the multiple steps of clamping the neonate’s cord close to the umbilicus, severing the cord without splattering blood, drawing a clean cord blood sample and assisting in the removal of the placenta.

CORDGUARD’s sharpless, closed system reduces the risk of exposure to potentially infected blood, and consequently reduces the high cost of exposure treatment under OSHA and CDC guidelines.

In addition, CORDGUARD facilitates obtaining neonatal blood that is otherwise hard to obtain safely and cleanly.

BT-CATH® is a patented uterine balloon tamponade catheter for controlling severe postpartum hemorrhage.

Its benefits include the ease of rapid deployment and ability to monitor further bleeding after the tamponade has been placed.

Abcorp toco belts and straps for fetal monitoring by an external tocodynamometer are provided in latex-free form in several configurations.

In 2014, UTMD extended the product line to include Bari-Belts™ and Bari-Bands™, a series of abdominal belts designed specifically for bariatric patients and bands to accommodate patients of all shapes and sizes.

In 2015, UTMD obtained FDA clearance to market a new mechanical cervical ripening device, the CVX-RIPE™ catheter, designed to mechanically improve the favorability of the cervix of pregnant patients at term gestation, for whom induction of labor is medically indicated.

The CVX-Ripe utilizes two adjacent conical silicone balloons, similar to the shape of an hourglass.

Neonatal Intensive Care :

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UTMD continues its customization of Deltran kits for specific hospital applications.

In the third quarter of 1998, UTMD acquired the neonatal product line of Gesco International.

In 1998, UTMD acquired the neonatal product line of Gesco International.

GESCO, best known for optimally biocompatible silicone catheters, gained an early distinctive reputation for its focus on the special developmental needs of tiny, critically-ill babies.

A class of catheters called umbilical vessel catheters (UVCs) are specially designed for administering vital medications and fluids immediately following birth through the infant’s umbilical vessel into the inferior vena cava.

A class of catheters called umbilical venous catheters (UVCs) are specially designed for administering vital medications and fluids immediately following birth through the infant’s umbilical vessel into the inferior vena cava.

Because of the neonate’s small size and lack of vascular development, there is no better access to vital organs.

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In order to keep pace with the trend of caring for smaller babies, UTMD has added smaller diameter versions of its URI-CATH® and NUTRI-CATH® products.

At the request of customers who prefer a stiffer catheter for insertion, UTMD added a Tecoflex polyurethane oral-connection only Nutri-Cath series in 2009.

In 2000, UTMD gained FDA premarketing clearance of a PICC family of products specifically designed to minimize trauma to the critically ill neonate, named PICC-NATE®.

The PICC-NATE product line was designed with the input of experienced neonatal medical practitioners for use as a long-term indwelling catheter system for single-use, therapeutic central venous infusion of drug solutions, blood products or other fluids and for blood sampling.

The soft, strong silicone PICC-Nate comes in two diameter sizes, 1.9 Fr and 3.0 Fr, and two hub configurations.

In early 2003, UTMD added Tecoflex polyurethane versions in the same sizes that offer many of the flexibility and biocompatibility advantages of silicone after insertion, with the greater rigidity of polyurethane preferred by many clinicians for insertion.

In late 2020, UTMD added a tiny 1.1Fr Tecoflex PICC-Nate.

In 2006, UTMD developed a unique enteral feeding-only extension set named NUTRI-LOK® that addresses important safety risks in the NICU – inadvertent connections with IV lines and inadvertent disconnections of components of the system spanning the dispensing container through the infusion catheter.

In October 2007, UTMD added dispensing syringes with interlocking connectors to its NUTRI-CATH/NUTRI-LOK family of enteral feeding devices.

In 2008, UTMD expanded the NUTRI-LOK system with specialty extension sets for GI tubes and for continuous connection to a fluid pump.

In 2009, UTMD added a Kangaroo bag for larger feeds along with other NUTRI-LOK accessories.

In 2011, UTMD added variations in adapters and extension sets used with NUTRI-CATH.

