What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-26 compared with 2025-03-03 · 291 added, 340 removed, 951 unchanged (40% of the section changed)

16 unchanged sentences

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 3, 2025 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 26, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

9 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Provision for chargebacks estimate

Description of the Matter

The Company’s provision for chargebacks estimate totaled $26.3 million at December 31, 2024.

As described in Note 4 to the consolidated financial statements, the Company estimates the provision for chargebacks using the expected value method at the time of sale to wholesalers.

Auditing the provision for chargebacks estimate was especially challenging because of the subjectivity of management assumptions about future wholesale customer mix and related contract pricing, which impact the rates at which future chargebacks on current sales will be paid.

The estimated provision for chargebacks is based on wholesaler inventory levels, historic chargeback rates, and current contract pricing and wholesaler customer mix.

How We Addressed the Matter in Our Audit

We tested the Company’s controls addressing the identified risks of material misstatement related to the valuation of the provision for chargebacks.

This included testing controls over management’s review of significant assumptions discussed above.

This testing also included management’s control to compare subsequent actual activity to estimated activity and controls to ensure the data used to evaluate the significant assumptions was complete and accurate.

To test the provision for chargebacks estimate, we obtained management’s calculations and performed the following procedures, among others.

We evaluated the appropriateness of the Company’s models and methodology, including recalculating the estimate using those models, and testing the completeness and accuracy of the inputs by comparing to internal and external data.

We evaluated the reasonableness of significant assumptions (e.g., estimated future wholesale customer mix and related contract pricing) by comparing rates at different time periods, including historical and subsequent periods, obtaining an understanding of the facts supporting the selected rates, and performing sensitivity analyses over those rates.

We evaluated subsequent events to assess whether there was any new information that would require adjustment to the initial provision.

Estimated selling price impacting the Enoxaparin inventory lower of cost or net realizable value

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Reserves for chargebacks and rebates

Description of the Matter

The Company's inventories totaled $153.7 million as of December 31, 2024 which is net of, amongst other things, provisions to reduce the value of Enoxaparin inventory to the lower of its cost and net realizable value.

Total charges of $7.4 million related to Enoxaparin inventory and related purchase commitments were included in cost of revenues in the Company’s consolidated statement of operations for the year ended December 31, 2024.

As explained in Note 2 to the consolidated financial statements, the Company states inventory at the lower of cost or net realizable value.

Net realizable value is determined using the estimated selling price, in the ordinary course of business, less estimated costs to complete and dispose of the inventory.

Auditing management's estimate in determining the net realizable value of Enoxaparin inventory involved subjective auditor judgment because the estimated selling price relies on a number of factors that are affected by market conditions outside the Company's control.

In particular, the estimated selling price forecast is sensitive to changes in significant assumptions, including demand for the Company’s products, customer mix, expected competition, and planned price changes.

The Company’s reserves for chargebacks and rebates totaled $79.2 million at December 31, 2025.

As described in Note 3 to the consolidated financial statements, the Company estimates chargebacks and rebates using the expected value method at the time of sale to customers based on inventory stocking levels, historical chargeback and rebate rates, and current contract pricing.

Auditing the estimates for chargebacks and rebates was complex due to the judgmental nature of the assumptions used.

In particular, for product that remains in the distribution channel at December 31, 2025, management is required to estimate the applicable rates that are utilized to calculate the ending chargebacks and rebate reserves.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over the Company's estimated selling price impacting the Enoxaparin inventory lower of cost or net realizable value.

This included controls over management's assessment of assumptions such as future demand, customer mix, expected competition, and planned price changes.

Our substantive audit procedures included, among others, evaluating the significant assumptions stated above and the accuracy and completeness of the underlying data management used to develop the estimated selling price.

We evaluated adjustments to the estimated selling price for specific considerations, such as demand for the Company’s products, new significant customers, competitors, or planned price changes.

We evaluated the reasonableness of management’s estimated selling price and whether expected changes in demand, competition, customer mix, or planned price changes were appropriate by comparing with the Company’s historical data and market conditions.

We also performed sensitivity analyses over the estimated selling price assumptions and assessed the historical accuracy of management's estimates by performing retrospective reviews over prior periods' estimated selling prices.

We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the chargebacks reserve estimation process.

This included testing controls over management’s review of significant assumptions and inputs used for the chargebacks reserve estimate, including actual sales, historical experience, wholesaler inventory levels, and contract pricing.

To test the reserve for chargebacks, we evaluated the reasonableness of the applicable chargebacks rate by comparing rates at different time periods, including historical and subsequent periods, and performing sensitivity analyses over those rates.

We evaluated subsequent activity to assess whether there was any new information that would require adjustment to the reserve.

To test the reserve for rebates, we assessed the reasonableness of management’s rebate rates assumptions by evaluating the historical trends, developing an independent range of the assumptions, and testing a sample of rebate payments.

We also evaluated subsequent activity to assess whether there was any new information that would require adjustment to the reserve.

/s/ Ernst & Young LLP

1 unchanged sentence

Irvine, California

March 3, 2025

February 26, 2026

AMPHASTAR PHARMACEUTICALS, INC.

13 unchanged sentences

Operating lease right-of-use assets

Investment in unconsolidated affiliate

Goodwill and intangible assets, net

4 unchanged sentences

Accounts payable and accrued liabilities

Accrued payments for BAQSIMI ® (see Note 3)

Income taxes payable

7 unchanged sentences

Total liabilities

Commitments and contingencies

Commitments and contingencies (see Note 17)

Stockholders’ equity:

11 unchanged sentences

Treasury stock

Total stockholders' equity

Total liabilities and stockholders’ equity

15 unchanged sentences

Income from operations

Non-operating income (expenses):

Non-operating expenses:

Interest income

1 unchanged sentence

Other income (expenses), net

Total non-operating income (expenses), net

Total non-operating expenses, net

Income before income taxes

22 unchanged sentences

( 9,998,162 )

Other comprehensive loss

Other comprehensive income

Purchase of treasury stock

5 unchanged sentences

( 11,321,313 )

Other comprehensive income

Other comprehensive loss

Purchase of treasury stock

5 unchanged sentences

( 13,229,433 )

Other comprehensive loss

Other comprehensive income

Purchase of treasury stock

31 unchanged sentences

Cash Flows From Investing Activities:

BAQSIMI ® acquisition (see Note 3)

BAQSIMI ® acquisition

Purchases and construction of property, plant, and equipment

Proceeds from the sale of property, plant and equipment

Purchase of intangible assets

Purchase of investments

18 unchanged sentences

Operating lease right-of-use assets in exchange for operating lease liabilities

Equipment acquired under finance leases

Supplemental Disclosures of Cash Flow Information:

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Amphastar Pharmaceuticals, Inc., a Delaware corporation (together with its subsidiaries, hereinafter referred to as the “Company”) is a bio-pharmaceutical company that focuses primarily on developing, manufacturing, marketing, and selling technically challenging generic and proprietary injectable, inhalation, and intranasal products, including products with high technical barriers to market entry.

Additionally, the Company sells insulin active pharmaceutical ingredient, or API, products.

Most of the Company’s products are used in hospital or urgent care clinical settings and are primarily contracted and distributed through group purchasing organizations and drug wholesalers.

The Company’s insulin API products are sold to other pharmaceutical companies for use in their own products and are being used by the Company in the development of injectable finished pharmaceutical products.

The Company’s over-the-counter inhalation product, Primatene MIST ® , is primarily distributed through drug retailers.

Amphastar Pharmaceuticals, Inc., a Delaware corporation (together with its subsidiaries, hereinafter referred to as the “Company”), is a biopharmaceutical company that focuses on developing, manufacturing, and commercializing technically challenging generic and proprietary injectable, inhalation, and intranasal products, including products with high technical barriers to market entry.

Additionally, the Company sells active pharmaceutical ingredient, or API, products.

Most of the Company’s products are contracted and distributed through group purchasing organizations, drug wholesalers, and drug retailers.

The Company’s insulin API products are sold to other pharmaceutical companies for use in their own products and are being used by the Company in the development of injectable pharmaceutical products.

Summary of Significant Accounting Policies

4 unchanged sentences

The Company’s subsidiaries include:

(1) International Medication Systems, Limited, or IMS, (2) Armstrong Pharmaceuticals, Inc., or Armstrong, (3) Amphastar Nanjing Pharmaceuticals Inc., or ANP, (4) Amphastar France Pharmaceuticals, S.A.S., or AFP, (5) Amphastar UK Ltd., or AUK, (6) International Medication Systems (UK) Limited, or IMS UK, and (7) Amphastar Medication Co., LLC, or Amphastar Medication.

(1) International Medication Systems, Limited, or IMS, (2) Armstrong Pharmaceuticals, Inc., or Armstrong, (3) Amphastar Nanjing Pharmaceuticals Inc., or ANP, (4) Amphastar France Pharmaceuticals, S.A.S., or AFP, (5) Amphastar UK Ltd., or AUK, and (6) International Medication Systems (UK) Limited, or IMS UK.

Investment in Unconsolidated Affiliate

2 unchanged sentences

Investments accounted for using the equity method may be reported on a lag of up to three months if financial statements of the investee are not available in sufficient time for the investor to apply the equity method as of the current reporting date.

The carrying value of equity method investments is reported as “Investment in unconsolidated affiliate” in the accompanying consolidated balance sheets.

