Retractable Technologies Inc: Form 10-K for the period ended Dec 31, 2025

DESCRIPTION OF BUSINESS

General Development of Business

Retractable Technologies, Inc. was incorporated in Texas in 1994. Our business is the manufacturing and marketing of safety medical products (predominately syringes) for the healthcare industry. We have manufacturing facilities in Little Elm, Texas and use manufacturers in China as well. Our syringes are well-suited for administering vaccinations.

On September 13, 2024, the Office of the U.S. Trade Representative (“USTR”) revealed final adjustments to increase tariffs on certain goods imported from China under Section 301 (“Section 301”) of the Trade Act of 1974 (“Trade Act”). Among those products included were syringes and needles, at a rate of 100%. Beginning in early 2025 and throughout much of the year, additional widespread tariffs were imposed on most products imported into the U.S. citing authority under the International Emergency Economic Powers Act (“IEEPA”). Those tariffs were in addition to the Section 301 tariffs which existed at the time. Throughout 2025, the prevailing tariff rates on various products and certain countries of origin, including many of our products, fluctuated greatly. These fluctuations negatively impacted our ability to predict the cost of importing certain goods or groups of goods and negatively impacted our business. In February 2026, the U.S. Supreme Court ruled that the President’s use of IEEPA to impose reciprocal tariffs exceeded his authority and that the IEEPA tariffs must be vacated. Looking forward after the Supreme Court’s ruling, the 2024 Section 301 tariff of 100% on syringes and needles from China remains unchanged. Additionally, following the Supreme Court’s ruling on the tariffs imposed under IEEPA, effective February 20, 2026 a 10% ad valorem duty went into effect under Section 122 of the Trade Act, which is in addition to the above-mentioned Section 301 tariffs.

As of March 9, 2026, the prevailing tariff rate on most syringe and needle products imported from China was 120%. Other products we import from China, which do not fall under the category of needles and syringes, are subject to a 20% tariff rate. As foreign trade policy continues to evolve, including the impact of the Supreme Court’s ruling, uncertainty as to future tariff rates and affected products remains. Tariffs are expected to have a continuing material impact on our ability to source finished goods and certain raw materials and component parts, and to our results of operations and financial position. We continue working to lessen the financial impact of the tariffs through strategic ordering of products from our Chinese suppliers and shifting a larger portion of manufacturing of 1mL, 3mL, and EasyPoint® needles to our domestic manufacturing facility.

Additionally, in recent past years, we increased our domestic manufacturing capacity for product lines typically used in the administration of vaccines, funded in part by the Technology Investment Agreement, as amended ("TIA") with the United States Government Department of Defense, U.S. Army Contracting Command-Aberdeen Proving Ground, Natick Contracting Division & Edgewood Contracting Division (ACC-APG, NCD & ECD) on behalf of the Biomedical Advanced Research and Development Authority (BARDA). The TIA funded the $81.0 million facilities expansion and purchase of new manufacturing equipment and related ancillary equipment. At our own expense, we constructed a new warehouse onsite for housing finished goods and raw materials to be used in the manufacturing process as well as an expansion to our administrative offices. The TIA (under its April 2023 successor agreement, Other Transaction Agreement) governs ongoing terms until June 30, 2030 which include maintenance of equipment, availability of capacity, and U.S. government preference in the event of a public health emergency.

Description of Business

Our goal is to become a leading provider of safety medical products. Our principal products were designed to protect healthcare workers, patients, and others from needlestick injuries, cross-contamination through reuse, and reduce disposal costs.

Our dominant revenue-generating products are our injection devices (syringes and needles). Such products are marketed under the VanishPoint®, Patient Safe®, and EasyPoint® brands. Most of our products incorporate a feature whereby our needles retract which is a safety feature designed to protect healthcare workers from needlestick injuries. Our VanishPoint® 1mL syringes meet the criteria set by pharmaceutical manufacturers for low dead space, which results in a reduction of wasted medication caused by residual medication remaining in the syringe after a dose has been administered. In some instances, the low dead space allows for additional doses to be obtained from a medication vial.

VanishPoint® syringe sales have historically comprised most of our sales. Syringe sales were 65.1%; 68.5%; and 78.3% of our revenues in 2025, 2024, and 2023. EasyPoint® products accounted for 31.2%; 27.1%; and 16.6% of sales in 2025, 2024, and 2023.

We believe domestic customers may have retained product provided for vaccination purposes in inventory, leading to a decrease in overall demand. The extent to which these supplies still exist and the effect they have on future ordering patterns is difficult to estimate.

Overall demand may also be affected by public sentiment and acceptance of the safety and efficacy of vaccinations. While some products in our catalog of products are unrelated to the administration of vaccines, changes in the acceptance of vaccinations could have a material impact on our business.

We currently have under development additional safety products that add to or build upon our current product line offering. One such product has been submitted to the U.S. Food and Drug Administration (FDA) for review. No products under development are expected to be commercially available in 2026.

Our products are sold to and used by healthcare providers. Historically, an overwhelming majority of our products have been sold domestically.

Representatives of group purchasing organizations (“GPOs”) and purchasing representatives (rather than the end-users of the product) make the vast majority of decisions relating to the purchase of medical supplies. The GPOs and larger manufacturers often enter into contracts which can prohibit or limit entry in the marketplace by competitors.

We distribute our products throughout the U.S. through general line and specialty distributors. We also use international distributors. We have developed a national direct marketing network in order to market our products to health care customers and their purchaser representatives.

Sources and Availability of Raw Materials

Our product components, including needle adhesives and packaging materials, are purchased from various suppliers. There is no current scarcity of such materials or such suppliers.

Intellectual Property

Intellectual property rights, particularly patent rights, are material to our business. The patent rights are jointly owned by the Company and Thomas J. Shaw, our founder and CEO, and have varying expiration dates. Under the terms of an exclusive license agreement that has been in effect since 1995, the Company is exclusively licensed to use the patent rights held by Mr. Shaw, and Mr. Shaw generally receives a 5% royalty on gross sales of products subject to the license and he receives 50% of the royalties paid to the Company by certain sublicensees of the technology subject to the license.

