RETRACTABLE TECHNOLOGIES INC

Previous wording

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

Current wording

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

Previous wording

We have been manufacturing and marketing our products since 1997. Syringes comprised 65.0% of our sales in the first nine months of 2025. EasyPoint®products accounted for 31.3% and other products, including our IV safety catheter and blood collection products, were 3.7% of our sales in the first nine months of 2025. For the first nine months of 2025, the sales mix included a higher proportion of international product sales compared to the first nine months of 2024. Traditionally, international sales carry lower average selling prices compared to domestic sales.

Current wording

We have been manufacturing and marketing our products since 1997. Syringes comprised 80.8% of our sales in the first quarter of 2026. EasyPoint®products accounted for 13.8% and other products, including our IV safety catheter and blood collection products, were 5.4% of our sales in the first quarter.

Previous wording

On September 13, 2024, the Office of the U.S. Trade Representative (“USTR”) revealed final adjustments to increase tariffs on certain goods imported from China under Section 301 of the Trade Act of 1974. Among those products included were syringes and needles, at a rate of 100%. During 2025, the on-going development and negotiation of U.S. foreign trade policy with China and other nations has caused the prevailing tariff rates on products imported into the U.S. to fluctuate. These fluctuations have impacted certain goods or groups of goods, and have varied based on country of origin. As of September 30, 2025, the prevailing tariff rate on most syringe and needle products imported from China was 130%. Other products we import from China, which do not fall under the category of needles and syringes, are subject to a 30% tariff rate. As foreign trade policy continues to evolve and as new trade deals are being negotiated, uncertainty as to future tariff rates and affected products remains. Tariffs are expected to have a continuing material impact to our results of operations and financial position. We are working to lessen the financial impact of the tariffs through strategic ordering of products from our Chinese suppliers and shifting a larger portion of manufacturing of 1mL, 3mL, and EasyPoint® needles to our domestic manufacturing facility.

Current wording

As of May 1, 2026, the prevailing tariff rate on most syringe and needle products imported from China was 110%. Other products we import from China, which do not fall under the category of needles and syringes, are subject to a 10% tariff rate. As foreign trade policy continues to evolve, including the impact of the Supreme Court’s ruling, uncertainty as to future tariff rates and affected products remains. Tariffs are expected to have a continuing material impact on our ability to source finished goods and certain raw materials and component parts, and to our results of operations and financial position. We continue working to lessen the financial impact of the tariffs through strategic ordering of products from our Chinese suppliers and continuing to manufacture 1mL, 3mL, and EasyPoint® needles in our domestic manufacturing facility.

Previous wording

While we have manufacturing capabilities to manufacture most of the products we currently sell domestically, some of our products are sourced exclusively from China. 61.7% and 90% of the products we obtained in the first nine months of 2025 and 2024, respectively, were purchased from our manufacturers in China, most of which are now impacted by the tariffs. Tariffs are expected to have a material impact to our results of operations and financial position. Approximately $2.3 million was spent on tariff expenses in the first nine months of 2025. We are working to lessen the financial impact of the tariffs, including shifting a larger portion of manufacturing of 1mL, 3mL, and EasyPoint® needles to our domestic manufacturing facility. This shift would decrease tariff expenses but would lead to an increase in our manufacturing workforce costs as we hire new employees. We implemented reductions in force in the second and third quarters of 2025 primarily within non-manufacturing functions, each expected to save approximately $1.6 million, however, overall workforce levels increased due to higher domestic manufacturing. As such, we expect that manufacturing workforce increases instituted in 2025 will raise payroll costs by approximately $825 thousand on an annualized basis.

Current wording

While we have manufacturing capabilities to manufacture most of the products we currently sell domestically, some of our products are sourced exclusively from China. We obtained 61.0% of our products from our manufacturers in China in the first quarter of 2026, most of which are impacted by the tariffs, however, a portion was shipped directly to international customers, on which no tariffs were assessed. Tariffs may continue to have a material impact to our results of operations and financial position. Approximately $11.6 thousand was incurred in tariff expense in the first quarter of 2026. We are working to lessen the financial impact of the tariffs, including continuing to manufacture 1mL, 3mL, and EasyPoint® needles in our domestic manufacturing facility.

Previous wording

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

Current wording

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

Previous wording

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.

Current wording

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

Previous wording

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

Current wording

Over the past several years, we have experienced certain cost increases in raw materials. Those costs primarily affected our domestic manufacturing because the finished goods we purchased from China were subject to a long-term fixed price contract. Sensitivity to cost fluctuations is likely to become more pronounced as we transition away from production under such a fixed price contract. Other factors that could affect our unit costs include tariffs, oil prices,

Previous wording

As detailed in Note 4 to the financial statements, we held $30.5 million in debt and equity securities as of September 30, 2025, which represented 20.8% of our total assets.

