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Item 1A. Risk Factors

2021-03-11 compared with 2020-02-27 · 536 added, 1019 removed, 46 unchanged (97% of the section changed)

The following are significant factors known

to us that could materially harm our business, financial position, or operating results or could cause our actual results to differ

materially from our anticipated results or other expectations, including those expressed in any forward-looking statement made

in this report.

Risk Factor Summary

Investing in our common stock involves a high degree of risk.

You should carefully consider all information in this Annual Report on Form 10-K prior to investing in our common stock.

These risks are discussed more fully in the section titled “Risk Factors.” These risks and uncertainties include, but are not limited to, the following:

● The conditions under the merger agreement relating to our announced acquisition of Novitium Pharma LLC (“Novitium”) may not be satisfied at all or in the anticipated timeframe.

● The uncertain impact that novel coronavirus (“COVID-19”) will have on our business and results of operations;

● The continuing trend toward consolidation of customer groups that could result in declines in the sales volume and prices of our products, and increased fees charged by customers;

● The FDA does not provide guidance on safety labeling for products that are marketed without approved NDAs or ANDAs, which could increase our potential liability with respect to failure-to-warn claims for these products;

● If the Drug Enforcement Administration (“DEA”) does not approve supply of the API we need to manufacture our controlled substances, we may be unable to manufacture controlled substances, which would eliminate our revenue on these products.

● Pharmaceutical product quality standards are steadily increasing on all products, and if we cannot meet these standards, we may be required to discontinue marketing and/or recall products from the market;

● Federal and state false claims litigation brought against us by private individuals and the government could result in civil and criminal penalties, damages, fines and other related actions;

● The use of legal, regulatory, and legislative strategies by competitors could result in increased costs to develop and market our products, delay new product introductions and reduce profit potential;

● Third-party payer actions may prevent us from effectively marketing our products or cause us to decrease pricing;

● Continuing studies of our products could produce results that could have a negative impact on our business;

● Healthcare reform legislation could have a material adverse effect on our business, financial position, and operating results;

● Barriers in achieving anticipated revenue growth and profitability could have a material adverse effect on our business, financial position, and operating results;

● In January 2016, we acquired two New Drug Applications (“NDAs”) for $75.0 million and a percentage of future net sales of products under the NDAs.

We have incurred substantial expense and may be unable to obtain FDA approval, successfully market and commercialize the product;

● The limited number of suppliers for our API could result in lengthy delays in production if we need to change suppliers;

● Several of the products we have acquired cannot be manufactured in our facilities and we must secure and maintain qualified and compliant contract manufacturers.

Noncompliance by these contract manufacturers or our inability to find qualified contract manufacturers could result in us being unable to commercialize these products;

Several of our products are manufactured and/or packaged by third parties, which we cannot control and could result in us being unable to market and distribute products;

● Future acquisitions and investments could disrupt our business and harm our financial position and operating results;

● Our Medicaid rebate accruals have increased and continue to increase due to our acquisitions and subsequent sales of branded products and authorized generics of branded products;

● Our accruals for the Medicare Coverage Gap Discount Program have increased due to growth and acquisitions;

● We face vigorous competition from other pharmaceutical manufacturers that threatens the commercial acceptance and pricing of our products;

● Our approved products may not achieve commercialization at levels of market acceptance that allow us to achieve profitability;

● We expect to spend a significant amount of resources on research and development efforts, and such efforts may not result in marketable products;

● Production at any or all of our three manufacturing facilities could be interrupted, which could cause us to fail to deliver product on a timely basis;

● We rely on third parties to assist with our clinical studies.

If these parties do not perform or are non-compliant, it could negatively impact the clinical trial and potential of regulatory approval;

Further, we may be required to audit or redo previously completed trials or recall already-approved commercial products;

● Inability to protect our intellectual property in the U.S.

and foreign countries could negatively affect sales of our branded products;

● We have very limited staffing and are dependent upon key employees, the loss of whom could adversely affect our operations;

● We rely significantly on information technology and any failure, inadequacy, interruption, or security lapse of that technology could harm our ability to operate the business effectively;

● We are involved in and may become involved in legal proceedings from time to time, which may result in substantial losses, government enforcement actions, damage to our business and reputation, and place a strain on our internal resources;

● We are susceptible to product liability claims that may not be covered by insurance, which, if successful, could require us to pay substantial sums;

● Our policies regarding returns, allowances and chargebacks, and marketing programs adopted by wholesalers may reduce revenues in future fiscal periods;

● Making interest and principal payments under our Senior Secured Credit Facility will continue to require a significant amount of cash;

● Financial and restrictive covenants on our secured term loan (“Term Loan”), senior secured revolving credit facility (the “Revolver”), and delayed draw term loan (“DDTL”).

If we are non-compliant, we will be in default, which could result in the acceleration of our outstanding indebtedness;

● Raising additional funds by issuing additional equity securities may cause dilution to our current stockholders.

Raising additional funds by issuing new debt financing may restrict our operations.

The following are significant factors known to us that could materially harm our business, financial position, or operating results or could cause our actual results to differ materially from our anticipated results or other expectations, including those expressed in any forward-looking statement made in this report.

The risks described are not the only risks facing us.

Additional risks and uncertainties not currently known to

us, or that we currently deem to be immaterial, also may adversely affect our business, financial position, and operating results.

Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, also may adversely affect our business, financial position, and operating results.

If any of these risks actually occur, our business, financial position, and operating results could suffer significantly.

result, the market price of our common stock could decline and investors could lose all or part of their investment.

Risks Related to our Industry

The continuing trend toward consolidation

of customer groups could result in declines in the sales volume and prices of our products, and increased fees charged by customers,

each of which could have a material adverse effect on our business, financial position, and operating results.

Consolidation and the formation of strategic

partnerships among and between wholesale distributors, chain drug stores, and group purchasing organizations has resulted in a

smaller number of companies, each controlling a larger share of pharmaceutical distribution channels.

For example, our net revenues

are concentrated among three customers representing 32%, 25%, and 23% of net revenues, respectively, during the year ended December 31,

As of December 31, 2019, accounts receivable from these three customers was approximately 88% of accounts receivable,

Drug wholesalers and retail pharmacy chains, which represent an essential part of the distribution chain for generic pharmaceutical

products, have undergone, and are continuing to undergo, significant consolidation.

This consolidation may result in declines in

our sales volumes if a customer is consolidated into another company that purchases products from a competitor.

In addition, the

consolidation of drug wholesalers and retail pharmacy chains could result in these groups gaining additional purchasing leverage

and consequently increasing the product pricing pressures facing our business and enabling those groups to charge us increased

Additionally, the emergence of large buying groups representing independent retail pharmacies and the prevalence and influence

of managed care organizations and similar institutions potentially enable those groups to extract price discounts on our products.

The result of these developments or the loss of our relationship with one or more of these wholesalers, may have a material adverse

effect on our business, financial position, and operating results.

Our reporting and payment obligations

under the Medicaid rebate program and other governmental purchasing and rebate programs are complex and may involve subjective

Any determination that we have failed to comply with those obligations could subject us to penalties and sanctions,

which could adversely affect our business, financial position, and operating results.

The regulations regarding reporting and

payment obligations with respect to Medicaid rebates and other governmental programs are complex.

Because our processes for these

calculations and the judgments involved in making these calculations involve subjective decisions and complex methodologies, these

calculations are subject to the risk of errors.

Our calculations and methodologies are subject to review and challenge by governmental

agencies, and it is possible that such reviews could result in changes.

Any determination by governmental agencies that we have

failed to comply with our reporting and payment obligations could subject us to penalties and sanctions, which could have a material

adverse effect on our business, financial position, and operating results.

Two of our products, which together

comprised 10% of our total revenue in 2019, are marketed without approved New Drug Applications (“NDAs”) or Abbreviated

New Drug Applications (“ANDAs”) and we can offer no assurances that the U.S.

Food and Drug Administration (“FDA”)

will not require us to either seek approval for these products or withdraw them from the market.

In either case, our business,

financial position, and operating results could be materially adversely affected.

Two of our products, Esterified Estrogen

with Methyltestosterone (“EEMT”) and Opium Tincture, are marketed without approved NDAs or ANDAs.

During the years

ended December 31, 2019, 2018, and 2017, revenues for EEMT were 9%, 11%, and 13% of total revenue, respectively, and revenues

from Opium Tincture were 1%, 1%, and 2% of total revenue, respectively.

The FDA's policy with respect to the continued

marketing of unapproved products appears in the FDA's September 2011 Compliance Policy Guide Sec.

440.100 titled "Marketed

New Drugs without Approved NDAs or ANDAs."

Under this policy, the FDA has stated that it will follow a risk-based approach

with regard to enforcement against marketing of unapproved products.

The FDA evaluates whether to initiate enforcement action on

a case-by-case basis, but gives higher priority to enforcement action against products in certain categories, such as those with

potential safety risks or that lack evidence of effectiveness.

While we believe that, so long as we comply with applicable manufacturing

standards, the FDA will not take action against us under the current enforcement policy, we can offer no assurances that the FDA

will continue this policy or not take a contrary position with any individual product or group of products.

Additionally, our EEMT products are related

to an outstanding Notice of Opportunity for Hearing on related to estrogen-androgen products.

We can offer no assurances that FDA

will not resolve this hearing nor take a contrary position in the future with regards to the marketing of EEMT products going forward.

Imported active pharmaceutical ingredients

(“API”) are subject to inspection by the FDA and the FDA can refuse to permit the importation of API for use in products

that are marketed without approved NDAs or ANDAs.

We are dependent on imported API to make certain of our products.

detained or refused to allow the importation of such API, our revenues from certain of our products would be reduced or eliminated

and our business, financial position, and operating results could be materially adversely affected.

We source some of the API for our products,

including those that are marketed without approved NDAs or ANDAs, from international suppliers.

From time to time, due to FDA inspections,

we have experienced temporary disruptions in the supply of imported API.

Any prolonged disruption in the supply of imported API

could materially affect our ability to manufacture and distribute our products, reduce or eliminate our revenues, and have a material

adverse effect on our business, financial position, and operating results.

In addition, as regulatory fees and compliance oversight

of API manufacturers increase, this could result in certain companies discontinuing their supply of API to ANI, which would materially

affect ANI’s ability to manufacture its products.

The FDA does not provide guidance

on safety labeling for products that are marketed without approved NDAs or ANDAs.

As a result, we are dependent on our internal

post-approval drug safety surveillance program to identify necessary safety-related changes to the labels for EEMT and Opium Tincture.

Pharmaceutical product labels contain

important safety information including Black Box warnings, contraindications, dosing and administration, adverse reactions,

drug interactions, use in specific populations such as pregnant women, pediatric, and geriatric patients, and other warnings

and precautions.

Pharmaceutical manufacturers may change product labels when post-approval drug safety surveillance programs

identify previously unknown side-effects, drug interactions, and other risks.

Manufacturers may also change product labels

after conducting post-approval clinical studies and may receive or seek guidance from the FDA regarding updating safety

labeling information.

However, the FDA does not provide guidance on labeling for products that are marketed without approved

NDAs or ANDAs.

As a result, we are dependent on our internal post-approval drug safety surveillance program to identify

necessary safety-related changes to the labels for EEMT and Opium Tincture.

Additionally, because the FDA does not review and

approve labeling for the products without approved NDAs or ANDAs, it would be difficult to make a claim for preemption due

to the FDA’s approval of the labeling and this could increase our potential liability with respect to failure-to-warn

claims for these products.

Such claims, even if successfully defended, could have an adverse impact on our business,

financial position, and operating results.

We are entirely dependent on periodic

approval by the Drug Enforcement Administration (“DEA”) for the supply of the API needed to manufacture our controlled

An inability to obtain such approvals would reduce or eliminate our revenues for our controlled substances, and could

have a material adverse effect on our business, financial position, and operating results.

In addition, we are subject to strict

regulation by the DEA and are subject to sanctions if we are unable to comply with related regulatory requirements.

The DEA regulates products containing controlled

substances, such as opiates, pursuant to the U.S.

Controlled Substances Act (“CSA”).

The CSA and DEA regulations impose

specific requirements on manufacturers and other entities that handle these substances including registration, recordkeeping, reporting,

storage, security, and distribution.

Recordkeeping requirements include accounting for the amount of product received, manufactured,

stored, and distributed.

Companies handling controlled substances also are required to maintain adequate security and to report

suspicious orders, thefts and significant losses.

The DEA periodically inspects facilities for compliance with the CSA and its

Failure to comply with current and future regulations of the DEA could lead to a variety of sanctions, including revocation

or denial of renewal of DEA registrations, injunctions, or civil or criminal penalties.

In addition, each year, we must submit

a request to the DEA for a quota to purchase the amount of API needed to manufacture our controlled substances.

Without approved

quotas from the DEA, we would not be able to purchase these ingredients from our suppliers.

As a result, we are entirely dependent

upon the DEA to approve, on an annual basis, a quota of API that is sufficiently large to support our plans for the continued manufacture

of our controlled substances at commercial levels.

In 2017, the DEA announced that the administration would decrease the total

quotas approved for Schedule II opioid painkillers.

The DEA did decrease quotas approved for Schedule II opioid painkillers in

2018, which resulted in moderate decreases to our quotas for certain of our products.

If the DEA does not approve our requested

quotas, we may be unable to obtain sufficient API to manufacture these products at levels required by our customers, which could

have an adverse impact on our business, financial position, and operating results.

Pharmaceutical product quality standards

are steadily increasing and all products, including those already approved, may need to meet current standards.

If our products

are not able to meet these standards, we may be required to discontinue marketing and/or recall such products from the market.

Steadily increasing quality standards are

applicable to pharmaceutical products still under development and those already approved and on the market.

These standards result

from product quality initiatives implemented by the FDA, such as criteria for residual solvents, and updated U.S.

Pharmacopeial

Convention (“USP”) Reference Standards.

The USP is a scientific nonprofit organization that sets standards for the

identity, strength, quality, and purity of medicines, food ingredients, and dietary supplements manufactured, distributed, and

consumed worldwide.

Pharmaceutical products approved prior to the implementation of new quality standards, including those produced

by us, may not meet these standards, which could require us to discontinue marketing and/or recall such products from the market,

either of which could adversely affect our business, financial position, and operating results.

We may become subject to federal

and state false claims litigation brought by private individuals and the government.

We are subject to state and federal laws

that govern the submission of claims for reimbursement.

The Federal False Claims Act (“FFCA”), also known as Qui Tam,

imposes civil liability and criminal fines on individuals or entities that knowingly submit, or cause to be submitted, false or

fraudulent claims for payment to the government.

Violations of the FFCA and other similar laws may result in criminal fines, imprisonment,

and civil penalties for each false claim submitted and exclusion from federally funded health care programs, including Medicare

and Medicaid.

The FFCA also allows private individuals to bring a suit on behalf of the government against an individual or entity

for violations of the FFCA.

These suits, also known as Qui Tam actions, may be brought by, with only a few exceptions, any private

citizen who has material information of a false claim that has not yet been previously disclosed.

These suits have increased significantly

in recent years because the FFCA allows an individual to share in any amounts paid to the federal government from a successful

Qui Tam action.

If our past or present operations are found to be in violation of any of such laws or other applicable governmental

regulations, we may be subject to civil and criminal penalties, damages, fines, exclusion from federal health care programs, and/or

the curtailment or restructuring of our operations, any of which could materially adversely affect our business, financial position,

and operating results.

Actions brought against ANI for violations of these laws, even if successfully defended, could also have

a material adverse effect on our business, financial position, and operating results.

The use of legal, regulatory, and

legislative strategies by competitors, both branded and generic, including "authorized generics,"

citizen's petitions,

and legislative proposals, may increase the costs to develop and market our generic products, could delay or prevent new product

introductions, and could significantly reduce our profit potential.

These factors could have a material adverse effect on our business,

financial position, and operating results.

