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RETRACTABLE TECHNOLOGIES INC

RETRACTABLE TECHNOLOGIES INCRVPEarnings & Financial Report

NYSE · Health Care · Surgical & Medical Instruments & Apparatus

Retractable Technologies Inc is a specialized medical device manufacturer that designs, manufactures and distributes safety-engineered disposable medical products, including retractable syringes, safety needles and IV catheters. Its key customers are healthcare facilities, pharmaceutical companies and public health agencies across North America and global markets, helping reduce needlestick injury risks for medical personnel and patients.

What changed in RETRACTABLE TECHNOLOGIES INC's 10-K — 2022 vs 2023

Top changes in RETRACTABLE TECHNOLOGIES INC's 2023 10-K

91 paragraphs added · 109 removed · 62 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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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. 4 Table of Contents Competitive Conditions Our competitive position remains much the same as before the COVID-19 pandemic.
We will continue to comply with applicable regulations of all countries in which our products are registered for sale. 4 Table of Contents We believe that we do not incur material costs in connection with compliance with environmental laws. Competitive Conditions Our competitive position remains much the same as before the COVID-19 pandemic.
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 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 syringes are well-suited for administering vaccinations and our revenues materially increased in 2020-2021 due to COVID-19 vaccination demand. Our revenues decreased as sales to the U.S. government for vaccinations wound down in the first quarter of 2022, although international vaccination demand positively impacted sales throughout 2022.
Our syringes are well-suited for administering vaccinations and our revenues materially increased in 2020-2021 due to COVID-19 vaccination demand. Our revenues decreased as sales to the U.S. government for vaccinations wound down in the first quarter of 2022, although international vaccination demand positively and materially impacted sales throughout 2022 and the first quarter of 2023.
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 10, 2023, we had 198 employees. 190 of such employees were full time employees.
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 11, 2024, we had 151 employees. 148 of such employees were full time employees.
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.
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.
EasyPoint ® products accounted for 4.9% of sales in 2022. 2 Table of Contents From 2020 through the first quarter of 2022, the U.S. government was a significant customer due to efforts to vaccinate the U.S. population against COVID-19.
EasyPoint ® products accounted for 16.6%, 5.0%, and 5.1% of sales in 2023, 2022, and 2021. 2 Table of Contents From 2020 through the first quarter of 2022, the U.S. government was a significant customer due to efforts to vaccinate the U.S. population against COVID-19.
VanishPoint ® syringe sales have historically comprised most of our sales. VanishPoint ® syringe sales were 91.5%; 93.6%; and 84.0% of our revenues in 2022, 2021, and 2020.
VanishPoint ® syringe sales have historically comprised most of our sales. Syringe sales were 78.3%; 91.5%; and 93.6% of our revenues in 2023, 2022, and 2021.
The increase is attributable to higher international revenues from vaccination efforts which lagged domestic vaccination sales by a year or more.
The increase in 2022 and the first quarter of 2023 is attributable to higher international revenues from vaccination efforts which lagged domestic vaccination sales by a year or more.
We expect to incur approximately $154 thousand in separation costs as a result. ​ Available Information We make available, free of charge on our website (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. ​ 5 Table of Contents
The decrease in headcount resulted in annualized savings in salaries and wage expense of approximately $1.7 million in 2023, net of separation costs of $154 thousand. ​ Available Information We make available, free of charge on our website (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. ​ 5 Table of Contents
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” ® .
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” ® . 3 Table of Contents Seasonality Historically, unit sales have increased during the flu season.
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.
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.
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.
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.
As such, comparability of 2022 revenue and expenses to revenues and expenses in recent years may be challenging. Moreover, we believe domestic customers may have retained product provided for vaccination purposes in inventory through 2022, leading to a decrease in overall demand.
As such, comparability of 2023 revenue and expenses to revenues and expenses in recent years may be challenging. Moreover, we believe domestic customers may have retained product provided for vaccination purposes in inventory, leading to a decrease in overall demand. We currently have under development additional safety products that add to or build upon our current product line offering.
In 2021, we increased wages considerably, particularly for our entry-level employees, in order to compete for labor. ​ On March 22, 2023, we reduced our workforce by approximately 22% as a result of decreased need for domestic production. The decrease in headcount will result in expected annualized savings in salaries and wage expense of approximately $1.7 million, or 13%.
In 2021, we increased wages considerably, particularly for our entry-level employees, in order to compete for labor. We continue to evaluate current compensation rates and job descriptions with industry standard salary surveys to maintain competitive wages. ​ On March 22, 2023, we reduced our workforce by approximately 22% as a result of decreased need for domestic production.
We currently have under development additional safety products that add to or build upon our current product line offering. Our products are sold to and used by healthcare providers. Historically, an overwhelming majority of our products have been sold domestically. However, in 2022, 44.9% of our sales were international sales.