The Company’s equity method investments are reported at cost and adjusted each period for the Company’s share of the investee’s earnings or losses and dividends paid, if any.

3 unchanged sentences

The principal accounting estimates include:

fair value of financial instruments, allowance for discounts, provision for chargebacks and rebates, provision for product returns, adjustment of inventory to its net realizable value, impairment of investments, long-lived and intangible assets and goodwill, litigation reserves, stock price volatility for share-based compensation expense, valuation allowances for deferred tax assets, and liabilities for uncertain income tax positions.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

fair value of financial instruments, allowance for credit losses, discounts, chargebacks and rebates, product returns, adjustment of inventory to its net realizable value, impairment of investments, long-lived and intangible assets and goodwill, litigation reserves, stock price volatility for share-based compensation expense, valuation allowances for deferred tax assets, and liabilities for uncertain income tax positions.

Foreign Currency

4 unchanged sentences

These books are remeasured into the functional currency of USD using the current or historical exchange rates.

The resulting currency remeasurement adjustments and other transactional foreign currency exchange gains and losses are reflected in the Company’s accompanying consolidated statements of operations.

The resulting currency remeasurement

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

adjustments and other transactional foreign currency exchange gains and losses are reflected in the Company’s accompanying consolidated statements of operations.

The Company’s French subsidiary, AFP, maintains its books of record in euros.

6 unchanged sentences

The unrealized gains or losses of intercompany foreign currency transactions that are of a long-term investment nature are reported in other accumulated comprehensive income.

The unrealized gains and losses of intercompany foreign currency transactions that are of a long-term investment nature for the years ended December 31, 2024, 2023, and 2022 were a $ 1.9 million loss, a $ 1.1 million gain, and a $ 1.8 million loss, respectively.

The unrealized gains and losses of intercompany foreign currency transactions that are of a long-term investment nature for the years ended December 31, 2025, 2024, and 2023 were a $ 4.0 million gain, a $ 1.9 million loss, and a $ 1.1 million gain, respectively.

Comprehensive Income

The Company’s comprehensive income includes its foreign currency translation gains and losses, changes in pension obligations as well as its share of other comprehensive income from its equity method investments.

The Company’s comprehensive income includes its foreign currency translation gains and losses and changes in pension obligations.

The Company evaluates acquisitions and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets.

9 unchanged sentences

Asset acquisitions may include contingent consideration arrangements that encompass obligations to make future payments to sellers contingent upon the achievement of future financial targets.

Contingent consideration, including assumed contingent considerations, is not recognized until all contingencies are resolved and the consideration is paid or becomes payable (unless contingent considerations meets the definition of a derivative, in which case the amount becomes part of the basis in the asset acquired), at which point the consideration is allocated to the assets acquired based on their relative

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

fair values at the acquisition date, with the exception of non-qualifying assets.

Judgments are used in determining estimates of useful lives of long-lived assets.

Useful life estimates are based on, among other factors, estimates of expected future net cash flows, the assessment of each asset’s life cycle, and the impact of competitive trends on each asset’s life cycle and other factors.

These judgments can materially impact the estimates used to allocate purchase consideration to assets acquired and liabilities assumed, and the resulting timing and amounts charged to or recognized in current and future operating results.

These judgments can materially impact the estimates used to allocate purchase consideration to assets acquired and liabilities assumed, and the resulting timing and amounts

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

charged to or recognized in current and future operating results.

For these and other reasons, actual results may vary significantly from estimated results.

6 unchanged sentences

Research and development costs are charged to expense as incurred and consist of costs incurred to further the Company’s research and development activities.

These include salaries and related employee benefits, costs associated with clinical trials, nonclinical research and development activities, regulatory activities, research-related overhead expenses and fees paid to external service providers.

The Company may produce or purchase inventories prior to or with the expectation of receiving regulatory approval in the near term, based on operational decisions about the most effective use of existing resources.

This inventory is referred to as pre-launch inventory.

It is the Company’s accounting policy that the pre-launch inventory is capitalized if it has a probable future economic benefit at the time it is purchased or manufactured.

If regulatory approval is received and previously expensed pre-launch inventory is sold, such sales may contribute up to a 100% margin to the Company’s operating results.

Pre-launch inventory costs include cost of work in process, materials, and finished drug products.

For the years ended December 31, 2024, 2023, and 2022, the Company did not have material capitalized pre-launch inventory.

These include salaries and related employee benefits, costs associated with clinical trials, nonclinical research and development activities, regulatory activities, license fees, milestone payments upon the achievement of clinical, or regulatory events, materials, supplies, research-related overhead expenses and fees paid to external service providers.

The Company has entered into, and may continue to enter into, license agreements to access and utilize certain technology.

In each case, the Company evaluates if the license agreement results in the acquisition of an asset or a business.

To date, none of the Company's license agreements have been considered an acquisition of a business.

For asset acquisitions, the upfront payments to acquire such licenses, as well as any future milestone payments made before product approval that do not meet the definition of a derivative, are immediately recognized as research and development expense in the statements of operations when paid or become payable, provided there is no alternative future use of rights in other research and development projects.

Financial Instruments

The Company’s accompanying consolidated balance sheets include the following financial instruments:

cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued expenses, short-term borrowings and long-term obligations.

cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued liabilities, short-term borrowings and long-term obligations.

The Company considers the carrying amounts of current assets and liabilities on the consolidated balance sheets to approximate the fair value of these financial instruments due to the short maturity of these items.

2 unchanged sentences

The Company’s interest rate swap contracts exchange the variable interest rates for fixed interest rates.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Cash and Cash Equivalents

Cash and cash equivalents consist of cash, money market accounts, certificates of deposit and highly liquid investments with original maturities of three months or less.

Investments as of December 31, 2024 and 2023 consisted of certificates of deposit and investment grade corporate, agency, and municipal bonds with original maturity dates between three and nineteen months.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Investments as of December 31, 2025 and 2024 consisted of certificates of deposit and investment grade corporate, agency, and municipal bonds with original maturity dates between three and thirty-six months.

Restricted Cash

6 unchanged sentences

Accounts receivable and Allowance for Credit Losses

Accounts receivable generally consists of amounts due from the Company’s customers, which primarily includes pharmaceutical wholesalers and drug retailers.

Accounts receivable is recorded net of discounts, chargebacks, allowances and other adjustments.

The Company evaluates the collectability of accounts receivable based on a combination of factors.

2 unchanged sentences

As of December 31, 2025 and 2024, the Company's allowance for credit losses was $ 3.3 million and $ 3.5 million, respectively.

Inventories consist of currently marketed products and products manufactured under contract.

Inventories are stated using the first-in, first-out method, on a consistent basis.

Inventories consist of currently marketed products.

The Company states inventory at the lower of cost or net realizable value.

Cost is determined in a manner that approximates the first-in, first-out method.

Provisions are made for slow moving, unsellable, or obsolete items.

Net realizable value is determined using the estimated selling price, in the ordinary course of business, less estimated costs to complete and dispose.

This inventory is referred to as pre-launch inventory.

It is the Company’s accounting policy that the pre-launch inventory is capitalized if it has a probable future economic benefit at the time it is purchased or manufactured.

If regulatory approval is received and previously expensed pre-launch inventory is sold, such sales may contribute up to a 100% margin to the Company’s operating results.

Pre-launch inventory costs include cost of work in process, materials, and finished drug products.

For the years ended December 31, 2025, 2024, and 2023, the Company did not have material capitalized pre-launch inventory.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Property, Plant and Equipment

6 unchanged sentences

Lesser of remaining lease term or useful life

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Intangible Assets

Intangible assets with finite lives are amortized using the straight-line method over the period the asset is expected to contribute directly or indirectly to the future cash flows of the Company as follows:

Intangible Assets, net

The evaluation of intangible assets includes assessing the amortization period for which the asset is expected to contribute to future cash flows of the Company.

Intangible assets with finite lives are amortized primarily on a straight-line basis over the period the asset is expected to contribute directly or indirectly to the future cash flows of the Company as follows:

Product rights

16 unchanged sentences

Convertible Debt

The Company accounts for its convertible debt instruments as a single unit of account, a liability, because the Company concluded that the conversion features do not require bifurcation as a derivative under Accounting Standards Codification, or ASC, 815-15, Derivatives and Hedging and the Company did not issue its convertible debt instruments at a substantial premium.

The Company accounts for its convertible debt instruments as a single unit of account, a liability, because the Company

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

concluded that the conversion features do not require bifurcation as a derivative under Accounting Standards Codification, or ASC, 815-15, Derivatives and Hedging and the Company did not issue its convertible debt instruments at a substantial premium.

In accordance with Accounting Standards Update, or ASU, 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) :

1 unchanged sentence

If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20, “ Debt with Conversion and Other Options” for consideration of any beneficial conversion features.

If no beneficial conversion features exist that require separate

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

recognition, convertible debt instruments are accounted for as a single liability measured at its amortized cost as long as no other features require separation and recognition as derivatives.

If no beneficial conversion features exist that require separate recognition, convertible debt instruments are accounted for as a single liability measured at its amortized cost as long as no other features require separation and recognition as derivatives.

Capitalized Software Implementation Costs

The Company capitalizes certain software implementation costs incurred under a cloud computing arrangement that is a service contract.

Costs incurred during the preliminary project phase or planning and research phase are expensed as incurred.

