Risk Factors Dashboard

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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. 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.

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). Such products are marketed under the VanishPoint^®, Patient Safe^®, and EasyPoint^® brands. Most of our products incorporate a feature whereby our needles retract which is a safety feature designed to protect healthcare workers from needlestick injuries. 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.

VanishPoint^® syringe sales have historically comprised most of our sales. Syringe sales were 65.1%; 68.5%; and 78.3% of our revenues in 2025, 2024, and 2023. EasyPoint^® products accounted for 31.2%; 27.1%; and 16.6% of sales in 2025, 2024, and 2023.

We believe domestic customers may have retained product provided for vaccination purposes in inventory, leading to a decrease in overall demand. The extent to which these supplies still exist and the effect they have on future ordering patterns is difficult to estimate.

Overall demand may also 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.

We currently have under development additional safety products that add to or build upon our current product line offering. One such product has been submitted to the U.S. Food and Drug Administration (FDA) for review. No products under development are expected to be commercially available in 2026.

Our products are sold to and used by healthcare providers. Historically, an overwhelming majority of our products have been sold domestically.

Representatives of group purchasing organizations (“GPOs”) and purchasing representatives (rather than the end-users of the product) make the vast majority of decisions relating to the purchase of medical supplies. The GPOs and larger manufacturers often enter into contracts which can prohibit or limit entry in the marketplace by competitors.

We distribute our products throughout the U.S. through general line and specialty distributors. We also use international distributors. We have developed a national direct marketing network in order to market our products to health care customers and their purchaser representatives.

Sources and Availability of Raw Materials

Our product components, including needle adhesives and packaging materials, are purchased from various suppliers. There is no current scarcity of such materials or such suppliers.

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Intellectual Property

Intellectual property rights, particularly patent rights, are material to our business. The patent rights are jointly owned by the Company and Thomas J. Shaw, our founder and CEO, and have varying expiration dates. 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. 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. Following the expiration of patents related to the old design, competitors may attempt to copy aspects of such prior design, but not the current design.

Patents related to recent modifications to the VanishPoint^® syringes and core technology of the VanishPoint^® syringes will expire during the years 2028 through 2032. Other patent applications covering inventions applicable to the VanishPoint^® syringes are pending.

The Company has unexpired patents which relate to the EasyPoint^® technology and other products as well.

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” ^®.

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. 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. These costs are ongoing and may become more significant if the regulatory landscape changes.

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The development, manufacture, marketing, sale, promotion, and distribution of our products are subject to government regulation by the U.S. Food and Drug Administration (FDA) and similar international regulatory agencies. Regulation by various international, federal and state agencies address the development and approval to market medical products, as well as approval and supervision of manufacturing, labeling, packaging, supply chains, distribution and record-keeping.

For all products manufactured for sale in the domestic market, we have given notice of intent to market to the FDA, and the devices were shown to be substantially equivalent to the predicate devices for the stated intended use. For all products manufactured for sale in the domestic market and foreign market, we hold a Quality Management System certification to ISO 13485:2016. Additionally, for all products manufactured for sale into the applicable countries, we hold a Quality Management System certification in compliance with the Medical Device Single Audit Program (MDSAP). 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. Among other effects, health care regulations and significant changes thereto may substantially increase the time, difficulty, and costs incurred in developing, obtaining, and maintaining approval to market, and marketing newly developed and existing products. We expect this regulatory environment will continue to require effort and investment to ensure compliance. Failure to comply could delay the release of a new product or result in regulatory and enforcement actions, the seizure or recall of a product,

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the suspension or revocation of the authority necessary for a product’s production and sale, and other civil or criminal sanctions including fines and penalties.

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. Department of Health and Human Services has issued rules governing the use, disclosure, and security of protected health information, and the FDA has issued further guidance concerning cybersecurity for medical devices. In addition, certain countries have issued or are considering “data localization” laws, which limit companies’ ability to transfer protected data across country borders. Failure to comply with data privacy and security laws and regulations can result in business disruption and enforcement actions, which could include civil or criminal penalties.

