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What changed in RETRACTABLE TECHNOLOGIES INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of RETRACTABLE TECHNOLOGIES INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+135 added−100 removedSource: 10-K (2025-03-28) vs 10-K (2024-03-29)

Top changes in RETRACTABLE TECHNOLOGIES INC's 2024 10-K

135 paragraphs added · 100 removed · 77 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

24 edited+11 added−2 removed20 unchanged
Biggest changeWe increased our manufacturing capacity in Little Elm, Texas, funded in part by the Technology Investment Agreement ("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), as amended (“TIA”).
Biggest changeArmy 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.
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.
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.
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.
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 ® syringes will effectively cause the modified VanishPoint ® syringes products to have extended patent expiration dates.
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.
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 CODID-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.
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.
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.
Under the terms of an exclusive license agreement that has been in effect since 1995, the Company is exclusively licensed to use the patent 3 Table of Contents rights held by Mr. Shaw, and Mr.
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.
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.
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.
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, 2025, we had 227 employees. 221 of such employees were full time employees.
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.
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.
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.
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.
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.
For the remainder of 2023 and for 2024, international sales were closer to 10% of total sales. 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 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 provide equal employment opportunities to all employees and applicants for employment without regard to race, color, religion, 5 Table of Contents gender, national origin, age, disability, marital status, ancestry, veteran status, workers’ compensation status or any other characteristic protected by federal, state, or local law.
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.
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 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.
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” ® .
We do not currently hold a CE mark but are pursuing certification to sell into the European Union. Compliance with domestic and international laws and regulations may affect our business.
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.
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.
For example, the European Union, various other countries, and various U.S. states (e.g., California) have 4 Table of Contents enacted stricter data protection laws that contain enhanced financial penalties for noncompliance. Similarly, the U.S.
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.
VanishPoint ® syringe sales have historically comprised most of our sales. Syringe sales were 68.5%; 78.3%; and 91.5% of our revenues in 2024, 2023, and 2022. EasyPoint ® products accounted for 27.1%; 16.6%; and 5.0% of sales in 2024, 2023, and 2022.
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.
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.
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).
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.
Sales to the Department of Health and Human Services for safety syringes totaled $15.7 million in 2022 (concentrated in the first quarter), $113.7 million in 2021, and $31.6 million in 2020. The orders from the Department of Health and Human Services included reimbursement of freight costs.
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. Sales to the Department of Health and Human Services for safety syringes totaled $15.7 million in 2022 (concentrated in the first quarter), $113.7 million in 2021, and $31.6 million in 2020.
Such products are marketed under the VanishPoint ® , Patient Safe ® , and EasyPoint ® brands. We have only one reporting segment. Most of our products incorporate a feature whereby our needles retract which is a safety feature designed to protect healthcare workers from needlestick injuries.
Most of our products incorporate a feature whereby our needles retract which is a safety feature designed to protect healthcare workers from needlestick injuries.
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.
The orders from the Department of Health and Human Services included reimbursement of freight costs. As such, comparability of 2024 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.
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
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), 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. ​
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 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.
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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.
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In September 2024, a new 100% tariff on syringes and needles imported from China became effective. Additionally, effective February 4th and March 4th of 2025, tariffs on Chinese imports were increased by an aggregate total of 20%. The increase of 20% applied not only to syringes and needles, but to other products we import from China.
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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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While we have manufacturing capabilities to manufacture most of the products we currently sell domestically, some of our products are sourced exclusively from China. Approximately $1.6 million was spent on tariff expenses from September - December 2024 when the tariff rate was 100% on syringes and needles imported from China.
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From January 1 to March 21, 2025 under a system of increasing tariffs, we have paid a total of approximately $951,000 on tariff expenses. We are currently 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.
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Additionally, we have recently adapted some equipment to increase our domestic manufacturing capabilities. These adaptations will allow us to manufacture 0.5 mL syringes domestically, reducing our reliance on imports for those products. We expect that commercial quantities will be available for sale in the second half of 2025.