Recognizing the important need to prevent misadministration of enteral feeding or medication by the wrong route, the FDA in February 2015 released its final guidance, “Safety Considerations to Mitigate the Risks of Misconnections with Small Bore Connectors Intended for Enteral Applications.” The guidance includes compliance with ISO 80369-3 standard connectors.

This new standard was released to create a universal connection that is not compatible with a luer connection or any other type of small bore medical connector.

In 2016, UTMD introduced an alternative enteral feeding family of devices incorporating ENFit™ ISO 80369-3 compliant connectors.

These purple connectors replace the current Nutri-Lok connectors on catheters and extension sets.

At the request of customers who prefer a stiffer catheter for insertion, UTMD added a Tecoflex polyurethane oral-connection only Nutri-Cath series.

PICC-NATE® is a percutaneous intraepithelial central venous catheter family of devices specifically designed to minimize trauma to the critically ill neonate.

The product line was designed with the input of experienced neonatal medical practitioners for use as a long-term indwelling catheter system for single-use, therapeutic central venous infusion of drug solutions, blood products or other fluids and for blood sampling.

The soft, strong silicone PICC-Nate comes in two diameter sizes, 1.9 Fr and 3.0 Fr, and two hub configurations for securement.

UTMD added Tecoflex polyurethane versions in the same sizes that offer many of the flexibility and biocompatibility advantages of silicone after insertion, with the greater rigidity of polyurethane preferred by many clinicians for insertion.

Recently, UTMD also added a tiny 1.1Fr Tecoflex PICC-Nate.

UTMD developed a unique enteral feeding-only extension set named NUTRI-LOK® that addresses important safety risks in the NICU – inadvertent connections with IV lines and inadvertent disconnections of components of the system spanning the dispensing container through the infusion catheter.

UTMD added dispensing syringes with interlocking connectors to its NUTRI-CATH/NUTRI-LOK family of enteral feeding devices.

UTMD further expanded the NUTRI-LOK system with specialty extension sets for GI tubes and for continuous connection to a fluid pump.

In addition, UTMD added variations in adapters and extension sets used with NUTRI-CATH.

Recognizing the important need to prevent misadministration of enteral feeding or medication by the wrong route, the FDA in February 2015 released its guidance, “Safety Considerations to Mitigate the Risks of Misconnections with Small Bore Connectors Intended for Enteral Applications.” The guidance includes compliance with ISO 80369-3 standard connectors.

The standard was released to create a universal connection that is not compatible with a luer connection or any other type of small bore medical connector.

As a result, UTMD introduced an alternative enteral feeding family of devices incorporating ENFit™ ISO 80369-3 compliant connectors.

These purple connectors are designed to replace Nutri-Lok connectors on catheters and extension sets.

UTMD also distributes ENFit oral syringes.

In 2006, UTMD completed the replacement of all DEHP plasticizer PVC materials in its Gesco product line that may come in contact with neonatal patients, addressing another safety concern related specifically to the possible maldevelopment of male neonates.

UTMD replaced all DEHP plasticizer PVC materials in its Gesco product line that may come in contact with neonatal patients, addressing another safety concern related specifically to the possible maldevelopment of male neonates.

Other GESCO specialty products include a disposable peritoneal dialysis (PD) set that is a pre-assembled, sterile, closed system, called DIALY-NATE®.

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DIALY-NATE is provided in a form that allows timely PD implementation.

In 2008, UTMD added a DIALY-NATE version that can be used with a variety of fluid warming systems.

In 2010, UTMD introduced a bifurcated system that allows for higher volume manual PD applications.

Since 2013, additional custom configurations have been added to satisfy specific clinical preferences.

A number of custom configurations of DIALY-NATE have been added to satisfy specific clinical preferences.

Other specialty NICU devices include a silicone oral protection device used to prevent palatal soft tissue injury by orotracheal tubes, called PALA-NATE®;

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GESCO’s first patented product, HEMO-NATE®, is a disposable filter designed to remove microaggregates from stored blood prior to transfusion into a neonate where any deficiency can have an overwhelmingly negative impact on a neonate’s chances for survival, given an under-developed vasculature and small total blood volume.