Our products are sold to and used by healthcare providers. Historically, an overwhelming majority of our products have been sold domestically. However, in 2022, 44.9% of our sales were international sales and in the first quarter of 2023, 50.7% of our sales were international. For the remainder of 2023, international sales were closer to 10% of total sales.
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Seasonality Historically, unit sales have increased during the flu season. Seasonal trends were less pronounced in 2020 and 2021 due to demand related to the COVID-19 vaccine.
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With the dramatic increase in sales attributable to COVID-19 vaccinations, however, the effect of flu season sales was less impactful in past years. Unit sales in 2023 increased each quarter domestically for those products associated with administering vaccinations (including the flu shot) which indicates that the seasonal trends are following pre-pandemic patterns.
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Trends in 2022 were difficult to categorize by revenue figures, as 3 Table of Contents 2022 demand was affected by a surplus of products remaining in our customers’ inventories following vaccination-related purchases and grants in 2020-2021. Government Approval and Government Regulations Compliance with government regulations represents an important part of our business.
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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.
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Though newly formed, 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, which specializes in diabetes management, along with BD itself, are formidable competitors with greater market share and greater resources than us.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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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. ​ 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.
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. ​ 7 Table of Contents 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.
In addition, diversion of products into other channels may result in reduced revenues. 9 Table of Contents 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.
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.
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.
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.
Though newly formed, 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 2022 annual report indicated that the company had 1,900 employees, as compared to our workforce of less than 200 employees.
Though newly formed, 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 2023 annual report indicated that the company had 2,200 employees, as compared to our workforce of less than 200 employees.
Even with increased domestic production, we may not be able to avoid a disruption in supply. Trade protection measures, including tariffs, and/or changes to import or export requirements could materially adversely impact our operations. We cannot predict the impact of potential changes to U.S. foreign trade policy. Additionally, we derived 44.9% of our revenues in 2022 from international sales.
Even with increased domestic production, we may not be able to avoid a disruption in supply. Trade protection measures, including tariffs, and/or changes to import or export requirements could materially adversely impact our operations. We cannot predict the impact of potential changes to U.S. foreign trade policy. Additionally, we derived 20.6% of our revenues in 2023 from international sales.
International sales, particularly in emerging market countries, are further subject to a variety of regulatory, economic, and political risks as well. We Are Controlled by One Shareholder Thomas J. Shaw, our President and Chief Executive Officer, has investment or voting power over a total of 51.4% of the outstanding Common Stock as of March 10, 2023. Mr.
International sales, particularly in emerging market countries, are further subject to a variety of regulatory, economic, and political risks as well. We Are Controlled by One Shareholder Thomas J. Shaw, our President and Chief Executive Officer, has investment or voting power over a total of 50.8% of the outstanding Common Stock as of March 11, 2024. Mr.
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. VanishPoint ® syringes comprised 91.5% of sales in 2022.
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 78.3% of sales in 2023.
With resources greatly in excess of our own, we expect Embecta will be a formidable competitor. Operations May Be Affected by Foreign Trade Policy We are subject to risks associated with foreign trade policy. In 2022, we used Chinese manufacturers to produce 91.6% of our products.
With resources greatly in excess of our own, we expect Embecta will be a formidable competitor. 6 Table of Contents Operations May Be Affected by Foreign Trade Policy We are subject to risks associated with foreign trade policy. In 2023, we used Chinese manufacturers to produce 88.4% of our products.
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. ​ Item 1B. Unresolved Staff Comments. Not applicable and none. ​
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. ​
Item 1A. Risk Factors. 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. We Are Concerned that Our Stock May Be Manipulated As previously disclosed, we are concerned there may be manipulation of our stock.
Item 1A. Risk Factors. 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.
Shaw has considerable influence on all business combination decisions. 7 Table of Contents Supply Chain Disruptions Could Negatively Impact our Profitability ​ Our operations are dependent upon timely delivery of finished goods from our Chinese manufacturers and timely delivery of sufficient quantities of components and raw materials for domestic manufacturing.
Supply Chain Disruptions Could Negatively Impact our Profitability ​ Our operations are dependent upon timely delivery of finished goods from our Chinese manufacturers and timely delivery of sufficient quantities of components and raw materials for domestic manufacturing.
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.
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.
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.
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. 8 Table of Contents Our key personnel and other employees could be affected by COVID-19 or any future pandemic, which could affect our ability to operate efficiently.
As such, independent of the rights granted to Mr. Shaw under the Amendment, as beneficial owner of 51.4% of our stock and Chairman of the Board, Mr.
As such, independent of the rights granted to Mr. Shaw under the Amendment, as beneficial owner of 50.8% of our stock and Chairman of the Board, Mr. Shaw has considerable influence on all business combination decisions.
These competitors may be able to use these 6 Table of Contents resources to improve their products through research and acquisitions or develop new products, which may compete more effectively with our products.
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.
