What changed in this filing

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Item 1A. Risk Factors

2022-03-15 compared with 2021-03-11 · 206 added, 143 removed, 439 unchanged (44% of the section changed)

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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;

● We may not achieve the anticipated benefits from our acquisition of Novitium Pharma LLC (“Novitium”) and we may face integration difficulties;

● The obligations and liabilities of Novitium, some of which may be unanticipated or unknown, may be greater than we have anticipated, which may diminish the value of Novitium to us;

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

● 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;

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● 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;

● Cortrophin Gel is our first rare disease pharmaceutical product and we recently announced commercial availability of this product.

To the extent we are not able to achieve commercial success with this product, including gaining market share, our business, financial condition, and results of operations will be negatively impacted;

● The limited number of suppliers for our active pharmaceutical ingredients (“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.

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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;

● 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;

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● 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;

● Our approved products, including Cortrophin Gel, 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;

● Production at any or all of our four 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.

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● 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;

● Making interest and principal payments under our Credit Agreement with Truist requires a significant amount of cash;

● Our Credit Facility contains restrictive and financial covenants and if are not in compliance with these covenants, our outstanding indebtedness under this facility could be accelerated and the lenders could terminate their commitments under the facility;

● 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.

Raising additional funds by entering into additional credit or other borrowing facilities or issuing debt may subject us to covenants and other requirements that may restrict our operations;

● Our international operations, including those resulting from our acquisition of Novitium and the global nature of its operations, will subject us to political and economic risks, increase our exposure to potential liability under anti-corruption, trade protection, tax, and other laws and regulations.

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.

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Risks Related to our Business

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.

We may not achieve the anticipated benefits from our acquisition of Novitium and we may face integration difficulties, which could have a material adverse effect on our business, financial position, and operating results.

On November 19, 2021 (the “Closing Date”), the Company completed its previously announced acquisition (the “Acquisition”) of Novitium pursuant to the terms of the Agreement and Plan of Merger, dated as of March 8, 2021 (the “Merger Agreement”), by and among the Company, Novitium, Nile Merger Sub LLC, a Delaware limited liability company , and certain other parties, with Novitium becoming a wholly owned subsidiary of ANI.

We may not realize the potential benefits from the Acquisition that we or the market expects.

Risks associated with the Acquisition include:

• failure to successfully integrate our businesses with the business of Novitium in the expected time frame which would adversely affect our financial condition and results of operation;

• failure to effectively manage our expanded operations, which were materially increased by the Acquisition;

• diversion of management’s attention, the disruption or interruption of, or the loss of momentum in, the businesses of ANI and Novitium 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 ;

• loss of key employees;

• failure to maintain relationships with third parties, including Novitium’s and our pre-existing customers, which relationships may be affected by customer preferences or public attitudes about the Acquisition.

Any adverse changes in these relationships could adversely affect our business, financial condition, and results of operations.

The obligations and liabilities of Novitium, some of which may be unanticipated or unknown, may be greater than we have anticipated, which may diminish the value of Novitium to us.

Novitium’s obligations and liabilities, some of which may not have been disclosed to us or may not be reflected or reserved for in Novitium’s historical financial statements, may be greater than we have anticipated.

The obligations and liabilities of Novitium could have a material adverse effect on Novitium’s business or Novitium’s value to us or on our business, financial condition, or results of operations.

Under the Merger Agreement relating to the Novitium acquisition, we have only limited indemnification with respect to obligations or liabilities of Novitium, whether known or unknown.

In addition, even in cases where we are able to obtain indemnification, we may discover liabilities greater than the contractual limits or the financial resources of the indemnifying party.

In the event that we are responsible for liabilities substantially in excess of any amounts recovered through rights to indemnification or alternative remedies that might be available to us, or any applicable insurance, we could suffer severe consequences that would substantially reduce our earnings and cash flows or otherwise materially and adversely affect our business, financial condition, or results of operations.

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.

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.

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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.

Cortrophin Gel is our first rare disease pharmaceutical product, and we are developing a sales and marketing platform to commercialize this product.

To the to the extent our efforts to commercialize this product are un successful, our business, financial condition and results of operations will be negatively impacted .

