What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-28 compared with 2024-02-29 · 942 added, 726 removed, 1079 unchanged (61% of the section changed)

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and Subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations, comprehensive income (loss), mezzanine equity and stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2023 and 2022, and the consolidated results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2024 and 2023, and the consolidated results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 28, 2025 expressed an unqualified opinion.

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

Critical Audit Matter

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

Critical Audit Matters

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

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

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

Evaluation of Certain Assumptions impacting the Chargeback Accrual

As described in Note 2 to the consolidated financial statements, the Company records certain variable consideration including discounts, which are estimated at the time of sale generally using the expected value method.

Amounts accrued for chargebacks as of December 31, 2023, are approximately $84.2 million and are evaluated on a quarterly basis.

Management’s estimate of chargebacks is based on the inventory levels in the distribution channel as provided by wholesalers, as well as the actual average selling price for each product which is impacted by changes in customer mix, changes in negotiated terms with customers, changes in the volume of off-contract purchases, and changes in the wholesaler acquisition cost, in order to estimate the expected provision.

The principal consideration for our determination that performing procedures relating to the chargeback reserve is a critical audit matter is that there was a significant judgment required by management with respect to measure uncertainty, as the calculation of the chargeback reserve includes assumptions such as average selling price, purchasing trends of distributors and historical product sales used to predict future sales.

This in turn led to a high degree of auditor judgment, subjectivity and effort in applying the procedures related to those assumption.

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

Evaluation of the Chargeback Accrual

As described in Note 2 to the consolidated financial statements, the Company records variable consideration estimated at the time of sale, for chargebacks.

The amount accrued for chargebacks as of December 31, 2024, is approximately $105.6 million.

Management’s estimate of the chargeback accrual is based on inventory levels in the distribution channel of wholesalers, impacted by the actual average selling price for each product and the wholesaler acquisition cost, utilized to estimate the expected chargeback provision and accrual.

We identified the chargeback accrual as a critical audit matter as there is especially challenging auditor judgment required with respect to the calculation of the chargeback accrual given certain assumptions used including purchasing trends of distributors and historical product sales used to predict future sales.

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Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included assessing the design and testing the effectiveness of controls relating to the chargeback reserve, including management’s control over the assumptions used to estimate the corresponding accruals.

We recalculated the chargeback accrual for a selection of products, based on a combination of Company internal data, historical accrual by recalculating the accrual using our independent assumptions.

We evaluated the Company’s ability to accurately estimate the accrual for chargebacks by comparing historically recorded accruals to the actual amount that was ultimately claimed by the wholesalers.

We analyzed year over year trends in the reserve in comparison with revenue trends to further evaluate reasonableness of the estimate and consistency with expectations.

These procedures included assessing the design and testing the effectiveness of controls relating to the chargeback accrual, including management’s control over the assumptions used to estimate the accrual.

We evaluated the inventory levels in the distribution channel of wholesalers and considered the underlying contracts for the actual average selling price.

We also validated the wholesaler acquisition costs for a selection of products.

We evaluated the accrual for chargebacks by comparing historically recorded accruals to the actual amount that was ultimately claimed by the wholesalers.

We analyzed year over year trends in the accrual in comparison with revenue trends to further evaluate reasonableness of the estimate and consistency with expectations.

Acquisition of Alimera – Valuation of Intangible Assets

As described in Note 3 to the consolidated financial statements, the Company acquired Alimera Sciences, Inc.

(“Alimera”) on September 16,2024 and the transaction was accounted for using the acquisition method of accounting for business combinations.

The acquisition of Alimera was complex due to the significant estimates required by management to determine the fair value of identified intangible assets of $400.0 million.

The determination of the fair value of the intangible assets acquired required management, to utilize the assistance of a third-party valuation specialist and to make significant estimates and assumptions including the estimated net revenue growth rate, gross profit margin, economic life and discount rate.

We identified the valuation of intangible assets resulting from the Alimera acquisition as a critical audit matter given the especially challenging auditor judgment required in evaluating the inputs and assumptions used in determining fair value off the intangible assets.

The key assumptions include discount rates, projected revenues and gross profit margins.

Changes in these significant assumptions could have a significant impact on the fair value of the intangible assets.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included assessing the design and testing the effectiveness of controls relating to the third-party valuation report which included management’s review of the third-party valuation report for the completeness and mathematical accuracy of the data, and evaluating the reasonableness of assumptions used in the calculation such as economic life and discount rate.

We utilized a valuation specialist to assist in evaluating the appropriateness of the Company’s valuation models developed for acquired intangible assets and evaluating the reasonableness of the significant assumptions used including the estimated net revenue growth rate, gross margin percentages, economic life and discount rate as compared to industry and market data.

We also examined the completeness and accuracy of the underlying data supporting the significant assumptions and estimates used in the third-party valuation report, including historical and projected financial information.

/s/ EisnerAmper LLP

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EISNERAMPER LLP

Philadelphia, Pennsylvania

West Palm Beach, Florida

February 28, 2025

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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ANI Pharmaceuticals, Inc.

Opinion on the Internal Control over Financial Reporting

Opinion on Internal Control over Financial Reporting

We have audited ANI Pharmaceuticals, Inc.

and Subsidiaries (the “Company”) internal control over financial reporting as of December 31, 2024, based on criteria established in the Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as December 31, 2023, based on criteria established in the Internal Control - Integrated Framework ( 2013 ) issued by COSO.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in the Internal Control - Integrated Framework (2013) issued by COSO.

As described in Management’s Annual Report on Internal Control over Financial Reporting, management’s assessment of the effectiveness of internal control over financial reporting did not include the internal controls of Alimera Sciences, Inc.

(“Alimera”), which was acquired on September 16, 2024, and whose financial statements represent approximately 5% of the Company’s consolidated revenues for the year ended December 31, 2024 and assets associated with Alimera’s operations represent approximately 1% of the Company’s consolidated assets as of December 31, 2024.

Accordingly, our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Alimera.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of ANI Pharmaceuticals, Inc.

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and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the entity’s assets that could have a material effect on the financial statements.

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

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EISNERAMPER LLP

Philadelphia, Pennsylvania

West Palm Beach, Florida

February 28, 2025

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ANI PHARMACEUTICALS, INC.

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Cash and cash equivalents $ 144,861 $ 221,121

Current restricted cash — 5,006

Restricted cash 33 —

Accounts receivable, net of $ 127,824 and $ 97,262 of adjustments for chargebacks and other allowances at December 31, 2024 and 2023, respectively

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Inventories 136,782 111,196

Prepaid income taxes — 3,827

Assets held for sale — 8,020

Prepaid expenses and other current assets 17,975 17,400

Investment in equity securities 6,307 —

Total Current Assets 527,684 519,816

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Non-current debt, net of deferred financing costs and current component 309,108 284,819

Non-current convertible notes, net of deferred financing costs 305,812 —

Accrued licensor payments due 20,961 —

Non-current contingent consideration, net of current 19,825 11,718

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The accompanying notes are an integral part of these consolidated financial statements.

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ANI PHARMACEUTICALS, INC.

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Contingent consideration fair value adjustment ( 619 ) 1,426 3,758

Legal settlement expense — — 8,750

Purified Cortrophin Gel pre-launch charges — — 780

Gain on sale of building ( 5,347 ) — —

Restructuring activities — 1,132 5,679

Intangible asset impairment charge 7,600 — 112

Total Operating Expenses 439,845 351,668 255,929

Total Operating Expenses, net 613,792 439,845 351,668

Operating Income (Loss) 584 46,971 ( 35,283 )

Other Expense, net

Unrealized gain on investment in equity securities 6,307 — —

Interest expense, net ( 17,602 ) ( 26,940 ) ( 28,052 )

Other (expense) income, net ( 4,033 ) ( 159 ) 670

Income (Loss) Before Expense (Benefit) for Income Taxes 19,872 ( 62,665 ) ( 56,058 )

Income tax expense (benefit) 1,093 ( 14,769 ) ( 13,455 )

Net Income (Loss) $ 18,779 $ ( 47,896 ) $ ( 42,603 )

Loss on extinguishment of debt ( 7,468 ) — —

(Loss) Income Before (Benefit) Expense for Income Taxes ( 22,212 ) 19,872 ( 62,665 )

Income tax (benefit) expense ( 3,690 ) 1,093 ( 14,769 )

Net (Loss) Income $ ( 18,522 ) $ 18,779 $ ( 47,896 )

Dividends on Series A Convertible Preferred Stock $ ( 1,625 ) $ ( 1,625 ) $ ( 1,625 )

Net Income (Loss) Available to Common Shareholders $ 17,154 $ ( 49,521 ) $ ( 42,793 )

Basic and Diluted Income (Loss) Per Share:

Basic Income (Loss) Per Share $ 0.86 $ ( 3.05 ) $ ( 3.40 )

Diluted Income (Loss) Per Share $ 0.85 $ ( 3.05 ) $ ( 3.40 )

Net (Loss) Income Available to Common Shareholders $ ( 20,147 ) $ 17,154 $ ( 49,521 )

Basic and Diluted (Loss) Income Per Share:

Basic (Loss) Income Per Share $ ( 1.04 ) $ 0.86 $ ( 3.05 )

Diluted (Loss) Income Per Share $ ( 1.04 ) $ 0.85 $ ( 3.05 )

Basic Weighted-Average Shares Outstanding 19,318 18,001 16,260

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The accompanying notes are an integral part of these consolidated financial statements.

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ANI PHARMACEUTICALS, INC.

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2024 2023 2022

Net income (loss) $ 18,779 $ ( 47,896 ) $ ( 42,603 )

Net (loss) income $ ( 18,522 ) $ 18,779 $ ( 47,896 )

Other comprehensive (loss) income, net of tax:

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Total other comprehensive (loss) income, net of tax ( 3,513 ) ( 3,311 ) 15,223

Total comprehensive income (loss), net of tax $ 15,468 $ ( 32,673 ) $ ( 34,221 )

Total comprehensive (loss) income, net of tax $ ( 22,035 ) $ 15,468 $ ( 32,673 )

The accompanying notes are an integral part of these consolidated financial statements.

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ANI PHARMACEUTICALS, INC.

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Restricted Stock Awards Forfeitures — — — ( 69 ) — — — — — — —

Issuance of Common Stock for Novitium Acquisition — — — 2,467 — 91,199 — — — 91,199

Issuance of Common Stock in Public Offering — — — 1,500 — 69,734 — — — — 69,734

Dividends on Convertible Preferred Stock — — — — — — — — — ( 1,625 ) ( 1,625 )

Issuance of Series A Convertible Preferred Stock from Mezzanine Equity 24,850 25 — — — — — — — — 24,850

Other comprehensive income — — — — — — — — 15,223 — 15,223

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Issuance of Restricted Stock Awards — — — 674 — — — — — — —

Restricted Stock Awards Forfeitures — — — ( 69 ) — — — — — — —

Issuance of Performance Stock Units — — — 85 — — — — — — —

Restricted Stock Awards and Performance Stock Unit Forfeitures — — — ( 83 ) — ( 1 ) — — — — ( 1 )

Issuance of Common Stock in Public Offering, net of offering costs — — 1 2,184 — 80,555 — — — — 80,556

Dividends on Convertible Preferred Stock — — — — — — — — — ( 1,625 ) ( 1,625 )

Other comprehensive income — — — — — — — — 15,223 — 15,223

Net Loss — — — — — — — — — ( 47,896 ) ( 47,896 )

Other comprehensive loss — — — — — — — — ( 3,311 ) — ( 3,311 )

Net Income — — — — — — — — — 18,779 18,779

Balance, December 31, 2023 $ 24,850 25 $ 2 20,731 $ — $ 514,103 264 $ ( 10,081 ) $ 8,857 $ ( 80,132 ) $ 457,599

Stock-based Compensation Expense — — — — — 29,344 — — — — 29,344

Capped Call Transaction, net of tax — — — — — ( 30,281 ) — — — — ( 30,281 )

Treasury Stock Purchases for Restricted Stock Vests — — — — — — 166 ( 10,959 ) — — ( 10,959 )

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Issuance of Performance Stock Units — — — 74 — — — — — — —

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Mezzanine Equity

Series A Convertible

Stock Mezzanine Equity

Series A Convertible

Preferred Stock

Shares Common

Par Value Common

Shares Class C

Stock Additional

Capital Treasury

Shares Treasury

Stock Accumulated Other

Comprehensive

Net of Tax Accumulated

Deficit Total

Mezzanine Equity

and Stockholders'

Restricted Stock Awards and Performance Stock Units Forfeitures — — — ( 127 ) — ( 1 ) — — — — ( 1 )

Issuance of Common Stock in Public Offering, net of offering costs — — 1 2,184 — 80,555 — — — — 80,556

Dividends on Convertible Preferred Stock — — — — — — — — — ( 1,625 ) ( 1,625 )

Dividends on Series A Convertible Preferred Stock — — — — — — — — — ( 1,625 ) ( 1,625 )

Other comprehensive loss — — — — — — — — ( 3,513 ) — ( 3,513 )

Net Income — — — — — — — — — 18,779 18,779

Net Loss — — — — — — — — — ( 18,522 ) ( 18,522 )

Balance, December 31, 2024 $ 24,850 25 $ 2 21,538 $ — $ 519,653 430 $ ( 21,040 ) $ 5,344 $ ( 100,279 ) $ 428,530

The accompanying notes are an integral part of these consolidated financial statements.

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ANI PHARMACEUTICALS, INC.

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Cash Flows From Operating Activities

Net income (loss) $ 18,779 $ ( 47,896 ) $ ( 42,603 )

Adjustments to reconcile net income (loss) to net cash and cash equivalents provided by (used in) operating activities:

Net (loss) income $ ( 18,522 ) $ 18,779 $ ( 47,896 )

Adjustments to reconcile net (loss) income to net cash and cash equivalents provided by (used in) operating activities:

Stock-based compensation 29,344 20,652 14,599

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Depreciation and amortization 67,731 59,791 59,653

Unrealized gain on investment in equity securities ( 6,307 ) — —

Acquired in-process research and development ("IPR&D") — — 1,151

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Contingent consideration fair value adjustment ( 619 ) 1,426 4,058

Gain on sale of building ( 5,347 ) — —

Loss on extinguishment of debt 7,468 — —

Amortization of inventory step up 13,599 — —

Asset impairment charges 7,600 — 574

Gain on sale of ANDAs — — ( 750 )

Changes in operating assets and liabilities, net of acquisition (2021):

Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable, net ( 21,087 ) 3,359 ( 36,912 )

Inventories ( 21,287 ) ( 5,841 ) ( 23,626 )

Prepaid expenses and other current assets ( 9,015 ) ( 798 ) 127

Prepaid expenses and other assets 2,129 ( 9,015 ) ( 798 )

Accounts payable 479 7,552 5,038

Accrued royalties 6,350 6,969 3,082

Current income taxes payable, net 11,991 ( 160 ) ( 7,573 )

Income taxes ( 1,415 ) 11,991 ( 160 )

Accrued government rebates 6,160 1,296 5,380

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Cash Flows From Investing Activities

Acquisition of Alimera, net of cash acquired ( 401,280 ) — —

Acquisition of Novitium Pharma LLC, net of cash acquired — — ( 33 )

Acquisition of product rights, IPR&D, and other related assets ( 9,643 ) ( 7,579 ) ( 21,081 )

Acquisition of product rights, intangible assets, and other related assets ( 717 ) ( 9,643 ) ( 7,579 )

Acquisition of property and equipment, net ( 16,236 ) ( 8,868 ) ( 8,876 )

Proceeds from the sale of long-lived assets — — 750

Proceeds from the sale of building 13,514 — —

Net Cash and Cash Equivalents Used in Investing Activities ( 404,719 ) ( 18,511 ) ( 15,738 )

Cash Flows From Financing Activities

Proceeds from public offering, net of transaction expenses 80,555 — 69,584

Proceeds from convertible notes 316,250 — —

Proceeds from term loan 325,000 — —

Purchase of capped call transaction ( 40,575 ) — —

Proceeds from public offering — 80,555 —

Payments on contingent consideration ( 12,500 ) ( 12,500 ) —

Payments on Term Loan and Delayed Draw Term Loan agreements — — ( 10,862 )

Payments on borrowings under credit agreements ( 3,000 ) ( 3,000 ) —

Borrowings under Prior Revolver agreement — — 24,000

Repayment of Prior Credit Facility — — ( 200,148 )

Borrowings under the Credit Facility, net of issuance costs — — 286,032

Proceeds from issuance of convertible preferred stock — — 25,000

Principal payments on borrowings under credit agreements ( 3,531 ) ( 3,000 ) ( 3,000 )

Debt issuance costs ( 17,353 ) — —

Repayment on borrowings under credit agreement ( 292,500 ) — —

Payment of accrued licensor payment ( 3,750 ) — —

Series A convertible preferred stock dividends paid ( 1,625 ) ( 1,625 ) ( 1,625 )

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Net Cash and Cash Equivalents Provided by (Used in) Financing Activities 264,945 67,439 ( 5,126 )

Net Change in Cash and Cash Equivalents 167,887 ( 52,067 ) 92,434

Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash ( 470 ) — —

Net Change in Cash, Cash Equivalents, and Restricted Cash ( 76,227 ) 167,887 ( 52,067 )

Cash and cash equivalents, beginning of year 221,121 53,234 105,301

Cash and cash equivalents, end of year $ 221,121 $ 53,234 $ 105,301

Cash, cash equivalents and restricted cash, end of year $ 144,894 $ 221,121 $ 53,234

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Year Ended December 31,

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Supplemental non-cash investing and financing activities:

Fair value of contingent consideration in a business combination $ — $ — $ 30,500

Fair value of equity issued as consideration in a business combination $ — $ — $ 91,199

Purchase consideration for Alimera Acquisition $ ( 8,322 ) $ — $ —

Acquisition of product rights included in accounts payable $ — $ — $ 1,000

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ANI Pharmaceuticals, Inc.

and its consolidated subsidiaries (together, “ANI,” the “Company,” “we,” “us,” or “our”) is a diversified bio-pharmaceutical company serving patients in need by developing, manufacturing, and marketing high quality branded and generic prescription pharmaceuticals, including for diseases with high unmet medical need.

The team is focused on delivering growth by scaling up the Rare Disease business through the successful launch of its lead asset, Cortrophin Gel, strengthening our generics business with enhanced development capability, innovation in established brands and leveraging our North American manufacturing capabilities.

and its consolidated subsidiaries (together, “ANI,” the “Company,” “we,” “us,” or “our”) is a diversified bio-pharmaceutical company.

The Company's mission is “Serving Patients, Improving Lives” by developing, manufacturing, and commercializing high-quality therapeutics.

On September 16, 2024, the Company completed its previously announced acquisition of Alimera Sciences, Inc.

("Alimera"), a Delaware corporation, pursuant to the terms of the Agreement and Plan of Merger (the "Merger Agreement"), dated as of June 21, 2024, by and among the Company, Alimera and ANIP Merger Sub INC., a Delaware corporation and wholly-owned subsidiary of the Company ("Merger Sub").

Pursuant to the Merger Agreement, Merger Sub merged with and into Alimera, with Alimera surviving the merger as a wholly-owned subsidiary of the Company.

In connection with the acquisition, the Company added two new products, ILUVIEN® and YUTIQ®, both of which are indicated for the treatment of chronic retinal diseases.

See Note 3 "Business Combination" in the notes to consolidated financial statements for further information on the acquisition.

The Company owns and operates three pharmaceutical manufacturing facilities, of which two are located in Baudette, Minnesota, and one is located in East Windsor, New Jersey, are together capable of producing oral solid dose products, as well as semi-solids, liquids and topicals, controlled substances, and potent products that must be manufactured in a fully-contained environment.

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The Company has fully completed the transition of the products manufactured or packaged at Oakville to one of the three U.S.-based manufacturing sites.

On November 6, 2023, ANI Pharmaceuticals Canada Inc., a wholly owned subsidiary of the Company, entered into an agreement for the sale of the Oakville, Ontario manufacturing facility, however, the agreement was subsequently terminated in December 2023 by mutual agreement.

In February 2024, the Company entered into an agreement for the purchase and sale of the Oakville site, for a purchase price of 19.2 million Canadian Dollars, or approximately $ 14.2 million US Dollars, based on the current exchange rate.

The sale is expected to close in March 2024 (Note 19).

In February 2024, the Company entered into an agreement for the sale of the Oakville site, for a price of $ 19.2 million Canadian Dollars, or approximately $ 14.2 million, based on the exchange rate at closing of such transaction.

The sale closed on March 28, 2024 (Note 4).

Basis of Presentation

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Foreign Currency

The Company has ceased operations at our subsidiary in Oakville, Ontario, Canada as of March 31, 2023.

The Company currently has a subsidiary located in India.

The Company currently has subsidiaries located in India, Ireland, Germany, and the United Kingdom.

The India-based subsidiary generally conducts its transactions in Indian Rupees, which is also its functional currency.

The Ireland and Germany locations generally conduct their transactions in Euros, which is also their functional currency.

The United Kingdom subsidiary conducts its transactions in Euros and British Pounds, and their functional currency is Euros.

The Company has ceased operations at its subsidiary in Oakville, Ontario, Canada as of March 31, 2023.

The Canada-based subsidiary conducted its transactions in U.S.

dollars and Canadian dollars, but its functional currency was the U.S.

The Indian-based subsidiary generally conducts its transactions in Indian rupees, which is also its functional currency.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

The results of any non-U.S.

dollar transactions and balances are remeasured in U.S.

dollars at the applicable exchange rates during the period and resulting foreign currency transaction gains and losses are included in the determination of net income.

dollars at the applicable exchange rates during the period and resulting foreign currency transaction gains and losses are included in the determination of net (loss) income.

The gain or loss on transactions denominated in foreign currencies and the translation impact of local currencies to U.S.

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Unless otherwise noted, all references to “$” or “dollar” refer to the U.S.

The Company’s asset and liability accounts are translated using the current exchange rate as of the balance sheet date, except for shareholders’ equity accounts, intercompany, and fixed assets, which are translated using historical rates.

The Company’s asset and liability accounts are translated using the current exchange rate as of the balance sheet date, except for shareholders’ equity accounts, which are translated using historical rates.

Net revenues and expense accounts are translated using an average exchange rate over the period ended on the balance sheet date.

Adjustments resulting from the translation of the financial statements of the Company’s foreign subsidiaries into U.S.

dollars are accumulated as a separate component of shareholders’ equity within accumulated other comprehensive income (loss), net of tax.

dollars are accumulated as a separate component of shareholders’ equity within accumulated other comprehensive (loss) income, net of tax.

Use of Estimates

The preparation of financial statements in conformity with U.S.

GAAP requires us to make estimates 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 reporting period.

In the consolidated financial statements, estimates are used for, but not limited to, variable consideration determined based on accruals for chargebacks, administrative fees and rebates, government rebates, returns and other allowances, income tax provision or benefit, deferred taxes and valuation allowance, stock-based compensation, revenue recognition, allowance for inventory obsolescence, valuation of financial instruments and intangible assets, accruals for contingent liabilities, including contingent consideration and contingent value rights in acquisitions, fair value of long-lived assets, determination of right-of-use assets and lease liabilities, allowance for credit losses, and the depreciable lives of long-lived assets.

Because of the uncertainties inherent in such estimates, actual results may differ from those estimates.

Management periodically evaluates estimates used in the preparation of the financial statements for reasonableness.

Business Combination and Goodwill

The Company accounted for its acquisition of Alimera using the acquisition method of accounting prescribed by ASC 805, Business Combinations , whereby the results of operations, including the revenues and earnings of Alimera, are included in the financial statements from the date of acquisition.