As of December 31, 2022, our market capitalization was $49.1 million (based on a $1.64 per share closing price) and total stockholders’ equity was $108 million. ​ Our Customers Have Excess Product In Inventory and We Cannot Predict When It Will Be Depleted We believe domestic customers have retained Retractable products purchased or provided for vaccination purposes in inventory, leading to a decrease in demand for our products.
Our stock price reached a low of $0.95 per share in 2023 despite our strong balance sheet. ​ 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.
Because 15.2% 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. 8 Table of Contents 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.
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.
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. ​ Our Stock Has Recently Experienced Significant Price Fluctuation Our stock price experienced significant fluctuation during 2022 and may continue to be unpredictable.
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 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.
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We engaged an independent, highly reputable economic consulting firm in 2021 at the expense of approximately $640 thousand which analyzed millions of trades in our stock in recent years.
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We Are Concerned that Our Stock Price is Not Correlated with Value As of December 29, 2023, our market capitalization was $33.2 million (based on a $1.11 per share closing price) and total stockholders’ equity was $99.3 million.
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The resulting in-depth analysis confirmed that there were statistically significant anomalies in the market’s reaction to our positive disclosures, meaning that our stock price would often react negatively or in a statistically insignificant way following positive earnings reports and press releases. We presented evidence of the anomalies to the U.S. Securities and Exchange Commission.
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As disclosed in a Current Report on Form 8-K on February 16, 2024, we initiated a voluntary recall on February 5, 2024 of our EasyPoint Needle lot number K220402 which was shipped within the U.S. between July 20, 2022 and September 20, 2023.
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In late November 2022, the SEC informed us that it would not pursue the matter further from an enforcement perspective.
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The recall was due to the possible detachment of the needle cannula from the needle holder, which could result in serious injury. The possible defect increases our risk of liability in connection with those units.
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As such, there is a risk that an investment in our stock will continue not to track our operational performance. ​ In our April 2022 press release describing the lack of correlation between the stock price and our economic performance, we noted that the then-current market capitalization was less our asset value at that time. This remains true.
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Because 19.3% 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.
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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.
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Travel and import restrictions may also disrupt our ability to manufacture or distribute our products.
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Our stock price fluctuated in 2022 from a high in January of $7.37 per share to a low price in December of $1.61.
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As of March 10, 2023, the stock price was $1.79 per share. ​ We entered into a private stock repurchase effective December 2022 for the purchase of three million shares of our Common Stock at $1.60 per share.
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We purchased 558,976 shares of our common stock in 2022 at an average price of $5.01 per share pursuant to our stock repurchase plan established in June 2021 which plan was terminated in April 2022. ​ 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.
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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.
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Our key personnel and other employees could be affected by COVID-19 or any future pandemic, which could affect our ability to operate efficiently.

Item 2. Properties

Properties — owned and leased real estate

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Item 2. Properties. 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 8.4% of the units that were manufactured in 2022.
Item 2. Properties. 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 10 Table of Contents manufacturing facility produced approximately 11.6% of the units that were manufactured in 2023.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities. MARKET INFORMATION Our Common Stock has been listed on the NYSE American (or its predecessor entities) under the symbol “RVP” since May 4, 2001. The closing market price on March 10, 2023 was $1.79 per share.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities. MARKET INFORMATION Our Common Stock has been listed on the NYSE American (or its predecessor entities) under the symbol “RVP” since May 4, 2001. The closing market price on March 11, 2024 was $1.20 per share.
SHAREHOLDERS As of March 10, 2023, there were 34,024,304 shares of Common Stock issued, of which 4,087,145 shares were held in treasury. There were 149 shareholders of record, not including Cede & Co. participants or beneficial owners thereof. DIVIDENDS We have not ever declared or paid any dividends on the Common Stock.
SHAREHOLDERS As of March 11, 2024, there were 34,024,304 shares of Common Stock issued, of which 4,087,145 shares were held in treasury. There were 148 shareholders of record, not including Cede & Co. participants or beneficial owners thereof. DIVIDENDS We have not ever declared or paid any dividends on the Common Stock.
We have no current plans to pay any cash dividends on the Common Stock. 10 Table of Contents ​ EQUITY COMPENSATION PLAN INFORMATION The following table sets forth information relating to our equity compensation plans as of December 31, 2022: Equity Compensation Plan Information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ Number of securities ​ ​ ​ ​ average exercise ​ remaining available for ​ ​ Number of securities ​ price of ​ future issuance under ​ ​ to be issued upon ​ outstanding ​ equity compensation ​ ​ exercise of ​ options, ​ plans (excluding ​ ​ outstanding options, ​ warrants and ​ securities reflected in ​ ​ warrants and rights ​ rights ​ column(a)) Plan category (a) (b) (c) Equity compensation plans approved by security holders 147,150 ​ $ 2.06 2,000,000 Total 147,150 ​ $ 2.06 2,000,000 ​ STOCK PERFORMANCE GRAPH The following graph compares the cumulative total return for our Common Stock (RVP) from December 31, 2017 to December 31, 2022, to the total returns for the Russell Microcap ® and the Dow Jones U.S.