Our competitors, both branded and generic,

often pursue legal, regulatory, and/or legislative strategies to prevent or delay competition from generic alternatives to branded

These strategies include, but are not limited to:

entering into agreements whereby other generic companies will begin to market an authorized generic, a generic equivalent of a branded product, at the same time generic competition initially enters the market;

launching a generic version of their own branded product at the same time generic competition initially enters the market;

filing citizen petitions with the FDA or other regulatory bodies, including timing the filings so as to thwart generic competition by causing delays of generic product approvals;

seeking to establish regulatory and legal obstacles that would make it more difficult to demonstrate bioequivalence or meet other approval requirements;

initiating legislative and regulatory efforts to limit the substitution of generic versions of branded pharmaceuticals;

filing suits for patent infringement that may delay regulatory approval of generic products;

introducing "next-generation"

products prior to the expiration of market exclusivity for the reference product, which often materially reduces the demand for the first generic product;

obtaining extensions of market exclusivity by conducting clinical trials of branded drugs in pediatric populations or by other potential methods;

persuading regulatory bodies to withdraw the approval of branded name drugs for which the patents are about to expire, thus allowing the branded company to obtain new patented products serving as substitutes for the products withdrawn;

seeking to obtain new patents on drugs for which patent protection is about to expire.

If we cannot compete with such strategies,

our business, financial position, and operating results could be adversely impacted.

If third-party payers deny coverage,

substitute another company’s product for our product, or offer inadequate levels of reimbursement, we may not be able to

market our products effectively or we may be required to offer our products at prices lower than anticipated.

Third-party payers are increasingly challenging

the prices charged for medical products and services.

For example, third-party payers may deny coverage, choose to provide coverage

for a competitor’s bioequivalent product rather than our product, or offer limited reimbursement if they determine that a

prescribed product has not received appropriate clearances from the FDA, is not used in accordance with cost-effective treatment

methods as determined by the third-party payer, or is experimental, unnecessary, or inappropriate.

Prices also could be driven

down by health maintenance organizations that control or significantly influence purchases of healthcare services and products.

If third-party payers deny coverage or limit reimbursement, we may not be able to market our products effectively or we may be

required to offer our products at prices lower than anticipated.

We are subject to federal, state,

and local laws and regulations, and complying with these may cause us to incur significant additional costs.

The pharmaceutical industry is subject

to regulation by various federal authorities, including the FDA, the DEA, and state governmental authorities.

Federal and state

statutes and regulations govern or influence the testing, manufacturing, packing, labeling, storing, record keeping, safety, approval,

advertising, promotion, sale, and distribution of our products.

Noncompliance with applicable legal and regulatory requirements

can have a broad range of consequences, including warning letters, fines, seizure of products, product recalls, total or partial

suspension of production and distribution, refusal to approve NDAs or other applications or revocation of approvals previously

granted, withdrawal of product from marketing, injunctions, withdrawal of licenses or registrations necessary to conduct business,

disqualification from supply contracts with the government, civil penalties, debarment, and criminal prosecution.

facilities where prescription

drugs are manufactured, tested, packaged, stored, or distributed must comply with FDA current good manufacturing practices (“cGMPs”).

All of our products are manufactured, tested, packaged, stored, and distributed according to cGMP regulations.

The FDA performs

periodic audits to ensure that our facilities remain in compliance with all applicable regulations.

If it finds violations of cGMP,

the FDA could make its concerns public and could impose sanctions including, among others, fines, product recalls, total or partial

suspension of production and/or distribution, suspension of the FDA's review of product applications, injunctions, and civil or

criminal prosecution.

If imposed, enforcement actions could have a material adverse effect on our business, financial position,

and operating results.

Under certain circumstances, the FDA also has the authority to revoke previously granted drug approvals.

Although we have internal compliance programs in place that we believe are adequate, the FDA may conclude that these programs do

not meet regulatory standards.

If compliance is deemed deficient in any significant way, it could have a material adverse effect

on our business.

government has enacted the Federal

Drug Supply Chain Security Act ("DSCSA") that requires development of an electronic pedigree to track and trace each

prescription drug at the salable unit level through the distribution system, which will be effective incrementally over a 10-year

All prescription pharmaceutical products distributed in the U.S.

must be serialized with unique product identifiers.

started manufacturing serialization-compliant products in November 2018.

The final requirement for tracking the products will

commence on November 27, 2023.

Compliance with DSCSA and future U.S.

federal or state electronic pedigree requirements may

increase the Company's operational expenses and impose significant administrative burdens.

In addition, if we are unable to comply

with DSCSA as of the required dates, we could face penalties or be unable to sell our products.

Our research, product development, and

manufacturing activities involve the controlled use of hazardous materials, and we may incur significant costs in complying with

numerous laws and regulations.

We are subject to laws and regulations enforced by the FDA, the DEA, and other regulatory statutes

including the Occupational Safety and Health Act (“OSHA”), the Environmental Protection Act, the Toxic Substances Control

Act, the Resource Conservation and Recovery Act, and other current and potential federal, state, local, and foreign laws and regulations

governing the use, manufacture, storage, handling, and disposal of our products, materials used to develop and manufacture such

products, and resulting waste products.

We cannot completely eliminate the risk

of contamination or injury, by accident or as the result of intentional acts, from these materials.

In the event of an accident,

we could be held liable for any damages that result, and any resulting liability could exceed our resources.

We may also incur

significant costs in complying with environmental laws and regulations in the future.

We are also subject to laws generally applicable

to businesses, including but not limited to, federal, state, and local regulations relating to wage and hour matters, employee

classification, mandatory healthcare benefits, unlawful workplace discrimination, and whistle-blowing.

Any actual or alleged failure

to comply with any regulation applicable to our business or any whistle-blowing claim, even if without merit, could result in costly

litigation, regulatory action or otherwise harm our business, financial position, and operating results.

Our operations in an international

market subject us to additional regulatory oversight both in the international market and in the U.S., as well as, social, and

political uncertainties, which could cause a material adverse effect on our business, financial position, and operating results.

We are subject to certain risks associated

with having assets and operations located in a foreign jurisdiction, including our operations in Canada.

Our Canadian operations

are subject to regulation by Health Canada and other federal, provincial, and local regulatory authorities.

Health Canada regulates

the testing, manufacture, labeling, marketing, and sale of pharmaceutical products manufactured and distributed in Canada.

operations in this jurisdiction may be adversely affected by general economic conditions and economic and fiscal policy, including

changes in exchange rates and controls, interest rates and taxation policies, and increased government regulation, which could

have a material adverse effect on our business, financial position, and operating results.

Currency fluctuations and changes

in exchange rates could have a material adverse effect on our business, financial position, and operating results.

A portion of our transactions are denominated

in a foreign currency, the Canadian dollar.

Because we engage in certain transactions in a foreign currency, we are subject to

the effects of exchange rate fluctuations.

dollar depreciates against the Canadian dollar, the expenses we recognize

from Canadian-denominated transactions made by our Canadian subsidiary could be translated at an unfavorable rate, leading to foreign

exchange losses.

Foreign exchange gains or losses as a result of exchange rate fluctuations in any given period could harm our

operating results and negatively impact our financial position and results of operations.

Continuing studies of our products

could produce negative results, which could require us to implement risk management programs, or discontinue product marketing.

In addition, ongoing post-approval drug safety surveillance of our products could result in the submission of adverse event reports

Studies of the proper utilization, safety,

and efficacy of pharmaceutical products are being conducted by the industry, government agencies, and others on a continuous basis.

Such studies, which increasingly employ sophisticated methods and techniques, can call into question the utilization, safety, and

efficacy of current and previously marketed products, including those that we produce.

In addition, we are required by the FDA

to submit reports of adverse events involving the use of our products.

In some cases, studies and safety surveillance programs

have resulted, and in the future may result, in the one or more of the following:

product label changes including FDA-mandated Black Box warnings;

risk management programs such as patient registries;

reduced product sales due to concerns among patients and physicians;

discontinuance of product marketing.

These situations, should they occur with

respect to any of our products, could have a material adverse effect on our business, financial position, and operating results.

Healthcare reform legislation could

have a material adverse effect on our business, financial position, and operating results.

In recent years, there have been numerous

initiatives on the federal and state levels for comprehensive reforms affecting the payment for, the availability of, and reimbursement

for healthcare services in the U.S., and it is likely that federal and state legislatures and health agencies will continue to

focus on health care reform in the future.

The Patient Protection and Affordable Care Act (“PPACA”) and the Health

Care and Education and Reconciliation Act of 2010, which amends the PPACA (collectively, “the ACA”), were signed into

law in March 2010.

While the ACA may increase the number of patients who have insurance coverage for our products and may

otherwise increase drug coverage, it also includes provisions such as, among others, the assessment of a pharmaceutical manufacturer

fee, the requirement that manufacturers provide discounts to Medicare beneficiaries through the Medicare Coverage Gap Discount

program, and an increase in the amount of rebates that manufacturers pay for coverage of their drugs by Medicaid programs.

The cost-containment measures that government

programs and healthcare insurers are instituting both as a result of general cost pressure in the industry and healthcare reforms

contained in the ACA may prevent us from maintaining prices for our products that are sufficient for us to realize profits and

may otherwise harm our business, financial position, and operating results.

In addition, to the extent that our products are marketed

outside of the U.S., foreign government pricing controls and other regulations may prevent us from maintaining prices for such

products that are sufficient for us to realize profits and may otherwise harm our business, financial position, and operating results.

As a result, the market price of our common stock could decline and investors could lose all or part of their investment.

Risks Related to our Business

Our anticipated revenue growth and

profitability, if achieved, is dependent upon our ability to develop, license or acquire, and commercialize new products on a timely

basis in relation to our competitors' product introductions, and to address all regulatory requirements applicable to the development

and commercialization of new products.

Our failure to do so successfully could impair our growth strategy and plans and could have

a material adverse effect on our business, financial position, and operating results.

Our future revenues and profitability are

dependent upon our ability to successfully develop, license or acquire, and commercialize pharmaceutical products in a timely manner.

Our proposed acquisition of Novitium Pharma LLC may not be completed or the closing of the acquisition may be delayed, and if completed, we may not realize any or all of the anticipated benefits of the acquisition or within the timeframe we anticipate.

As previously announced, on March 8, 2021, ANI entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Nile Merger Sub LLC, a Delaware limited liability company and our wholly-owned subsidiary (“Merger Sub”), Novitium, and certain other parties under which Merger Sub will merge with and into Novitium, with Novitium surviving the merger as a wholly owned subsidiary of ANI.

While we expect to complete the proposed transaction in the second half of 2021, the proposed merger is subject to a number of conditions that must be satisfied in order for the transaction to be consummated, including, among others, the approval by our stockholders of the issuance of shares of our common stock in connection with the merger, and the closing of the new equity and debt arrangements related to the acquisition.

We cannot guarantee that the acquisition will be consummated on the terms or timeline currently contemplated or at all.

Any delay in completing the acquisition could diminish the anticipated benefits of the acquisition and result in additional transaction costs, and failure to complete the acquisition could adversely impact the market price of our stock as well as our business and operating results.

If completed, the success of the Novitium acquisition will depend, in part, on our ability to successfully combine and integrate Novitium into our businesses and realize the anticipated benefits from the transaction.

If we are unable to achieve these objectives within the anticipated time frame, or at all, the anticipated benefits may not be realized fully or at all, or may take longer to realize than expected.

If the acquisition is not completed for any reason, including as a result of our shareholders declining to approve the issuance of shares of our common stock in connection with the merger, our ongoing business may be adversely affected and, without realizing any of the benefits of having completed the merger, we would be subject to a number of risks, including the following:

● we may experience negative reactions from the financial markets, including negative impacts on our stock price;

● we may experience negative reactions from our customers, vendors and employees;

● we will have incurred substantial expenses and will be required to pay certain costs relating to the acquisition, whether or not the acquisition is completed;

● we will have spent substantial commitment of time and resources by management on matters relating to the acquisition, which would otherwise have been devoted to day-to-day operations and other opportunities that may have been beneficial to us.

Our anticipated revenue growth and profitability, if achieved, is dependent upon our ability to develop, license or acquire, and commercialize new products on a timely basis in relation to our competitors’ product introductions, and to address all regulatory requirements applicable to the development and commercialization of new products.

Our failure to do so successfully could impair our growth strategy and plans and could have a material adverse effect on our business, financial position, and operating results.

Our future revenues and profitability are dependent upon our ability to successfully develop, license or acquire, and commercialize pharmaceutical products in a timely manner.

Product development is inherently risky and time-consuming.

Likewise, product licensing involves inherent risks, including uncertainties

due to matters that may affect the achievement of milestones, as well as the possibility of contractual disagreements with regard

to the supply of product meeting specifications and terms such as license scope or termination rights.

The development and commercialization

process also requires substantial time, effort, and financial resources.

We may not be successful in commercializing products on

a timely basis, if at all, which could adversely affect our business, financial position, and operating results.

The FDA must approve any new prescription

product before it can be marketed in the U.S.

The process of obtaining regulatory approval to manufacture and market branded and

generic pharmaceutical products is rigorous, time consuming, costly, and largely unpredictable.

We may be unable to obtain requisite

approvals on a timely basis for branded or generic products that we may develop, license, or acquire.

Moreover, if we obtain regulatory

approval for a drug, we may be limited with respect to the indicated uses and delivery methods for which the drug may be marketed,

which in turn could restrict the potential market for the drug.

Also, for products pending approval, we may obtain raw materials

or produce batches of inventory.

In the event that regulatory approval is denied or delayed, we could be exposed to the risk of

any such inventory becoming obsolete.

The timing and cost of obtaining regulatory approvals could adversely affect our product

introduction plans, business, financial position, and operating results.

The approval process for generic pharmaceutical

products often results in the FDA granting simultaneous final approval to a number of generic pharmaceutical products at the time

a patent claim for a corresponding branded product or other market exclusivity expires.

This often forces a generic firm to face

immediate competition when it introduces a generic product into the market.

Additionally, further generic approvals often continue

to be granted for a given product subsequent to the initial launch of the generic product.

These circumstances generally result

in significantly lower prices, as well as reduced margins, for generic products compared to branded products.

New generic market

entrants generally cause continued price and margin erosion over the generic product life cycle.

As a result, we could be unable

to grow or maintain market share with respect to our generic pharmaceutical products, which could have a material adverse effect

on our ability to market that product profitably and on our business, financial position, and operating results.

Furthermore, if we are unable to address

all regulatory requirements applicable to the development and commercialization of new products in a timely manner, our product

introduction plans, business, financial position, and operating results could be materially adversely affected.

The FDA regulates and monitors all promotion

and advertising of prescription drugs after approval.

All promotion must be consistent with the conditions of approval and submitted

to the agency.

Failure to adhere to FDA promotional requirements can result in enforcement letters, warning letters, changes to

existing promotional material, and corrective notices to healthcare professionals.

Promotion of a prescription drug for uses not

approved by the FDA can have serious consequences and result in lawsuits by private parties, state governments and the federal

government, significant civil and criminal penalties, and compliance agreements that require a company to change current practices

and prevent unlawful activity in the future.

January 2016, we acquired two NDAs for $75.0 million and a percentage of future net sales of products under the NDAs.

to invest in the NDAs and if we are unable to commercialize these products, it could have a material adverse effect on our business,

financial position, and operating results.

January 2016, we acquired the right, title, and interest in the NDAs for Cortrophin Gel, 40 units/mL and 80 units/mL and Cortrophin

Zinc, 40 units/mL, along with certain documentation and trademark applications, from Merck for $75.0 million and a percentage of

future net sales of the products under the NDAs.

We have incurred and intend to continue to incur significant research and development

expense with respect to development of the products.

In order to commercialize Cortrophin Gel, we have executed long-term commercial

supply agreements with a supplier for pig pituitary glands, our primary API raw material.

We have also executed long-term supply

agreements with a corticotropin API manufacturer and a Cortrophin Gel fill/finish contract manufacturer.