Recent and expected modifications to our VanishPoint® products will effectively cause the modified VanishPoint® products to have extended patent expiration dates. Following the expiration of patents related to the old design, competitors may attempt to copy aspects of such prior design, but not the current design.

Patents related to recent modifications to the VanishPoint® syringes and core technology of the VanishPoint® syringes will expire during the years 2028 through 2032. Other patent applications covering inventions applicable to the VanishPoint® syringes are pending.

The Company has unexpired patents which relate to the EasyPoint® technology and other products as well.

The Company has registered the following trade names and trademarks for our products: VanishPoint®, EasyPoint®, Patient Safe®, VanishPoint® logos, RT and design, the VanishPoint® and design, the spot design and the Company slogans “The New Standard for Safety” ® and “We Make Safety Safe” ®.

Seasonality

Historically, unit sales have increased during the flu season.

Government Approval and Government Regulations

Compliance with government regulations represents an important part of our business. As a manufacturer of medical devices and operating under the TIA, we are subject to stringent regulatory requirements. In addition, we are also subject to maintain systems to monitor and report our findings to various regulatory bodies. We are also subject to audit by those bodies and/or third parties acting as proxies to verify our compliance with such regulations. The cost of compliance can be significant in terms of financial and human resource commitments. These costs are ongoing and may become more significant if the regulatory landscape changes.

The development, manufacture, marketing, sale, promotion, and distribution of our products are subject to government regulation by the U.S. Food and Drug Administration (FDA) and similar international regulatory agencies. Regulation by various international, federal and state agencies address the development and approval to market medical products, as well as approval and supervision of manufacturing, labeling, packaging, supply chains, distribution and record-keeping.

For all products manufactured for sale in the domestic market, we have given notice of intent to market to the FDA, and the devices were shown to be substantially equivalent to the predicate devices for the stated intended use. For all products manufactured for sale in the domestic market and foreign market, we hold a Quality Management System certification to ISO 13485:2016. Additionally, for all products manufactured for sale into the applicable countries, we hold a Quality Management System certification in compliance with the Medical Device Single Audit Program (MDSAP). We do not currently hold a CE mark but are pursuing certification under EU MDR 2017/745.

Compliance with domestic and international laws and regulations may affect our business. Among other effects, health care regulations and significant changes thereto may substantially increase the time, difficulty, and costs incurred in developing, obtaining, and maintaining approval to market, and marketing newly developed and existing products. We expect this regulatory environment will continue to require effort and investment to ensure compliance. Failure to comply could delay the release of a new product or result in regulatory and enforcement actions, the seizure or recall of a product, the suspension or revocation of the authority necessary for a product’s production and sale, and other civil or criminal sanctions including fines and penalties.

The regulation of data privacy and security, and the protection of the confidentiality of certain personal information (including patient health information, financial information, and other sensitive personal information), is increasing. For example, the European Union, various other countries, and various U.S. states (e.g., California) have enacted stricter data protection laws that contain enhanced financial penalties for noncompliance. Similarly, the U.S. Department of Health and Human Services has issued rules governing the use, disclosure, and security of protected health information, and the FDA has issued further guidance concerning cybersecurity for medical devices. In addition, certain countries have issued or are considering “data localization” laws, which limit companies’ ability to transfer protected data across country borders. Failure to comply with data privacy and security laws and regulations can result in business disruption and enforcement actions, which could include civil or criminal penalties.

The sale of medical products is subject to laws and regulations pertaining to health care fraud and abuse, including state and federal anti-kickback, anti-self-referral, and false claims laws in the United States.

We will continue to comply with applicable regulations of all countries in which our products are registered for sale.

We believe that we do not incur material costs in connection with compliance with environmental laws.

Competitive Conditions

Our competitive position with respect to product acceptance and market share remains much the same as before the COVID-19 pandemic. From a business perspective, our competitive position has been made more difficult with the implementation of tariffs on products we import from China. As of March 9, 2026, the prevailing tariff rate on most syringe and needle products imported from China was 120%. Other products we import from China, which do not fall under the category of needles and syringes, are subject to a 20% tariff rate. We continue to face fierce competition from much larger and more established companies across the U.S. healthcare market. While our products were widely used in the mass vaccination efforts during the COVID-19 pandemic, there is no assurance that we will be able to gain market share due to our relative size and presence in the overall U.S. healthcare market.

Becton, Dickinson and Company (“BD”), a global company which we had previously considered our primary competitor, spun off a portion of its syringe, needle, and injection product division as Embecta Corp. (“Embecta”) in April 2022. Embecta, which specializes in diabetes management, along with BD itself, are formidable competitors with greater market share and greater resources than us.

We compete primarily on the basis of healthcare worker and patient safety, product performance, and quality. We believe our competitive advantages include, but are not limited to, our leadership in quality and innovation. We believe our products continue to be the most effective safety devices in today’s market. Our VanishPoint® 1mL syringes meet the criteria set by pharmaceutical manufacturers for low dead space, which results in a reduction of wasted medication caused by residual medication remaining in the syringe after a dose has been administered. In some instances, the low dead space allows for additional doses to be obtained from a medication vial. Our syringe products include passive safety activation, require less disposal space, and are activated while in the patient, reducing exposure to the contaminated needle. Our price per unit is competitive or even lower than the competition once all the costs incurred during the life cycle of a syringe are considered. Such life cycle costs include disposal costs, testing and treatment costs for needlestick injuries, and treatment for contracted illnesses resulting from needlestick injuries.

EasyPoint® retractable needles offer unique safety benefits not found in other commercially available safety needles. Manually activated safety needles that compete with EasyPoint® must be removed from the patient, exposing the contaminated needle prior to activation of the manual safety mechanism. EasyPoint® needles allow for activation of the automated retraction mechanism while the needle is still in the patient, reducing exposure to the contaminated needle and effectively reducing the risk of needlestick injuries. EasyPoint® retractable needles are compatible with Luer-fitting syringes, including pre-filled syringes. In addition, EasyPoint® retractable needles may be activated with fluid in the syringe, making it applicable for aspiration procedures such as blood collection.