Assets acquired and liabilities assumed as of the date of acquisition are recognized at their fair values based on widely accepted valuation techniques in accordance with ASC 820, Fair Value Measurements .

Goodwill is recognized for the excess of the consideration transferred over the net fair values of assets acquired and liabilities assumed.

Management’s assessment of qualitative factors affecting goodwill for each acquisition includes estimates of market share at the date of purchase, ability to grow in the market, synergy with existing Company operations and the payor profile in the markets.

The fair value assigned to the intangible assets was determined using the income approach, specifically the multi-period excess earnings methodology.

The process for estimating fair values requires the use of significant estimates, assumptions and judgments, including determining the timing and estimates of future cash flows and developing appropriate discount rates.

The estimates of fair value are based upon assumptions believed to be reasonable using the best information available.

These assumptions are inherently uncertain and unpredictable and, as a result, actual results may differ materially from estimates.

ASC 805, Business Combinations , establishes a measurement period to provide the Company with a reasonable amount of time to obtain the information necessary to identify and measure various items in a business combination and cannot extend beyond one year from the acquisition date.

Measurement period adjustments are recognized in the reporting period in which the adjustments are determined and calculated as if the accounting had been completed as of acquisition date.

The Company expects to complete the final fair value determination of the assets acquired and liabilities assumed as soon as practicable within the measurement period, but not to exceed one year from the acquisition date.

Investment in Equity Securities

The Company accounts for its investment in equity securities with a readily determinable fair value in accordance with the guidance in ASC 321, Investments – Equity Securities .

The Company presents unrealized gains and losses related to the equity securities, within Unrealized gain on investment in equity securities in its consolidated statements of operations.

Fair values are obtained from quoted prices on the NASDAQ Stock Market, Inc.

ANI Pharmaceuticals, Inc.

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For the years ended December 31, 2024, 2023, and 2022

Use of Estimates

The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.

In the consolidated financial statements, estimates are used for, but not limited to, variable consideration determined based on accruals for chargebacks, administrative fees and rebates, government rebates, returns and potential adjustments, income tax expense or benefit, deferred taxes and valuation allowance, stock-based compensation, allowance for inventory obsolescence, valuation of financial instruments and intangible assets, accruals for contingent liabilities, including contingent consideration in acquisitions, fair value of long-lived assets, determination of right-of-use assets and lease liabilities, allowance for credit losses, and the depreciable lives of long-lived assets.

The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances.

Actual results could differ from such estimates.

Because of the uncertainties inherent in such estimates, actual results may differ from those estimates.

Restructuring Activities

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Such costs include cash employee contractual severance and other termination benefits, one-time employee termination severance and benefits, contract termination charges, impairment and acceleration of depreciation associated with long-lived assets, and other exit or disposal costs.

In general, we record involuntary employee- related exit and disposal costs when there is a substantive plan for employee severance and related payments are probable and estimable.

In general, the Company records involuntary employee- related exit and disposal costs when there is a substantive plan for employee severance and related payments are probable and estimable.

For one-time termination benefits, including those with a service requirement, expense is recorded when the employees are entitled to receive such benefits and the amount can be reasonably estimated.

9 unchanged sentences

• Allocation of the transaction price to the performance obligations in the contract;

• Recognition of revenue when we satisfy a performance obligation.

The Company derives its revenues primarily from sales of generic, rare disease, and established brand pharmaceutical products, royalties, and other pharmaceutical services.

• Recognition of revenue when the Company satisfies a performance obligation.

The Company derives its revenues primarily from sales of generic, rare disease, and brands portfolio pharmaceutical products, royalties, and other pharmaceutical services.

Revenue is recognized when obligations under the terms of contracts with customers are satisfied, which generally occurs when control of the products sold is transferred to the customer.

3 unchanged sentences

Estimates for these elements of variable consideration require significant judgment.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022, and 2021

Revenue from Distribution Agreements

5 unchanged sentences

These profit-sharing percentages are recognized in cost of sales in the consolidated statements of operations and are accrued in accrued royalties in the consolidated balance sheets until payment has occurred.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

Contract Manufacturing Product Sales Revenue

12 unchanged sentences

All highly liquid investments with original maturities of three months or less from the date of purchase are classified as cash equivalents.

Cash and cash equivalents consist of cash deposited in checking accounts, time deposits with maturities of less than three months, and money market accounts with maturities of three months or less at the date of purchase.

Cash and cash equivalents consist of cash deposited in checking accounts, time deposits with original maturities of less than three months, and money market accounts with original maturities of three months or less at the date of purchase.

Cash and cash equivalents include cash on-hand and money market funds which invest exclusively in high-quality, short-term securities that are issued or guaranteed by the U.S.

Due to the short-term maturity of the funds invested in the money market accounts, the carrying amounts are a reasonable estimate of fair value.

All interest bearing and non-interest bearing accounts are guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) up to $ 250 thousand.

The majority of the Company's cash balances are held in interest bearing and non-interest bearing accounts in U.S.-based financial institutions which are guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) up to $ 250 thousand.

The majority of the Company's cash balances are in excess of FDIC coverage, which the Company considers to be a normal business risk.

Restricted cash at December 31, 2022, represented $ 5.0 million of funds held in a bank account owned by the Company to be used to pay for future milestones related to the purchase of the rights, title, and interest in the NDA for Inderal LA, as well as certain documentation, trademark rights, and finished goods from Cranford Pharmaceuticals, LLC in April 2016.

This amount was was released from restricted cash during the first quarter of the year ended December 31, 2023.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022, and 2021

In addition, the Company has cash and cash equivalents held in international bank accounts that are denominated in various foreign currencies, specifically in the UK, Germany, Ireland, Portugal, and India.

Accounts Receivable

1 unchanged sentence

Expected credit losses are measured at amortized cost, including trade and unbilled receivables, on a collective basis, based on their similar risk characteristics.

Expected credits losses are based on historical credit loss experience, review of the current aging or status of accounts receivable and current and forward-looking views from an economic and industry perspective.

Expected credit losses are based on historical credit loss experience, review of the current aging or status of accounts receivable and current and forward-looking views from an economic and industry perspective.

Receivables are written off when it is determined that amounts are uncollectible.

3 unchanged sentences

The Company periodically reviews and adjusts standard costs, which generally approximate weighted average cost.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

Property and Equipment

19 unchanged sentences

The Company determined that the Oakville, Ontario, Canada property met the held-for-sale criteria.

As of December 31, 2023 and 2022, approximately $ 8.0 million of assets held for sale were recorded on the consolidated balance sheets.

See Note 4 to the consolidated financial statements for additional information.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022, and 2021

As of December 31, 2023, approximately $ 8.0 million of assets held for sale were recorded on the consolidated balance sheets.

S ee Note 4 "Restructuring Canada Operations" in the notes to the con solidated financial statements for additional information.

Operating lease right-of-use ("ROU") assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

3 unchanged sentences

Operating lease ROU assets are included in other non-current assets and operating lease liabilities are included in accrued expenses and other and other non-current liabilities in the consolidated balance sheets.

As of December 31, 2023 and 2022, the Company did not have any finance leases.

As of December 31, 2024, the Company had finance leases that consist of leases for automobiles.

Finance leases are included in property and equipment, net, accrued expenses and other current liabilities, and other liabilities on our consolidated balance sheets.

Finance lease assets are amortized on a straight-line basis over the shorter of the estimated useful lives of the assets or the lease terms.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

Intangible Assets

Intangible assets with definite lives are amortized based on their pattern of economic benefit over their estimated useful lives and reviewed periodically for impairment.

The definite-lived ANDAs, NDAs and product rights, marketing and distribution rights, customer relationships, and non-compete agreement are stated at cost, net of amortization, and generally amortized over their remaining estimated useful lives, ranging from seven to ten years , based on the straight-line amortization method.

Intangible assets with definite lives are amortized based on their pattern of economic benefit over their estimated useful lives, or the straight-line amortization method if not materially different, and reviewed periodically for impairment.

The definite-lived ANDAs, NDAs and product rights, marketing and distribution rights, customer relationships, and non-compete agreement are stated at cost, net of amortization, and generally amortized over their remaining estimated useful lives, ranging from seven to twelve years , based on the straight-line amortization method.

In the case of certain NDA and product rights, an accelerated amortization method is used to better match the anticipated economic benefits expected to be provided.

Management reviews definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, in a manner similar to that for property and equipment.

During the year ended December 31, 2024, $ 3.6 million of impairment charges were recognized on intangible assets.

During the year ended December 31, 2023, no impairment charges were recognized on intangible assets.

During the year ended December 31, 2022, the Company recognized a full impairment of a definite-lived ANDA asset with a remaining carrying value of $ 0.1 million.

During the year ended December 31, 2022, the Company recognized an impairment charge of $ 0.1 million related to a definite-lived ANDA intangible asset.

No events or circumstances arose in 2023, 2022, or 2021 that indicated that the carrying value of any of the other definite-lived intangible assets may not be recoverable.

Indefinite-lived intangible assets other than goodwill include in-process research and development (“IPR&D”) projects.

3 unchanged sentences

Judgment is used in determining when these events and circumstances arise.

No events or circumstances arose in 2023 that indicated that the carrying value of any of the indefinite-lived intangible assets may not be recoverable.

Goodwill, which represents the excess of purchase price over the fair value of net assets acquired, is carried at cost, using the purchase method of accounting, and is related to past business combinations with BioSante Pharmaceuticals, Inc., WellSpring, and Novitium.

During the year ended December 31, 2024, $ 4.0 million of impairment charges were recognized on indefinite-lived intangible assets, respectively.

During the year ended December 31, 2023, no impairment charges were recognized on indefinite-lived intangible assets.

The Company is organized in three reporting units, Generics and Other, Brands, and Rare Disease.

Goodwill is not amortized, but is subject to periodic review for impairment.

The Company is organized in two operating segments, and two reporting units, and has determined that goodwill resides in one reporting unit, Generics, Established Brands, and Other.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022, and 2021

All of the Company's goodwill is recorded in the Generics and Other reporting unit, except for goodwill recorded as a result of the Alimera acquisition, which is recorded in the Rare Disease reporting unit.

The Company reviews goodwill for impairment on a reporting unit basis annually, on October 31, and whenever events or changes in circumstances indicate the carrying value of goodwill might not be recoverable.

5 unchanged sentences

The judgments made in determining the projected cash flows used to estimate the fair value can materially impact the Company’s financial condition and results of operations.

The Company assessed the assets qualitatively, and concluded it was more likely than not that the fair value of the Generics, Established Brands, and Other reporting unit is greater than its carrying value as of October 31, 2023 and 2022, and therefore no quantitative testing for impairment was required.

The Company assessed the assets qualitatively, and concluded it was more likely than not that the fair value of the reporting units are greater than their carrying value as of October 31, 2024 and 2023, and therefore no quantitative testing for impairment was required.

No impairment loss related to goodwill was recognized in the years ended December 31, 2024, 2023, and 2022.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

Collaborative Arrangements

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The related share-based compensation expense is determined based on the estimated fair value of the underlying shares on the date of grant and is recognized straight-line over the vesting term.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022, and 2021

The Company also administers an Employee Stock Purchase Plan (“ESPP”).

8 unchanged sentences

The Company is subject to taxation in various U.S.

jurisdictions, Canada, and India, and all of our income tax returns remain subject to examination by tax authorities due to the availability of net operating loss carryforwards.

We use a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return.

jurisdictions, Canada, Europe, and India, and all of our income tax returns remain subject to examination by tax authorities due to the availability of net operating loss carryforwards.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

The Company uses a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return.

For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.

We have not identified any uncertain income tax positions that could have a material impact on the consolidated financial statements.

The Company has previously entered into an interest rate swap agreement (Note 6) designated as a cash flow hedge designed to manage exposure to changes in SOFR-interest rate underlying our variable rate debt.

Due to the effective nature of the hedge, the initial fair value of the hedge and subsequent changes in the fair value of the hedge are recognized in other comprehensive income (loss) in the consolidated balance sheets.

Income taxes are allocated to the hedge component of other comprehensive income (loss) based on appropriate intra-period tax allocations when those effects are deemed material.

The Company has not identified any uncertain income tax positions that could have a material impact on the consolidated financial statements.

The Company recognizes interest and penalties accrued on any unrecognized tax exposures as a component of income tax expense.

Derivative Instruments and Hedge Accounting

1 unchanged sentence

The Company recognizes all derivative instruments as either assets or liabilities at fair value.

For all of the Company’s derivative positions that are designated and qualify as part of a cash flow hedging relationship, the effective portion of the gain or loss on the derivatives is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transactions affect earnings.

For all of the Company’s derivative positions that are designated and qualify as part of a cash flow hedging relationship, the effective portion of the gain or loss on the derivatives is reported as a component of other comprehensive (loss) income and reclassified into earnings in the same period or periods during which the hedged transactions affect earnings.

Gains and losses on derivatives representing any ineffective component of the hedge are recognized in current earnings.

All of the Company’s cash flow hedges have been deemed effective as of December 31, 2023 for both accounting and tax purposes.

All of the Company’s cash flow hedges have been deemed effective as of December 31, 2024 and 2023 for both accounting and tax purposes.

The Company has elected hedge accounting for both U.S.

2 unchanged sentences

Company policy further includes a quarterly probability analysis covering hedge effectiveness.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022, and 2021

Contingent Consideration

8 unchanged sentences

As payments are not expected to be made shortly after the acquisition, any future payment of contingent consideration will be reported as a financing cash flow for amounts paid up to the acquisition-date fair value of the consideration, and as an operating cash outflow for any amounts in excess of the acquisition-date fair value in our consolidated statement of cash flows.

Accrued Licensor Payments

The terms of an agreement between the Company and EyePoint Pharmaceuticals, Inc.

(“EyePoint”) include the potential payment of future consideration that is contingent upon the achievement o f annual U.S.

net sales of certain products (including YUTIQ and ILUVIEN) in excess of certain thresholds, beginning at $ 70.0 million in 2025, increasing annually thereafter.

Significant inputs used in the measurement of the fair value include discount rates and probabilities of achievement of net revenue.

The discount rates are derived using accepted valuation methodologies.

T he projected net sales are based on internal forecasts and long-term plans.

The contingent payments are remeasured each reporting period using Level 3 inputs.

Changes in fair value, which incorporate changes in assumptions and the passage of time, are recognized as an operating expense in the consolidated statements of operations.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

Contingent Value Rights

In connection with the acquisition of Alimera, the Company issued Contingent Value Rights ("CVRs"), which provided for the holders to receive future contingent milestone cash payments based on certain net revenue thresholds established for 2026 and 2027.

See Note 12 "Fair Value" in the notes to the consolidated financial statements for more information relating to CVR obligations.

The contingent value rights are remeasured each reporting period using Level 3 inputs.

Changes in fair value, which incorporate changes in assumptions and the passage of time, are recognized as an operating expense in the consolidated statements of operations.

There were no amounts due and payable during the year ended December 31, 2024.

Fair Value Measurements

8 unchanged sentences

The consolidated balance sheets include certain financial instruments (primarily cash and cash equivalents, prepaid expenses, accounts receivable, accounts payable, accrued expenses, and other current liabilities) that are carried at cost and that approximate fair values as of December 31, 2024, 2023 due to their short term nature.

See Note 10 for additional information regarding fair value.

See Note 12 "Fair Value" in the notes to the consolidated financial statements.

Recent Accounting Pronouncements

Recent Accounting Pronouncements Not Yet Adopted

Recently Issued Accounting Pronouncements Not Yet Adopted

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and are adopted by the Company as of the specified effective date.

Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

In November 2023, the FASB issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which improves reportable segment disclosure requirements, primarily through enhanced disclosures related to significant segment expenses.

The guidance in this ASU is effective for all public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The guidance is applied retrospectively to all periods presented in the financial statements, unless it is impracticable.

The Company is currently evaluating the effect the adoption of this ASU may have on its disclosures in the notes to the consolidated financial statements.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022, and 2021

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

2 unchanged sentences

These amendments apply on a prospective basis, but entities have an option to apply it retrospectively for all periods presented.

The Company does not expect that the adoption of this guidance will have a material impact on the consolidated financial statements.

Recent Accounting Pronouncements Adopted

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting .

This ASU provides optional expedients and exceptions, that may be elected over time as reference rate reform activities occur, for applying GAAP to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform.

The guidance in this ASU was extended in December 2022 when the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848 , extending the sunset date under Topic 848 to December 31, 2024 to align the temporary accounting relief guidance with the expected LIBOR cessation.

In August 2023, the Company completed the transition of its debt and derivative instruments from LIBOR to Adjusted Term Secured Overnight Financing Rate ("SOFR") and applied the optional expedients in ASC 848 related to contract modifications and changing critical terms of the Company’s hedging relationships.

Application of these expedients allowed the Company to preserve presentation of derivatives as qualifying cash flow hedges and to account for the debt modification as a continuation of the existing contract.

The adoption of this guidance did not have a material impact on the consolidated financial statements.

The Company is currently evaluating the impact that the adoption of ASU 2023-09 will have on the consolidated financial statements and disclosures and will adopt in the 2025 annual report on Form 10-K.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (DISE) , which specifies additional disclosure requirements.

The new guidance requires additional disclosures, including the composition of certain income expense line items (such as purchases of inventory, employee compensation, and "other expenses") and a separate disclosure for selling expenses.

This change is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, however, early adoption is permitted.

The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on the consolidated financial statements and disclosures and anticipate adoption in the 2027 annual report on Form 10-K.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which improves reportable segment disclosure requirements, primarily through enhanced disclosures related to significant segment expenses.

The Company has adopted the provisions of ASU 2023-07 for the year ended December 31, 2024, and has applied this guidance to the disclosures for the year ended December 31, 2024, and retroactively for all previous periods presented.

See Note 19 “Segment Reporting” in the notes to the consolidated financial statements.

REVENUE RECOGNITION AND RELATED ALLOWANCES

Revenue Recognition

Revenues are primarily derived from sales of generic, rare disease, and established brand pharmaceutical products, royalties, and other pharmaceutical services.

Revenue is recognized when obligations under the terms of contracts with customers are satisfied, which generally occurs when control of the products we sell is transferred to the customer.

Revenues are primarily derived from sales of generic, rare disease, and brands portfolio pharmaceutical products, royalties, and other pharmaceutical services.

Revenue is recognized when obligations under the terms of contracts with customers are satisfied, which generally occurs when control of the products is transferred to the customer.

Variable consideration is estimated after the consideration of applicable information that is reasonably available.

3 unchanged sentences

The following table depicts the disaggregation of revenue:

Products and Services Years Ended December 31,

(in thousands) 2023 2022 2021

Sales of generic pharmaceutical products $ 269,449 $ 210,121 $ 143,571

Sales of established brand pharmaceutical products, royalties, and other pharmaceutical services 105,250 64,578 72,565

Sales of rare disease pharmaceutical products 112,117 41,686 —

Total net revenues $ 486,816 $ 316,385 $ 216,136

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022, and 2021

Timing of Revenue Recognition Years Ended December 31,

(in thousands) 2023 2022 2021

Years Ended December 31,

Products and Services (in thousands) 2024 2023 2022

Rare Disease and Brands

Cortrophin Gel $ 198,085 $ 112,117 $ 41,686

ILUVIEN and YUTIQ 31,514 — —

Rare Disease total net revenues $ 229,599 $ 112,117 $ 41,686

Brands 64,743 85,384 39,462

Rare Disease and Brands total net revenues $ 294,342 $ 197,501 $ 81,148

Generics and Other

Generic pharmaceutical products $ 301,004 $ 269,449 $ 210,120

Royalties and other pharmaceutical services 19,030 19,866 25,117

Generics and Other total net revenues $ 320,034 $ 289,315 $ 235,237

Total net revenue $ 614,376 $ 486,816 $ 316,385

Years Ended December 31,

Timing of Revenue Recognition (in thousands) 2024 2023 2022

Performance obligations transferred at a point in time $ 614,376 $ 486,441 $ 313,436

3 unchanged sentences

As of December 31, 2024, there were no contract assets recorded which were related to revenue recognized based on percentage of completion but not yet billed.

The Company recognized an increase of $ 4.1 million of net revenue from performance obligations satisfied in prior periods during the year ended December 31, 2023, consisting primarily of revised estimates for variable consideration, including chargebacks, rebates, returns, and other allowances, related to prior period sales.

For the years ended December 31, 2023 and 2022, the Company recognized less than $ 0.1 million of revenue that was included in deferred revenue as of December 31, 2022 and 2021.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

The Company recognized a decrease of $ 3.0 million of net revenue from performance obligations satisfied in prior periods during the year ended December 31, 2024, consisting primarily of revised estimates for variable consideration, including chargebacks, rebates, returns, and other allowances, related to prior period sales.

As of December 31, 2024, the aggregate amount of the transaction price allocated to the remaining performance obligations for all open contract manufacturing customer contracts was $ 0.7 million, which consists of firm orders for contract manufactured products.

We will recognize revenue for these performance obligations as they are satisfied, which is anticipated within six months .

ANI will recognize revenue for these performance obligations as they are satisfied, which is anticipated within six months .

Variable Consideration

14 unchanged sentences

The Company continually monitors chargeback activity and adjusts ASPs when the Company believes that actual selling prices will differ from current ASPs.

Government Rebates

Government rebates reserve consists of estimated payments due to governmental agencies for utilization of our products by beneficiaries under such governmental programs.

The two largest government programs are Medicaid and Medicare.

ANI Pharmaceuticals, Inc.

2 unchanged sentences

For the years ended December 31, 2024, 2023, and 2022

Government Rebates

Government rebates reserve consists of estimated payments due to governmental agencies for utilization of our products by beneficiaries under such governmental programs.

The two largest government programs are Medicaid and Medicare.

The Company participates in the Medicaid Drug Rebate Program and pays rebates to the states related on Medicaid beneficiary utilization of the Company's products.

Medicaid rebates are billed 60-90 days of the end of the quarter in which the product was dispensed to a Medicaid beneficiary.

Medicaid rebates are billed within 60-90 days of the end of the quarter in which the product was dispensed to a Medicaid beneficiary.

Medicaid rebate amounts per product unit are established by law, based on the Average Manufacturer Price (“AMP”), which is reported on a monthly and quarterly basis, and, in the case of branded products, best price, which is reported on a quarterly basis.

16 unchanged sentences

While such experience has allowed for reasonable estimation in the past, history may not always be an accurate indicator of future returns.

We continually monitor estimates for returns and make adjustments when it is expected that actual product returns may differ from the established accruals.

The Company continually monitors estimates for returns and make adjustments when it is expected that actual product returns may differ from the established accruals.

Accruals for returns are recorded as a reduction to gross revenues in the consolidated statements of operations and as an increase to the return goods reserve in the consolidated balance sheets.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022, and 2021

Generally, the Company does not accept product returns in international markets, however, there is a limited history of returns in such areas.

Administrative Fees and Other Rebates

3 unchanged sentences

The Company continually monitors administrative fee activity and adjust accruals when it is expected that actual administrative fees may differ from the accruals.

Accruals for administrative fees and other rebates are recorded as a reduction in both gross revenues in the consolidated statements of operations and accounts receivable in the consolidated balance sheets.

Accruals for administrative fees and other rebates are recorded as a reduction in both gross revenues in the consolidated statements of operations and accounts receivable or accrued expenses in the consolidated balance sheets.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

Prompt Payment Discounts

22 unchanged sentences

Credit Concentration

Customers are primarily wholesale distributors, chain drug stores, group purchasing organizations, and other pharmaceutical companies.

During the year ended December 31, 2023 four customers accounted for 10% or more of net revenues.