EQUITY COMPENSATION PLAN INFORMATION The following table sets forth information relating to our equity compensation plans as of December 31, 2023: Equity Compensation Plan Information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ Number of securities ​ ​ ​ ​ average exercise ​ remaining available for ​ ​ Number of securities ​ price of ​ future issuance under ​ ​ to be issued upon ​ outstanding ​ equity compensation ​ ​ exercise of ​ options, ​ plans (excluding ​ ​ outstanding options, ​ warrants and ​ securities reflected in ​ ​ warrants and rights ​ rights ​ column(a)) Plan category (a) (b) (c) Equity compensation plans approved by security holders 147,150 ​ $ 2.06 2,000,000 Total 147,150 ​ $ 2.06 2,000,000 ​ 11 Table of Contents STOCK PERFORMANCE GRAPH The following graph compares the cumulative total return for our Common Stock (RVP) from December 31, 2018 to December 31, 2023, to the total returns for the Russell Microcap ® and the Dow Jones U.S.
The graph assumes an investment of $100 in the aforementioned equities as of December 31, 2017, and that all dividends are reinvested. ​ UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Not applicable. ​ 11 Table of Contents PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS ISSUER PURCHASES OF EQUITY SECURITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of ​ Approximate ​ ​ Total ​ ​ ​ ​ Shares Purchased as ​ Dollar Value of ​ ​ Number of ​ Average Price ​ Part of Publicly ​ Shares that May Yet Be ​ ​ Shares ​ Paid Per ​ Announced Plans or ​ Purchased Under the Period ​ Purchased ​ Share ​ Programs ​ Plans or Programs December 1, 2022 through December 31, 2022 ​ 3,000,000 ​ $ 1.60 ​ — ​ $ — Total ​ 3,000,000 ​ $ 1.60 ​ — ​ ​ ​ ​ These shares were purchased pursuant to a stock repurchase agreement with BML Investment Partners, L.P. effective December 27, 2022.
Select Medical Equipment Index (DJSMDQ). The graph assumes an investment of $100 in the aforementioned equities as of December 31, 2018, and that all dividends are reinvested. ​ UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Not applicable. ​ PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS None. ​ Item 6. Reserved. Not required. ​
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Select Medical Equipment Index (DJSMDQ). We have selected the DJSMDQ Index this year following the spin off by Becton, Dickinson and Company (BDX) of its diabetes care business, Embecta Corp. (EMBC). In accordance with the instructions to Item 201(e) of Regulation S-K, we have included five years of information for our former peer issuer, BDX, as well.
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We have no current plans to pay any cash dividends on the Common Stock.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Item 6. Selected Financial Data ​ 12 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation ​ 12 Item 7A. Quantitative and Qualitative Disclosures About Market Risk ​ 17 Item 8. Financial Statements and Supplementary Data ​ F- 1 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ​ 18 Item 9A.
Item 6. Selected Financial Data ​ 12 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation ​ 12 Item 7A. Quantitative and Qualitative Disclosures About Market Risk ​ 16 Item 8. Financial Statements and Supplementary Data ​ F- 1 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ​ 17 Item 9A.
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Controls and Procedures ​ 17 Item 9B. Other Information ​ 17 Item 9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections ​ 18 ​ PART III ​ ​ Item 10. Directors, Executive Officers and Corporate Governance ​ 18 Item 11. Executive Compensation ​ 18 Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ​ 18 Item 13. Certain Relationships and Related Transactions, and Director Independence ​ 18

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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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 2022 and 2021.
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 2023 and 2022.
Product purchases from our Chinese manufacturers have enabled us to increase manufacturing capacity with little capital outlay and have provided a competitive manufacturing cost. In 2022, our Chinese manufacturers produced approximately 91.6% of our products.
Product purchases from our Chinese manufacturers have enabled us to increase manufacturing capacity with little capital outlay and have provided a competitive manufacturing cost. In 2023, our Chinese manufacturers produced approximately 88.4% of our products.
Such factors include, among others, supply chain disruptions, our ability to scale up production volumes in response to an increase in demand, potential tariffs, 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.
Such factors include, among others, material changes in demand, potential tariffs, 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 12 Table of Contents 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. VanishPoint ® syringes comprised 91.5% of our sales in 2022. EasyPoint ® products accounted for 4.9% of sales in 2022.
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 78.3% of our sales in 2023. EasyPoint ® products accounted for 16.6% of sales in 2023.
This was primarily due to proceeds from the government under the TIA for payments on our orders for fixed assets, but was offset by our repurchase of our own common stock in the amount of $7.6 million as well as our payment of $1.1 million in connection with the private stock exchange discussed in Note 20.
This was primarily due to proceeds of $2.6 million from the government under the TIA for payments on our orders for fixed assets but was offset by our third and final installment payment of $1.1 million in connection with the private stock exchange discussed in Note 19.