We have continued to advance

the manufacturing of the corticotropin API and have manufactured six different commercial scale batches, including registration

and process validation batches.

All commercial scale API batches have met specifications.

We have also continued to advance to

manufacturing of Cortrophin Gel and have manufactured four different commercial scale batches, including registration and process

validation batches.

All commercial scale Cortrophin Gel batches have met specifications.

We must complete registration enabling

stability studies, which are ongoing, and we are on track to submit our supplementary NDA to the FDA in first quarter 2020.

will also need to obtain approval from the FDA of our supplementary NDA filing in order to commercialize the product.

we will need to market the products directly to physicians and negotiate with third-party payers to provide coverage and adequate

levels of reimbursement for the products, none of which is required for our current products.

If we are unable to perform any of

these steps, we may be unable to commercialize the products, which could have a material adverse effect on our business, financial

position, and operating results.

We depend on a limited number of

suppliers for API.

Generally, only a single source of API is qualified for use in each product due to the costs and time required

to validate a second source of supply.

Changes in API suppliers must usually be approved through a Prior Approval Supplement (“PAS”)

Our ability to manufacture and distribute

products is dependent, in part, upon ingredients and components supplied by others, including entities based outside the U.S.

purchased approximately 13% of our inventory from one supplier during the year ended December 31, 2019.

We purchased approximately

13% of our inventory from one supplier during the year ended December 31, 2018 and approximately 23% of our inventory from

two suppliers during the year ended December 31, 2017.

Any disruption in the supply of these ingredients or components or

any problems in their quality could materially affect our ability to manufacture and distribute our products and could result in

legal liabilities that could materially affect our ability to realize profits or otherwise harm our business, financial, and operating

Likewise, product licensing involves inherent risks, including uncertainties due to matters that may affect the achievement of milestones, as well as the possibility of contractual disagreements with regard to the supply of product meeting specifications and terms such as license scope or termination rights.

The development and commercialization process also requires substantial time, effort, and financial resources.

We may not be successful in commercializing products on a timely basis, if at all, which could adversely affect our business, financial position, and operating results.

The FDA must approve any new prescription product before it can be marketed in the U.S.

The process of obtaining regulatory approval to manufacture and market branded and generic pharmaceutical products is rigorous, time consuming, costly, and largely unpredictable.

We may be unable to obtain requisite approvals on a timely basis for branded or generic products that we may develop, license, or acquire.

Moreover, if we obtain regulatory approval for a drug, we may be limited with respect to the indicated uses and delivery methods for which the drug may be marketed, which in turn could restrict the potential market for the drug.

Also, for products pending approval, we may obtain raw materials or produce batches of inventory.

In the event that regulatory approval is denied or delayed, we could be exposed to the risk of any such inventory becoming obsolete.

The timing and cost of obtaining regulatory approvals could adversely affect our product introduction plans, business, financial position, and operating results.

The approval process for generic pharmaceutical products often results in the FDA granting simultaneous final approval to a number of generic pharmaceutical products at the time a patent claim for a corresponding branded product or other market exclusivity expires.

This often forces a generic firm to face immediate competition when it introduces a generic product into the market.

Additionally, further generic approvals often continue to be granted for a given product subsequent to the initial launch of the generic product.

These circumstances generally result in significantly lower prices, as well as reduced margins, for generic products compared to branded products.

New generic market entrants generally cause continued price and margin erosion over the generic product life cycle.

As a result, we could be unable to grow or maintain market share with respect to our generic pharmaceutical products, which could have a material adverse effect on our ability to market that product profitably and on our business, financial position, and operating results.

Furthermore, if we are unable to address all regulatory requirements applicable to the development and commercialization of new products in a timely manner, our product introduction plans, business, financial position, and operating results could be materially adversely affected.

The FDA regulates and monitors all promotion and advertising of prescription drugs after approval.

All promotion must be consistent with the conditions of approval and submitted to the agency.

Failure to adhere to FDA promotional requirements can result in enforcement letters, warning letters, changes to existing promotional material, and corrective notices to healthcare professionals.

Promotion of a prescription drug for uses not approved by the FDA can have serious consequences and result in lawsuits by private parties, state governments and the federal government, significant civil and criminal penalties, and compliance agreements that require a company to change current practices and prevent unlawful activity in the future.

In January 2016, we acquired two NDAs for $75.0 million and a percentage of future net sales of products under the NDAs.

We continue to invest in the NDAs and if we are unable to commercialize these products, it could have a material adverse effect on our future business, financial position, and operating results.

In January 2016, we acquired the right, title, and interest in the NDAs for Cortrophin Gel, 40 units/mL and 80 units/mL and Cortrophin Zinc, 40 units/mL, along with certain documentation and trademark applications, from Merck for $75.0 million and a percentage of future net sales of the products under the NDAs.

We have incurred and intend to continue to incur research and development expenses with respect to approval of sNDA of Cortrophin Gel.

made significant progress, including validation of drug substance and drug product manufacturing processes and initiation of manufacturing of commercial batches to prepare for a future product launch.

We continue to press forward with the resubmission process and have developed a detailed plan for the completion of all activities related to the remediation efforts.

Our internal team has been consolidated to ensure the appropriate expertise and headcount have been dedicated to this effort.

Our team is working closely with prominent consultants in the industry and have remained engaged with the FDA throughout to ensure this submission meets current FDA expectations.

However, in the instance where we may be unable to commercialize the products this could have a material adverse effect on our future business, financial position, and operating results.

We depend on a limited number of suppliers for API.

Generally, only a single source of API is qualified for use in each product due to the costs and time required to validate a second source of supply.

We may experience lengthy delays if we need to change an API supplier, which could have a material impact on business and results of operations.

Our ability to manufacture and distribute products is dependent, in part, upon ingredients and components supplied by others, including entities based outside the U.S.

We purchased approximately 10% of our inventory from one supplier during the year ended December 31, 2020.

We purchased approximately 13% of our inventory from one supplier during the years ended December 31, 2019 and 2018.

Any disruption in the supply of these ingredients or components or any problems in their quality could materially affect our ability to manufacture and distribute our products and could result in legal liabilities that could materially affect our ability to realize profits or otherwise harm our business, financial, and operating results.

Virtually all of our contracts for the supply of pharmaceutical products to customers contain "failure to supply"

Under these clauses, if we are unable to supply the requested quantity of product within a certain period after receipt of a customer’s purchase order, the customer is entitled to procure a substitute product elsewhere and we must reimburse the customer for the difference between our contract price and the price the customer was forced to pay to procure the substitute product.

Therefore, our ability to source sufficient quantities of API for manufacturing is critical.

We source the raw materials

for our products from both domestic and international suppliers, which we carefully select.

Generally, we qualify only a single

source of API for use in each product due to the cost and time required to validate and qualify a second source of supply.

change in one of our API suppliers must usually be approved through a PAS by the FDA.

The process of obtaining an approval of such

a PAS can require between four and 18 months.

While we also generally qualify a single source for non-API raw materials, the process

required to qualify an alternative source of a non-API raw material is typically much less rigorous.

If we were to change the supplier

of a raw material for a product, the cost for the material could be greater than the amount we paid with the previous supplier.

Changes in suppliers are rare, but could occur as a result of a supplier’s business failing, an issue arising from an FDA

inspection, or failure to maintain our required standards of quality.

As a result, we select suppliers with great care, based on

various factors including quality, reliability of supply, and long-term financial stability.

Certain of the APIs for our drug products,

including those that are marketed without approved NDAs or ANDAs, are sourced from international suppliers.

From time to time,

we have experienced temporary disruptions in the supply of certain of such imported API due to FDA inspections.

Several of the products we have acquired

cannot be manufactured in our facilities.

If we are unable to secure or maintain qualified contract manufacturers for those products

or if a contract manufacturer fails to comply with federal, state, and local laws and regulations, our business, financial position,

and operating results could be materially, adversely affected.

We have acquired, and may continue to acquire,

a variety of products that we seek to commercialize.

Some of these products, including injectables and softgel capsules, are products

that we cannot manufacture in our facilities.

We source the raw materials for our products from both domestic and international suppliers, which we carefully select.

Generally, we qualify only a single source of API for use in each product due to the cost and time required to validate and qualify a second source of supply.

Any change in one of our API suppliers must usually be approved through a PAS by the FDA.

The process of obtaining an approval of such a PAS can require between four and 18 months.

While we also generally qualify a single source for non-API raw materials, the process required to qualify an alternative source of a non-API raw material is typically much less rigorous.

If we were to change the supplier of a raw material for a product, the cost for the material could be greater than the amount we paid with the previous supplier.

Changes in suppliers are rare but could occur as a result of a supplier’s business failing, an issue arising from an FDA inspection, or failure to maintain our required standards of quality.

As a result, we select suppliers with great care, based on various factors including quality, reliability of supply, and long-term financial stability.

Certain of the APIs for our drug products, including those that are marketed without approved NDAs or ANDAs, are sourced from international suppliers.

From time to time, we have experienced temporary disruptions in the supply of certain of such imported API due to FDA inspections.

Several of the products we have acquired cannot be manufactured in our facilities and are manufactured and/or packaged by third parties, which we cannot control.

If we are unable to secure or maintain qualified contract manufacturers for those products or if a contract manufacturer fails to comply with federal, state, and local laws and regulations, our business, financial position, and operating results could be materially, adversely affected.

We have acquired, and may continue to acquire, a variety of products that we seek to commercialize.

Some of these products, including injectables and softgel capsules, are products that we cannot manufacture in our facilities.

As a result, we may seek partners to contract manufacture the products on our behalf.

Like our company, these firms must comply with cGMPs and other federal, state, and local laws and regulations regarding pharmaceutical

manufacturing.

Noncompliance by those firms may result in warning letters, fines, product recalls, and partial or total suspension

of production and distribution.

If we are unable to find qualified contract manufacturers or if a contract manufacturer fails to

comply with federal, state, and local laws and regulations, we may be unable to commercialize these products, which could have

a material adverse effect on our business, financial position, and operating results, including an impairment of the acquired product.

Several of our products are manufactured

and/or packaged by third parties, which we cannot control.

We rely on third parties to manufacture

and/or package many of our products.

We expect our reliance on third party manufacturers to continue to increase in the future

as we receive approvals for new products to be manufactured through our collaborative arrangements, and as we seek additional growth

opportunities outside of the capabilities of our current manufacturing facilities.

If we are unable to secure third-party manufacturers

for these products on commercially acceptable terms, we may not be able to market and distribute such products at a profit.

delays or difficulties with third-party manufacturers could adversely affect the marketing and distribution of these products,

or future products, which could have a material adverse effect on our business, financial position, and operating results.

Our branded products may become subject

to increased generic competition.

Many of our branded products have not been

patent-protected for several years and no longer have market exclusivity.

As a result, trends moving toward increased substitution

and reimbursement of generics for cost-containment purposes may reduce and limit the sales of our mature brand products.

Additionally,

increased focus by the FDA on approval of generic products may accelerate this trend.

If generic products are substituted for these

branded products, our revenue from these products will decrease, which could have an adverse effect on our business, financial

position, and operating results.

Future acquisitions and investments

could disrupt our business and harm our financial position and operating results.

Our growth will depend, in part, on our

continued ability to develop, commercialize, and expand our products, including in response to changing regulatory and competitive

In some circumstances, we may determine to accelerate our growth through the acquisition of complementary businesses

and technologies rather than through internal development.

The identification of suitable acquisition candidates or products can

be difficult, time-consuming, and costly, and we may not be able to successfully complete or successfully execute strategies for

identified acquisitions.

Like our company, these firms must comply with cGMPs and other federal, state, and local laws and regulations regarding pharmaceutical manufacturing.

Noncompliance by those firms may result in warning letters, fines, product recalls, and partial or total suspension of production and distribution.

If we are unable to find qualified contract manufacturers or if a contract manufacturer fails to comply with federal, state, and local laws and regulations, we may be unable to commercialize these products, which could have a material adverse effect on our business, financial position, and operating results, including an impairment of the acquired product.

We rely on third parties to manufacture and/or package many of our products.

We expect our reliance on third party manufacturers to continue to increase in the future as we receive approvals for new products to be manufactured through our collaborative arrangements, and as we seek additional growth opportunities outside of the capabilities of our current manufacturing facilities.

If we are unable to secure third-party manufacturers for these products on commercially acceptable terms, we may not be able to market and distribute such products at a profit.

Any delays or difficulties with third-party manufacturers could adversely affect the marketing and distribution of these products, or future products, which could have a material adverse effect on our business, financial position, and operating results.

Our branded products may become subject to increased generic competition.

Many of our branded products have not been patent-protected for several years and no longer have market exclusivity.

As a result, trends moving toward increased substitution and reimbursement of generics for cost-containment purposes may reduce and limit the sales of our mature brand products.

Additionally, increased focus by the FDA on approval of generic products may accelerate this trend.

If generic products are substituted for these branded products, our revenue from these products will decrease, which could have an adverse effect on our business, financial position, and operating results.

Future acquisitions and investments could disrupt our business and harm our financial position and operating results.

Our growth will depend, in part, on our continued ability to develop, commercialize, and expand our products, including in response to changing regulatory and competitive pressures.

In some circumstances, we have and may continue to grow our business through the acquisition of complementary businesses and technologies rather than through internal development.

The identification of suitable acquisition candidates or products can be difficult, time-consuming, and costly, and we may not be able to successfully complete or successfully execute strategies for identified acquisitions.

The risks faced in connection with acquisitions include:

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● retention of key employees from the acquired company;

integration of the acquired company’s accounting information, management, human resources, and other administrative systems;

● integration of the acquired company’s accounting information, management, human resources, and other administrative systems;

● the need to implement or improve controls, procedures, and policies at a business that prior to the acquisition may have lacked effective controls, procedures and policies;

● difficulties relating to integrating the acquired business;

● liability for activities of the acquired company and/or products before the acquisition, including patent infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities;

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● litigation or other claims in connection with the acquired company or product, including claims from product users, former stockholders, or other third parties.

In any acquisition that we may undertake,

our failure to address these risks or other problems encountered in connection with any acquisitions and investments could cause

us to fail to realize the anticipated benefits of these acquisitions or investments, cause us to incur unanticipated liabilities,

and harm our business generally.

Future acquisitions could also result in dilutive issuances of our equity securities, the incurrence

of additional debt, contingent liabilities, amortization expenses, incremental operating expenses, or the write-off of goodwill,

any of which could harm our business, financial position, and operating results.

Our Medicaid rebate accruals have

increased and continue to increase due to our acquisitions and subsequent sales of branded products and authorized generics of

branded products, and the estimates on which our accruals are based are subject to change.

Any such change could have a material

adverse effect on our business, financial position, and operating results.

Our Medicaid rebate accruals have increased

significantly due to our acquisitions and subsequent sales of branded products and authorized generics of branded products.

accrue for these rebates at the time of sale based on our estimates of the amount of our product that will be prescribed to Medicaid

beneficiaries.

The resulting accruals are significant, and as Medicaid utilization trends change, we may need to change our estimates

In any acquisition that we may undertake, our failure to address these risks or other problems encountered in connection with any acquisitions and investments could cause us to fail to realize the anticipated benefits of these acquisitions or investments, cause us to incur unanticipated liabilities, and harm our business generally.

Our Medicaid rebate accruals have increased and continue to increase due to our acquisitions and subsequent sales of branded products and authorized generics of branded products, and the estimates on which our accruals are based are subject to change.

Any such change could have a material adverse effect on our business, financial position, and operating results.

Our Medicaid rebate accruals have increased significantly due to our acquisitions and subsequent sales of branded products and authorized generics of branded products.

We accrue for these rebates at the time of sale based on our

estimates of the amount of our product that will be prescribed to Medicaid beneficiaries.

The resulting accruals are significant, and as Medicaid utilization trends change, we may need to change our estimates accordingly.

We cannot guarantee that actual results will not differ from our estimates.