During the years ended December 31, 2022 and 2021 , three customers accounted for 10% or more of net revenues.

ANI ’ s customers are primarily wholesale distributors, chain drug stores, group purchasing organizations, pharmaceutical companies, hospitals, and healthcare providers.

During the years ended December 31, 2024 and 2023 four customers accounted for 10% or more of net revenues.

During the year ended December 31, 2022 , three customers accounted for 10% or more of net revenues.

As of December 31, 2024, accounts receivable from these customers totaled 70 % of accounts receivable, net.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022, and 2021

The four customers represent the total percentage of net revenues as follows:

5 unchanged sentences

Customer 4 16 % 12 % 6 %

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

BUSINESS COMBINATION

On November 19, 2021, the Company acquired all of the interests of Novitium pursuant to the terms of the Agreement and Plan of Merger, dated as of March 8, 2021.

On September 16, 2024 (the “Closing Date”), the Company completed the previously announced acquisition of Alimera pursuant to the terms of the Agreement and Plan of Merger, dated as of June 21, 2024 (the “Merger Agreement”), by and among the Company, Alimera and ANIP Merger Sub INC., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”).

Pursuant to the Merger Agreement, Merger Sub merged with and into Alimera, with Alimera surviving the Merger as a wholly owned subsidiary of the Company.

At the effective time of the Merger, each share of common stock, par value $ 0.01 per share, of Alimera (the “Alimera Common Stock”) outstanding, including each Alimera RSA (as defined below), but excluding any treasury shares or shares owned by the Company, Merger Subs or any other subsidiary of the Company or Alimera, was canceled and ceased to exist and was converted into the right to receive (i) $ 5.50 in cash (“Closing Cash Consideration”), and (ii) one contingent value right (a “CVR”), which represents the right to receive the milestone payments (as defined below) subject to the terms and conditions set forth in the CVR Agreement entered into on September 16, 2024 (collectively, the “Merger Consideration”).

The CVRs have been remeasured to fair value as of December 31, 2024, see Note 12 “Fair Value” in the notes to the consolidated financial statements.

In addition to the amounts payable to the holders thereof in connection with the Closing, all of the outstanding awards of restricted stock with respect to shares of Alimera Common Stock (each, an “Alimera RSA”), each Alimera Performance Stock Unit (“Alimera PSU”), each Alimera Restricted Stock Unit (“Alimera RSU”) and each Alimera Warrant that were outstanding immediately prior to the Effective Time were automatically canceled and converted into the right to receive one (1) CVR per share of Alimera Common Stock then underlying the applicable instrument.

Each stock option previously granted by Alimera to purchase Alimera Common Stock (each, an “Alimera Option”) that was outstanding and unexercised as of the Effective Time and which had a per share exercise price that was less than the Closing Cash Consideration was, in addition to the amounts payable to the holders thereof in connection with the Closing, automatically canceled and converted into the right to receive one (1) CVR per share of Alimera Common Stock then underlying such Alimera Option.

No other Alimera Options were cancelled and converted into the right to receive a CVR, provided that each Alimera Option with a per share exercise price greater than or equal to the Closing Cash Consideration but less than the Total Consideration (as defined in the Merger Agreement) may receive a payment in connection with the payout of the CVRs (if any).

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

This acquisition was accounted for as a business combination.

The total consideration consisted of cash of approximately $ 88.1 million, 2,466,654 restricted shares of common stock valued at $ 91.2 million, and up to $ 46.5 million in additional contingent consideration.

Additionally, the Company agreed to pay certain debts of Novitium in the amount of $ 8.5 million.

The contingent consideration is based on the achievement of certain milestones, including milestones on gross profit of Novitium portfolio products over a 24 -month period, regulatory filings completed during this 24 -month period, and a percentage of net profits on certain products that are launched in the future.

As of the acquisition date, the contingent consideration had a fair value of $ 30.8 million.

Total consideration including cash, restricted shares and contingent consideration, net of cash acquired of $ 12.1 million was $ 206.5 million at the date of purchase.

The fair value of the contingent consideration was $ 24.0 million and $ 35.1 million as of December 31, 2023 and 2022, respectively.

Refer to Note 10 for changes in contingent consideration and changes in fair value.

The cash consideration was funded in part by borrowings under the cr edit facility (Note 5) and through issuance of convertible preferred stock sha res.

Concurrently with the execution of the Merger Agreement, the Company entered into an Equity Commitment and Investment Agreement with Ampersand 2020 Limited Partnership (the “PIPE Investor”), pursuant to which the PIPE Investor agreed to purchase, 25,000 shares of the Company's Series A Convertible Preferred Stock (the “PIPE Shares”), for a purchase price of $ 1,000 per share and an aggregate purchase price of $ 25.0 million on November 19, 2021 (Note 11) .

T he acquisition of Novitium was completed due to its proven track record of being a research and development growth engine capable of fueling sustainable growth, to expand the research and development pipeline via niche opportunities, to enhance the contract development and manufacturing organization (“CDMO”) business and U.S.

based manufacturing capacity, and to diversify the Company's revenue base.

Purchase consideration consisted of the following:

(In thousands, except share price and exchange ratio) Purchase Consideration

Alimera common shares outstanding $ 53,971

Alimera warrants outstanding after exercise 989

Alimera common shares and warrants outstanding 54,960

Cash consideration per share 5.50

Cash consideration for Alimera Common Stock 302,280

Repayment of Alimera Debt 78,540

Payment of Alimera transaction costs 20,172

Cash settlement for pre-acquisition equity awards 9,535

Fair value of CVRs 8,322

Total Merger Consideration $ 418,849

The cash payment was funded through the New Credit Facility, see Note 6 “New Credit Agreement” in the notes to the consolidated financial statements, and also cash on-hand from the Company's balance sheet.

As part of the purchase consideration the Company paid approximately $ 78.5 million for the repayment of the outstanding term loan Alimera had with SLR Investment Corp., including interest payable, prepayment and end of term fees.

Furthermore, the Company repaid $ 20.2 million of transaction costs incurred by Alimera.

In accordance with the terms of the Merger Agreement, the Company settled all outstanding equity awards held by Alimera employees, for a total cash amount of $ 19.3 million, of which, $ 1.3 million was paid in cash at the close of the Merger.

Of the $ 19.3 million, $ 9.5 million was determined to be related to the pre-Merger services provided and as a result was allocated to the purchase consideration transferred.

The remaining amounts were attributed to the post-Merger period and deemed to be for the benefit of the Company.

As a result, $ 8.8 million was recognized as selling, general, and administrative and $ 1.0 million as research and development expense, respectively, for the year ended December 31, 2024.

The CVRs represent a form of contingent consideration and are included as part of the purchase consideration transferred.

The CVRs represent the right to future cash payments for the former Alimera shareholders based on certain 2026 and 2027 revenue targets.

Management determined the contingent consideration to be liability classified and will measure the liability at fair value each reporting period.

The fair value of the CVRs have been estimated using a monte carlo simulation under an option pricing framework, $ 8.3 million of the total $ 8.7 million was related to the pre-combination period and recognized as consideration transferred.

The remaining $ 0.4 million of the fair value of the CVR was allocated to post-merger period and recognized as selling, general, and administrative for the year ended December 31, 2024.

The CVRs have been remeasured to fair value as of December 31, 2024, see Note 12 “Fair Value” in the notes to the consolidated financial statements.

The preliminary purchase price allocation, measurement period adjustments, and updated purchase price allocation of the fair value of the Alimera acquisition is shown in the table below.

The allocation of the fair value will be finalized when the valuation is completed, and the differences will be trued up for the final allocated amounts.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

(in thousands)

Preliminary Purchase Price Allocation Measurement Period Adjustment Purchase Price Allocation

Cash and cash equivalents $ 9,247 $ — $ 9,247

Accounts receivable 38,605 ( 43 ) 38,562

Prepaid expenses and other assets 2,618 — 2,618

Inventories 19,457 ( 1,559 ) 17,898

Property and equipment 3,086 — 3,086

Intangible assets 400,000 — 400,000

Deferred tax asset, net of deferred tax liabilities and valuation allowance 198 ( 80 ) 118

Derivative and other non-current assets 1,224 — 1,224

Total assets $ 474,435 $ ( 1,682 ) $ 472,753

Accounts payable $ 8,001 $ — $ 8,001

Accrued expenses and other 11,396 96 11,492

Accrued government rebates — 385 385

Returned goods reserve 3,095 ( 2,600 ) 495

Current accrued licensor payment 3,684 — 3,684

Deferred tax liability 37,932 — 37,932

Accrued licensor payment, net of current 21,316 — 21,316

Other non-current liabilities 2,364 — 2,364

Total liabilities $ 87,788 $ ( 2,119 ) $ 85,669

Total fair value of consideration transferred $ 418,849 $ — $ 418,849

fair value of net acquired identifiable assets and liabilities 386,647 437 387,084

Goodwill $ 32,202 $ ( 437 ) $ 31,765

The net assets were recorded at their estimated fair value.

In valuing acquired assets and liabilities, fair value estimates were based primarily on future expected cash flows, market rate assumptions for contractual obligations, and appropriate discount rates.

In connection with the acquisition, $ 46.9 million of indefinite-lived in-process research and development intangible assets, $ 67.4 million of acquired ANDA intangible assets, $ 24.9 million of customer relationship intangible assets, and goodwill of $ 24.6 million was recognized.

Goodwill is considered an indefinite-lived asset and relates primarily to intangible assets that do not qualify for separate recognition, such as the assembled workforce and synergies between the entities.

Goodwill established as a result of the acquisition is tax deductible in the U.S.

Novitium operations generated $ 149.9 million and $ 90.3 million of revenue during the years ended December 31, 2023 and 2022, respectively.

Transaction Costs

In conjunction with the acquisition, approximately $ 9.4 million in transaction costs were expensed during the year ended 2022 as selling, general, and administrative expense in the consolidated statement of operations.

During the fourth quarter of 2024, the Company updated its inventories fair value, accounts receivable, returned goods reserve, accrued government rebates, and accrued expenses and other based upon new information that was not available to the Company at the acquisition date.

The Company determined that the adjustments would be considered measurement period adjustments under the accounting guidance.

The Company recorded a net decrease to goodwill of approximately $ 0.4 million, as a result of the adjustments identified in the table above.

The fair value of finished goods inventory utilizes a sales comparison approach which estimates the selling price of the inventory in completed condition less costs of disposal and a reasonable profit allowance for the selling effort.

As part of the Merger, the Company acquired the product rights to ILUVIEN and YUTIQ.

The fair value of the acquired intangible assets was determined using an income approach, and more specifically, the multi-period excess earnings methodology.

The identifiable intangible assets acquired are amortized on a straight-line basis over their estimated useful lives.

The following table summarizes the estimated fair value of identifiable intangible assets acquired and their remaining amortization period (in years):

ANI Pharmaceuticals, Inc.

2 unchanged sentences

For the years ended December 31, 2024, 2023, and 2022

Restricted Shares

The Novitium acquisition consideration included 2,466,654 restricted shares, which were valued at $ 91.2 million.

These shares contained restrictions on their transfer for periods from three to twenty-four months following the completion of the acquisition.

A Finnerty model was used to value the restricted shares.

It includes inputs of not readily observable market data, which are Level 3 inputs.

These unobservable inputs include ANI stock volatility with a range of 65 % to 71 %, and the discounted lack of marketability with a range of 7.5 % to 21.5 % depending on the length of restriction.

Fair Value (in thousands) Amortization Period

ILUVIEN $ 230,000 12

YUTIQ $ 170,000 12

The estimated deferred tax liability, recognized based on the estimated tax impact of the differences between the financial reporting and tax bases of the assets and liabilities acquired, is included in Deferred tax assets, net of deferred tax liabilities and valuation allowance in the consolidated balance sheet as of December 31, 2024.

Goodwill is calculated as the difference between the fair value of the preliminary aggregate purchase consideration and the values assigned to the identifiable tangible and intangible assets acquired and liabilities assumed.

Goodwill represents the workforce acquired, as well as future operating efficiencies and cost savings.

The actual amount of goodwill will depend upon the final determination of the fair value of the assets acquired and liabilities assumed and may differ materially from this preliminary determination.

Goodwill established as a result of the acquisition is tax deductible in the U.S.

Alimera operations generated approximately $ 31.5 million of net revenue and record ed a net loss of approximately $ 14.4 million from the date of acquisition through December 31, 2024.

Transaction Costs

In conjunction with the acquisition, the Company incurred approximately $ 12.4 million in transaction costs during the year ended December 31, 2024, all of which were recognized as selling, general, and administrative expense in the consolidated statement of operations.

Pro Forma Consolidated Financial Information (unaudited)

The following unaudited pro forma consolidated financial information summarizes the results of operations for the periods indicated as if the Novitium acquisition had been completed as of January 1, 2020.

The following unaudited pro forma financial information summarizes the results of operations for the periods indicated as if the acquisition had been completed as of January 1, 2023.

Year Ended December 31,

2 unchanged sentences

Net loss $ ( 24,338 ) $ ( 71,552 )

RESTRUCTURING

The unaudited pro forma financial information includes, where applicable, adjustments for (i) the amortization of the inventory step-up, (ii) additional amortization expense related to acquired intangible assets, (iii) transaction costs and other one-time non-recurring costs, (iv) additional interest expense for borrowings related to the Acquisition, and (v) associated tax-related impacts of adjustments.

These pro forma adjustments are based on the available information as of the date hereof and upon assumptions that the Company believes are reasonable to reflect the impact of the Acquisition with the Company's historical financial information on a pro forma basis.

Adjustments do not include costs related to integration activities, cost savings or synergies that have been or may be achieved by the combined business.

RESTRUCTURING CANADA OPERATIONS

On March 31, 2023 the Compan y ceased operations at the Oakville, Ontario, Canada manufacturing plant.

1 unchanged sentence

ANI has fully completed the transition of the products manufactured or packaged in Oakville to one of the Company's three U.S.-based manufacturing sites.

For the year ended December 31, 2023, restructuring activities resulted in expenses of $ 1.1 million.

This included $ 0.2 million of severance and other employee benefit costs and $ 0.7 million of asset-related impairment and accelerated depreciation costs, and $ 0.2 million for other miscellaneous other costs.

As of December 31, 2023, $ 0.1 million of the severance and other employee benefits are unpaid and accrued.

For the year ended December 31, 2022, restructuring activities resulted in expenses of $ 5.7 million.

This included $ 2.1 million of severance and other employee benefit costs and $ 3.1 million of asset-related impairment and accelerated depreciation costs, and $ 0.4 million for other miscellaneous other costs.

There were no restructuring expenses incurred for the year ended December 31, 2021.

These costs are recorded as restructuring activities, an operating item, in the accompanying consolidated statements of operations.

Certain of the severance and other employee benefit costs contain a service requirement, and as such, are being accrued over time as they are earned.

In conjunction with the exit of the Canadian facility, the Company has determined that the land and building at the Oakville, Ontario, Canada plant will be sold together and met the criteria to be classified as held for sale as of March 31, 2023.

The land and building have a net carrying value of $ 8.0 million, which is presented as assets held for sale on the accompanying consolidated balance sheets as of December 31, 2023.

These assets are part of the Generics, Established Brands, and Other segment.

On November 6, 2023, ANI Pharmaceuticals Canada Inc., a wholly owned subsidiary of the Company, entered into an agreement with a potential buyer for the sale of the Oakville, Ontario manufacturing facility, however, the agreement was subsequently terminated in December 2023 by mutual agreement.

The sale is expected to close in March 2024 (Note 19).

For the year ended December 31, 2024, there were no restructuring activities recorded in the consolidated statements of operations or the consolidated balance sheets.

ANI Pharmaceuticals, Inc.

2 unchanged sentences

For the years ended December 31, 2024, 2023, and 2022

Credit Facility

On November 19, 2021, the Company, as borrower, entered into a credit agreement (the “Credit Agreement”) with Truist Bank and other lenders, which provides for credit facilities consisting of (i) a senior secured term loan facility in an aggregate principal amount of $ 300.0 million (the “Term Facility”) and (ii) a senior secured revolving credit facility in an aggregate commitment amount of $ 40.0 million, which may be used for revolving credit loans, swingline loans and letters of credit (the “Revolving Facility,” and together with the Term Facility, the “Credit Facility”).

The Term Facility proceeds were used to finance the cash portion of the consideration under the Merger Agreement, repay the existing credit facility, and pay fees, costs and expenses incurred in connection with the merger.

The Term Facility matures in November 2027 and the Revolving Facility in November 2026.

The Credit Facility has a subjective acceleration clause in case of a material adverse effect.

In July 2023, the Company amended its Credit Agreement to transition from LIBOR to SOFR due to the cessation of LIBOR pursuant to the terms of Amendment No.1 to the Credit Agreement (“Amendment No.

SOFR will be applied to the Credit Facility for the interest period (as defined in the Credit Agreement) beginning on August 1, 2023 and replaced all LIBOR terms.

The Credit Facility permits both base rate borrowings (“ABR Loans”) and Eurodollar rate borrowings (“Eurodollar Loans”), plus a spread of (a) 5.00 % above the base rate in the case of ABR Loans under the Term Facility and 6.00 % above the SOFR Rate (or alternate benchmark rate as defined in the Credit Agreement) in the case of SOFR loans under the Term Facility and (b) 3.75 % above the base rate in the case of ABR Loans under the Revolving Facility and 4.75 % above the SOFR Rate (as defined in the Credit Facility) in the case of loans under the Revolving Facility.

Amendment No.

1 also includes the addition of a credit spread adjustment of 0.11448 % for an interest period of one-month duration, 0.26161 % for a three-month duration, and 0.42826 % for a six-month duration, in addition to SOFR and the applicable margin, as noted above.

There were no other changes or modifications to the Credit Agreement.

The Company has applied the optional expedients in ASC 848, Reference Rate Reform , and elected to treat the change in the benchmark interest rate to SOFR as a continuation of the existing Credit Agreement and account for the change prospectively.

The interest rate under the Term Facility was 11.46 % at December 31, 2023.

As of December 31, 2023, there was $ 0 drawn on the Revolving Facility and $ 40.0 million remained available for borrowing subject to certain conditions.

For the year ended December 31, 2023, restructuring activities resulted in expenses of $ 1.1 million.

For the year ended December 31, 2022, restructuring activities resulted in expenses of $ 5.7 million.

These costs were recorded as restructuring activities, an operating item, in the accompanying consolidated statements of operations.

Certain of the severance and other employee benefit costs contain a service requirement, and as such, were accrued over time as they were earned.

In conjunction with the exit of the Canadian facility, the Company determined that the land and building at the Oakville, Ontario, Canada plant (the “Property”) will be sold together and met the criteria to be classified as held for sale as of December 31, 2023.

The land and building had a net carrying value of approximately $ 8.0 million, which was presented as assets held for sale on the accompanying consolidated balance sheets as of December 31, 2023.

These assets were part of the Generics and Other segment.

As of December 31, 2024 these assets were sold.

On February 15, 2024, ANI Pharmaceuticals Canada Inc., a wholly owned subsidiary of the Company, entered into an agreement with 1540700 Ontario Limited for the sale of the Property for a total purchase price of $ 19.2 million Canadian Dollars, or approximately $ 14.2 million, based on the exchange rate at closing.

On March 28, 2024 the Company completed the sale of the Property.

After payment of commissions, real estate taxes, and other related costs of approximately $ 0.7 million, the Company received a net proceeds of approximately $ 13.5 million at closing.

The gain on the sale of the Property was approximately $ 5.3 million, recorded in the consolidated statements of operations for the year ended December 31, 2024 .

TRUIST CREDIT FACILITY

In connection with the acquisition of Novitium on November 19, 2021, the Company, as borrower, entered into a credit agreement (the “Credit Agreement”) with Truist Bank and other lenders, which provides for credit facilities consisting of (i) a senior secured term loan facility in an aggregate principal amount of $ 300.0 million (the “Term Facility”) and (ii) a senior secured revolving credit facility in an aggregate commitment amount of $ 40.0 million, which provided for revolving credit loans, swingline loans and letters of credit (the "Revolving Facility," and together with the Term Facility, the "Credit Facility").

The Company incurred $ 14.0 million in deferred debt issuance costs associated with the Credit Facility.

2 unchanged sentences

A commitment fee of 0.5 % per annum on any unused portion of the Revolving Facility.

The Credit Facility is secured by a lien on substantially all of ANI Pharmaceuticals, Inc.’s and its principal domestic subsidiary’s assets and any future domestic subsidiary guarantors’ assets.

The Credit Facility is subject to customary financial and nonfinancial covenants.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

The carrying value of the current and non-current components of the Term Facility as of the years ended December 31:

3 unchanged sentences

Current debt, net of deferred financing costs $ — $ 850

(in thousands) 2024 2023

Non-current borrowing on debt $ — $ 291,000

Deferred financing costs — ( 6,181 )

Non-current debt, net of deferred financing costs and current component $ — $ 284,819

The following table sets forth the components of total interest expense related to the Term Facility recognized in the accompanying consolidated statements of operations for the years ended December 31:

(in thousands) 2024 2023 2022

Contractual coupon $ 16,644 $ 30,692 $ 26,150

Amortization of deferred financing costs 1,477 2,364 2,363

$ 18,121 $ 33,056 $ 28,513

Extinguishment of the Credi t Facility

On August 13, 2024, the Company entered into an indenture with U.S.

Bank Trust Company, National Association, as trustee, for the issuance of the 2.25 % Convertible Senior Notes due 2029 (as described in Note 7 “ 2.25 % Convertible Senior Notes” to the notes to consolidated financial statements).

The proceeds of the Convertible Senior Notes and cash on-hand were used to repay the Credit Facility in its entirety, approximately $ 294.0 million, comprised of $ 292.5 million of unpaid principal, $ 1.2 million in accrued and unpaid interest, and $ 0.3 million of legal fees.

In connection with the issuance of the Convertible Senior Notes, the Company recorded a loss on debt extinguishment in the consolidated statement of operations for the year ended December 31, 2024, amounting to approximately $ 7.5 million, comprised of the write-off unamortized deferred financing fees related to the Credit Facility as of August 13, 2024.

NEW CREDIT AGREEMENT

On August 13, 2024, the Company, as lead borrower, and ANIP Acquisition Company, as initial subsidiary borrower (“ANIP”) entered into a credit agreement (the “New Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent, and the financial institutions party thereto as lenders (together, the “Lenders”), which provides for aggregate principal commitments consisting of (i) a senior secured delayed-draw term loan facility in an aggregate principal amount of $ 325.0 million (the “Term Loan A” or “TLA”), and (ii) a senior secured revolving credit facility in an aggregate commitment amount of $ 75.0 million, which may be used for revolving credit loans, swingline loans and letters of credit (the “TLA Revolver” and together with the TLA, the “New Credit Facility”).

On September 16, 2024 (the “Closing Date”), ANIP drew the full $ 325.0 million of Term Loan A principal, with proceeds used to finance the acquisition of Alimera, including fees, costs and expenses incurred in connection with the acquisition.

As of December 31, 2024, the TLA Revolver remains undrawn, and $ 75.0 million is available for borrowing.

The TLA and the TLA Revolver mature on September 16, 2029.

The New Credit Facility contains certain contingent acceleration clauses that could result in an earlier maturity date, none of which have been triggered as of December 31, 2024.

The cash interest rate and effective rate under the Term Loan A was approximately 6.98 % and 7.34 % per annum at December 31, 2024, respectively.

ANI Pharmaceuticals, Inc.

2 unchanged sentences

For the years ended December 31, 2024, 2023, and 2022

The New Credit Facility is secured by a lien on substantially all of the Company’s and its principal domestic subsidiary’s assets and any future domestic subsidiary guarantors’ assets.

