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Item 1A. Risk Factors

2026-02-27 compared with 2025-02-28 · 419 added, 408 removed, 622 unchanged (57% of the section changed)

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

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

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

• Our approved products, including Cortrophin Gel, ILUVIEN and YUTIQ, may not achieve commercialization at levels of market acceptance that will continue to allow us to achieve profitability;

• Cortrophin Gel is our first rare disease pharmaceutical product.

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

• We may fail to realize the benefits expected from our acquisition of Alimera and the combined company may not perform as we or the market expects;

Below is a summary of the principal risks that could adversely affect our business, financial position and operating results :

• Our approved products, including Cortrophin Gel and ILUVIEN, may not achieve commercialization at levels of market acceptance that will allow us to maintain profitability;

• To the extent our ongoing and continuing efforts to commercialize Cortrophin Gel, ILUVIEN, and our other products for which we have received marketing approval are unsuccessful, our business, financial condition, and results of operations will be negatively impacted;

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

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

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

• We are subject to United States federal and state laws related to healthcare fraud and abuse and health information privacy and security, and the failure to comply with such laws may adversely affect our business;

• Failure to comply with data protection laws and regulations could subject us to government enforcement actions, private litigation and/or adverse publicity, which could negatively affect our operating results and business;

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

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

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

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

• If we fail to comply with broad and complex U.S.

healthcare and other laws, as well as comparable laws and regulations in foreign jurisdictions, we could face substantial penalties and our business, operations, and financial condition could be adversely affected;

• If we fail to comply with data protection laws and regulations, we could be subject to government enforcement actions (which could include civil or criminal penalties), private litigation and/or adverse publicity, which could negatively affect our operating results and business;

• Any failure to comply with the complex reporting and payment obligations under the Medicaid Drug Rebate Program and other government pricing and price reporting programs may result in penalties and sanctions, which may have a material adverse effect on our business, financial position, and operating results;

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

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

• Our accruals for the Medicare Manufacturer Discount Program have increased due to growth and acquisitions.

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

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

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

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• Clinical trials for our products may not generate the outcomes we expect, may take longer or be more costly to complete than we anticipate;

• We may be adversely affected by the expiration of patents that protect key aspects of our products in the near- to medium-term;

• We may be adversely affected by the expiration of patents that protect key aspects of ILUVIEN and YUTIQ in the near- to medium-term;

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

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• Our success is largely dependent upon certain key employees, including members of our senior management, the loss of whom could adversely affect our operations;

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

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

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

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

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

• Our operations in an international market subject us to additional regulatory oversight both in the international market and in the U.S., as well as, social, and political uncertainties, which could cause a material adverse effect on our business, financial position, and operating results;

• Our operations, including those resulting from our acquisition of Alimera, and its international operations, will subject us to political and economic risks, increase our exposure to potential liability under anti-corruption, trade protection, tax, and other laws and regulations;

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

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

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

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

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

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

• Public health outbreaks, epidemics, or pandemics (such as COVID-19) have adversely affected and may in the future adversely affect our business;

• Public health outbreaks, epidemics, or pandemics have adversely affected and may in the future adversely affect our business;

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

• The Food and Drug Administration (“FDA”) does not provide guidance on safety labeling for products that are marketed without approved New Drug Applications (“NDAs”) or Abbreviated New Drug Applications (“ANDAs”), which could increase our potential liability with respect to failure-to-warn claims for these products;

• Four of our products are marketed without approved NDAs or ANDAs and we can offer no assurances that the FDA will not require us to either seek approval for these products or withdraw them from the market.

• Four of our products are marketed without approved NDAs or ANDAs and we cannot be certain that the FDA will not require us to either seek approval for these products or withdraw them from the market.

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

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

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

• Our indebtedness and liabilities could limit the cash flow available for our operations and expose us to risks that could adversely affect our business, financial condition and results of operation;

• To service our indebtedness, we will be required to generate a significant amount of cash;

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

• Certain risks relating to our 2.25% Convertible Senior Notes due 2029 and related capped call transactions;

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

• If the DEA does not approve supply of the API we need to manufacture our controlled substances, we may be unable to manufacture controlled substances, which would eliminate our revenue on these products;

• Pharmaceutical product quality standards are steadily increasing on all products as set forth by the FDA and other governmental agencies, and if we cannot meet these standards, we may be required to discontinue marketing and/or recall products from the market;

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

• The successful commercialization of our products depends on adequate coverage and reimbursement from third party payors;

healthcare reform initiatives may materially and adversely affect our business, financial position, and operating results;

• The international nature of our operations, including those resulting from our acquisition of Alimera and its international operations, will subject us to political and economic risks and increase our exposure to potential liability under anti-corruption, trade protection, tax, and other laws and regulations;

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

• Our indebtedness and liabilities could limit the cash flow available for our operations and expose us to risks that could adversely affect our business, financial condition and operating results;

• Our 2024 Credit Agreement contains restrictive and financial covenants and if we are not in compliance with these covenants, our outstanding indebtedness under this facility could be accelerated and the lenders could terminate their commitments under the facility;

• We incurred certain risks relating to the Notes and related capped call transactions;

• Raising additional funds by issuing additional equity securities may cause dilution to our current stockholders;

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Risks Related to our Business

Our approved products, including Cortrophin Gel, ILUVIEN and YUTIQ, may not achieve commercialization at levels of market acceptance that will continue to allow us to achieve profitability and we may face substantial competition from competitors that discover, develop or commercialize competing products before or more successfully than we do, which could have a material adverse effect on our business, financial position, and operating results.

The development and commercialization of new drugs is highly competitive, and the commercial success of our products or any of our future products or product candidates will depend on several factors, including our ability to differentiate any such products or product candidates from our competitors’ current or future products, including the creation of generic competitive products.

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

However, w e face competition from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide with respect to our current products and to any future products or product candidates that we may develop or commercialize in the future.

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Even if we are able to obtain regulatory approvals for our pharmaceutical products, if we fail to predict accurately demand for such products, or our competitors more effectively develop competitive products, that have few or less severe adverse side effects and have higher rates of acceptance by physicians, our business, financial position, and operating results could be adversely affected.

Our approved products, including Cortrophin Gel and ILUVIEN, may not achieve commercialization at levels of market acceptance that will allow us to maintain profitability and we may face substantial competition from competitors that discover, develop or commercialize competing products before or more successfully than we do, which could have a material adverse effect on our business, financial position, and operating results.

The commercialization of new drugs is highly competitive, and the commercial success of our products or any of our future products or product candidates will depend on several factors, including our ability to differentiate any such products or product candidates from our competitors’ current or future products, including the creation of generic competitive products.

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

Even if we are able to obtain regulatory approvals for our pharmaceutical products, if we fail to predict the demand for such products accurately, or if our competitors more effectively develop competitive products, that have few or less severe adverse side effects and have higher rates of acceptance by physicians, our business, financial position, and operating results could be adversely affected.

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

• relative convenience and ease of administration of our products;

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

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• timing of our market entry;

• publicity and health authority communications concerning our products or competing products and treatments;

• our ability to market our products effectively to the retail level;

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

Cortrophin Gel is our first rare disease pharmaceutical product.

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

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

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

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

In October 2023, we announced FDA approval and commercial availability of a 1-mLvial of Cortrophin Gel, appropriate for adjunctive treatment of certain patients with acute gouty arthritis flares.

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

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

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

• broad acceptance of Cortrophin Gel by physicians, patients, and gaining market access share in the healthcare community;

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

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

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

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

To the extent our ongoing and continuing efforts to commercialize Cortrophin Gel, ILUVIEN, and our other products for which we have received marketing approval are unsuccessful, our business, financial condition and results of operations will be negatively impacted.

We have received approval from the FDA for our Cortrophin Gel product for the treatment of certain chronic autoimmune disorders, including acute exacerbations of multiple sclerosis (“MS”) and rheumatoid arthritis (“RA”), in addition to other indications.

In 2025, a significant portion of our net product revenues were derived from the sale of Cotrophin Gel, and we expect that sales of Cortrophin Gel will continue to account for a significant portion of our net product revenues in future years.

As a result, our business is dependent on our ability to sustain and grow revenues from sales of Cortrophin Gel, and we are accordingly subject to risks relating to the commercial success of Cotrophin Gel, including the risk that physicians, payors or patients will perceive the cost of Cortrophin Gel to outweigh the benefits of treatment;

that we may be unable to maintain and increase sales of Cotrophin Gel or continue to gain market share from competing products;

and that we may be unable to obtain and sustain favorable access and reimbursement rates.

In addition, we have received approval from the FDA for ILUVIEN for the treatment of NIU-PS in addition to DME, for which ILUVIEN was already approved.

To the extent we receive FDA approval to commercialize other products in the future, we expect to devote significant time and money towards commercialization effects in the U.S, including building out our sales force and developing a patient support program.

In addition, we are expanding our commercialization efforts with respect to Cortrophin Gel to include a 1 mL vial, appropriate for adjunctive treatment of certain patients with acute gouty arthritis flares.

Additionally, on February 28, 2025, the FDA approved a prefilled syringe format for Cortrophin Gel.

This new presentation became available in 40 USP units/0.5 mL and 80 USP units/mL single-dose options through Cortrophin Gel’s established specialty pharmacy network during the second quarter of 2025.

The prefilled syringe reduces administration steps for patients using Cortrophin Gel, which remains available in 5 mL and 1 mL vials.

The ability for us to generate significant net product revenues from ILUVIEN, our Cortrophin Gel products or any other products for which we receive marketing approval will depend upon our ability to successfully sell the product and numerous other factors, including:

• successfully establishing and maintaining effective sales, marketing, and distribution systems in jurisdictions in which our approved products are approved for sale;

• successfully establishing and maintaining manufacturing capabilities with our third-party suppliers and contract manufacturers and manufacturing adequate commercial quantities of our approved products at acceptable cost and quality levels, including maintaining cGMP and quality systems regulation standards required by various regulatory agencies;

• broad acceptance of the products for which we have received marketing approval by physicians and patients, as well as our ability to gain market access share in the healthcare community;

• the acceptance of pricing and placement of the products for which we have received marketing approval on payers’ formularies and the associated tiers;

• effectively competing with other products that are approved and available to patients for the same conditions, as well as other products that are in development or may be developed in the future as treatment options;

• continued demonstration of safety and efficacy of the products for which we have received marketing approval in comparison to competing products or treatment options;

• our ability to comply with ongoing regulatory obligations and continued regulatory review of the products for which we have received marketing approval, which may result in significant additional expense and may require labeling changes based on new safety information, post-market studies or clinical trials to evaluate safety risks;

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

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

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

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If we do not achieve one or more of these factors, we could experience an inability to successfully commercialize or continue to successfully commercialize ILUVIEN, Cortrophin Gel or any other products for which we receive marketing approval, which would negatively impact our business, financial condition and results of operations.

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

We may enter into new lines of business that offer new products and/or services and we may have limited experience in marketing such new products and/or services, which may subject us to additional risks.

From time to time, we may enter into new lines of business that offer new products and/or services.

For example, in September 2024 we acquired Alimera, a global pharmaceutical company that specializes in the commercialization and development of ophthalmic retinal pharmaceuticals, which for us is a new line of business.

Our lack of experience with or knowledge of such business or other new lines of business we may choose to enter, as well as external factors, such as competitive alternatives, potential conflicts of interest, either real or perceived, and shifting market preferences, may impact our implementation and operation of such new lines of business.