Although we experienced certain cost increases in raw materials, those costs primarily affected our domestic manufacturing because the finished goods we purchased from China (being 91.6% of our products) did not change in price during 2022. Other factors that could affect our unit costs include increases in tariffs, supplier cost increases, and changing production volumes.
Although we have recently experienced certain cost increases in raw materials, those costs primarily affected our domestic manufacturing because the finished goods we purchased from China (being 88.4% of our products) are subject to a long-term fixed price contract. Other factors that could affect our unit costs include increases in tariffs, supplier cost increases, and changing production volumes.
Dollar amounts have been rounded for ease of reading. 14 Table of Contents Comparison of Year Ended December 31, 2022 and Year Ended December 31, 2021 Domestic sales, including sales to the U.S. government, accounted for 55.1% and 88.9% of the revenues in 2022 and 2021, respectively.
Dollar amounts have been rounded for ease of reading. Comparison of Year Ended December 31, 2023 and Year Ended December 31, 2022 Domestic sales, including sales to the U.S. government, accounted for 79.4% and 55.1% of the revenues in 2023 and 2022, respectively. Domestic revenues decreased 33.7% principally due to the lack of sales to the U.S. government.
We have historically funded operations primarily from the proceeds from revenues, private placements, litigation settlements, and loans. We expect to fund operations going forward from revenues, cash reserves, and investments available for sale if the need to access those funds arises. We do not, and historically have not, utilized lines of credit to fund operations.
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 available for sale if the need to access those funds arises. Margins The mix of domestic and international sales affects the average sales price of our products.
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.
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.
The amount reported as a contractual allowance 16 Table of Contents for rebates involves examination of past historical trends related to our sales to customers and the related credits issued once contractual obligations of the customers have been met.
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.
In June 2022, we reduced our workforce by approximately 16% as a result of the substantial completion of our facility expansion efforts and the completion of U.S. government orders to provide products for COVID-19 vaccination efforts. However, in past years, wages, including those of executive officers, were increased.
In June 2022, we reduced our workforce by approximately 16% and we further reduced our workforce by an additional 22% in March 2023. These reductions in force were a result of the substantial completion of our facility expansion and the fulfillment of U.S. government orders to provide products for COVID-19 vaccinations.
Cost of manufactured product decreased 25.8% principally due to an overall decline in units sold of 38.9%. Royalty expense decreased 47.5% due to lower gross sales. Operating expenses increased 27.9% from the prior year.
Cost of manufactured product decreased 49.0% principally due to an overall decline in units sold. Royalty expense decreased 39.5% due to the associated decrease in gross sales. As a result of the above, gross profit margins decreased from 29.8% in 2022 to 20.9% in 2023. 14 Table of Contents Operating expenses decreased 29.2% from the prior year.
Besides cash reserves and expected income from operations, 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, contractual obligations, capital expenditures, payment of income taxes, quarterly preferred stock dividends, and other operational priorities.
Besides cash reserves and expected income from operations, we also 15 Table of Contents have access to our investments which may be liquidated in the event that we need to access the funds for operations.
We also manufacture and market an IV safety catheter and blood collection products, including the blood collection tube holder and VanishPoint ® Blood Collection Set, which were 3.6% of our total product sales in 2022. We believe domestic customers have retained products provided for vaccination purposes in inventory through 2022, leading to a decrease in our 2022 domestic sales.
We also manufacture and market an IV safety catheter and blood collection products, including the blood collection tube holder and VanishPoint ® Blood Collection Set, which were 5.0% of our total product sales in 2023. 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.
A comparison of the results of operations for the years ended December 31, 2021 and December 31, 2020 is omitted from this discussion. Such comparison was included in our Annual Report on Form 10-K filed with the SEC on March 31, 2022 in Item 7 of Part II thereof.
Such comparison was included in our Annual Report on Form 10-K filed with the SEC on March 30, 2023 in Item 7 of Part II thereof. LIQUIDITY AND CAPITAL RESOURCES Cash flow provided by operations was $2.8 million in 2023 due to a number of factors.
Capital Resources Since the execution of the TIA on July 1, 2020, we have significantly expanded our facilities. There are no remaining planned capital projects. 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”).
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.
Our year-end liabilities are detailed in our financial statements, including Notes 8 through 9 to the financial statements. We believe we will have adequate means to meet our currently foreseeable long-term liquidity needs. In the event that our long-term cash requirements exceed our current reserves and our ability to generate cash from operations, management would reduce our operational cash requirements.
Expected short-term uses of cash include payroll and benefits, royalty expense, inventory purchases, 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 and 8 to the financial statements. We believe we will have adequate means to meet our currently foreseeable long-term liquidity needs.
The increase is attributable to higher international revenues from vaccination efforts which lagged domestic vaccination sales by a year or more. ​ As detailed in Note 4 to the financial statements, we held $29.7 million in debt and equity securities as of December 31, 2022, which represented 15.2% of our total assets.