Current wording

As detailed in Note 4 to the financial statements, we held $32.8 million in debt and equity securities as of March 31, 2026, which represented 23.9% of our total assets. The unrealized gain on debt and equity securities was $192 thousand due to the increased market values of those securities.

Previous wording

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

Current wording

Historically, unit sales have increased during the flu season. Additionally, there may be more demand for EasyPoint® products during the flu season, particularly in the retail pharmacy market. Purchases from our retail pharmacy customers may differ from purchasing patterns of general line distributors.

Previous wording

Domestic sales accounted for 91.1% and 93.1% of total revenues for the three months ended September 30, 2025 and 2024, respectively. Domestic revenues decreased 4.6%, while domestic unit sales decreased 20.4%. Domestic unit sales represented 83.9% of total unit sales for the three months ended September 30, 2025 compared to 92.4% for the same period last year. The decrease in unit sales did not translate into a proportional decrease in domestic revenues, primarily due to an increase in average domestic selling price. The average selling price was impacted by change in product mix. The average domestic selling price increased due to decreased EasyPoint®needle sales in relation to all products sold.

Current wording

Domestic sales accounted for 82.9% and 89.6% of total revenues for the three months ended March 31, 2026 and 2025, respectively. Domestic revenues decreased 20.0%, while domestic unit sales decreased 11.5%. Domestic unit sales represented 72.1% of total unit sales for the three months ended March 31, 2026 compared to 84.9% for the same period last year. The decrease in sales was not proportional to the decrease in unit sales, primarily due to a decrease in average selling price, which was due to change in product mix and higher transaction costs associated with distributor agreements.

Previous wording

Cost of manufactured product decreased 20.1% compared to the same period last year primarily due to lower unit sales. The decrease also reflects a favorable shift in product mix, with a higher proportion of VanishPoint® syringe sales relative to EasyPoint®needles during the three months ended September 30, 2025, contributing to higher overall gross margins. Royalty expense decreased 6.5% primarily due to the decrease in gross sales.

Current wording

Cost of manufactured product decreased 3.1% compared to the same period last year primarily due to a decrease in freight and tariff expense Royalty expense decreased 7.0% due to the decrease in gross sales.

Previous wording

Tariffs are expected to continue to materially impact our costs in future periods. Approximately $172 thousand was spent on tariff expenses in the third quarter of 2025. These costs are included in Cost of manufactured product.

Current wording

Tariffs may continue to materially impact our costs in future periods. Approximately $11.6 thousand was spent on tariff expenses in the first quarter of 2026. The reduction in tariff costs compared to prior periods is attributable to ongoing mitigation efforts, including strategic sourcing decisions and increased domestic production. These costs are included in Cost of manufactured product.

Previous wording

The loss from operations was $13.5 million compared to a loss of approximately $13.9 million for the same period last year. This was primarily due to a decrease in legal and litigation fees.

Current wording

The loss from operations was $6.2 million compared to a loss of approximately $4.7 million for the same period last year. The increase in loss from operations was primarily driven by negative gross margin for the period and higher donation expense.

Previous wording

The unrealized loss on debt and equity securities was $3.2 million due to the decreased market values of those securities.

Current wording

The unrealized gain on debt and equity securities was $192 thousand for the three month period ended March 31, 2026 due to the increased market values of those securities. In contrast, there was a material unrealized loss on debt and equity securities of $7.2 million for the three month period ended March 31, 2025.

Previous wording

The provision for income taxes was $1.7 thousand as compared to a benefit for income taxes of $31 thousand for the same period in 2024. The change is primarily due to reporting income for the three months ended September 30, 2025, compared with a net loss for the three months ended September 30, 2024.

Current wording

The provision for income taxes was $1.8 thousand as compared to a benefit for income taxes of $286 thousand for the same period in 2025. The change is primarily due to a decrease in net loss in the current period.

Previous wording

Cash flow used by operations was $6.5 million for the nine months ended September 30, 2025 due to a number of factors. Aside from the various reconciling items used in determining the overall use of cash, our net loss for the period was the predominant factor. We recognized approximately $4.5 million in other income from the TIA, offset by $3.2 million in unrealized loss in debt and equity securities which is material to the adjustments to total cash flow from operations. Changes in working capital also impacted cash flows from operating activities. Accounts receivable increased by $904 thousand, inventories increased by $2.4 million, and accounts payable increased by $284 thousand.

Current wording

Cash flow used by operations was $1.4 million for the three months ended March 31, 2026 due to a number of factors. Aside from the various reconciling items used in determining the overall use of cash, our net loss for the period was the predominant factor. We recognized approximately $1.5 million in other income from the TIA. Changes in working capital also impacted cash flows from operating activities. Accounts receivable decreased by $926 thousand, inventories increased by $107 thousand, accounts payable increased by $44 thousand, and accrued liabilities increased by $794 thousand.