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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.

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

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

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

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 ma terial inventory purchases.

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

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

We source the raw materials for our products from both domestic and international suppliers.

During the year ended December 31, 2025 , approximately 17%, of our raw materials and API purchases were from one domestic supplier.

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

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

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

We source the raw materials and API for our products from both domestic and international suppliers.

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

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

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

Any change in one of our API suppliers generally is required to be approved by the FDA through a PAS.

The process of obtaining approval of a PAS can take between six and nine months, and could take an additional eight to ten months if additional information is required to be submitted by the FDA.

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

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

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

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

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From time to time, we have experienced temporary disruptions in the supply of certain of such imported API due to FDA inspections, and we may experience future disruptions in the supply of certain imported API due to trade tensions or embargoes, geopolitical tensions and macroeconomic conditions.

Any disruptions in our API supply, and particularly with respect to the API used to manufacture Cortrophin Gel and ILUVIEN, could have a material adverse effect on our business, financial condition and operating results.

Our manufacturing facilities or those of our third-party manufacturers or suppliers may fail to meet regulatory requirements.

Failure to meet cGMP requirements could increase production costs or impact supply of our products.

All facilities where prescription drugs are manufactured, tested, packaged, stored, or distributed must comply with FDA cGMPs.

All of our products are manufactured, tested, packaged, stored and distributed according to cGMP regulations, which govern manufacturing processes and procedures, including record keeping, and the implementation and operation of quality systems to control and assure the quality of drug products.

Poor control of cGMP production processes can lead to product quality failures that can impact our ability to supply product, resulting in cost overruns, which could be extensive.

Such production process issues include:

failure to meet target production costs and yields, facility and equipment failures, raw material failures, failure to meet product release specifications, including stability of the product, quality assurance system failures, operator error, equipment malfunction, and shortages of qualified personnel, as well as noncompliance with strictly enforced federal, state and foreign regulations.

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

If it finds violations of cGMP, the FDA could make its concerns public and could impose sanctions including, among others, fines, product recalls, total or partial suspension of production and/or distribution, suspension of the FDA’s review of product applications, injunctions, and civil or criminal prosecution.

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

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

Although we have internal compliance programs in place that we believe are adequate, the FDA may conclude that these programs do not meet regulatory standards.

If compliance is deemed deficient in any significant way, it could have a material adverse effect on our business, financial condition and operating results.

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

If we are unable to secure or maintain qualified contract manufacturers for those products, a contract manufacturer or distributor fails to comply with federal, state, and local laws and regulations, or third-party manufacturers or distributors sustain delays in production and distribution of our products, our business, financial position, and operating results could be materially, adversely affected.

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

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

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

If we are unable to secure or maintain qualified contract manufacturers for those products, if any of our contract manufacturers or distributors fails to comply with federal, state, and local laws and regulations, or if any of our third-party manufacturers or distributors sustain delays in production and distribution of our products, our business, financial position and operating results could be materially adversely affected.

We have acquired, and may continue to acquire, a variety of products that we have commercialized or are seeking to commercialize.

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

As a result, we have contracted with third-party contract manufacturers to manufacture these products on our behalf, and we rely on single-source third parties to manufacture, package and/or distribute many of our products.

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

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

In addition, manufacturers and distributors of our products may sometimes encounter difficulties in production and distribution.

These problems include failure to meet target production costs and yields, failure to meet product release specifications, including stability of the product, quality assurance system failures, operator error, and shortages of qualified personnel.

Our reliance on contract manufacturers reduces our control over these activities but does not relieve us of our responsibility to ensure compliance with all required regulations.

If a contract manufacturer does not successfully carry out its contractual duties, meet expected deadlines or manufacture our products in accordance with regulatory requirements, or if there are disagreements between us and a contract manufacturer, we may need to enter into an appropriate replacement third-party relationship, which may not be readily available or available on acceptable terms, and which may cause additional delay or increased expense in our ability to commercialize our products.

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

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

In addition, manufacturers and distributors of our products may sometimes encounter difficulties in production and distribution.

Adverse weather conditions and natural disasters may also affect our manufacturers’ and distributors’ supply chains, which could negatively impact our ability to source materials and components to make our products and, in more severe cases, such as hurricanes, earthquakes, floods, droughts, tornadoes or blizzards, eliminate the availability, or significantly increase the cost, of the components to make our products, sometimes for prolonged periods of time.

The response of federal, state and local governmental bodies and agencies to climate change through regulations, mandates, reporting and disclosure requirements, taxes or levies could materially increase our or our manufacturers’ cost to operate or obtain product components at a reasonable price, resulting in a material adverse effect on our financial results.

Any of these situations could materially and adversely harm our business and financial condition.

We cannot assure you that any product quality issues relating to the manufacture and/or distribution of our products or any future product candidates will not occur in the future.

We cannot be certain that any product quality issues relating to the manufacture and/or distribution of our products or any future product candidates will not occur in the future.

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

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We are subject to United States federal and state laws related to healthcare fraud and abuse and health information privacy and security, and the failure to comply with such laws may adversely affect our business.

Many of our products are eligible for reimbursement under federal and state health care programs such as Medicaid, Medicare, TRICARE, and/or state pharmaceutical assistance programs, and as a result, certain U.S.

federal and state healthcare laws and regulations pertaining to fraud and abuse and patients’ rights are, and will be, applicable to our business.

We could be subject to healthcare fraud and abuse and patient privacy regulation by both the federal government and the states in which we conduct our business.

The domestic and foreign laws that may affect our ability to operate include, but are not limited to:

Anti-Kickback Statute, which applies to our marketing and research practices, educational programs, pricing policies and relationships with healthcare providers or other entities, by prohibiting, among other things, soliciting, receiving, offering or paying remuneration, directly or indirectly, as a means of inducing, or in exchange for, either the referral of an individual or the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs;

federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment to Medicare, Medicaid or other federal healthcare program payers that are false or fraudulent;

(iii) new federal criminal statutes that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;

(iv) the U.S.

Physician Payments Sunshine Act, which among other things, requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually information related to certain “payments or other transfers of value” made to physicians, physician assistants, advanced practice nurses and teaching hospitals, and ownership and investment interests held by physicians and their immediate family members, and similar state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and may require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures;

(v) the government pricing rules applicable to the Medicare and Medicaid programs, the 340B Drug Pricing Program, the U.S.

Department of Veterans Affairs program, the TRICARE program, and state price transparency reporting laws;

and (vi) state and foreign law equivalents of each of the above U.S.

laws, such as anti-kickback and false claims laws which may apply to items or services.

Defense of litigation claims and government investigations can be costly, time-consuming, and distract management, and it is possible that we could incur judgments, settlements, deferred or non-prosecution agreements, or corporate integrity agreements that would require us to change the way we operate our business.

We are committed to conducting the sales and marketing of our products in compliance with the healthcare fraud and abuse laws, but certain applicable laws may impose liability even in the absence of specific intent to defraud.

Furthermore, should there be ambiguity, a governmental authority may take a position contrary to a position we have taken, or should an employee violate these laws without our knowledge, a governmental authority may impose civil and/or criminal sanctions.

Any adverse outcome in these types of actions, or the imposition of penalties or sanctions for failing to comply with fraud and abuse laws, could adversely affect us and may have a material adverse effect on our business, results of operations, financial condition and cash flows.

Some of the statutes and regulations that govern our activities, such as federal and state anti-kickback and false claims laws, are broad in scope, and while exemptions and safe harbors protecting certain common activities exist, they are often narrowly drawn and construed by the courts.

While we manage our business activities to comply with these statutory provisions, due to their breadth, complexity and, in certain cases, uncertainty of application, it is possible that our activities could be subject to challenge by various government agencies.

In particular, the FDA, the DOJ, the Office of Inspector General at the U.S.

Department of Health and Human Services, and other agencies have increased their enforcement activities with respect to the manufacturing, sales, marketing, research and similar activities of pharmaceutical companies in recent years, and many pharmaceutical companies have been subject to government investigations related to these practices.

A determination that we are in violation of these and/or other government regulations and legal requirements may result in civil damages and penalties, criminal fines and prosecution, administrative remedies, the recall of products, the total or partial suspension of manufacturing and/or distribution activities, seizure of products, injunctions, whistleblower lawsuits, failure to obtain approval of pending product applications, withdrawal of existing product approvals, exclusion from participation in government healthcare programs and other sanctions.

Any of these types of investigations or enforcement actions could affect our ability to commercially distribute our products and could materially and adversely affect our business, financial condition, results of operations and cash flows.

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If we fail to comply with broad and complex U.S.

healthcare and other laws, as well as comparable laws and regulations in foreign jurisdictions, we could face substantial penalties and our business, operations and financial condition could be adversely affected.

Within the U.S., the marketing of pharmaceutical products and related arrangements with healthcare providers, third-party payors, patients and other third parties in the healthcare industry are subject to a wide range of federal and state healthcare laws and regulations that may constrain our business and/or financial arrangements.

These laws include:

• the AKS, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving, or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made under federal and state healthcare programs such as Medicare and Medicaid;

• federal civil and criminal false claims laws, including the federal False Claims Act, which can be enforced through civil whistleblower, or qui tam actions, as well as civil monetary penalty laws can impose criminal and civil penalties, assessments, and exclusion from participation for various forms of frauds and abuse involving the federal healthcare programs, such as Medicare and Medicaid;

• the federal Health Insurance Portability and Accountability Act of 1996, as amended, which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program and also establishes requirements related to the privacy, security, and transmission of individually identifiable health information which apply to many healthcare providers, physicians, and third-party payers with whom we interact;

• the federal Food, Drug and Cosmetic Act, which, among other things, strictly regulates drug product and medical device marketing, prohibits manufacturers from marketing such products for off-label use, and regulates the distribution of samples;

• federal laws that require pharmaceutical manufacturers to calculate, report, and certify certain complex product prices and other data to the government or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement of the manufacturers’ drugs under government healthcare programs, which data may be used in the calculation of reimbursement and/or discounts on approved products;

• the so-called federal “sunshine law” or Open Payments program, which requires manufacturers of drugs, devices, biologics and medical supplies covered under certain government health benefit programs to report to CMS information related to “payments and other transfers of value” to teaching hospitals, physicians, and other healthcare practitioners, as well as ownership and investment interests held by physicians and their immediate family members;

• federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers;

• state laws and regulations analogous to federal laws, including anti-kickback or related laws, some of which apply regardless of whether products or services are covered by government health benefit programs or private insurance, false claims laws, laws prohibiting consumer protection and unfair competition laws, and laws governing privacy, security, and breaches of health information in certain circumstances, many of which differ in significant ways from federal laws and across states and are often not preempted by federal law, thus complicating compliance efforts;

• state laws that require pharmaceutical companies to comply with specific compliance standards, restrict financial interactions between pharmaceutical companies and healthcare providers, report drug product pricing information, financial interactions with health care providers, or marketing expenditures, and/or require the registration of pharmaceutical sales representatives.

The distribution of pharmaceutical products is subject to additional requirements and regulations, including extensive record-keeping, licensing, storage, and security requirements intended to prevent the unauthorized sale of pharmaceutical products.

Efforts to ensure that our activities comply with applicable healthcare laws and regulations will involve substantial costs.

Given the breadth of the laws and regulations, limited guidance for certain laws and regulations, and evolving government interpretations of the laws and regulations, governmental authorities may possibly conclude that our business practices may not comply with such laws.