In 2001, UTMD introduced a new filter and an improved blood bag spike for HEMO-NATE, and a needleless version.

UTMD expects to continue to improve and expand its neonatal product line, seeking to reinforce a reputation as having the most reliable and developmentally-friendly specialty devices available for the NICU.

UTMD also introduced a new filter and an improved blood bag spike for HEMO-NATE, and a needleless version.

UTMD expects to continue to enhance and expand its neonatal product line, seeking to reinforce a reputation as having the most reliable and developmentally-friendly specialty devices available for the NICU.

Gynecology /Urology /Electrosurgery :

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Excising too much tissue can compromise fertility and result in premature birth.

Excising too little tissue can result in failure to remove the precancerous tissue.

UTMD continues to augment its specialty electrodes.

For example, the Company markets a unique conization electrode for deep endocervical disease called C-LETZ®, designed by UTMD to limit the removal of healthy tissue margins that might compromise adequate cervical function.

In 2010, UTMD introduced a patented electrode attachment that prevents interference with the colposcope during LETZ.

UTMD introduced a patented electrode attachment that prevents interference with the colposcope during LETZ.

UTMD also will continue to provide other components to augment the use of its market-leading specialty electrodes with other manufacturers’ electrosurgical generators.

After more than 20 years on the market, in 2012 UTMD completed a significant redesign, and achieved certification to the latest EN 60601 international safety standards, for a FINESSE+ electrosurgical generator.

After more than 20 years on the market, UTMD completed a significant redesign, and achieved certification to current EN 60601 international safety standards, for a FINESSE+ electrosurgical generator.

The FINESSE+ design includes dispersive pad contact monitoring for improved patient safety, improved circuitry for computer controlled-output that provides a precise tissue specimen for histopathology, a more efficient output stage resulting in less heat generation and longer electronic component life, an update to electronic components which reduces the number of required components and increases service life, and an easy change internal filter for integral smoke evacuation, a unique feature of FINESSE.

UTMD obtained FDA premarketing clearance for FINESSE+ in January 2013.

FINESSE+ Generator;

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UTMD acquired the distribution rights to a unique reusable four-way expander system which facilitates access to, and visualization of, the cervix, eliminating the need for less effective specula and lateral retractors.

In 2007, UTMD developed OptiSpec®, a patented ultra-bright light for cervical visualization without physician distraction during exams, pap smears and other vaginal procedures requiring direct cervical visualization without the use of a colposcope.

In 2011, UTMD acquired Femcare’s single patient use trocars and cannulae available in shielded and bladeless designs, suction and irrigation tubing, insufflation tubing and connectors, pressure infusor bags and control valves.

OptiSpec® is a patented ultra-bright light for cervical visualization without physician distraction during exams, pap smears and other vaginal procedures requiring direct cervical visualization without the use of a colposcope.

As part of its acquisition of Femcare, UTMD acquired single patient use trocars and cannulae available in shielded and bladeless designs, suction and irrigation tubing, insufflation tubing and connectors, pressure infusor bags and control valves.

Also acquired were Femcare’s hormone replacement therapy (HRT) trocar/obturator and HRT procedure tray for subdermal placement of hormone tablets, and a femoral sponge product used during joint replacement surgery.

EPITOME® and OptiMicro™ Electrosurgical Devices

In 1996, after finding the general surgical market lacked a precision electrosurgical blade, UTMD developed EPITOME, an electrosurgical scalpel which delivers precise performance in surgical incision and excision with hemostasis while minimizing thermal side effects.

After finding the general surgical market lacked a precision electrosurgical blade, UTMD developed EPITOME, an electrosurgical scalpel which delivers precise performance in surgical incision and excision with hemostasis while minimizing thermal side effects.

Where rapid yet precise dissection of dense or fatty tissue is necessary, such as in mammaplasty or abdominoplasty, UTMD believes that EPITOME has no close substitute.

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EPITOME is useful where minimization of thermal tissue injury is important but control of bleeding needed.

A bendable version of EPITOME with a smaller active electrode was introduced in 1998.

A bendable version of EPITOME with a smaller active electrode was introduced later.