The sale of medical products is subject to laws and regulations pertaining to health care fraud and abuse, including state and federal anti-kickback, anti-self-referral, and false claims laws in the United States.

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. From a business perspective, our competitive position has been made more difficult with the implementation of tariffs on products we import from China. As of March 9, 2026, the prevailing tariff rate on most syringe and needle products imported from China was 120%. Other products we import from China, which do not fall under the category of needles and syringes, are subject to a 20% tariff rate. 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.

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.

We compete primarily on the basis of healthcare worker and patient safety, product performance, and quality. We believe our competitive advantages include, but are not limited to, our leadership in quality and innovation. We believe our products continue to be the most effective safety devices in today’s market. 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 syringe products include passive safety activation, require less disposal space, and are activated while in the patient, reducing exposure to the contaminated needle. Our price per unit is competitive or even lower than the competition once all the costs incurred during the life cycle of a syringe are considered. Such life cycle costs include disposal costs, testing and treatment costs for needlestick injuries, and treatment for contracted illnesses resulting from needlestick injuries.

EasyPoint^® retractable needles offer unique safety benefits not found in other commercially available safety needles. Manually activated safety needles that compete with EasyPoint^® must be removed from the patient, exposing the contaminated needle prior to activation of the manual safety mechanism. EasyPoint^® needles allow for activation of the automated retraction mechanism while the needle is still in the patient, reducing exposure to the contaminated needle and effectively reducing the risk of needlestick injuries. EasyPoint^® retractable needles are compatible with Luer-fitting

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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 9, 2026, we had 201 employees. 195 of such employees were full-time employees. 233 of such employees were full time employees. 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 continue to evaluate current compensation rates and job descriptions with industry standard salary surveys to maintain competitive wages.

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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. 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. 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.

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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.

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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. In 2025, we used Chinese manufacturers to produce 62.6% of our products.

Tariffs on our products continue to have a material negative impact to our results of operations and financial position. 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. 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.

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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. To 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.

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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. Even with increased domestic production, we may not be able to avoid a disruption in supply.

We derived 15.8% of our revenues in 2025 from international sales. International sales, particularly in emerging market countries, are further subject to a variety of regulatory, economic, and political risks as well. 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

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countries in reaction to recently enacted and threatened tariffs by the U.S. The overall risk to our successful efforts in international markets is unknown and difficult to predict.

We Are Concerned that Our Stock Price is Not Correlated with Value

As of December 31, 2025, our market capitalization was $23.1 million (based on a $0.77 per share closing price) and total stockholders’ equity was $74.4 million. Our stock price reached a low of $0.62 per share in 2025 despite our strong balance sheet. We are therefore concerned that our stock price is not correlated with our value.

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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. It is unclear when the excess inventory surplus will clear. Until the inventory is depleted, we expect domestic demand to continue to be depressed. The extent to which surplus product still exists, and the potential impact it may have on future orders, is uncertain.

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We Are Challenged by Uncertainties in Obtaining and Enforcing Intellectual Property Rights

Our main competitive strength is our technology. 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 65.1% of sales in 2025. When the patents of the VanishPoint^® syringes and other products expire, we may experience a significant and rapid loss of sales, and our competitive position in the marketplace may weaken if other competitors use our technology. Such occurrences could have a material adverse effect on profitability.

We do not maintain patent or trademark protection in all foreign countries, but, where possible, have taken steps to protect our patents and trademarks in those countries where we market our products or where we believe other manufacturers are most likely to attempt to replicate our technology. Our lack of patent and trademark protection in certain foreign countries heightens the risk that our designs may be copied by a competitor in those countries.

We Are Vulnerable to New Technologies

Because we have a narrow focus on particular product lines and technology (currently, predominantly retractable needle products), we are vulnerable to the development of superior competing products and to changes in technology which could eliminate or reduce the need for our products. If a superior technology is created, the demand for our products could greatly diminish.