If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal, and administrative penalties, damages, fines, exclusion from participation in federal health care programs such as Medicare and Medicaid, the curtailment or restructuring of our operations, and other actions.

Further, defending against any such actions can be costly, time-consuming, and may require significant personnel resources.

Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired.

Supreme Court’s June 2024 decision in Loper Bright Enterprises v.

Raimondo overturned the longstanding Chevron doctrine, under which courts were required to give deference to regulatory agencies’ reasonable interpretations of ambiguous federal statutes.

The Loper decision could result in additional legal challenges to regulations and guidance issued by federal agencies, including FDA and CMS, on which we rely.

Any such legal challenges, if successful, could have a material impact on our business.

Additionally, the Loper decision may result in increased regulatory uncertainty, inconsistent judicial interpretations, and other impacts to the agency rulemaking process, any of which could adversely impact our business and operations.

We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action or as a result of legal challenges, either in the U.S.

If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, our business could be materially harmed.

If we fail to comply with data protection laws and regulations, we could be subject to government enforcement actions (which could include civil or criminal penalties), private litigation and/or adverse publicity, which could negatively affect our operating results and business.

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The California Privacy Rights Act currently in effect, significantly amends the CCPA.

Virginia, Colorado, Utah, and Connecticut have enacted privacy laws similar to the CCPA that impose new obligations or limitations in areas affecting our business, and similar laws are under consideration in other states.

The CCPA provides for civil penalties for violations, as well as a private right of action in connection with certain data breaches, and establishes a regulatory agency authorized to implement and enforce the CCPA.

In addition, almost 20 other states have enacted privacy laws similar to the CCPA that impose new obligations or limitations in areas affecting our business, and similar laws are under consideration in other states.

These laws and regulations are evolving and subject to interpretation and may impose limitations on our activities or otherwise adversely affect our business.

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regulators is active, and failure to comply with the GDPR or applicable Member State law may result in substantial fines.

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Legal mechanisms to allow for the transfer of personal data from the EEA or U.K.

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After an approval process, the European Commission is expected to adopt the final adequacy decision, which will allow data to flow freely from the EU to the U.S.

We are in the process of adopting and implementing our policies with respect to information subject to applicable data privacy laws and transfer restrictions.

If we or our distributors fail to comply with applicable data privacy laws concerning, or if the legal mechanisms we or our distributors rely upon to allow, the transfer of personal data from the EEA or Switzerland to the U.S.

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Failure to comply with data protection laws and regulations could result in unfavorable outcomes, including increased compliance costs, delays or impediments in the development of new products, increased operating costs, diversion of management time and attention, government enforcement actions and create liability for us (which could include civil, administrative, and/or criminal penalties), private litigation and/or adverse publicity that could negatively affect our operating results and business.

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

The success of our business is dependent upon our ability to develop, license or acquire, and commercialize new products on a timely basis in relation to our competitors’ product introductions, and to address all regulatory requirements applicable to the development and commercialization of new products.

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

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

Additionally, we have entered profit-sharing or royalty arrangements with third parties in which we sell products under ANDAs or NDAs owned or licensed by these third parties.

Additionally, we have entered profit-sharing or royalty arrangements with third parties pursuant to which we sell products under ANDAs or NDAs owned or licensed by these third parties.

Under these agreements, we pay these third parties a specified percentage of the gross profit earned on sales of the products, and such percentages in certain cases increase as additional gross profit is earned.

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

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

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

In addition, the Patient Protection and Affordable Care Act (“PPACA”) included a significant expansion of state Medicaid programs.

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

In addition, with the advent of changes in federal law, as individuals become eligible for coverage under these programs or lose eligibility for such coverage, Medicaid utilization of our products could change, resulting in a corresponding change in our rebate payments.

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

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

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

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

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

As we acquire and launch additional products, many of which, are often used by patients in the 65 and older age range, our estimates of these rebates have grown.

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

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

Any failure to comply with the complex reporting and payment obligations under the Medicaid Drug Rebate Program and other government pricing and price reporting programs may result in penalties and sanctions, which may have a material adverse effect on our business, financial position, and operating results.

laws and regulations regulating the Medicaid Drug Rebate Program and other government pricing and price reporting programs are complex, vary across drug products and programs, continue to evolve and are often subject to interpretation by agencies and courts.

These interpretations may change over time, and complex methodologies and related assumptions used in making calculations under these programs are subject to review and challenge.

Any inaccuracies in our prior reporting may lead to recalculations and restatements, which may increase our historic liability.

Further, civil monetary or other penalties may be applied if we fail to pay required rebates or other amounts, if we are found to have knowingly submitted false pricing or product information to the government, or if we are found to have made other misrepresentations or errors in our pricing.

Government agencies also could decide to terminate our relevant government agreements, in which case federal government reimbursement would not be available under Medicaid or Medicare Part B for our products.

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

Increases in Medicare Manufacturer Discount rebates, and further legislative changes to the Medicare Manufacturer Discount Program, could decrease our revenues from product sales, which in turn could have a material adverse effect on our business, financial position, and operating results.

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

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

As we acquire and launch additional products, many of which, are often used by patients in the 65 and older age range, our accruals with respect to these anticipated rebates have grown.

Increases in Medicare Manufacturer Discount rebates, and further legislative changes to the Medicare Manufacturer Discount Program, could decrease our revenues from product sales, which in turn could adversely affect our business, financial position, and operating results.

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

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

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

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We produce the majority of our products in three manufacturing facilities.

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

Our internal manufacturing operations are currently based in three fa cilities.

We have transitioned products manufactured or packaged in Oakville to one of our three U.S.-based manufacturing sites.

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

Our internal manufacturing operations are currently based in three facilities.

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

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

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

Virtually all of our contracts for the supply o f generic products to our customers contain “failure to supply” clauses which require us to reimburse the customer for the difference between our contract price and the price the customer was forced to pay to procure the substitute product in the event we failed to deliver the requested quantity within a specified period of time.

Virtually all of our contracts for the supply o f generic products contain “failure to supply” clauses that require us to reimburse the customer for the difference between our contract price and the price the customer would be forced to pay to procure the substitute product in the event we fail to deliver the requested quantity within a specified period of time.

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

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

The NEW DAY clinical trial may fail to demonstrate the efficacy of ILUVIEN as baseline therapy in patients with early DME, fail to generate data demonstrating the benefits of ILUVIEN when compared to the current leading therapy for DME, take longer or be more costly to complete than we currently anticipate or fail to change physician prescribing practices.

We are conducting our NEW DAY clinical trial, which is a multicenter, single-masked, randomized, controlled trial designed to generate prospective data evaluating ILUVIEN as a baseline therapy in the treatment of DME and demonstrate its potential advantages over the current standard of care of repeat anti-VEGF (aflibercept) injections.

The NEW DAY clinical trial is fully enrolled as of May 2023 with 300 treatment-naïve, or almost naïve, DME patients in approximately 42 sites around the U.S.

The NEW DAY clinical trial may fail to demonstrate the efficacy of ILUVIEN as baseline therapy in patients with early DME, fail to generate data demonstrating the benefits of ILUVIEN when compared to the current leading therapy for DME, or take longer or be more costly to complete than we currently anticipate, and/or fail to change physician prescribing practices despite a successful result.

The occurrence of any of these events could materially and adversely affect our business, financial condition and cash flows, and results of operations.

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

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

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

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

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

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

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Clinical trials for our products may not generate the outcomes we expect, may take longer or be more costly to complete than we anticipate.

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The timing of patient enrollment in these trials, and related costs, can be unpredictable, and any such trials or studies may be more expensive or take longer than we expect, data may be inconclusive, or such studies and trials may fail to change physician prescribing practices.

Further, the outcome of continuing post-marketing clinical trials, such as NEW DAY and SYNCHRONICITY, may fail, take longer than anticipated to complete or, could produce negative results requiring us to submit reports to the FDA of adverse events involving the use of our products and we may be required to implement risk management programs, or discontinue product marketing as a result.

The results of preclinical studies and early clinical trials of our product candidates may not predict results of later-stage clinical trials, and results in one indication may not predict results for the same product candidate in another indication.

Differences in trial design between early-stage clinical trials and later-stage clinical trials raise challenges for extrapolating the results of earlier clinical trials to later clinical trials.

In addition, delays occur when a clinical trial is suspended, put on clinical hold or terminated by the trial sponsor, the FDA or other regulatory bodies, or the IRBs of the institutions in which such trials are being conducted.

Suspensions and terminations are imposed due to a number of factors, including failure to conduct a clinical trial in accordance with regulatory requirements or trial protocols, failure to conduct the trial in accordance with GCPs or applicable regulatory guidelines, failed inspections of clinical trial operations or trial sites by the FDA or other regulatory bodies, unforeseen safety issues or adverse side effects, failure to establish or achieve clinically meaningful trial endpoints, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.

Clinical trials frequently are delayed or terminated as a result of ambiguous or negative interim results or unanticipated adverse events.

If trials or tests are not positive or are only modestly positive or if there are safety concerns, we may be required to repeat or conduct additional clinical trials or preclinical studies for our product candidates beyond those that we currently contemplate, we may be delayed in or prevented from obtaining marketing approval or may obtain marketing approval in some countries and not in others, we may obtain approval for indications or patient populations that are not as broad as intended or desired or obtain approval with significant use or distribution restrictions or safety warnings, be subject to post-marketing testing requirements, or be subject to increased pricing pressure.

Further, the FDA or other regulatory bodies may disagree with our clinical trial design and our interpretation of data from clinical trials or may change the requirements for approval even after they have reviewed and commented on the design for our clinical trials.

Further, the outcome of continuing post-marketing clinical trials, such as SYNCHRONICITY, may fail, take longer than anticipated to complete or, could produce negative results requiring us to submit reports to the FDA of adverse events involving the use of our products and we may be required to implement risk management programs, or discontinue product marketing as a result.

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

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These situations, should they occur with respect to any of our products, could have a material adverse effect on our business, financial position, and operating results.

Any significant adverse events or undesirable side effects caused by our products may impact regulatory approval or market acceptance, or result in significant negative consequences.

If we or others identify undesirable side effects caused by any product that we develop or commercialize, several potentially significant negative consequences could result, including the interruption, delay or suspension of clinical trials, the suspension or withdrawal of approvals and licenses, the addition of warning labels, changes to the way a product is administered, the requirement to conduct further clinical trials, lawsuits or increased liability for harm to patients and their children and reputational harm to us.

Any of these events could prevent us from obtaining or maintaining regulatory approvals or achieving or maintaining market acceptance of any products we develop or commercialize.

Additionally, the FDA or other regulatory bodies could require us to adopt REMS for any product to ensure that the benefits of treatment outweigh the risks for each potential patient, which may include, among other things, a medication guide outlining the risks of the product for distribution to patients, a communication plan to health care practitioners, extensive patient monitoring or distribution systems and processes that are highly controlled, restrictive and more costly than what is typical for the industry.

Climate change concerns could disrupt our businesses, adversely affect client activity levels, adversely affect the creditworthiness of our counterparties, and damage our reputation.

Climate change may cause extreme weather events that, among other things, could damage our facilities and equipment, injure our employees, disrupt operations at one or more of our primary locations, negatively affect our ability to service and interact with our clients, and adversely affect the value of our assets.

Climate change may cause extreme weather events that, among other things, could damage our facilities and equipment, injure our employees, disrupt operations at one or more of our primary locations or those of our partners, negatively affect our ability to service and interact with our clients, and adversely affect the value of our assets.