On October 29, 2021, we received approval from the FDA for our Cortrophin Gel product for the treatment of certain chronic autoimmune disorders, including acute exacerbations of multiple sclerosis (“MS”) and rheumatoid arthritis (“RA”), in addition to excess urinary protein due to nephrotic syndrome.

We have devoted significant time and money over the past five years to the development of this product since we acquired the rights to the product in 2016.

We have invested and continue to invest significantly in the commercialization of this product in the U.S, including building out a sales force and developing a patient support program, with a full-scale launch in January 2022.

for us to generate significant net product revenues from Cortrophin Gel will depend upon our ability to successfully sell the product and numerous other factors, including:

● successfully establishing and maintaining effective sales, marketing, and distribution systems in jurisdictions in which Cortrophin Gel is approved for sale;

● successfully establishing and maintaining manufacturing capabilities and manufacturing adequate commercial quantities of Cortrophin Gel at acceptable cost and quality levels, including maintaining current good manufacturing practice (“cGMP”) and quality systems regulation standards required by various regulatory agencies;

● broad acceptance of Cortrophin Gel by physicians, patients and the healthcare community;

● the acceptance of pricing and placement of Cortrophin Gel on payers’ formularies and the associated tiers;

● effectively competing with the only other competitor that has an approved adrenocorticotropic hormone (“ACTH”) therapy product on the market, as well as other products that are in development or may be developed in the future as a treatment option ;

● continued demonstration of safety and efficacy of Cortrophin Gel in comparison to competing products or treatment options ;

● our ability to comply with ongoing regulatory obligations and continued regulatory review which may result in significant additional expense and may require labeling changes based on new safety information , post-market studies or clinical trials to evaluate safety risks related to the use of Cortrophin Gel;

● obtaining, maintaining, enforcing, and defending intellectual property rights and claims.

If we do not achieve one or more of these factors, we could experience an inability to successfully commercialize Cortrophin Gel, which would negatively impact our business, financial condition and results of operations .

In addition, sales of Cortrophin Gel could be negatively affected by discovery of previously unknown problems with the product, such as adverse events of unanticipated severity or frequency, problems with the facilities where the product is manufactured, or imposition of restrictions on Cortrophin Gel, including requiring withdrawal of the product from the market, by a regulatory agency if it disagrees with the promotion, marketing, or labeling of the product.

We are developing our marketing and sales organization to support Cortrophin Gel and have no experience in marketing prescription rare disease drug products.

If we are unable to successfully establish marketing and sales capabilities for Cortrophin Gel , our business will suffer .

We have only recently established rare disease sales, marketing or distribution capabilities and have no institutional experience in marketing rare disease products.

We intend to continue to develop an in-house marketing organization and sales force, which will require significant expenditures, management resources and time.

We will have to compete with other pharmaceutical and biotechnology companies to recruit, hire, train and retain marketing and sales personnel.

We depend on a limited number of suppliers for API.

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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.

During the year ended December 31, 2021, no single vendor represented at least 10% of inventory purchases.

We purchased approximately 10% and 13% of our inventory from one supplier during the years ended December 31, 2020 and 2019, respectively.

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"

Virtually all of our generic 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.

We source the raw materials for our products from both

domestic and international suppliers.

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.

Any change in one of our API suppliers must usually be approved through a Prior Approval Supplement (“PAS”) by the FDA.

The process of obtaining an approval of such a PAS can require between 4 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.

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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.

As a result, we carefully select suppliers, 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.

In addition, the COVID-19 pandemic and associated workforce factors has disrupted certain supply chains and generally led to longer lead times for the procurement of goods that are essential to the manufacture of our products.

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.

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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.

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

As a result, we may seek partners to contract manufacture the products on our behalf, and we rely on third parties to manufacture and/or package many of our products.

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

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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.

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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.

As a result, they face competition from lower priced generic products which 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.

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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 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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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.

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.

In addition, the Patient Protection and Affordable Care Act (“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.

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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.

As we acquire and launch additional products, many of which, are often used by patients in the 65 and older 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.

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We face intense competition from U.S.

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

and foreign manufacturers, many of whom are significantly larger than us and operate in lower cost geographies.