Employees

As of March 9, 2026, we had 201 employees. 195 of such employees were full-time employees. We provide equal employment opportunities to all employees and applicants for employment without regard to race, color, religion, gender, national origin, age, disability, marital status, ancestry, veteran status, workers’ compensation status or any other characteristic protected by federal, state, or local law. We have adopted a policy of zero tolerance for any form of unlawful discrimination or retaliation. We continue to evaluate current compensation rates and job descriptions with industry standard salary surveys to maintain competitive wages.

We recognize that we are now more reliant on our manufacturing workforce than in recent years as a result of tariffs imposed on the import of our products from our overseas manufacturers. As we continue to increase our output of domestically produced products and decrease our overall import mix, a strong and reliable workforce is essential to our success. As such, we are committed to attracting and retaining talent through market-competitive wages and benefits as well as providing a safe and supportive working environment.

Available Information

We make available, free of charge on our website (www.retractable.com (http://www.retractable.com)), our Form 10-K Annual Report and Form 10-Q Quarterly Reports and Current Reports on Form 8-K (and any amendments to such reports) as soon as reasonably practical after such reports are filed.

You should carefully consider the following material risks facing us. If any of these risks occur, our business, results of operations, or financial condition could be materially affected.

Recent Tariffs and Other Foreign Trade Policy Risks

We are subject to risks associated with foreign trade policy. In 2025, we used Chinese manufacturers to produce 62.6% of our products.

Tariffs on our products continue to have a material negative impact to our results of operations and financial position. We are working to lessen the financial impact of the tariffs, including shifting a larger portion of manufacturing of 1mL, 3mL, and EasyPoint® needles to our domestic manufacturing facility. Notwithstanding our efforts to shift the majority of our manufacturing to our domestic facility, we are still reliant on our Chinese manufacturers to provide products we are not able to manufacture.

While we are committed to decreasing our reliance on imported products, and decreasing the negative financial impact such tariffs carry, there is no guarantee that our efforts will be successful. To the extent possible, we are working to increase our domestic production capacity and efficiency to be cost-competitive with our international manufacturers on a pre-tariff basis.

In the event that we become unable to purchase product from our Chinese manufacturers or produce those products domestically, we may need to find an alternate manufacturer for the blood collection set, IV catheter, Patient Safe® syringe, 0.5mL insulin syringe, 0.5mL autodisable syringe, and 2mL, 5mL, and 10mL syringes. Even with increased domestic production, we may not be able to avoid a disruption in supply.

We derived 15.8% of our revenues in 2025 from international sales. International sales, particularly in emerging market countries, are further subject to a variety of regulatory, economic, and political risks as well. Among the political risk we face with regard to international sales is the risk that our products may be subject to reciprocal tariffs in foreign countries in reaction to recently enacted and threatened tariffs by the U.S. The overall risk to our successful efforts in international markets is unknown and difficult to predict.

We Are Concerned that Our Stock Price is Not Correlated with Value

As of December 31, 2025, our market capitalization was $23.1 million (based on a $0.77 per share closing price) and total stockholders’ equity was $74.4 million. Our stock price reached a low of $0.62 per share in 2025 despite our strong balance sheet. We are therefore concerned that our stock price is not correlated with our value.

Our Customers Have Excess Product In Inventory and We Cannot Predict When It Will Be Depleted

We believe domestic customers have retained Retractable products (as well as competitive products) purchased or provided for vaccination purposes in inventory, leading to a decrease in demand for our products. It is unclear when the excess inventory surplus will clear. Until the inventory is depleted, we expect domestic demand to continue to be depressed. The extent to which surplus product still exists, and the potential impact it may have on future orders, is uncertain.

We Are Challenged by Uncertainties in Obtaining and Enforcing Intellectual Property Rights

Our main competitive strength is our technology. We are dependent on patent rights, and if the patent rights are invalidated or circumvented, our business would be adversely affected. Patent protection is considered, in the aggregate, to be of material importance in the design, development, and marketing of our products.

Syringes comprised 65.1% of sales in 2025. When the patents of the VanishPoint® syringes and other products expire, we may experience a significant and rapid loss of sales, and our competitive position in the marketplace may weaken if other competitors use our technology. Such occurrences could have a material adverse effect on profitability.

We do not maintain patent or trademark protection in all foreign countries, but, where possible, have taken steps to protect our patents and trademarks in those countries where we market our products or where we believe other manufacturers are most likely to attempt to replicate our technology. Our lack of patent and trademark protection in certain foreign countries heightens the risk that our designs may be copied by a competitor in those countries.

We Are Vulnerable to New Technologies

Because we have a narrow focus on particular product lines and technology (currently, predominantly retractable needle products), we are vulnerable to the development of superior competing products and to changes in technology which could eliminate or reduce the need for our products. If a superior technology is created, the demand for our products could greatly diminish.

In addition, ongoing innovation in pharmaceutical therapies, delivery methods, and clinical guidelines, including glucagon-like peptide 1 (“GLP 1”) based treatments and other long acting therapies, may alter traditional treatment patterns and reduce, delay, or change the use of insulin and other injectable therapies, which could result in lower demand for certain products or changes in the mix and volume of devices sold. Any such changes could materially and adversely affect our net sales, margins, financial condition, results of operations, and cash flows.

Our Competitors Have Greater Resources

Our competitors have greater financial resources, larger and more established sales and marketing and distribution organizations, and greater market influence, including long-term contracts. These competitors may be able to use these resources to improve their products through research and acquisitions or develop new products which may compete more effectively with our products. If our competitors choose to use their resources to create products superior to ours, we may be unable to sell our products and our ability to continue operations would be weakened.

For instance, Becton, Dickinson and Company (“BD”), a global company which we had previously considered our primary competitor, spun off a portion of its syringe, needle, and injection product division as Embecta Corp. (“Embecta”) in April 2022. Embecta licenses existing BD intellectual property and has continued to use the BD branding on its products and is provided with certain other services by BD. Embecta’s 2025 annual report indicated that the company had 1,850 employees, as compared to our workforce of 201 employees. With resources greatly in excess of our own, we expect Embecta will be a formidable competitor.