Costs incurred during the application development stage related to the implementation of the hosting arrangement are capitalized and included within other assets on the accompanying consolidated balance sheets.

Capitalized implementation costs are amortized on a straight-line basis over the term of the associated hosting arrangement when ready for its intended use.

Capitalized implementation costs were $ 6.8 million as of December 31, 2025 and are included in other long-term assets in the Company’s consolidated balance sheet.

As of December 31, 2024, the Company did no t have any capitalized implementation costs.

For the years ended December 31, 2025 and 2024, the Company did no t record any amortization expense for capitalized implementation costs.

Impairment of Indefinite-Lived Intangible Asset and Goodwill

16 unchanged sentences

Changes in estimates are recorded in the period identified.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Litigation, Commitments and Contingencies

Litigation, commitments and contingencies are accrued when management, after considering the facts and circumstances of each matter as then known to management, has determined it is probable a liability will be found to have been incurred and the amount of the loss can be reasonably estimated.

Litigation, commitments and contingencies are accrued when management, after considering the facts and circumstances of each matter as then known, has determined it is probable a liability will be found to have been incurred and the amount of the loss can be reasonably estimated.

When only a range of amounts is reasonably estimable and no amount within the range is more likely than another, the low end of the range is recorded.

2 unchanged sentences

Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board, or FASB, issued Accounting Standard Update 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures which is intended to improve reportable segment disclosure requirements, primarily through additional disclosures about significant segment expenses.

The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The amendments should be applied retrospectively to all prior periods presented in the financial statements.

In December 2023, the Financial Accounting Standard Board, or FASB, issued ASU 2023-09, Income taxes (Topic 740):

Improvements to Income Tax Disclosures, which requires entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation table, as well as disclosure of income taxes paid disaggregated by jurisdiction.

The disclosure requirements will be applied prospectively.

The Company adopted this guidance on December 31, 2025 and updated its disclosures to conform to this tax disclosure requirements.

The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements and related disclosures.

In December 2023, the FASB issued Accounting Standard Update 2023-09, Income taxes (Topic 740):

Improvements to Income Tax Disclosures which requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information on income taxes paid by jurisdiction.

The disclosure requirements will be applied on a prospective basis, with the option to apply them retrospectively.

The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the disclosure

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

requirements related to the new standard.

In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting-Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses.

3 unchanged sentences

The standard updates are to be applied prospectively with the option for retrospective application.

The Company is currently evaluating the impact of disclosure requirements related to the new standard on its financial statements.

BAQSIMI ® Acquisition

On June 30, 2023, the Company completed its acquisition of BAQSIMI ® glucagon nasal powder, or BAQSIMI ® pursuant to an asset purchase agreement, or the Purchase Agreement, with Eli Lilly & Company, or Lilly, dated April 21, 2023.

In connection with the closing of the transaction, or the Closing, the Company paid Lilly $ 500.0 million in cash.

In addition, the Company paid to Lilly a $ 125.0 million guaranteed payment on the first anniversary of the Closing.

The Company also paid Lilly $ 4.0 million upon the assignment of certain contracts to the Company.

The Company may also be required to pay additional contingent consideration of up to $ 450.0 million to Lilly based on the achievement of certain milestones.

The Purchase Agreement provides that the contingent consideration that may become payable to Lilly would be achieved as follows:

(i) a one-time payment of $ 100.0 million if the Company achieves annual net sales of $ 175.0 million or more of BAQSIMI ® and certain related products, or the Milestone Products, in any one contract year during the first five years after the Closing;

(ii) up to two payments of $ 100.0 million each if the Company achieves annual net sales of $ 200.0 million or more of Milestone Products in any one contract year during the first five years after the Closing;

and (iii) a one-time payment of $ 150.0 million if the Company achieves total cumulative net sales of $ 950.0 million or more of the Milestone Products for the first five years after the Closing.

In addition, the Company assumed certain contingent consideration of Lilly, which would require the Company to pay up to an aggregate of $ 125.0 million based on the achievement of annual net sales milestones of $ 350.0 million, $ 400.0 million and $ 600.0 million.

Through December 31, 2024, the Company has not triggered any milestones and therefore no amounts have been recognized or paid.

The Company has accounted for the BAQSIMI ® acquisition as an asset acquisition in accordance with ASC 805, Business Combination s, as substantially all the fair value of the assets acquired is concentrated in a single identifiable asset, BAQSIMI ® product rights.

The BAQSIMI ® product rights include the license for the BAQSIMI ® intellectual property, regulatory documentation, marketing authorizations, and domain names, which are considered a single asset as they are inextricably linked.

As an asset acquisition, the cost to acquire the group of assets, including transaction costs, is allocated to the individual assets acquired based on their relative fair values, with the exception of non-qualifying assets.

The relative fair values of identifiable assets from the acquisition of BAQSIMI ® are based on estimates of fair value using assumptions that the Company believes are reasonable.

The following table summarizes the aggregate amount paid for the assets acquired by the Company in connection with the acquisition of BAQSIMI ® :

(in thousands)

Fair value of deferred cash payments

Transaction costs

Total purchase price

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The total purchase price was allocated to the acquired assets based on their relative fair values, as follows:

(in thousands)

Property, plant, and equipment

BAQSIMI ® product rights

Deferred tax assets

Total assets acquired

The Company is amortizing the acquired intangible asset on a straight-line basis over its estimated useful life of 24 years (See Note 10 for additional information).

The fair value of the deferred cash payment was accreted to the full $ 129.0 million amount over a one-year period through interest expense.

During the years ended December 31, 2024 and 2023, $ 3.6 million and $ 3.7 million of interest expense was recognized related to accretion of the deferred cash payments, respectively.

The Company made the $129.0 million deferred cash payment in June 2024.

Manufacturing Services Agreement

In connection with the Closing, the Company entered into a Manufacturing Services Agreement, or the MSA, with Lilly, pursuant to which Lilly agreed, for a period of time not to exceed 18 months , to provide certain manufacturing, packaging, labeling and supply services for BAQSIMI ® directly or through third-party contractors to the Company in connection with its operation of the development, manufacture, and commercialization of BAQSIMI ® .

Upon termination of the MSA, the Company was obligated to purchase all API, components, and finished goods on hand at prices agreed upon in the MSA.

In December 2024, as the MSA expired, the Company entered into a commercial supply agreement with a third party contract manufacturing organization, or CMO, pursuant to which the CMO will provide manufacturing services for BAQSIMI ® .

Transition Services Agreement

In connection with the Closing, the Company entered into a Transition Services Agreement, or the TSA, with Lilly pursuant to which Lilly agreed, for a period of time not to exceed 18 months , to provide certain services to the Company to support the transition of BAQSIMI ® operations to the Company, including with respect to the conduct of certain clinical, regulatory, medical affairs, and commercial sales channel activities.

Throughout 2024, the Company assumed distribution responsibilities, from Lilly, to its customers in the United States, and certain other countries.

As a result, the Company has recorded the sales and related cost of BAQSIMI ® to its customers in these countries as product revenue, net and cost of revenues, respectively.

The assumption of distribution of BAQSIMI ® for the final two countries occurred on January 1, 2025.

Credit Agreement

On June 30, 2023, in conjunction with the Company’s acquisition of BAQSIMI ® , the Company entered into a $ 700.0 million syndicated credit agreement, or the Credit Agreement, by and among the Company, certain subsidiaries of the Company, as guarantors, certain lenders, and Wells Fargo Bank, National Association, or Wells Fargo, as Administrative Agent (in such capacity, Agent), Swing line Lender and L/C Issuer.

The Credit Agreement provides for a senior secured term loan, or the Wells Fargo Term Loan, in an aggregate principal amount of $ 500.0 million.

The Wells Fargo Term Loan matures on June 30, 2028.

In 2023, the Company repaid $ 250.0 million of the Wells Fargo Term Loan.

Proceeds from the Term Loan were used to finance the acquisition of

The Company is currently evaluating the impact of disclosure requirements related to the new standard on the Company’s consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-04, Debt– Debt with Conversion and Other Options, (subtopic 470-20).

The update is intended to improve the relevance and consistency in application of the induced conversion guidance in Subtopic 470-20 for (a) convertible debt instruments with cash conversion features and (b) debt instruments that are not currently convertible.

ASU 2024-04 is effective for annual reporting periods beginning after December 15, 2025.

The Company is currently evaluating the impact of the new standard on the Company’s consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other-Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software.

The ASU amends the existing standard to remove all references to prescriptive and sequential software development project stages.

Under this guidance, eligible software development costs will begin to be capitalized when management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended.

In evaluating whether it is probable the project will be completed;

management is required to consider whether there is significant uncertainty associated with the development activities of the software.

This guidance is effective for all annual periods beginning after December 15, 2027, and for interim periods within those annual reporting periods, with early adoption permitted.

The guidance may be applied on a prospective basis, a modified basis for in-process projects, or a retrospective basis.

The Company is currently evaluating the impact of the new standard on the Company’s consolidated financial statements and related disclosures.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Credit Agreement also provides a senior secured revolving credit facility, or the Revolving Credit Facility, in an aggregate principal amount of $ 200.0 million.

The Revolving Credit Facility matures on June 30, 2028.

As of December 31, 2024, the Company had no borrowings outstanding under the Revolving Credit Facility.