Previous wording

Cash used by financing activities was $423 thousand for the nine months ended September 30, 2025. This was primarily due to repayments of long-term debt and payment of preferred stock dividends.

Current wording

Cash used by financing activities was $147 thousand for the first quarter of 2026. This was primarily due to repayments of long-term debt and payment of preferred stock dividends.

Previous wording

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. We received a settlement payment of $1.9 million in May 2025.

Current wording

We have historically funded operations primarily from the proceeds from revenues, private placements, investment proceeds, 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.

Previous wording

The imposition of tariffs on our products will continue to have a material effect on our operating results and liquidity. 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 plus the purchase of additional molds to produce 0.5 mL syringes which have never been produced domestically is expected to cost approximately $1 million, most of which has already been expended. Those products accounted for roughly 9.1% of our overall domestic unit sales and 15.2% of our domestic syringe unit sales for the three months ended September 30, 2025. The products accounted for roughly and 10.9% of our overall domestic unit sales and 16.6% of our domestic syringe unit sales for the nine months ended September 30, 2025. We expect that workforce increases, primarily in manufacturing, instituted in 2025 to support higher domestic production will raise payroll costs by approximately $825 thousand on an annualized basis.

Current wording

The imposition of tariffs on our products may continue to have a material effect on our operating results and liquidity. The workforce reduction implemented in April 2026 is expected to result in cost savings in future periods.

Previous wording

Our margins have experienced significant fluctuations over the past two years. Most recently, our margins have faced negative pressure from numerous factors. The tariffs enacted in 2024-2025 have had a direct negative impact on products we import from China to date. In reaction to the tariffs, we have acted to increase our domestic production and reduce, to the extent possible, our reliance on imports. While we believe these efforts will enable us to avoid some of the impact of the tariffs, we will be forced to import the products we are unable to produce in the U.S. As we work to increase our domestic production and achieve manufacturing efficiencies, we expect to incur higher manufacturing costs in the near term, but will continue to work to minimize our reliance on imported products.

Current wording

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

Previous wording

We believe we will have adequate means to meet our short-term needs to fund operations for at least 12 months from the date of issuance of the financial statements.** Besides cash reserves 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. Our liabilities are our bank debt as set forth as Long-term debt on our Condensed Balance Sheets and other liabilities detailed herein in Note 6 **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. 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 further reduce operational costs. In the event that the foregoing is insufficient, we may liquidate certain assets.

Current wording

We believe we will have adequate means to meet our short-term needs to fund operations for at least 12 months from the date of issuance of the financial statements.** Besides cash reserves, we also have access to our investments which may be liquidated in the event that we need to access the funds for operations. Expected short-term uses of cash include payroll and benefits, royalty expense, inventory purchases, tariffs, contractual obligations, payment of income taxes, quarterly preferred stock dividends, and other operational priorities. Our liabilities are our bank debt as set forth as Long-term debt on our Condensed Balance Sheets and other liabilities detailed herein in Note 6 and 7 **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 have increased our expenses materially. For the next 1-3 years, we believe our liquidity will decline materially, but we expect that we may be able to satisfy our long-term cash requirements using a combination of cash and liquidation of our equity investments. If cash needs cannot be met using existing cash and investments, management may further reduce operational costs. In the event that the foregoing is insufficient, we may liquidate certain assets.

Previous wording

We are responsible for developing estimates for amounts reported as assets and liabilities, and revenues and expenses in conformity with U.S. generally accepted accounting principles (“GAAP”). Those estimates require that we develop assumptions of future events based on past experience and expectations of economic factors. Among the more critical estimates management makes is the estimate for customer rebates. The amount reported as a contractual allowance for rebates involves examination of past historical trends related to our sales to distributors and the related credits issued once our distributors have satisfied their contractual obligations. The estimate includes consideration of historical redemption rates, discount rates, a combination of estimated distributor inventories based on tracking information provided by the distributors or if known, inventory turnover rates. The establishment of a liability for future claims of rebates against sales in the current period requires that we have an understanding of the relevant sales with respect to product categories, sales distribution channels, and the likelihood of contractual obligations being satisfied. We examine the results of estimates against actual results historically and use the determination to further develop our basis for assumptions in future periods, as well as the accuracy of past estimates. Based on distributors’ purchasing and claiming rebates practices, we do not expect significant changes to the current inputs and assumption used in the estimate calculations. While we believe that we have sufficient historical data, and a firm basis for establishing reserves for contractual obligations, there is an inherent risk that our estimates and the underlying assumptions may not reflect actual future results. In the event that these estimates and/or assumptions are incorrect, adjustments to our reserves may have a material impact on future results. As of September 30, 2025, we estimate that the total potential future credits to be issued as a result of prior purchases which have not yet been claimed is $2.2 million. These credits are recognized as a liability and included in Accounts payable on the Condensed Balance Sheets.

Current wording

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