This trend is consistent with historical sales patterns, coinciding with flu season sales. As detailed in Note 4 to the financial statements, we held $34.6 million in debt and equity securities as of December 31, 2023, which represented 19.3% of our total assets.
Interest and other income declined by $257 thousand primarily due to the loss of $289 thousand on the sale of investments. The provision for income taxes was $84 thousand for 2022 in comparison to $18.9 million in 2021. For a detailed description of the determination and components of calculating the provision, please refer to Note 11 of the financial statements.
For a detailed description of the determination and components of calculating the provision, please refer to Note 11 of the financial statements. A comparison of the results of operations for the years ended December 31, 2022 and December 31, 2021 is omitted from this discussion.
Increases in costs may not be recoverable through price increases of our products. ​ Historically, an overwhelming majority of our products have been sold domestically. However, in 2022, 44.9% of our sales were international sales.
Increases in costs may not be recoverable through price increases of our products. ​ During 2023, 20.6% of our revenues were international sales, predominantly from international sales in the first quarter of the year.
In some instances, the low dead-space allows for additional doses of medication to be obtained from the vials.
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. In 2020 and 2021, we were awarded significant orders and contracts by the U.S. government for safety syringes for COVID-19 vaccination efforts.
Overall unit sales decreased 38.9% and our overall revenues decreased by 49.7%. The significant decrease in domestic revenues, principally U.S. government sales, accounts for the predominant change in overall revenue. We cannot predict whether any future U.S. government orders may occur. There is uncertainty as to the timing of future international orders.
Domestic unit sales decreased 26.6%. Domestic unit sales were 74.1% of total unit sales for 2023. International revenues decreased 78.9% predominantly due to fewer international vaccination-related sales. Overall unit sales decreased 58.7% and our overall revenues decreased by 54.0%. There is uncertainty as to the timing of future international orders.
Both of the above-mentioned orders as well as the TIA from the U.S. government are material events particular to the COVID-19 pandemic and are not indicative of future operations. Effective July 1, 2020, we entered into a TIA with the United States Government Department of Defense, U.S.
The successor agreement governs ongoing terms established by the TIA until June 30, 2030, which includes maintenance of equipment, availability of capacity, and US 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.
Removed
Customers have reported that demand was diminished due to such remaining syringe inventory. 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.
Added
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. In 2020, we entered into a Technology Investment Agreement (“TIA”) with the U.S. government which provided significant government funding for expanding our domestic production of needles and syringes to meet ongoing and future U.S.
Removed
Our 2022 marketing strategy included a focus on the advantages of our low dead-space products, including the potential to reduce the costs associated with wasted medication. 12 Table of Contents On May 1, 2020, we were awarded a delivery order under an existing contract by the Department of Health and Human Services of the United States to supply automated retraction safety syringes for COVID-19 vaccination efforts, which order was in the amount of $83.8 million plus $10 million in expedited freight costs.
Added
COVID-19 medical countermeasures demands. Recent additions of manufacturing equipment and facilities have increased our production capacity and our overhead costs. Additionally, in 2022, we expanded our existing administrative offices at a total cost of $5.8 million. There are currently no plans to further expand our production or administrative facilities, nor do we have material commitments for additional manufacturing equipment purchases.
Removed
The period of performance for this order ended in March 2022. The Department of Health and Human Services awarded us another contract on February 12, 2021 to supply low dead-space safety syringes for COVID-19 vaccination efforts. The base price for the contract and purchase order was $54.2 million for the initial five-month base period of performance.
Added
At the request of the US government, the TIA was transferred to a successor agreement, identified as Other Transaction Agreement in April 2023. Such agreement contains no additional requirements, and, for the purposes of this report, the agreement shall continue to be referred to herein as the “TIA”.
Removed
We received orders for an additional four option periods which extended through the end of December 2021. Freight reimbursement cost was included in total overall contract value and was approximately 25% of the overall price.
Added
The timing and volumes of international sales are more difficult to predict than domestic sales, and international vaccination campaigns tend to lag behind those in the domestic market. ​ We believe domestic customers have retained products provided for vaccination purposes in inventory, leading to a decrease in our 2023 domestic sales.
Removed
Our sales under both of the foregoing orders from the U.S. government were $15.7 million in 2022 (which sales were concentrated in the first quarter) as compared to $113.7 million in 2021.
Added
Customers have reported that demand was diminished due to their remaining syringe inventory. While it is difficult to estimate how much of the remaining inventory might still remain in the market, domestic unit sales have increased each quarter of this year subsequent to the surge in government sales for COVID-19 vaccinations.
Removed
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) for $53.7 million in government funding for expanding our domestic production of needles and syringes to meet ongoing and future U.S. COVID-19 medical countermeasures demands.