Revenue Recognition

Product revenues, net

In accordance with ASC 606 Revenue from Contracts with Customers , revenue is recognized at the time that the Company’s customers obtain control of the promised goods and we satisfy our performance obligations, which is generally at the time of product delivery to the Company’s customers.

In some cases, our performance obligation is satisfied, and revenue is recognized at the time of shipment when stipulated by the terms of the sale agreements.

The consideration to which the Company expects to be entitled includes a stated list price, less various forms of variable consideration including provision for chargebacks and rebates, accrual for product returns, prompt pay discounts, distributor fees, patient co-pay assistance, and other related deductions.

In accordance with ASC 606 Revenue from Contracts with Customers , revenue is recognized at the time that the Company’s customers obtain control of the promised goods and we satisfy the Company’s performance obligations, which is generally at the time of product delivery to the Company’s customers.

In some cases, the Company’s performance obligation is satisfied and revenue is recognized at the time of shipment when stipulated by the terms of the sale agreements.

The consideration to which the Company expects to be entitled includes a stated list price, less various forms of variable consideration including chargebacks and rebates, product returns, prompt pay discounts, distributor fees, patient co-pay assistance, and other related deductions.

These deductions to product sales are referred to as gross-to-net deductions and are estimated and recorded in the period in which the related product sales occur.

5 unchanged sentences

Shipping and handling activities are considered to be fulfillment activities rather than a separate performance obligation and are recorded within selling, distribution and marketing expenses in the accompanying consolidated statements of operations.

Provision for Chargebacks and Rebates:

The provision for chargebacks and rebates is a significant estimate used in the recognition of revenue.

Chargebacks and Rebates:

Wholesaler chargebacks relate to sales terms under which the Company agrees to reimburse wholesalers for differences between the gross sales prices at which the Company sells its products to wholesalers and the actual prices of such products that wholesalers resell under the Company’s various contractual arrangements with third parties such as hospitals, group purchasing organizations and pharmacy benefit managers in the United States.

1 unchanged sentence

The Company estimates chargebacks and rebates using the expected value method at the time of sale to customers based on inventory stocking levels, historical chargeback and rebate rates, and current contract pricing.

The provision for chargebacks and rebates is reflected as a component of product revenues, net.

The following table is an analysis of the chargeback and rebate provision:

Chargebacks and rebates are reflected as a component of product revenues, net.

The following table is an analysis of the chargeback and rebate activities and ending balances:

Year Ended December 31,

5 unchanged sentences

Changes in the chargeback provision from period to period are primarily dependent on the Company’s sales to its wholesalers, the level of inventory held by wholesalers, and the wholesalers’ customer mix.

Changes in the rebate

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

provision from period to period are primarily dependent on retailers’ and other indirect customers’ purchases.

Changes in the rebate provision from period to period are primarily dependent on retailers’ and other indirect customers’ purchases.

The approach that the Company uses to estimate chargebacks and rebates has been consistently applied for all periods presented.

Variations in estimates have been historically small.

The Company continually monitors the provision for chargebacks and rebates and makes adjustments when it believes that the actual chargebacks and rebates may differ from the estimates.

The Company continually monitors chargebacks and rebates and makes adjustments when it believes that the actual chargebacks and rebates may differ from the estimates.

Accounts receivable and/or accounts payable and accrued liabilities are reduced and/or increased by the chargebacks and rebate amounts depending on whether the Company has the right to offset with the customer.

The provision for chargebacks and rebates is included in the following balance sheet accounts:

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Chargebacks and rebates are included in the following balance sheet accounts:

(in thousands)

28 unchanged sentences

inventory management, chargeback administration, and service level commitments.

The Company estimates the amount of distribution services fees to be paid and adjusts the transaction

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

price with the amount of such estimate at the time of sale to the customer.

The Company estimates the amount of distribution services fees to be paid and adjusts the transaction price with the amount of such estimate at the time of sale to the customer.

An accrued liability is recorded for unpaid distribution service fees.

1 unchanged sentence

Co-pay assistance represents financial assistance to qualified patients, assisting them with prescription drug co-payments required by insurance.

The accrual for co-pay is based on an estimate of claims and the cost per claim that the Company expects to receive associated with inventory that exists in the distribution channel at period end.

The accrued liability for co-pay is based on an estimate of claims and the cost per claim that the Company expects to receive associated with inventory that exists in the distribution channel at period end.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Revenues derived from contract manufacturing services are recognized when third-party products are shipped to customers.

6 unchanged sentences

Revenues related to BAQSIMI ® sales made by Lilly under the TSA during the years ended December 31, 2024, and 2023, were recorded on a net basis, similar to a royalty arrangement.

Income per Share

Net Income per Share

Basic net income per share is calculated based upon the weighted-average number of shares outstanding during the period.

2 unchanged sentences

The 2029 Convertible Notes had no impact on the computation of diluted net income per share as the average stock price during the period was less than the conversion price.

For the year ended December 31, 2023, the Company did not have any options that were excluded in the computation of diluted net income per share because the effect would be anti-dilutive.

For the year ended December 31, 2024, options to purchase 618,973 shares of stock with a weighted-average exercise price of $ 46.63 per share were excluded in the computation of diluted net income per share because their effect would be anti-dilutive.

The 2029 Convertible Notes had no impact on the computation of diluted net income per share as the average stock price during the period was less than the conversion price.

For the year ended December 31, 2022, options to purchase 704,483 shares of stock with a weighted-average exercise price of $ 34.79 per share were excluded from the computation of diluted net income per share attributable to Amphastar Pharmaceuticals, Inc.

stockholders because their effect would be anti-dilutive.

For the year ended December 31, 2023, the Company did no t have any options that were excluded in the computation of diluted net income per share because the effect would be anti-dilutive.

The 2029 Convertible Notes had no impact on the computation of diluted net income per share as the average stock price during the period was less than the conversion price.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table provides the calculation of basic and diluted net income per share attributable to Amphastar Pharmaceuticals, Inc.

stockholders for each of the periods presented:

The following table provides the calculation of basic and diluted net income per share for each of the periods presented:

Year Ended December 31,

10 unchanged sentences

The Company’s Chief Executive Officer, is the Chief Operating Decision Maker, or CODM.

The Company has previously disclosed two reporting segments:

Finished pharmaceutical products and APIs.;

however, the BAQSIMI ® acquisition that was completed in 2023 as well as the decline in API revenues resulted in a change to information provided to and used regularly by the CODM to assess the Company’s performance.

The CODM currently uses consolidated information to assess the Company’s performance.

As a result, in the fourth quarter of 2024, the Company combined both of its reportable segments into one segment, pharmaceutical products.

The CODM uses consolidated information to assess the Company’s performance.

As a result, the Company has one reportable segment, pharmaceutical products.

The measure of segment assets is reported on the consolidated balance sheets as total assets.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Selected segment financial information is presented below:

The Company has recast the corresponding items of segment information for the periods presented:

Year Ended December 31,

13 unchanged sentences

Equity in losses of unconsolidated affiliate

(1) Other segment items includes maintenance and repairs expense, travel expense, professional services expense, legal expense, rent expense, manufacturing amounts capitalized on the balance sheet, certain overhead expenses, miscellaneous expenses, and foreign currency exchange gains and losses .

(1) Other segment items primarily include maintenance and repairs expense, travel expense, professional services expense, legal expense, rent expense, product costs, certain overhead expenses, manufacturing cost absorption and variances, inventory provisions, miscellaneous expenses, and foreign currency exchange gains and losses .

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Net revenues by product are presented below:

7 unchanged sentences

Total net revenues

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Net revenues and carrying values of long-lived assets, which includes property, plant and equipment, as well as finance and operating lease right-of-use assets, by geographic regions, based on where the Company conducts its operations, are as follows:

Net revenues and carrying values of long-lived assets, which includes property, plant and equipment, as well as finance and operating lease right-of-use assets, by geographic region, based on where the Company conducts its operations, are as follows:

Long-Lived Assets

2 unchanged sentences

United States

(1) Includes revenue from the sales of BAQSIMI ® .

Customer and Supplier Concentration

Customer Concentrations

The following table provides accounts receivable and net revenue information for the Company’s four major customers:

The following table provides accounts receivable and net revenue information for the Company’s three major customers:

% of Total Accounts

1 unchanged sentence

Cardinal Health

(1) Net revenues from BAQSIMI ® sales made under the TSA agreement.

Supplier Concentrations

The Company depends on suppliers for raw materials, APIs, and other components that are subject to stringent FDA requirements.

The Company depends on suppliers for raw materials, APIs, and other components and depends on a contract manufacturing organization, or CMO, for the supply of BAQSIMI ® that are all subject to stringent FDA requirements.

Some of these materials may only be available from one or a limited number of sources.

1 unchanged sentence

Furthermore, a significant portion of raw materials may only be available from foreign sources.

If the Company is unable to secure, on a timely basis, sufficient quantities of the materials it depends on to manufacture and market its products, it could have a materially adverse effect on the Company’s business, financial condition, and results of operations.

If the Company is unable to secure, on a timely basis, sufficient quantities of the materials it depends on to manufacture and market its products, or if the Company’s CMO is found to be non-compliant with the FDA’s or other regulatory agencies quality

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

system regulation, cGMP, or other applicable laws or regulations, it could have a materially adverse effect on the Company’s business, financial condition, and results of operations.