In addition, the PPACA included a significant

expansion of state Medicaid programs.

As more individuals become eligible for coverage under these programs, Medicaid utilization

of our products could increase, resulting in a corresponding increase in our rebate payments.

Increases in Medicaid rebate payments

could decrease our revenues from product sales, which in turn could adversely affect our business, financial position, and operating

Our accruals for the Medicare Coverage

Gap Discount Program have increased due to growth and acquisitions.

Any such change could have a material adverse effect on our

business, financial position, and operating results.

Our accruals for the rebates under the

Medicare Coverage Gap Discount Program have increased due to growth and acquisitions.

We accrue for these rebates at the time of

sale based on our estimates of the amount of product that will be prescribed to patients in the Medicare Coverage Gap Discount

program, which is primarily for the benefit of persons aged 65 years and over.

As our products are often used by patients in this

age range, our estimates of these rebates have grown.

Increases in Medicare Coverage Gap Discount rebates could decrease our revenues

from product sales, which in turn could adversely affect our business, financial position, and operating results.

We have entered into distribution

agreements under which we market products under ANDAs and NDAs owned by third parties.

Any changes to these agreements could have

a material adverse effect on our business, financial position, and operating results.

We have entered into several distribution

agreements to market and distribute products under our own label that are sold under ANDAs and NDAs owned by third parties, over

which we have no control.

In addition, the PPACA included a significant expansion of state Medicaid programs.

As more individuals become eligible for coverage under these programs, Medicaid utilization of our products could increase, resulting in a corresponding increase in our rebate payments.

Increases in Medicaid rebate payments could decrease our revenues from product sales, which in turn could adversely affect our business, financial position, and operating results.

Our accruals for the Medicare Coverage Gap Discount Program have increased due to growth and acquisitions.

Any such change could have a material adverse effect on our business, financial position, and operating results.

Our accruals for the rebates under the Medicare Coverage Gap Discount Program have increased due to growth and acquisitions.

We accrue for these rebates at the time of sale based on our estimates of the amount of product that will be prescribed to patients in the Medicare Coverage Gap Discount program, which is primarily for the benefit of persons aged 65 years and over.

As our products are often used by patients in this age range, our estimates of these rebates have grown.

Increases in Medicare Coverage Gap Discount rebates could decrease our revenues from product sales, which in turn could adversely affect our business, financial position, and operating results.

We have entered into distribution agreements under which we market products under ANDAs and NDAs owned by third parties.

Any changes to these agreements could have a material adverse effect on our business, financial position, and operating results.

We have entered into several distribution agreements to market and distribute products under our own label that are sold under ANDAs and NDAs owned by third parties, over which we have no control.

Generally, the responsibility for maintaining the ANDAs and NDAs lies with these third parties.

regulatory issues were to arise with the underlying ANDA or NDA for one of these products, we could be required to discontinue

sales of the product, which could have an adverse effect on our business, financial position, and operating results.

We may not achieve the anticipated

benefits from our acquisition of WellSpring Pharma Services Inc.

(“WellSpring”) and we may face integration difficulties,

which could have a material adverse effect on our business, financial position, and operating results.

Our acquisition of WellSpring Pharma Services

Inc., now ANI Pharmaceuticals Canada Inc.

(“ANI Canada”) involved the combination of two companies that operated as

independent companies prior to the closing of the business combination.

The integration of the business may be more time consuming

and require more resources than initially estimated and we may fail to realize some or all of the anticipated benefits of the acquisition

if the integration process takes longer than expected or is more costly than expected.

The integration process could also result

in the diversion of management’s attention, the disruption or interruption of, or the loss of momentum in, the businesses

of ANI and ANI Canada or inconsistencies in standards, controls, procedures, and policies, any of which could adversely affect

our ability to maintain relationships with customers, partners, and employees or our ability to achieve the anticipated benefits

of the acquisition.

Any of these could reduce our earnings or otherwise have a material adverse effect our business, financial

position, and operating results.

We face vigorous competition from

other pharmaceutical manufacturers that threatens the commercial acceptance and pricing of our products.

If we are unable to successfully

compete, such competition could have a material adverse effect on our business, financial position, and operating results.

The generic pharmaceutical industry is

highly competitive.

If any regulatory issues were to arise with the underlying ANDA or NDA for one of these products, we could be required to discontinue sales of the product, which could have an adverse effect on our business, financial position, and operating results.

We face vigorous competition from other pharmaceutical manufacturers that may adversely impact commercial acceptance and pricing of our products.

If we are unable to successfully compete, such competition could have a material adverse effect on our business, financial position, and operating results.

The generic pharmaceutical industry is highly competitive.

We face intense competition from U.S.

and foreign manufacturers, many of whom are significantly larger than

Our competitors may be able to develop products and processes competitive with or superior to ours for many reasons, including

but not limited to the possibility that they may have:

and foreign manufacturers, many of whom are significantly larger than us.

Our competitors may be able to develop products and processes competitive with or superior to ours for many reasons, including but not limited to the possibility that they may have:

● greater financial resources;

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● more experience in developing new drugs.

Any of our significant competitors, due

to one or more of these and other factors, could have a material adverse effect on our business, financial position, and operating

Our approved products may not achieve

commercialization at levels of market acceptance that allow us to achieve profitability, which could have a material adverse effect

on our business, financial position, and operating results.

We seek to develop, license, or acquire

products that we can commercialize at levels of market acceptance that would allow us to recoup our costs, grow market share, and

achieve profitability.

Even if we are able to obtain regulatory approvals for our pharmaceutical products, if we fail to predict

accurately demand for such products, our business, financial position, and operating results could be adversely affected.

of market acceptance for our products could be impacted by several factors, including but not limited to:

Any of our significant competitors, due to one or more of these and other factors, could have a material adverse effect on our business, financial position, and operating results.

Our approved products may not achieve commercialization at levels of market acceptance that allow us to achieve profitability, which could have a material adverse effect on our business, financial position, and operating results.

We seek to develop, license, or acquire products that we can commercialize at levels of market acceptance that would allow us to recoup our costs, grow market share, and achieve profitability.

Even if we are able to obtain regulatory approvals for our pharmaceutical products, if we fail to predict accurately demand for such products, our business,

financial position, and operating results could be adversely affected.

Levels of market acceptance for our products could be impacted by several factors, including but not limited to:

● availability of alternative products from our competitors;

our products’

pricing relative to that of our competitors;

● our products’ pricing relative to that of our competitors;

● our marketing effectiveness relative to that of our competitors;

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● acceptance of our products by government and private formularies.

Some of these factors are outside of our

control and, if any arise, our profitability, business, financial position, and operating results could be materially adversely

We have entered into several collaborative

arrangements that may not result in marketable products.

We have entered into several collaborative

arrangements to develop generic products for us to market in the U.S.

We can offer no assurances that these arrangements will result

in additional approved products, or that we will be able to market the products at a profit.

In addition, any expenses related

to clinical trials, or additional studies required by the FDA, that we may incur in connection with these collaborative arrangements

may negatively affect our business, financial position, and operating results.

Some of these factors are outside of our control and, if any arise, our profitability, business, financial position, and operating results could be materially adversely affected.

We have entered into several collaborative arrangements that may not result in marketable products.

We have entered into several collaborative arrangements to develop generic products for us to market in the U.S.

We can offer no assurances that these arrangements will result in additional approved products, or that we will be able to market the products at a profit.

In addition, any expenses related to clinical trials, or additional studies required by the FDA, that we may incur in connection with these collaborative arrangements may negatively affect our business, financial position, and operating results.

Specifically:

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● formulation development could take longer and be more costly than we expect;

may be required to obtain specialized equipment in order to manufacture products on a commercial scale;

we may be subject to milestone payments to collaborative partners, the

timing of which we may be unable to predict.

Any of these events could have a material

adverse effect on our business, financial position, and operating results.

We expect to spend a significant

amount of resources on research and development efforts, and such efforts may not result in marketable products.

Failure to successfully

introduce products into the market could have a material adverse effect on our business, financial position, and operating results.

We conduct research and development primarily

to enable us to manufacture and market approved products in accordance with applicable regulations.

Research and development is

expensive and time-consuming.

As we seek to develop new products, or re-commercialize products that were previously approved, our

research expenses will increase, potentially significantly, and we cannot be certain that we will recover our investment in a product,

even if that product is commercialized.

If we spend significant resources on research and development efforts and are not able

to introduce new products, our business, financial position, and operating results may be materially adversely affected.

We own three manufacturing facilities

that produce the majority of our products.

Production at any or all of these facilities could be interrupted, which could cause

us to fail to deliver sufficient product to customers on a timely basis and have a material adverse effect on our business, financial

position, and operating results.

Our manufacturing operations are based

in three facilities.

While these facilities are sufficient for our current needs, the facilities are highly specialized and any

damage to or need for replacement of all or any significant function of our facilities could be very costly and time-consuming

and could impair or prohibit production and shipping.

A significant disruption at any of the facilities, even on a short-term basis,

whether due to a labor strike, adverse quality or compliance observation, vandalism, natural disaster, storm or other environmental

damage, or other events could impair our ability to produce and ship products on a timely basis and, among other consequences,

could subject us to “failure to supply”

claims from our customers, as discussed below.

Although we believe we carry

commercially reasonable business interruption and liability insurance, we might suffer losses because of business interruptions

that exceed the coverage available under our insurance policies or for which we do not have coverage.

Any of these events could

have a material adverse effect on our business, financial position, and operating results.

Virtually all our contracts for the supply

of products to our customers contain "failure to supply"

Under these clauses, if we are unable to supply the

requested quantity of product within a certain period after receipt of a customer's purchase order, the customer is entitled to

procure a substitute product elsewhere and we must reimburse the customer for the difference between our contract price and the

price the customer was forced to pay to procure the substitute product.

This difference can be substantial because of the much

higher spot price at which the customer must cover its requirements, and can be far in excess of the revenue that we would otherwise

have received on the sale of our own product.

Therefore, our ability to produce and ship a sufficient quantity of product on a

consistent basis is critical.

Failure to deliver products could have a material adverse effect on our business, financial position,

and operating results.

We rely on third parties to assist

with our clinical studies.

If these third parties do not perform as required or expected, or if they are not in compliance with

FDA rules and regulations, our clinical studies may be extended, delayed or terminated, or may need to be repeated, and we

may not be able to obtain regulatory approval for or commercialize the products being tested in such studies.

Further, we may be

required to audit or redo previously completed trials or recall already-approved commercial products.

We rely on third parties, such as medical

institutions, clinical investigators, and contract laboratories, to assist with our clinical studies.

We are responsible for confirming

that our studies are conducted in accordance with applicable regulations and that each of our clinical studies is conducted in

accordance with our general investigational plan and protocol.

The FDA requires us to comply with regulations and standards, commonly

referred to as good clinical practices for conducting, monitoring, recording, and reporting the results of clinical studies, to

assure that data and reported results are accurate and that the clinical study participants are adequately protected.

on these third parties does not relieve us of these responsibilities.

If the third parties assisting us with our clinical studies

do not perform their contractual duties or obligations, do not meet expected deadlines, fail to comply with the FDA's good clinical

practice regulations, do not adhere to our protocols or otherwise fail to generate reliable clinical data, we may need to enter

into new arrangements with alternative third parties and our clinical studies may be extended, delayed or terminated or may need

to be repeated, and we may not be able to obtain regulatory approval for or commercialize the products being tested in such studies.

For our already-approved commercial products, we may be required to audit or redo previously completed trials or recall our products

from the market, which could have a material adverse effect on our business, financial position, and operating results.

With the exception of a license for

patent technology for Inderal XL and InnoPran XL, we do not own or license any material patents associated with our products, and

our ability to protect and control unpatented trade secrets, know-how, and other technological innovation is limited.

Generally, the branded pharmaceutical business

relies upon patent protection to ensure market exclusivity for the life of the patent.

Except for a license for patent technology

for Inderal XL and InnoPran XL, we do not own or license any material patents associated with our products and therefore do not

enjoy the same level of intellectual property protection with respect to such products as would a pharmaceutical manufacturer that

markets a patented product.

We have limited ability to protect and control trade secrets, know-how, and other technological innovation,

all of which are unpatented.

Others independently may develop similar or better proprietary information and techniques and disclose

them publicly.

In addition, others may gain access to our trade secrets, and we may not be able to protect our rights to our unpatented

trade secrets.

In addition, confidentiality agreements and other measures may not provide protection for our trade secrets in the

event of unauthorized use or disclosure of such information.

Failure to protect and control such trade secrets, know-how and innovation

could harm the value of our trade secrets, know-how and other technological innovation, which could have a material adverse effect

on our business, financial position, and operating results.

Inability to protect our intellectual

property in the U.S.

● we may be required to obtain specialized equipment in order to manufacture products on a commercial scale;

● we may be subject to milestone payments to collaborative partners, the timing of which we may be unable to predict.

Any of these events could have a material adverse effect on our business, financial position, and operating results.

We expect to spend a significant amount of resources on research and development efforts, and such efforts may not result in marketable products.

Failure to successfully introduce products into the market could have a material adverse effect on our business, financial position, and operating results.

We conduct research and development primarily to enable us to manufacture and market approved products in accordance with applicable regulations.

Research and development is expensive and time-consuming.

As we seek to develop new products, or re-commercialize products that were previously approved, our research expenses will increase, potentially significantly, and we cannot be certain that we will recover our investment in a product, even if that product is commercialized.

If we spend significant resources on research and development efforts and are not able to introduce new products, our business, financial position, and operating results may be materially adversely affected.

We own three manufacturing facilities that produce the majority of our products.

Production at any or all of these facilities could be interrupted, which could cause us to fail to deliver sufficient product to customers on a timely basis and have a material adverse effect on our business, financial position, and operating results.

Our manufacturing operations are based in three facilities.

While these facilities are sufficient for our current needs, the facilities are highly specialized and any damage to or need for replacement of all or any significant function of our facilities could be very costly and time-consuming and could impair or prohibit production and shipping.

A significant disruption at any of the facilities, even on a short-term basis, whether due to a labor strike, adverse quality or compliance observation, vandalism, natural disaster, storm or other environmental damage, or other events could impair our ability to produce and ship products on a timely basis and, among other consequences, could subject us to “failure to supply” claims from our customers, as discussed below.

Although we believe we carry commercially reasonable business interruption and liability insurance, we might suffer losses because of business interruptions that exceed the coverage

available under our insurance policies or for which we do not have coverage.

Any of these events could have a material adverse effect on our business, financial position, and operating results.

Virtually all our contracts for the supply of products to our customers contain "failure to supply"

clauses which require us to reimburse the customer for the difference between our contract price and the price the customer was forced to pay to procure the substitute product in the event we failed to deliver the requested quantity within a specified period of time.

This difference can be substantial because of the much higher spot price at which the customer must cover its requirements and can be far in excess of the revenue that we would otherwise have received on the sale of our own product.

Therefore, our ability to produce and ship a sufficient quantity of product on a consistent basis is critical.

Failure to deliver products could have a material adverse effect on our business, financial position, and operating results.

We rely on third parties to assist with our clinical studies.

If these third parties do not perform as required or expected, or if they are not in compliance with FDA rules and regulations, our clinical studies may be extended, delayed or terminated, or may need to be repeated, and we may not be able to obtain regulatory approval for or commercialize the products being tested in such studies.

Further, we may be required to audit or redo previously completed trials or recall already-approved commercial products.

We rely on third parties, such as medical institutions, clinical investigators, and contract laboratories, to assist with our clinical studies.

We are responsible for confirming that our studies are conducted in accordance with applicable regulations and that each of our clinical studies is conducted in accordance with our general investigational plan and protocol.

The FDA requires us to comply with regulations and standards, commonly referred to as good clinical practices for conducting, monitoring, recording, and reporting the results of clinical studies, to assure that data and reported results are accurate and that the clinical study participants are adequately protected.

Our reliance on these third parties does not relieve us of these responsibilities.