We Are Controlled by One Shareholder

Thomas J. Shaw, our President and Chief Executive Officer, has investment or voting power over a total of 55.7% of the outstanding Common Stock as of March 9, 2026. Mr. Shaw therefore has the ability to direct our operations and financial affairs and significant influence to elect members of our Board of Directors. His interests may not always coincide with the Company’s interests or the interests of other stockholders. This concentration of ownership, for example, may have the effect of delaying, deferring, or preventing a change in control, impeding a merger, consolidation, takeover, or other business combination involving us, or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could materially adversely affect the market price of our Common Stock. The concentration of ownership may likewise influence Mr. Shaw’s continued employment and position as President, CEO, and Chairman of the Board. Mr. Shaw’s rights under the Technology License Agreement, as the owner of the technology we produce, present similar conflicts of interest.

Defensive Measures to Deter Hostile Takeovers

On November 16, 2021, we and Mr. Shaw entered into the Third Amendment to Technology License Agreement (the “Amendment”). The Amendment expands the scope of the Technology License Agreement and provides additional protection to the parties in the event of a Hostile Takeover, as defined by the Amendment. Under the Amendment, under certain conditions, Mr. Shaw is granted the unilateral right to terminate the Technology License Agreement or cancel or convert a license thereunder from exclusive to nonexclusive following a Hostile Takeover.

Additionally, as a public Texas corporation, we are generally prohibited from entering into a business combination with a person who acquires twenty percent or more of our stock for three years unless either: (1) the combination or acquisition is pre-approved by our Board; or (2) the combination is approved by affirmative vote of the shareholders of at least two-thirds of the outstanding voting shares entitled to vote, excluding the affiliated shareholder. As such, independent of the rights granted to Mr. Shaw under the Amendment, as beneficial owner of 55.7% of our stock and Chairman of the Board, Mr. Shaw has considerable influence on all business combination decisions.

Supply Chain Disruptions Could Negatively Impact our Profitability

Our operations have historically been dependent on timely delivery of finished goods from our Chinese manufacturers and timely delivery of sufficient quantities of components and raw materials for domestic manufacturing. As mentioned earlier, we are shifting our production operations away from China to our domestic facility. With this change of production venue, we will face increased reliance on our domestic supply chain for raw materials and components parts. We expect this reliance to continue to increase as our domestic production output increases. Any disruption in our suppliers’ operations or timely availability of shipments from our third-party freight carriers could disrupt our ability to provide product to our customers in a timely manner, which could materially and adversely affect our results of operations and cash flows.

Geopolitical conflicts, including ongoing tensions in the Middle East, could disrupt our supply chain and limit the timely availability of components or finished goods, which could materially and adversely affect our results of operations and cash flows.

Inflationary Price Pressures and Uncertain Availability of Commodities, Raw Materials, Utilities, Labor or Other Inputs Used by us and our Suppliers, or Instability in Logistics and Related Costs, Could Negatively Impact our Profitability

Increases in the price of commodities, raw materials, utilities, labor or other inputs that we or our suppliers use in manufacturing and supplying products, components and parts, along with logistics and other related costs, may lead to higher production and shipping costs for our products, parts, and components. Further, increasing global demand for, and uncertain supply of, such materials could disrupt our or our suppliers’ ability to obtain such materials in a timely manner to meet our supply needs and/or could lead to increased costs. A material increase in the cost of inputs to our production could lead to higher costs for our products and could negatively impact our operating results. We expect that as we increase our materials acquisition levels for domestic production, we will be able to achieve economies of scale and greater volume-purchasing agreements with our suppliers, but there is no guarantee such benefits will materialize.

Vaccine Hesitancy Could Impact Demand

Overall demand may be affected by public sentiment and acceptance of the safety and efficacy of vaccinations. While some products in our catalog of products are unrelated to the administration of vaccines, changes in the acceptance of vaccinations could have a material impact on our business. In addition to public sentiment regarding vaccinations, U.S. public health policy and recommendations by the U.S. Centers for Disease Control and Prevention (CDC) may negatively impact demand for our products used in vaccine administration.

We Face Inherent Product Liability Risks

As a manufacturer and provider of safety needle products, we face an inherent business risk of exposure to product liability claims. Additionally, our success depends on the quality, reliability, and safety of our products and defects in our products could damage our reputation. If a product liability claim is made and damages are in excess of our product liability coverage, our competitive position could be weakened by the amount of money we could be required to pay to compensate those injured by our products. In the event of a recall, we have recall insurance. Historically, we have not incurred a negative material impact from product recalls of our products. We and our contract manufacturers adhere to stringent quality control standards and processes to ensure that our products are of the highest quality and remain safe and effective. The safety of healthcare workers and patients remains our highest priority.

Our Business May Be Affected by Changes in the Health Care Regulatory Environment

In the U.S. and internationally, government authorities may enact changes in regulatory requirements, reform existing reimbursement programs, and/or make changes to patient access to health care, all of which could adversely affect the demand for our products and/or put downward pressure on our prices. Future healthcare rulemaking could affect our business. We cannot predict the timing or impact of any future rulemaking or changes in the law.

We May Experience Losses in Our Investment Account

Our investment portfolio is subject to market risk. As a result, the value and liquidity of our cash equivalents and marketable securities could fluctuate substantially. Likewise, our other income and expenses could vary materially depending on gains or losses realized on the sale or exchange of investments and other factors. Increased volatility in the financial markets and overall economic uncertainty could increase the risk that actual amounts realized on our investments may differ from the fair values currently assigned to them. Because 24.1% of our total assets are invested in the market, fluctuations in market values could have a material adverse impact on our business, financial condition, results of operations, or cash flows.

Health Crises Could Have an Adverse Effect on Our Business

In any future health crisis, we may elect or be required to close temporarily which would result in a disruption in our activities and operations. Our supply chain, including transportation channels, may be impacted by any such restrictions as well. Any such disruption could impact our sales and operating results.

Widespread health crises also negatively affect economies which could affect demand for our products. In the event of a resurgence of COVID-19 or in the case of any future pandemic, there is no guarantee that revenues from syringes needed for vaccines would offset the effects to our business of a global economic decline.

