RETRACTABLE TECHNOLOGIES INC
For the period ended Dec 31, 2024. Filed Mar 28, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 28, 2025
RVP$0.57-0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-29.
0001558370-24-004361
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-28.
0001558370-25-003976
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 46 previous paragraphs and 48 current paragraphs.
16 unchanged; 18 reworded; 13 added; 10 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
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%. 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. While we have manufacturing capabilities to manufacture most of the products we currently sell domestically, some of our products are sourced exclusively from China. 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. 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. 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.
Current report
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. We expect that commercial quantities will be available in the second half of 2025. **
Current report
Certain products must be purchased from third party suppliers as we do not currently have the machinery to manufacture our entire product line in our U.S. facility. When equipment was added to our U.S. facility pursuant to the TIA, it was strictly for product lines typically used in the administration of vaccines, as required by the TIA.
Current report
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. Overall demand may be affected by public sentiment and acceptance of the safety and efficacy of vaccinations. While some products in our catalog of products are unrelated to the administration of vaccines, changes in the acceptance of vaccinations could have a material impact on our business.
Current report
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. 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. 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.
Current report
Cost of manufactured product remained consistent. However, the decrease in revenue did not result in a corresponding decrease in costs. 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.
Current report
Tariffs are expected to materially increase our costs in future periods. Approximately $1.6 million was spent on tariff expenses from September - December 2024. These costs are included in Cost of manufactured product.
Current report
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.
Current report
Cash flow used by operations was $11.6 million in 2024 due to a number of factors. Aside from the various reconciling items used in determining the overall use of cash, our net loss for the year was the predominant factor. We recognized approximately $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. Accounts receivable decreased by $2.0 million, inventories increased by $1.6 million, and accounts payable decreased by $488 thousand.
Current report
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.
Current report
The imposition of tariffs on our products will 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 to produce products which have never been produced domestically is expected to cost approximately $1 million. 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.
Current report
Our margins have experienced significant fluctuations over the past two years. Most recently in 2024, our margins have faced negative pressure from numerous factors. 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. 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. As we work to increase our domestic production and achieve manufacturing efficiencies, we will continue to work to minimize our reliance on imported products.
Current report
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. 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.
Removed paragraphs (10)
Previous report
During 2023, 20.6% of our revenues were international sales, predominantly from international sales in the first quarter of the year. 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.
Previous report
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.
Previous report
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. 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.
Previous report
Historically, unit sales have increased during the flu season. With the dramatic increase in sales attributable to COVID-19 vaccinations, however, the effect of flu season sales was less impactful in past years. Unit sales in 2023 have increased each quarter domestically for those products associated with administering vaccinations (including the flu shot) which indicates that the seasonal trends are following pre-pandemic patterns.
Previous report
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. 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.
Previous report
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.
Previous report
Operating expenses decreased 29.2% from the prior year. 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.
Previous report
Cash flow provided by operations was $2.8 million in 2023 due to a number of factors. 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. 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.
Previous report
Cash provided by financing activities was $942 thousand for 2023. 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.
Previous report
Since the execution of the TIA on July 1, 2020, we have significantly expanded our facilities. There are no remaining capital projects.
Reworded paragraphs (18)
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, 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
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, 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. Risk Factors. 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 78.3% of our sales in 2023. EasyPoint®products accounted for 16.6% of sales in 2023. 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.
Current wording
We have been manufacturing and marketing our products since 1997. Syringes comprised 68.5% of our sales in 2024. 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.
Previous wording
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. 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. 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”. 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.
Current wording
Recent additions of manufacturing equipment and facilities under the 2020 TIA have increased our production capacity and our overhead costs. Under the TIA and its successor agreement, until June 30, 2030 we must continue to abide by ongoing terms which include maintenance of equipment, availability of capacity, and US government preference in the event of a public health emergency.
Previous wording
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. 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 (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. 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.
Previous wording
We believe domestic customers have retained products provided for vaccination purposes in inventory, leading to a decrease in our 2023 domestic sales. 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. This trend is consistent with historical sales patterns, coinciding with flu season sales.