Added
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.
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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. 2 Table of Contents Description of Business Our goal is to become a leading provider of safety medical products.
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The extent to which these supplies still exist and the effect it has on future ordering patterns is difficult to estimate. We currently have under development additional safety products that add to or build upon our current product line offering. Such products are not expected to be commercially available in 2025.
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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.
Added
From a business perspective, our competitive position has been made more difficult with the implementation of tariffs on products we import from China. In September of 2024, a 100% tariff was placed on syringes and needles, and in 2025 an additional 20% tariff was placed on other products we import which had not previously been covered under the 2024 tariffs.
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We have adopted a policy of zero tolerance for any form of unlawful discrimination or retaliation.
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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.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn the event that we become unable to purchase product from our Chinese manufacturers, 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, and we would increase domestic production for the 1mL and 3mL syringes.
Biggest changeTo 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.
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.
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.
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.
As such, independent of the rights granted to Mr. Shaw under the Amendment, as beneficial owner of 53.3% of our stock and Chairman of the Board, Mr. Shaw has considerable influence on all business combination decisions.
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.
Because 25.1% 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.
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.
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 2024 annual report indicated that the company had 2,100 employees, as compared to our workforce of 227 employees.
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.
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 68.5% of sales in 2024.
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.
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. Recent Tariffs and Other Foreign Trade Policy Risks We are subject to risks associated with foreign trade policy.
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 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.
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.
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.
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.
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. 9 Table of Contents 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. 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.
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.
It is unclear when the excess inventory surplus will clear. Until the inventory is depleted, we expect domestic demand to continue to be depressed. ​ We Are Challenged by Uncertainties in Obtaining and Enforcing Intellectual Property Rights Our main competitive strength is our technology.
It is unclear when the excess inventory surplus will clear. Until the inventory is depleted, we expect domestic demand to continue to be depressed.
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.
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 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.
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.
The overall risk to our successful efforts in international markets is unknown and difficult to predict. 6 Table of Contents We Are Concerned that Our Stock Price is Not Correlated with Value As of December 31, 2024, our market capitalization was $20.7 million (based on a $0.69 per share closing price) and total stockholders’ equity was $87.2 million.
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.
With resources greatly in excess of our own, we expect Embecta will be a formidable competitor. 7 Table of Contents We Are Controlled by One Shareholder Thomas J. Shaw, our President and Chief Executive Officer, has investment or voting power over a total of 53.3% of the outstanding Common Stock as of March 10, 2025. Mr.
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.
Even with increased domestic production, we may not be able to avoid a disruption in supply. We derived 11.1% of our revenues in 2024 from international sales. International sales, particularly in emerging market countries, are further subject to a variety of regulatory, economic, and political risks as well.
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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.
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In 2024, we used Chinese manufacturers to produce 83.9% of our products. Recently enacted tariffs on our products are expected to have a material negative impact to our results of operations and financial position.
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Travel and import restrictions may also disrupt our ability to manufacture or distribute our products.
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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, but these actions are expensive, and the timeline remains uncertain. In addition, the tariffs implemented in 2025 are expanded beyond the original 2024 tariffs placed on syringes and needles.
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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. We expect a material increase in the costs of imported goods which is expected to materially impact our operations.
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However, we have recently adapted some equipment to increase our domestic manufacturing capabilities. ​ 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.
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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.
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Our stock price reached a low of $0.57 per share in 2024 despite our strong balance sheet.
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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.
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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.
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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. The full impact of greater domestic production on our sourcing materials through our supply chain is not yet known and difficult to estimate.
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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. ​ 8 Table of Contents Vaccine Hesitancy Could Impact Demand ​ Overall demand may be affected by public sentiment and acceptance of the safety and efficacy of vaccinations.