In addition, ongoing innovation in pharmaceutical therapies, delivery methods, and clinical guidelines, including glucagon-like peptide 1 (“GLP 1”) based treatments and other long acting therapies, may alter traditional treatment patterns and reduce, delay, or change the use of insulin and other injectable therapies, which could result in lower demand for certain products or changes in the mix and volume of devices sold. Any such changes could materially and adversely affect our net sales, margins, financial condition, results of operations, and cash flows.

Our Competitors Have Greater Resources

Our competitors have greater financial resources, larger and more established sales and marketing and distribution organizations, and greater market influence, including long-term contracts. These competitors may be able to use these resources to improve their products through research and acquisitions or develop new products which may compete more effectively with our products. If our competitors choose to use their resources to create products superior to ours, we may be unable to sell our products and our ability to continue operations would be weakened.

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For instance, Becton, Dickinson and Company (“BD”), a global company which we had previously considered our primary competitor, spun off a portion of its syringe, needle, and injection product division as Embecta Corp. (“Embecta”) in April 2022. 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 2025 annual report indicated that the company had 1,850 employees, as compared to our workforce of 201 employees. With resources greatly in excess of our own, we expect Embecta will be a formidable competitor.

We Are Controlled by One Shareholder

Thomas J. Shaw, our President and Chief Executive Officer, has investment or voting power over a total of 55.7% of the outstanding Common Stock as of March 9, 2026. Mr. Shaw, our President and Chief Executive Officer, has investment or voting power over a total of 46.9% of the outstanding Common Stock as of March 11, 2022. Mr. Shaw therefore has the ability to direct our operations and financial affairs and significant influence to elect members of our Board of Directors. His interests may not always coincide with the Company’s interests or the interests of other stockholders. This concentration of ownership, for example, may have the effect of delaying, deferring, or preventing a change in control, impeding a merger, consolidation, takeover, or other business combination involving us, or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could materially adversely affect the market price of our Common Stock. The concentration of ownership may likewise influence Mr. Shaw’s continued employment and position as President, CEO, and Chairman of the Board. Mr. Shaw’s rights under the Technology License Agreement, as the owner of the technology we produce, present similar conflicts of interest.

Defensive Measures to Deter Hostile Takeovers

On November 16, 2021, we and Mr. Shaw entered into the Third Amendment to Technology License Agreement (the “Amendment”). The Amendment expands the scope of the Technology License Agreement and provides additional protection to the parties in the event of a Hostile Takeover, as defined by the Amendment. Under the Amendment, under certain conditions, Mr. Shaw is granted the unilateral right to terminate the Technology License Agreement or cancel or convert a license thereunder from exclusive to nonexclusive following a Hostile Takeover.

Additionally, as a public Texas corporation, we are generally prohibited from entering into a business combination with a person who acquires twenty percent or more of our stock for three years unless either: (1) the combination or acquisition is pre-approved by our Board; or (2) the combination is approved by affirmative vote of the shareholders of at least two-thirds of the outstanding voting shares entitled to vote, excluding the affiliated shareholder. As such, independent of the rights granted to Mr. Shaw under the Amendment, as beneficial owner of 55.7% of our stock and Chairman of the Board, Mr. Shaw under the Amendment, as owner of 46.9% of our stock and Chairman of the Board, Mr. Shaw has considerable influence on all business combination decisions.

Supply Chain Disruptions Could Negatively Impact our Profitability

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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. 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. 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.

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Geopolitical conflicts, including ongoing tensions in the Middle East, could disrupt our supply chain and limit the timely availability of components or finished goods, which could materially and adversely affect our results of operations and cash flows.

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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. Further, increasing global demand for, and uncertain supply of, such materials could disrupt our or our suppliers’ ability to obtain such materials in a timely manner to meet our supply needs and/or could lead to increased costs. 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 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.