Travel and import restrictions may also disrupt our ability to manufacture or distribute our products. Any import or export or other cargo restrictions related to our products or the raw materials used to manufacture our products could restrict our ability to manufacture and ship products and harm our business, financial condition, and results of operations.

Our key personnel and other employees could be affected by COVID-19 or any future pandemic, which could affect our ability to operate efficiently.

Disruption of Critical Information Systems or Material Breaches in the Security of Our Systems Could Harm Our Business, Customer Relations, and Financial Condition

Information technology helps us operate efficiently, interface with customers and suppliers, maintain financial accuracy and efficiency, and accurately produce our financial statements. If we do not allocate and effectively manage the resources necessary to build and sustain the proper technology infrastructure, we could be subject to transaction errors, processing inefficiencies, the loss of customers, business disruptions, or the loss of or damage to intellectual property through security breach. If our data management systems do not effectively collect, store, process, and report relevant data for the operation of our business, whether due to equipment malfunction or constraints, software deficiencies, or human error, our ability to effectively plan, forecast, and execute our business plan and comply with applicable laws and regulations will be impaired, perhaps materially. Any such impairment could materially and adversely affect our financial condition, results of operations, cash flows, and the timeliness with which we report our internal and external operating results. Third parties may attempt to fraudulently induce employees or customers into giving away sensitive information, which may in turn be used to access our information technology systems. In addition, unauthorized persons may attempt to hack into our systems to obtain our confidential or proprietary information or confidential information we hold on behalf of third parties. If the unauthorized persons successfully hack into or interfere with our system, we may experience a negative impact to our business and reputation. We have programs in place to detect, contain, and respond to data security incidents, and we make ongoing improvements to our systems in order to minimize vulnerabilities, in accordance with industry and regulatory standards. However, we may not be able to anticipate and prevent these intrusions or mitigate them when and if they occur. We also rely on external vendors to supply and/or support certain aspects of our information technology systems. The systems of these external vendors may contain defects in design or manufacture or other problems that could unexpectedly compromise information security of our own systems, and we are dependent on these third parties to deploy appropriate security programs to protect their systems. It is possible for such vulnerabilities to remain undetected for an extended period, including several years or longer. The costs to us to eliminate or alleviate network security problems, bugs, viruses, worms, ransomware and other malicious software programs, and security vulnerabilities could be significant. Our efforts to address these problems may not be successful and could result in unexpected interruptions, delays, cessation of service, and harm to our business operations. Depending on the type of breach, we could also be exposed to a risk of loss or litigation and potential liability, which could have a material adverse impact on our business, financial condition, results of operations, or cash flows.

Illegal Distribution and Sale by Third Parties of Counterfeit Versions of Our Products Could Have a Negative Impact

Third parties may illegally distribute and sell counterfeit versions of our products which do not meet our rigorous manufacturing and testing standards. Our reputation and business could suffer harm as a result. In addition, diversion of products into other channels may result in reduced revenues.

General Risk Factors

We face risk factors common to other U.S. businesses. We could be subject to complex and costly regulation. Our business could suffer if we or our suppliers encounter manufacturing problems or disruptions to transportation channels. We could be subject to risks associated with doing business outside of the U.S, including risks associated with global economic, regulatory, or political changes, or health crises. Current or worsening economic conditions may adversely affect our business and financial condition.

We prioritize cybersecurity throughout our operations to protect sensitive data, ensure device integrity, and maintain business continuity. Our strategy is built on a layered approach encompassing proactive risk assessments, vulnerability management, data security, device security, employee training, and incident response. We have a documented incident response plan outlining steps for detection, containment, eradication, and recovery from cyberattacks. We conduct regular incident response drills to ensure preparedness. We use threat intelligence feeds and industry reports to stay informed about evolving cyber threats targeting the medical manufacturing industry. We conduct annual comprehensive risk assessments using industry-standard methodologies and tailored questionnaires for medical manufacturing risks. We continuously monitor system logs and security alerts for suspicious activity indicative of potential attacks. We track and prioritize identified risks based on a risk scoring system considering factors like data sensitivity and operational disruption. We implement multi-factor authentication for all remote access and privileged accounts. We segment our network to isolate critical systems holding personal identifying information, corporate data, and operational data. We encrypt sensitive data at rest and in transit using industry-standard algorithms. We regularly patch vulnerabilities in our systems based on severity and potential exploitability. We have strict access controls in place, granting privilege access based on job roles and responsibilities. We continuously monitor network activity for anomalies and suspicious behavior.

Cybersecurity risks are integrated into our enterprise risk management framework and considered alongside other operational and financial risks during decision-making processes. The Information Security Officer (ISO) reports directly to the Chief Financial Officer (CFO) and regularly briefs the executive team on cybersecurity risks and mitigation strategies. Our ISO has 20 years of Chief Information Security Officer (CISO) experience and has served in IT leadership roles for multiple organizations. He specializes in cybersecurity and disaster recovery. Strengthened by SANS LDR512 and LDR514 training, he provides the strategic frameworks and digital expertise needed to navigate complex enterprise security landscapes. We engage independent cybersecurity firms to conduct penetration testing, vulnerability assessments, and security audits of our IT and OT infrastructure. We also use external expertise for incident response support and regulatory compliance guidance. We conduct thorough cybersecurity risk assessments of all third-party vendors before onboarding, evaluating their security controls, data handling practices, and incident response capabilities. We require vendors to sign contracts that mandate adherence to specific cybersecurity standards and data privacy regulations. We conduct ongoing monitoring of vendor security posture and require them to promptly report any security incidents.

The Board of Directors oversees the overall cybersecurity risk management program and holds management accountable for its effectiveness. The Board receives regular briefings on cybersecurity risks and mitigation strategies. The ISO regularly reports to the Board and executive management on the status of the cybersecurity risk management program, including key risks, mitigation strategies, and incident reports. The program is reviewed periodically to assess its effectiveness and identify areas for improvement. Management’s role is to assist the Board in identifying and considering material cybersecurity risks, ensure implementation of management-level and employee-level cybersecurity practices and training, and provide the Board with regular reports regarding any cybersecurity attacks or vulnerabilities. As of the date of this Annual Report on Form 10-K, our assessment indicates that cybersecurity incidents have not had a material effect on our operations or financial condition and, based on the current knowledge of Management, are not likely to materially affect us.