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Since the initiation of the voluntary recall, all reasonable efforts have been made to remove EasyPoint Needle lot K220402 from the market in accordance with the recall strategy. We believe the recall is complete and we have requested termination of the voluntary recall from the FDA.
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The Medical Devices and Radiological Health Risk Mitigation and Response Branch has: confirmed our request for termination, notified us that the division is currently experiencing a severe backlog of termination requests which are being processed in the order they are received and informed us that once the termination process begins, they will follow up with us concerning any additional questions they may have.
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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 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAs of the date of this Annual Report on Form 10-K, we believe that cybersecurity threats have not materially affected us, and, based on the current knowledge of Management, are not likely to materially affect us.
Biggest changeAs 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.
We have strict access controls in place, granting least 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.
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.
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.
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. ​ 11 Table of Contents ​

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs a result of recent expansions, we have significant additional domestic production capacity. A loan in the original principal amount of approximately $4,210,000 is secured by our land and buildings. See Note 8 to our financial statements for more information.
Biggest changeHowever, 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.
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 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 16.1% of the units that were manufactured in 2024.
In the opinion of Management, the property and equipment are suitable for their intended use and are adequately covered by an insurance policy.
See Note 8 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.
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As a result of recent expansions, we have significant additional domestic production capacity for some of our products, primarily vaccination syringes and needles associated with the TIA.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeEQUITY 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.
Biggest changeEQUITY COMPENSATION PLAN INFORMATION The following table sets forth information relating to our equity compensation plans as of December 31, 2024: ​ 12 Table of Contents ​ 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 145,950 ​ $ 2.05 2,000,000 Total 145,950 ​ $ 2.05 2,000,000 ​ STOCK PERFORMANCE GRAPH The following graph compares the cumulative total return for our Common Stock (RVP) from December 31, 2019 to December 31, 2024, to the total returns for the Russell Microcap ® and the Dow Jones U.S.
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.
SHAREHOLDERS As of March 10, 2025, there were 34,024,304 shares of Common Stock issued, of which 4,087,145 shares were held in treasury. There were 143 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.
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. ​
Select Medical Equipment Index (DJSMDQ). The graph assumes an investment of $100 in the aforementioned equities as of December 31, 2019, 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 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.
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, 2025 was $0.72 per share.

Item 7. Management's Discussion & Analysis

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

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Biggest changeWith 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.
Biggest changeDuring 2024, we liquidated $6 million in mutual funds for operating purposes. 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.
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.
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.
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.
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, 2023 and December 31, 2022 is omitted from this discussion.
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.
Such factors include, among others, material changes in demand, 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.
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. ​
As of December 31, 2024, we estimate that the total potential future credits to be issued as a result of prior purchases which have not yet been claimed is $2.1 million. ​
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.
Included in net sales for 2024 is $189 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.
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.
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 15 Table of Contents and those discussed in any forward-looking statements. All period references are to our fiscal years ended December 31, 2024 and 2023.
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 and transportation costs can also significantly affect our margins.
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.
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.
Such comparison was included in our Annual Report on Form 10-K filed with the SEC on March 29, 2024 in Item 7 of Part II thereof. LIQUIDITY AND CAPITAL RESOURCES Cash flow used by operations was $11.6 million in 2024 due to a number of 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 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.
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.
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 68.5% of our sales in 2024.
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.
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.
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.
As we work to increase our domestic production and achieve manufacturing efficiencies, we 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.
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.
Dollar amounts have been rounded for ease of reading. Comparison of Year Ended December 31, 2024 and Year Ended December 31, 2023 Domestic sales accounted for 88.9% and 79.4% of the revenues in 2024 and 2023, respectively.
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 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 have a material effect on our operating results and liquidity.
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.
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, tariffs, contractual obligations, payment of income taxes, quarterly preferred stock dividends, and other operational priorities.
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.
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 US government preference in the event of a public health emergency.