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:

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● more products;

● access to lower cost wages;

● more experience in developing new drugs.

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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.

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:

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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.

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.

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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.

We own four 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.

Our manufacturing operations are based in four 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.

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, fire, 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"

Virtually all our contracts for the supply of generic 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.

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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.

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.

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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.

With the exception of a license of patent technology for Veregen 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.

Except for a license for patent technology for Veregen 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.

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

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

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.

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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.

The population in northern Minnesota, where two of our four 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.

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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.

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

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.

dollar depreciates against the Canadian dollar and the Indian rupee, the expenses we recognize from Canadian-denominated and Indian-denominated transactions made by our Canadian and Indian subsidiaries 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.

The COVID-19 pandemic is ongoing and its impact on the global economy and our operations remains uncertain.

A continuation 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.

While restrictions and impacts eased in 2021, 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 years ended December 31, 2021 and 2020, as fewer patients visited physicians for conditions treated by our products, fewer elective surgeries occurred and visits to pharmacies declined due to government orders and closures of or restrictions placed on visits to medical offices and facilities.

Additionally, we have experienced disruptions to our supply chain, including increased lead times on the procurement of materials.

While most government orders, closures and restrictions have now lapsed, 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 continued emergence of new variants of COVID-19, the length of time it takes for normal economic and operating conditions to resume, the impact of the pandemic on inflation, additional governmental actions that may be taken, and numerous other uncertainties.

It is currently not possible to predict how long the pandemic will continue, whether new government restrictions will be reinstituted, the effectiveness of mitigation efforts such as vaccines, the emergence of new variants of the virus, and the related impact on economic activity, including inflation.

A disruption in the financial markets and volatility, as seen in 2020 and 2021, 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.

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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.

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.

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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.

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.

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.

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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.

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

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

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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.

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.

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

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.

Pharmaceutical products approved prior to the implementation of new or revised quality standards, including those produced or sold 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.

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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.

For a description of legal proceedings which are currently pending relating to ranitidine, 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.

Another example of evolving standards occurred in December of 2021, when the FDA issued an information request to manufacturers of propranolol products, including Inderal LA (Propranolol ER) currently being marketed in the United States to evaluate their product for the presence and level of a nitrosamine impurity known as N-nitroso-propranolol (“NNP”), which is distinct from NDMA.

and its affiliates (“Pfizer”), our contract manufacturer for both our Inderal LA brand product and our authorized generic product, Propranolol ER, initiated that evaluation and shared its analysis and test results with the Company in February 2022.

Pfizer also manufactures and markets Inderal LA in Canada.

On March 1, 2022, Pfizer announced that it was recalling all lots and strengths (60 mg, 80 mg, 120 mg, and 160 mg) of Inderal LA in the Canadian market after engagement with Health Canada.

We are currently undertaking our own review and analysis of the nitrosamine impurity at issue, working with testing and toxicology experts, and are in active communication with the FDA on the appropriate acceptable daily intake for NNP, which has not been established.

In the interim, we have halted further sales of the product to our trade customers.

In March of 2022, we submitted our response to the FDA information request, including reference to both the evaluation performed by Pfizer and our review and evaluation to date performed with guidance from an independent third-party toxicologist.

In addition, we requested a meeting with the FDA regarding the appropriate approach for the product in the U.S.

Recently the FDA has responded and we anticipate a meeting in the near future.

The discussion above illustrates the potential risk of a recall of a product due to enhanced standards, at the initiation of the Company and/or the FDA.

The loss of sales of this product would have an adverse effect on our results of operations, as revenues from Inderal LA and Propranolol ER are anticipated to contribute approximately 5% of our forecasted total 2022 ex-Cortrophin Net Revenues.

In addition, Pfizer’s decision to withdraw the product in Canada creates uncertainties as to the future supply of our product from Pfizer which could have an adverse effect on our operating results if we are unable to supply the product pursuant to existing contracts with our customers.

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

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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, also known as Qui Tam actions, may be brought, with only a few exceptions, by 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.

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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.

We are subject to certain risks associated with having assets and operations located in a foreign jurisdiction, including our operations in Canada and India.

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.

Our operations in Canada and India 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.

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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.