Designed to significantly reduce the chance of tissue burns due to inadvertent electrode contact and where a smaller, bent scalpel tip is needed, the bendable EPITOME is of particular value, e.g., to thoracic surgeons in harvesting the internal mammary artery during coronary artery bypass surgery, as well as to otolaryngologists for tonsillectomies or uvulopalatoplasties, or plastic surgeons creating or working in a breast pocket during augmentation or capsulectomy.

In 2002, UTMD introduced a product line of ultra-fine tipped microdissection needles, called OptiMicro™ Needles, to complement the Epitome Scalpel.

UTMD introduced a product line of ultra-fine tipped microdissection needles, called OptiMicro™ Needles, to complement the Epitome Scalpel.

Whereas the Epitome Scalpel has been particularly effective for large scale surgeries that entail a great amount of tissue cutting, the OptiMicro electrosurgical needles are particularly useful in small-scale plastic and reconstructive surgery applications where extreme precision and ideal cosmetic results are expected.

In 2009, UTMD added extended length OptiMicro needle versions useful in certain head and neck procedures.

UTMD added extended length OptiMicro needle versions useful in certain head and neck procedures.

Filshie® Clip System

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The Filshie Clip, implanted in over six million women worldwide during the last 39 years, has empirically been proven to be the safest and most effective tubal occlusive device, is as easy or easier to achieve occlusion as any of the alternative surgical techniques, and has a substantially higher probability of reversibility when compared to all of the other approaches for women who later decide that they might like to get pregnant.

Femcare has obtained numerous regulatory approvals for the Filshie Clip System, which throughout 2020 was sold OUS directly by UTMD to medical facilities in Canada, Ireland, France, the UK and Australia, and through specialty distributors in other countries.

Beginning in 4Q 2020, UTMD began to distribute the Filshie Clip System directly to New Zealand medical facilities.

Femcare has obtained numerous regulatory approvals for the Filshie Clip System, which throughout 2021 was sold OUS directly by UTMD and its subsidiaries to medical facilities in Canada, Ireland, France, the UK, Australia and New Zealand, and through specialty distributors in other countries.

Femcare Australia began to distribute the Filshie Clip System directly to New Zealand medical facilities in 4Q 2020.

In February 2019, UTMD purchased the remaining exclusive U.S.

distribution rights of CooperSurgical Inc.

(CSI), allowing the Company to directly sell the Filshie Clip System to medical facilities in the U.S.

(CSI), allowing the Company to directly distribute the Filshie Clip System to medical facilities in the U.S.

There are several tubal ligation methods with varying degrees of effectiveness, safety and opportunity to be reversed.

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In particular, within a few hundred thousand implanted ESSURE devices, thousands of women complained about possible autoimmune responses, allergic response to nickel and/or significant chronic pain.

These symptoms simply do not apply to Filshie Clips as the ESSURE device and Filshie Clips are substantially different in design and use.

These symptoms do not apply to Filshie Clips as the ESSURE device and Filshie Clips are substantially different in design and use.

ESSURE had a metal coil with a tip capable of perforation, with nickel components, hysteroscopically implanted (with some difficulty and risk of unwanted bodily injury) inside the Fallopian tubes, which then caused scar tissue to grow around it over time and occlude the tubes.

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Orthopedic implants, for example, are routinely made of titanium in massively greater amounts.

There have been a few patient complaints of suspected allergic response to Filshie Clips within millions of uses (including from patients allergic to copper, which there is none in Filshie Clips), but no such reports from clinicians or in the clinical literature.

There have been a few patient complaints of suspected allergic response to Filshie Clips within millions of uses (including from patients allergic to copper, of which there is none in Filshie Clips), but no such reports from clinicians or in the clinical literature.

Pain associated normally with any laparoscopic procedure generally resolves within 48 hours, and is not severe nor does it become chronic unless the result of an infection.

Sterile Filshie Clips are provided to the surgeon in validated sterile packaging.

Nevertheless, pain is the most prevalent (but rare) FILSHIE complaint.

Nevertheless, pain is the most prevalent (but still rare) Filshie Clip complaint.