Fair Value Measurements

2 unchanged sentences

● Level 1 – Inputs to measure fair value are based on quoted prices (unadjusted) in active markets on identical assets or liabilities;

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

● Level 2 – Inputs to measure fair value are based on the following:

3 unchanged sentences

As of December 31, 2025 and 2024, cash equivalents include money market accounts and corporate and municipal bonds with original maturities of less than three months.

Investments consist of certificates of deposit as well as investment-grade corporate, agency and municipal bonds with original maturity dates between three and nineteen months.

Investments consist of certificates of deposit as well as investment-grade corporate, agency and municipal bonds with original maturity dates between three and thirty-six months.

The certificates of deposit are carried at amortized cost in the Company’s consolidated balance sheets, which approximates their fair value determined based on Level 2 inputs.

17 unchanged sentences

Total assets and liabilities measured at fair value as of December 31, 2024

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company does not hold any Level 3 instruments that are measured at fair value on a recurring basis.

3 unchanged sentences

The Company’s deferred compensation plan assets are valued using the cash surrender value of the life insurance policies and are not included in the table above.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following is a summary of the Company’s investments that are classified as held-to-maturity:

1 unchanged sentence

Corporate and agency bonds (due within 1 year)

Corporate and agency bonds (due within 1 to 3 years)

Municipal bonds (due within 1 year)

10 unchanged sentences

Expected credit losses on held-to-maturity investments were not material to the consolidated financial statements.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Goodwill and Intangible Assets

10 unchanged sentences

As of December 31, 2025

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Weighted-Average

9 unchanged sentences

Intangible assets with indefinite lives have an indeterminable average life.

In 2023, the Company recorded an impairment related to its IMS (UK) international product rights in the amount of $ 2.7 million.

The Company recorded the impairment in the cost of revenues in its consolidated statement of operations for the year ended December 31, 2023.

The changes in the carrying amounts of goodwill are as follows:

3 unchanged sentences

Ending balance

Primatene ® Trademark

In January 2009, the Company acquired the exclusive rights to the trademark, domain name, website and domestic marketing, distribution and selling rights related to Primatene MIST ® , an over-the-counter bronchodilator product, recorded at the allocated fair value of $ 29.2 million, which is its carrying value as of December 31, 2024.

The trademark was determined to have an indefinite life.

In determining its indefinite life, the Company considered the following:

the expected use of the intangible;

the longevity of the brand;

the legal, regulatory and contractual provisions that affect their maximum useful life;

the Company’s ability to renew or extend the asset’s legal or contractual life without substantial costs;

effects of the regulatory environment;

expected changes in distribution channels;

maintenance expenditures required to obtain the expected future cash flows from the asset;

and considerations for obsolescence, demand, competition and other economic factors.

BAQSIMI ® Product Rights

As discussed in Note 3, in June 2023, the Company acquired the BAQSIMI ® product rights.

The BAQSIMI ® product rights intangible asset is amortized over its estimated useful life of 24 years .

In determining the BAQSIMI ® product rights’ useful life, the Company considered the following:

the expected use of the intangible asset;

the longevity of the brand;

the legal, regulatory and contractual provisions that affect their maximum useful life;

the Company’s ability to renew or extend the asset’s legal or contractual life without substantial costs;

effects of the regulatory environment;

Included in cost of revenues for the years ended December 31, 2025, 2024, and 2023 is product rights amortization expense of $ 25.0 million, $ 24.7 million, and $ 15.5 million, respectively.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

expected changes in distribution channels;

maintenance expenditures required to obtain the expected future cash flows from the asset;

and considerations for obsolescence, demand, competition and other economic factors.

Included in cost of revenues for the years ended December 31, 2024, 2023 and 2022 is product rights amortization expense of $ 24.7 million, $ 15.5 million, and $ 0.9 million, respectively.

As of December 31, 2025, the expected amortization expense for all amortizable intangible assets during the next five fiscal years ending December 31 and thereafter is as follows:

12 unchanged sentences

For the year ended December 31, 2024, these charges included $ 7.4 million in the cost of revenues to adjust the Company’s enoxaparin inventory and related firm purchase commitments to their net realizable value.

Additionally, as a result of amending the MannKind RHI Supply Agreement in December 2023, the Company booked a $ 3.6 million adjustment to reduce RHI inventory to its net realizable value.

For the year ended December 31, 2022, the charge included $ 14.9 million in the cost of revenues to adjust the Company’s enoxaparin inventory and related firm purchase commitments to their net realizable value.

For the year ended December 31, 2023, these charges included $ 9.1 million in the cost of revenues to adjust the Company’s enoxaparin inventory and related firm purchase commitments to their net realizable value.

AMPHASTAR PHARMACEUTICALS, INC.

19 unchanged sentences

Accrued loss on firm purchase commitments

Accrued litigation and settlements

Other accrued liabilities

9 unchanged sentences

Wells Fargo Term Loan due June 2028

Mortgage Loans

Mortgage payable with East West Bank paid off June 2024

Other Loans and Payment Obligations

5 unchanged sentences

Equipment under Finance Leases

Less current portion of long-term debt

current portion of long-term debt

loan issuance costs

7 unchanged sentences

The fair value of the 2029 Convertible Notes was approximately $ 319.1 million as of December 31, 2025 based on Level 2 inputs.

For the years ended December 31, 2025, 2024, and 2023, the total interest expense related to the 2029 Convertible Notes was $ 8.9 million, $ 8.9 million, and $ 2.6 million, with coupon interest expense of $ 6.9 million, $ 6.9 million, and $ 2.0 million, and the amortization of debt issuance cost of $ 2.0 million, $ 2.0 million, and $ 0.6 million, respectively.

The 2029 Convertible Notes are general senior, unsecured obligations and bear an interest rate of 2.0 % per year.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2024 and 2023, the total interest expense related to the 2029 Convertible Notes was $ 8.9 million and $ 2.6 million, with coupon interest expense of $ 6.9 million and $ 2.0 million, and the amortization of debt issuance cost of $ 2.0 million and $ 0.6 million, respectively.

The 2029 Convertible Notes are general senior, unsecured obligations and bear an interest rate of 2.0 % per year.

The 2029 Convertible Notes were issued pursuant to an indenture, dated September 15, 2023, or the Indenture, between the Company and U.S.

2029 Convertible Notes were issued pursuant to an indenture, dated September 15, 2023, or the Indenture, between the Company and U.S.

Bank Trust Company, National Association, as trustee.

11 unchanged sentences

The Company may redeem the 2029 Convertible Notes, at its option, in whole or in part (subject to certain limitations), on or after September 20, 2026 and prior to the 41 st scheduled trading day preceding the maturity date, if the last reported sale price of the Company’s common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on and including the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100 % of the principal amount of the 2029 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The initial conversion rate is 15.8821 shares of the Company’s common stock per $ 1,000 principal amount of the 2029 Convertible Notes, which represents an initial conversion price of approximately $ 62.96 per share of common stock.

1 unchanged sentence

The conversion rate is subject to adjustment under certain circumstances in accordance with the terms of the Indenture.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

If a fundamental change, as defined in the Indenture, occurs at any time prior to the maturity date, then, subject to certain conditions, holders of the 2029 Convertible Notes may require the Company to repurchase for cash all or any portion of their 2029 Convertible Notes at a repurchase price equal to 100 % of the principal amount of the 2029 Convertible Notes to be repurchased, plus any accrued and unpaid interest.

12 unchanged sentences

The Credit Agreement also provides for a $ 200.0 million Revolving Credit Facility and bears the same interest rate as the Wells Fargo Term Loan.

In conjunction with the Credit Agreement, the Company entered into an interest rate swap agreement with Wells Fargo, with a notional amount of $ 250.0 million to exchange the variable rate on the Wells Fargo Term Loan for a fixed rate of 4.04 %.

The interest swap agreement had a fair value of $ 0.2 million liability as of December 31, 2024.

For lenders that were part of the previous credit agreement with Capital One N.A.

as well as the new Credit Agreement, the transaction was accounted for as a modification under ASC 470-50, Debt Modifications and Extinguishments , based on a comparison of the present value of the cash flows for each lender under the terms of the debt immediately before and after the transaction, which resulted in a change of less than 10%.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In conjunction with the Credit Agreement, the Company entered into an interest rate swap contract with Wells Fargo, with a notional amount of $ 250.0 million to exchange the variable rate on the Wells Fargo Term Loan for a fixed rate of 4.04 %.

The interest swap contract liability had a fair value of $ 4.6 million as of December 31, 2025.

The Company incurred approximately $ 14.3 million in issuance costs in connection with the Credit Agreement, of which $ 3.0 million represented debt modification costs and were charged to interest expense in the Company’s consolidated statement of operations for year ended December 31, 2023.

1 unchanged sentence

Unamortized debt issuance costs related to the Credit Agreement as of December 31, 2025 and 2024 were $ 4.3 million and $ 6.0 million, respectively, which are being amortized over the term of the Credit Agreement using the effective interest rate method.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As a result of the $ 250.0 million repayment of the principal balance of the Wells Fargo Term Loan, approximately $ 3.8 million of unamortized debt issuance costs were written off during the year ended December 31, 2023.

Mortgage Loans

Mortgage Payable with East West Bank — Paid off June 2024

In May 2017, the Company entered into a mortgage term loan with East West Bank in the principal amount of $ 9.0 million, which would have matured in June 2027.

