| | REGULATION
The U.S. Congress has passed the Federal Food, Drug,
and Cosmetic Act. Under that act and through its own rules, the U.S. Food and
Drug Administration (“FDA”) regulates the development, testing, packaging, labeling,
and marketing of medical devices and manufacturing procedures relating to these
devices. In general, the FDA requires that manufacturers adhere to certain standards
designed to ensure the safety and effectiveness of medical devices. We employ
a Vice President of Regulatory Affairs and a Vice President of Quality Systems
who are responsible for compliance with all applicable FDA regulations. Although
we believe that we are currently in material compliance with these requirements,
any failure on our part to comply with all applicable current and future regulations
could adversely affect our business. The FDA’s Quality
Systems Regulations standards regulate our manufacturing processes, require the
maintenance of certain records, and provide for unscheduled inspections of our
facilities. We must also comply with certain requirements of state, local, and
foreign governments in the manufacture and marketing of the Company's products.
New medical devices may also be subject to either
the Section 510(k) Pre-Market Notification regulations or the Pre-Market Approval,
or “PMA,” regulations promulgated by the FDA and similar regulatory authorities
in foreign countries. New products in either category require extensive documentation,
careful engineering and manufacturing controls to ensure quality. Products needing
PMA approval require extensive pre-clinical and clinical testing and approval
by the FDA prior to marketing. Products subject to the Section 510(k) of the Federal
Food Drug and Cosmetic Act require FDA clearance prior to marketing. To date,
our products have required only compliance with Section 510(k). Most of our products
are subject to foreign regulatory approvals before they may be marketed abroad.
We place the "CE" mark on devices and products sold in Europe. We have received
ISO 13485 certification for our Utah and Texas facilities. We have received EN
ISO 13485 certification for our Galway, Ireland facility. We have also received
ISO 9002 certification for our Merit Sensor Systems, Inc. facility in Santa Clara,
California. EMPLOYEES
As of December 31, 2005, we employed 1,519 people, including 1,146 in manufacturing,
152 in sales and marketing, 133 in engineering, research and development, and
88 in administration. Many of our present employees
are highly skilled. Our failure or success will depend, in part, upon our ability
to retain such employees. We believe that an adequate supply of skilled employees
is available. We have from time to time experienced rapid turnover among our entry-level
assembly workers, as well as occasional shortages of such workers, resulting in
increased labor costs and administrative expenses related to hiring and training
of replacement and new entry-level employees. All of our employees are bound by
confidentiality policies. None of our employees is represented by a union or other
collective bargaining group. We believe that our relations with our employees
are good. AVAILABLE INFORMATION We
file annual, quarterly and current reports and other information with the SEC.
These materials can be inspected and copied at the SEC’s Public Reference Room
at 100 F Street, N.E., Washington, D.C. 20549. Copies of these materials may also
be obtained by mail at prescribed rates from the SEC’s Public Reference Room at
the above address. Information about the Public Reference Room can be obtained
by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site
that contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC. The address of the SEC’s
Internet site is www.sec.gov. We make available,
free of charge, on our Internet website, located at www.merit.com, our
most recent Annual Report on Form 10-K, our most recent Quarterly Report on Form
10-Q, any current reports on Form 8-K filed since our most recent Annual Report
on Form 10-K, and any amendments to such reports as soon as reasonably practicable
following the electronic filing of such report with the SEC. In addition, we provide
electronic or paper copies of our filings free of charge upon request. | |