Adverse weather conditions and natural disasters may also affect our or our manufacturers’ and distributors’ supply chains, which could negatively impact our ability to source materials and components to make our products and, in more severe cases, such as hurricanes, earthquakes, floods, droughts, tornadoes or blizzards, eliminate the availability, or significantly increase the cost, of the components to make our products, sometimes for prolonged periods of time.

Any of these events may increase our costs, including our costs to insure against these events.

Climate change may also have a negative impact on the financial condition of our clients, which may decrease revenues from those clients and increase the credit exposures to those clients.

Climate change may also have a negative impact on the financial condition of our clients, which may decrease revenues from those clients and increase our credit exposures to those clients.

Additionally, our reputation and client relationships may be damaged as a result of our involvement, or our clients’ involvement, in certain industries associated with causing or exacerbating, or alleged to cause or exacerbate, climate change.

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New regulations or guidance relating to climate change, as well as the perspectives of shareholders, employees, and other stakeholders regarding climate change, may affect whether and on what terms and conditions we engage in certain activities or offer certain products.

Our current and potential future use of artificial intelligence and machine learning may not be successful and introduces emerging risks and challenges to our business.

We have implemented certain artificial intelligence (“AI”) technologies into our operations with the goal of improving efficiency, and may further expand our use of AI as the technology continues to evolve.

However, the use, development, and integration of AI and machine learning technologies present risks and challenges that could materially and adversely affect our business, financial condition, and results of operations.

AI algorithms may be flawed, datasets may be insufficient or biased, and ineffective AI development or deployment could lead to compliance violations, cybersecurity risks, breaches of confidentiality and privacy obligations, noncompliance with applicable laws and regulations, threats to intellectual property rights, and the misuse of personally identifiable information, including protected health information.

AI and machine learning technologies may also contribute to novel and urgent cybersecurity risks, including through the use by third parties of such technologies to launch more automated, targeted, and coordinated attacks.

Additionally, the regulatory framework for AI and machine learning technologies is rapidly evolving, and it is possible that new laws and regulations will be adopted, or that existing laws and regulations may be interpreted in ways that would affect our business.

Several jurisdictions, including Europe and the U.S., have proposed or enacted laws governing AI, and we may be required to commit significant resources to modify and maintain business practices to comply with any applicable regulations concerning the use of AI, the nature of which cannot be determined at this time.

Developing, testing, and deploying AI systems may increase our operating costs due to the nature of the computing costs involved in such systems.

Our efforts to develop, acquire, or integrate these technologies may involve significant time, costs, and other resources, and may divert our management team’s attention and focus from executing on other elements of our strategy.

We may also face increased competition from other companies that are using AI, some of which may develop more effective methods to deploy these technologies than we or any of our business partners have, which could impair our ability to compete effectively.

Risks Related to Our Intellectual Property

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patent that will expire in August 2027, and has expired in the EU in October 2024, although extensions have been obtained or applied for through May 2027 in various EU countries.

Otherwise, no patent term extension will be available for any of these U.S.

A second U.S.

patent relating to ILUVIEN will expire in November 2028, and a second U.S.

patent relating to YUTIQ will expire in January 2028.

We do not expect that any patent term extension will be available for any of these U.S.

patents, European patents or any of our licensed U.S.

or European pending patent applications.

After these patents expire in August 2027 in the U.S., we will not be able to block others from marketing FAc in an implant similar to ILUVIEN or YUTIQ.

After these patents expire in August 2027 and November 2028 in the U.S., we will not be able to block others from marketing FAc in an implant similar to ILUVIEN or YUTIQ.

We rely on patent, trademark and other intellectual property protection in the discovery, development, manufacturing and sale of our products.

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Patents covering our products normally provide market exclusivity, which is important for the profitability of many of our products.

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As patents for certain of our products expire, we will or could face competition from lower priced generic or biosimilar products.

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

We own the trademark names for most of our branded pro ducts, including, Cortenema, Purified Cortrophin Gel, Cortrophin-Zinc, ILUVIEN, Inderal LA, Inderal XL, InnoPran XL, Lithobid, Reglan, Vancocin, Veregen, and YUTIQ.

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

We own the trademarks for most of our branded products, including, Cortenema, Purified Cortrophin Gel, Cortrophin-Zinc, ILUVIEN, Inderal LA, Inderal XL, InnoPran XL, Inzirqo, Lithobid, Reglan, Vancocin, Veregen, and YUTIQ.

We license the trademarks for Atacand, Atacand HCT, Arimidex, Casodex, and Oxistat.

While we will seek to protect those trademarks through timely renewal in applicable jurisdictions, we may not be able to renew our trademarks in a timely manner or to prevent third parties from using our trademarks, which could have a material adverse effect on our business, financial position, and operating results.

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Our licenses are material to our business, and we may enter into additional licenses in the future.

We hold a license from EyePoint to intellectual property relating to ILUVIEN pursuant to the New Collaboration Agreement.

We hold a license from EyePoint to intellectual property relating to ILUVIEN pursuant to the A&R Collaboration Agreement.

Pursuant to the Product Rights Agreement with EyePoint, we also have the commercialization rights to YUTIQ in the entire world, except Europe, the Middle East and Africa as we had previously licensed from EyePoint rights to certain products, which included YUTIQ (known as ILUVIEN in Europe, the Middle East and Africa) for the prevention of relapse in recurrent NIU-PS in those territories.

The Product Rights Agreement also excludes any rights to YUTIQ for the treatment and prevention of chronic NIU-PS in China and certain other countries and regions in Asia, which rights are subject to a pre-existing exclusive license between EyePoint Parent and Ocumension.

Our ability to pursue the development and commercialization of our products depends upon the continuation of our agreements with EyePoint.

The New Collaboration Agreement imposes various commercialization, milestone payment, royalty payments, insurance and other obligations on us, including the right by EyePoint to audit.

The A&R Collaboration Agreement imposes various commercialization, milestone payment, royalty payments, insurance and other obligations on us, including the right by EyePoint to audit.

If we fail to comply with these obligations, EyePoint may have the right to terminate the license.

Our license rights to EyePoint’s proprietary insert technology utilized in ILUVIEN could revert to EyePoint in certain circumstances, including failure to cure contractual breaches and filing for bankruptcy protection.

We have from time to time amended the New Collaboration Agreement, and we may again seek to do so in the future if the need arises.

If our license with EyePoint, or any other current or future material license agreement, were terminated, or if we were unable to amend the New Collaboration Agreement or resolve any dispute related to such agreement, we may be unable to market the applicable products, such as ILUVIEN, that may be covered by such license, which would materially and adversely affect our business, results of operations and future prospects.

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We have from time to time amended the A&R Collaboration Agreement, and we may again seek to do so in the future if the need arises.

If our license with EyePoint, or any other current or future material license agreement, were terminated, or if we were unable to amend the A&R Collaboration Agreement or resolve any dispute related to such agreement, we may be unable to market the applicable products, such as ILUVIEN, that may be covered by such license, which would materially and adversely affect our business, financial condition and operating results.

We do not control the commercialization of ILUVIEN in China, East Asia and the Western Pacific, and receipt of the value we currently anticipate will depend on, among other factors, Ocumension’s ability to further commercialize ILUVIEN in that region.

We have granted an e xclusive license to Ocumension for the development and commercialization of our 0.19mg FAc intravitreal injection in China, East Asia and the Western Pacific.

We have granted an exclusive license to Ocumension for the development and commercialization of our 0.19mg FAc intravitreal injection in China, East Asia and the Western Pacific.

Our ability to receive aggregated potential sales milestone payments of up to $89.0 million depend upon achievement by Ocumension of specified amounts of net sales of ILUVIEN in that region in the future.

However, we cannot assure you as to the amount, if any, we might receive.

If there are any adverse developments or perceived adverse developments with respect to Ocumens ion’s ability to commercialize ILUVIEN in China, East Asia and the Western Pacific, we may not realize the value we currently anticipate from this license, which would harm our business and may cause the price of our securities to fall.

If there are any adverse developments or perceived adverse developments with respect to Ocumension’s ability to commercialize ILUVIEN in China, East Asia and the Western Pacific, we may not realize the value we currently anticipate from this license, which would harm our business and may cause the price of our securities to fall.

Examples of such adverse developments include, but are not limited to:

• regulatory hurdles in China, including related to the ongoing COVID-19 pandemic or the geopolitical tensions between the U.S.

• regulatory hurdles in China, including related to current geopolitical tensions between the U.S.

• competition, whether from current competitors or new products developed by others in the future;

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Our success will depend in part on the ability of our licensors to obtain, maintain (including making periodic filings and payments) and enforce patent protection for their intellectual property, in particular, those patents to which we have secured exclusive rights.

Under our license with EyePoint, EyePoint controls the filing, prosecution and maintenance of all patents.

Under our license agreement with EyePoint, EyePoint controls the filing, prosecution and maintenance of all patents.

Our licensors may not successfully prosecute or continue to prosecute the patent applications to which we are licensed.

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In addition, our patents and our licensors’ patents may not afford us protection against competitors with similar technology.

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Litigation or third-party claims of intellectual property infringement would require us to divert resources and may prevent or delay our commercialization of our current products or the development or regulatory approval of other product candidates.

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Further, if a patent infringement suit were brought against us or our collaborators, we or they could be forced to stop or delay manufacturing, sales, research or development of the product or product candidate that is the subject of the suit.

Several issued and pending U.S.

patents claiming methods and devices for the treatment of eye diseases, including through the use of steroids, implants and injections into the eye, purport to cover aspects of our products.

For example, one of our potential competitors holds issued and pending U.S.

patents and a pending European patent application with claims covering injecting an ocular implant into a patient’s eye similar to our current products’ applicator.

There is also an issued U.S.

patent with claims covering implanting a steroidal anti-inflammatory agent to treat an inflammation-mediated condition of the eye.

If these or any other patents were held by a court of competent jurisdiction to be valid and to cover aspects of our current products, then the owners of such patents would be able to block our ability to commercialize our current products unless and until we obtain a license under such patents (which license might require us to pay royalties or grant a cross-license to one or more patents that we own), until those patents expire or unless we are able to redesign our products to avoid any such valid patents.

As a result of patent infringement claims, or in order to avoid potential claims, we or our collaborators may choose to seek, or be required to seek, a license from a third-party and would most likely be required to pay license fees or royalties or both.

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Moreover, it is possible that a third-party could successfully challenge the scope (i.e., whether a patent is infringed), validity and enforceability of our licensed patents before patent expiration and obtain approval to market a competitive product.

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Further, the patent applications that we license or have filed may fail to result in issued patents.

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Even after amendment, a patent may not be permitted to issue.

Further, the existing or future patents to which we have rights based on our New Collaboration Agreement with EyePoint may be too narrow to prevent third parties from developing or designing around these patents.

Further, the existing or future patents to which we have rights based on our A&R Collaboration Agreement with EyePoint may be too narrow to prevent third parties from developing or designing around these patents.

Additionally, we may lose our rights to the patents and patent applications we license in the event of a breach or termination of our license agreement with EyePoint.

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If we are unable to protect or defend the intellectual property related to our technologies, we will not be able to establish or maintain a competitive advantage in our market.

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Our success is largely dependent upon certain key employees, including members of our senior management team, the loss of whom could adversely affect our operations.

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

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

Our success is dependent upon the efforts of certain key employees, including members of our senior management team.