The loan was payable in monthly installments with a final balloon payment of $ 7.4 million plus interest.

The loan was secured by one of the buildings at the Company’s Rancho Cucamonga, California, headquarters complex and two buildings at the Company’s Chino, California, facility.

The loan had a variable interest rate at the one-month SOFR rate plus 2.6 %.

The Company entered into a fixed interest rate swap contract on this loan to exchange the variable interest rate for a fixed interest rate of 4.79 % until June 2024.

In June 2024, the Company repaid all outstanding amounts due under this loan.

Line of Credit Facilities

11 unchanged sentences

The credit agreement expires in November 2033.

As of December 31, 2024, the Company borrowed approximately $ 18.4 million under the credit agreement.

The loan bears interest at the prime rate as published by The People’s Bank of China minus 0.2 %.

1 unchanged sentence

As of December 31, 2025, the Company had $ 24.6 million of principal outstanding under this loan, which is recorded net of loan issuance costs of $ 1.3 million.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Interest Rate Swap Contract

1 unchanged sentence

For the Wells Fargo Term Loan, the Company has entered into a fixed interest rate swap contract to exchange the variable interest rates for fixed interest rates.

The interest rate swap contract is recorded at fair value in the other assets line in the consolidated balance sheets.

Changes in the fair values of interest rate swaps were $ 5.0 million and $ 5.9 million for the years ended December 31, 2024 and 2023, respectively.

The interest rate swap contract is recorded at fair value in the other long-term liabilities line in the consolidated balance sheets.

Changes in the fair values of interest rate swaps were $ 4.3 million, $ 5.0 million, and $ 5.9 million for the years ended December 31, 2025, 2024, and 2023, respectively.

At December 31, 2025 and 2024, the Company was in compliance with all of its debt covenants.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Long-Term Debt Maturities

7 unchanged sentences

Total income before income taxes

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company’s provision for income taxes consisted of the following:

6 unchanged sentences

Total provision for income taxes

For tax years beginning after December 31, 2021, certain research and development costs are required to be capitalized and amortized over a five or fifteen-year period under the Tax Cuts and Jobs Act of 2017.

The Company has reviewed and incorporated this change, which increases the current U.S.

federal and state tax expense and cash taxes to be paid for the tax year ending December 31, 2024.

A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:

The lower federal current provision in 2025 reflects the impact of a tax deduction for certain previously deferred capitalized research and development expenditures under the One Big Beautiful Bill Act, or the OBBB Act.

For the year ended December 31, 2025, the Company adopted ASU 2023-09 on a prospective basis.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A reconciliation of the US federal statutory income tax rate of 21% to the Company’s effective tax rate after the adoption of ASU 2023-09 is as follows:

Year Ended December 31,

(in thousands)

US federal statutory tax rate

State and local income taxes, net of federal income tax effect*

Foreign tax effects

Effect of cross-border tax laws

Research and development tax credits

Nontaxable or nondeductible items

Executive compensation

Changes in unrecognized tax benefits

Other adjustments

Effective tax rate

* State taxes in California made up the majority (greater than 50%) of the tax effect in this category.

A reconciliation of the US federal statutory income tax rate of 21% to the Company’s effective tax rate before the adoption of ASU 2023-09 is as follows:

Year Ended December 31,

Statutory federal income tax

5 unchanged sentences

Executive compensation

Employee-related expenses

Intercompany transfer of assets other than inventory

Effective tax rate

The Company’s effective tax rate for 2024 decreased in comparison to 2023 primarily due to excess tax benefit from share-based compensation and lower state income tax expense.

Deferred Tax Assets and Liabilities

Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, tax credit carryforwards, and the tax effects of net operating loss carryforwards.

The Company’s effective tax rate for 2025 increased in comparison to 2024 primarily due to lower excess tax benefit from share-based compensation.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Income Taxes Paid

The following table presents income taxes paid (net of refunds received) for the year ended December 31, 2025:

Year Ended December 31,

(in thousands)

State & Local

Other state & local jurisdictions

Other foreign jurisdictions

Total Income Taxes Paid

Deferred Tax Assets and Liabilities

The significant components of the Company’s deferred tax assets and liabilities are as follows:

18 unchanged sentences

Net deferred tax assets

Tax Law Updates

On July 4, 2025, the OBBB Act, was enacted into law.

The OBBB Act includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

framework and the restoration of favorable tax treatment for certain business provisions.

The OBBB Act did not result in any material adjustments to the Company’s total income tax provision for the year ended December 31, 2025 and the Company’s deferred tax balances were adjusted to reflect impacts of the OBBB Act enactment.

Net Operating Loss Carryforwards and Tax Credits

1 unchanged sentence

federal or state net operating loss carryforwards, or NOL carryforwards.

The Company had France and United Kingdom foreign NOL carryforwards of approximately $ 83.6 million and $ 2.8 million, respectively.

The France and United Kingdom NOL carryforwards can be used annually with certain limitations and have an indefinite carryforward.

The Company had China, France and United Kingdom foreign NOL carryforwards of approximately $ 0.8 million, $ 91.9 million, and $ 2.9 million, respectively.

The China NOL has a 5-year carryforward period and the France and United Kingdom NOLs have indefinite carryforward periods.

At December 31, 2025, the Company had California research and development tax credit carryforwards of approximately $ 18.8 million.

7 unchanged sentences

As of December 31, 2025 and 2024, the Company had a full valuation allowance against the net deferred tax assets of AFP, which totaled $ 22.4 million and $ 20.7 million, respectively, and a full valuation allowance against the net deferred tax assets of its UK subsidiaries of immaterial amounts.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company also records a valuation allowance on net deferred income tax assets in states where it files separately and will continue to do so until sufficient taxable income is generated to realize these state deferred income tax assets.

Undistributed Earnings from Foreign Operations

As of December 31, 2024 and 2023, deferred income taxes have not been provided for any undistributed earnings from foreign operations.

The foreign subsidiaries have significant accumulated losses, and as such there are no earnings in which to provide taxes.

It is the Company’s plan not to repatriate future foreign earnings to the U.S.

and indefinitely reinvest such earnings in the foreign jurisdiction.

Uncertain Income Tax Positions

2 unchanged sentences

Balance at the beginning of the year

Deductions based on tax positions related to prior year

Additions based on tax positions related to prior years

Additions based on tax positions related to the current year

8 unchanged sentences

As of December 31, 2025, the Company is under U.S.

federal examination for the 2022 tax year and in California for the 2019-2021 tax years.

federal examination for the

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2022 tax year, California for the 2019-2021 tax years, and New York for the 2023 tax year.

The Company does not have a tax examination in progress for Massachusetts, other states, or foreign jurisdictions.

3 unchanged sentences

the Amended and Restated 2015 Equity Incentive Plan, or the Amended 2015 Plan, and the 2014 Employee Stock Purchase Plan or ESPP.

Prior to the adoption of these plans, the Company granted options pursuant to the Amended and Restated 2005 Equity Incentive Award Plan.

Upon termination of the predecessor plans, the shares available for grant at the time of termination, and shares subsequently returned to the plans upon forfeiture or option termination, were transferred to the successor plan in effect at the time of share return.

The Company issues new shares of common stock upon exercise of stock options, vesting of restricted stock units, or RSU, and settlement of ESPP, with the exception of the awards granted to employees at AFP, which are settled through re-issuance of the Company’s treasury shares.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Amended and Restated 2015 Equity Incentive Plan

8 unchanged sentences

As of December 31, 2025, the Company reserved an aggregate of 6,625,746 shares of common stock for future issuance under the Amended 2015 Plan.

Amended and Restated 2005 Equity Incentive Award Plan

The Amended and Restated 2005 Equity Incentive Award Plan, or 2005 Plan, provided for the grant of incentive stock options, or ISOs, nonqualified stock options, or NQSOs, restricted stock awards, restricted stock unit awards, stock appreciation rights, or SARs, dividend equivalents and stock payments to the Company’s employees, members of the Board of Directors and consultants.

Stock options under the 2005 Plan were granted with a term of up to ten years and at prices no less than the fair market value of the Company’s common stock on the date of grant.

To date, stock options granted to existing employees generally vest over three to five years and stock options granted to new employees vest over four years .

Stock options granted to Board of Directors and consultants generally vested over one year .

2014 Employee Stock Purchase Plan

5 unchanged sentences

An offering may be terminated under certain circumstances.

The price at which the stock is purchased is equal to 85 % of the lower of the fair market value of the common stock at the beginning of an offering period or on the date of purchase.

As of December 31, 2024, the Company has issued 1,289,452 shares of common stock under the ESPP and 710,548 shares of its common stock remains available for issuance under the ESPP.

The price at which

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the stock is purchased is equal to 85 % of the lower of the fair market value of the common stock at the beginning of an offering period or on the date of purchase.

As of December 31, 2025, the Company has issued 1,443,046 shares of common stock under the ESPP and 556,954 shares of its common stock remains available for issuance under the ESPP.

For the years ended December 31, 2025, 2024, and 2023, the Company recorded ESPP expense of $ 1.2 million, $ 1.2 million, and $ 1.1 million, respectively.

11 unchanged sentences

The fair value of RSUs is estimated at the grant date using the Company’s common share price.

The Company records share-based compensation expense net of expected forfeitures.