In women with implanted clips who have reported chronic pain, several other gynecological symptoms are typically present which are not related to Filshie Clips.

The obvious recourse for a person experiencing pain that she associates with an implanted device is to remove it.

ESSURE, difficult if not impossible to remove, required very specialized surgical technique.

In contrast, given currently widely available imaging and normal laparoscopic skills, Filshie Clips can be removed safely, although removal is rarely requested.

ESSURE, difficult if not impossible to remove, requires specialized surgical technique.

In contrast, given currently widely available imaging and normal laparoscopic skills, Filshie Clips can be removed safely, although removal is rarely requested by patients or recommended by physicians.

A well-known and clinically-reported potential side effect of Filshie Clip tubal ligation is clip migration.

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Marcus Filshie, the inventor of the clip, expressed his opinion in 2002 that more than 25% of patients will experience a migration of one or more clips, typically within the abdominal cavity.

Once detached, the clip becomes encompassed in dense adhesive tissue normally without any symptoms, only rarely causing any complication.

Once detached, the clip becomes encompassed in dense adhesive tissue normally without any symptoms, only rarely causing any symptoms.

A low grade inflammatory response can occur.

Because clips are biologically inert and relatively small, physicians generally have concluded that removing a migrated clip represents more risk to long term well-being than leaving it in the body.

In 2019, UTMD retained a clinical expert who in 2010 had published the results of a twenty-year retrospective review of all reported Filshie Clip migration events in the English literature, in order to independently review all reported complaints contained in the US FDA MAUDE website and the Australia TGA DAEN website over the most recent ten years.

In 2019, UTMD retained a clinical expert who in 2010 had published the results of an almost twenty-year retrospective review of all reported Filshie Clip migration events in the English literature, in order to independently review all reported complaints contained in the US FDA MAUDE website and the Australia TGA DAEN website over the most recent ten years.

His February 2019 written report generally observed that “There were no serious clinical or life-threatening complications that related directly or indirectly to the Filshie Clips or their migration.”

In summary, UTMD stockholders should be confident that Filshie Clips are a very safe and effective method of tubal occlusion.

FDA released the Filshie Clip for marketing in the U.S.

in 1996 after a Femcare PMA submission which included a prospective clinical trial involving 5,454 women implanted with Filshie Clips.

Unfortunately, in late 2021, after 25 years’ use in the U.S., implanted in millions of women, a clip migration lawsuit was filed in Texas.

Subsequently, plaintiffs’ lawyers solicited and recruited claimants in five other states.

There are presently a total of seven clip migration lawsuits filed in six states.

In UTMD’s view, the current lawsuits which have not been litigated yet are without merit, and should be resolved without a material impact on UTMD’s consolidated performance.

UTMD stockholders should be confident that Filshie Clips remain a very safe and effective method of tubal occlusion.

FDA approved the Filshie Clip for marketing in the U.S.

in 1996 after a PMA submission which included a prospective clinical trial involving 5,454 women implanted with Filshie Clips.

As mandated by the FDA, Femcare, the developer and manufacturer of the Filshie Clip System, must submit an annual experience report for FDA’s continual review and vigilance of the safety and effectiveness of the PMA device.

In late 2016, the FDA approved the use of Femcare’s Sterishot single use applicator for applying Filshie Clips.

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(OUS) sales .

OUS sales in 2020, as a percentage of consolidated total USD sales, represented 39% compared to 41% in 2019.

OUS sales in 2021, as a percentage of consolidated total USD sales, represented 38% compared to 39% in 2020 and 41% in 2019.

The lower OUS share of total sales in 2021 was the result of more restrictions on medical procedures OUS, especially in Europe, due to the COVID-19 pandemic.

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It is UTMD’s assessment that U.S.

hospitals are not currently saving costs under GPO contracts when it comes to specialty medical devices that can reduce complications, utilization rates, clinician time and unwanted side effects, because administrators are focused primarily on out-of-pocket costs and miss the broader total cost of care issues.

hospitals are not saving costs under GPO contracts when it comes to specialty medical devices that can reduce complications, utilization rates, clinician time and unwanted side effects, because administrators are focused primarily on out-of-pocket costs and miss the broader total cost of care issues.