The ISO handles developing, implementing, and maintaining the cybersecurity risk management program and reports directly to the CFO who has the authority to allocate resources and make decisions related to cybersecurity. A cross-functional committee composed of representatives from Management, IT, legal, compliance, operations and other relevant departments aids the ISO in managing cyber risks and developing program initiatives. Business unit and departmental leaders are responsible for implementing cybersecurity controls within their areas of responsibility and reporting potential risks to the ISO. Regular cybersecurity awareness training is provided to all employees to educate them on cyber threats, best practices, and reporting procedures. Management and IT personnel receive additional training on specific security concepts and risk management techniques. We are committed to continuous improvement of our cybersecurity risk management program. We actively monitor industry best practices and adapt our program to address evolving threats and risks.

Our headquarters are located at 511 Lobo Lane, on 35 acres, which we own, overlooking Lake Lewisville in Little Elm, Texas. The headquarters are in good condition and houses our administrative offices and manufacturing facility. The manufacturing facility produced approximately 37.4% of the units that were manufactured in 2025. Since 2020, we have significant additional domestic production capacity for some of our products, primarily vaccination syringes and needles associated with the TIA. However, we do not currently have the necessary equipment to produce every product we offer and may continue to rely on our international manufacturers to supply those products, incurring the cost of import tariffs.

A loan in the original principal amount of approximately $4,210,000 is secured by our land and buildings. See Note 9 to our financial statements for more information.

In the opinion of Management, the property and equipment are suitable for their intended use and are adequately covered by an insurance policy.

FORWARD-LOOKING STATEMENT WARNING

Certain statements included by reference in this filing containing the words “could,” “may,” “believes,” “anticipates,” “intends,” “expects,” and similar such words constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Any forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such factors include, among others, tariffs, material changes in demand, our ability to maintain liquidity, our maintenance of patent protection, our ability to maintain favorable third party manufacturing and supplier arrangements and relationships, foreign trade risk, our ability to access the market, production costs, the impact of larger market players in providing devices to the safety market, and other factors referenced in Item 1A. Risk Factors. Given these uncertainties, undue reliance should not be placed on forward-looking statements.

Overview

We have been manufacturing and marketing our products since 1997. Syringes comprised 65.1% of our sales in 2025. EasyPoint® products accounted for 31.2% of sales in 2025 and other products, including our IV safety catheter and blood collection products were 3.7% of our total product sales in 2025.

Our products have been and continue to be distributed nationally and internationally through numerous distributors. Some of our popular syringe products provide low dead-space. Low dead-space syringes reduce residual medication remaining in the syringe after the dose has been administered. In some instances, the low dead-space allows for additional doses of medication to be obtained from the vials.

On September 13, 2024, the Office of the U.S. Trade Representative (“USTR”) revealed final adjustments to increase tariffs on certain goods imported from China under Section 301 (“Section 301”) of the Trade Act of 1974 (“Trade Act”). Among those products included were syringes and needles, at a rate of 100%. Beginning in early 2025 and throughout much of the year, additional widespread tariffs were imposed on most products imported into the U.S. citing authority under the International Emergency Economic Powers Act (“IEEPA”). Those tariffs were in addition to the Section 301 tariffs which existed at the time. Throughout 2025, the prevailing tariff rates on various products and certain countries of origin, including many of our products, fluctuated greatly. These fluctuations negatively impacted our ability to predict the cost of importing certain goods or groups of goods and negatively impacted our business. In February 2026, the U.S. Supreme Court ruled that the President’s use of IEEPA to impose reciprocal tariffs exceeded his authority and that the IEEPA tariffs must be vacated. Looking forward after the Supreme Court’s ruling, the 2024 Section 301 tariff of 100% on syringes and needles from China remains unchanged. Additionally, following the Supreme Court’s ruling on the tariffs imposed under IEEPA, effective February 20, 2026 a 10% ad valorem duty went into effect under Section 122 of the Trade Act, which is in addition to the above-mentioned Section 301 tariffs.

As of March 9, 2026, the prevailing tariff rate on most syringe and needle products imported from China was 120%. Other products we import from China, which do not fall under the category of needles and syringes, are subject to a 20% tariff rate. As foreign trade policy continues to evolve, including the impact of the Supreme Court’s ruling, uncertainty as to future tariff rates and affected products remains. Tariffs are expected to have a continuing material impact on our ability to source finished goods and certain raw materials and component parts, and to our results of operations and financial position. We continue working to lessen the financial impact of the tariffs through strategic ordering of products from our Chinese suppliers and shifting a larger portion of manufacturing of 1mL, 3mL, and EasyPoint® needles to our domestic manufacturing facility.

While we have manufacturing capabilities to manufacture most of the products we currently sell domestically, some of our products are sourced exclusively from China. We obtained 62.6% of our products from our manufacturers in China in 2025, most of which are impacted by the tariffs, however, a portion was shipped directly to international customers, on which no tariffs were assessed. Tariffs are expected to continue to have a material impact to our results of operations and financial position. Approximately $1.8 million was incurred in tariff expense in 2025. We are working to lessen the financial impact of the tariffs, including shifting a larger portion of manufacturing of 1mL, 3mL, and EasyPoint® needles to our domestic manufacturing facility. We implemented reductions in force in the second and third quarters of 2025 in both manufacturing and non-manufacturing functions.

We have recently adapted some equipment to increase our domestic manufacturing capabilities. The adaptations to existing equipment will allow us to produce 0.5 mL syringes domestically. Once operational, we will no longer rely on imports for these products. We currently anticipate that commercial quantities will become available, as market demand necessitates, in the second half of 2026.

Certain products must be purchased from third party suppliers as we do not currently have the machinery to manufacture our entire product line in our U.S. facility. When equipment was added to our U.S. facility pursuant to the TIA, it was strictly for product lines typically used in the administration of vaccines, as required by the TIA.