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

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

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

Competition for personnel is intense in certain localities in which we operate, specifically northern Minnesota, where two of our three current manufacturing facilities are located, is small, and as a result, there is a limited number of qualified personnel available in all functional areas, which could make it difficult to retain and attract the qualified personnel necessary for the development and growth of our business.

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

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

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

Unauthorized parties or rogue insiders may also attempt to gain access to our systems or facilities through fraud or other forms of deception targeted at our customers, associates, suppliers and service providers.

Any such incidents could compromise our networks and the information stored there could be accessed, misused, publicly disclosed, lost, stolen or rendered, permanently or temporarily, inaccessible.

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

Further, any security breach incident could expose us to risks of regulatory and law enforcement investigations, enforcement actions, litigation (including class claims) and liability and could result in negative publicity, any of which could significantly harm our reputation and relationships with our customers and adversely affect our business, financial condition, operating results, liquidity and stock price.

Insurance policies that may provide coverage with regard to such incidents may not cover any or all of the resulting financial losses.

See “ Cybersecurity – Risk management and Strategy ,” Item 1C of this Annual Report on Form 10-K for additional information.

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

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

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

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

For a description of legal proceedings which are currently pending, see Note 17 “Commitments and Contingencies” in the notes to the consolidated financial statements in Part II, Item 8 of this Annual Re port on Form 10-K.

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

For a description of legal proceedings which are currently pending, see Note 17 “C ommitments and Contingencies” in the notes to the consolidated financial statements in Part II, Item 8 of this Annual Re port on Form 10-K.

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

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

We may fail to realize the benefits expected from our acquisition of Alimera and the combined company may not perform as we or the market expects, which could have an adverse effect on the price of our common stock.

On September 16, 2024, we completed our previously announced acquisition (the “Merger”) 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”).

The anticipated benefits we expect from this acquisition include, among other things, benefits relating to enhanced revenues, a strengthened market position for the combined company and operating efficiencies and these benefits are, necessarily, based on projections and assumptions about the combined businesses of our Company and Alimera, which may not materialize as expected or which may prove to be inaccurate.

The value of our common stock could be adversely affected if we are unable to realize the anticipated benefits from the Merger on a timely basis or at all.

Achieving the benefits of the Merger will depend, in part, on our ability to continue to integrate the business, operations and products of Alimera successfully and efficiently with our business.

The combined company may not perform as we or the market expects.

Risks associated with the combined company following the Merger include:

• integrating businesses is a difficult, expensive, and time-consuming process, and the failure to successfully integrate our businesses with the business of Alimera timely would adversely affect our financial condition and results of operation;

• there may be inconsistencies in standards, controls, procedures and policies that will need to be reconciled;

• the Merger has materially increased the size of our operations, and if we are not able to effectively manage our expanded operations, our common stock price may be adversely affected;

• it is possible that our key employees or key employees of Alimera might decide not to remain with us, and the loss of such personnel could have a material adverse effect on the financial condition, results of operations, and growth prospects of the combined company;

• the success of the combined company will also depend upon relationships with third parties and Alimera’s or our pre-existing customers, which relationships may be affected by customer preferences or public attitudes about the Merger.

Any adverse changes in these relationships could adversely affect the combined company’s business, financial condition, and results of operations;

• unanticipated write-offs or charges.

In connection with the Merger we recorded goodwill and intangible assets in the fair value amount of the acquisition.

If we conclude that some portion of such goodwill or intangible assets are impaired, a non-cash charge for the amount of such impairment would be recorded against earnings;

• our expansion into international operations as a result of the Merger (as discussed below);

• incurrence of significant costs in connection with consummating the Merger and integrating the operations of Alimera into our business;

• the potential for securities class action lawsuits and derivative lawsuits that may be brought as a result of the Merger, including costs associated with defending such lawsuits;

• our failure to identify or accurately assess the magnitude of certain liabilities we assumed in the Merger could result in unexpected litigation or regulatory exposure, unfavorable accounting charges, unexpected increases in taxes due, a loss of anticipated tax benefits or other known and unknown liabilities which could result in adverse effects on our business, operating results or financial condition.

The occurrence of any of these Merger-related events individually or in combination could materially and adversely affect our business, results of operations, financial condition and the market price of our common stock.

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

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

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

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

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

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

We have incurred, and will continue to incur, direct and indirect costs as a result of the Merger.

We have incurred, and will continue to incur, significant costs and expenses, including fees for professional services and other transaction costs, in connection with the Merger, including costs that we may not currently expect.

There are a number of factors beyond our control that could affect the total amount or the timing of these costs and expenses.

We must pay substantially all of the costs and expenses whether or not the transaction is completed.

Moreover, many of the expenses that will be incurred are, by their nature, difficult to estimate accurately.

To the extent these acquisition and integration expenses are higher than anticipated, we may experience liquidity or cash flow issues.

In connection with the Merger, we recorded goodwill and intangible assets and if either goodwill or intangible assets become impaired, our earnings could be significantly impacted.

Under current accounting methods, goodwill is not amortized but, instead, is subject to impairment tests on at least an annual basis and more frequently if an event occurs or circumstances change that reduce the fair value of a reporting unit below its carrying amount.

In connection with the Merger, we recorded goodwill and intangible assets in the fair value amount of such acquisition.

Although we do not anticipate impairment charges, if we conclude that some portion of such goodwill or intangible assets are impaired, a non-cash charge for the amount of such impairment would be recorded against earnings.

A goodwill impairment charge could be caused by a decline in our stock price or the occurrence of a triggering event that compounds negative financial results.

Therefore, if goodwill recorded in connection with the Merger becomes impaired, our earnings could be significantly and adversely affected.

The Merger may become the target of derivative lawsuits that could result in substantial costs in connection with the Merger.

We may incur significant, non-recurring costs in connection with consummating the Merger and integrating the operations of Alimera into our business operations.

Securities class action and derivative lawsuits are often brought against public companies that have entered into merger agreements and have consummated acquisitions.

The outcome of any litigation is uncertain, but regardless of the outcome of any such lawsuits, we may incur significant fees and expenses relating to legal services (including any costs that would be incurred in defending against any potential derivative lawsuits in connection with the Merger if any such proceedings are brought), accounting and other fees and costs, associated with consummating the Merger.

Our business is subject to political, economic, legal, and social risks, and if we fail to successfully manage our domestic and international operations, our business, operating results and financial condition could suffer.

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as a result of such changes, could adversely affect our business and decrease our anticipated revenue growth and profitability.

Further, in connection with the merger we have acquired direct international operations outside of the U.S., and are marketing products outside the United States, that cover the United Kingdom and much of Europe and the Middle East.

We have not historically conducted any operations or marketed any of our products outside the United States.

As a result of the closing of the Merger, the percentage of our revenues generated outside of the United States increased materially, and our new international operations require significant management attention and financial resources.

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Further, in connection with the Merger we have acquired direct international operations outside of the U.S., and are marketing products outside the U.S., that cover the UK and much of Europe and the Middle East.

We have not historically conducted any operations or marketed any of our products outside the U.S.

As a result of the closing of the Merger, the percentage of our revenues generated outside of the U.S.

has increased materially, and our international operations require significant management attention and financial resources.

There is a high level of regulation in all markets where the products we acquired from Alimera have been sold and great diversity in how those markets operate.

Consequently, experience and expertise will be required in understanding the market dynamics of each country, the rules and regulations in place governing the sale of medicines, the codes of practice governing promotion of medicines, different currencies, the financial frameworks applying to taxation (both corporate and value-added tax) and the need to communicate in different languages.

We also import inputs for certain products, including API, from international suppliers.

We also import components for certain products, including API, from international suppliers.

As a result, our operations may be affected by challenges to the global supply chain, including increased costs of API and other inputs for our products.

government recently announced tariffs on products manufactured in several jurisdictions, including China, Mexico and Canada.

and has made announcements regarding the potential imposition of tariffs on other jurisdictions.

government recently announced tariffs on products manufactured in several jurisdictions, including China, Mexico and Canada, and has continued making announcements regarding the potential imposition of tariffs on other jurisdictions.

Some countries have, and other countries may in the future, implement trade restrictions and/or retaliatory measures as well.

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• changes in currency exchange rates;

• currency transfer and other restrictions and regulations that may limit our ability to sell our products internationally or repatriate profits to the United States;

• currency transfer and other restrictions and regulations that may limit our ability to sell our products internationally or repatriate profits to the U.S.;

• difficulties adapting to new cultures, business customs, and legal systems;

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• adverse economic conditions, including increasing inflation and the stability and solvency of business financial markets, financial institutions and sovereign nations.

In particular, regulatory oversight of pharmaceutical products, including production, marketing and sales, can vary significantly among countries and will require additional oversight by our compliance and marketing teams.

We need to spend significantly more time and invest in additional resources to ensure compliance with regulatory regimes outside the United States.

Similarly, there are often supply chain risks that are specific to a given region, and our expansion outside the United States exposes us to additional risks and expenses related thereto.

In particular, regulatory oversight of pharmaceutical products, including production, marketing and sales, can vary significantly among countries and requires additional oversight by our compliance and marketing teams.

We plan to spend significantly more time and invest in additional resources to ensure compliance with regulatory regimes outside the U.S.

Similarly, there are often supply chain risks that are specific to a given region, and our expansion outside the U.S.

exposes us to additional risks and expenses related thereto.

In addition, compliance with foreign and U.S.

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laws such as the Foreign Corrupt Practices Act, and local laws prohibiting corrupt payments to governmental officials.

There can be no assurance that our employees, partners and other persons with whom we do business will not take actions in violation of our policies or these laws.

We cannot be certain that our employees, partners and other persons with whom we do business will not take actions in violation of our policies or these laws.

Any violations of these laws could subject us to civil or criminal penalties, including substantial fines or prohibitions on our ability to offer our products in one or more countries, and could also materially and adversely harm our business and financial condition.

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As a result of the consummation of the Merger, we need to meet certain additional requirements for our international operations, including adequate levels of reimbursement and various regulatory approvals, and our inability to meet these requirements could adversely affect our results of operations.

Following the consummation of the Merger, we now have certain additional requirements that we need to meet in order to engage in international operations.

For example, in the European Economic Area (“EEA”) and the United Kingdom, each country has a different reviewing body that evaluates reimbursement dossiers submitted by marketing authorization holders of new drugs and then makes recommendations as to whether or not the drug should be reimbursed.

For example, in the EEA and the UK, each country has a different reviewing body that evaluates reimbursement dossiers submitted by marketing authorization holders of new drugs and then makes recommendations as to whether or not the drug should be reimbursed.

Limitations on reimbursement could be imposed at the national, regional or local level or by fiscal intermediaries in each country, either through the initial authorization process or at some point in the future.

In addition, due to price referencing within the EEA, the United Kingdom and certain other countries, existing pricing in our current markets could be negatively affected by a change in pricing in a country where Alimera historically has reimbursement or by a new price in a country where we obtain reimbursement approval in the future.

In addition, due to price referencing within the EEA, the UK and certain other countries, existing pricing in our current markets could be negatively affected by a change in pricing in a country where Alimera historically has reimbursement or by a new price in a country where we obtain reimbursement approval in the future.

Our business could also be adversely affected if governments, private insurers or other reimbursing bodies or payers limit the indications for reimbursement approval to a smaller subset than we believe our products are effective in treating or establish a limit on the frequency with which our products may be administered that is less often than we believe would be effective.

Those actions could limit our revenues and harm our business.