Current wording
We believe domestic customers have retained products provided for vaccination purposes in inventory. Customers have reported that demand was diminished due to their remaining syringe inventory. It is difficult to estimate how much of the remaining inventory might still remain in the market.
Previous wording
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. 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. The net purchases have materially decreased our cash position since December 2022.** **
Current wording
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. During 2024, we liquidated $6 million in mutual funds for operating purposes.
Previous wording
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.
Current wording
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.
Previous wording
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. Dollar amounts have been rounded for ease of reading.
Current wording
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
Previous wording
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. 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.
Current wording
Domestic sales accounted for 88.9% and 79.4% of the revenues in 2024 and 2023, respectively. 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. 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.
Previous wording
As a result of the above, gross profit margins decreased from 29.8% in 2022 to 20.9% in 2023.
Current wording
As a result of the above, gross profit margins decreased from 20.9% in 2023 to (3.1)% in 2024.
Previous wording
The loss from operations was $11.5 million as compared to a loss from operations of $853 thousand in 2022. The greater loss was principally due to the significant decline of net revenues and resulting gross profit in 2023.
Current wording
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.
Previous wording
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. 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.
Current wording
The unrealized gain on debt and equity securities was $10.8 million due to the increased market values of those securities.
Previous wording
The benefit for income taxes was $1.9 million as compared to a provision for income taxes of $84 thousand for 2022. For a detailed description of the determination and components of calculating the provision, please refer to Note 11 of the financial statements.
Current wording
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. For a detailed description of the determination and components of calculating the provision, please refer to Note 11 of the financial statements.
Previous wording
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.
Current wording
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. The $6 million obtained as a result of the sale of securities was used to fund operating activities during the year.
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 available for sale if the need to access those funds arises.
Current 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.
Previous wording
The mix of domestic and international sales 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. Some international sales of our products are shipped directly from China to the customer. The number of units produced by us versus manufactured in China can have a significant effect on the carrying costs of Inventory as well as Cost of sales. Generally, an overall increase in units sold can positively affect our margins. The cost of raw materials used in manufacturing and transportation costs can also significantly affect our margins. 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.
Current wording
The mix of domestic and international sales, along with product mix, affects the average sales price of our products. Generally, the higher the ratio of domestic sales to international sales, the higher the average sales price will be. Additionally, product mix plays a role, with syringe sales typically having higher average selling prices and gross profit margins than our other product lines. Some international sales of our products are shipped directly from China to the customer. The number of units produced by us versus manufactured in China can have a significant effect on the carrying costs of Inventory as well as Cost of sales. Generally, an overall increase in units sold can positively affect our margins. The cost of raw materials used in manufacturing, transportation costs, and the impact of tariffs can also significantly affect our margins.
Previous wording
have access to our investments which may be liquidated in the event that we need to access the funds for operations. Expected short-term uses of cash include payroll and benefits, royalty expense, inventory purchases, contractual obligations, 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. 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.
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 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 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. 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. 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 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.
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, a combination of estimated distributor inventories based on tracking information provided by the distributors or if known, inventory turnover rates. The establishment of a liability for future claims of rebates against sales in the current period requires that we have an understanding of the relevant sales with respect to product categories, sales distribution channels, and the likelihood of contractual obligations being satisfied. We examine the results of estimates against actual results historically and use the determination to further develop our basis for assumptions in future periods, as well as the accuracy of past estimates. Based on distributors’ purchasing and claiming rebates practices, we do not expect significant changes to the current inputs and assumption used in the estimate calculations. While we believe that we have sufficient historical data, and a firm basis for establishing reserves for contractual obligations, there is an inherent risk that our estimates and the underlying assumptions may not reflect actual future results. In the event that these estimates and/or assumptions are incorrect, adjustments to our reserves may have a material impact on future results. As of December 31, 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.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
and those discussed in any forward-looking statements. All period references are to our fiscal years ended December 31, 2024 and 2023. Dollar amounts have been rounded for ease of reading.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
in providing devices to the safety market, and other factors referenced in Item 1A. Risk Factors. Given these uncertainties, undue reliance should not be placed on forward-looking statements.
Previous report — wording carried elsewhere
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