Compensation cost for all share-based payments granted with service-based graded vesting schedules is recognized using the straight-line method over the requisite service period.

Options issued under the Company’s Amended 2015 Plan, Original 2015 Plan, and 2005 Plan are granted at exercise prices equal to or greater than the fair value of the underlying common shares on the date of grant and vest based on continuous service.

Options issued under the Company’s Amended 2015 Plan, and Original 2015 Plan are granted at exercise prices equal to or greater than the fair value of the underlying common shares on the date of grant and vest based on continuous service.

There have been no awards with performance conditions and no awards with market conditions.

The options have a contractual term of five to ten years and generally vest over a three - to five -year period.

The options have a contractual term of five to ten years and generally vest over a one - to five -year period.

The Black-Scholes option pricing model has various inputs such as the common share price on the date of grant, exercise price, the risk-free interest rate, volatility, expected term and dividend yield, all of which are estimates.

4 unchanged sentences

For options and ESPP awards granted, the fair value for its underlying common stock is determined using the closing price on the date of grant as reported on the Nasdaq Global Select Market, or Nasdaq, with consideration of whether there is material nonpublic information that could impact that estimated fair value when it is released.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

● Expected Volatility.

2 unchanged sentences

The expected term represents the period of time in which the options granted are expected to be outstanding.

The Company estimates the expected term of options with consideration of

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

vesting date, contractual term, and historical experience for exercise and post-vesting employment or contractual termination behavior after its common stock has been publicly traded.

The expected term of “plain vanilla” options is estimated (using the simplified method as outlined in SAB Topic 14 due to a lack of sufficient historical exercise data) based on the midpoint between the vesting date and the end of the contractual term under the simplified method permitted by the SEC implementation guidance.

The Company estimates the expected term of options with consideration of vesting date, contractual term, and historical experience for exercise and post-vesting employment or contractual termination behavior after its common stock has been publicly traded.

The expected term of “plain vanilla” options is estimated (using the simplified method as outlined in SAB Topic 14 because historical exercise data does not provide a reasonable basis upon which to estimate the expected term) based on the midpoint between the vesting date and the end of the contractual term under the simplified method permitted by the SEC implementation guidance.

● Risk- Free Rate.

6 unchanged sentences

Forfeiture rates are separately estimated for its (1) directors and officers, (2) management personnel and (3) other employees.

Share-based compensation is recorded net of expected forfeitures.

The Company periodically assesses the forfeiture rate and the amount of expense recognized based on estimated historical forfeitures as compared to actual forfeitures.

7 unchanged sentences

Dividend yield rate

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock Options

6 unchanged sentences

Options exercised

( 1,728,293 )

Options forfeited

4 unchanged sentences

(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the estimated fair value of the Company’s stock for those awards that have an exercise price below the estimated fair value at December 31, 2025.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the years ended December 31, 2025, 2024, and 2023, the Company recorded expense of $ 13.1 million, $ 11.6 million, and $ 9.6 million, respectively, related to stock options granted under all plans.

19 unchanged sentences

The RSUs may not be sold or otherwise transferred until vested.

The RSUs do not have any voting or dividend rights prior to the issuance of the underlying common stock.

The RSUs do not have any voting or

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dividend rights prior to the issuance of the underlying common stock.

The share-based expense associated with these grants was based on the Company’s common stock fair value at the time of grant and is amortized over the requisite service period, which generally is the vesting period, using the straight-line method.

2 unchanged sentences

The cost is expected to be recognized over a weighted-average period of 2.4 years and will be adjusted for future changes in estimated forfeitures.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Information relating to RSU grants and deliveries is as follows:

24 unchanged sentences

The Company’s subsidiary, AFP, has an obligation associated with a defined-benefit plan for its eligible employees.

This plan provides benefits to the employees from the date of retirement and is based on the employee’s length of time employed by the Company.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

plan provides benefits to the employees from the date of retirement and is based on the employee’s length of time employed by the Company.

The calculation is based on a statistical calculation combining a number of factors that include the employee’s age, length of service, and AFP employee turnover rate.

2 unchanged sentences

The plan is currently unfunded, and the benefit obligation under the plan was $ 2.7 million and $ 2.6 million at December 31, 2025 and 2024, respectively.

The Company recorded an immaterial amount of expense under the plan for each of the

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

years ended December 31, 2024, 2023 and 2022.

Gain or loss due to change in actuarial valuation of the Company’s defined benefit pension plan is recorded in other comprehensive income.

The Company recorded an immaterial amount of expense under the plan for each of the years ended December 31, 2025, 2024, and 2023.

Gain or loss due to change in actuarial valuation of the Company’s defined benefit pension plan was not material.

Non-qualified Deferred Compensation Plan

18 unchanged sentences

The Company, at its option, can renew a substantial portion of its leases, at the market rate, for various renewal periods ranging from one to six years .

In connection with entry into one of the agreements with our CMOs, the Company identified an embedded lease and as a result recorded a ROU asset and a related operating lease liability of approximately $ 16.4 million in December 2024.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The components of lease costs were as follows:

8 unchanged sentences

Total lease costs

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Other information pertaining to leases is as follows:

14 unchanged sentences

Finance leases

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Future minimum rental payments under leases that have initial or remaining non-cancelable lease terms in excess of 12 months as of December 31, 2025, are as follows:

1 unchanged sentence

Total lease payments

Purchase Commitments

As of December 31, 2024, the Company has entered into commitments to purchase equipment and raw materials for an aggregate amount of approximately $ 135.5 million.

New Real Estate Lease Agreement

In July 2025, the Company entered into an agreement to lease approximately 225,167 square feet of building space in Rancho Cucamonga, California.

The non-cancelable lease term is approximately 10 years with a renewal option to extend the lease for two additional five-year periods.

The monthly lease payments are $ 0.3 million subject to an annual increase of 3.25 %.

The Company did not recognize any lease expense and has no ROU assets or lease liability recognized as of December 31, 2025, given that the lease commenced on January 1, 2026.

In connection with the BAQSIMI ® acquisition from Lilly, t he Company may also be required to pay additional contingent consideration of up to $ 450.0 million to Lilly based on the achievement of certain milestones.

The Purchase Agreement provides that the contingent consideration that may become payable to Lilly would be achieved as follows:

and (iii) a one-time payment of $ 150.0 million if the Company achieves total cumulative net sales of $ 950.0 million or more of the Milestone Products for the first five years after the Closing.

Through December 31, 2025, the Company has not triggered any milestones and therefore no amounts have been recognized or paid.

Licensing Agreement with Nanjing Anji Biotechnology Co., Ltd.

In August 2025, the Company and Nanjing Anji Biotechnology Co., Ltd., or Anji, entered into a License Agreement, or License Agreement, pursuant to which Anji has granted the Company an exclusive license to certain intellectual property to develop, make, use and commercialize products incorporating or comprising certain compounds, including three identified products, or Licensed Products, in the United States and Canada, or the Territory.

Anji has also been granted a non-exclusive license under certain intellectual property controlled by the Company to develop, make, use and commercialize Licensed Products outside the Territory.

For the year ended December 31, 2025, the Company made earnest money and upfront payments for a total of $ 6.0 million, which were recorded as a research and development

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

expense in the Company’s consolidated statement of operations.

The Company is also obligated to make cash payments to Anji of up to $ 42.0 million in development-based milestone payments and up to $ 225.0 million in sales-based milestone payments, subject to the achievement of the applicable development and sales milestone events respectively, and royalty payments of 5 % on net sales, not to exceed a maximum annual amount of $ 22.5 million each calendar year for each Licensed Product and a maximum accumulated amount of $ 60.0 million for each Licensed Products.

The Company is also required to pay Anji a certain percentage of sublicense income received from the sublicense transactions.

The term of this License Agreement will expire, on a Licensed Product-by-Licensed Product and region-by-region basis, on the tenth anniversary of the first commercial sale of such Licensed Product in the applicable region in the Territory, with the Company having the right to extend the License Agreement until the earlier of ten additional years or the expiration, lapse, or invalidation of the last remaining valid claim of the patents licensed by Anji to the Company that covers the Licensed Products in the Territory.

Purchase Commitments

As of December 31, 2025, the Company has entered into commitments to purchase inventory and raw materials for an aggregate amount of approximately $ 37.5 million.

Related-Party Transactions

9 unchanged sentences

The Company has various contract manufacturing agreements with Hanxin and its subsidiaries, whereby Hanxin will develop several active pharmaceutical ingredients and finished products for the Chinese market and will engage the Company to manufacture the products on a cost-plus basis.

In January 2026, the Company amended the contract manufacturing agreement with Hanxin, whereby, the amendment now expands the territory of the Manufacturing Agreement with the addition of a global territory, with the exception of the United States and Canada for Lidocaine and Cotricotropin, as well as a global territory for API of Semaglutide, and a global territory for Finished Product of Semaglutide tablet with dose 3, 7 and 14 milligrams.

Additionally, the amendment clarifies the intellectual property rights and adds indemnification and limitation of liability terms.

During the years ended December 31, 2025, 2024, and 2023, the Company recognized $ 1.1 million, $ 0.5 million and $ 0.1 million of revenue from manufacturing services provided to Hanxin, respectively.