Generally, the higher the ratio of domestic sales to international sales, the higher the average sales price will be. Some international sales of our products are shipped directly from China to the customer.
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.
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.
The loss from operations was $21.1 million as compared to a loss from operations of $11.5 million in 2023. The increased loss was due to lower gross profit for the year. The unrealized gain on debt and equity securities was $10.8 million due to the increased market values of those securities.
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.
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, although the new tariffs and our costs related to an increase in domestic manufacturing will increase our expenses materially.
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.
While additional equipment expenditures may be necessary in the future, this near-term equipment conversion is expected to be completed by the second quarter of 2025. 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”).
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.
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. 14 Table of Contents Recent additions of manufacturing equipment and facilities under the 2020 TIA have increased our production capacity and our overhead costs.
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.
Those costs primarily affected our domestic manufacturing because the finished goods we purchased from China (being 83.9% of our products in 2024) were subject to a long-term fixed price contract. Sensitivity to cost fluctuations may become more pronounced as we transition away from production under such a fixed price contract.
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.
International revenues decreased 59.1% predominantly due to fewer international vaccination-related sales. Overall unit sales decreased 19.1% and our overall revenues decreased by 24.2%. There is uncertainty as to the timing of future international orders. Cost of manufactured product remained consistent. However, the decrease in revenue did not result in a corresponding decrease in costs.
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.
Accounts receivable decreased by $2.0 million, inventories increased by $1.6 million, and accounts payable decreased by $488 thousand. 16 Table of Contents Cash flow from investing activities was $3.7 million in 2024 due primarily to the net sale of debt and equity securities, offset by $1.4 million for the purchase of property, plant, and equipment.
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.
Customers have reported that demand was diminished due to their remaining syringe inventory. It is difficult to estimate how much of the remaining inventory might still remain in the market. As detailed in Note 4 to the financial statements, we held $40.3 million in debt and equity securities as of December 31, 2024, which represented 25.1% of our total assets.
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.
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. 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.
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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.
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EasyPoint ® products accounted for 27.1% of sales in 2024 and other products, including our IV safety catheter and blood collection products were 4.5% of our total product sales in 2024. On September 13, 2024, the Office of the U.S.
Removed
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”.
Added
Trade Representative (“USTR”) revealed final adjustments to increase tariffs on certain goods imported from China under Section 301 of the Trade Act of 1974. Among those products included were syringes and needles, at a rate of 100%. Additionally, effective February 4th and March 4th of 2025, tariffs on Chinese imports were increased by an aggregate total of 20%.
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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.
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The increase of 20% applied not only to syringes and needles, but to other products we import from China. While we have manufacturing capabilities to manufacture most of the products we currently sell domestically, some of our products are sourced exclusively from China.
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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.
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As previously noted, 83.9% of the products the Company obtained in 2024 were purchased from our manufacturers in China, most of which are impacted by the tariffs. The adjusted tariffs were effective on September 27, 2024. Tariffs are expected to have a material impact to our results of operations and financial position.
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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.
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Approximately $1.6 million was spent on tariff expenses from September - December 2024 when the tariff rate was 100% on syringes and needles imported from China. From January 1 to March 21, 2025 under a system of increasing tariffs, we have paid a total of approximately $951,000 on tariff expenses.
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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.
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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, but while these actions would decrease tariff expenses, they have led to an annualized estimated $3.8 million increase in compensation and benefits expense as we have hired additional manufacturing personnel.
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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.
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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, and they will no longer be affected by tariff costs.
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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.
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We expect that commercial quantities will be available in the second half of 2025. 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.
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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.
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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.
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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.
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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 have retained products provided for vaccination purposes in inventory.
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In the event that we become unable to purchase products from our Chinese manufacturers, 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, and we would increase domestic production for the 1mL and 3mL syringes and EasyPoint ® needles.