Added
During 2023, we purchased an aggregate amount of $68.5 million in debt and equity securities and sold and aggregate amount of $58.6 million in debt and equity securities.
Removed
Effective May 12, 2021, we entered into an amendment to the TIA to include two additional assembly lines and additional controlled environment space. We have received all equipment and have completed all property construction required by the TIA. Recent additions of manufacturing equipment and facilities have increased our production capacity and our overhead costs.
Added
The net purchases have materially decreased our cash position since December 2022. 13 Table of Contents On July 13, 2023, we received a refund of previously paid estimated state tax payments of approximately $8 million. The $8 million was recorded as Income Taxes Receivable on the Balance Sheets at December 31, 2022 through June 30, 2023.
Removed
Additionally, in 2022, we expanded our existing administrative offices at a total cost of $5.8 million. Freight costs were materially higher in 2022 than in previous years. The increase in freight costs significantly impacted our cost of manufactured product.
Added
The result of such cost saving measures represents annualized overall savings in employee related costs of approximately $1.7 million in 2023 as compared to 2022. The savings are comprised of overall reductions in gross wages, payroll taxes, and insurance as well as other related employee costs. Historically, unit sales have increased during the flu season.
Removed
These cost increases are not unique to our business, but the fact that a substantial percent of our prior period sales were related to orders from the U.S. government with reimbursed freight costs will affect comparability of 2022 costs and margins to prior periods.
Added
With the dramatic increase in sales attributable to COVID-19 vaccinations, however, the effect of flu season sales was less impactful in past years. Unit sales in 2023 have increased each quarter domestically for those products associated with administering vaccinations (including the flu shot) which indicates that the seasonal trends are following pre-pandemic patterns.
Removed
In the first half of 2022, we had challenges sourcing transportation and closures in Shanghai delayed certain shipments. To date, transportation delays have not had a material adverse effect on our customer base. ​ In addition, in 2022, we experienced an increase in raw materials costs, principally the cost of petroleum-based plastics used in our molded components.
Added
Included in overall net sales for 2023 is $778 thousand in licensing fees recorded under a sublicensing agreement with one of our Chinese manufacturers. Under the terms of our licensing agreement with Mr. Shaw, he is entitled to receive 50% of this amount, which is recorded as royalty expense to shareholder in total cost of sales for the year.
Removed
Such amount includes $14 million of additional cash investments made in 2022. We realized a $328 thousand loss from investment sales in 2022, but recognized an unrealized gain of $2.3 million. We continually monitor our invested balances.
Added
This is substantially due to the recognition of $10.1 million in stock option expense in 2022 and no such expense in 2023, as further discussed in Note 16. The loss from operations was $11.5 million as compared to a loss from operations of $853 thousand in 2022.
Removed
The annualized reduction in salary and wage expense was approximately $2.1 million, offset by roughly $200 thousand in separation costs. On March 22, 2023, we reduced our workforce by approximately 22% as a result of decreased need for domestic production.
Added
The greater loss was principally due to the significant decline of net revenues and resulting gross profit in 2023. The unrealized loss on debt and equity securities was $10.5 million due to the decreased market values of those securities; however, the Company had a realized gain on sale of equity securities of $5.6 million.
Removed
The decrease in headcount will result in expected annualized savings in salaries and wage expense of approximately $1.7 13 Table of Contents million, or 13% as compared to 2022 expenses. We expect to incur approximately $154 thousand in separation costs as a result.
Added
Interest and other income increased by $1.4 million primarily due to dividend and interest income on invested balances, as well as interest earned on the refund of estimated state taxes. The benefit for income taxes was $1.9 million as compared to a provision for income taxes of $84 thousand for 2022.
Removed
In December 2022, the Board terminated all outstanding awards under the 2021 Stock Option Plan because they were underwater. The termination caused an acceleration of recognition of future periods’ stock option expense in the fourth quarter of 2022. A total of $10.1 million in stock option expense was recognized in 2022.
Added
On July 13, 2023, we received a refund of previously paid estimated state tax payments of approximately $8 million. This amount was reported as cash on the balance sheet at September 30, 2023 and increased cash balances in the third quarter of 2023. The $8 million was recorded as Income Taxes Receivable on the Balance Sheets at December 31, 2022.
Removed
Of this amount, $5.5 million was due to the acceleration. These non-cash expenses are classified as General and administrative expenses. Total stock option expense associated with the now-terminated options comprises approximately 42.1% of the total General and administrative expenses incurred in 2022. For further information regarding the stock option expense acceleration, refer to Note 19.
Added
The net operating cash was additionally impacted by a decrease in inventories by $2.9 million and increase in accounts receivable by $6.4 million and accounts payable by $1.6 million. We recognized approximately $6.2 million in other income from the TIA.
Removed
Effective June 4, 2021, we entered into a repurchase plan (the “Plan”) for the purchase of up to $10 million of our Common Stock. Under the Plan, open market purchases of our Common Stock commenced June 18, 2021 and 1,087,145 shares were purchased through the Plan’s termination on April 14, 2022 for an aggregate purchase price of approximately $8.1 million.