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Vaccine Hesitancy Could Impact Demand

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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. In addition to public sentiment regarding vaccinations, U.S. public health policy and recommendations by the U.S. Centers for Disease Control and Prevention (CDC) may negatively impact demand for our products used in vaccine administration.

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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. Additionally, our success depends on the quality, reliability, and safety of our products and defects in our products could damage our reputation. If a product liability claim is made and damages are in excess of our product liability coverage, our competitive position could be weakened by the amount of money we could be required to pay to compensate those injured by our products. In the event of a recall, we have recall insurance. Historically, we have not incurred a negative material impact from product recalls of our products. We and our contract manufacturers adhere to stringent quality control standards and processes to ensure that our products are of the highest quality and remain safe and effective. The safety of healthcare workers and patients remains our highest priority.

Our Business May Be Affected by Changes in the Health Care Regulatory Environment

In the U.S. and internationally, government authorities may enact changes in regulatory requirements, reform existing reimbursement programs, and/or make changes to patient access to health care, all of which could adversely affect the demand for our products and/or put downward pressure on our prices. Future healthcare rulemaking could affect our business. We cannot predict the timing or impact of any future rulemaking or changes in the law.

We May Experience Losses in Our Investment Account

Our investment portfolio is subject to market risk. As a result, the value and liquidity of our cash equivalents and marketable securities could fluctuate substantially. Likewise, our other income and expenses could vary materially depending on gains or losses realized on the sale or exchange of investments and other factors. Increased volatility in the financial markets and overall economic uncertainty could increase the risk that actual amounts realized on our investments may differ from the fair values currently assigned to them. Because 24.1% 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. Because 12.7% of our current 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.

Health Crises Could Have an Adverse Effect on Our Business

In any future health crisis, we may elect or be required to close temporarily which would result in a disruption in our activities and operations. Our supply chain, including transportation channels, may be impacted by any such restrictions as well. Any such disruption could impact our sales and operating results.

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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. However, in the event of a resurgence of this disease or in the case of any future pandemic, there is no guarantee that revenues from syringes needed for vaccines would offset the effects to our business of a global economic decline.

Travel and import restrictions may also disrupt our ability to manufacture or distribute our products. 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.

Our key personnel and other employees could be affected by COVID-19 or any future pandemic, which could affect our ability to operate efficiently.Our key personnel and other employees could still be affected by COVID-19 or any future pandemic, which could affect our ability to operate efficiently.

Disruption of Critical Information Systems or Material Breaches in the Security of Our Systems Could Harm Our Business, Customer Relations, and Financial Condition

Information technology helps us operate efficiently, interface with customers and suppliers, maintain financial accuracy and efficiency, and accurately produce our financial statements. If we do not allocate and effectively manage the resources necessary to build and sustain the proper technology infrastructure, we could be subject to transaction errors, processing inefficiencies, the loss of customers, business disruptions, or the loss of or damage to intellectual property through security breach. If our data management systems do not effectively collect, store, process, and report relevant data for the operation of our business, whether due to equipment malfunction or constraints, software deficiencies, or human error, our ability to effectively plan, forecast, and execute our business plan and comply with applicable laws and regulations will be impaired, perhaps materially. Any such impairment could materially and adversely affect our financial condition, results of operations, cash flows, and the timeliness with which we report our internal and external operating results. Third parties may attempt to fraudulently induce employees or customers into giving away sensitive information, which may in turn be used to access our information technology systems. In addition, unauthorized persons may attempt to hack into our systems to obtain our confidential or proprietary information or confidential information we hold on behalf of third parties. If the unauthorized persons successfully hack into or interfere with our system, we may experience a negative impact to our business and reputation. We have programs in place to detect, contain, and respond to data security incidents, and we make ongoing improvements to our systems in order to minimize vulnerabilities, in accordance with industry and regulatory standards. However, we may not be able to anticipate and prevent these intrusions or mitigate them when and if they occur. We also rely on external vendors to supply and/or support certain aspects of our information technology systems. The systems of these external vendors may contain defects in design or manufacture or other problems that could unexpectedly compromise information security of our own systems, and we are dependent on these third parties to deploy appropriate security programs to protect their systems. It is possible for such vulnerabilities to remain undetected for an extended period, including several years or longer. The costs to us to eliminate or alleviate network security problems, bugs, viruses, worms, ransomware and other malicious software programs, and security vulnerabilities could be significant. Our efforts to address these problems may not be successful and could result in unexpected interruptions, delays, cessation of service, and harm to our business operations. Depending on the type of breach, we could also be exposed to a risk of loss or litigation and potential liability, which could have a material adverse impact on our business, financial condition, results of operations, or cash flows.