The New Credit Facility is subject to customary financial and nonfinancial covenants.

The Company is required to make quarterly principal payments, beginning on December 31, 2024, in the amount of (i) 0.625 % of the original principal amount of the Term Loan A on each quarterly payment date on or prior to the one year anniversary of the Closing Date, (ii) 1.25 % of the original principal amount of the Term Loan A on each quarterly payment date following the one year anniversary of the Closing Date and 1.875 % of the original principal amount of the Term Loan A on each quarterly payment date following the three year anniversary of the Closing Date and with the remaining unpaid principal amount due on the maturity date of the Term Loan A.

A commitment fee accrues on the unutilized commitments under the TLA Revolver and, from and after the date that is two months after the closing date of the New Credit Agreement, the TLA at a per annum rate equal between 0.25 % and 0.40 % depending on the Company’s first lien net leverage ratio.

The Company incurred $ 5.0 million in deferred debt issuance costs associated with the TLA, which costs are classified as a direct reduction to the current and non-current portion of debt.

The Company incurred $ 1.1 million in deferred debt issuance costs associated with the TLA Revolver.

Of the $ 1.1 million of unamortized deferred debt issuance costs allocated to the TLA Revolver, $ 0.9 million is included in other non-current assets in the consolidated balance sheets, and $ 0.2 million is included in prepaid expenses and other current assets in the consolidated balance sheets.

The carrying value of the current and non-current components of the Term Loan A as of the years ended December 31:

(in thousands) 2024 2023

Current borrowing on debt $ 10,156 $ —

Deferred financing costs ( 984 ) —

Current debt, net of deferred financing costs $ 9,172 $ —

(in thousands) 2024 2023

Non-current borrowing on debt $ 312,813 $ —

1 unchanged sentence

Non-current debt, net of deferred financing costs and current component $ 309,108 $ —

As of December 31, 2023, outstanding principal was $ 294.0 million on the Term Facility.

Of the $ 0.6 million of unamortized deferred debt issuance costs allocated to the Revolving Facility, $ 0.4 million is included in other non-current assets in the consolidated balance sheets, and $ 0.2 million is included in prepaid expenses and other current assets in the consolidated balance sheets.

The contractual maturity of the Term Facility is as follows for the years ending December 31:

(in thousands) Term Facility

The contractual maturity of the Term Loan A is as follows for the period ending:

(in thousands) New Term Facility

2025 $ 10,156

Total $ 322,969

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

The following table sets forth the components of total interest expense, net recognized in the accompanying consolidated statements of operations for the years ended December 31:

(in thousands) 2024 2023 2022

Contractual coupon $ 30,692 $ 26,150 $ 11,129

Amortization of finance fees 2,364 2,363 914

Capitalized interest ( 587 ) ( 95 ) ( 98 )

$ 32,469 $ 28,418 $ 11,945

Contractual coupon interest expense, Truist $ 20,993 $ 33,270 $ 23,870

Contractual coupon interest expense, Term Loan A 7,264 — —

Contractual coupon interest expense, Convertible Notes 2,747 — —

Amortization of deferred financing costs 2,624 2,364 2,363

Interest expense on interest rate swap — — 2,280

Interest expense 33,628 35,634 28,513

Capitalized interest related to Construction in Progress ( 492 ) ( 588 ) ( 95 )

Interest and dividend income on bank balances ( 9,268 ) ( 5,528 ) ( 366 )

Interest income on interest rate swap ( 6,266 ) ( 2,578 ) —

Interest income ( 16,026 ) ( 8,694 ) ( 461 )

Interest expense, net $ 17,602 $ 26,940 $ 28,052

2.25 % CONVERTIBLE SENIOR NOTES

Offering of Convertible Senior Notes

On August 7, 2024, the Company entered into a purchase agreement (the “Purchase Agreement”) with the initial purchasers (the “Initial Purchasers”) relating to the issuance of the $ 275.0 million aggregate principal amount of the Company's Convertible Senior Notes due 2029 (the “Notes”).

Pursuant to the terms of the Purchase Agreement, the Company granted the Initial Purchasers an option to purchase up to an additional $ 41.25 million aggregate principal amount of Notes (the “Option”) for settlement at any time during the thirteen days beginning on, and including August 7, 2024, which Option was exercised in full on August 8, 2024.

On August 13, 2024 (the “Closing Date” or “Issue Date”), the Company completed an offering of $ 316.25 million aggregate principal amount of Notes.

The Notes were issued pursuant to an indenture (the “Indenture”) dated as of August 13, 2024 between the Company and U.S.

Bank Trust Company, National Association (“Trustee”).

The Notes are due September 1, 2029, unless earlier repurchased, redeemed, or converted.

The Notes will accrue interest at a rate of 2.25 % per annum, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2025.

After deducting the initial purchasers’ discounts and commissions of approximately $ 9.5 million, but before deducting the Company’s offering expenses, the net proceeds to the Company from the offering of the Notes was approximately $ 306.8 million.

After payment of the cost of entering into the Capped Call Transactions (as defined below), the Company used the remainder of the net proceeds from the Notes offering, together with cash on hand, to repay the Company’s existing senior secured credit agreement, dated as of November 19, 2021, by and among the Company, certain of the Company’s subsidiaries, as guarantors, Truist Bank, as administrative agent, and other parties thereto, as amended, supplemented or otherwise modified from time to time (as amended, the “Credit Agreement”).

Refer to Note 5 “Truist Credit Facility” to the notes to consolidated financial statements for the details of the extinguishment of the Credit Agreement.

The Notes are the Company’s senior, unsecured obligations and are (i) equal in right of payment with the Company’s existing and future senior, unsecured indebtedness;

(ii) senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated to the Notes;

(iii) effectively subordinated to the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness;

and (iv) structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company’s subsidiaries.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

Conversion Options

Prior to the close of business on the business day immediately preceding June 1, 2029, holders of the Notes will have the right to convert their Notes only upon the occurrence of certain events as set forth in the Indenture.

All or any portion of the Notes may be converted prior to June 1, 2029 at the holders’ option upon the occurrence of any of the following:

(i) during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ending on September 30, 2024, if the last reported sale price per share of the Company’s common stock exceeds 130 % of the conversion price of the Notes for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;

(ii) during the five consecutive business days immediately after any ten consecutive trading day period (such ten consecutive trading day period, the “measurement period”) in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate of the Notes on such trading day;

(iii) upon the occurrence of certain corporate events or distributions on the Company's common stock, as described in the Indenture;

or (iv) if the Company calls such Notes for redemption.

On or after June 1, 2029 until the close of business on the second scheduled trading day immediately before the maturity date of the Notes, holders may convert all or any portion of their Notes at any time at their election.

The initial conversion rate for the Notes is 13.4929 shares of the Company’s common stock per $1,000 principal amount of Notes, which represents an initial conversion price of approximately $ 74.11 per share of the Company’s common stock.

The conversion rate and conversion price will be subject to customary adjustments upon the occurrence of certain events.

In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the Indenture) occur, then the conversion rate will, in certain circumstances, be increased for holders that convert their Notes in connection with such Make-Whole Fundamental Change, as described in the Indenture.

Upon conversion of the Notes, the Company will pay cash up to the aggregate principal amount of the Notes to be converted and pay or deliver, as the case may be, cash, shares of the Company's common stock or a combination of cash and shares of the Company's common stock, at the Company’s election, in respect of the remainder, if any, of the Company's conversion obligation.

The Notes will be redeemable, in whole or in part (subject to certain limitations described below), at the Company’s option at any time, and from time to time, on or after September 1, 2027 and on or before the 61st scheduled trading day immediately before the maturity date, but only if (i) the notes are “Freely Tradable” (as defined in the Indenture) as of the date the Company sends the related redemption notice and all accrued and unpaid additional interest, if any, has been paid in full as of the first interest payment date occurring on or before the date the Company sends the related redemption notice;

and (ii) the last reported sale price per share of the Company’s common stock exceeds 130 % of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends such redemption notice;

and (2) the trading day immediately before the date the Company sends such redemption notice.

However, the Company may not redeem less than all of the outstanding Notes unless at least $ 75.0 million aggregate principal amount of Notes are outstanding and not called for redemption as of the time the Company sends the related redemption notice.

The redemption price will be a cash amount equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

In addition, calling any Note for redemption will constitute a Make-Whole Fundamental Change with respect to that Note, in which case the conversion rate applicable to the conversion of that Note will be increased in certain circumstances if it is converted with a conversion date that is on or after the date the Company sends the related redemption notice and on or before the second business day immediately before the related redemption date.

If certain corporate events that constitute a “Fundamental Change” (as defined in the Indenture) occur, then, subject to a limited exception for certain cash mergers, holders of the Notes may require the Company to repurchase their Notes at a cash repurchase price equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date.

The definition of Fundamental Change includes certain business combination transactions involving the Company and certain de-listing events with respect to the Company’s common stock.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

Events of Default

The Notes include customary provisions relating to the occurrence of “Events of Default” (as defined in the Indenture), including breaches of covenants, breaches of warranty, change of control, nonpayment, bankruptcy, assignment, foreclosure, cessation of business, and defaults under ancillary documents.

Certain of the Events of Default are subject to notice and cure periods.

As of December 31, 2024, the Company was in compliance with all covenants associated with the Notes.

Debt issuance costs related to the Notes totaled $ 11.2 million at inception and were comprised of discounts and commissions payable to the initial purchasers and third-party offering costs and will be amortized to interest expense using the effective interest method over the contractual term.

As of December 31, 2024, the unamortized debt discount and debt issuance cost of the Notes was approximately $ 10.4 million on the consolidated balance sheets.

The effective interest rate during the year ended December 31, 2024 was 3.01 % .

During the year ended December 31, 2024, the Notes did not meet any of the circumstances that would allow for a conversion.

The Notes were therefore not convertible as of December 31, 2024, and were classified as long-term debt on the Company’s consolidated balance sheet as of December 31, 2024.

As of December 31, 2024, the total estimated fair value (which represents a Level 2 valuation) of the Notes is approximately $ 317.6 million.

The Company recognized $ 2.7 million of contractual coupon interest expense and $ 0.8 million of interest expense related to the amortization of deferred financing costs for the year ended December 31, 2024.

Capped Call Transactions

In connection with the offering of Notes, on August 7, 2024 and August 8, 2024, the Company entered into capped call transactions with certain financial institutions (“Capped Calls”).

The Capped Calls each have an initial cap price of $ 114.02 , which represents a premium of 100 % over the last reported sale price of the Company’s common stock on August 7, 2024.

The Company used approximately $ 40.6 million of the net proceeds from the offering of the Notes to pay premiums on the Capped Calls.

The Capped Calls are expected to generally reduce potential dilution to the Company’s common stock upon any conversion of the Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted Notes.

The Capped Calls cover, subject to anti-dilution adjustments, approximately 4.3 million shares of the Company's common stock.

The Capped Calls will expire upon the maturity of the Notes.

The Capped Calls are separate transactions entered into by the Company with the financial institution counterparties thereto, the Capped Calls are not part of the terms of the Notes and the Capped Calls do not change the holders’ rights under the Notes.

The Capped Calls do not meet the criteria for separate accounting as a derivative as they meet the criteria for equity classification, and the capped call transaction premiums are recorded as a reduction to Additional Paid-In Capital within Shareholders’ Equity, net of deferred income taxes.

DERIVATIVE FINANCIAL INSTRUMENT AND HEDGING ACTIVITY

In April 2020, the Company entered into an interest rate swap with Citizens Bank, N.A.

to manage exposure to changes in LIBOR-based interest rates (or alternate benchmark rate as defined in the Credit Agreement) underlying total borrowings under term facilities related to the Prior Credit Agreement.

The interest rate swap matures in December 2026.

to manage its exposure to changes in the London Interbank Offered Rate (“LIBOR”)LIBOR-based interest rates underlying total borrowings under term facilities related to the prior credit agreement, and the interest rate swap matures in December 2026.

The Company amended its Credit Agreement to transition from LIBOR to the Secured Overnight Financing Rate (“SOFR”) due to the cessation of LIBOR in the third quarter of 2023, and accordingly, the interest rate swap transitioned from LIBOR to SOFR.

The interest rate swap is used to manage changes in SOFR-based interest rates underlying a portion of the borrowing under the Term Facility.

Concurrent with the termination of the prior credit agreement and entry into the Credit Agreement with Truist Bank, the interest rate swap with a notional value of $ 168.6 million at origin on November 21, 2021 was novated and Truist Bank became the new counterparty.

As described further below, the Company amended its Credit Agreement to transition from LIBOR to SOFR due to the cessation of LIBOR, and accordingly, the interest rate swap transitioned from LIBOR to SOFR.

The swap is used to manage changes in SOFR-based interest rates underlying a portion of the borrowing under the Term Facility.

The interest rate swap provides an effective fixed interest rate of 2.26 % and has been designated as an effective cash flow hedge and therefore qualifies for hedge accounting.

The notional amount of the interest rate swap was $ 139.4 million and $ 151.5 million as of December 31, 2023 and 2022, respectively, and decreased quarterly by approximately $ 4.0 million until December 2023, after which it remains static until maturity in December 2026.

As of December 31, 2023, the fair value of the interest rate swap asset was recorded in other non-current assets in the consolidated balance sheets was $ 6.2 million.

As of December 31, 2023, $ 8.9 million was recorded in accumulated other comprehensive income (loss) in the consolidated balance sheets.

ANI Pharmaceuticals, Inc.

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For the years ended December 31, 2024, 2023, and 2022

During the year ended December 31, 2023, the change in fair value of the interest rate swaps was a loss of $ 3.7 million.

During the year ended December 31, 2023, losses on the interest rate swap of $ 3.4 million were recorded in other comprehensive income (loss) , net of tax.

Di fferences between the hedged SOFR rate and the fixed rate are recorded as interest expense in the same period that the related interest is recorded for the Term Facility based on the SOFR rate.

In the years ended December 31, 2023 and 2022, $ 2.6 million and $ 2.3 million, respectively, of interest expense was recognized in relation to the interest rate swaps.

Included in these amounts for the years ended December 31, 2023 and 2022 are reclassifications out of accumulated other comprehensive income (loss) of $ 2.8 million in expense, related to terminated and de-designated cash flow hedges.

In conjunction with the amendment of the Credit Agreement (Note 5), the Company’s derivative positions automatically transitioned to SOFR, the designated fallback terms, as determined by the International Swaps and Derivatives Association on August 1, 2023.

Concurrently, the Company updated its hedge documentation to reflect the change of the benchmark index, which changed solely as a result of reference rate reform.

Under ASC 848, Reference Rate Reform, hedge accounting may continue without de-designation if certain criteria are met.

For cash flow hedges in which the designated hedged risk is LIBOR (or another rate that is expected to be discontinued), the guidance allows an entity to assert that it remains probable that the hedged forecasted transaction will occur.

The Company applied the optional expedient within ASC 848 to conclude the updates to the hedge relationship due to reference rate reform did not have a material impact on the Company's consolidated financial statements.

On August 30, 2024, in connection with the New Credit Facility, the interest rate swap with a notional value of $ 139.4 million was transferred from Truist Bank to JPMorgan Chase Bank, N.A., as the new counterparty.

The interest rate swap is used to manage changes in SOFR-based interest rates underlying a portion of the borrowing under the New Term Facility.

The interest rate swap provides an effective fixed interest rate of 2.313 % and is designated as an effective cash flow hedge and therefore qualifies for hedge accounting.

As of December 31, 2024 , the notional amount of the interest rate swap was $ 139.4 million, and will remain static until maturity in December 2026.

As of December 31, 2024 , the fair value of the interest rate swap asset recorded in other non-current assets in the consolidated balance sheets is $ 4.9 million .

As of December 31, 2024, $ 6.1 million was recorded in accumulated other comprehensive (loss) income , net of tax in the consolidated balance she ets.

During the year ended December 31, 2024, the loss on fair value of the interest rate swaps, net of tax recorded in accumulated other comprehensive (loss) income in the consolidated statements of comprehensive income was approximately $ 2.9 million.

Differences between the hedged SOFR rate and the fixed rate are recorded as interest expense in the same period that the related interest is recorded for the Term Facility based on the SOFR rat e.

In the years ended December 31, 2024 and 2023, the Company recorded a reduction in interest expense of $ 6.3 million and $ 2.6 million in relation to the interest rate swaps, respectively.

Included in these amounts for the years ended December 31, 2024 and 2023 are reclassifications out of accumulated other comprehensive (loss) income of $ 0.8 million of interest income and $ 2.8 million of interest expense, respectively, related to terminated and de-designated cash flow hedges.

The following table shows the Company's inventory by asset class as of the years ended December 31:

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Inventories $ 136,782 $ 111,196

Note, Finished Goods as of December 31, 2024 does not include the inventory step-up from the acquisition of Alimera, as the step-up was fully amortized during 2024.

Vendor Concentration

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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.

As a result, we are dependent upon current vendors to supply reliably the API required for on-going product manufacturing.

During the year ended December 31, 2023, no single vendor represented at least 10% of invent ory purchases.

During th e year ended December 31, 2022, the Company purchased approximately 19 % of inventory from one supplier.

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

As a result, the Company is dependent upon current vendor s to reliably supply the API required for on-going product manufacturing.

During the year ended December 31, 2024, approximately 12 %, of our raw material inventory purchases were from one domestic supplier.

During the year ended December 31, 2023, no single vendor represented more than 10% of our raw material inventory purchases.

During the year ended December 31, 2022 approximately 19 % , of our raw material inventory purchases were from one domestic supplier.

ANI Pharmaceuticals, Inc.

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Machinery, furniture, and equipment 68,697 50,412

Leasehold improvements 1,297 —

Finance leases 1,161 —

Construction in progress 4,568 7,692

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GOODWILL AND INTANGIBLE ASSETS

As a result of the 2013 merger with BioSante Pharmaceuticals, Inc.

(“BioSante”), the Company recorded goodwill of $ 1.8 million.

As a result of the acquisition of WellSpring Pharma Services Inc., the Company recorded goodwill of $ 1.7 million in 2018.

From the acquisition of Novitium in 2021, the Company recorded goodwill of $ 24.6 million.

As of December 31, 2023, the Company had two operating segments, which were also deemed the Company's two reporting units, Generics, Established Brands, and Other reporting unit and the Rare Disease reporting unit.

All of the goodwill is recorded in the Generics, Established Brands, and Other reporting unit.reporting unit.

Goodwill is reviewed for impairment at least annually, at October 31st, or more frequently if a triggering event occurs between impairment testing dates.

The Company’s impairment assessment begins with a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value.

Qualitative factors may include, macroeconomic conditions, industry and market considerations, cost factors, and other relevant entity and Company specific events.

If, based on the qualitative test, the Company determines that it is “more likely than not” that the fair value of a reporting unit is less than its carrying value, then we evaluate goodwill for impairment by comparing the fair value of the reporting unit to its respective carrying value, including its goodwill.

If it is determined that it is “not likely” that the fair value of the reporting unit is less than its carrying value, then no further testing is required.

Based on the qualitative assessments performed by the Company, it was determined that it was more likely than not that the fair value of the Generics, Established Brands, and Other reporting unit was greater than its carrying value as of October 31, 2023, and therefore no impairment charges have been recognized, and no quantitative testing was required.

As of December 31, 2024, the Company has assigned its goodwill in three reporting units, Generics and Other, Brands, and Rare Disease reporting units.

As a result of the 2013 merger with BioSante Pharmaceuticals, Inc., the Company recorded goodwill of $ 1.8 million.

As a result of the acquisition of WellSpring Pharma Services Inc.

in 2018, the Company recorded goodwill of $ 1.7 million.

From the acquisition of Noviti um in 2021, the Company recorded goodwill of $ 24.6 million .

The goodwill from the transactions with BioSante Pharmaceuticals, Inc., WellSpring Pharma Services Inc., and Novitium is recorded in the Generics and Other reporting unit.

As a result of the acquisition of Alimera, on September 16, 2024, the Company recorded goodwill of $ 31.8 million in the Rare Disease reporting unit.

Refer to Note 3 “Business Combination” to the notes to the consolidated financial statements for further information related to the acquisition.

There have been no events or changes in circumstances that would have reduced the fair value of the reporting units below their carrying value during the year ended December 31, 2024 and 2023, and as a result, no impairment charges have been recognized.

In addition to the qualitative impairment analysis performed at October 31, 2024, there were no events or changes in circumstances that would have reduced the fair value of the reporting unit below its carrying value from October 31, 2024 to December 31, 2024.

No impairment loss was recognized during the years ended December 31, 2023, 2022, and 2021, and the balance of goodwill was $ 28.2 million as of December 31, 2023 and 2022.

No impairment loss was recognized during the years ended December 31, 2024, 2023, and 2022.

ANI Pharmaceuticals, Inc.

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The components of net definite-lived intangible assets and net indefinite-lived intangible assets other than goodwill are as follows:

December 31, 2023 December 31, 2022 Weighted Average

December 31, 2024 December 31, 2023 Remaining Weighted Average

(in thousands) Gross Carrying Amount

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Marketing and distribution rights 17,157 ( 15,233 ) 1,924 17,157 ( 14,271 ) 2,886 2.0 years

Non-compete agreement 624 ( 624 ) — 624 ( 602 ) 22 - years

Customer relationships 24,900 ( 11,264 ) 13,636 24,900 ( 7,707 ) 17,193 3.8 years

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Definite-lived intangible assets arising from business combinations and other asset acquisitions include intangibles such as Abbreviated New Drug Applications (“ANDAs”), New Drug Applications (“NDAs”) and product rights, marketing and distribution rights, customer relationships, and non-compete agreements.

Definite-lived intangible assets are amortized over the estimated period during which the asset is expected to contribute directly or indirectly to future cash flows.

Definite-lived intangible assets are stated at cost, net of amortization, and generally amortized over their remaining estimated useful lives, ranging from seven to ten years years, based on the straight-line amortization method.

In the case of certain NDAs and product rights assets, an accelerated amortization method is used to better match the anticipated economic benefits expected to be provided.

Definite-lived intangible assets are tested for impairment annually, or when events or changes in circumstances indicate that these asset might be impaired.

Indefinite-lived intangible assets other than goodwill include primarily IPR&D projects.

Definite-lived intangible assets are tested for impairment when events or changes in circumstances indicate that these asset might be impaired.

During the year ended December 31, 2024, the Company acquired Alimera, and as a result, acquired two intangible assets for ILUVIEN and YUTIQ, in the amount of $ 170.0 million and $ 230.0 million, respectively, which will be amortized over twelve years.

The Company recorded approximately $ 3.6 million of impairment losses during the three months ended December 31, 2024 related to definite-lived intangibles.

There were no impairment losses recorded during the year ended December 31, 2023.

During the year ended December 31, 2022, impairment losses of approximately $ 0.1 million, were recognized in relation to ANDA assets.

Amortization expense for definite-lived intangible assets was $ 60.3 million , $ 52.3 million, and $ 49.5 million for the years ended December 31, 2024, 2023, and 2022, respectively .

See Note 12 "Fair Value" in the notes to the consolidated financial statements for more details on acquired definite-lived and in definite-lived intangible assets.

Indefinite-lived intangible assets other than goodwill include primarily In-Process Research & Development (“IPR&D”) projects.

IPR&D intangible assets represent the fair value of technology acquired in a business combination or asset acquisition for which the technology projects are incomplete but have substance or alternative future use.

When an IPR&D project is completed (generally upon receipt of regulatory approval), then the IPR&D will be accounted for as a definite-lived intangible asset.