The longer term overall cost of care in the U.S.

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hospital customers request it, UTMD provides its devices through national distribution companies, also known as Med/Surg distributors.

Sales to Med/Surg distributors in 2020 comprised 9% of total domestic direct sales.

Sales to Med/Surg distributors in 2021 comprised 11% of total domestic direct sales (excluding domestic OEM sales).

In the U.S., Canada, Ireland, France, the UK, New Zealand and Australia, UTMD sells its products with the support of its own directly employed customer service and sales force, independent consultants and selective independent manufacturer representatives.

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The direct employee sales force is comprised primarily of “inside” representatives who operate by telephone and email from corporate offices.

The Company also utilizes independent sales representatives on a commission basis.

The Company also utilizes independent sales representatives primarily on a growth commission basis.

Direct representatives are trained to understand the medical procedures being performed within UTMD’s clinical focus.

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This OEM distribution channel is simply maximizing utilization of manufacturing capabilities that are otherwise needed for UTMD's primary business, and does not compete with or dilute UTMD’s direct distribution and marketing programs.

OUS, the Company distributes directly to end-user facilities in Canada, the UK, France, Ireland, New Zealand and Australia, and in 2020 sold to over 230 regional distributors and OEMs (other medical device manufacturers and/or distributors) in over a hundred countries.

OUS, the Company and its subsidiaries distribute directly to end-user facilities in Canada, the UK, France, Ireland, New Zealand and Australia, and in 2021 sold to over 220 regional distributors and OEMs (other medical device manufacturers and/or distributors) in over a hundred countries.

Ten percent of UTMD’s independent OUS distributors comprised 77% of UTMD’s indirect OUS sales in the years of 2019 - 2021.

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EMPLOYEES AND OTHERS

At December 31, 2020, the Company had 181 employees, eight regular consultants, 24 independent manufacturer’s sales representatives and an additional eleven subcontract production employees in Utah.

The subcontract employees represent UTMD’s desire to provide handicapped persons additional work opportunities, hired through the Utah state-supported Work Activity Center.

At December 31, 2021, the Company worldwide had 178 full-time employees, 33 part-time employees, 7 regular consultants, 20 independent manufacturer’s sales representatives and an additional 11 subcontract production employees in Utah.

The Utah subcontract employees represent UTMD’s desire to provide handicapped persons additional work opportunities, hired through the Utah state-supported Work Activity Center.

The Company utilizes independent consultants, some of which were prior employees.

Almost all of UTMD’s internally-manufactured devices are made either in Utah or in Ireland.

The average tenure with the Company of the 165 employees in the U.S.

and Ireland is fifteen years.

In Ireland, the average tenure of full-time employees declined from 15 years to 10 years as a result of a significant increase in production employees in 2021.

In the U.S., the average tenure of full-time employees increased from 15 years to 16 years.

At the end of 2021, the average tenure with the Company of the combined 166 full-time employees in the U.S.

and Ireland is now 14 years.

This experience conveys an important benefit due to the level of training required to produce consistently high quality medical devices and appreciation of how UTMD’s devices provide unique benefits for clinicians and patients.

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GOVERNMENT REGULATION

UTMD's products and manufacturing processes are subject to regulation by the U.S.

UTMD and its subsidiaries’ products and manufacturing processes are subject to regulation by the U.S.

Food & Drug Administration (“FDA”), as well as many other regulatory entities globally.

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The MDSAP offers an “all-in-one” inspection regime to accommodate the quality system requirements of Australia, Brazil, Canada, USA and Japan.

UTMD remains on a continuous periodic audit schedule by its independent notified body and authorized MDSAP auditing organization in order to stay current with international regulatory standards, and retain its certifications.

UTMD and Femcare remain on a continuous periodic audit schedule by its independent notified body and authorized MDSAP auditing organization in order to stay current with international regulatory standards, and retain its certifications.

UTMD has received CE Mark certifications (demonstrates proof of compliance with the European Community’s ISO standards) for all of its major products.

