What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-03-27 compared with 2022-03-25 · 33 added, 27 removed, 559 unchanged (10% of the section changed)

31 unchanged sentences

We have audited the accompanying balance sheets of Utah Medical Products, Inc.

(the Company) as of December 31, 2021 and 2020, and the related statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2021 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, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2021 in conformity with accounting principles generally accepted in the United States of America.

(the Company) as of December 31, 2022 and 2021, and the related statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2022, 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, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2022, 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 $23,055,729 and $26,752,000 as of December 31, 2022 and 2021, respectively and total revenues of $4,333,431, $4,419,000 and $4,871,000 for the years ended December 31, 2022, 2021 and 2020, respectively.

Those portions of the consolidated financial statements were audited by other auditors whose reports have been furnished to us, and our opinions, insofar as they relate to the amounts included for Femcare Group Limited is based solely on the reports of the other auditors.

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

24 unchanged sentences

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

7 unchanged sentences

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, 2021 and 2020, and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2021, and the related notes (collectively referred to as the financial statements).

We have audited the consolidated balance sheets of Femcare Group Limited (the Company), including its subsidiaries, as of December 31, 2022 and 2021, and the related consolidated statements of income, comprehensive income, stockholders’ equity, for each of the years in the two-year period ended December 31, 2022, 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, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

38 unchanged sentences

Current assets:

Accounts & other receivables, net (note 2)

Accounts and other receivables, net (note 2)

Inventories (note 2)

18 unchanged sentences

Common stock, $ 0.01 par value;

50,000 shares authorized, 3,655 shares issued and outstanding in 2021 and 3,643 shares in 2020

50,000 shares authorized, issued 3,628 shares in 2022 and 3,655 shares in 2021

Accumulated other comprehensive loss

46 unchanged sentences

Accrued expenses

Long-term repatriation tax payable

Net cash provided by operating activities

10 unchanged sentences

Effect of exchange rate changes on cash

Net increase (decrease) in cash and cash equivalents

Net increase in cash and cash equivalents

Cash at beginning of year

13 unchanged sentences

stock options for cash

Shares received and retired upon exercise

of stock options

Stock option compensation expense

5 unchanged sentences

stock options for cash

Shares received and retired upon exercise

of stock options

Stock option compensation expense

8 unchanged sentences

Stock option compensation expense

Common stock purchased and retired

Foreign currency translation adjustment

61 unchanged sentences

In 2019, $ 21,000 in intangible assets were acquired from CSI.

The future amortization expenses on those assets are estimated to be $ 4,421 per year in 2022, and $ 3,684 in 2023 (see note 15).

The future amortization expenses on those assets are estimated to be $ 3,864 in 2023 (see note 15).

Stock-Based Compensation

65 unchanged sentences

Distribution agreements

Right-of-Use Asset

Regulatory approvals & product certifications

3 unchanged sentences

Accrued expenses:

Income taxes payable

Income taxes payable (receivable)

Payroll and payroll taxes

24 unchanged sentences

Furniture, equipment and tooling

Right-of-Use Asset

Construction-in-progress

7 unchanged sentences

Furniture, equipment and tooling

Right-of-Use Asset

Construction-in-progress

5 unchanged sentences

Furniture, equipment and tooling

Right-of-Use Asset

Construction-in-progress

9 unchanged sentences

The Company is self-insured for product liability risk.

“Product liability” is an insurance industry term for the cost of legal defense and possible damages awarded as a result of use of a company’s product during a procedure which results in an injury of a patient.

The Company maintains a reserve for product liability litigation and damages consistent with its previous long-term experience.

Actual product liability litigation costs and damages during the last three reporting years have been immaterial, which is consistent with the Company’s overall history.

“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 actual product liability litigation expense at $ 670 was substantially higher in 2022 relative to history, costs during the prior two reporting years were immaterial.

There were no product liability damages in any of the three reporting years, which is consistent with the Company’s long-term history.

The Company absorbs the costs of clinical training and trouble-shooting in its on-going operating expenses.

6 unchanged sentences

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, 2022 or December 31, 2021.

The Company has been involved in lawsuits which are an expected consequence of its operations and in the ordinary course of business.

Presently, there is no litigation or threatened litigation for which the Company believes the outcome may be material to its financial results.

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 the Filshie clip lawsuits by a single U.S.

law firm, there is no litigation or threatened litigation.

The Company does not expect the outcome of the Filshie clip litigation will be material to consolidated financial results.

The Company applies its accounting policy to accrue legal costs that can be reasonably estimated.

13 unchanged sentences

Foreign income taxes (blended rate)

ETI, manufacturing deduction and tax credits

R&D tax credits and manufacturing profit deduction

Deemed repatriation transition tax

8 unchanged sentences

Changes in stock options were as follows:

82.60 - 82.60

Expired or canceled

5 unchanged sentences

33.30 - 77.05

77.05 - 77.05

Expired or canceled

5 unchanged sentences

33.30 - 77.05

77.05 - 77.05

Expired or canceled

14 unchanged sentences

Expected life of options

The per share weighted average fair value of options granted during 2020 is $ 16.17 .

No options were granted in 2021 or 2019.

The per share weighted average fair value of options granted during 2022 is $ 25.34 and in 2020 is $ 16.17 .

No options were granted in 2021.

All UTMD options vest over a four-year service period.

10 unchanged sentences

Range of Exercise Prices

Number Outstanding

Actual Number Outstanding

Weighted Average Remaining Contractual Life (Years)

30 unchanged sentences

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 10 years and on the automobile it is 30 months.

The remaining lease term on the parking lot is 9 years and on the automobile is 18 months.

There are no options to extend or terminate the leases.

22 unchanged sentences

distribution rights for the Filshie Clip System from CooperSurgical, Inc.

(CSI) on February 1, 2019, after which CSI will no longer sell the FILSHIE Clip System and UTMD will distribute the FILSHIE Clip System directly to clinical facilities in the U.S.

(CSI) on February 1, 2019, after which CSI no longer sells the Filshie Clip System and UTMD distributes the Filshie Clip System directly to clinical facilities in the U.S.

The $ 21,000 purchase price represents an identifiable intangible asset which will be 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 will be fully amortized in 4th quarter 2023.

As part of the agreement, UTMD also purchased the remaining CSI inventory for approximately $2,100.

16 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data