Added
Cash used by investing activities was $10.8 million in 2023 due primarily to the purchase of $68.5 million of debt and equity securities, which was offset by $58.6 million of proceeds from the sale of debt and equity securities. Cash provided by financing activities was $942 thousand for 2023.
Removed
We terminated the repurchase plan because our stock price appeared not to be correlated with our economic performance. This concern remains. We engaged an independent highly reputable economic consulting firm in 2021 at an expense of approximately $640 thousand and presented the consulting firm’s evidence of anomalies in our trading to the U.S. Securities and Exchange Commission in March 2022.
Added
In the event that our long-term cash requirements exceed our current reserves and our ability to generate cash from operations, management would reduce our operational cash requirements. Capital Resources Since the execution of the TIA on July 1, 2020, we have significantly expanded our facilities. There are no remaining capital projects.
Removed
In late November 2022, the SEC informed us that it would not pursue the matter further from an enforcement perspective.
Added
The estimate includes consideration of historical redemption rates, discount rates, a combination of estimated distributor inventories based on tracking information provided by the distributors or if known, inventory turnover rates.
Removed
We were approached in late 2022 by an unaffiliated shareholder to engage in a private repurchase of a block of three million shares and we negotiated the repurchase at a price per share of $1.60 for a total transaction price of $4.8 million. Historically, unit sales have increased during the flu season.
Added
As of December 31, 2023, we estimate that the total potential future credits to be issued as a result of prior purchases which have not yet been claimed is $2.2 million. ​
Removed
Seasonal trends in 2020 and 2021 were less pronounced due to demand related to the COVID-19 vaccine. Trends in 2022 were difficult to categorize by revenue figures. A significant factor in depressed 2022 domestic demand was the retention of vaccination products by domestic customers in inventory.
Removed
Domestic revenues decreased 68.8% principally due to the cessation of orders from the U.S. government and an overall decrease in non-government domestic orders commensurate with declining demand for COVID-19 vaccinations. Domestic unit sales decreased 69.5%. Domestic unit sales were 41.7% of total unit sales for 2022. International revenues increased 105% predominantly due to international vaccination campaigns.
Removed
The revenues on a per-unit basis in the international market are significantly lower than in the U.S. market. As a result, increases in international orders and unit sales have the potential to lower our overall revenues on a per-unit basis, as well as our profit margins.
Removed
This is substantially due to the acceleration of stock option expense related to the cancellation of stock options previously granted to executive officers, resulting in approximately $5.5 million in additional expenses. Of the total $24.0 million in General and administrative expenses for 2022, stock option expense accounted for approximately $10.1 million, as compared to $3.7 million in 2021.
Removed
The loss from operations was $853 thousand as compared to income from operations of $72.6 million in 2021. The decrease was principally due to the significant decline in sales to the U.S. government and sharply higher operating expenses. Contributing to the decline was also the lower per-unit international revenues and higher than previous per-unit costs.
Removed
Other income – TIA recognized in 2022 increased by $3.4 million over 2021 as manufacturing assets were placed into service and began to replace original manufacturing equipment. The income is recognized coincident with depreciation expense and reduces our other long-term liability attributable to the TIA.
Removed
The unrealized gain on debt and equity securities was $2.3 million due to the increased market values of those securities. Interest expense for 2022 decreased from the prior year due to less imputed interest associated with the stock exchanges discussed in Note 20 of the financial statements.
Removed
LIQUIDITY AND CAPITAL RESOURCES Cash flow from operations was $16.8 million in 2022, principally due to a $29.7 million reduction of accounts receivable but was offset by a $14.0 million decrease of accounts payable.
Removed
Additionally, we have recorded $10.6 million in income taxes receivable and deferred taxes of $7.3 million which is material to the adjustments to total cash flow from operations. The recognition of $10.6 million in income taxes receivable is due to revised state tax estimates as the result of a state tax nexus study.
Removed
The deferred tax asset represents amounts available to reduce income taxes payable on taxable 15 Table of Contents income in future years. The determination and calculation of state taxes and deferred taxes is further discussed in Note 11 of the financial statements.
Removed
Cash used by investing activities was $31.2 million for the year ended December 31, 2022 due primarily to the purchase of property, plant and equipment, building improvements, and the purchase of equity securities. The impact to cash from the purchase of fixed assets primarily reflects payments on orders for certain assets reimbursed by the U.S. government under the TIA.
Removed
We do not expect any significant future cash flows from the TIA, with the exception of collection of amounts due from the government at year end. Cash provided by financing activities was $5.0 million for the year ended December 31, 2022.
Removed
We continue to assess our operational cash needs and potential sources of financing but can make no assurances to future sources of funding on acceptable terms. Margins The mix of domestic and international sales affects the average sales price of our products.
Removed
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.

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