SOURCES AND AVAILABILITY OF RAW MATERIALS

Most of the components which the Company purchases from various vendors are readily available from a number of sources in a number of locations worldwide.

That notwithstanding, the Company maintains safety stocks that anticipate potential disruption to its supply chain from changes in government policies including tariffs, as well as a possible disruption from the coronavirus pandemic, including the time required to source and qualify new vendors.

Most of the components which the Company purchases from various vendors are available from a number of sources and in a number of locations worldwide.

That notwithstanding, the Company maintains safety stocks that anticipate potential disruption to its supply chain from changes in government policies including tariffs, as well as disruptions resulting from the COVID-19 pandemic, including the time required to source and qualify new vendors.

Fortunately, given availability of its significant cash reserves, UTMD has the financial ability to mitigate supply chain risk by carrying extra inventories during periods of increased uncertainty.

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and 3) from a manufacturing point of view, reduced dependence on one manufacturing site and increased capacity for meeting customer needs.

Total 2020 trade revenues in USD terms from customers OUS were $16,312 (39% of total sales) compared to $19,411 (41% of total sales) in 2019 and $20,806 (50% of total sales) in 2018.

Total 2021 trade revenues in USD terms from customers OUS were $18,395 (38% of total consolidated USD sales) compared to $16,312 (39% of sales) in 2020 and $19,411 (41% of total sales) in 2019.

OUS trade sales (U.S.

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exports represented 22%, 28% and 22% of total OUS trade sales in 2021, 2020 and 2019, respectively.

export numbers exclude Utah intercompany sales of components and finished devices to UTMD foreign subsidiaries, which then distribute U.S.-made components and finished devices as part of their sales to OUS customers.

export numbers exclude Utah intercompany sales of components and finished devices to UTMD foreign subsidiaries, which then distribute Utah-made components and finished devices as part of their sales to OUS customers.

For sales by OUS geographic area, please see note 9 to the Consolidated Financial Statements.

Backlog is defined as orders received and accepted by UTMD which have not shipped yet.

As a supplier of primarily disposable hospital products, the nature of UTMD’s non-distributor or non-OEM business requires fast response to customer orders.

As a supplier of primarily disposable hospital products, the nature of UTMD’s non-distributor and non-OEM business requires fast response to customer orders.

Virtually all direct shipments to end-user facilities are accomplished within a few days of acceptance of purchase orders.

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In any lawsuit against a company where an individual plaintiff suffers permanent physical injury, a possibility of a large award for damages exists whether or not a causal relationship exists.

However, no such damages have been awarded against UTMD in its 42-year history of shipping millions of devices.

However, no such damages have been awarded against UTMD in its 44-year history of shipping many millions of devices.

UTMD is self-insured for product liability risk, and reserves funds against its current performance on an ongoing basis to provide for its costs of defense should any lawsuits be filed.

The Company’s average cost of defense over the last twenty-eight years, including the last ten years following the acquisition of the Filshie Clip System, was $22 per year, well below the deductible level of product liability insurance policies.

In its 42 year history of shipping over 50 million finished devices used in critical care and over 400 million components, there has never been a product liability judgment against UTMD.

This experience validates that the most important aspect of product liability risk management is the safe design and reliable integrity of manufactured products.

The best defense the Company believes that it has is the consistent conformance to specifications of its proven safe and effective products.

Over the time span of the last twenty-eight years, UTMD has been named as a defendant in a total of nine lawsuits.

Four lawsuits involved a patient injury related to operative vaginal deliveries where a UTMD VAD birthing cup or hand pump was used.

UTMD was named as a defendant on six product liability lawsuits over the time span of the last twenty-nine years, excluding the Filshie Clip System acquired eleven years ago.

Four of the six lawsuits involved a patient injury related to operative vaginal deliveries where a UTMD VAD birthing cup or hand pump was used.

The VADS devices in all four cases did conform to specifications.

UTMD was ultimately dismissed as a defendant in all four VADS lawsuits, and legal costs were not material to performance.

In the fifth lawsuit, regarding the use of EndoCurette, there was no evidence of patient injury.