Healthcare reform and changes in pharmaceutical pricing, reimbursement and coverage, by governmental authorities and third-party payors may materially affect our business, financial position and operating results.

generally and prescription drug coverage, reimbursement and pricing specifically, and it is likely that federal and state legislatures will continue to advocate change to the healthcare system generally and to prescription drug coverage, reimbursement and pricing specifically.

At the federal level, the American Rescue Plan Act eliminated the cap on Medicaid Drug Rebate Program rebates beginning January 1, 2023.

As such, we could end up owing additional rebates to state Medicaid programs related to utilization of our drug products negatively impacting profitability.

States continue to look for ways to save on Medicaid spend specifically related to prescription drugs.

As such, states are increasingly expanding or change supplemental rebates programs to secure additional rebates from manufacturers in exchange for drug coverage and to limit coverage of

certain drugs for certain Medicaid patients or to all Medicaid patients.

To the extent the Centers for Medicare & Medicaid Services entertains waivers to federal requirements under the Medicaid program to allow states Medicaid programs such flexibility, coverage of and payment for our drugs utilized by Medicaid beneficiaries could be negatively impacted.

Significant developments that may adversely affect pricing in the United States include proposed drug pricing and Medicare reforms by Congress and regulatory changes to Medicare Part B (physician administered drugs) and Medicare Part D (prescription drug benefit) could financially impact us.

On November 19, 2021, the U.S.

House of Representatives passed the Build Back Better Act, which includes several provisions aimed at lowering prescription drug costs and reducing spending by the federal government and private payers by, among other things, allowing the U.S.

federal government to negotiate prices for certain high-cost drugs covered under Medicare, imposing rebates on manufacturers of single-source drugs and biologics covered by Medicare Part B and nearly all drugs covered under Part D, if drug prices increase faster than the rate of inflation, based on the Consumer Price Index for All Urban Consumers (“CPI-U”).

Build Back Better would also re-structure the Part D benefit and replace the existing Coverage Gap Discount Program with another manufacturer-imposed rebate or discount program, which could result in additional rebates to Medicare Part D plans in order to obtain Medicare Part D coverage.

We are actively monitoring legislative developments to understand the likelihood of enactment and how such legislation would impact our business and operations, if enacted.

states have implemented statutes aimed at prescription drug price transparency and some of those laws would permit state run boards or agencies to cap reimbursement for certain prescription drugs in the states.

Such laws could negatively impact our financial performance and could result in us terminating distribution of certain products in certain states or regions.

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

Inflationary pressures have begun to rapidly increase in the U.S.

and key worldwide markets.

The rate of inflation may significantly increase input costs for our products and, given the competitive nature of the generic markets in which we compete, we may not be able to pass those costs on to our generic customers.

Risks Related to Accounting, Tax, and SEC Rules and Regulations

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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 subsidiaries in Canada and India, we are subject to, or potentially subject to, income taxes as well as non-income based taxes in these jurisdictions as well as the U.S.

Significant judgment is required in determining our international provision for income taxes and other tax liabilities.

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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.

operations and our Canadian and Indian subsidiaries in relation to various aspects of our business, including research and development services, 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.

Our expanded international operations from the Novitium acquisition increased our exposure to potential liability under anti-corruption, trade protection, tax, and other laws and regulations.

The Foreign Corrupt Practices Act and other anti-corruption laws and regulations (“Anti-Corruption Laws”) prohibit corrupt payments by our employees, vendors, or agents.

From time to time, we receive inquiries from authorities in the U.S.

and elsewhere about our business activities outside of the U.S.

and our compliance with Anti-Corruption Laws.

While we devote substantial resources to our global compliance programs and have implemented policies, training, and internal controls designed to reduce the risk of corrupt payments, our employees, vendors or agents may violate our policies and with the acquisition of Novitium, our expanded

international operations would significantly increase our exposure to potential liability.

Our failure to comply with Anti-Corruption Laws could result in significant fines and penalties, criminal sanctions against us, our officers or our employees, prohibitions on the conduct of our business, and damage to our reputation.

Operations outside of the U.S.

may be affected by changes in trade production laws, policies, and measures, and other regulatory requirements affecting trade and investment.