1 unchanged sentence

Contract Research Agreement with Hanxin

In July 2022, the Company entered into a three-year contract research agreement with Hanxin, a related party, whereby Hanxin will develop Recombinant Human Insulin Research Cell Banks, or RCBs, for the Company and license the RCBs to the Company subject to a fully paid, exclusive, perpetual, transferable, sub-licensable worldwide license.

The Company entered into various contract research agreements with Hanxin, a related party, whereby Hanxin will develop Recombinant Human Insulin Research Cell Banks and Recombinant Peptide Research Cell Banks, or RCBs, for the Company and license the RCBs to the Company subject to a fully paid, exclusive, perpetual, transferable, sub-licensable worldwide license.

Hanxin will also perform scale-up manufacturing process development using the RCBs for the Company.

During the years ended December 31, 2025, 2024, and 2023, the Company paid $ 0.4 million, $ 0.2 million and $ 1.6 million, respectively, under this agreement.

As of December 31, 2024, the Company had an immaterial amount of payable to Hanxin under this agreement.

As of December 31, 2025, the Company had an immaterial amount of

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

payable to Hanxin under this agreement.

Supply Agreement with Letop

2 unchanged sentences

The agreement is effective for three years and the total cost of the agreement shall not exceed $ 1.5 million, with payments adjusted based on the then current exchange rates.

During the year ended December 31, 2024, the Company paid an immaterial amount under this agreement.

During the years ended December 31, 2023 and 2022, the Company paid $ 0.7 million and $ 0.2 million, respectively, under this agreement.

As of December 31, 2024, the Company did not have any additional accruals payable to Letop.

During the years ended December 31, 2025 and 2024, the Company paid an immaterial amount under this agreement.

During the year ended December 31, 2023, the Company paid $ 0.7 million under this agreement.

As of December 31, 2025, the Company did no t have any additional accruals payable to Letop.

Primatene MIST ® Distribution Agreement with Hong Kong Genreach Limited

In August 2024, the Company entered into a distribution agreement with Hong Kong Genreach Limited, or Genreach, a wholly owned subsidiary of Hanxin, a related party.

Per the terms of the agreement, the Company has appointed Genrearch as the exclusive distributor to market and sell Primatene MIST ® in Mainland China, Taiwan, Hong Kong, and Macau in the Greater China region.

Per the terms of the agreement, the Company has appointed Genreach as the exclusive distributor to market and sell Primatene MIST ® in Mainland China, Taiwan, Hong Kong, and Macau in the Greater China region.

Genreach will be responsible for obtaining any and all regulatory approvals in the region for Primatene MIST ® .

In January 2026, Armstrong and Genreach amended the distribution agreement to expand the region of the distribution agreement to include the Middle East countries and Southeast Asia, as well as amending the annual minimum purchase amount.

The term of the agreement is for ten years, with both parties having termination rights without cause after the completion of the second contract year.

During the year ended December 31, 2025, the Company did no t recognize any revenue from the distribution agreement.

During the year ended December 31, 2024, the Company recognized $ 1.1 million of revenue from the distribution agreement with Genreach.

As of December 31, 2025, the Company did no t have any receivables from Genreach.

BAQSIMI ® Distribution Agreement with Nanjing Chengong Pharmaceutical Co., Limited.

In October 2025, the Company entered into a distribution agreement with Nanjing Chengong Pharmaceutical Co., Limited, or Chengong, a wholly-owned subsidiary of Hanxin, a related party.

Per the terms of the agreement, the Company will collaborate with Chengong to expand distribution of BAQSIMI ® , in Mainland China, Taiwan, Hong Kong, and Macau in the Greater China region, and appoint Chengong as the exclusive distributor to market and sell BAQSIMI ® in the Greater China Region.

Chengong is responsible for obtaining any and all regulatory approvals in the Region, and performing the required post marketing clinical trials for BAQSIMI ® .

The term of the agreement is for ten years , with both parties having termination rights without cause after the completion

of the fourth contract year.

During the year ended December 31, 2025, the Company did no t recognize any revenue from the distribution agreement.

As of December 31, 2025, the Company did no t have any receivables from Chengong.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The term of the agreement is ten years, with both parties having termination rights without cause after the completion of the second contract year.

During the year ended December 31, 2024, the Company recognized $ 1.1 million of revenue from the distribution agreement with Genreach.

As of December 31, 2024, the Company did not have any receivables from Genreach.

Albuterol sulfate Inhalation Aerosol Patent Litigation

On July 25, 2024, Teva Branded Pharmaceutical Products R&D, Inc.

(“Teva Branded”), Norton (Waterford) Ltd.

(“Norton”), and Teva Pharmaceuticals USA, Inc.

(“Teva USA”), collectively referred to as (“Plaintiff”) filed a Complaint in the United States District Court for the District of Delaware (“Delaware Court”) against the Company for infringement of U.S.

9,463,289, with regard to Amphastar’s ANDA No.

212447, for approval to manufacture and sell generic version of ProAir ® HFA (albuterol sulfate) Inhalation Aerosol.

On October 21, 2024, Plaintiff amended its complaint against the Company to include additional claims for infringement of U.S.

9,808,587 and 10,561,808, with regard to Amphastar’s ANDA No.

212447, for approval to manufacture and sell generic version of ProAir ® HFA (albuterol sulfate) Inhalation Aerosol.

This lawsuit was subsequently settled in January 2025.

As part of the settlement, the Company agreed to pay the Plaintiff $ 2.0 million in exchange for a license to use their Patent.

The settlement amount was recorded as an intangible asset and is being amortized over its useful life of six years .

Employee Litigations

Employee Litigation Matters

On April 15, 2024, a former employee initiated an employment litigation against Amphastar and IMS by filing a complaint, as amended, having individual and class action claims for alleged violations of the California Labor Code pertaining to California’s Private Attorneys General Act, or PAGA, wage and hour, and other state laws.

8 unchanged sentences

The Company intends to vigorously defend itself against the complaint.

Other Litigation

On October 30, 2025, a former employee initiated a class action litigation against Amphastar and IMS by filing a complaint for alleged violations of the California Labor Code pertaining to California’s PAGA, wage and hour, and other state laws.

This complaint was filed in the Superior Court of California for the County of Los Angeles.

In the complaint, the plaintiff is seeking damages and related remedies under California law, as well as various penalty payments under the California Labor Code.

The Company intends to vigorously defend itself against the complaint.

Other Litigation Matters

On August 23, 2023, the Company was subject to a personal injury lawsuit.

A jury trial was held in the Superior Court of California, for the County of San Bernardino from September 2025 to October 2025.

On October 22, 2025, the jury returned a verdict awarding the plaintiff $ 34.1 million, of which $ 11.0 million was covered by the Company’s insurance policies.

The remaining $ 23.1 million was recorded within general and administrative expenses in the Company’s consolidated statement of operations for the year ended December 31, 2025.

The Company entered into a settlement agreement with the plaintiff in November 2025 pursuant to which the settlement amount based on the jury verdict was paid by the Company in the fourth quarter of 2025.

The Company is also subject to various other claims, arbitrations, investigations, and lawsuits from time to time arising in the ordinary course of business.

In addition, third parties may, from time to time, assert claims against the Company in the forms of letters and other communications.

Currently, the Company is subject to a lawsuit for a property and casualty claim, for which it has recorded an estimated liability of $ 6.0 million within accounts payable and other accrued liabilities on the balance sheet as of December 31, 2024.

This estimated liability is fully covered by the Company’s insurance policies.

The $ 6.0 million insurance recovery related to this claim is recorded within prepaid expenses and other current assets on the consolidated balance sheet as of December 31, 2024.

The Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

In the opinion of management, the ultimate resolution of any such matters is not expected to have a material adverse effect on its financial position, results of operations, or cash flows;

however, the results of litigation and claims are inherently unpredictable and the Company’s view of these matters may

however, the results of litigation and claims are inherently unpredictable and the Company’s view of these matters may change in the future.

Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors.

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

change in the future.

Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors.

Subsequent Events

Licensing Agreement with Hanxin

In January 2026, the Company and Hanxin, a related party, entered into a license agreement pursuant to which Hanxin has granted the Company an exclusive license to certain intellectual property controlled by Hanxin to develop, make, use and commercialize products incorporating or comprising of corticotropin compound, or corticotropin, in the United States and Canada, or the Territory.

Hanxin has also granted a non-exclusive license under certain intellectual property controlled by the Company to develop, make, use and commercialize corticotropin outside the Territory.

As part of the agreement, the Company made an upfront payment of $ 2.0 million to Hanxin upon signing.

The Company is also obligated to make cash payments to Hanxin of up to $ 14.0 million in development milestone payments and up to $ 75.0 million in sales milestone payments, subject to the achievement of the applicable development and sales milestone events respectively, and royalty payments of 5 % on net sales, not to exceed a maximum annual amount of $ 7.5 million each calendar year and a maximum accumulated amount of $ 60.0 million for corticotropin.

Hanxin will pay to the Company a royalty payment of net sales of corticotropin that are based on any patents licensed by the Company to Hanxin under the License Agreement or regulatory exclusivity covering corticotropin.

The term of the license agreement will expire, region-by-region basis, on the tenth anniversary of the first commercial sale of corticotropin in the applicable region, with the Company having the right to extend the license agreement until the earlier of ten additional years or the expiration, lapse, or invalidation of the last remaining valid claim of the patents licensed by Hanxin to the Company that covers the product.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data