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Additionally, there may be more demand for EasyPoint ® products during the flu season, particularly in the retail pharmacy market. Overall demand may be affected by public sentiment and acceptance of the safety and efficacy of vaccinations.
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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.
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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.
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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.
Added
A material portion of our net losses for the year ended December 31, 2024 is comprised of the approximately $8.4 million change in valuation allowance which occurred in the second quarter of 2024 on the deferred tax asset which is included as a provision for income taxes on the Condensed Statements of Operations.
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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.
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The devaluation of the deferred tax asset was related to our determination that, based on current information, it was more likely than not that we wouldn’t be in a position to use loss carryforwards against future taxable net income based on a variety of factors and accounting guidelines.
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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.
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The announced implementation of tariffs on imported syringes from China was one of the factors considered in this determination. Our assessment of the valuation allowance has not changed since the second quarter. In 1995, we entered into a license agreement with Thomas J.
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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.
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Domestic revenues decreased 15.1% principally due to a decrease in the average selling price, largely due to higher sales of our EasyPoint ® needles which typically have a lower average selling price combined with higher transactional and order fulfillment costs with our distributors. Domestic unit sales decreased 4.3%. Domestic unit sales were 87.7% of total unit sales for 2024.
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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.
Added
This is primarily driven by a decrease in the volume of units sold, partially offset by higher period costs associated with increased domestic production activities. Royalty expense decreased 18.8% due to the associated decrease in gross sales and decrease in royalties from sublicenses. Tariffs are expected to materially increase our costs in future periods.
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We will continue to evaluate the appropriate mix of products manufactured domestically and those manufactured in China to achieve economic benefits as well as to maintain our domestic manufacturing capability.
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Approximately $1.6 million was spent on tariff expenses from September - December 2024. These costs are included in Cost of manufactured product. As a result of the above, gross profit margins decreased from 20.9% in 2023 to (3.1)% in 2024.
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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.
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Operating expenses decreased slightly, primarily due to a reduction in property tax expense resulting from newly enacted property tax exemption legislation related to medical device property. This decrease was partially offset by increases in litigation costs, wages, and sales and marketing expenses.
Added
The provision for income taxes was $8.4 million as compared to a benefit for income taxes of $1.9 million for 2023. The difference is primarily related to fully reserving our deferred tax asset in the second quarter of 2024.
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Aside from the various reconciling items used in determining the overall use of cash, our net loss for the year was the predominant factor.
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We recognized approximately $5.9 million in other income from the TIA, offset by an increase of $8.4 million in valuation allowance related to deferred tax assets which is material to the adjustments to total cash flow from operations. Changes in working capital also impacted cash flows from operating activities.
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The $6 million obtained as a result of the sale of securities was used to fund operating activities during the year. Cash used by financing activities was $535 thousand for 2024. This was primarily due to repayments of long-term debt and payment of preferred stock dividends.
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Additional 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 to produce products which have never been produced domestically is expected to cost approximately $1 million.
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Those products accounted for roughly 10.5% of our overall domestic unit sales and 16.6% of our domestic syringe unit sales. The overall impact of additional workforce needed to produce these and other products is an increase of approximately $3.8 million on an annual basis.
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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.
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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 in 2024, our margins have faced negative pressure from numerous factors.
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The tariffs enacted in 2024 have had a direct negative impact on products we import from China in 2024 and to date in 2025. In reaction to the tariffs, we have acted to increase our domestic production and reduce, to the extent possible, our reliance on imports.
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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. The decline in units sold in 2024 has also had a negative impact on our margins.
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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 equity investments. If cash needs cannot be met using existing cash and investments, management would reduce operational costs.
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In the event that the foregoing is insufficient, we may liquidate certain assets. 17 Table of Contents Capital Resources We expect to spend approximately $1 million over the next few months using existing cash reserves to convert a portion of our domestic equipment to align to our plan to produce more units at our U.S. facility.
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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.

Other RVP 10-K year-over-year comparisons