Illegal Distribution and Sale by Third Parties of Counterfeit Versions of Our Products Could Have a Negative Impact

Third parties may illegally distribute and sell counterfeit versions of our products which do not meet our rigorous manufacturing and testing standards. Our reputation and business could suffer harm as a result. In addition, diversion of products into other channels may result in reduced revenues.

General Risk Factors

We face risk factors common to other U.S. businesses. We could be subject to complex and costly regulation. Our business could suffer if we or our suppliers encounter manufacturing problems or disruptions to transportation channels. We could be subject to risks associated with doing business outside of the U.S, including risks associated with global economic, regulatory, or political changes, or health crises. Current or worsening economic conditions may adversely affect our business and financial condition.

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Item 1B. Unresolved Staff Comments.

Not applicable and none.

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Item 1C. Cybersecurity

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Cybersecurity risks are integrated into our enterprise risk management framework and considered alongside other operational and financial risks during decision-making processes. The Information Security Officer (ISO) reports directly to the Chief Financial Officer (CFO) and regularly briefs the executive team on cybersecurity risks and mitigation strategies. Our ISO has 20 years of Chief Information Security Officer (CISO) experience and has served in IT leadership roles for multiple organizations. He specializes in cybersecurity and disaster recovery. Strengthened by SANS LDR512 and LDR514 training, he provides the strategic frameworks and digital expertise needed to navigate complex enterprise security landscapes. We engage independent cybersecurity firms to conduct penetration testing, vulnerability assessments, and security audits of our IT and OT infrastructure. We also use external expertise for incident response support and regulatory compliance guidance. We conduct thorough cybersecurity risk assessments of all third-party vendors before onboarding, evaluating their security controls, data handling practices, and incident response capabilities. We require vendors to sign contracts that mandate adherence to specific cybersecurity standards and data privacy regulations. We conduct ongoing monitoring of vendor security posture and require them to promptly report any security incidents.

The Board of Directors oversees the overall cybersecurity risk management program and holds management accountable for its effectiveness. The Board receives regular briefings on cybersecurity risks and mitigation strategies. The ISO regularly reports to the Board and executive management on the status of the cybersecurity risk management program, including key risks, mitigation strategies, and incident reports. The program is reviewed periodically to assess its effectiveness and identify areas for improvement. Management’s role is to assist the Board in identifying and considering material cybersecurity risks, ensure implementation of management-level and employee-level cybersecurity practices and training, and provide the Board with regular reports regarding any cybersecurity attacks or vulnerabilities. As 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.

The ISO handles developing, implementing, and maintaining the cybersecurity risk management program and reports directly to the CFO who has the authority to allocate resources and make decisions related to cybersecurity. A cross-functional committee composed of representatives from Management, IT, legal, compliance, operations and other relevant departments aids the ISO in managing cyber risks and developing program initiatives. Business unit and departmental leaders are responsible for implementing cybersecurity controls within their areas of responsibility and

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reporting potential risks to the ISO. Regular cybersecurity awareness training is provided to all employees to educate them on cyber threats, best practices, and reporting procedures. Management and IT personnel receive additional training on specific security concepts and risk management techniques. 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.

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