During 2023, definite-lived intangibles increased approximately $ 16.4 million, which includes $ 6.8 million which was reclassified from indefinite-lived IPR&D to acquired ANDA intangible assets upon completion of projects and launch of related products, and the Company added approximately $ 9.6 million of intangible assets, comprised of $ 7.1 million of ANDA intangible assets related to asset acquisitions with Slayback Pharma Limited Liability Company and Akorn Holding Company, $ 2.0 million in product rights related to the transaction with Alvogen, Inc., and other asset acquisitions.

During 2022, approximately $ 20.3 million was reclassified from indefinite-lived IPR&D to acquired ANDA intangible assets upon completion of projects and launch of related products.

The Company added $ 7.2 million in ANDA intangible assets related to the July 21, 2022 transaction with Oakrum Pharma, LLC (Note 10).

These assets will be amortized over a seven -year useful life.

ANI Pharmaceuticals, Inc.

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For the years ended December 31, 2024, 2023, and 2022

Amortization expense for definite-lived intangible assets was $ 52.3 million, $ 49.5 million, and $ 41.8 million for the years ended December 31, 2023, 2022, and 2021, respectively.

Refer to Note 10 for more details on acquired definite-lived and indefinite-lived intangible assets.

Indefinite-lived intangible assets are not amortized, and the Company tests for impairment of indefinite-lived intangible assets annually as of October 31, 2024, as well as with definite-lived intangibles when events or circumstances indicate that the carrying value of the assets may not be recoverable.

The Company performed qualitative assessments to determine whether it was more likely than not that the assets were impaired in order to determine the necessity of performing a quantitative impairment test, under which management would calculate the asset’s fair value.

When performing the qualitative assessments, the Company evaluated events and circumstances that would affect the significant inputs used to determine the fair value of the assets.

The Company recorded $ 4.0 million of impairment losses on indefinite-lived intangible assets, more specifically, IPR&D during the three months ended December 31, 2024.

No impairment charges were recorded during the years ended December 31, 2023 and 2022.

No amounts were reclassified from indefinite-lived IPR&D to intangible assets during the year ended December 31, 2024.

Expected future amortization expense is as follows for the years ending December 31:

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Actual amounts of amortization expense may differ due to timing of regulatory approvals related to IPR&D assets, additional intangible assets acquired, impairment of intangible assets, and other events.

Indefinite-lived intangible assets are not amortized, and the Company tests for impairment of indefinite-lived intangible assets and definite-lived intangibles when events or circumstances indicate that the carrying value of the assets may not be recoverable, and the Company performs an asset impairment analysis annually, as of October 31, 2023.

When performing the qualitative assessments, the Company evaluated events and circumstances that would affect the significant inputs used to determine the fair value of the assets.

Based on the assessments of the aforementioned factors, it was determined that it was more likely than not that the fair value of assets are greater than their carrying amount as of October 31, 2023, and therefore no quantitative testing for impairment was required.

In addition to the qualitative impairment analysis performed at October 31, 2023, there were no events or changes in circumstances that would have reduced the fair value of the indefinite or definite-lived intangible assets below their carrying values from October 31, 2023 to December 31, 2023.

No impairment loss was recognized during the year ended December 31, 2023.

During the years ended December 31, 2022 and 2021, impairment losses of approximately $ 0.1 million and $ 2.4 million, respectively, were recognized in relation to ANDA assets.

Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date.

GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair value.

GAAP establishes a hierarchical disclosure framework that prioritizes and ranks the level of observability of inputs used in measuring fair value.

The inputs used in measuring the fair value of cash and cash equivalents are considered to be Level 1 in accordance with the three-tier fair value hierarchy.

The fair market values are based on period-end statements supplied by the various banks and brokers that held the majority of the funds.

The Term Facility bears an interest rate that fluctuates with the changes in SOFR and, because the variable interest rates approximate market borrowing rates available to the Company, the carrying values of these borrowings approximated their fair values at December 31, 2023 and 2022.

The fair market values are based on period-end statements supplied by the various banks and brokers that held the majority of our funds.

The fair value of short-term financial instruments (primarily accounts receivable, prepaid expenses, accounts payable, accrued expenses, and other current liabilities) approximate their carrying values because of their short-term nature.

The Term Facility, which was extinguished on August 13, 2024, and the New Credit Facility bear interest rates that fluctuates with the changes in SOFR and because the variable interest rates approximate market borrowing rates available to us, the Company believes the carrying values of these borrowings approximated their fair values at December 31, 2024 and 2023.

ANI Pharmaceuticals, Inc.

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Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

Alimera Contingent Value Rights Agreement

On September 16, 2024, prior to consummation of the Alimera Acquisition, the Company entered into a CVR pursuant to which holders of Alimera Common Stock, as well as holders of Alimera Warrants, Alimera Options, Alimera PSUs, Alimera RSAs and Alimera RSUs, may become entitled to contingent cash payments per CVR (each, a “Milestone Payment”), such payments being contingent upon, and subject to, the achievement of:

(i) $ 140.0 million in net revenue (the “2026 Milestone”) on third party sales of ILUVIEN and YUTIQ for the Company’s 2026 fiscal year (the “2026 Net Revenue”) and/or (ii) $ 160.0 million in net revenue (the “2027 Milestone” and together with the 2026 Milestone, the “Milestones”) on third party sales of ILUVIEN and YUTIQ for the Company’s 2027 fiscal year (the “2027 Net Revenue”).

Each CVR entitles the holder (the “Holder”) to receive a Milestone Payment upon satisfaction of the applicable Milestones.

The Milestone Payment for each CVR will equal the product (rounded to the nearest 1/100 of $0.01) of (i) $ 0.25 multiplied by a fraction (not exceeding one), the numerator of which is the amount, if any, by which the 2026 Net Revenue exceeds $ 140.0 million and the denominator of which is $ 10.0 million (subject to adjustment for the exercise price of applicable Alimera Options) and/or (ii) $ 0.25 multiplied by a fraction (not exceeding one), the numerator of which is the amount, if any, by which the 2027 Net Revenue exceeds $ 160.0 million and the denominator of which is $ 15.0 million (subject to adjustment for the exercise price of applicable Alimera Options).

If Milestones are met, the distributions in respect of the CVRs will be made on or prior to the date that is fifteen ( 15 ) business days following the filing by the Company of its audited financial statements with the SEC on Form 10-K in respect of the applicable year in which such Milestones have been achieved, and will be subject to a number of deductions, exceptions and limitations, including, but not limited to, certain taxes.

The fair value of the CVR liability is based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy.

The Company utilized a Monte Carlo simulation model to estimate the fair value of the CVR liability.

For each simulated path of future revenue, the payments to the CVR holders were calculated based on the contractual terms of the rights.

The average payments from all simulated paths were then discounted to present value at an estimated cost of debt.

The CVR liability had an estimated fair value of approximately $ 9.0 million as of December 31, 2024, and is classified as non-current contingent consideration in the Company's consolidated balance sheet.

Year Ended December 31,

(in thousands) 2024

Beginning balance $ —

CVR Agreement 8,700

Change in fair value 300

Ending balance $ 9,000

Money Market Funds

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The fair value of the money market funds as of December 31, 2024 was approximately $ 84.3 million.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

Interest Rate Swap

The fair value of the interest rate swap is estimated based on the present value of projected future cash flows using the SOFR forward rate curve.

The fair value of the interest rate swap is estimated based on the present value of projected future cash flows using the SOFR forward rate curve (see Note 6 "New Credit Agreement" in the notes to the consolidated financial statements).

The model used to value the interest rate swap includes inputs of readily observable market data, a Level 2 input.

As described in detail in Note 5, the fair value of the interest rate swap was a $ 6.2 million and $ 8.8 million at December 31, 2023 and 2022, respectively, and was classified as a non-current asset.

Contingent Consideration

As described in further detail in Note 8 “Derivative Financial Instrument and Hedging Activity” to the notes to consolidated financial statements.

As described in detail in Note 8, the fair value of the interest rate swap was a $ 4.9 million and $ 6.2 million at December 31, 2024 and 2023, respectively, and was classified as a non-current assets in the consolidated balance sheets.

CG Oncology Equity Securities

The Company currently holds 219,925 shares of common stock in CG Oncology (Nasdaq:

The Company accounts for its investment in CG Oncology equity securities as an equity investment with a readily determinable fair value, as the securities are publicly traded on the Nasdaq Global Select Market.

The fair value of the equity securities is based on its closing price on the Nasdaq and is classified within Level 1 of the fair value hierarchy because the equity securities are valued using quoted market prices.

The Company does not adjust the quoted market price for such financial instruments.

The fair value of the CG Oncology equity securities as of December 31, 2024 was approximately $ 6.3 million based on a closing market price of $ 28.68 on December 31, 2024.

This amount is classified on the consolidated statements of operations as Unrealized gain on investment in equity securities for the year ended December 31, 2024.

Between 2013 and 2023, CG Oncology securities held by the Company were valued at zero under U.S.

Novitium Contingent Consideration

In connection with the acquisition of Novitium, the Company may pay up to $ 46.5 million in additional consideration related to the achievement of certain milestones, including milestones on gross profit of Novitium portfolio products over a 24-month period, regulatory filings completed during this 24-month period, and a percentage of net profits on certain products that are launched in the future.

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As of the November 19, 2021 acquisition date, the contingent consideration had a fair value of $ 30.8 million.

Pursuant to the terms of the Agreement and Plan of Merger, dated as of March 8, 2021, on December 12, 2023, the Company paid $ 12.5 million of cash consideration to the Company Members, defined as the holders of Novitium ownership interests in the Agreement and Plan of Merger, as the holders of Novitium ownership interests, for the achievement of the "ANDA Filing Earn-Out," as defined in the Agreement (Note 17).

Furthermore, on February 22, 2024, the Company paid $ 12.5 million to Company Members of Novitium upon the achievement of the "Gross Profit Earn-Out," as defined in the Agreement (Note 19).

Pursuant to the terms of the Agreement and Plan of Merger, on December 12, 2023, the Company paid $ 12.5 million of cash consideration to the Company Members, defined as the holders of Novitium ownership interests in the Agreement and Plan of Merger, as the holders of Novitium ownership interests, for the achievement of the "ANDA Filing Earn-Out," as defined in the Agreement (see Note 18 "Related Party Transactions" in the notes to the consolidated financial statements).

Furthermore, on February 22, 2024, the Company paid $ 12.5 million to Company Members of Novitium upon the achievement of the "Gross Profit Earn-Out," as defined in the Agreement.

The fair value of the contingent consideration was approximately $ 10.9 million and $ 24.0 million as of December 31, 2024 and 2023, respectively, and is reflected as a current and non-current accrued contingent consideration liability in the consolidated balance sheets.

The recurring Level 3 fair value measurements of contingent consideration for which a liability is recorded include the following significant unobservable inputs:

The recurring Level 3 fair value measurements of contingent consideration for which a liability is recorded include the following significant unobservable inputs as of December 31, 2024 :

Payment Type Valuation Technique Unobservable Input Assumptions

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Projected fiscal year of payment 2025-2035

Product development-based milestone payments Probability-weighted discounted cash flow Discount rate 12.0 %

Probability of payment 100 %

Projected fiscal year of payment 2024

ANI Pharmaceuticals, Inc.

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The following table presents the changes in contingent consideration balances classified as Level 3 balances for the years ended December 31, 2024 and 2023:

Years Ended December 31,

Year Ended December 31,

(in thousands) 2024 2023

Beginning balance $ 23,984 $ 35,058

Measurement period adjustment — 300

Payment of ANDA filing earn-out ( 12,500 ) —

Payment of Gross-Profit and ANDA Filing earn-out ( 12,500 ) ( 12,500 )

Change in fair value ( 630 ) 1,426

Ending balance $ 10,854 $ 23,984

Contingent Value Rights

The contingent value rights (“CVRs”), which were granted coincident with the merger with BioSante expired during June 2023, were considered contingent consideration and were classified as liabilities, and there were no payments made pursuant to the terms of the CVR agreement.

The Company determined that the fair value of the CVRs was immaterial as of December 31, 2022, and also determined that the changes in such fair value were immaterial for the years ended December 31, 2022, and 2021.

Accrued Licensor Payments

On May 17, 2023, Alimera entered into the Product Rights Agreement with EyePoint which granted Alimera an exclusive and sublicensable right and license under EyePoint’s and its affiliates’ interest in certain of EyePoint’s and its affiliates’ intellectual property to develop, manufacture, sell, commercialize and otherwise exploit certain products, including YUTIQ, for the treatment and prevention of uveitis in the entire world, except Europe, the Middle East and Africa, where the Company already has such rights pursuant to the New Collaboration Agreement, and except for China, Hong Kong, Macau, Taiwan, Brunei, Burma (Myanmar), Cambodia, Timor-Leste, Indonesia, Laos, Malaysia, the Philippines, Singapore, South Korea, Thailand and Vietnam, where Ocumension holds a license from EyePoint.

Pursuant to the agreement, Alimera paid EyePoint an upfront payment of $ 75.0 million and has also made four quarterly guaranteed payments to EyePoint totaling $ 7.5 million during the year ended December 31, 2024.

The Company will also pay royalties to EyePoint from 2025 to 2028 at a percentage of mid-to-low double digits of annual U.S.

net sales of certain products (including YUTIQ and ILUVIEN) in excess of certain thresholds, beginning at $ 70.0 million in 2025, increasing annually thereafter.

Upon making the quarterly payments in the aggregate amount of $ 7.5 million in 2024, the licenses and rights granted to the Company will automatically become perpetual and irrevocable.

During the quarter ended December 31, 2024, the Company paid the final quarterly payment of $ 1.9 million.

The present value of the remaining payments to EyePoint for years 2025 to 2028 will continue to be revalued at an appropriate discount rate for the Company at each reporting date until they are settled.

The fair value of the remaining future payments as of December 31, 2024 was approximately $ 21.0 million.

The recurring Level 3 fair value measurements of the EyePoint royalty for which a liability is recorded include the following significant unobservable inputs as of December 31, 2024 :

Payment Type Valuation Technique Unobservable Input Assumptions

Annual royalty payments for US net revenues of sales of YUTIQ and ILUVIEN Probability-weighted discounted cash flow Discount rate 12.0 %

Projected fiscal year of payment 2025-2029

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

The following table presents the changes in accrued licensor payments classified as Level 3 balances for the year ended December 31, 2024:

Year Ended December 31,

(in thousands) 2024

Beginning balance $ —

Accrued licensor payments 25,000

Payments during 2024 ( 3,750 )

Change in fair value ( 289 )

Ending balance $ 20,961

The following table presents financial assets and liabilities accounted for at fair value on a recurring basis as of December 31, 2024 and December 31, 2023, by level within the fair value hierarchy:

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Interest rate swap $ 4,897 $ — $ 4,897 $ —

Contingent consideration $ 23,984 $ — $ — $ 23,984

CG Oncology - Investment in equity securities $ 6,307 $ 6,307 $ — $ —

Contingent consideration, Novitium $ 10,854 $ — $ — $ 10,854

Contingent Value Rights, Alimera $ 9,000 $ — $ — $ 9,000

Accrued licensor payment $ 20,961 $ — $ — $ 20,961

(in thousands)

Description Fair Value at

December 31, 2023 Level 1 Level 2 Level 3

Money Market Fund $ 191,841 $ 191,841 $ — $ —

Interest rate swaps $ 6,236 $ — $ 6,236 $ —

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Long-lived assets, including property and equipment, ROU assets, intangible assets, and goodwill, are measured at fair value on a non-recurring basis.

During the year ended December 31, 2023, there were no impairment charges recognized related to non-financial assets and liabilities measured at fair value on a non-recurring basis.

During the year ended December 31, 2022, the Company recognized an impairment charge of $ 0.1 million related to a definite-lived ANDA intangible asset.

There were no other fair value impairments recognized in the years ended December 31, 2023 and 2022.

During the years ended December 31, 2024 and 2023 there were $ 7.6 million and $ 0 of impairment charges recognized related to non-financial assets and liabilities measured at fair value on a non-recurring basis, respectively.

During the year ended December 31, 2022, impairment losses of approximately $ 0.1 million, were recognized in relation to ANDA assets.

Acquired Non-Financial Assets Measured at Fair Value

On September 16, 2024, the Company acquired ILUVIEN and YUTIQ in connection with the acquisition of Alimera.

See Note 3 “Business Combination” in the notes to the consolidated financial statements.

On December 27, 2023, the Company acquired from Alvogen, Inc.

the rights to certain pharmaceutical products for total cash consideration of $ 2.0 million (Note 8), which we plan to launch commercially in early 2024.

the rights to certain pharmaceutical products for total cash consideration of $ 2.0 million (Note 8), which launched commercially in early 2024.

The transaction was accounted for as an asset acquisition and there were no transaction costs directly related to the acquisition.

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No such triggering events were identified during the period from the date of acquisition to December 31, 2024.

August 14, 2023, the Company acquired one ANDA and registered patents and pending patent applications from Slayback Pharma Limited Liability Company for total consideration of $ 3.0 million (Note 9).

On August 14, 2023, the Company acquired one ANDA and registered patents and pending patent applications from Slayback Pharma Limited Liability Company for total consideration of $ 3.0 million.

The Company also acquired an NDA which has yet to be filed.

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For the years ended December 31, 2024, 2023, and 2022

On July 21, 2022, we acquired four ANDAs from Oakrum Pharma, LLC for total consideration of $ 8.0 million plus an immaterial amount for the purchase of finished goods inventory.

On July 21, 2022, ANI acquired four ANDAs from Oakrum Pharma, LLC for total consideration of $ 8.0 million plus an immaterial amount for the purchase of finished goods inventory.

The transaction was funded from cash on hand.

We accounted for this transaction as an asset acquisition and capitalized the transaction costs directly related to the acquisition.

ANI accounted for this transaction as an asset acquisition and capitalized the transaction costs directly related to the acquisition.

The product portfolio included one commercial product, one approved product with a launch completed in September 2022 and two filed products, with approval pending.

We recognized $ 7.2 million as acquired ANDA intangible assets and $ 1.2 million as research and development expense because certain of the generic products have significant remaining work required in order to be commercialized and the products do not have an alternative future use.

ANI recognized $ 7.2 million as acquired ANDA intangible assets and $ 1.2 million as research and development expense because certain of the generic products have significant remaining work required in order to be commercialized and the products do not have an alternative future use.

The payment was allocated to the acquired intangible assets and in-process research and development based on relative fair value, which was determined using Level 3 unobservable inputs.

We used the present value of the estimated cash flows related to the products, using a discount rate of 13 % to determine the fair value of the acquired intangible assets and in-process research and development.

ANI used the present value of the estimated cash flows related to the products, using a discount rate of 13 % to determine the fair value of the acquired intangible assets and in-process research and development.

The inventory acquired was immaterial.

Contingent liabilities are accrued when they are both estimable and probable.

We accrued $ 0.2 million in contingent payments due to a third party upon the launch of a product completed in September.

ANI accrued $ 0.2 million in contingent payments due to a third party upon the launch of a product completed in September 2022.

This was accrued and recorded in the fair value of acquired intangible assets as it was probable at the acquisition date and has been paid in 2023.

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No such triggering events were identified during the period from the date of acquisition to December 31, 2024, and therefore no impairment loss was recognized for the year ended December 31, 2024.

In April 2021, we acquired three NDAs and an ANDA and certain related inventories from Sandoz, Inc.

for total consideration of $ 20.7 million.

We also incurred and paid $ 0.4 million in transaction costs directly related to the acquisition.

The acquisition was funded via borrowings under our Revolver.

We accounted for this transaction as an asset acquisition and capitalized the transaction costs directly related to the acquisition.

We recognized $ 11.4 million as acquired intangible assets and $ 9.7 million of inventory at fair value, including $ 0.6 million of API, $ 1.0 million of sample inventory, and $ 8.1 million in finished goods inventory.

In order to determine the fair value of the intangible assets, we used the present value of the estimated cash flows related to the product rights using a discount rate of 10 %, which are level 3 unobservable inputs.

The fair value of the inventory was determined based on the estimated selling price to be generated from the finished goods, less costs to sell, including a reasonable margin, which are level 3 unobservable inputs.

The intangible assets are being amortized in full over a useful life of seven years and are tested for impairment when events or circumstances indicate that the carrying value of the asset may not be recoverable.

No such triggering events were identified during the period from the date of acquisition to December 31, 2023 and therefore no impairment loss was recognized for the years ended December 31, 2022 and 2023.

MEZZANINE AND STOCKHOLDERS’ EQUITY

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Authorized shares

The Company is authorized to issue up to 33.3 million shares of common stock with a par value of $ 0.0001 per share, 0.8 million shares of class C special stock with a par value of $ 0.0001 per share, and 1.7 million shares of undesignated preferred stock with a par value of $ 0.0001 per share at December 31, 2023 and 2022.

The Company is authorized to issue up to 33.3 million shares of common stock with a par value of $ 0.0001 per share, 0.8 million shares of class C special stock with a par value of $ 0.0001 per share, and 1.7 million shares of undesignated preferred st ock with a par value of $ 0.0001 per share at December 31, 2024 and 2023.

There were 21.5 million and 21.1 million shares of common stock issued and outstanding as of December 31, 2024, respectively, and 20.7 million and 20.5 million shares of common stock issued and outstanding as of December 31, 2023, respectively.

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In May 2023, through a public offering, the Company completed the issuance and sale of 2,183,545 shares of ANI common stock, resulting in net proceeds after issuance costs of $ 80.6 million.

During 2021, the Company issued 1.5 million shares related to a public offering of the Company's common stock and 2.5 million shares as consideration for the acquisition of Novitium.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022, and 2021

Class C Special Stock

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The holders of class C special stock have no cumulative voting, preemptive, subscription, redemption, or sinking fund rights.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

Mezzanine Equity

Concurrently with the execution of the Merger Agreement, and as financing for a portion of the acquisition, on March 8, 2021, the Company entered into an Equity Commitment and Investment Agreement with Ampersand 2020 Limited Partnership (the “PIPE Investor”), pursuant to which the PIPE Investor agreed to purchase, 25,000 shares of the Company's Series A Convertible Preferred Stock (the “PIPE Shares”), for a purchase price of $ 1,000 per share and an aggregate purchase price of $ 25.0 million on November 19, 2021.

Concurrently with the acquisition of Novitium, and as financing for a portion of the acquisition, on March 8, 2021, the Company entered into an Equity Commitment and Investment Agreement with Ampersand 2020 Limited Partnership (the “PIPE Investor”), pursuant to which the PIPE Investor agreed to purchase, 25,000 shares of the Company's Series A Convertible Preferred Stock (the “PIPE Shares”), for a purchase price of $ 1,000 per share and an aggregate purchase price of $ 25.0 million on November 19, 2021.

The PIPE Shares are classified as mezzanine equity because the shares are mandatorily redeemable for cash upon a change in control, an event that is not solely in the Company's control.

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Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted-average number of shares of common stock outstanding during the period.

For periods of net income, and when the effects are not anti-dilutive, we calculate diluted earnings (loss) per share by dividing net income available to common stockholders by the weighted-average number of shares outstanding plus the impact of all potential dilutive common shares, consisting primarily of common stock options, shares to be purchased under our ESPP, and performance stock units, using the more dilutive of the treasury stock or the two-class method.

For periods of net income, and when the effects are not anti-dilutive, the Company calculates diluted earnings (loss) per share by dividing net income available to common stockholders by the weighted-average number of shares outstanding plus the impact of all potential dilutive common shares, consisting primarily of common stock options, shares to be purchased under our ESPP, and performance stock units, using the more dilutive of the treasury stock or the two-class method.

