RETRACTABLE TECHNOLOGIES INC Fair Value Disclosure
4. FAIR VALUE OF FINANCIAL INSTRUMENTS
ASC 820, “Fair Value Measurements”, defines fair value, establishes a framework for measuring fair value and requires additional disclosures regarding certain fair value measurements. ASC 820 establishes a three-tier hierarchy for measuring fair value, as follows:
| ● | Level 1 – quoted market prices in active markets for identical assets and liabilities |
| ● | Level 2 – inputs other than quoted prices that are directly or indirectly observable |
| ● | Level 3 - unobservable inputs where there is little or no market activity |
The Company considers any potential impairment of property, plant, and equipment, including construction in progress, to be a Level 3 fair value measurement.
The following tables summarize the values of assets designated as Investments in debt and equity securities:
December 31, 2025 | ||||||||||||
| Level 1 | | Level 2 | | Level 3 | | Total | |||||
Mutual funds | $ | 33,774,204 | $ | — | $ | — | $ | 33,774,204 | ||||
Municipal bonds | 608,604 | — | — | 608,604 | ||||||||
$ | 34,382,808 | $ | — | $ | — | $ | 34,382,808 | |||||
December 31, 2024 | ||||||||||||
| Level 1 | | Level 2 | | Level 3 | | Total | |||||
Equity securities | $ | 29,259,826 | $ | — | $ | — | $ | 29,259,826 | ||||
Mutual funds | 10,404,218 | — | — | 10,404,218 | ||||||||
Municipal bonds |
| 664,264 | — | — | 664,264 | |||||||
$ | 40,328,308 | $ | — | $ | — | $ | 40,328,308 | |||||
The investment assets are held as trading securities and are carried at fair value as of the date of the Balance Sheets.
The Company intends to hold these assets for possible future operating requirements.
The following table summarizes gross unrealized gains and losses from Investments in debt and equity securities:
December 31, 2025 | ||||||||||||
Cumulative Unrealized | Aggregate | |||||||||||
| Cost | | Gains | | Losses | | Fair Value | |||||
Mutual funds | $ | 33,695,124 | $ | 79,080 | $ | — | $ | 33,774,204 | ||||
Municipal bonds | 582,289 | 26,315 | — | 608,604 | ||||||||
$ | 34,277,413 | $ | 105,395 | $ | — | $ | 34,382,808 | |||||
December 31, 2024 | ||||||||||||
Cumulative Unrealized | Aggregate | |||||||||||
| Cost | | Gains | | Losses | | Fair Value | |||||
Equity securities | $ | 24,230,746 | $ | 5,029,080 | $ | — | $ | 29,259,826 | ||||
Mutual funds | 10,319,644 | 84,574 | — | 10,404,218 | ||||||||
Municipal bonds |
| 636,449 | 27,815 | — | 664,264 | |||||||
$ | 35,186,839 | $ | 5,141,469 | $ | — | $ | 40,328,308 | |||||
Unrealized losses on investments were $5.0 million for the year ended December 31, 2025. Unrealized gains on investments were $10.81 million for the year ended December 31, 2024. Unrealized losses on investments were $10.52 million for the year ended December 31, 2023.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 27, 2026 | Showing above |
| 2024 | Mar 28, 2025 | |
| 2023 | Mar 29, 2024 | |
| 2022 | Mar 30, 2023 | |
| 2021 | Mar 31, 2022 | |
| 2020 | Mar 31, 2021 | |
| 2019 | Mar 30, 2020 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.