If the third parties assisting us with our clinical studies do not perform their contractual duties or obligations, do not meet expected deadlines, fail to comply with the FDA’s good clinical practice regulations, do not adhere to our protocols or otherwise fail to generate reliable clinical data, we may need to enter into new arrangements with alternative third parties and our clinical studies may be extended, delayed or terminated or may need to be repeated, and we may not be able to obtain regulatory approval for or commercialize the products being tested in such studies.

For our already-approved commercial products, we may be required to audit or redo previously completed trials or recall our products from the market, which could have a material adverse effect on our business, financial position, and operating results.

With the exception of a license for patent technology for Inderal XL and InnoPran XL, we do not own or license any material patents associated with our products, and our ability to protect and control unpatented trade secrets, know-how, and other technological innovation is limited.

Generally, the branded pharmaceutical business relies upon patent protection to ensure market exclusivity for the life of the patent.

Except for a license for patent technology for Inderal XL and InnoPran XL, we do not own or license any material patents associated with our products and therefore do not enjoy the same level of intellectual property protection with respect to such products as would a pharmaceutical manufacturer that markets a patented product.

We have limited ability to protect and control trade secrets, know-how, and other technological innovation, all of which are unpatented.

Others independently may develop similar or better proprietary information and techniques and disclose them publicly.

In addition, others may gain access to our trade secrets, and we may not be able to protect our rights to our unpatented trade secrets.

In addition, confidentiality agreements and other measures may not provide protection for our trade secrets in the event of unauthorized use or disclosure of such information.

Failure to protect and control such trade secrets, know-how and innovation could harm the value of our trade secrets, know-how and other technological innovation, which could have a material adverse effect on our business, financial position, and operating results.

Inability to protect our intellectual property in the U.S.

and foreign countries could negatively affect sales of our branded products.

We own the trademark names for most of

our branded products, including, Cortenema, Cortrophin Gel, Cortrophin-Zinc, Inderal LA, Inderal XL, InnoPran XL,

Lithobid, Reglan, and Vancocin.

We own the trademark names for most of our branded products, including, Cortenema, Cortrophin Gel, Cortrophin-Zinc, Inderal LA, Inderal XL, InnoPran XL, Lithobid, Reglan, and Vancocin.

We license the trademark names for Atacand, Atacand HCT, Arimidex, and Casodex.

While we will seek

to protect those trademarks through timely renewal in applicable jurisdictions, we may not be able to renew our trademarks in a

timely manner or to prevent third parties from using our trademarks, which could have a material adverse effect on our business,

financial position, and operating results.

We have very limited staffing and

are dependent upon key employees, the loss of whom could adversely affect our operations.

Competition for talent is intense, especially

in northern Minnesota, where the population is small.

If we cannot attract and retain qualified personnel, the growth and success

of our business could be adversely affected.

Our success is dependent upon the efforts

of a relatively small management team and staff.

We have employment arrangements in place with our executive and other officers,

but none of these executive and other officers are bound legally to remain employed with ANI for any specific term.

We do not have

key person life insurance policies covering our executive and other officers or any of our other employees.

If key individuals

were to leave ANI, our business could be affected adversely if suitable replacement personnel are not recruited quickly.

The population

in northern Minnesota, where two of our manufacturing facilities are located, is small, and as a result, there is a limited number

of qualified personnel available in all functional areas, which could make it difficult to retain and attract the qualified personnel

necessary for the development and growth of our business.

If we were unable to attract and retain qualified personnel, our business,

financial position, and operating results could be materially adversely affected.

We rely significantly on information

technology and any failure, inadequacy, interruption, or security lapse of that technology, including any cybersecurity incidents,

could harm our ability to operate the business effectively.

We rely significantly on our information

technology and manufacturing infrastructure to effectively manage and maintain inventory and financial reports, manufacture and

ship products, and invoice customers in a timely manner.

While we have invested in the protection of data and information technology,

any failure, accidents, inadequacy, or interruption of that infrastructure or security lapse of that technology, including cybersecurity

incidents, could harm our ability to operate our business effectively.

Our ability to manage and maintain inventory and financial

reports, manufacture and ship products, and invoice customers timely depends significantly on our general ledger, our contracted

electronic data interface system, and other information systems.

Cybersecurity attacks in particular are evolving and include,

but are not limited to, malicious software, attempts to gain unauthorized access to data and other electronic security breaches

that could lead to disruptions in systems, misappropriation of confidential or otherwise protected information and corruption of

Cybersecurity incidents resulting in the failure of our information systems to operate effectively or to integrate with other

systems, or a breach in security or other unauthorized access of these systems, may affect our ability to manage and maintain inventory

and financial reports, and result in delays in product fulfillment and reduced efficiency of operations.

A breach in security,

unauthorized access resulting in misappropriation, theft, or sabotage with respect to proprietary and confidential information,

including research or clinical data could require significant capital investments to remediate any such failure, problem or breach,

all of which could adversely affect our business, financial position, and operating results.

We may become involved in legal

proceedings from time to time which may result in substantial losses, government enforcement actions, damage to our business and

reputation, and place a strain on our internal resources.

the ordinary course of our business, we may become involved in legal proceedings, as a party or non-party witness, with both private

parties and certain government agencies.

We may incur substantial time and expenses participating in these types of lawsuits and

investigations, which could also divert management’s attention from ongoing business concerns and normal operations.

addition, these matters and any other substantial litigation may result in verdicts against us or government enforcement actions,

which may include significant monetary awards, and preventing the manufacture, marketing and sale of our products.

resolved unfavorably, could have a material adverse effect on our business, financial position, and operating results.

Commitments and Contingencies, in the notes to the consolidated financial statements in Part II - Item 8 of

this Annual Report on Form 10-K.

We are susceptible to product liability

claims that may not be covered by insurance, which, if successful, could require us to pay substantial sums.

Like all pharmaceutical companies, we face of the risk of loss

resulting from, and the adverse publicity associated with, product liability lawsuits, whether or not such claims are valid.

likely cannot avoid such claims.

Unanticipated side effects or unfavorable publicity concerning any of our products or product

candidates would likely have an adverse effect on our ability to achieve acceptance by prescribing physicians, managed care providers,

pharmacies and other retailers, customers, patients and clinical trial participants.

Even unsuccessful product liability claims

could require us to spend money on litigation, divert management’s time, damage our reputation and impair the marketability

of our products.

In addition, although we believe that we have adequate product liability insurance coverage, we cannot be certain

that our insurance will, in fact, be sufficient to cover such claims or that we will be able to obtain or maintain adequate insurance

coverage in the future at acceptable prices.

A successful product liability claim that is excluded from coverage or exceeds our

policy limits could require us to pay substantial sums.

Additionally, insurance coverage for product liability may become prohibitively

expensive in the future or may not be available at all, and as a result, we may not be able to maintain adequate product liability

insurance coverage to mitigate the risk of large claims, or we may be required to maintain a larger self-insured retention that

we would otherwise choose.

Risks Related to Accounting, Tax, and SEC Rules and

We have increased exposure to tax

liabilities, including foreign tax liabilities.

While we will seek to protect those trademarks through timely renewal in applicable jurisdictions, we may not be able to renew our trademarks in a timely manner or to prevent third parties

from using our trademarks, which could have a material adverse effect on our business, financial position, and operating results.

We have very limited staffing and are dependent upon key employees, the loss of whom could adversely affect our operations.

Competition for talent is intense, especially in northern Minnesota, where the population is small.

If we cannot attract and retain qualified personnel, the growth and success of our business could be adversely affected.

Our success is dependent upon the efforts of a relatively small management team and staff.

We have employment arrangements in place with our executive and other officers, but none of these executive and other officers are bound legally to remain employed with ANI for any specific term.

We do not have key person life insurance policies covering our executive and other officers or any of our other employees.

If key individuals were to leave ANI, our business could be affected adversely if suitable replacement personnel are not recruited quickly.

The population in northern Minnesota, where two of our manufacturing facilities are located, is small, and as a result, there is a limited number of qualified personnel available in all functional areas, which could make it difficult to retain and attract the qualified personnel necessary for the development and growth of our business.

If we were unable to attract and retain qualified personnel, our business, financial position, and operating results could be materially adversely affected.

We rely significantly on information technology and any failure, inadequacy, interruption, or security lapse of that technology, including any cybersecurity incidents, could harm our ability to operate the business effectively.

We rely significantly on our information technology and manufacturing infrastructure to effectively manage and maintain inventory and financial reports, manufacture and ship products, and invoice customers in a timely manner.

While we have invested in the protection of data and information technology, any failure, accidents, inadequacy, or interruption of that infrastructure or security lapse of that technology, including cybersecurity incidents, could harm our ability to operate our business effectively.

Our ability to manage and maintain inventory and financial reports, manufacture and ship products, and invoice customers timely depends significantly on our general ledger, our contracted electronic data interface system, and other information systems.

Cybersecurity attacks in particular are evolving and include, but are not limited to, malicious software, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in systems, misappropriation of confidential or otherwise protected information and corruption of data.

Cybersecurity incidents resulting in the failure of our information systems to operate effectively or to integrate with other systems, or a breach in security or other unauthorized access of these systems, may affect our ability to manage and maintain inventory and financial reports, and result in delays in product fulfillment and reduced efficiency of operations.

A breach in security, unauthorized access resulting in misappropriation, theft, or sabotage with respect to proprietary and confidential information, including research or clinical data could require significant capital investments to remediate any such failure, problem or breach, all of which could adversely affect our business, financial position, and operating results.

We are currently involved in and may from time to time become involved in legal proceedings, some of which may result in substantial losses, government enforcement actions, damage to our business and reputation, and place a strain on our internal resources.

We are currently involved in and in the future may become involved in legal proceedings in the ordinary course of our business, , as a party or non-party witness, with both private parties and certain government agencies.

We may incur substantial time and expenses participating in these types of lawsuits and investigations, which could also divert management’s attention from ongoing business concerns and normal operations.

In addition, these matters and any other substantial litigation may result in verdicts against us or government enforcement actions, which may include significant monetary awards, and preventing the manufacture, marketing and sale of our products.

Any dispute resolved unfavorably, could have a material adverse effect on our business, financial position, and operating results.

For a description of legal proceedings which are currently pending, see Note 12.

Commitments and Contingencies, in the notes to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

We are susceptible to product liability claims that may not be covered by insurance, which, if successful, could require us to pay substantial sums.

Like all pharmaceutical companies, we face of the risk of loss resulting from, and the adverse publicity associated with, product liability lawsuits, whether or not such claims are valid.

We likely cannot avoid such claims.

Unanticipated side effects or unfavorable publicity concerning any of our products or product candidates would likely have an adverse effect on our ability to achieve acceptance by prescribing physicians, managed care providers, pharmacies and other retailers, customers, patients and clinical trial participants.

Even unsuccessful product liability claims could require us to spend money on litigation, divert management’s time, damage our reputation and impair the marketability of our products.

In addition, although we believe that we have adequate product liability insurance coverage, we cannot be certain that our insurance will, in fact, be sufficient to cover such claims or that we will be able to obtain or maintain adequate insurance coverage in the future at acceptable prices.

A successful product liability claim that is excluded from coverage or exceeds our policy limits could require us to pay substantial sums.

Additionally, insurance coverage for product liability may become prohibitively expensive in the future or may not be available at all, and as a result, we may not be able to maintain adequate product liability insurance coverage to mitigate the risk of large claims, or we may be required to maintain a larger self-insured retention that we would otherwise choose.

Currency fluctuations and changes in exchange rates could have a material adverse effect on our business, financial position, and operating results.

A portion of our transactions are denominated in a foreign currency, the Canadian dollar.

Because we engage in certain transactions in a foreign currency, we are subject to the effects of exchange rate fluctuations.

dollar depreciates against the Canadian dollar, the expenses we recognize from Canadian-denominated transactions made by our Canadian subsidiary could be translated at an unfavorable rate, leading to foreign exchange losses.

Foreign exchange gains or losses as a result of exchange rate fluctuations in any given period could harm our operating results and negatively impact our financial position and results of operations.

Risks Related to our Industry

The COVID-19 pandemic has resulted in significant financial market volatility, and its impact on the global economy and our operations remains uncertain.

A continuation or worsening of the pandemic could have a material adverse impact on our business, results of operations and financial condition and on the market price of our common stock.

On March 12, 2020, the World Health Organization declared COVID-19 to be a pandemic.

In an effort to contain and mitigate the spread of COVID-19, many countries, including the United States and Canada, imposed unprecedented restrictions on travel, and there were business closures and a substantial reduction in economic activity in countries that have had significant outbreaks of COVID-19.

Significant uncertainty remains as to the continued potential impact of the COVID-19 pandemic on our operations and on the global economy as a whole.

Demand for the products we sell was negatively impacted by COVID-19 during the year ended December 31, 2020, and most significantly during the three month period ended June 30, 2020, as fewer patients visited physicians for conditions treated by our products, fewer elective surgeries occurred and visits to pharmacies declined due to government-mandated “shelter-in-place” orders and closures of or restrictions placed on visits to medical offices and facilities.

This situation could continue or worsen depending on the duration and severity of the COVID-19 pandemic, the level of success in implementing mitigation measures, such as vaccines, the length of time it takes for normal economic and operating conditions to resume, additional governmental actions that may be taken and/or extensions of time for restrictions that been imposed to date, and numerous other uncertainties.

While many of government-mandated “shelter-in-place” or similar orders have elapsed or become less restrictive, it is possible future similar orders could be reinstituted due to uncertainty regarding the virus that causes COVID-19, including the emergence of new strains, which could negatively impact in future product sales.

It is currently not possible to predict how long the pandemic will last, whether “shelter-in-place” orders will be reinstituted, the availability of vaccines to the general population or the time that it will take for economic activity to return to pre-pandemic levels.

The COVID-19 pandemic has resulted in significant financial market volatility and uncertainty.

A continuation or worsening of the levels of market disruption and volatility seen in the recent past could have an adverse effect on our ability to access capital, our pharmaceutical supply chain, our business, results of operations and financial condition, and the market price of our common stock.

The continuing trend toward consolidation of customer groups could result in declines in the sales volume and prices of our products, and increased fees charged by customers, each of which could have a material adverse effect on our business, financial position, and operating results.

Consolidation and the formation of strategic partnerships among and between wholesale distributors, chain drug stores, and group purchasing organizations has resulted in a smaller number of companies, each controlling a larger share of pharmaceutical distribution channels.

For example, our net revenues are concentrated among three customers representing 34%, 24%, and 19% of net revenues, respectively, during the year ended December 31, 2020.

As of December 31, 2020, accounts receivable from these three customers was approximately 81% of our accounts receivable, net.

Drug wholesalers and retail pharmacy chains, which represent an essential part of the distribution chain for generic pharmaceutical products, have undergone, and are continuing to undergo, significant consolidation.

This consolidation may result in declines in our sales volumes if a customer is consolidated into another company that purchases products from a competitor.

In addition, the consolidation of drug wholesalers and retail pharmacy chains could result in these groups gaining additional purchasing leverage and consequently increasing the product pricing pressures facing our business and enabling those groups to charge us increased fees.

Additionally, the emergence of large buying groups representing independent retail pharmacies and the prevalence and influence of managed care organizations and similar institutions potentially enable those groups to extract price discounts on our products.

The result of these developments or the loss of our relationship with one or more of these wholesalers, may have a material adverse effect on our business, financial position, and operating results.

Our reporting and payment obligations under the Medicaid rebate program and other governmental purchasing and rebate programs are complex and may involve subjective decisions.

Any determination that we have failed to comply with those obligations could subject us to penalties and sanctions, which could adversely affect our business, financial position, and operating results.

The regulations regarding reporting and payment obligations with respect to Medicaid rebates and other governmental programs are complex.

Because our processes for these calculations and the judgments involved in making these calculations involve subjective decisions and complex methodologies, these calculations are subject to the risk of errors.

Our calculations and methodologies are subject to review and challenge by governmental agencies, and it is possible that such reviews could result in changes.