We also need to maintain current or obtain marketing authorization and commercialization rights in countries outside the United States.

We also need to maintain current or obtain marketing authorization and commercialization rights in countries outside the U.S.

Certain countries, such as those in the EEA, require minimum sales within three years or licenses may be revoked if extensions are not negotiated.

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As a result of the consummation of the Merger, our reliance on third parties to manufacture and test certain of our products will increase, and if any of these third parties is unable to satisfy our demand, our business, operating results and financial condition could suffer.

Alimera did not have in-house manufacturing capability and depended entirely on single source third-party manufacturers for the manufacture of its products;

Alimera did not have in-house manufacturing capabilities and depended entirely on single source third-party manufacturers for the manufacture of its products;

following the consummation of the Merger, we rely on these third-party manufacturers for the manufacture of the products we acquired from Alimera, including for supply of active pharmaceutical ingredients, the product applicator, the product implants, and the final assembly of the injectors with the implants.

In addition, Alimera relied, and we now rely, on third parties for the quality release testing.

In addition, Alimera relied, and we now rely, on third parties for quality release testing.

If any of these third-party manufacturers breaches its agreement, is unable to meet its contractual or quality requirements or becomes unwilling to perform for any reason, we may be unable, in a timely manner or at all, to locate alternative acceptable manufacturers or testing facilities, as applicable, enter into favorable agreements with them and ensure that they are approved by the applicable regulatory authorities, such as the FDA.

For example, Alimera relied, and we now rely, on (subject to certain exceptions) the YUTIQ Supply Agreement with EyePoint for the manufacturing and supply of YUTIQ, which has an initial term of two years through May 2025.

On February 27, 2025, the Company received written notice of non-renewal from EyePoint of the YUTIQ Supply Agreement, effective May 31, 2025.

The Company has submitted a PAS to the FDA seeking to add YUTIQ’s indication of chronic NIU-PS to the ILUVIEN label.

The Company expects FDA approval of the PAS in the second quarter of 2025 and plans to market ILUVIEN for chronic NIU-PS in addition to its current indication of DME in the U.S.

In order to support the transition to of NIU-PS to ILUVIEN, in July 2024, the Company extended its partnership with Siegfried, its long-term supplier for ILUVIEN, through 2029, and contracted with Siegfried to upgrade equipment on the existing manufacturing line and significantly expand capacity through the addition of a second manufacturing line.

If the PAS approval is delayed, or not approved at all, or we are unable to timely transfer manufacturing to Siegfried or another replacement supplier or make other arrangements to supply product, we may not be able to fulfill demand for

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YUTIQ and / or the NIU-PS indication in the U.S.

In addition, on July 12, 2024, EyePoint received a warning letter from the FDA alleging violations of current good manufacturing practice (CGMP) requirements in connection with a February 2024 FDA inspection and associated February 2024 Form FDA-483 specifically related to the manufacturing of YUTIQ at the supplier’s facility (the “Warning Letter”).

The Warning Letter requires the supplier to implement certain corrective and preventive actions.

Any failure by the supplier to remediate to the FDA’s satisfaction these findings or any future findings the FDA may have, could result in the supply of YUTIQ being adversely effected or terminated, and our ability to fulfill demand for YUTIQ prior to the addition of NIU-PS to the ILUVIEN label could be materially impaired.

Additionally, we may experience lengthy delays if we need to change a third-party supplier or manufacturer, including for YUTIQ, which could have a material impact on business and results of operations.

For example, in order to support the transition to of NIU-PS to ILUVIEN, in July 2024, the Company extended its partnership with Siegfried Holding AG (“Siegfried”), its long-term supplier for ILUVIEN, through 2029, and contracted with Siegfried to upgrade equipment on the existing manufacturing line and significantly expand capacity through the addition of a second manufacturing line.

Additionally, we may experience lengthy delays if we need to change a third-party supplier or manufacturer, which could have a material impact on our business, financial condition and operating results.

Further, suppliers and manufacturers for the products we acquired from Alimera rely on additional third parties for the manufacture of component parts.

Any inability of these contract manufacturers to acquire sufficient quantities of the active pharmaceutical ingredients and other component parts in a timely manner from these third parties could delay commercial production of YUTIQ or ILUVIEN.

Any of these events could adversely affect our ability to fulfill demand for the acquired products and / or indications.

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Risks Related to Our Industry

Public health outbreaks, epidemics, or pandemics (such as the COVID-19 pandemic) have adversely affected and may in the future adversely affect our business.

The COVID-19 pandemic previously adversely affected us in the years ended December 31, 2021 and 2020, and the COVID-19 pandemic or other actual or threatened public health outbreaks, epidemics, or pandemics may in the future adversely affect, among other things, the economic and financial markets and labor resources of the countries in which we operate;

Public health outbreaks, epidemics, or pandemics have adversely affected and may in the future adversely affect our business.

Public health outbreaks, epidemics, or pandemics (actual or threatened) may in the future adversely affect, among other things, the economic and financial markets and labor resources of the countries in which we operate;

our manufacturing and supply chain operations, research and development efforts, commercial operations and sales force, administrative personnel, third-party service providers, and business partners and customers;

and the demand for our products.

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Such disruptions in our operations could materially adversely impact our business, prospects, operating results, and financial condition.

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

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

For example, our net revenues are concentrated among four customers representing 25%, 16%, 12%, and 11% of net revenues, respectively, during the year ended December 31, 2024.

As of December 31, 2024, accounts receivable from these four customers was approximately 70% of our accounts receivable, net.

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

For example, our net revenues are concentrated among three customers representing 22%, 17%, and 14% of our net revenues, respectively, during the year ended December 31, 2025.

As of December 31, 2025, accounts receivable from these three customers was approximately 64% of our accounts receivable, net.

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

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

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

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

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

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

Four products, which tog ether comprised less than 10% of our total revenue in 2024, are marketed without approved NDAs or Abbreviated New Drug Applications (“ANDAs”) and we can offer no assurances that the U.S.

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

Four products, which together comprised less than 10% of our total revenue in 2025, are marketed without approved NDAs or ANDAs and we cannot be certain that the FDA will not require us to either seek approval for these products or withdraw them from the market.

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

Four products, Esterified Estrogen with Methyltestosterone (“EEMT”), Opium Tincture, Thyroid Tablets, and Hyoscyamine are marketed without approved NDAs or ANDAs.

Four of our products, EEMT, Opium Tincture, Thyroid Tablets, and Hyoscyamine, are marketed without approved NDAs or ANDAs.

The FDA's policy with respect to the continued marketing of unapproved products appears in the FDA's September 2011 Compliance Policy Guide Sec.

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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.

However, we cannot be certain that the FDA will continue to follow this approach or that it will not take a contrary position with any individual product or group of products.

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

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

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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.

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

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

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

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

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

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

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

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

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

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

Controlled Substances Act (“CSA”).

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

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

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

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

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For a description of legal proceedings which are currently pending relating to ranitidine, see Note 17 “Commitments and Contingencies” in the notes to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

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

In December of 2021, the FDA issued an information request to all manufacturers of propranolol products, including Inderal LA (Propranolol ER) currently being marketed by ANI in the U.S.

to evaluate their product for the presence and level of a nitrosamine impurity known as N-nitroso-propranolol (“NNP”), which is distinct from NDMA.

We undertook a review and analysis of NNP, working with testing and toxicology experts, and communicated with the FDA on the scientific bases for establishing appropriate acceptable daily intake for NNP and the appropriate approach for propranolol products in the U.S.

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Based on this guidance, we were able to continue sales of the product to our customers.

Inadequate funding for the FDA, DEA, the SEC and other government agencies, including from government shutdowns, or other disruptions to these agencies’ operations, could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.

Inadequate funding for the FDA and other government agencies, in addition to potentially shifting priorities under the current presidential administration, could hinder the ability of the FDA or other government agencies to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner, or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business, financial position and operating results.

Without appropriation of funding to federal agencies, our business operations related to our product development activities for the U.S.

market could be impacted.

The ability of the FDA to review and approve new products, to provide feedback on clinical trials and development programs, to meet with or engage in other informal interactions with sponsors and to otherwise review regulatory submissions can be affected by a variety of factors, including government budget and funding levels;

the ability to hire and retain key personnel and accept the payment of user fees;

and statutory, regulatory, and policy changes, among other factors.

Similarly, the DEA’s regulation of controlled substances can be affected by a variety of factors, including government budget and funding levels, the ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory and policy changes.

Average review times at the agency may and have fluctuated in recent years as a result.

In addition, government funding of the SEC and other government agencies on which our operations may rely, including those that fund research and development activities, is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other agencies may also slow the time necessary for new product candidates to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.

If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

Further, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

Since the start of the current presidential administration in 2025, U.S.

policy changes have been implemented at a rapid pace and additional changes are likely.

It is difficult to predict how executive actions that may be taken under the current administration may affect the FDA, the DEA, or other agencies’ ability to exercise their regulatory authority.

Any disruptions at the FDA and other agencies that impose constraints on the FDA’s ability to engage in routine oversight and product review activities may slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies or to otherwise respond to regulatory submissions, which would adversely affect our business.

For example, the current administration has discussed several changes to the reach and oversight of the FDA, which could affect its relationship with the pharmaceutical industry, transparency in decision making and ultimately the cost and availability of prescription drugs.

The FDA may pursue legislative, regulatory or policy changes regarding the standards or processes for approving our products or product candidates that we may be unable to satisfy.

Additionally, over the last several years, the U.S.

government has shut down multiple times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA and other government employees and stop critical activities.

For example, the current administration previously announced plans to reduce the number of federal employees by establishing voluntary termination programs, by position eliminations or by involuntary terminations.

Reductions in workforce, particularly in the review or inspection divisions, could extend NDA review timelines, delay or prevent pre-approval inspections, and limit opportunities for FDA feedback on pending applications.

In addition, as a result of the government shutdown, the FDA staff many be unable to process and review regulatory submission in a timely manner or at all.

A significant reduction in the FDA’s workforce or budget, changes in the FDA’s regulatory and oversight priorities or activities, or a prolonged government shutdown could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

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

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

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

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

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

The Federal False Claims Act (“FCA”), imposes civil liability and criminal fines on individuals or entities that among other acts, knowingly submit, or cause to be submitted, false or fraudulent claims for payment to the government.

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

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

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

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

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

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

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

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The use of legal, regulatory, and legislative strategies by competitors, both branded and generic, including “authorized generics,” citizen’s petitions, and legislative proposals, may increase the costs to develop and market our generic products, could delay or prevent new product introductions, and could significantly reduce our profit potential.

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

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

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

These strategies include, but are not limited to:

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

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

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

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

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

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

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

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

If third-party payers deny coverage or limit reimbursement, we may not be able to market our products effectively or we may be required to offer our products at prices lower than anticipated.

The successful commercialization of our products depends on adequate coverage and reimbursement from third party payors.

Significant uncertainty exists as to the coverage and reimbursement status of pharmaceutical products.

and markets in other countries, patients generally rely on third-party payors to reimburse all or part of the costs associated with their treatment.

Adequate coverage and reimbursement from governmental healthcare programs, such as Medicare and Medicaid, private health insurers and other organizations is critical to the commercial success of our products.

Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize a sufficient return on our investment.

Within the U.S., no uniform policy for coverage and reimbursement exists across all payors.

Coverage and reimbursement can differ significantly from payor to payor and be subject to change at any time.