We are also subject to Indian foreign tax regulations.

Such regulations may not be clear, not consistently applied and subject to sudden change, particularly with regard to international transfer pricing.

Our earnings could be reduced by the uncertain and changing nature of such tax regulations.

The global nature of Novitium’s operations (including those of its Indian subsidiary Novitium Labs Private Limited) will subject us to political and economic risks that could adversely affect our business, results of operations, or financial condition.

The risks presented by global operations include:

• limitations on ownership or participation in local enterprises;

• price controls, exchange controls, and limitations on repatriation of earnings;

• transportation delays and interruptions;

• the application of additional legal, regulatory and taxation regimes to our operations;

• political, social, and economic instability and disruptions in applicable regions;

• acts of terrorism;

• government embargoes or foreign trade restrictions;

• imposition of duties and tariffs and other trade barriers;

• import and export controls;

• labor unrest and current and changing regulatory environments;

• fluctuations in foreign current exchange and interest rates;

• difficulties in staffing and managing multi-national operations;

• limitations on our ability to enforce legal rights and remedies;

• the severity and duration of the COVID-19 pandemic and its impacts where we operate globally.

If we are unable to successfully manage these and other risks associated with managing the expansion of our business to the jurisdictions in which Novitium operates, including India, the risks could have a material adverse effect on our business, results of operations, or financial condition.

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.

We are subject to complex transfer pricing and other tax regulations in the United States, Canada, and India 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 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.

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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.

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.

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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.

We recognized an impairment of $2.4 million in the year ended December 31, 2021, in relation to an ANDA asset, and there can be no assurances that our remaining intangible assets will not be impaired in the future.

Our management is required to devote substantial time to comply with public company regulations.

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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.

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 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.

Making interest and principal payments under our Credit Facility consisting of $300.0 million term loan and a $40.0 million revolving credit facility, requires a significant amount of cash.

In connection with the completion of the Novitium acquisition, we entered into a new $300.0 million term loan and a $40.0 million revolving credit facility.

The Credit Facility, which is secured by all our assets and the assets of our subsidiaries, was used to finance the cash consideration of the acquisition of Novitium and terminate and repay our previous senior credit facilities.

In order to service the debt we incur under this facility, we will require a significant amount of cash.

Our ability to make scheduled payments of principal and interest 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 flow from operations in the future sufficient to service our debt.

If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt, or obtaining additional debt or equity financing on terms that may not be favorable to us or available to us at all.

Our ability to refinance any such debt will depend on the capital markets and our financial condition at that time.

We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default under our current or future indebtedness.

Any event of default or inability to otherwise satisfy our obligations could have a material adverse effect on our future operating results and financial condition.

Our Credit Agreement contains restrictive and financial covenants and if we are not in compliance with these covenants, our outstanding indebtedness under this facility could be accelerated and the lenders could terminate their commitments under the facility.

The Credit Agreement contains customary covenants that require maintenance of a leverage ratio at or below specified thresholds and restricts our ability to make certain distributions with respect to our capital stock, prepay other debt, make certain investments, 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.

In addition, we pledged our assets in order to secure our repayment obligations under the New Credit Agreement.

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 we are unable to comply with the covenants in the Credit Agreement, we will be in default, which could result in the acceleration of our outstanding indebtedness and termination of funding commitments by the lenders.

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.

Amounts drawn under the New Credit Facility may bear interest rates in relation to LIBOR, depending on our selection.

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.

Subsequently, regulators have announced that most USD tenors of LIBOR, including LIBOR options of the New Credit Facility, will now cease on December 31, 2023.

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.

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.

financial institutions, is recommending 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.

At this time, it is not possible to predict the effect any discontinuance, modification or other reforms to LIBOR, or the establishment of alternative reference rates such as SOFR, or any other reference rate, will have on the Company or its borrowing costs.

Risks Related to our Common Stock

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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.

Raising additional funds by entering into additional credit or other borrowing facilities or issuing debt may subject us to covenants and other requirements that may restrict our operations.

We may seek to raise additional funds through the issuance of equity or equity-linked securities.

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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.

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, contingent consideration, and the depreciable lives of fixed and intangible assets.

Actual results could differ from those estimates.

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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