Any determination by governmental agencies that we have failed to comply with our reporting and payment obligations could subject us to penalties and sanctions, which could have a material adverse effect on our business, financial position, and operating results.

Two of our products, which together comprised 8% of our total revenue in 2020, are marketed without approved NDAs or Abbreviated New Drug Applications (“ANDAs”) and we can offer no assurances that the U.S.

Food and Drug Administration (“FDA”) will not require us to either seek approval for these products or withdraw them from the market.

In either case, our business, financial position, and operating results could be materially adversely affected.

Two of our products, Esterified Estrogen with Methyltestosterone (“EEMT”) and Opium Tincture, are marketed without approved NDAs or ANDAs.

Previously, the FDA’s Unapproved Drug Initiative included publication of their policy with respect to the continued marketing of unapproved products in the September 2011 Compliance Policy Guide Sec.

440.100 titled “Marketed New Drugs without Approved NDAs or ANDAs.” Under this policy, the FDA had stated that it would follow a risk-based approach with regard to enforcement against marketing of unapproved products.

The guideline allowed the FDA to evaluate whether to initiate enforcement action on a case-by-case basis, while giving higher priority to enforcement action against products in certain categories, such as those with potential safety risks or that lack evidence of

effectiveness.

In November 2020 (effective December 2020), the Department of Health and Human Services (“HHS”) published a notice in the Federal Register to terminate the FDA’s Unapproved Drug Initiative, which would include the withdrawal of this September 2011 Compliance Policy Guide.

Neither the HHS nor the FDA has provided any additional guidance, notice or statement regarding how they intend to approach enforcement against marketing of unapproved products.

We continue to believe that, so long as we comply with applicable manufacturing standards, the FDA will continue to operate on a risk-based approach and will not take action against us.

However, we can offer no assurance that the FDA will continue to follow this approach or that it will not take a contrary position with any individual product or group of products.

Additionally, our EEMT products are related to an outstanding Notice of Opportunity for Hearing on estrogen-androgen products.

The hearing relates to the FDA's intent to reclassify certain estrogen-androgen combination drugs as lacking substantial evidence of their effectiveness for the treatment of moderate to severe vasomotor symptoms associated with the menopause in those patients not improved by estrogen alone.

If the FDA were to move away from the risk-based approach to enforcement against marketing of unapproved products, we may be required to seek FDA approval for these products or withdraw such products from the market.

If we decide to withdraw the products from the market, our net revenues for generic pharmaceutical products would decline materially, and if we decide to seek FDA approval, we would face increased expenses and might need to suspend sales of the products until such approval was obtained, and there are no assurances that we would receive such approval.

Imported API are subject to inspection by the FDA and the FDA can refuse to permit the importation of API for use in products that are marketed without approved NDAs or ANDAs.

We are dependent on imported API to make certain of our products.

If the FDA detained or refused to allow the importation of such API, our revenues from certain of our products would be reduced or eliminated and our business, financial position, and operating results could be materially adversely affected.

We source some of the API for our products, including those that are marketed without approved NDAs or ANDAs, from international suppliers.

From time to time, due to FDA inspections, we have experienced temporary disruptions in the supply of imported API.

Any prolonged disruption in the supply of imported API could materially affect our ability to manufacture and distribute our products, reduce or eliminate our revenues, and have a material adverse effect on our business, financial position, and operating results.

In addition, as regulatory fees and compliance oversight of API manufacturers increase, this could result in certain companies discontinuing their supply of API to ANI, which would materially affect ANI’s ability to manufacture its products.

The FDA does not provide guidance on safety labeling for products that are marketed without approved NDAs or ANDAs.

As a result, we are dependent on our internal post-approval drug safety surveillance program to identify necessary safety-related changes to the labels for EEMT and Opium Tincture.

Pharmaceutical product labels contain important safety information including Black Box warnings, contraindications, dosing and administration, adverse reactions, drug interactions, use in specific populations such as pregnant women, pediatric, and geriatric patients, and other warnings and precautions.

Pharmaceutical manufacturers may change product labels when post-approval drug safety surveillance programs identify previously unknown side-effects, drug interactions, and other risks.

Manufacturers may also change product labels after conducting post-approval clinical studies and may receive or seek guidance from the FDA regarding updating safety labeling information.

However, the FDA does not provide guidance on labeling for products that are marketed without approved NDAs or ANDAs.

As a result, we are dependent on our internal post-approval drug safety surveillance program to identify necessary safety-related changes to the labels for EEMT and Opium Tincture.

Additionally, because the FDA does not review and approve labeling for the products without approved NDAs or ANDAs, it would be difficult to make a claim for preemption due to the FDA’s approval of the labeling and this could increase our potential liability with respect to failure-to-warn claims for these products.

Such claims, even if successfully defended, could have an adverse impact on our business, financial position, and operating results.

We are entirely dependent on periodic approval by the DEA for the supply of the API needed to manufacture our controlled substances.

An inability to obtain such approvals would reduce or eliminate our revenues for our controlled substances, and could have a material adverse effect on our business, financial position, and operating results.

In addition, we are subject to strict regulation by the DEA and are subject to sanctions if we are unable to comply with related regulatory requirements.

The DEA regulates products containing controlled substances, such as opiates, pursuant to the U.S.

Controlled Substances Act (“CSA”).

The CSA and DEA regulations impose specific requirements on manufacturers and other entities that handle these substances including registration, recordkeeping, reporting, storage, security, and distribution.

Recordkeeping requirements include accounting for the amount of product received, manufactured, stored, and distributed.

Companies handling controlled substances also are required to maintain adequate security and to report suspicious orders, thefts and significant losses.

The DEA periodically inspects facilities for compliance with the CSA and its regulations.

Failure to comply with current and future regulations of the DEA could lead to a variety of sanctions, including revocation or denial of renewal of DEA registrations, injunctions, or civil or criminal penalties.

In addition, each year, we must submit a request to the DEA for a procurement quota in order to purchase the amount of API needed to manufacture our Schedule II controlled substances.

Without approved procurement quotas from the DEA, we would not be able to purchase these ingredients from our suppliers.

As a result, we are entirely dependent upon the DEA to approve, on an annual basis, a quota of API that is sufficiently large to support our plans for the continued manufacture of our controlled substances at commercial levels.

In 2017, the DEA announced that the administration would decrease the total quotas approved for Schedule II opioid painkillers.

In 2018, the DEA decreased quotas approved for Schedule II opioid painkillers.

The DEA continues to closely monitor quotas of certain opioids and as a result there may be a reduction from what was requested;

however, firms may file an application for a quota adjustment at any time during the calendar year.

If the DEA does not approve our requested procurement quotas, we may be unable to obtain sufficient API to manufacture these products at levels required by our customers, which could have an adverse impact on our business, financial position, and operating results.

Pharmaceutical product quality standards are steadily increasing and all products, including those already approved, may need to meet current standards.

If our products are not able to meet these standards, we may be required to discontinue marketing and/or recall such products from the market.

Steadily increasing quality standards are applicable to pharmaceutical products still under development and those already approved and on the market.

These standards result from product quality initiatives implemented by the FDA, such as criteria for residual solvents, periodic guidance from the FDA regarding testing for impurities, such as nitrosamine, in our products, and updated U.S.

Pharmacopeial Convention (“USP”) Reference Standards.

The USP is a scientific nonprofit organization that sets standards for the identity, strength, quality, and purity of medicines, food ingredients, and dietary supplements manufactured, distributed, and consumed worldwide.

Pharmaceutical products approved prior to the implementation of new quality standards, including those produced by us, may not meet these standards, which could require us to discontinue marketing and/or recall such products from the market, either of which could adversely affect our business, financial position, and operating results.

In addition, results of periodic testing we conduct on our products may indicate the presence of substances at levels above which are acceptable under FDA or other standards, which will require a recall of the product.

For example, during the fourth quarter of 2019, testing of the API used in our ranitidine drug product, as well as testing of the drug product itself, indicated a level of a nitrosamine impurity called N-nitrosdimethylamine (“NDMA”) above acceptable thresholds.

NDMA is classified as a probable human carcinogen.

Appco Pharma, LLC, with whom we had partnered to develop and market the product, initiated a voluntary recall, and we elected to exit the market for Ranitidine in 2019.

In July 2020, we were served with a complaint brought by the Office of the Attorney General of the State of New Mexico against manufacturers and sellers of ranitidine products.

The complaint asserts a public nuisance claim and a negligence claim against the generic ranitidine manufacturer defendants, including us.

The public nuisance claim asserts that the widespread sale of ranitidine products in the state created a public nuisance that requires a state-wide medical monitoring program of New Mexico residents for the development of colorectal cancer, stomach cancer, gastrointestinal disorders and liver disease.

We may become subject to federal and state false claims litigation brought by private individuals and the government.

We are subject to state and federal laws that govern the submission of claims for reimbursement.

The Federal False Claims Act (“FFCA”), also known as Qui Tam, imposes civil liability and criminal fines on individuals or entities that knowingly submit, or cause to be submitted, false or fraudulent claims for payment to the government.

Violations of the FFCA and other similar laws may result in criminal fines, imprisonment, and civil penalties for each false claim submitted and exclusion from federally funded health care programs, including Medicare and Medicaid.

The FFCA also allows private individuals to bring a suit on behalf of the government against an individual or entity for violations of the FFCA.

These suits, also known as Qui Tam actions, may be brought by, with only a few exceptions, any private citizen who has material information of a false claim that has not yet been previously disclosed.

These suits have increased significantly in recent years because the FFCA allows an individual to share in any amounts paid to the federal government from a successful Qui Tam action.

If our past or present operations are found to be in violation of any of such laws or other applicable governmental regulations, we may be subject to civil and criminal penalties, damages, fines, exclusion from federal health care programs, and/or the curtailment or restructuring of our operations, any of which could materially adversely affect our business, financial position, and operating results.

Actions brought against ANI for violations of these laws, even if successfully defended, could also have a material adverse effect on our business, financial position, and operating results.

The use of legal, regulatory, and legislative strategies by competitors, both branded and generic, including "authorized generics,"

citizen’s petitions, and legislative proposals, may increase the costs to develop and market our generic products, could delay or prevent new product introductions, and could significantly reduce our profit potential.

These factors could have a material adverse effect on our business, financial position, and operating results.

Our competitors, both branded and generic, often pursue legal, regulatory, and/or legislative strategies to prevent or delay competition from generic alternatives to branded products.

These strategies include, but are not limited to:

● entering into agreements whereby other generic companies will begin to market an authorized generic, a generic equivalent of a branded product, at the same time generic competition initially enters the market;

● launching a generic version of their own branded product at the same time generic competition initially enters the market;

● filing citizen petitions with the FDA or other regulatory bodies, including timing the filings so as to thwart generic competition by causing delays of generic product approvals;

● seeking to establish regulatory and legal obstacles that would make it more difficult to demonstrate bioequivalence or meet other approval requirements;

● initiating legislative and regulatory efforts to limit the substitution of generic versions of branded pharmaceuticals;

● filing suits for patent infringement that may delay regulatory approval of generic products;

● introducing "next-generation"

products prior to the expiration of market exclusivity for the reference product, which often materially reduces the demand for the first generic product;

● obtaining extensions of market exclusivity by conducting clinical trials of branded drugs in pediatric populations or by other potential methods;

● persuading regulatory bodies to withdraw the approval of branded name drugs for which the patents are about to expire, thus allowing the branded company to obtain new patented products serving as substitutes for the products withdrawn;

● seeking to obtain new patents on drugs for which patent protection is about to expire.

If we cannot compete with such strategies, our business, financial position, and operating results could be adversely impacted.

If third-party payers deny coverage, substitute another company’s product for our product, or offer inadequate levels of reimbursement, we may not be able to market our products effectively or we may be required to offer our products at prices lower than anticipated.

Third-party payers are increasingly challenging the prices charged for medical products and services.

For example, third-party payers may deny coverage, choose to provide coverage for a competitor’s bioequivalent product rather than our product, or offer limited reimbursement if they determine that a prescribed product has not received appropriate clearances from the FDA, is not used in accordance with cost-effective treatment methods as determined by the third-party payer, or is experimental, unnecessary, or inappropriate.

Prices also could be driven down by health maintenance organizations that control or significantly influence purchases of healthcare services and products.

If third-party payers deny coverage or limit reimbursement, we may not be able to market our products effectively or we may be required to offer our products at prices lower than anticipated.

We are subject to federal, state, and local laws and regulations, and complying with these may cause us to incur significant additional costs.

The pharmaceutical industry is subject to regulation by various federal authorities, including the FDA, the DEA, and state governmental authorities.

Federal and state statutes and regulations govern or influence the testing, manufacturing, packing, labeling, storing, record keeping, safety, approval, advertising, promotion, sale, and distribution of our products.

Noncompliance with applicable legal and regulatory requirements can have a broad range of consequences, including warning letters, fines, seizure of products, product recalls, total or partial suspension of production and distribution, refusal to approve NDAs or other applications or revocation of approvals previously granted, withdrawal of product from marketing, injunctions, withdrawal of licenses or registrations necessary to conduct business, disqualification from supply contracts with the government, civil penalties, debarment, and criminal prosecution.

facilities where prescription drugs are manufactured, tested, packaged, stored, or distributed must comply with FDA current good manufacturing practices (“cGMPs”).

All of our products are manufactured, tested, packaged, stored, and distributed according to cGMP regulations.

The FDA performs periodic audits to ensure that our facilities remain in compliance with all applicable regulations.

If it finds violations of cGMP, the FDA could make its concerns public and could impose sanctions including, among others, fines, product recalls, total or partial suspension of production and/or distribution, suspension of the FDA’s review of product applications, injunctions, and civil or criminal prosecution.

If imposed, enforcement actions could have a material adverse effect on our business, financial position, and operating results.

Under certain circumstances, the FDA also has the authority to revoke previously granted drug approvals.

Although we have internal compliance programs in place that we believe are adequate, the FDA may conclude that these programs do not meet regulatory standards.

If compliance is deemed deficient in any significant way, it could have a material adverse effect on our business.

government has enacted the Federal Drug Supply Chain Security Act ("DSCSA") that requires development of an electronic pedigree to track and trace each prescription drug at the salable unit level through the distribution system, which will be effective incrementally over a 10-year period.

All prescription pharmaceutical products distributed in the U.S.

must be serialized with unique product identifiers.

ANI started manufacturing serialization-compliant products in November 2018.

The final requirement for tracking the products will commence on November 27, 2023.

Compliance with DSCSA and future U.S.

federal or state electronic pedigree requirements may increase the Company’s operational expenses and impose significant administrative burdens.

In addition, if we are unable to comply with DSCSA as of the required dates, we could face penalties or be unable to sell our products.

Our research, product development, and manufacturing activities involve the controlled use of hazardous materials, and we may incur significant costs in complying with numerous laws and regulations.

We are subject to laws and regulations enforced by the FDA, the DEA, and other regulatory statutes including the Occupational Safety and Health Act (“OSHA”), the Environmental Protection Act, the Toxic Substances Control Act, the Resource Conservation and Recovery Act, and other current and potential federal, state, local, and foreign laws and regulations governing the use, manufacture, storage, handling, and disposal of our products, materials used to develop and manufacture such products, and resulting waste products.

We cannot completely eliminate the risk of contamination or injury, by accident or as the result of intentional acts, from these materials.

In the event of an accident, we could be held liable for any damages that result, and any resulting liability could exceed our resources.

We may also incur significant costs in complying with environmental laws and regulations in the future.

We are also subject to laws generally applicable to businesses, including but not limited to, federal, state, and local regulations relating to wage and hour matters, employee classification, mandatory healthcare benefits, unlawful workplace discrimination, and whistle-blowing.

Any actual or alleged failure to comply with any regulation applicable to our business or any whistle-blowing claim, even if without merit, could result in costly litigation, regulatory action or otherwise harm our business, financial position, and operating results.