Third-party payors are increasingly seeking to control drug costs by examining the cost effectiveness of products and services in addition to their safety and efficacy;

managing drug utilization and challenging the price of drugs.

To obtain or maintain coverage and reimbursement for our products, we may need to conduct expensive pharmacoeconomic studies to demonstrate the medical necessity and cost-effectiveness of our product.

These studies will be in addition to the studies required to obtain regulatory approvals.

Third-party payors may limit coverage of product by, for example, only covering specific products on an approved list, or formulary, which might not include all of the FDA approved products for a particular indication.

Some third-party payors may manage utilization of a particular product by requiring pre-approval (known as “prior authorization”) for coverage of particular prescriptions (to allow the payor to assess medical necessity) or otherwise restricting coverage of a product even if used consistent with its approved indication.

Our Branded and Generic products with other generic competition may be subject to increasing price erosion.

We are required to offer discounted pricing to government health benefit programs, government purchasers and certain private purchasers in order to be eligible for coverage under government health care programs.

Price concessions may need to be offered to private third party payors to obtain favorable coverage or to purchasers to achieve sales.

We are subject to federal, state, and local laws and regulations, and complying with these may cause us to incur significant additional costs.

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Noncompliance with applicable legal and regulatory requirements can have a broad range of consequences, including warning letters, fines, seizure of products, product recalls, total or partial suspension of production and distribution, refusal to approve NDAs or other applications or revocation of approvals previously granted, withdrawal of product from marketing, injunctions, withdrawal of licenses or registrations necessary to conduct business, disqualification from supply contracts with the government, civil penalties, debarment, and criminal prosecution.

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

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

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

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

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

Although we have internal compliance programs in place that we believe are adequate, the FDA may conclude that these programs do not meet regulatory standards.

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

government has enacted the Federal Drug Supply Chain Security Act (“DSCSA”) that requires development of an electronic pedigree to track and trace each prescription drug at the salable unit level through the distribution system, which will be effective incrementally over a 10-year period.

government has enacted the DSCSA that requires development of an electronic pedigree to track and trace each prescription drug at the salable unit level through the distribution system, which will be effective incrementally over a 10-year period.

All prescription pharmaceutical products distributed in the U.S.

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ANI started manufacturing serialization-compliant products in November 2018.

The DSCSA establishes national traceability standards requiring drugs to be labeled and tracked at the bottle level, preempts state drug pedigree requirements, and requires all supply-chain stakeholders to participate in an electronic, interoperable prescription drug traceability system by November 2023.

In August 2023, however, the FDA established a one-year stabilization period to allow trading partners to implement, troubleshoot and mature their electronic interoperable systems.

The FDA expects trading partners to use this stabilization period, which expired on November 27, 2024, to build and validate interoperable systems and processes, manage products and data, and ensure continuity of the supply chain and product availability to patients.

The Company continues to provide serialized commercial products as required to comply with the DSCSA.

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Our research, product development, and manufacturing activities involve the controlled use of hazardous materials, and we may incur significant costs in complying with numerous laws and regulations.

We are subject to laws and regulations enforced by the FDA, the DEA, and other regulatory statutes including the Occupational Safety and Health Act (“OSHA”), the Environmental Protection Act, the Toxic Substances Control Act, the Resource Conservation and Recovery Act, and other current and potential federal, state, local, and foreign laws and regulations governing the use, manufacture, storage, handling, and disposal of our products, materials used to develop and manufacture such products, and resulting waste products.

We are subject to laws and regulations enforced by the FDA, the DEA, and other regulatory statutes including the Occupational Safety and Health Act, the Environmental Protection Act, the Toxic Substances Control Act, the Resource Conservation and Recovery Act, and other current and potential federal, state, local, and foreign laws and regulations governing the use, manufacture, storage, handling, and disposal of our products, materials used to develop and manufacture such products, and resulting waste products.

We cannot completely eliminate the risk of contamination or injury, by accident or as the result of intentional acts, from these materials.

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Such foreign regulation may be equally or more demanding than corresponding U.S.

Our operations in an international market subject us to additional regulatory oversight both in the international market and in the U.S., as well as, social, and political uncertainties, which could cause a material adverse effect on our business, financial position, and operating results.

Our operations in international markets subject us to additional regulatory oversight both in the international market and in the U.S., as well as, social, and political uncertainties, which could cause a material adverse effect on our business, financial position, and operating results.

We are subject to certain risks associated with having assets and operations located in foreign jurisdictions.

Our operations in foreign jurisdictions may be adversely affected by general economic conditions and economic and fiscal policy, including changes in exchange rates and controls, interest rates and taxation policies, and increased government regulation, which could have a material adverse effect on our business, financial position, and operating results.

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Additionally, involvement in a war or other military action or international acts of terrorism may cause significant disruption to commerce throughout the world.

To the extent that such disruptions result in (i) delays or cancellations of customer orders, (ii) a general decrease in consumer spending on healthcare technology, (iii) our inability to effectively market and distribute our products internationally (iv) our inability to timely engage with and collect payment from our customers or (v) our inability to access capital markets, our business and results of operations could be materially and adversely affected.

For example, in response to the continued conflict between Russia and Ukraine, the United States has imposed and may further impose, and other countries may additionally impose, broad sanctions or other restrictive actions against governmental and other entities in Russia.

For example, in response to the continued conflict between Russia and Ukraine, the U.S.

has imposed and may further impose, and other countries may additionally impose, broad sanctions or other restrictive actions against governmental and other entities in Russia.

Additionally, further escalation of geopolitical tensions, such as the conflict in the middle east and the surrounding areas, and conflicts related to the attacks on cargo ships in the Red Sea, could have a broader impact that extends into other markets where we do business.

We are unable to predict whether acts of international terrorism or the involvement in a war or other military actions by the United States and/or the countries in which we sell or distribute our products will result in any long-term commercial disruptions or if such involvement or responses will have any long-term material adverse effect on our business, results of operations, or financial condition.

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

In recent years, there have been numerous initiatives on the federal and state levels for comprehensive reforms affecting the payment for, the availability of, and reimbursement for healthcare services in the U.S.

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

At the federal level, the American Rescue Plan Act eliminated the cap on Medicaid Drug Rebate Program rebates beginning January 1, 2024.

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

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

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

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

Passage of the Inflation Reduction Act (“IRA”) has brought sweeping change to Medicare coverage of and reimbursement for prescription drugs.

Most notably, CMS is able to directly negotiate the reimbursement for certain prescription drugs reimbursed under Medicare Part D or B to be effective for the 2026 plan year.

If a manufacturer’s drug is selected for negotiation, the manufacturer must negotiate a Maximum Fair Price with CMS or be liable for an excise tax of 65% to 95% of Medicare utilization based on the prior year.

While no ANI drugs have currently been selected for negotiation, ANI continues to evaluate the implications of direct negotiation on its products in the future and potential repercussions of competitive products being selected for direct negotiation.

In addition, as previously noted, there are numerous legal challenges to the direct negotiation provisions of the IRA.

If any of those challenges are successful, this could change the current competitive landscape for manufacturers generally and may change the dynamics of the Medicare Part D marketplace potentially resulting in increased premiums, fewer Part D plans and sponsors and increased pressure on manufacturers to offer formulary placement rebates and additional price concessions.

In addition, under the IRA the Part D benefit design with be altered and the coverage gap discount program replaced by a new manufacturer discount program pursuant to which manufacturers will provide a 10 percent discount off the negotiated price for applicable drugs (branded drugs and biologics manufactured by companies that have Part D discount agreements) after the deductible is satisfied through the catastrophic phase of the benefit.

In the catastrophic phase, manufacturers will provide a 20 percent discount off negotiated price.

Any pharmaceutical product marketed under an NDA, regardless of whether the product is marketed as a “generic,” is subject to the manufacturer discount requirement.

This could increase discounts due on Medicare Part D utilization of our drug products.

Lastly, the IRA imposed additional rebates on manufacturers including ANI to the extent certain drug pricing metrics are rising faster than inflation.

These new inflation rebates are similar to those imposed on manufacturers under Medicaid and could result in additional rebates due from us on Medicare utilization of our products.

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

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

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We are unable to predict whether acts of international terrorism or the involvement in a war or other military actions by the U.S.

and/or the countries in which we sell or distribute our products will result in any long-term commercial disruptions or if such involvement or responses will have any long-term material adverse effect on our business, results of operations, or financial condition.

healthcare reform initiatives may materially and adversely affect our business and operating results.

In the U.S., there have been numerous initiatives on the federal and state levels for comprehensive reforms affecting the payment for, the availability of, and reimbursement for healthcare services in the U.S.

generally and prescription drug coverage, reimbursement and pricing specifically.

For example, in 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, collectively, ACA, was enacted and includes measures that have significantly changed the way healthcare is financed by both governmental and private insurers.

Those reform efforts are likely to continue and may increase the difficulty and cost for us to commercialize our products successfully.

In the U.S., in recent years, the pharmaceutical industry has been a particular focus of healthcare reform efforts and has been significantly affected by major legislative, administrative and executive initiatives.

For example, the Inflation Reduction Act (IRA) of 2022 included a number of changes intended to address rising prescription drug prices in Medicare Parts B and D.

These changes included caps on Medicare Part D out-of-pocket costs, Medicare Part B and Part D drug price inflation rebates, a new Medicare Part D manufacturer discount drug program (replacing the previous coverage gap discount program) and a drug price negotiation program for certain high-spend Medicare Part B and D drugs.

The IRA has had and will likely continue to have a significant impact on the pharmaceutical industry.

Beyond the IRA, changes to Medicaid effective in 2024 eliminated the Medicaid rebate cap, and changes to certain Medicare price reporting requirements for drugs beginning in 2026 will likely increase the administrative and compliance burden for manufacturers.

More recently, President Trump issued an executive order in April 2025 with multiple directives aimed at lowering drug prices, including refining the Medicare drug price negotiation program established by the IRA;

accelerating competition for high-cost prescription drugs by accelerating approval of generics and biosimilars and facilitating the process for re-classifying prescription drugs as over-the-counter drugs;

and increasing drug importation.

In May 2025, President Trump issued another executive order that directed government agencies and officials to identify most-favored nation pricing targets for prescription drugs (and looked to pharmaceutical manufacturers to make significant progress towards delivering target prices to patients);

prevent foreign countries from disproportionately shifting the cost of global pharmaceutical research and development to the U.S.;

and facilitate direct-to-consumer purchasing programs for pharmaceutical manufacturers to sell their products to patients at the most-favored-nation price.

In the wake of the executive orders and related executive initiatives, a number of pharmaceutical manufacturers have announced direct-to-consumer offerings with discounted prices and/or reached agreement with the federal government regarding pricing for drugs, including prices for Medicaid drugs and newly launched products.

A website sponsored by the federal government offering pharmaceutical direct-to-consumer channels has also been launched.

Federal agencies are developing new drug pricing pilot programs, such as the GENEROUS model, which would authorize the federal government to negotiate Medicaid supplemental rebates with participating manufacturers on behalf of state Medicaid programs, in exchange for standardized coverage criteria for participating manufacturer drugs, and the proposed Medicare Part B and Part D pilot models that, if finalized as proposed, would replace existing inflation-based Medicare rebates with rebates determined on the basis of international prices, for drugs and patients subject to the model.

Many of these reform initiatives would require additional legal and/or administrative action to implement and may be subject to legal challenge.

Other federal healthcare reform efforts or actions may affect access to healthcare coverage or the funding of health care benefits, although the full impact of such efforts or actions cannot be predicted.