In 2020 and 2021, we were awarded significant orders and contracts by the U.S. government for safety syringes for COVID-19 vaccination efforts. From 2020 through the first quarter of 2022, the U.S. government was a significant customer. We cannot predict whether any future U.S. government orders may occur.

Recent additions of manufacturing equipment and facilities under the 2020 TIA have increased our production capacity and our overhead costs. Under the TIA and its successor agreement, until June 30, 2030 we must continue to abide by ongoing terms which include maintenance of equipment, availability of capacity, and U.S. government preference in the event of a public health emergency.

The U.S. government orders as well as the TIA are material events particular to the COVID-19 pandemic and are not indicative of future operations.

Over the past several years, we have experienced certain cost increases in raw materials. Those costs primarily affected our domestic manufacturing because the finished goods we purchased from China were subject to a long-term fixed price contract. Sensitivity to cost fluctuations is likely to become more pronounced as we transition away from production under such a fixed price contract. Other factors that could affect our unit costs include tariffs, supplier cost increases, increases in workforce costs associated with increased domestic production, and changing production volumes. Increases in costs may not be recoverable through price increases of our products.

We believe domestic customers retained products provided for vaccination purposes in inventory. Customers have reported that demand was diminished due to their remaining syringe inventory. It is difficult to estimate how much, if any, of the remaining inventory might still remain in the market.

As detailed in Note 4 to the financial statements, we held $34.4 million in debt and equity securities as of December 31, 2025, which represented 24.1% of our total assets.

Historically, unit sales have increased during the flu season. From 2020-2022, seasonal effects of the flu season on our revenues were less impactful due to the dramatic increase in sales attributable to COVID-19 vaccinations. Seasonal trends for syringe sales may now be following pre-pandemic patterns. Additionally, there may be more demand for EasyPoint® products during the flu season, particularly in the retail pharmacy market. Purchases from our retail pharmacy customers may differ from purchasing patterns of general line distributors. EasyPoint® sales volumes increased primarily for this reason.

Overall demand may be affected by public sentiment and acceptance of the safety and efficacy of vaccinations. While some products in our catalog of products are unrelated to the administration of vaccines, changes in the acceptance of vaccinations could have a material impact on our business.

The unrealized loss on debt and equity securities was $5.0 million due to the decreased market values of those securities; however, we realized gain on the sale of equity securities of $5.6 million.

In May 2025, we received a settlement payment of $1.9 million related to the resolution of litigation with former legal counsel. The amount was recorded in Litigation proceeds during the second quarter ended June 30, 2025.

In 1995, we entered into a license agreement with Thomas J. Shaw for the exclusive right to manufacture, market, and distribute products utilizing his patented automated retraction technology and other patented technology. This technology is the subject of various patents and patent applications owned by Mr. Shaw. The license agreement generally provides for quarterly payments of a 5% royalty fee on gross sales of products subject to the license and he receives fifty percent (50)% of the royalties paid to us by certain sublicensees of the technology subject to the license.

RESULTS OF OPERATIONS

The following discussion may contain trend information and other forward-looking statements that involve a number of risks and uncertainties. Our actual future results could differ materially from our historical results of operations and those discussed in any forward-looking statements. All period references are to our fiscal years ended December 31, 2025 and 2024. Dollar amounts have been rounded for ease of reading.

Comparison of Year Ended

December 31, 2025 and Year Ended December 31, 2024

Domestic sales accounted for 84.2% and 88.9% of the revenues in 2025 and 2024, respectively. Domestic revenues increased 9.7% principally due to an increase in VanishPoint® and EasyPoint® needle sales. Domestic unit sales increased 3.6%. Domestic unit sales were 73.7% of total unit sales for 2025. International revenues increased 64.0%, primarily driven by higher EasyPoint® needle sales, while international unit volume increased 164.7%. Revenue growth was lower than unit growth due to discounted pricing on international units, which had a negative impact on gross margin. Overall unit sales increased 23.3% and our overall revenues increased by 15.8%. There is uncertainty as to the timing of future international orders.

Cost of manufactured product increased 12.7%. Royalty expense increased 6.6% due to the associated increase in gross sales.

Approximately $1.8 million was incurred in tariff expense in 2025. These costs are included in Cost of manufactured product.

As a result of the above, gross profit margins increased from (3.1)% in 2024 to 0.1% in 2025.

Operating expenses increased 5.7%, primarily due to an impairment charge of $954 thousand and increased sales and marketing expenses due to increased headcount. The impairment charge of $954 thousand was primarily related to older syringe and tooling equipment.

The loss from operations was $21.2 million as compared to a loss from operations of $21.1 million in 2024.

The unrealized loss on debt and equity securities in 2025 was $5.0 million due to the decreased market values of those securities. A $5.6 million gain was realized from the sale of debt and equity securities in 2025.

The provision for income taxes was $291 thousand as compared to a provision for income taxes of $8.4 million as for 2024. The difference is primarily related to fully reserving our deferred tax asset in the second quarter of 2024.

A comparison of the results of operations for the years ended December 31, 2024 and December 31, 2023 is omitted from this discussion. Such comparison was included in our Annual Report on Form 10-K filed with the SEC on March 28, 2025 in Item 7 of Part II thereof.

LIQUIDITY AND CAPITAL RESOURCES

Cash flow used by operations was $7.1 million in 2025 due to a number of factors. Aside from the various reconciling items used in determining the overall use of cash, our net loss for the year was the predominant factor. We recognized approximately $6.0 million in other income from the TIA. Changes in working capital also impacted cash flows from operating activities. Accounts receivable increased by $451 thousand, inventories increased by $197 thousand, and accounts payable decreased by $1.0 million.

Cash flow from investing activities was $6.0 million in 2025 due primarily to the sale of $37.1 million in debt and equity securities.

Cash used by financing activities was $567 thousand for 2025. This was primarily due to repayments of long-term debt and payment of preferred stock dividends.

We have historically funded operations primarily from the proceeds from revenues, private placements, litigation settlements, and loans. We may fund operations going forward from revenues, cash reserves, and investments in trading securities should the need to access those funds arise.