Our operations in an international market subject us to additional regulatory oversight both in the international market and in the U.S., as well as, social, and political uncertainties, which could cause a material adverse effect on our business, financial position, and operating results.

We are subject to certain risks associated with having assets and operations located in a foreign jurisdiction, including our operations in Canada.

Our Canadian operations are subject to regulation by Health Canada and other federal, provincial, and local regulatory authorities.

Health Canada regulates the testing, manufacture, labeling, marketing, and sale of pharmaceutical products manufactured and distributed in Canada.

Our operations in this jurisdiction may be adversely affected by general economic conditions and economic and fiscal policy, including changes in exchange rates and controls, interest rates and taxation policies, and increased government regulation, which could have a material adverse effect on our business, financial position, and operating results.

Continuing studies of our products could produce negative results, which could require us to implement risk management programs, or discontinue product marketing.

In addition, ongoing post-approval drug safety surveillance of our products could result in the submission of adverse event reports to the FDA.

Studies of the proper utilization, safety, and efficacy of pharmaceutical products are being conducted by the industry, government agencies, and others on a continuous basis.

Such studies, which increasingly employ sophisticated methods and techniques, can call into question the utilization, safety, and efficacy of current and previously marketed products, including those that we produce.

In addition, we are required by the FDA to submit reports of adverse events involving the use of our products.

In some cases, studies and safety surveillance programs have resulted, and in the future may result, in the one or more of the following:

● product label changes including FDA-mandated Black Box warnings;

● risk management programs such as patient registries;

● reduced product sales due to concerns among patients and physicians;

● discontinuance of product marketing.

These situations, should they occur with respect to any of our products, could have a material adverse effect on our business, financial position, and operating results.

Healthcare reform legislation could have a material adverse effect on our business, financial position, and operating results.

In recent years, there have been numerous initiatives on the federal and state levels for comprehensive reforms affecting the payment for, the availability of, and reimbursement for healthcare services in the U.S., and it is likely that federal and state legislatures and health agencies will continue to focus on healthcare reform in the future.

The Patient Protection and Affordable Care Act (“PPACA”) and the Health Care and Education and Reconciliation Act of 2010, which amends the PPACA (collectively, “the ACA”) substantially changed the way healthcare is financed by both governmental and private insurers.

While the ACA may increase the number of patients who have insurance coverage for our products and may otherwise increase drug coverage, it also includes provisions such as, among others, the assessment of a pharmaceutical manufacturer fee, the requirement that manufacturers provide discounts to Medicare beneficiaries through the Medicare Coverage Gap Discount program, and an increase in the amount of rebates that manufacturers pay for coverage of their drugs by Medicaid programs.

The constitutionality of the PPACA is currently under review by the U.S.

Supreme Court, and it is unclear when a decision will be reached.

We expect that the PPACA, as currently enacted or as it may be amended in the future, and other healthcare reform measures that may be adopted in the future, could have a material adverse effect on our industry generally and on our ability to maintain or increase sales of our existing products.

The cost-containment measures that government programs and healthcare insurers are instituting both as a result of general cost pressure in the industry and healthcare reforms contained in the ACA may adversely affect the demand for our products and prevent us from maintaining prices for our products that are sufficient for us to realize profits and may otherwise harm our business, financial position, and operating results.

In addition, to the extent that our products are marketed outside of the U.S., foreign government pricing controls and other regulations may prevent us from maintaining prices for such products that are sufficient for us to realize profits and may otherwise harm our business, financial position, and operating results.

We expect that legislators, policymakers and healthcare insurance funds in Europe will continue to propose and implement cost-containing measures to keep healthcare costs down.

These measures could include limitations on the prices we will be able to charge for our products or the level of reimbursement available for these products from governmental authorities or third party payors.

Further, an increasing number of European and other foreign countries use prices for medicinal products established in other countries as “reference prices” to help determine the price of the product in their own territory.

Consequently, a downward trend in prices of medicinal products in some countries could contribute to similar downward trends elsewhere.

Additionally, if we become the subject of any future government investigation or U.S.

Congressional oversight with respect to drug pricing or other business practices, we could incur significant expense and could be distracted from operation of our business and execution of our strategy.

Any such investigation or hearing could also result in reduced market acceptance and demand for our products, could harm our reputation and our ability to market our products in the future, and could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Risks Related to Accounting, Tax, and SEC Rules and Regulations

We have increased exposure to tax liabilities, including foreign tax liabilities.

As a company based in the U.S.

with a subsidiary

in Canada, we are subject to, or potentially subject to, income taxes as well as non-income based taxes in this jurisdiction as

well as the U.S.

with a subsidiary in Canada, we are subject to, or potentially subject to, income taxes as well as non-income based taxes in this jurisdiction as well as the U.S.

Significant judgment is required in determining our international provision for income taxes and other tax liabilities.

Changes in tax laws or tax rulings may have a significantly adverse impact on our effective tax rate.

In addition, we have potential

tax exposures resulting from the varying application of statutes, regulations, and interpretations, which include exposures on

intercompany terms of cross-border arrangements between our U.S.

operations and our Canadian subsidiary in relation to various

aspects of our business, including tech transfers and contract manufacturing.

Tax authorities in various jurisdictions may disagree

with, and subsequently challenge, the amount of profits taxed in such jurisdictions;

such challenges may result in increased tax

liability, including accrued interest and penalties, which would cause our tax expense to increase and which could have a material

adverse effect on our business, financial position and results of operations and our ability to satisfy our debt obligations.

to comply with applicable transfer pricing and similar regulations could have a material adverse effect

on our financial position and operating results.

are subject to complex transfer pricing and other tax regulations in the United States and Canada designed to ensure that

appropriate levels of income are reported as earned and are taxed in the appropriate taxing jurisdictions.

we believe that we are in substantial compliance with all applicable U.S and Canadian regulations and restrictions, we are subject

to the risk that governmental authorities could audit our transfer pricing and related practices and assert that additional

taxes are owed.

In the event that the audits or assessments are concluded adversely against us, we may or may

not be able to offset or mitigate the consolidated effect of any such assessments.

We use a variety of estimates, judgments,

and assumptions in preparing our consolidated financial statements.

Estimates, judgments, and assumptions are inherently subject

to change, and any such changes could result in corresponding changes to the amounts of assets, liabilities, revenues, expenses,

Any such changes could have a material adverse effect on our business, financial position, and operating results.

The preparation of financial statements

in conformity with accounting principles generally accepted in the United States of America (“U.S.

GAAP”) requires

us to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent

assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the period.

There are inherent uncertainties involved in estimates, judgments and assumptions, and any changes in estimates, judgments and

assumptions used could have a material adverse effect on our business, financial position, and operating results.

In the consolidated financial statements

included in the periodic reports filed with the SEC, estimates, judgments, and assumptions are used for, but not limited to, revenue

recognition, allowance for doubtful accounts, accruals for chargebacks, rebates, returns and other allowances, allowance for inventory

obsolescence, stock-based compensation, valuation of financial instruments and intangible assets, allowances for contingencies

and litigation, deferred tax assets and liabilities, deferred tax valuation allowance, and the depreciable lives of fixed and intangible

Actual results could differ from those estimates.

Estimates, judgments, and assumptions are inherently subject to change

in the future, and any such changes could result in corresponding changes to the amounts of assets, liabilities, revenues, expenses,

Any such changes could have a material adverse effect on our business, financial position, and operating results.

Changes in estimates regarding the

fair value of goodwill or intangible assets may result in an adverse impact to our business, financial position, and operating

We test goodwill for impairment annually,

or more frequently if changes in circumstances indicate that the carrying amount of goodwill might not be recoverable.

is used in determining when these events and circumstances arise.

We perform our review of goodwill based on our one reporting

If we determine that the carrying value of our assets may not be recoverable, we assess, using judgment and estimates, the

fair value of our assets and to determine the amount of any impairment loss, if any.

Changes in judgments and estimates may result

in the recognition of an impairment loss, which could have a material negative impact on our business, financial position, and

operating results.

While our testing in fiscal 2019 did not result in an impairment charge related to goodwill, there can be no

assurances that our goodwill will not be impaired in the future.

Our material definite-lived intangible

assets consist of ANDAs for previously marketed generic products, NDAs and product rights for our branded products, product rights

related to certain generic products, and a non-compete agreement.

These assets are being amortized over their useful lives of four

For these definite-lived intangible assets, we perform an impairment analysis when events or circumstances indicate

that the carrying value of the assets may not be recoverable.

An impairment loss is recognized if, based on our impairment analysis,

the carrying amount of the asset is not recoverable and its carrying amount exceeds its fair value.

Any significant change in market

conditions, estimates or judgments used to determine expected future cash flows that indicate a reduction in carrying value may

give rise to impairment in the period that the change becomes known.

An impairment charge could have a material negative impact

on our business, financial position, and operating results.

We recorded an impairment charge of $75 thousand in the year ended

December 31, 2019, in relation to our Ranitidine product right asset and there can be no assurances that our remaining intangible

assets won’t be impaired in the future.

No impairment charge was recognized during the year ended December 31, 2018.

Our management is required to devote

substantial time to comply with public company regulations.

If we are unable to comply with these regulations, investors could

lose confidence in us, which could have a material adverse effect on our stock price, business, financial position, and operating

As a public company, we are required to

comply with significant legal, accounting, and other requirements that ANIP Acquisition Company did not face as a private company

and as such, have incurred significant regulatory compliance-related expenses.

The Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall

Street Reform and Consumer Protection Act as well as rules implemented by the SEC and The NASDAQ Global Market, impose various

requirements on public companies, including those related to corporate governance practices.

Our management and other personnel

devote a substantial amount of time to these requirements.

Some members of management do not have significant experience in addressing

these requirements.

Moreover, these rules and regulations have increased our legal and financial compliance costs relative

to those of previous years and make some activities more time consuming and costly.

The Sarbanes-Oxley Act requires, among

other things, that we maintain effective internal controls for financial reporting and disclosure controls and procedures.

In particular,

we must perform system and process evaluation and testing of our internal controls over financial reporting to allow management

to report on the effectiveness of our internal controls over financial reporting, as required by Section 404 of the Sarbanes-Oxley

The Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) provides a framework for companies

to assess and improve their internal control systems.

Our compliance with these requirements has required that we incur substantial

accounting and related expenses and expend significant management efforts.

Moreover, if we are not able to comply with the requirements

of Section 404 of the Sarbanes-Oxley Act, are unable to assert that our internal controls over financial reporting are effective,

or identify deficiencies that are deemed to be material weaknesses, investors could lose confidence in the accuracy and completeness

of our financial reports, the market price of our common stock could decline and we could be subject to sanctions or investigations

by The NASDAQ Global Market, the SEC, or other regulatory authorities.

Any of these events could have a material adverse effect

on our business, financial position, and operating results.

Our policies regarding returns, allowances

and chargebacks, and marketing programs adopted by wholesalers may reduce revenues in future fiscal periods.

We, like other generic drug manufacturers,

have agreements with customers allowing chargebacks, product returns, administrative fees, and other rebates.

Under many of these

arrangements, we may match lower prices offered to customers by competitors.

If we choose to lower our prices, we generally give

the customer a credit on the products that the customer is holding in inventory, which could reduce sales revenue and gross margin

for the period the credit is provided.

Like our competitors, we also give credits for chargebacks to wholesalers with whom we have

contracts for their sales to hospitals, group purchasing organizations, pharmacies, or other customers.

A chargeback is the difference

between the price at which we invoice the wholesaler and the price that the wholesaler’s end-customer pays for a product.

Although we establish reserves based on prior experience and our best estimates of the impact that these policies may have in subsequent

periods, we cannot ensure that our reserves are adequate or that actual product returns, allowances, and chargebacks will not exceed

our estimates.

In addition, we have potential tax exposures resulting from the varying application of statutes, regulations, and interpretations, which include exposures on intercompany terms of cross-border arrangements between our U.S.

operations and our Canadian subsidiary in relation to various aspects of our business, including tech transfers and contract manufacturing.

Tax authorities in various jurisdictions may disagree with, and subsequently challenge, the amount of profits taxed in such jurisdictions;

such challenges may result in increased tax liability, including accrued interest and penalties, which would cause our tax expense to increase and which could have a material adverse effect on our business, financial position and results of operations and our ability to satisfy our debt obligations.

Failure to comply with applicable transfer pricing and similar regulations could have a material adverse effect on our financial position and operating results.

We are subject to complex transfer pricing and other tax regulations in the United States and Canada designed to ensure that appropriate levels of income are reported as earned and are taxed in the appropriate taxing jurisdictions.

Although we believe that we are in substantial compliance with all applicable U.S and Canadian regulations and restrictions, we are subject to the risk that governmental authorities could audit our transfer pricing and related practices and assert that additional taxes are owed.

In the event that the audits or assessments are concluded adversely against us, we may or may not be able to offset or mitigate the consolidated effect of any such assessments.

Changes in estimates regarding the fair value of goodwill or intangible assets may result in an adverse impact to our business, financial position, and operating results.

We test goodwill for impairment annually, or more frequently if changes in circumstances indicate that the carrying amount of goodwill might not be recoverable.

Judgment is used in determining when these events and circumstances arise.

We perform our review of goodwill based on our one reporting unit.

If we determine that the carrying value of our assets may not be recoverable, we assess, using judgment and estimates, the fair value of our assets and to determine the amount of any impairment loss, if any.

Changes in judgments and estimates may result in the recognition of an impairment loss, which could have a material negative impact on our business, financial position, and operating results.

While our testing in fiscal 2020 did not result in an impairment charge related to goodwill, there can be no assurances that our goodwill will not be impaired in the future.

Our material definite-lived intangible assets consist of ANDAs for previously marketed generic products, NDAs and product rights for our branded products, product rights related to certain generic products, and a non-compete agreement.

These assets are being amortized over their useful lives of four to 10 years.

For these definite-lived intangible assets, we perform an impairment analysis when events or circumstances indicate that the carrying value of the assets may not be recoverable.

An impairment loss is recognized if, based on our impairment analysis, the carrying amount of the asset is not recoverable and its carrying amount exceeds its fair value.

Any significant change in market conditions, estimates or judgments used to determine expected future cash flows that indicate a reduction in carrying value may give rise to impairment in the period that the change becomes known.

An impairment charge could have a material negative impact on our business, financial position, and operating results.

We recorded an impairment charge of $0.4 million in the year ended December 31, 2020, in relation to a marketing and distribution right asset, and there can be no assurances that our remaining intangible assets will not be impaired in the future.

We recorded an impairment charge of $75 thousand in the year ended December 31, 2019, in relation to a separate product right asset.

Our management is required to devote substantial time to comply with public company regulations.

If we are unable to comply with these regulations, investors could lose confidence in us, which could have a material adverse effect on our stock price, business, financial position, and operating results.

As a public company, we are required to comply with significant legal, accounting, and other requirements, and as a result, we incur significant regulatory compliance-related expenses.

The Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act as well as rules implemented by the SEC and The Nasdaq Stock Market, impose various requirements on public companies, including those related to corporate governance practices.

Our management and other personnel devote a substantial amount of time to these requirements.

Some members of management do not have significant experience in addressing these requirements.

Moreover, these rules and regulations have increased our legal and financial compliance costs relative to those of previous years and make some activities more time consuming and costly.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal controls for financial reporting and disclosure controls and procedures.

In particular, we must perform system and process evaluation and testing of our internal controls over financial reporting to allow management to report on the effectiveness of our internal controls over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act.

The Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) provides a framework for companies to assess and improve their internal control systems.

Our compliance with these requirements has required that we incur substantial accounting and related expenses and expend significant management efforts.

Moreover, if we are not able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act, are unable to assert that our internal controls over financial reporting are effective, or identify deficiencies that are deemed to be material weaknesses, investors could lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline and we could be subject to sanctions or investigations by The Nasdaq Stock Market, the SEC, or other regulatory authorities.

Any of these events could have a material adverse effect on our business, financial position, and operating results.