For periods of net loss, diluted loss per share is calculated similarly to basic loss per share.

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in periods of net income, the calculation of basic and diluted earnings (loss) per share excludes from the numerator net income (but not net loss) attributable to the unvested restricted shares and the common shares assumed converted from the preferred shares and excludes the impact of those shares from the denominator.

The Company’s participating securities do not have a co ntractual obligation to share in the Company’s losses.

As such, the net loss was attributed entirely to common stockholders.

As the Company has reported a net loss for the year ended December 31, 2024 , diluted net loss per share attributable to common shareholders is the same as basic net loss per share attributable to common shareholders for this period.

Earnings (loss) per share for the years ended December 31, 2024, 2023, and 2022 are calculated for basic and diluted earnings (loss) per share as follows:

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2024 2023 2022 2024 2023 2022

Net income (loss) available to common shareholders $ 17,154 $ ( 49,521 ) $ ( 42,793 ) $ 17,154 $ ( 49,521 ) $ ( 42,793 )

Net (loss) income available to common shareholders $ ( 20,147 ) $ 17,154 $ ( 49,521 ) $ ( 20,147 ) $ 17,154 $ ( 49,521 )

Earnings allocated to participating securities — ( 1,679 ) — — ( 1,663 ) —

Net income (loss) available to common shareholders $ 15,475 $ ( 49,521 ) $ ( 42,793 ) $ 15,491 $ ( 49,521 ) $ ( 42,793 )

Net (loss) income available to common shareholders $ ( 20,147 ) $ 15,475 $ ( 49,521 ) $ ( 20,147 ) $ 15,491 $ ( 49,521 )

Basic Weighted-Average Shares Outstanding 19,318 18,001 16,260 19,318 18,001 16,260

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Diluted Weighted-Average Shares Outstanding 19,318 18,194 16,260

Earnings (loss) per share $ 0.86 $ ( 3.05 ) $ ( 3.40 ) $ 0.85 $ ( 3.05 ) $ ( 3.40 )

(Loss) earnings per share $ ( 1.04 ) $ 0.86 $ ( 3.05 ) $ ( 1.04 ) $ 0.85 $ ( 3.05 )

The number of anti-dilutive shares, which have been excluded from the computation of diluted earnings (loss) per share, were 2.3 million , 2.4 million, and 2.6 million for the years ended December 31, 2024, 2023, and 2022, respectively.

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In July 2016, the Company commenced administration of the ANI Pharmaceuticals, Inc.

As of December 31, 2023 there are 0.1 million shares of common stock available for issuance under the ESPP.

Under the ESPP, participants can purchase shares of common stock at a 15 % discount.

The Company issued 38 thousand, 29 thousand, and 14 thousand shares in the years ended December 31, 2023, 2022, and 2021, respectively.

The following table summarizes ESPP expense incurred under the 2016 Employee Stock Purchase Plan and included in the consolidated statements of operations:

(in thousands) Years Ended December 31,

2023 2022 2021

Selling, general, and administrative $ 360 $ 222 $ 87

Cost of sales 60 50 15

Research and development 47 41 21

$ 467 $ 313 $ 123

As of December 31, 2024, there are approximately 0.1 million shares of common stock available for issuance under the ESPP.

Under the ESPP, participants can purchase shares of common stock at a 15 % discount on the lowest share price on the first day of the purchase period or the last day of the purchase period.

Stock Incentive Plan

During the 2024 Annual Meeting of Stockholders held on May 21, 2024, the stockholders of the Company approved an amendment to the Amended and Restated Stock Incentive Plan (the “2022 Plan”) (such amendment, the “2024 Stock Plan Amendment” and the 2022 Plan, after giving effect to the 2024 Stock Plan Amendment, the “Amended 2022 Stock Plan”).

Subject to adjustment, the 2024 Stock Plan Amendment authorizes the issuance of an additional 1,610,000 shares.

As of December 31, 2024, approximately 2.0 million shares of common stock were available for issuance under the 2022 Plan.

Equity-based service awards are granted under the ANI Pharmaceuticals, Inc.

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The 2022 Plan, among other things, increased the number of shares reserved for issuance thereunder by 1,150,000 shares.

As of December 31, 2023, 1.1 million shares of common stock were available for issuance under the 2022 Plan.

On May 23, 2023, the Company’s stockholders approved an amendment to the 2022 Plan (such amendment, the “2023 Stock Plan Amendment”).

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Stock-based compensation expense is recognized ratably over the vesting periods of the awards.

The following table summarizes stock-based compensation expense incurred for stock options, restricted stock awards, performance-based restricted stock units, and Inducement Grants and included in the consolidated statements of operations:

The following table summarizes stock-based compensation expense incurred for ESPP expense incurred under the 2016 Employee Stock Purchase Plan, stock options, restricted stock awards, performance-based restricted stock units, and Inducement Grants and included in the consolidated statements of operations:

(in thousands) Years Ended December 31,

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$ 29,344 $ 20,652 $ 14,599

Income tax benefits of approximately $ 2.8 million , $ 3.3 million, and $ 1.7 million were recognized for stock-based compensation-related tax deductions in the 2024, 2023, and 2022 consolidated statements of operations, respectively.

ANI Pharmaceuticals, Inc.

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For the years ended December 31, 2024, 2023, and 2022

Income tax benefits of approximately $ 3.3 million, $ 1.7 million, and $ 1.0 million were recognized for stock-based compensation-related tax deductions in the 2023, 2022, and 2021 consolidated statements of operations, respectively.

Stock Options

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Outstanding stock options granted to non-employee directors generally vest over a period of one to four years and have 10-year contractual terms.

There were no grants of stock options during 2024.

For 2023, and 2022, the fair value of each option grant was estimated using the Black-Scholes option-pricing model, using the following assumptions:

Years Ended December 31,

2023 2022 2021

Expected option life (years) 6.25

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therefore, an expected dividend yield of zero was used.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022, and 2021

A summary of stock option activity under the 2022 Plan and Inducement Grants during the years ended December 31, 2024, 2023, and 2022 is presented below:

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Outstanding at December 31, 2023 689 $ 46.05 4.9 $ 8,370

Granted 3 41.84 $ 22.12

Exercised ( 102 ) 43.80 2,001

Forfeited ( 21 ) 33.45

Expired ( 3 ) 50.88

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Exercisable at December 31, 2024 551 $ 47.15 3.8 $ 6,500

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

As of December 31, 2024, there was $ 0.4 million of total unrecognized compensation cost related to non-vested stock options granted under the 2022 Plan and Inducement Grant.

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The fair value of each RSA is based on the market value of the Company's stock on the date of grant.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022, and 2021

A summary of RSA activity under the Plan during the years ended December 31, 2024, 2023, and 2022 is presented below:

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PSUs granted to date vest over a three -year performance period.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

February 14, 2024 Performance-Based Restricted Stock Units Grant

On February 14, 2024, the Company granted 73,588 PSUs to officers and employees of the Company under the 2022 Plan ( 66,433 to officers of the Company).

PSU performance will be measured over a three-year performance period from January 1, 2024 through December 31, 2026 and will cliff-vest contingent upon the achievement of specified performance objectives.

Of these PSUs, 50 % were MPRSUs, vesting of which is contingent upon the Company meeting certain TSR levels as compared to a select peer group over the over three years starting January 1, 2024, and 50 % of the PSUs were PRSUs, vesting of which is contingent upon the Company meeting certain adjusted non-GAAP year-on-year EBITDA growth rates over the over three years starting January 1, 2024.

Both the MPRSUs and the PRSUs have a maximum potential to vest at 200 %.

At each reporting period, the Company analyzes progress on the performance goals to assess the likelihood of achievement.

The estimated grant date fair value per share of the MPRSUs was $ 85.65 and was calculated using a Monte Carlo simulation model.

Based on the Company's analysis, the MPRSUs are included at 100 % of the estimate number of shares at the end of the three-year performance period and are reflected under “Granted” in the table below.

The estimated grant date fair value per share of the PRSUs was $ 56.10 based on the closing price of the stock on the date of grant.

Based on the Company's analysis, the PRSUs are included at 100 % of the estimated number of shares at the end of the three-year performance period and are reflected under “Granted” in the table below.

February 28, 2023 Performance-Based Restricted Stock Units Grant

On February 28, 2023, as part of the Company's equity compensation program, PSUs were granted to certain executives.

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The estimated grant date fair value per share of the MPRSUs was $ 68.65 and was calculated using a Monte Carlo simulation model.

These MPRSUs are included at 100 % of the estimate number of shares at the end of the three -year performance period and are reflected under “Granted” in the table below.

The MPRSUs are included at 100 % of the estimate number of shares at the end of the three -year performance period and are reflected under “Granted” in the table below.

The other 50 % of the PSUs were performance based restricted stock units (“PRSUs”), vesting of which is contingent upon the Company meeting certain adjusted non-GAAP year-on-year EBITDA growth rates over the over three years starting January 1, 2023.

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The related share-based compensation expense is determined based on the estimated fair value of the underlying shares on the date of grant and is recognized straight-line over the vesting term.

The Company analyzed progress on the performance goals to assess the likelihood of achievement.

At each reporting period, the Company analyzes progress on the performance goals to assess the likelihood of achievement.

The estimated grant date fair value per share of the PRSUs was $ 41.84 based on the closing price of the stock on the date of grant.

These PRSUs are included at 100 % of the estimated number of shares at the end of the three -year performance period and are reflected under “Granted” in the table below.

The PRSUs are included at 100 % of the estimated number of shares at the end of the three -year performance period and are reflected under “Granted” in the table below.

ANI Pharmaceuticals, Inc.

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Unvested at December 31, 2023 84 41.84 2.0

Granted 74 56.10

Forfeited ( 8 ) 48.06

Unvested at December 31, 2024 150 $ 48.52 1.6

As of December 31, 2024, there was $ 7.2 million of total unrecognized compensation cost related to non-vested PSUs granted under the Plan, which is expected to be recognized over a weighted-average period of 1.6 years .

On August 6, 2018, ANI Pharmaceuticals Canada Inc.

(“ANI Canada”) acquired all the issued and outstanding equity interests of WellSpring in a non-taxable transaction.

Following the consummation of the transaction, WellSpring was merged into ANI Canada.

Federal and state income tax purposes, ANI Canada is not part of ANI’s consolidated group;

rather, ANI Canada is subject to income taxes only in Canada and solely based on its stand-alone operations.

The foreign current and foreign deferred provisions (benefits) below represent the Company's tax provision (benefit) from the Canadian and Indian taxing jurisdictions.

The Company is required to establish a valuation allowance is required to be established for deferred tax assets if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The foreign current and foreign deferred (benefits) expenses below represent our tax (benefit) expense from Canada, India, United Kingdom, Ireland, Portugal, and Germany jurisdictions.

The Company is required to establish a valuation allowance for deferred tax assets if, based on the weight of all available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

Projected future taxable income and tax planning strategies in making this assessment.

As of December 31, 2023 and 2022, the consolidated valuation allowance was $ 0.4 million and $ 0.4 million, respectively, related solely to deferred tax assets for net operating loss carryforwards in certain U.S.

The Company considers the projected future taxable income and tax planning strategies in making this assessment.

As of December 31, 2024 and 2023, the consolidated valuation allowance was $ 9.5 million and $ 0.4 million, respectively, primarily related to deferred tax assets for net operating losses in the UK and and U.S.

state jurisdictions.

Total income tax expense (benefit) for income taxes consists of the following for the years ended December 31:

The Company recorded a valuation allowance of approximately $ 7.5 million in connection with the acquisition of Alimera, and recorded an additional increase in the valuation allowance of approximately $ 1.5 million during the three months ended December 31, 2024.

(Loss) income before taxes consisted of the following:

As of December 31,

(in thousands) 2024 2023 2022

Current income tax provision

Domestic $ ( 24,618 ) $ 19,124 $ ( 64,913 )

Foreign 2,406 748 2,248

(Loss) income before income tax (benefit) expense $ ( 22,212 ) $ 19,872 $ ( 62,665 )

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

Total income tax (benefit) expense for income taxes consists of the following for the years ended December 31:

As of December 31,

(in thousands) 2024 2023 2022

Current income tax expense

Federal $ 13,714 $ 9,117 $ 152

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Change in valuation allowance 1,488 ( 8 ) ( 4 )

Total expense (benefit) for income taxes $ 1,093 $ ( 14,769 ) $ ( 13,455 )

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022, and 2021

The difference between expected income tax expense (benefit) from applying U.S.

Federal statutory tax rates to the pre-tax income (loss) and actual income tax expense (benefit) relates primarily to the effect of the following:

Total (benefit) expense for income taxes $ ( 3,690 ) $ 1,093 $ ( 14,769 )

The difference between the expected income tax (benefit) expense from applying U.S.

Federal statutory tax rates to the pre-tax (loss) income and actual income tax (benefit) expense relates primarily to the effect of the following:

As of December 31,

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Effective income tax rate 16.6 % 5.5 % 23.6 %

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

Deferred income taxes reflect the net tax effects of differences between the bases of assets and liabilities for financial reporting and income tax purposes.

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Capitalized research expenditures 19,836 11,294

Other 7,450 11,840

Interest expense carryforwards 6,400 5,132

Debt instruments 9,590 —

Other assets 5,305 2,318

Total deferred tax assets $ 120,737 $ 102,247

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Depreciation $ ( 6,710 ) $ ( 5,658 )

Intangible assets ( 12,537 ) —

Other liabilities ( 6,934 ) ( 5,440 )

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As of December 31, 2024, U.S.

federal net operating loss carryforwards were approximately $ 8.0 million, all of which arose as a result of the 2013 merger with BioSante Pharmaceuticals, Inc.

Net operating loss carryforwards related to the 2013 merger, if not used, expire in annual increments through 2033 and are limited on an annual basis as prescribed by Section 382 of the U.S.

federal net operating loss carryforwards were approximately $ 55.6 million and UK net operating losses of approximately $ 50.8 million, primarily arose as a result of the acquisition of Alimera and the 2013 merger with BioSante Pharmaceuticals, Inc.

Net operating loss carryforwards related to the 2024 acquisition are indefinite lived.

Net operating loss carryforwards related to the 2013 merger, if not used, expire in annual increments through 2033.

All of the net operating loss carryforwards are limited on an annual basis as prescribed by Section 382 of the U.S.

Internal Revenue Code;

and the current annual limitation is approximately $ 0.8 million per year.

Additionally, as of December 31, 2023, there were total net operating losses in various states of approximately $ 13.0 million which begin to expire through 2042, and in Canada of $ 1.0 million that expire through 2038.

the current annual limitation is approximately $ 7.2 million per year.

Additionally, as of December 31, 2024, the Company has total net operating losses in various states of $ 5.7 million which begin to expire through 2042.

The Company is subject to income taxes in numerous jurisdictions in the U.S.

and certain foreign jurisdictions.

Significant judgement is required in evaluating tax positions and determining the expense for income taxes.

The Company established liabilities for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due.

These liabilities are established when the Company believe that certain positions might be challenged despite our belief that our tax return positions are fully supportable.

We adjusts these liabilities in light of changing facts and circumstances, such as the outcome of a tax audit.

The expense for income taxes includes the impact of changes to the liability that is considered appropriate.

The Company has not identified any material uncertain income tax positions as of December 31, 2024 and 2023.

The Company is subject to income tax audits in all jurisdictions for which tax returns are filed.

Tax audits by their nature are often complex and can require several years to complete.

All of the Company's income tax returns remain subject to examination by tax authorities due to the availability of net operating loss carryforwards.

ANI Pharmaceuticals, Inc.

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For the years ended December 31, 2024, 2023, and 2022

The Company is subject to income taxes in numerous jurisdictions in the U.S., Canada, and India.

Significant judgment is required in evaluating the tax positions and determining the provision for income taxes.

Liabilities are established for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due.

These liabilities are established when it is believed that certain positions might be challenged despite the belief that our tax return positions are fully supportable.

These liabilities are adjusted in light of changing facts and circumstances, such as the outcome of a tax audit.

The provision for income taxes includes the impact of changes to the liability that is considered appropriate.

There were no material uncertain income tax positions identified as of December 31, 2023 and 2022.

The Company is subject to income tax audits in all jurisdictions for which tax returns are filed.

Tax audits by their nature are often complex and can require several years to complete.

All of the Company's income tax returns remain subject to examination by tax authorities due to the availability of net operating loss carryforwards.

COMMITMENTS AND CONTINGENCIES

Operating Leases

All existing leases as of December 31, 2023 are classified as operating leases.

As of December 31, 2023, there are 14 operating leases for facilities and office equipment with remaining terms expiring from 2025 through 2028 and a weighted average remaining lease terms of 3.9 years and 2.6 years, as of December 31, 2023 and 2022, respectively.

During April 2023, the Company entered into a lease agreement for additional warehouse space in East Windsor, New Jersey.

Additionally, during October 2023, the Company entered into an amendment for the Middleton, Wisconsin location which expanded the Company's square footage and also extended the termination date to December 2028.

Many of the operating leases have fair value renewal options, none of which are considered certain of being exercised or included in the minimum lease term.

The majority of the Com pany's leases as of December 31, 2024 are classified as operating leases.

Leases with an initial term of twelve months or less are not recorded on the balance sheet, and the Company does not separate lease and non-lease components of contracts.

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The Company benchmarked itself against other companies of similar credit ratings and comparable quality and derived an incremental borrowing rate, which was used to discount its lease liabilities.

The weighted average incremental borrowing rates as of December 31, 2023 and 2022 is 8.12 % and 3.99 %, respectively.

Rent expense is recognized on a straight-line basis over the lease term.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

In addition, the Company does not have any finance leases, any sublease arrangements, or any leases where the Company is considered the lessor.

In April 2023, the Company entered into an agreement to lease additional warehouse space in East Windsor, New Jersey.

The lease has a term of five years , and is classified as an operating lease.

Additionally, during October 2023, the Company entered into an amendment for the Middleton, Wisconsin location which expanded the Company ’ s square footage and also extended the termination date to December 2028.

In connection with the acquisition of Alimera, the Company acquired operating leases for office space in Alpharetta, Georgia, which has a remaining term of approximately five years .

The Company also entered into a new lease agreement in Princeton, New Jersey, for office space which is expected to have a commencement date during 2025.

The Princeton, New Jersey lease will have a remaining term of approximately 10 years.

As of December 31, 2024, there are 15 operating leases for facilities and office equipment with remaining terms expiring from 2025 through 2029 and a weighted average remaining lease terms of 3.8 years and 3.9 years, as of December 31, 2024 and 2023, respectively.

Many of the operating leases have fair value renewal options, none of which are considered certain of being exercised or included in the minimum lease term.

The weighted average incremental borrowing rates as of December 31, 2024 and 2023 is 8.10 % and 8.12 %, respectively.

Lease expense consisted of the following for the years ended December 31:

1 unchanged sentence

Operating lease costs $ 2,122 $ 2,031 $ 701

Finance lease costs 43 — —

Variable lease costs 261 221 236

Total lease costs $ 2,426 $ 2,252 $ 937

The table below reconciles the fixed component of the undiscounted cash flows for each of the first five years and the total remaining years to the operating leas e liabilities recorded on the Consolidated Balance Sheet as of December 31, 2024 :

ANI Pharmaceuticals, Inc.

2 unchanged sentences

For the years ended December 31, 2024, 2023, and 2022

The table below reconciles the fixed component of the undiscounted cash flows for each of the first five years and the total remaining years to the lease liabilities recorded on the Consolidated Balance Sheet as of December 31, 2023:

(in thousands)

4 unchanged sentences

Non-current lease liability, included in other non-current liabilities $ 4,393

Finance Leases

In connection with the acquisition of Alimera, the Company acquired finance leases primarily consisting of automobiles.

The automobiles are capitalized at the lesser of fair market value or the present value of the minimum lease payments at the inception of the leases using the Company’s incremental borrowing rate.

The Company’s finance lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Finance lease ROU assets are included in other non-current assets, specifically in Property and equipment, net, and finance lease liabilities are included in accrued expenses and other and other non-current liabilities in the consolidated balance sheets.

As of December 31, 2024, a schedule of maturity of lease liabilities under finance leases, together with the present value of minimum lease payments is as follows:

(in thousands)

Future payments:

Total minimum lease payments $ 531

effects of discounting ( 135 )

Present value of future minimum lease payments 396

current lease liability, included in accrued expenses and other ( 240 )

Non-current lease liability, included in other non-current liabilities $ 156

As of December 31, 2024 , the weighted average remaining lease terms of the Company's financing leases was 1.7 years.

As of December 31, 2024 the we ighted average discount rate used to determine the financing lease liabilities was 10.7 %.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

Government Regulation

3 unchanged sentences

Unapproved Products

Three products, Esterified Estrogen with Methyltestosterone (“EEMT”), Opium Tincture, Thyroid Tablets, and are marketed without approved NDAs or ANDAs.

During the years ended December 31, 2023, 2022, and 2021, net revenues for Esterified Estrogen with Methyltestosterone (“EEMT”), Opium Tincture and Thyroid Tablets products totaled $ 22.4 million, $ 14.2 million, and $ 16.2 million, respectively.

The Company obtained the rights to Hyoscyamine, a product without an approved NDA as of December 27, 2023, which we plan to launch commercially in early 2024 (see further discussion below).

The FDA's policy with respect to the continued marketing of unapproved products appears in the FDA's September 2011 Compliance Policy Guide Sec.

Four products, Esterified Estrogen with Methyltestosterone (“EEMT”), Opium Tincture, Thyroid Tablets, and Hyoscyamine are marketed without approved NDAs or ANDAs.

On December 27, 2023, the Company acquired from Alvogen, Inc.

the rights to Hyoscyamine for total cash consideration of $ 2.0 million, which product was launched commercially in February 2024.

During the years ended December 31, 2024, 2023, and 2022, net revenues from the commercial sales of these products totaled $ 22.4 million, $ 22.4 million, and $ 14.2 million, respectively.

Before acquisition of Hyoscyamine, contract manufacturing revenues for Hyoscyamine, for the years ended December 31, 2024, 2023, and 2022 were $ 0.1 million, $ 1.9 million and $ 2.6 million, respectively.

The FDA's policy with respect to the continued marketing of unapproved products appears in the FD A'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.

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.

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, 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.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022, and 2021

One group of products that the Company manufactured on behalf of a contract customer, Hyoscyamine, was marketed by that customer without an approved NDA.

Contract manufacturing revenues for Hyoscyamine, for the years ended December 31, 2023, 2022, and 2021 were $ 1.9 million, $ 2.6 million, and $ 2.4 million , respectively.

On December 27, 2023 the Company purchased the intellectual property and product rights to Hyoscamine from Alvogen, Inc.

The Company believes that, so long as it complies with applicable manufacturing standards, the FDA will continue to operate on a risk-based approach and will not take action against us.

However, the Company 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.

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

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

Legal proceedings

1 unchanged sentence

These matters are complex and subject to significant uncertainties.

While we believe that we have valid claims and/or defenses in the litigation and other matters described below, litigation is inherently unpredictable, particularly where the damages sought are substantial or indeterminate or when the proceedings, investigations or inquiries are in the early stages, and the outcome of the proceedings could result in losses, including substantial damages, fines, civil or criminal penalties and injunctive or administrative remedies.

We intend to vigorously prosecute and/or defend these matters, as appropriate;

however, from time to time, we may settle or otherwise resolve these matters on terms and conditions that we believe are in our best interests.

While the Company believes that it have valid claims and/or defenses in the litigation and other matters described below, litigation is inherently unpredictable, particularly where the damages sought are substantial or indeterminate or when the proceedings, investigations or inquiries are in the early stages, and the outcome of the proceedings could result in losses, including substantial damages, fines, civil or criminal penalties and injunctive or administrative remedies.