In a fifth lawsuit, regarding the use of EndoCurette, there was no evidence of patient injury.

The lawsuit was settled in 2010 for an immaterial amount to avoid the diversion of management time and substantial costs of litigation, even though UTMD was confident that the case was without merit.

In the sixth, UTMD was brought into the lawsuit by a defendant physician, speculating a design deficiency in a Finesse electrosurgical generator (ESU) which had been in use for eighteen years before the injury event, and used successfully by the same physician in multiple procedures after the event.

In a sixth, UTMD was brought into the lawsuit by a defendant physician, speculating a design deficiency in a Finesse electrosurgical generator (ESU) which had been in use for eighteen years before the injury event, and used successfully by the same physician in multiple procedures after the event.

The injured patient did not allege any fault by UTMD.

The case was settled in 2012 without any UTMD involvement or liability.

There have been three Filshie Clip System lawsuits since UTMD acquired Femcare in 2011, all of which were dismissed with prejudice prior to the conclusion of discovery.

The average annual cost of Filshie Clip System lawsuits since 2011 was $7 per year.

There has never been an adverse judgement against Femcare in over 13 million Filshie Clip implantations over a period of 37 years.

Other than the three Filshie Clip System claims, there have been no product liability lawsuits for any other UTMD device during the last nine years.

In summary, since 1993 during which time over one hundred million finished devices and OEM components were distributed by UTMD, there have been no judgments resulting from a claim of defect in UTMD’s design or manufacture of its products, or a fault in its informational materials.

In the current tort system in the U.S., meritless product liability cases do get filed where aggressive attorneys calculate that a company will find it cheaper to settle for what they consider a nominal amount in lieu of potentially substantial defense costs of discovery and going to court.

The Company’s average cost of defense of the six lawsuits was $15/year, well below the deductible level of product liability insurance policies and hundreds of thousands of dollars less than product liability insurance premiums.

In its 44 year history of shipping over 50 million finished devices used in critical care and over 400 million components, there has never been a product liability judgment against UTMD.

This experience validates that the most important aspect of product liability risk management is the safe design and reliable integrity of manufactured products.

The best defense the Company believes that it has is the consistent conformance to specifications of its proven safe and effective products.

Prior to late 2021, there were three Filshie Clip System lawsuits since UTMD acquired Femcare in 2011, all of which were dismissed with prejudice prior to the conclusion of discovery.

The average annual cost of all Filshie Clip System lawsuits since 2011 up to late 2021 was $7 per year (less than $25 per lawsuit to achieve resolution).

In late 2021, Femcare was added as a defendant in a clip migration lawsuit in Texas, which now has expanded to five other states with a total of seven lawsuits as plaintiffs’ lawyers have sought to solicit and recruit claimants in other states.

As there is no basis for a claim of a poor device design which is approved by the U.S.

FDA, no evidence of defective clips implanted in the patients and no lack of proper disclosure to physicians who have used Filshie Clips for decades in millions of patients, the current lawsuits, which are currently in the early stages of discovery and have not been litigated yet, are clearly without merit.

Although the cost of defense will be higher than UTMD’s historical average, the Company believes that they should be resolved without a material impact on UTMD’s consolidated financial performance.

There has never been an adverse judgment against Femcare in over 13 million Filshie Clip implantations over a period of 39 years.

Other than Filshie Clip System claims, there have been no product liability lawsuits for any UTMD device during the last ten years.

Except for the six non-Filshie Clip System lawsuits described above, there have been no other product liability claims filed over the last 29 years after distribution and use of over 20 million critical care and surgical finished devices.

In summary, since 1993, during which time over one hundred million finished devices and OEM components were manufactured and distributed by UTMD and its subsidiaries, there have been no adverse judgments resulting from a claim of defect in UTMD’s or its subsidiaries’ designs or manufacture of products, or a fault in informational materials.

In the current tort system, particularly in the U.S., meritless product liability cases do get filed where aggressive attorneys calculate that a company will find it cheaper to settle for what they consider a nominal amount in lieu of potentially substantial defense costs of discovery and going to court.

FORWARD LOOKING INFORMATION

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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