Retractable Technologies(US:RVP)2025-05-15 18:03PART I – FINANCIAL INFORMATION Financial Statements The unaudited condensed financial statements for Q1 2025 report a net loss of $10.5 million, driven by gross loss and unrealized investment losses Condensed Balance Sheets Total assets decreased to $149.3 million as of March 31, 2025, from $160.7 million, driven by reduced cash and investments Condensed Balance Sheet Summary (unaudited) | Balance Sheet Item | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $63,662,376 | $73,272,059 | | Total Assets | $149,307,449 | $160,724,202 | | Total Current Liabilities | $9,497,961 | $8,780,916 | | Total Liabilities | $72,695,085 | $73,553,511 | | Total Stockholders' Equity | $76,612,364 | $87,170,691 | Condensed Statements of Operations Q1 2025 net loss was $10.5 million, or ($0.35) per share, driven by a gross loss and a $7.2 million unrealized investment loss Q1 2025 vs. Q1 2024 Operating Results (unaudited) | Metric | Q1 2025 (Three Months Ended Mar 31) | Q1 2024 (Three Months Ended Mar 31) | | :--- | :--- | :--- | | Sales, net | $8,295,173 | $7,599,363 | | Gross Profit (Loss) | ($1,911) | $1,900,929 | | Loss from Operations | ($4,676,752) | ($2,986,137) | | Unrealized Gain (Loss) on Securities | ($7,156,513) | $1,732,649 | | Net Income (Loss) | ($10,500,716) | $429,384 | | Diluted Earnings (Loss) per Share | ($0.35) | $0.01 | Condensed Statements of Cash Flows Net cash used in operating activities was $1.5 million in Q1 2025, resulting in a net decrease of $0.85 million in cash and equivalents Q1 2025 Cash Flow Summary (unaudited) | Cash Flow Activity | Three Months Ended March 31, 2025 | | :--- | :--- | | Net cash used in operating activities | ($1,475,185) | | Net cash from (used in) investing activities | $762,239 | | Net cash used in financing activities | ($139,527) | | Net decrease in cash and cash equivalents | ($852,473) | | Cash and cash equivalents at end of period | $3,382,915 | Notes to Condensed Financial Statements Notes detail significant policies, including concentration risks, tariff impacts, investment losses, and a subsequent workforce reduction - The company obtained 62.7% of its products from Chinese manufacturers in Q1 2025, creating a significant concentration risk37 - Tariffs on goods imported from China have been adjusted to 130% for needles and syringes and 30% for other products, which is expected to have a material impact on financial results40 - In April 2025, after the reporting period, the company reduced its workforce by approximately 7%81 Revenue by Geography (Q1 2025 vs Q1 2024) | Geographic Segment | Q1 2025 Sales | Q1 2024 Sales | | :--- | :--- | :--- | | U.S. sales | $7,432,309 | $6,641,168 | | North and South America (ex-U.S.) | $553,500 | $154,633 | | Other international sales | $309,364 | $803,562 | | Total | $8,295,173 | $7,599,363 | - The company recorded a valuation allowance of $11.3 million against its net deferred tax asset as of March 31, 2025, an increase from $9.1 million at year-end 20244966 Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes the Q1 2025 net loss to tariffs and unrealized investment losses, outlining mitigation strategies and affirming liquidity - Tariffs on Chinese imports are expected to have a material impact. The company spent approximately $1.5 million on tariff expenses in Q1 202588106 - The company is shifting more manufacturing to its domestic facility to mitigate tariff impacts, leading to an estimated $3.8 million increase in annualized compensation and benefits expense88115 - In April 2025, the company reduced its workforce by approximately 7%, which is expected to save an estimated $1.6 million in annual wages and benefits, offset by $300 thousand in one-time separation payments89 - A material portion of the net loss for Q1 2025 is comprised of a $7.2 million unrealized loss in debt and equity securities98107 - Management believes the company has adequate liquidity to meet short-term needs for at least 12 months, with access to cash reserves and investments118 Quantitative and Qualitative Disclosures About Market Risk The company has indicated that this item is not applicable for this reporting period - The company stated that this section is 'Not applicable'122 Controls and Procedures Management concluded that disclosure controls and procedures were not effective as of March 31, 2025, due to unremediated material weaknesses - Management concluded that as of March 31, 2025, the company's disclosure controls and procedures were not effective123 - The ineffectiveness is due to ongoing material weaknesses related to the COSO framework (risk assessment and control activities) and specific controls over revenue contract evaluation124 - Remediation efforts are underway, including enhanced review of contractual modifications, but management cannot yet estimate a completion date125126 PART II—OTHER INFORMATION Legal Proceedings This section details an ongoing lawsuit filed by the company against its former legal counsel for alleged malpractice and negligence - The company is engaged in a lawsuit against its former legal representation, Locke Lord, LLP, for alleged malpractice and negligence73129 Risk Factors The company states that there have been no material changes to the risk factors previously disclosed in its most recent annual report - There were no material changes in Risk Factors from those set forth in the most recent annual report130 Other Information No new Rule 10b5-1 trading arrangements were adopted or terminated in Q1 2025, though CEO Thomas J. Shaw's existing plan remains active - CEO Thomas J. Shaw has an active Rule 10b5-1 plan to purchase up to $800,000 in company common stock, which may continue through November 19, 2025131 Exhibits This section lists the exhibits filed with the Form 10-Q, including officer certifications and financial data in Inline XBRL format - The filed exhibits include officer certifications (31.1, 31.2, 32) and financial statements formatted in Inline XBRL (101, 104)135