The imposition of tariffs on our products will continue to have a material effect on our operating results and liquidity. Recent capital improvements and increases to our manufacturing workforce will also increase expenses in the near term as a result of the tariffs and our expected increase in domestic manufacturing. The conversion of existing equipment plus the purchase of additional molds to produce 0.5 mL syringes which have never been produced domestically cost approximately $1 million in 2025. Those products accounted for roughly 11% of our overall domestic unit sales and 10.1% of our domestic syringe unit sales in 2025.

Margins

The mix of domestic and international sales, along with product mix, affects the average sales price of our products. Generally, the higher the ratio of domestic sales to international sales, the higher the average sales price will be. Additionally, product mix plays a role, with syringe sales typically having higher average selling prices and gross profit margins than our other product lines. Some international sales of our products are shipped directly from China to the customer. The number of units produced by us versus manufactured in China can have a significant effect on the carrying costs of Inventory as well as Cost of sales. Generally, an overall increase in units sold can positively affect our margins. The cost of raw materials used in manufacturing, transportation costs, and the impact of tariffs can also significantly affect our margins.

Our margins have experienced significant fluctuations over the past two years. Most recently, our margins have faced negative pressure from numerous factors. The tariffs enacted in 2024-2026 have had a direct negative impact on products we import from China to date. In reaction to the tariffs, we have acted to increase our domestic production and reduce, to the extent possible, our reliance on imports. While we believe these efforts will enable us to avoid some of the impact of the tariffs, we will be forced to import the products we are unable to produce in the U.S. As we work to increase our domestic production and achieve manufacturing efficiencies, we expect to incur higher manufacturing costs in the near term but will continue to work to minimize our reliance on imported products.

Cash Requirements

We believe we will have adequate means to meet our short-term needs to fund operations for at least 12 months from the date of issuance of the financial statements. Besides cash reserves, we also have access to our investments which may be liquidated in the event that we need to access the funds for operations. Expected short-term uses of cash include payroll and benefits, royalty expense, inventory purchases, tariffs, contractual obligations, payment of income taxes, quarterly preferred stock dividends, and other operational priorities. Our year-end liabilities are detailed in our financial statements, including Notes 7, 8 and 9 to the financial statements. We believe we will have adequate means to meet our currently foreseeable long-term liquidity needs, although the tariffs and our costs related to an increase in domestic manufacturing will increase our expenses materially. For the next 1-3 years, we believe our liquidity will decline materially, but we expect that we may be able to satisfy our long-term cash requirements using a combination of cash and liquidation of our investments. If cash needs cannot be met using existing cash and investments, management would reduce operational costs, similar to reductions in administrative support in the second quarter of 2025. In the event that the foregoing is insufficient, we may liquidate certain assets.

Capital Resources

As of December 31, 2025, there were no commitments for material capital expenditures.

CRITICAL ACCOUNTING ESTIMATES

We are responsible for developing estimates for amounts reported as assets and liabilities, and revenues and expenses in conformity with U.S. generally accepted accounting principles (“GAAP”). Those estimates require that we develop assumptions of future events based on past experience and expectations of economic factors. Among the more critical estimates management makes is the estimate for customer rebates. The amount reported as a contractual allowance for rebates involves examination of past historical trends related to our sales to distributors and the related credits issued once our distributors have satisfied their contractual obligations. The estimate includes consideration of historical redemption rates, discount rates, and a combination of estimated distributor inventories based on tracking information provided by the distributors or if known, inventory turnover rates. The establishment of a liability for future claims of rebates against sales in the current period requires that we have an understanding of the relevant sales with respect to product categories, sales distribution channels, and the likelihood of contractual obligations being satisfied. We examine the results of estimates against actual results historically and use the determination to further develop our basis for assumptions in future periods, as well as the accuracy of past estimates. Based on distributors’ purchasing and claiming rebates practices, we do not expect significant changes to the current inputs and assumption used in the estimate calculations. While we believe that we have sufficient historical data, and a firm basis for establishing reserves for contractual obligations, there is an inherent risk that our estimates and the underlying assumptions may not reflect actual future results. In the event that these estimates and/or assumptions are incorrect, adjustments to our reserves may have a material impact on future results. As of December 31, 2025, we estimate that the total potential future credits to be issued as a result of prior purchases which have not yet been claimed is $2.4 million.

Disclosure Controls and Procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (the "Exchange Act"), Management, with the participation of our President, Chairman, and Chief Executive Officer, Thomas J. Shaw (the “CEO”), and our Vice President and Chief Financial Officer, John W. Fort III (the “CFO”), acting in their capacities as our principal executive and financial officers, evaluated the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) under the Exchange Act. The term disclosure controls and procedures means controls and other procedures that are designed to ensure that information required to be disclosed by us in our periodic reports is: i) recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission's (the “SEC”) rules and forms; and ii) accumulated and communicated to our Management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Based upon this evaluation, the CEO and CFO concluded that, as of December 31, 2025, our disclosure controls and procedures were not effective, as discussed below.

Management's Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over our financial reporting as defined in Rule 13a-15(f) under the Exchange Act. The term internal control over financial reporting means a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our Board of Directors, Management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of assets; (ii) provide reasonable assurance that our transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of Management and Directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements. Management used the Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission to evaluate the effectiveness of our internal control over financial reporting as required by paragraph (c) of Rule 13a-15 under the Exchange Act. Based on that evaluation, Management concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2025.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Management identified the following material weaknesses in internal controls as of December 31, 2025:

• The Company’s controls over the monthly close process and account reconciliations were not operating at a level of precision to prevent or detect misstatements in a timely manner.

Our Management, including the CEO and CFO, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all instances of fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met.

Remediation of the Material Weaknesses in Internal Control over Financial Reporting:

In light of the material weaknesses in internal control over financial reporting, Management intends to enhance its controls over the monthly close process and account reconciliations. These enhancements will include strengthening review procedures, increasing the level of precision applied in account analyses, and ensuring timely preparation and review of reconciliations by experienced members of the accounting team, including senior leadership.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the fourth quarter of 2025 which has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.