The Company intends to vigorously prosecute and/or defend these matters, as appropriate;

however, from time to time, ANI may settle or otherwise resolve these matters on terms and conditions that it believes are in the Company's best interests.

Resolution of any or all claims, investigations, and legal proceedings, individually or in the aggregate, could have a material adverse effect on our results of operations and/or cash flows in any given accounting period or on our overall financial condition.

Unless otherwise disclosed, we are unable to predict the outcome of the matter or to provide an estimate of the range of reasonably possible material losses.

We record accruals for loss contingencies to the extent we conclude it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

From time to time, we are also involved in other pending proceedings for which, in our opinion based upon facts and circumstances known at the time, either the likelihood of loss is remote or any reasonably possible loss associated with the resolution of such proceedings is not expected to be material to our results, and therefore remain undisclosed.

If and when any reasonably possible losses associated with the resolution of such other pending proceedings, in our opinion, become material, we will disclose such matters.

Furthermore, like many pharmaceutical manufacturers, we are periodically exposed to product liability claims.

The prevalence of these claims could limit our coverage under future insurance policies or cause those policies to become more expensive, which could harm our business, financial condition, and operating results.

Recent trends in the product liability and director and officer insurance markets is to exclude matters related to certain classes of drugs.

Our policies have been subject to such exclusions which place further potential risk of financial loss on us.

Legal fees for litigation-related matters are expensed as incurred and included in the consolidated statements of operations under the selling, general, and administrative expense line item.

Unless otherwise disclosed, the Company is unable to predict the outcome of the matter or to provide an estimate of the range of reasonably possible material losses.

The Company records accruals for loss contingencies to the extent it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

ANI Pharmaceuticals, Inc.

2 unchanged sentences

For the years ended December 31, 2024, 2023, and 2022

From time to time, the Company may also be involved in other pending proceedings for which, in our opinion based upon facts and circumstances known at the time, either the likelihood of loss is remote or any reasonably possible loss associated with the resolution of such proceedings is not expected to be material to our results, and therefore remain undisclosed.

If and when any reasonably possible losses associated with the resolution of such other pending proceedings, in our opinion, become material, ANI will disclose such matters.

Furthermore, like many pharmaceutical manufacturers, the Company is periodically exposed to product liability claims.

Recent trends in the product liability and director and officer insurance markets is to exclude matters related to certain classes of drugs.

Our policies have been subject to such exclusions which place further potential risk of financial loss on us.

Legal fees for litigation-related matters are expensed as incurred and included in the consolidated statements of operations under the selling, general, and administrative expense line item.

Commercial Litigation

12 unchanged sentences

The complaints did not specify the amount of damages sought from the Company or other defendants and the Company.

The cases were consolidated in the United States District Court for the Southern District of New York as In re Bystolic Antitrust Litigation, Case No.

20-cv-005735 (LJL).

The cases were consolidated in the United States District Court for the Southern District of New York.

On April 23, 2021, the Company and other defendants filed motions to dismiss the amended complaints.

5 unchanged sentences

Plaintiffs filed an appeal in the Second Circuit.

Oral arguments were held on December 6, 2023 and a decision from the court is pending.

ANI continues to dispute any liability in this matter.

On March 24, 2021, Azurity Pharmaceuticals, Inc.

(“Azurity”) filed a complaint in the United States District Court for the District of Minnesota against ANI, asserting that ANI’s vancomycin hydrochloride oral solution drug product infringes U.S.

The complaint sought injunctive relief, damages, including lost profits and/or royalty, treble damages, and attorneys’ fee and costs.

On February 15, 2022, the Company entered into a settlement agreement with Azurity to resolve all claims related to this action.

Under the terms of the agreement, Azurity granted ANI a non-exclusive, non-transferable, non-sublicensable, royalty-bearing license under its patents to sell ANI product in the United States and dismissed the action with prejudice.

In exchange, ANI paid Azurity $ 1.9 million of royalties from past sales and will pay Azurity a royalty equal to 20 % of gross margin of sales of the ANI product for a contractually defined term.

On April 1, 2021, United Therapeutics Corp.

and Supernus Pharmaceuticals, Inc.

(“UTC/Supernus”) filed a complaint in the United States District Court for the District of Delaware against ANI, asserting that ANI’s proposed Treprostinil extended release drug product, which is subject to ANI’s Abbreviated New Drug Application No.

215667, infringes U.S.

7,417,070, 7,544,713, 8,252,839, 8,349,892, 8,410,169, 8,747,897, 9,050,311, 9,278,901, 9,393,203, 9,422,223, 9,593,066 and 9,604,901 (“the Asserted Patents”).

The complaint sought injunctive relief , attorneys' fee and costs.

On May 26, 2022, the parties’ respective claims and counterclaims were dismissed pursuant to a confidential settlement agreement.

On May 13, 2024, the Second Circuit affirmed the district court’s judgment, dismissing plaintiffs’ claims with prejudice.

ANI Pharmaceuticals, Inc.

2 unchanged sentences

For the years ended December 31, 2024, 2023, and 2022

On October 3, 2022, Azurity filed a complaint in the United States District Court for the District of New Jersey against Novitium, seeking a declaratory judgment that Novitium’s manufacture, use, sale, importation and/or offer to sell Bionpharma Inc.’s (“Bionpharma”) enalapril maleate oral solution drug product (the “Product”) would infringe U.S.

11,040,023 and 11,141,405 (the “Novitium Action”).

The complaint sought injunctive relief, and an award of Azurity’s costs and expenses.

On October 12, 2022, Bionpharma filed a motion in the New Jersey court to intervene on Novitium’s behalf in the litigation and on October 14, 2022, Novitium and Bionpharma jointly moved to transfer venue to the District of Delaware.

Transfer was granted on January 20, 2023.

On March 27, 2023, the transferred Novitium Action (assigned Delaware Civil Action No.

23-163-MSG) was consolidated with the Delaware Third Wave Suits against Bionpharma (Civil Action Nos.

21-1286-MSG, 21-1455-MSG), which include Azurity’s infringement claims against Bionpharma involving the same patents asserted in the Novitium Action, as well as Bionpharma’s antitrust claims against Azurity.

On August 3, 2023, Azurity filed an amended complaint against Novitium seeking damages for supplying Bionpharma's ANDA product.

On November 14, 2023, the court dismissed all of Azurity's claims against Novitium with prejudice and dismissed Novitium as a party from the Delaware Third Wave Suits.

Bionpharma has agreed to indemnify Novitium under the terms of its manufacturing and supply agreement for any damages, costs, and expenses relating to actual or alleged infringement of intellectual property rights or sale of the Product by Bionpharma.

On September 29, 2023, Orphalan SA ("Orphalan") filed a complaint in the United States District Court for the District of Delaware against Novitium, asserting that Novitium's proposed triethylenetetramine tetrachloride drug product, which is subject to Novitium's Abbreviated New Drug Application No.

218493, infringes U.S.

10,988,436 and 11,072,577.

On March 4, 2024, ANI commenced a civil action against CG Oncology, Inc.

f/k/a Cold Genesys, Inc.

(“CG Oncology”) in the Superior Court of the State of Delaware (“Delaware Action”).

ANI’s complaint alleges that, under an Assignment and Technology Transfer Agreement dated as of November 15, 2010 (the “November 2010 Agreement”), CG Oncology is liable to pay ANI a running royalty of 5 % of the worldwide net sales of cretostimogene made by CG Oncology or any affiliate or sublicensee thereof;

and that in February 2024, CG Oncology wrongfully repudiated its royalty obligation to ANI.

On April 2, 2024, CG Oncology filed an answer and counterclaim (the “CGON Answer and Counterclaim”) and concurrently moved for judgment on the pleadings or, in the alternative, for partial summary judgment (the “Motion for Summary Judgment”).

CG Oncology’s Motion for Summary Judgment seeks judgment declaring that the November 2010 Agreement does not “oblige CGON to pay royalties after expiration of the latest-running assigned patent.” CG Oncology also seeks judgment awarding compensatory damages and punitive damages on counterclaims for alleged breach of the November 2010 Agreement and for alleged misappropriation of trade secrets under federal and Delaware state law.

On April 22 and 25, 2024, ANI filed its reply to CG Oncology’s counterclaims, denying any liability to CG Oncology and asserting additional counterclaims against CG Oncology (“Reply Counterclaims”) for alleged breach of the November 2010 Agreement and, in the alternative, for unjust enrichment.

ANI’s Reply Counterclaims seek judgment (i) declaring that, under Section 3.3 of the November 2010 Agreement, CG Oncology is contractually obligated to pay ANI 5 % of the worldwide net sales of cretostimogene made by CG Oncology or any affiliate or sublicensee thereof;

(ii) dismissing CG Oncology’s counterclaims with prejudice;

(iii) awarding ANI compensatory damages as provided by law, including damages grounded in restitution and unjust enrichment;

(iv) in the event of a judgment in ANI’s favor on ANI’s fourth counterclaim for unjust enrichment, ordering CG Oncology to re-transfer to ANI ownership of all assets that ANI sold to CG Oncology under the November 2010 Agreement, including, without limitation, all data and documentation comprising IND 12154;

and (v) in the event of a judgment in ANI’s favor on ANI’s fourth counterclaim for unjust enrichment, imposing a constructive trust on all fruits of CG0070-related assets that ANI sold to CG Oncology under the November 2010 Agreement including, without limitation, all data and documentation comprising IND 12154 and any other IND that CG Oncology may have for CG0070.

On May 15, 2024, CG Oncology filed a reply to ANI’s counterclaims, which generally maintains the positions in the CGON Answer and Counterclaim.

The parties are currently engaged in pretrial fact discovery.

On August 22, 2024, the court heard the parties' oral arguments in a hearing on CG Oncology’s Motion for Summary Judgment.

On November 18, 2024, the court issued its decision denying CG Oncology's Motion for Summary Judgment.

The deadline for submitting amendments or supplements to the pleadings has passed.

The court entered the case management order on January 16, 2025 and trial is scheduled to commence on July 21, 2025.

ANI intends to vigorously pursue this matter.

On March 5, 2024, a complaint was filed against ANI by Acella Pharmaceuticals, LLC, in the United States District Court of Minnesota, asserting, among other things, false advertising under the Lanham Act, and unfair trade practices and false advertising under Minnesota law, relating to ANI’s natural desiccated thyroid tablets USP.

The complaint seeks injunctive relief, actual and consequential damages, disgorgement of profits, and attorneys’ fees and costs.

On April 16, 2024, ANI filed an answer to Acella’s complaint, denying all claims, and asserting certain affirmative defenses, and counterclaims against Acella for false advertising of its thyroid product marketed as NP Thyroid® Tablets, under the Lanham Act, common law unfair competition and unfair and deceptive trade practices and false advertising under Minnesota and Georgia law.

ANI seeks injunctive relief, compensatory damages, punitive damages and attorneys’ fees and costs.

On May 17, 2024, Acella filed a motion to dismiss ANI’s counterclaims.

On June 7, 2024, ANI filed an amended answer to Acella’s complaint and counterclaims.

Acella filed a motion to dismiss ANI’s amended counterclaims on July 31, 2024.

A hearing was held on September 11, 2024 on Acella’s motion to dismiss.

On December 18, 2024, the court issued an order denying Acella's motion.

The parties have been unable to reach a settlement and have agreed to an extension for fact discovery until July 1, 2025.

Trial is currently scheduled to begin as early as April 2026.

ANI disputes any liability in this matter and intends to defend this lawsuit vigorously.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

Patent Litigation

On November 21, 2023, a complaint was filed against Novitium and certain other defendants in the case of Harmony Biosciences, LLC, Bioprojet Societe Civile de Recherche and Bioprojet Pharma SAS v.

AET Pharma US, Inc., Annora Pharma Private Limited, Novitium Pharma LLC, Zenara Pharma Private Limited and Biophore India Pharmaceuticals Private Limited in the United States District Court for the District of Delaware, asserting, among other things, that Novitium’s proposed pitolisant hydrochloride drug product, which is subject to Novitium’s Abbreviated New Drug Application, infringes certain U.S.

patents owned by the plaintiffs.

The complaint seeks damages, injunctive relief, attorneys’ fees and costs.

On December 1, 2023, Orphalan voluntarily dismissed the action without prejudice.

On January 29, 2024, Novitium filed its answer, denying all allegations and asserting counterclaims of non-infringement and invalidity.

On February 16, 2024, plaintiffs filed their answer, denying Novitium’s counterclaims and asserting certain affirmative defenses against Novitium.

On April 15, 2024, the court consolidated Novitium’s case and two other cases brought by plaintiffs against Lupin Limited et al, and MSN Pharms.

et al., into one consolidated matter filed in C.A.

The case is currently in discovery.

The court set a trial date for February 2026.

Novitium disputes any liability in this matter.

On November 21, 2023, Harmony Biosciences, LLC, Bioprojet Societe Civile de Recherche and Bioprojet Pharma SAS filed a compliant in the United States District Court for the District of Delaware against Novitium and certain other defendants named in the complaint, asserting, among other things, that Novitium's proposed pitolisant hydrochloride drug product, which is subject to Novitium's Abbreviated New Drug Application No.

218495, infringes U.S.

Patent Nos 8,207,197, 8,354,430 and 8,486,947.

On December 27, 2024, a complaint was filed against Novitium by Athena Bioscience, LLC (“Athena”) in the United States District Court for the District of Delaware, asserting, among other things, that Novitium’s proposed tramadol hydrochloride solution drug product, which is subject to Novitium’s Abbreviated New Drug Application, infringes certain U.S.

patents owned by Athena.

The complaint seeks damages, injunctive relief, attorneys’ fees and costs.

1 unchanged sentence

Ranitidine Related Litigation

State of New Mexico Litigation .

In July 2020, ANI and Novitium were served with a complaint brought in the First Judicial Court, County of Santa Fe, State of New Mexico by the Office of the Attorney General of the State of New Mexico against manufacturers and sellers of ranitidine products.

The complaint asserted a public nuisance claim and a negligence claim against the generic ranitidine manufacturer defendants, including ANI and Novitium.

As damages for the nuisance claim, New Mexico asked that the defendants fund this medical monitoring program.

With respect to the nuisance claim, New Mexico asserted that it paid for ranitidine products through state-funded insurance and health-care programs.

On April 16, 2021, New Mexico filed an amended complaint in the New Mexico First Judicial District Court in Santa Fe County.

It did not name ANI in the amended complaint, effectively voluntarily dismissing ANI from the action.

Novitium was named as a defendant in the amended complaint.

On September 1, 2023, the court entered an order dismissing Novitium without prejudice.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022, and 2021

Federal Court Personal Injury Litigation .

In June 2020, ANI was served with a personal injury complaint in the case of Koepsel v.

Boehringer Ingelheim Pharmaceuticals, et al.

20-MD-2924, Case No.

9:20-cv-80882-RLR, filed in the United States District Court for Southern District of Florida, in which the plaintiff alleges that he developed kidney cancer in 2018 as a result of taking over the counter medication containing ranitidine.

The Koepsel action was filed within the existing multi-district litigation concerning ranitidine-containing drugs pending in the Southern District of Florida, In re Zantac MDL , 20 MDL 2924 (the "MDL").

A Master Personal Injury Complaint (“MPIC”) in that MDL that was filed on June 22, 2020 also named ANI and Novitium as defendants.

ANI was dismissed from the Koepsel case on August 21, 2020 and was dismissed from the MPIC on September 8, 2020.

On December 31, 2020, after ANI was dismissed, the district court dismissed the MPIC claims against generic manufacturer defendants partially with prejudice and partially with leave to replead.

The failure to warn and design defect claims were dismissed with prejudice on preemption grounds.

An Amended MPIC was filed on February 8, 2021, which did not name ANI but did name Novitium.

By opinion dated July 8, 2021, the district court dismissed all claims against the generic manufacturer defendants with prejudice on preemption grounds.

In addition, by opinion and order dated December 6, 2022, the district court granted the brand manufacturer defendants’ Daubert motion to exclude the plaintiffs’ expert testimony on general causation for the “designated cancers” that the plaintiffs’ leadership team claimed to be caused by ranitidine.

The district court also granted the brand manufacturer defendants’ motion for summary judgment because the plaintiffs had failed to produce admissible primary evidence of general causation.

The plaintiffs have appealed to the Eleventh Circuit Court of Appeals.

ANI and Novitium were named in other individual personal injury complaints filed in the MDL in which plaintiffs allege that they developed cancer after taking prescription and over the counter medication containing ranitidine.

ANI was served with complaints in five of those additional cases:

Boehringer Ingelheim Pharmaceuticals, et al.

20-MD-2924, Case No.

9:20-cv-81130-RLR (served September 30, 2020), Lineberry v.

Amneal Pharmaceuticals, LLC, et al.

20-MD-2924, Case No.

9:20-cv-81079-RLR (served August 20, 2020), Lovette v.

Amneal Pharmaceuticals, LLC, et al.

20-MD-2924, Case No.

9:20-cv-81040-RLR (served August 26, 2020), Hightower v.

Pfizer, et al, MDL No.

20-MD-2924, Case No.

9-20-cv-82214-RLR (served December 16, 2020) and Bird v.

Boehringer Ingelheim Pharmaceuticals, et al.

20-MD-2924, Case No.

9-20-cv-80837-RLR (served December 30, 2020).

Each of the plaintiffs in the five pending cases alleges a cancer diagnosis prior to the time that ANI sold ranitidine, and ANI informally sought dismissal from these cases on that basis.

ANI was voluntarily dismissed from the Cooper , Lineberry and Lovette actions on November 20, 2020, from the Bird action on March 15, 2021, and from the Hightower action on March 29, 2021.

Prior to the district court’s July 8, 2021 preemption decision, Novitium had been named in 158 short form complaints filed by claimants in the MDL.

Those complaints were effectively dismissed with prejudice with the MPIC on July 8, 2021.

Counsel for the plaintiffs have been notified that Novitium did not sell an over the counter ranitidine product and sold a generic prescription ranitidine product for a limited period of time, from December 2018 until September 2019 and Novitium’s product was voluntarily recalled in October 2019.

Out of the 158 short form complaints, approximately 114 plaintiffs either were diagnosed with cancer before Novitium began manufacturing the product, only took over the counter ranitidine, or took ranitidine before Novitium began manufacturing it.

Two of those 114 plaintiffs dismissed Novitium from their short form complaints.

In light of the Court’s dismissal of all claims with prejudice, Novitium has not pursued dismissal of the short form complaints against it at this time.

Following the district court’s Daubert decision, plaintiffs began filing additional short form complaints in the MDL.

Novitium currently is named as a defendant in more than 700 short form complaints.

The plaintiffs have taken multiple appeals from decisions issued by the district court in the MDL to the Eleventh Circuit.

On September 8, 2023, the Eleventh Circuit remanded a subset of the MDL appeals back to the district court for entry of final judgments pursuant to Rule 58.

The defendants filed a motion with the Eleventh Circuit to remand a similarly situated appeal for similar entry of a final judgment.

In addition, the defendants are seeking a stay from the Eleventh Circuit of all non-remanded related appeals in order to have all of the related appeals decided together.

The district court has entered final judgments and the appeals are now pending before the Eleventh Circuit.

ANI and Novitium dispute any liability in these matters.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022, and 2021

Federal Court Multi District Litigation

ANI and Novitium were named as defendants, along with numerous other brand and generic pharmaceutical manufacturers, wholesale distributors, retail pharmacy chains, and repackagers of ranitidine-containing products, in In re:

Zantac/Ranitidine NDMA Litigation (MDL No, 2924), filed in the United States District Court for the Southern District of Florida (the “MDL Court”).

Plaintiffs allege that defendants failed to disclose and/or concealed the alleged inherent presence of N-Nitrosodimethylamine (or “NDMA”) in brand-name Zantac or generic ranitidine and the alleged associated risk of cancer.

While ANI was initially a defendant, the lead plaintiff attorneys voluntarily dismissed ANI as a defendant in the Master Complaint.

On July 8, 2021, the MDL Court dismissed all claims by all plaintiffs against the generic drug manufacturers with prejudice , on preemption grounds.

The MDL Court also dismissed all claims by all plaintiffs against the brand manufacturers on summary judgment.

Plaintiffs appealed the MDL Court’s dismissals to the Eleventh Circuit Court of Appeals.

On November 7, 2022, the Eleventh Circuit affirmed the MDL Court’s dismissal of cases brought by third-party payors.

The Eleventh Circuit raised questions in the appeals of the other cases about the finality of the MDL Court’s judgments, which were resolved in September 2023.

Plaintiffs filed opening briefs on April 10, 2024 and generics defendants filed their response on July 25, 2024.

ANI and Novitium dispute any liability in this matter.

State Court Personal Injury Litigation

On February 3, 2022, a complaint was filed in Cook County, Illinois, naming Novitium as a defendant.

The complaint incorrectly identifies Novitium as a “repackager.” The case is styled Ross v.

Boehringer Ingelheim Pharmaceuticals, Inc., et.

The complaint asserts claims of strict liability/failure to warn, strict liability/design defect, negligent failure to warn, negligent product design, general negligence, negligent misrepresentation, breach of express and implied warranties, and unjust enrichment.

The plaintiff alleges that he was diagnosed with prostate cancer in 2017, before Novitium began selling generic ranitidine products, and that he took over the counter ranitidine that he purchased at Walgreens from 2008 to 2019.

At this point, the allegations show that the plaintiff’s alleged cancer injury could not have come from a Novitium product.

The Ross action was consolidated with the coordinated proceedings in Illinois, which have been dismissed, as discussed below.

In August 2022, the Keller Postman law firm commenced six multi-plaintiff actions in Illinois state court naming generic ranitidine manufacturers, including ANI and/or Novitium, as defendants.

Those cases are:

(1) Jodee Gillespie v.

Walgreen Co., et.

al., Circuit Court of the Third Judicial Circuit, Madison County, Illinois, Case No.

2022LA001007 (naming both Novitium and ANI);

(2) John Jackson v.

Walgreen Co., et.

al., Circuit Court of the Third Judicial Circuit, Madison County, Illinois, Case No.

2022LA001012 (naming Novitium);

(3) Ayesha Salahuddin v.

Walgreen Co., et.

al., Circuit Court of the Twentieth Judicial Circuit, St.

Clair County, Illinois, Case No.

22LA0709 (naming Novitium);

(4) Lashanda McGruder v.

Walgreen Co., et.

al., Circuit Court of the Third Judicial Circuit, Madison County, Illinois, Case No.

22LA0710 (naming both Novitium and ANI);

(5) Richard Devriendt v.

Walgreen Co., et.

al., Circuit Court of Cook County, Illinois, Case No.

2022L007429 (naming Novitium);

(6) Anthony Stigger v.

Walgreen Co., et.

al., Circuit Court of Cook County, Illinois, Case No.

2022L007396 (naming both Novitium and ANI).

The complaints allege causes of action for failure to warn, design defect, general negligence, loss of consortium and wrongful death.

Pursuant to an Order of the Illinois Supreme Court dated October 25, 2022, the pending ranitidine personal injury actions in Illinois have been consolidated in Cook County for coordinated pre-trial proceedings.

Plaintiffs filed a master long-form complaint on March 9, 2023 naming Novitium as a defendant.

ANI is not named as a defendant.

The Keller Postman firm has confirmed that its clients are no longer pursuing claims against ANI.

When the court ruled the cases needed to be re-filed as single-plaintiff cases, Novitium was never served.

The counts in the master complaint include strict liability for failure to warn/design defects, general negligence, negligent misrepresentation, negligent storage and transport, apparent manufacturer liability, common law fraud, unjust enrichment, civil conspiracy, and breach of express and implied warranties.