Our policies regarding returns, allowances and chargebacks, and marketing programs adopted by wholesalers may reduce revenues in future fiscal periods.

We, like other generic drug manufacturers, have agreements with customers allowing chargebacks, product returns, administrative fees, and other rebates.

Under many of these arrangements, we may match lower prices offered to customers by competitors.

If we choose to lower our prices, we generally give the customer a credit on the products that the customer is holding in inventory, which could reduce sales revenue for the period the credit is provided.

Like our competitors, we also give credits for chargebacks to wholesalers with whom we have contracts for their sales to hospitals, group purchasing organizations, pharmacies, or other customers.

A chargeback is the difference between the price at which we invoice the wholesaler and the price that the wholesaler’s end-customer pays for a product.

Although we establish reserves based on prior experience and our best estimates of the impact that these policies may have in subsequent periods, we cannot ensure that our reserves are adequate or that actual product returns, allowances, and chargebacks will not exceed our estimates.

Risks Related to our Debt

Making interest and principal payments

under our Senior Secured Credit Facility will continue to require a significant amount of cash.

Our ability to continue to make scheduled

interest payments and to make future principal payments on our debt, including our secured term loan (“Term Loan”)

and Delayed Draw Term Loan (“DDTL”), depends on our future performance, which is subject to economic, financial, competitive,

and other factors beyond our control.

Our business may not continue to generate cash flows from operations sufficient to service

our debt and make necessary capital expenditures.

If we are unable to generate such cash flows, we may be required to adopt one

or more alternatives, such as selling assets, restructuring debt, or obtaining additional equity capital on terms that may be onerous

or highly dilutive.

Our Term Loan, senior secured revolving

credit facility (the “Revolver”), and DDTL contain restrictive and financial covenants.

If we are unable to comply

with these covenants, we will be in default.

A default could result in the acceleration of our outstanding indebtedness, which

would have an adverse effect on our business and stock price.

The Credit Facility contains customary

covenants that require maintenance of certain specified financial ratios and restricts our ability make certain distributions with

respect to our capital stock, prepay other debt, encumber our assets, incur additional indebtedness, make capital expenditures,

engage in certain business combinations, transfer, lease or dispose of our assets, alter the character of our business in any material

respect or undertake various other corporate activities.

Therefore, as a practical matter, these covenants restrict our ability

to engage in or benefit from such activities.

Further, we must limit our total and senior secured leverage ratios and maintain

our fixed charge coverage ratio at or above specified thresholds.

In addition, we pledged our assets in order to secure our repayment

obligations under the Credit Facility.

This pledge may reduce our operating flexibility because it restricts our ability to dispose

of our assets or engage in other transactions that may be beneficial to us.

If we are unable to comply with the covenants

in the Credit Facility, we will be in default, which could result in the acceleration of our outstanding indebtedness.

an acceleration occurs, we may not be able to repay our debt and we may not be able to borrow sufficient additional funds to refinance

our debt, which would have a material adverse effect on our business, financial position, and operating results.

Changes in the method of determining

London Interbank Offered Rate ("LIBOR"), or the replacement of LIBOR with an alternative reference rate, may adversely

affect interest expense related to outstanding debt.

Amounts drawn under the Credit Facility

may bear interest rates in relation to LIBOR, depending on our selection of repayment options.

On July 27, 2017, the Financial

Conduct Authority (“FCA”) in the United Kingdom announced that it would phase out LIBOR as a benchmark by the end of

Making interest and principal payments under our Senior Secured Credit Facility will continue to require a significant amount of cash.

Our ability to continue to make scheduled interest payments and to make future principal payments on our debt, including our Term Loan and Delayed Draw Term Loan under our Senior Secured Credit Facility, depends on our future performance, which is subject to economic, financial, competitive, and other factors beyond our control.

Our business may not continue to generate cash flows from operations sufficient to service our debt and make necessary capital expenditures.

If we are unable to generate such cash flows, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt, or obtaining additional equity capital on terms that may be onerous or highly dilutive.

Our Senior Secured Credit Facility contain restrictive and financial covenants.

If we are unable to comply with these covenants, we will be in default.

A default could result in the acceleration of our outstanding indebtedness, which would have an adverse effect on our business and stock price.

The Senior Secured Credit Facility contains customary covenants that require maintenance of certain specified financial ratios and restricts our ability to make certain distributions with respect to our capital stock, prepay other debt, encumber our assets, incur additional indebtedness, make capital expenditures, engage in certain business combinations, transfer, lease or dispose of our assets, alter the character of our business in any material respect or undertake various other corporate activities.

Therefore, as a practical matter, these covenants restrict our ability to engage in or benefit from such activities.

Further, we must limit our total and senior secured leverage ratios and maintain our fixed charge coverage ratio at or above specified thresholds.

In addition, we pledged our assets in order to secure our repayment obligations under the Credit Facility.

This pledge may reduce our operating flexibility because it restricts our ability to dispose of our assets or engage in other transactions that may be beneficial to us.

If we are unable to comply with the covenants in the Senior Secured Credit Facility, we will be in default, which could result in the acceleration of our outstanding indebtedness.

If such an acceleration occurs, we may not be able to repay our debt and we may not be able to borrow sufficient additional funds to refinance our debt, which would have a material adverse effect on our business, financial position, and operating results.

Changes in the method of determining London Interbank Offered Rate ("LIBOR"), or the replacement of LIBOR with an alternative reference rate, may adversely affect interest expense related to outstanding debt.

Amounts drawn under the Credit Facility may bear interest rates in relation to LIBOR, depending on our selection of repayment options.

On July 27, 2017, the Financial Conduct Authority (“FCA”) in the United Kingdom announced that it would phase out LIBOR as a benchmark by the end of 2021.

It is unclear whether new methods of calculating LIBOR will be established such that it continues to exist after 2021.

Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S.

financial institutions, is considering replacing U.S.-dollar LIBOR with the Secured Overnight Financing Rate (“SOFR”),

a new index calculated by short-term repurchase agreements, backed by Treasury securities.

If LIBOR ceases to exist, we may need

to renegotiate the Credit Facility and may not able to do so with terms that are favorable to us.

The overall financial market

may be disrupted as a result of the phase-out or replacement of LIBOR.

Disruption in the financial market or the inability to renegotiate

the Credit Facility with favorable terms could have a material adverse effect on our business, financial position, and operating

financial institutions, is considering replacing U.S.-dollar LIBOR with the Secured Overnight Financing Rate (“SOFR”), a new index calculated

by short-term repurchase agreements, backed by Treasury securities.

When LIBOR ceases to exist, we may need to renegotiate the Credit Facility and may not able to do so with terms that are favorable to us.

The overall financial market may be disrupted as a result of the phase-out or replacement of LIBOR.

Disruption in the financial market or the inability to renegotiate the Credit Facility with favorable terms could have a material adverse effect on our business, financial position, and operating results.

Risks Related to our Common Stock

Our principal stockholders, directors,

and executive officers own a significant percentage of our stock and will be able to exercise meaningful influence over our business.

Our current principal stockholders, directors,

and executive officers beneficially own approximately 24% of our outstanding capital stock entitled to vote as of December 31,

As a result, these stockholders, if acting together, would be able to influence or control matters requiring approval by

our stockholders, including the election of directors and the approval of mergers, acquisitions, or other extraordinary transactions.

They may also have interests that differ from stockholders generally and may vote in a way with which other stockholders disagree

and which may be adverse to their interests.

This concentration of ownership may have the effect of delaying, preventing, or deterring

a change of control of ANI, could deprive stockholders of an opportunity to receive a premium for their common stock as part of

a sale of ANI, and might ultimately affect the market price of our common stock.

Shares of our

common stock are relatively illiquid which may affect the market price of our common stock.

For the twelve months

ended December 31, 2019, the average daily trading volume of our common stock on the NASDAQ Global Market was approximately

136 thousand shares.

Because of our relatively small public float, our common stock may be less liquid than the stock of companies

with broader public ownership and trading of a relatively small volume of our common stock may have a greater impact on the market

price for our shares than would be the case if our public float were larger.

Raising additional funds by issuing

additional equity securities may cause dilution to our current stockholders.

Raising additional funds by issuing new debt financing

may restrict our operations.

We may seek to raise additional funds through

the issuance of equity or equity-linked securities.

If we were to raise funds through the issuance of equity or equity-linked securities,

the percentage ownership of our stockholders could be diluted, potentially significantly, and these newly issued securities may

have rights, preferences, or privileges senior to those of our existing stockholders.

In addition, the issuance of any equity securities

could be at a discount to the then-prevailing market price of our common stock.

If we require new debt financing, there

is no assurance that such a transaction will be available on terms acceptable to us, or at all.

In addition, we could be subject

to onerous repayment terms or covenants that restrict our ability to operate our business and make distributions to our stockholders.

These restrictive covenants may include limitations on additional borrowing and specific restrictions on the use of our assets,

as well as prohibitions on our ability to create liens, pay dividends, redeem our stock, or make investments.

We can offer no assurance

that any equity or debt financing transaction will be available on terms acceptable to us, or at all.

The market price of our common stock

has been volatile, and an investment in our common stock could decline in value.

The market price of our common stock has

fluctuated in the past, has increased significantly since the completion of the Merger, and is likely to continue to fluctuate

in the future.

From time to time, the securities of small capitalization, pharmaceutical companies, including ANI, experience significant

market price fluctuations, often unrelated to these companies’

operating performance.

In particular, the market price of

our common stock may fluctuate significantly due to a variety of factors, including, but not limited to, regulatory or legal developments

with respect to our industry, variations in our financial results or those of companies that are perceived to be similar to us,

and rumors or new announcements by third parties, many of which are beyond our control and that may not be related to our operating

In addition, the occurrence of any of the

risks described in this report or in subsequent reports we file with the SEC could have a material adverse impact on the market

price of our common stock.

Securities class action litigation is sometimes brought against a company following periods of volatility

in the market price of its securities or for other reasons.

Securities litigation, whether with or without merit, could result

in substantial costs and divert management’s attention and resources, which could harm our business, financial position,

and operating results, as well as the market price of our common stock.

Provisions in our charter documents

and Delaware law could discourage or prevent a takeover, even if such a transaction would be beneficial to our stockholders.

Provisions of our certificate of incorporation

and bylaws, as well as provisions of Delaware law, could make it more difficult for a third party to acquire ANI, even if doing

so would be beneficial to our stockholders.

Our principal stockholders, directors, and executive officers own a significant percentage of our stock and will be able to exercise meaningful influence over our business.

Our current principal stockholders, directors, and executive officers beneficially own approximately 22% of our outstanding capital stock entitled to vote as of December 31, 2020.

As a result, these stockholders, if acting together, would be able to influence or control matters requiring approval by our stockholders, including the election of directors and the approval of mergers, acquisitions, or other extraordinary transactions.

They may also have interests that differ from stockholders generally and may vote in a way with which other stockholders disagree and which may be adverse to their interests.

This concentration of ownership may have the effect of delaying, preventing, or deterring a change of control of ANI, could deprive stockholders of an opportunity to receive a premium for their common stock as part of a sale of ANI, and might ultimately affect the market price of our common stock.

Raising additional funds by issuing additional equity securities may cause dilution to our current stockholders.

Raising additional funds by issuing new debt financing may restrict our operations.

We may seek to raise additional funds through the issuance of equity or equity-linked securities.

If we were to raise funds through the issuance of equity or equity-linked securities, the percentage ownership of our stockholders could be diluted, potentially significantly, and these newly issued securities may have rights, preferences, or privileges senior to those of our existing stockholders.

In addition, the issuance of any equity securities could be at a discount to the then-prevailing market price of our common stock.

If we require new debt financing, there is no assurance that such a transaction will be available on terms acceptable to us, or at all.

In addition, we could be subject to onerous repayment terms or covenants that restrict our ability to operate our business and make distributions to our stockholders.

These restrictive covenants may include limitations on additional borrowing and specific restrictions on the use of our assets, as well as prohibitions on our ability to create liens, pay dividends, redeem our stock, or make investments.

We can offer no assurance that any equity or debt financing transaction will be available on terms acceptable to us, or at all.

Provisions in our charter documents and Delaware law could discourage or prevent a takeover, even if such a transaction would be beneficial to our stockholders.

Provisions of our certificate of incorporation and bylaws, as well as provisions of Delaware law, could make it more difficult for a third party to acquire ANI, even if doing so would be beneficial to our stockholders.

These provisions include:

authorizing the issuance of “blank check”

preferred shares that could be issued by our board of directors to increase the number of outstanding shares and thwart a takeover attempt;

● authorizing the issuance of “blank check” preferred shares that could be issued by our board of directors to increase the number of outstanding shares and thwart a takeover attempt;

● prohibiting cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates;

1 unchanged sentence

● as a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation law, which prevents certain stockholders holding more than 15% of our outstanding common stock from engaging in certain business combinations without approval of the holders of at least two-thirds of our outstanding common stock not held by such 15% or greater stockholder.

Any provision of our certificate of incorporation

and bylaws or Delaware law that has the effect of delaying, preventing, or deterring a change in control could limit the opportunity

for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors

are willing to pay for our common stock.

Any provision of our certificate of incorporation and bylaws or Delaware law that has the effect of delaying, preventing, or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.

General Risk Factors

We use a variety of estimates, judgments, and assumptions in preparing our consolidated financial statements.

Estimates, judgments, and assumptions are inherently subject to change, and any such changes could result in corresponding changes to the amounts of assets, liabilities, revenues, expenses, and income.

Any such changes could have a material adverse effect on our business, financial position, and operating results.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S.

GAAP”) requires us to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the period.

There are inherent uncertainties involved in estimates, judgments and assumptions, and any changes in estimates, judgments and assumptions used could have a material adverse effect on our business, financial position, and operating results.

In the consolidated financial statements included in the periodic reports filed with the SEC, estimates, judgments, and assumptions are used for, but not limited to, revenue recognition, allowance for credit losses, accruals for chargebacks, rebates, returns and other allowances, allowance for inventory obsolescence, stock-based compensation, valuation of financial instruments and intangible assets, allowances for contingencies and litigation, deferred tax assets and liabilities, deferred tax valuation allowance, and the depreciable lives of fixed and intangible assets.

Actual results could differ from those estimates.

Estimates, judgments, and assumptions are inherently subject to change in the future, and any such changes could result in corresponding changes to the amounts of assets, liabilities, revenues, expenses, and income.

Any such changes could have a material adverse effect on our business, financial position, and operating results.

The market price of our common stock has been volatile, and an investment in our common stock could decline in value.

The market price of our common stock has increased and decreased significantly and is likely to continue to fluctuate in the future.

From time to time, the securities of small capitalization pharmaceutical companies, including ANI, experience significant market price fluctuations, often unrelated to these companies’ operating performance.

In particular, the market price of our common stock may fluctuate significantly due to a variety of factors, including, but not limited to, regulatory or legal developments with respect to our industry, variations in our financial results or those of companies that are perceived to be similar to us, and rumors or new announcements by third parties, many of which are beyond our control and that may not be related to our operating performance.

In addition, the occurrence of any of the risks described in this report or in subsequent reports we file with the SEC could have a material adverse impact on the market price of our common stock.

Securities class action litigation is sometimes brought against a company following periods of volatility in the market price of its securities or for other reasons.

Securities litigation, whether with or without merit, could result in substantial costs and divert management’s attention and resources, which could harm our business, financial position, and operating results, as well as the market price of our common stock.

Shares of our common stock are relatively illiquid which may affect the market price of our common stock.

For the twelve months ended December 31, 2020, the average daily trading volume of our common stock on the NASDAQ Global Market was approximately 99,000 shares.

Because of our relatively small public float, our common stock may be less liquid than the stock of companies with broader public ownership and trading of a relatively small volume of our common stock may have a greater impact on the market price for our shares than would be the case if our public float were larger.

Unresolved Staff Comments

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 1A. Risk Factors