The complaint further alleges violations of the Illinois Consumer Fraud Act.

Pursuant to the court’s standing order, the generic defendants filed a motion to dismiss pursuant to IL 2-615 (failure to state a claim on the face of the complaint) on April 13, 2023, claiming preemption by federal law.

On August 10, 2023, the court dismissed all claims against the generic defendants, including Novitium, with prejudice on preemption grounds.

ANI and Novitium have also been named as defendants in various state lawsuits.

The pending cases in California state court naming generic ranitidine manufacturers were transferred to an existing civil case coordination docket for pretrial proceedings (JCCP) in Alameda County.

On September 21, 2023, plaintiffs filed a master complaint in the JCCP alleging strict liability, negligent failure to warn and general negligence, but not naming any generic defendants.

Plaintiffs filed an amended master complaint on April 29, 2024 and filed a second amended master complaint on July 2, 2024.

Defendants filed omnibus demurrers to the complaint.

Novitium is named in one third wave case.

The court heard arguments for the demurrers on August 22, 2024 and issued its final ruling on August 28, 2024, allowing some counts to survive.

The surviving counts as to generic defendants include strict liability (manufacturing defect) and general negligence (storage and transport, failure to warn and product containers).

Novitium filed its answer to the second amended master complaint on September 6, 2024.

Discovery is currently ongoing.

ANI Pharmaceuticals, Inc.

2 unchanged sentences

For the years ended December 31, 2024, 2023, and 2022

In August and September 2022, the Keller Postman law firm commenced seven multi-plaintiff actions in California state court, Alameda County, naming generic ranitidine manufacturers, including ANI and/or Novitium, as defendants.

Those cases are:

(1) Carlos Ascencio v.

ANI Pharmaceuticals, et.

al., Superior Court of California, County of Alameda, Case.

22CV016230 (naming both Novitium and ANI);

(2) Andre Lebeau v.

Actavis Mid Atlantic, LLC et.

al., Superior Court of California, County of Alameda, Case No.

22CV016448 (naming Novitium);

(3) Roque Torres v.

ANI Pharmaceuticals, Inc., et.

al., Superior Court of California, County of Alameda, Case No.

22CV016338 (naming both Novitium and ANI);

(4) Deborah Hinds v.

ANI Pharmaceuticals, Inc., et.

al., Superior Court of California, County of Alameda, Case No.

22CV016123 (naming both Novitium and ANI);

(5) Mark Cruz v.

ANI Pharmaceuticals, Inc., et.

al., Superior Court of California, County of Alameda, Case No.

22CV016338 (naming both Novitium and ANI);

(6) Bent Olsen v.

ANI Pharmaceuticals, Inc., et.

al., Superior Court of California, County of Alameda, Case No.

22CV016402 (naming both Novitium and ANI);

(7) John Norman v.

Actavis Mid Atlantic, LLC, et.

al., Superior Court of California, County of Alameda, Case No.

22CV018334 (naming Novitium).

The complaints allege causes of action for failure to warn, design defect, general negligence, loss of consortium and wrongful death.

By stipulation and order dated December 28, 2022, the cases were transferred to an existing civil case coordination docket for pretrial proceedings (JCCP) pending in Alameda County.

On January 19, 2023, the court ordered that counsel for the plaintiffs must dismiss the individual plaintiffs (other than the first-named plaintiff) from each of the multi-plaintiff complaints and that each of the dismissed plaintiffs must re-file their claims in a single plaintiff complaint.

On September 21, 2023, the plaintiff leadership filed a master complaint in the JCCP.

The master complaint does not name any generic defendants.

However, the short form complaints allow individual plaintiffs to name "other defendants," leaving open the option for individual plaintiffs to name generic manufacturers as defendants.

The master complaint alleges strict liability (design defect and failure to warn), negligent failure to warn, and general negligence.

In December 2023, the Keller Postman firm filed approximately 200 individual plaintiff short form complaints in the JCCP that name generic defendants.

Novitium is named in 28 of the short form complaints which reference the allegations for the master complaint.

In December 2023, the Keller Postman firm filed approximately 200 individual plaintiff short form complaints that name generic defendants.

Novitium is named in 29 of the short form complaints which reference the claims for the master complaint, but Novitium has not been served.

ANI is not named.

On February 1, 2024, the generic defendants filed an omnibus demurrer challenging the sufficiency of the Keller Postman complaints, largely on the basis of preemption.

On April 23, 2024, the California court sustained the demurrer in part, dismissing all design defect claims against the generic defendants with prejudice on preemption grounds, but the court otherwise granted plaintiffs an opportunity for leave to amend their other claims against the generic defendants.

Plaintiffs filed amended short form complaints on September 20, 2024 and defendants filed responses on October 6, 2024.

Pleadings are now closed and discovery is currently ongoing.

Pennsylvania.

In September 2022, two single-plaintiff complaints were filed in Pennsylvania state court, Philadelphia County, naming Novitium as a defendant:

(1) William Titus v.

Glaxo SmithKline LLC, et.

al., Court of Common Pleas, Philadelphia County, Pennsylvania, Case No.

and (2) Jodi Woodard v.

Ajanta Pharma USA, Inc., et.

al., Court of Common Pleas, Philadelphia County, Pennsylvania, Case No.

These complaints allege causes of action for negligence, failure to warn, negligent storage and transportation, breach of express and implied warranties, negligent misrepresentation, and fraud.

In September 2022, two complaints were filed naming Novitium as a defendant in Pennsylvania state court, Philadelphia County.

On February 16, 2023, the Pennsylvania plaintiffs filed a consolidated long-form complaint against the generic defendants, Plaintiffs v.

4 unchanged sentences

The generic defendants filed their preliminary objections to Plaintiffs’ consolidated long-form generic complaint on March 20, 2023.

The court sustained the generics’ objection that plaintiffs’ failure to warn/design defect claims were preempted by federal law;

therefore, all allegations related to failure to warn/design defects are dismissed.

The court noted the substantive law of another state may not conflict with federal law, and, further, strict liability and breach of implied warranty causes of action of another state may apply in individual cases.

This is a determination that can only be made after short form complaints are filed.

It is the generics’ position that the court’s ruling on the preliminary orders effectively dismissed the generics from the case unless and until a non-resident plaintiff names a generic in a short form complaint.

The court dismissed all claims related to failure to warn/design defects on preemption grounds.

The court also sustained the generics’ preliminary objections relating to the counts of strict liability-design defect and breach of implied warranty to the extent Pennsylvania substantive law applies, effectively dismissing the generic defendants from the case unless and until a non-resident plaintiff names a generic in a short form complaint.

Out of an abundance of caution, however, the generics, including Novitium, all filed answers to the long form complaint in June 2023.

In January 2024, plaintiffs filed short form complaints naming generic defendants, including Novitium in one complaint, Titus .

In January 2024, plaintiffs filed short form complaints naming generic defendants, including Novitium in one complaint.

Generic defendants filed joint preliminary objections to the short form complaints based on preemption.

The deadline for filing responses to these objections has passed.

In addition, Novitium was not named in any amended short form complaint filed by plaintiffs

ANI and Novitium dispute any liability in these matters.

Other Industry Related Matters

On or about September 20, 2017, the Company and certain of its employees were served with search warrants and/or grand jury subpoenas to produce documents and possibly testify relating to a federal investigation of the generic pharmaceutical industry.

We have been cooperating and intend to continue cooperating with the investigation.

However, no assurance can be given as to the timing or outcome of the investigation.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022, and 2021

PURIFIED CORTROPHIN GEL PRE-LAUNCH CHARGES

In January 2016, the Company acquired the right, title and interest in the NDAs for Cortrophin Gel and Cortrophin-Zinc.

Subsequently, the Company assembled a Cortrophin Gel re-commercialization team of scientists, executed a long-term supply agreement with a supplier of pig pituitary glands, our primary raw material for corticotrophin API, executed a long-term supply agreement with an API manufacturer, with whom ANI has advanced the manufacture of corticotropin API via manufacture of commercial-scale batches, and executed a long-term commercial supply agreement with a current good manufacturing practice (“cGMP”) aseptic fill contract manufacturer.

Prior to the third quarter 2019, all purchases of material, including pig pituitary glands and API, related to the re-commercialization efforts were consumed in research and development activities and recognized as research and development expense in the period in which they were incurred.

In the third quarter of 2019, the purchase of materials commenced that were intended to be used commercially in anticipation of FDA approval of Cortrophin Gel and the resultant product launch.

The FDA granted approval of the sNDA of this product on October 29, 2021.

Prior to FDA approval, under U.S.

GAAP, the Company was prohibited from capitalizing these pre-launch purchases of materials as inventory, and accordingly, they were charged to expense in the period in which they were incurred.

Subsequent to approval, these purchases are recorded as inventory at net realizable value.

During the year ended December 31, 2021, the Company recognized $ 0.8 million of charges for the purchase of materials.

Other charges were incurred directly related to the Cortrophin pre-launch commercialization efforts, including, but not limited to, sales and marketing and consulting expenses.

During the year ended December 31, 2021, the Company incurred $ 14.0 million of these charges, which are included on the consolidated statements of operations as a selling, general, and administrative expense.

There were no comparable expenses in 2023 and 2022 .

RELATED PARTY TRANSACTIONS

5 unchanged sentences

Shanmugam also serves on the Company ’ s board of directors.

Shanmugam holds a minority interest in Scitus Pharma Services (“Scitus”), which provides clinical research services to Novitium, a majority interest in SS Pharma LLC (“SS Pharma”), which acquires and supplies API to Novitium, a minority interest in Nuray Chemical Private Limited (“Nuray”), which manufactures and supplies API to Novitium, and a majority interest in Esjay Pharma LLC (“Esjay”), which provided research and development and facilities consulting services through September 30, 2022.

Gassert holds a minority interest in Scitus.

Shanmugam holds a minority interest in Scitus Pharma Services (“Scitus”), which provides clinical research services to Novitium, a majority interest in SS Pharma LLC (“SS Pharma”), which acquires and supplies API to Novitium, a minority interest in Nuray Chemical Private Limited (“Nuray”), which manufactured and supplied API to Novitium in prior periods, a majority interest in Esjay Pharma LLC (“Esjay”), which provides research and development and facilities consulting services, and a minority interest in SThree Chemicals Pvt Ltd (“SThree”), which acquires and supplies API to Novitium.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

A summary of payments to related parties is presented below:

4 unchanged sentences

Esjay Pharma LLC 115 — 101

SThree Chemicals Pvt Ltd 11,428 — —

Nuray Chemical Private Limited — — 1,110

$ 15,546 $ 11,881 $ 6,955

____________________

(1) Includes payments during the period from November 19, 2021 to December 31, 2021, subsequent to the acquisition of Novitium.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022, and 2021

As of December 31, 2023, the outstanding balances due to Scitus and SS Pharma were $ 0.7 million and $ 0.6 million, respectively.

There was no outstanding balance due to Nuray or Esjay at December 31, 2023.

As of December 31, 2024, the outstanding balances due to Scitus was $ 0.9 million .

There was no outstanding balance due to SS Pharma, SThree, Nuray, or Esjay at December 31, 2024.

On December 12, 2023, the Company paid $ 12.5 million of cash consideration to the Company Members of Novitium for the achievement of the "ANDA Filing Earn-Out," as defined in the Novitium acquisition agreement, as discussed in Note 2.

8 unchanged sentences

An operating segment is defined as a component of an entity that engages in business activities from which it may recognize revenues and incur expense, its operating results are regularly reviewed by the entity’s chief operating decision maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance, and its discrete financial information is available.

Prior to 2022 , based on this definition, the Company was organized as one operating and reporting segment.

Prior period segment disclosures have been recast for the new segment presentation.

Effective in the first quarter of 2022 and prospectively, in conjunction with the principal completion of the buildout of infrastructure in the areas of commercialization of rare disease therapies and the launch of Cortrophin Gel, it was determined that the Company has two operating segments as follows:

• Generics, Established Brands, and Other – Consists of operations related to the development, manufacturing, and marketing of generic and established brand pharmaceuticals, including those sold through traditional channels, contract manufactured products, product development services, royalties, and other.

• Rare Disease – Consists of operations related to the development, manufacturing and marketing of pharmaceuticals used in the treatment of patients with rare conditions.

The rare disease segment currently consists of operations related to Cortrophin Gel.

The CODM evaluates the performance of the Company as two operating segments based on revenues and EBITDA, exclusive of corporate expenses and other expenses not directly allocated or attributable to an operating segment.

These expenses include, but are not limited to, certain management, legal, accounting, human resources, insurance, and information technology expenses.

The CODM for the Company is the Chief Executive Officer.

The Company does not aggregate its operating segments for reporting purposes, and therefore, the reportable segments are the same as its operating segments.

Following the acquisition of Alimera and during the fourth quarter of 2024, the Company reorganized the segment information that is regularly provided to the chief operating decision maker which caused the identification of significant segment expenses to change.

Therefore, the Company recasted prior period segment information to conform to the current-period presentation in accordance with the segment guidance at ASC 280-10-50-34.

The Company is now organized into two operating segments a s follows:

• Rare Disease and Brands – Consists of two reporting units, Rare Disease and Brands.

The Rare Disease unit consists of operations related to the development, manufacturing and marketing of proprietary branded pharmaceutical products, with a strategic focus on products used in the treatment of patients with rare disease conditions and consists of operations related to Cortrophin Gel, and from September 16, 2024, through December 31, 2024, ILUVIEN and YUTIQ.

In addition, the Brands reporting unit includes a portfolio of approximately 16 brand products that are principally sold in highly genericized markets.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

• Generics and Other – Consists of operations related to the development, manufacturing, and marketing of generic pharmaceutical products including those sold through traditional wholesale and retail sales channels, sales of contract manufactured products, royalties on contract manufactured products, product development services, and other.

As of December 31, 2024, this reporting segment was comprised of over 100 product families.

The CODM evaluates the performance of the Company as two operating segments based on revenues and Operating income (loss), exclusive of corporate expenses and other expenses not directly allocated or attributable to an operating segment.

These expenses include, but are not limited to, certain management, legal, accounting, human resources, insurance, an d information technology expenses, and transaction and integration expenses related to the acquisition of Alimera and other acquisitions .

The Company does not manage assets of the Company by operating segment and the CODM does not review asset information by operating segment.

Accordingly, the Company does not present total assets by operating segment.

Financial information by reportable segment is as follows:

Year Ended December 31, 2024

Generics and Other Rare Disease and Brands Corporate and Unallocated Total

Net Revenues $ 320,034 $ 294,342 $ — $ 614,376

Cost of sales (excluding depreciation and amortization) ( 168,371 ) ( 81,839 ) — ( 250,210 )

Research and Development ( 30,519 ) ( 14,062 ) — ( 44,581 )

Selling, general, and administrative ( 5,120 ) ( 125,972 ) ( 118,544 ) ( 249,636 )

Depreciation and amortization — — ( 67,731 ) ( 67,731 )

Fair value adjustment — — 619 619

Gain on sale of building — — 5,347 5,347

Intangible asset impairment charge — — ( 7,600 ) ( 7,600 )

Operating Income (Loss) $ 116,024 $ 72,469 $ ( 187,909 ) $ 584

Unrealized gain on investment in equity securities $ — $ — $ 6,307 6,307

Interest expense, net — — ( 17,602 ) ( 17,602 )

Other expense, net — — ( 4,033 ) ( 4,033 )

Loss on extinguishment of debt — — ( 7,468 ) ( 7,468 )

Income (Loss) Before Expense (Benefit) for Income Taxes $ 116,024 $ 72,469 $ ( 210,705 ) $ ( 22,212 )

ANI Pharmaceuticals, Inc.

2 unchanged sentences

For the years ended December 31, 2024, 2023, and 2022

Financial information by reportable segment, including historical information that has been retroactively re-cast to reflect two reporting segments, is as follows:

Year Ended December 31, 2023

(in thousands) 2023 2022 2021

Generics, Established Brands, and Other $ 374,699 $ 274,699 $ 216,136

Rare Disease 112,117 41,686 —

Total net revenues $ 486,816 $ 316,385 $ 216,136

Segment earnings (loss) before interest, taxes, depreciation and amortization (“EBITDA”) and reconciliation to income (loss) before income taxes

Generics, Established Brands, and Other $ 152,990 $ 78,958 $ 63,418

Rare Disease 12,498 ( 18,348 ) ( 18,571 )

Generics and Other Rare Disease and Brands Corporate and Unallocated Total

Net Revenues $ 289,314 $ 197,502 $ — $ 486,816

Cost of sales (excluding depreciation and amortization) ( 152,739 ) ( 28,774 ) — ( 181,513 )

Research and Development ( 28,197 ) ( 6,089 ) — ( 34,286 )

Selling, general, and administrative ( 2,451 ) ( 73,466 ) ( 85,780 ) ( 161,697 )

Depreciation and amortization — — ( 59,791 ) ( 59,791 )

Corporate and other unallocated expenses (1)

( 58,726 ) ( 38,920 ) ( 37,388 )

Total operating income (loss) $ 46,971 $ ( 35,283 ) $ ( 39,793 )

Fair value adjustment — — ( 1,426 ) ( 1,426 )

Restructuring activities — — ( 1,132 ) ( 1,132 )

Operating Income (Loss) $ 105,927 $ 89,173 $ ( 148,129 ) $ 46,971

Interest expense, net — — ( 26,940 ) ( 26,940 )

Other income (expense), net ( 159 ) 670 ( 4,343 )

Income (loss) before expense (benefit) for income taxes $ 19,872 $ ( 62,665 ) $ ( 56,058 )

____________________

(1) Includes expenses not directly allocated or attributable to a reporting segment, including certain management, legal, accounting, human resources, insurance, and information technology expenses, and are included in selling, general, and administrative expenses in our consolidated statement of operations.

Other expense, net — — ( 159 ) ( 159 )

Income (Loss) Before Expense for Income Taxes $ 105,927 $ 89,173 $ ( 175,228 ) $ 19,872

Year Ended December 31, 2022

Generics and Other Rare Disease and Brands Corporate and Unallocated Total

Net Revenues $ 235,237 $ 81,148 $ — $ 316,385

Cost of sales (excluding depreciation and amortization) ( 125,835 ) ( 12,950 ) — ( 138,785 )

Research and Development ( 19,964 ) ( 2,354 ) — ( 22,318 )

Selling, general, and administrative ( 3,963 ) ( 55,306 ) ( 64,775 ) ( 124,044 )

Depreciation and amortization — — ( 56,972 ) ( 56,972 )

Fair value adjustment — — ( 3,758 ) ( 3,758 )

Restructuring activities — — ( 5,679 ) ( 5,679 )

Intangible asset impairment charge — — ( 112 ) ( 112 )

Operating Income (Loss) $ 85,475 $ 10,538 $ ( 131,296 ) $ ( 35,283 )

Interest expense, net — — ( 28,052 ) ( 28,052 )

Other income, net — — 670 670

Income (Loss) Before Benefit for Income Taxes $ 85,475 $ 10,538 $ ( 158,678 ) $ ( 62,665 )

Geographic Information

Operations are located in the United States and India.

The following depicts the Company's total revenue according to geographic location.

The Company has ceased operations at the Oakville, Ontario, Canada location as of March 31, 2023.

The revenue from the acquisition of Alimera is also included in the year ended December 31, 2024 in the table below.

The majority of the assets of the Company are located in the United States.

The Company's operations are also located in the United Kingdom, Ireland, India, and Portugal.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024, 2023, and 2022

The following table depicts the Company’s revenue by geographic operations during the following periods:

2 unchanged sentences

United States $ 604,989 $ 486,251 $ 312,427

Canada 565 3,958 4,243

International 9,387 565 3,958

Total Revenue $ 614,376 $ 486,816 $ 316,385

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022, and 2021

The following table depicts the Company’s property and equipment, net according to geographic location as of:

The following table depicts the Company’s property, plant and equipment, net according to geographic location, which excludes the land and building at the Company’s Canada facility, which was classified as held for sale as of December 31, 2023 .

These assets had a carrying value of approximately $ 8.0 million .

The land and building at the Canada facility was sold on March 28, 2024, refer to Note 4 “Restructuring Canada Operations” to the notes to consolidated financial statements .

(in thousands) December 31, 2024 December 31, 2023

United States $ 54,730 $ 43,163

India 1,430 1,047

International 2,133 1,430

Total property and equipment, net $ 56,863 $ 44,593

____________________

(1) Amounts as of December 31, 2023 and 2022 exclude the land and building at the Canada facility, which are classified as held for sale as of December 31, 2023 and 2022.

These assets have a carrying value of $ 8.0 million.

SUBSEQUENT EVENTS

2 unchanged sentences

These RSAs vest over four years .

The Company granted 73,588 PSUs to employees and officers of the Company ( 66,433 to officers of the Company).

The Company granted 79,859 PSUs to employee and officers of the Company ( 74,421 to officers of the Company).

PSU performance will be measured over three years from January 1, 2025 through December 31, 2027 and will cliff-vest contingent upon the achievement of specified performance objectives.

1 unchanged sentence

Additionally, on February 15, 2025, the Company granted 46,182 RSAs to new employees of the Company, which will vest over four years .

On February 16, 2024, ANI Pharmaceuticals Canada, Inc.

and 1540700 Ontario Limited entered into an agreement of purchase and sale for the Oakville, Ontario manufacturing facility for a purchase price of 19.2 million Canadian Dollars, or approximately $ 14.2 million US Dollars, based on the current exchange rate.

The first and second deposits, each amounting to approximately 1.0 million Canadian Dollars or approximately $ 0.7 million US Dollars, based on the current exchange rate, were received on February 20, 2024, and February 27, 2024, respectively.

The remaining balance of the purchase price, less deposits, will be paid upon closing, which is expected to occur by the end of March 2024.

The closing of the transaction is subject to customary termination conditions, including the buyer’s right to terminate the agreement if the property is materially damaged prior to the closing.

On February 22, 2024, the Company paid $ 12.5 million to the Company Members of Novitium for the achievement of the "Gross Profit Earn-Out," as defined in the Novitium acquisition agreement, as discussed in Note 2.

On November 15, 2010, ANI, formerly Biosante, entered into an assignment and technology transfer agreement and stock subscription agreement (collectively the "CG Agreement") with CG Oncology, Inc.

formerly, Cold Genesys, Inc.

(“CG Oncology”), pursuant to which the Company sold to CG Oncology exclusive, worldwide rights to develop and commercialize BioSante’s oncolytic virus technology.

The technology includes a replication-competent adenovirus that has completed clinical trials for treatment of superficial bladder cancer.

Under the terms of the CG Agreement, the Company receive d an equity investment in CG Oncology, an upfront cash payment and the right to receive future royalty payments.

Historically, this equity investment was recorded at cost and as of December 31, 2023, this equity investment was valued at zero .

On January 24, 2024, CG Oncology completed their Initial Public Offering, at an offering price of $ 19.00 per share.

The Company currently holds 219,925 shares of common stock in CG Oncology.

As of February 27, 2024 these shares are valued at approximately $ 10.2 million.

On February 28, 2024, CG Oncology disputed the Company's rights to receive royalties.

The dispute is unresolved at this time.

On February 27, 2025, the Company received written notice of non-renewal from EyePoint, effective May 31, 2025, of the YUTIQ Supply Agreement, dated May 17, 2023, by and among Alimera and EyePoint, under which EyePoint manufactures and supplies YUTIQ for ANI.

The Company has submitted a PAS to the FDA seeking to add YUTIQ’s indication of chronic NIU-PS to the ILUVIEN label.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data