At the state level, individual states are increasingly implementing initiatives designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and measures to encourage importation from other countries and bulk purchasing.

For example, certain states have formed Prescription Drug Affordability Boards that assert the authority to set reimbursement rates and/or drug pricing in the state.

States are also increasingly expanding or changing Medicaid supplemental rebate programs to secure additional rebates from manufacturers in exchange for drug coverage and to limit coverage of certain drugs for certain Medicaid patients or to all Medicaid patients.

These activities and any additional flexibility afforded the states could negatively affect Medicaid coverage and reimbursement for our products.

In addition, health systems, hospitals and other healthcare organizations are increasingly using bidding procedures (directly or through group purchasing organizations) to determine what pharmaceutical products and which suppliers will be included in their prescription drug formularies or otherwise available.

These measures could reduce the ultimate demand for our products or put pressure on our product pricing.

Furthermore, other broader legislative changes have been adopted that could have an adverse effect upon, and could prevent, our products’ commercial success.

For example, the Budget Control Act of 2011, as amended, resulted in the imposition of reductions in Medicare (but not Medicaid) payments to providers in 2013 and remains in effect through 2032 unless additional Congressional action is taken.

Any significant spending reductions affecting Medicare, Medicaid or other publicly funded or subsidized health programs that may be implemented and/or any significant taxes or fees that may be imposed on us could have an adverse impact on our results of operations.

The nature and extent of future healthcare reforms cannot be predicted.

There is significant uncertainty regarding the nature or impact of any drug pricing or broader healthcare reform implemented at the federal or state level and the extent to which such action may be subject to litigation or other challenges.

Ongoing efforts to contain or reduce costs of healthcare and/or impose price controls may adversely affect the demand for our products and our ability to achieve or maintain profitability.

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

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We are subject to, or potentially subject to, income taxes as well as non-income based taxes in various U.S.

jurisdictions, Canada, India, the United Kingdom, Ireland, Portugal, and Germany.

jurisdictions, Canada, India, the UK, Ireland, Portugal, and Germany.

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

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Tax authorities in various jurisdictions may disagree with, and subsequently challenge, the amount of profits taxed in such jurisdictions;

such challenges may result in increased tax liability, including accrued interest and penalties, which would cause our tax expense to increase and which could have a material adverse effect on our business, financial position and results of operations and our ability to satisfy our debt obligations.

We are subject to certain risks associated with having assets and operations located in foreign jurisdictions.

Our international operations may be adversely affected by general economic conditions and economic and fiscal policy, including changes in exchange rates and controls, interest rates and taxation policies, and increased government regulation, which could have a material adverse effect on our business, financial position, and operating results.

Additionally, involvement in a war or other military action or international acts of terrorism may cause significant disruption to commerce throughout the world.

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

such challenges may result in increased tax liability, including accrued interest and penalties, which would cause our tax expense to increase and which could have a material adverse effect on our business, financial position and operating results and our ability to satisfy our debt obligations.

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

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

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

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We are also subject to tax regulations in certain foreign locations.

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

Significant political, trade, regulatory developments, and other circumstances beyond our control, could have a material adverse effect on our financial condition or results of operations.

Significant political, trade, or regulatory developments in the jurisdictions in which we sell our products are difficult to predict and may create periods of volatility in such markets which may have a material adverse effect on us.

Recent changes in U.S.

federal policy that affect the geopolitical landscape could give rise to circumstances outside our control that could have negative impacts on our business operations.

For example, the current presidential administration has commenced activities to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements and treaties with foreign countries, and the administration has imposed or threatened tariffs on U.S.

trading partners.

Related to these actions, certain foreign governments, including China, have instituted or threatened to impose retaliatory reciprocal tariffs on certain U.S.

On February 20, 2026, the U.S.

Supreme Court ruled that certain tariffs announced throughout 2025, including those on global imports from China, Canada and Mexico, were impermissible.

This decision creates uncertainty about the immediate path forward for many supply chains, including that the process and likelihood for obtaining potential tariff refunds remains unclear.

Further, not all tariffs announced throughout 2025 will be impacted by this U.S.

Supreme Court decision and new tariffs have, and may continue to be, implemented through other legal authorities.

Historically, tariffs have led to increased trade and political tensions, between not only the U.S.

and China, but also between the U.S.

and other countries in the international community.

It remains unclear what the current administration or foreign governments will or will not do with respect to tariffs or other international trade agreements and policies.

A trade war or other governmental action related to tariffs or international trade agreements or policies has the potential to disrupt our research activities, affect our suppliers, increase the cost of materials purchased to manufacture our products, impact our ability to sell our products outside the U.S.

or to sell our products outside the U.S.

at competitive prices and/or to affect the U.S.

or global economy or certain sectors thereof and, thus, could adversely impact our business.

Currently, we import a portion of our APIs, raw materials and excipients from countries outside of the U.S., including China and India.

These tariffs or any new or additional tariffs on goods imported to the U.S.

from China, India, or other countries, could increase the cost of some of our products and reduce our margins.

Similarly, retaliation tariffs on U.S.

products imported into the EU or other non-U.S.

markets, could increase the cost of some of our products and reduce our margins.

Political tensions and general uncertainty as a result of shifting trade policies could reduce trade volume, investment, technological exchange, and other economic activities between major international economies, resulting in a material adverse effect on global economic conditions and the stability of global financial markets.

Any changes in political, trade, regulatory, and economic conditions, including, but not limited to, U.S.

and China and India trade policies, could have a material adverse effect on our financial condition or results of operations.

Failure to comply with applicable transfer pricing and similar regulations could have a material adverse effect on our financial position and operating results.

We are subject to complex transfer pricing and other tax regulations in the United States and other foreign locations designed to ensure that appropriate levels of income are reported as earned and are taxed in the appropriate taxing jurisdictions.

We are subject to complex transfer pricing and other tax regulations in the U.S.

and other foreign locations designed to ensure that appropriate levels of income are reported as earned and are taxed in the appropriate taxing jurisdictions.

Although we believe that we are in substantial compliance with all applicable regulations and restrictions, we are subject to the risk that governmental authorities could audit our transfer pricing and related practices and assert that additional taxes are owed.

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Changes in judgments and estimates may result in the recognition of an impairment loss, which could have a material negative impact on our business, financial position, and operating results.

While our testing in fiscal 2024 did not result in an impairment charge related to goodwill, there can be no assurances that our goodwill will not be impaired in the future.

While our testing in fiscal 2025 did not result in an impairment charge related to goodwill, we cannot be certain that our goodwill will not be impaired in the future.

Our material definite-lived intangible assets consist of ANDAs for previously marketed generic products, NDAs and product rights for our branded products, product rights related to certain generic products, and a non-compete agreement.

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An impairment charge could have a material negative impact on our business, financial position, and operating results.

We recorded impairment losses of $7.6 million in the year ended December 31, 2024 .

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We recorded impairment losses of $0.8 million, $7.6 million, and zero in the years ended December 31, 2025, 2024, and 2023, respectively.

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

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As a public company, we are required to comply with significant legal, accounting, and other requirements, and as a result, we incur significant regulatory compliance-related expenses.

The Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act as well as rules implemented by the SEC and The Nasdaq Stock Market, impose various requirements on public companies, including those related to corporate governance practices.

The Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act as well as rules implemented by the SEC and The Nasdaq Stock Market, impose various requirements on public companies, including those related to corporate governance practices.

Our management and other personnel devote a substantial amount of time to these requirements.

Some members of management do not have significant experience in addressing these requirements.

Moreover, these rules and regulations have increased our legal and financial compliance costs relative to those of previous years and make some activities more time consuming and costly.

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In particular, we must perform system and process evaluation and testing of our internal controls over financial reporting to allow management to report on the effectiveness of our internal controls over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act.

The Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) provides a framework for companies to assess and improve their internal control systems.

The Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) provides a framework for companies to use in assessing their internal control systems.

Our compliance with these requirements has required that we incur substantial accounting and related expenses and expend significant management efforts.

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

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

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

We, like other generic drug manufacturers, have agreements with customers allowing chargebacks, product returns, administrative fees, and other rebates.

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Although we establish reserves based on prior experience and our best estimates of the impact that these policies may have in subsequent periods, we cannot ensure that our reserves are adequate or that actual product returns, allowances, and chargebacks will not exceed our estimates.

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Risks Related to our Debt

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As of December 31, 2025 , we had approximately $629.1 million of indebtedness and other liabilities on a consolidated basis.

Subject to the limitations in the New Credit Agreement, we may also incur additional debt to meet future financing needs.

Subject to the limitations in the 2024 Credit Agreement, we may also incur additional debt to meet future financing needs.

Our level of indebtedness could have negative consequences for our security holders and our business, results of operation and financial condition by, among other things:

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• limiting our flexibility to plan for, or react to, changes in our business;

• diluting the interests of our existing stockholders as a result of issuing shares of our common stock upon conversion of our 2.25% Convertible Senior Notes due 2029 (“Senior Notes”);

• diluting the interests of our existing stockholders as a result of issuing shares of our common stock upon conversion of the Notes;

• placing us at a competitive disadvantage with competitors that are less leveraged than us or have better access to capital;

• making it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations under any of our debt instruments, including restrictive covenants, could result in an event of default under the New Credit Agreement, the indenture governing our Senior Notes and the agreements governing our other indebtedness.

In connection with the completion of the Merger, we entered into the New Credit Agreement consisting of a $325.0 million term loan and a $75.0 million revolving credit facility.

The New Credit Agreement, which is secured by all our assets and the assets of our subsidiaries, was used to finance the cash consideration of the Merger.

In addition, in August 2024 the Company completed an offering of $316.25 million aggregate principal amount of Senior Notes at an interest 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.

In order to service the indebtedness we have incurred, and may in the future incur, under the New Credit Agreement, as well as the Senior Notes, we will require a significant amount of cash.

• making it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations under any of our debt instruments, including restrictive covenants, could result in an event of default under the 2024 Credit Agreement, the indenture governing our Notes and the agreements governing our other indebtedness.

In connection with the completion of the Merger, we entered into the 2024 Credit Agreement consisting of a $325.0 million term loan and a $75.0 million revolving credit facility.

The 2024 Credit Agreement, which is secured by all our assets and the assets of our subsidiaries, was used to finance the cash consideration of the Merger.

In addition, in August 2024 the Company completed an offering of $316.25 million aggregate principal amount of the Notes at an interest 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.

In order to service the indebtedness we have incurred, and may in the future incur, under the 2024 Credit Agreement, as well as the Notes, we will require a significant amount of cash.

Our ability to make scheduled payments of principal and interest depends on our future performance, which is subject to economic, financial, competitive, and other factors beyond our control.

Our business may not continue to generate cash flow from operations in the future, and we may otherwise be unable to maintain cash reserves sufficient to service our indebtedness, including the Senior Notes and indebtedness incurred under the New Credit Agreement, and our cash needs may increase in the future.

Our business may not continue to generate cash flow from operations in the future, and we may otherwise be unable to maintain cash reserves sufficient to service our indebtedness, including the Notes and indebtedness incurred under the 2024 Credit Agreement, and our cash needs may increase in the future.

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

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Our indebtedness could have significant negative consequences for our stockholders and our business and any event of default or inability to otherwise satisfy our obligations could have a material adverse effect on our future operating results and financial condition.

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

The New Credit Agreement contains customary covenants that require maintenance of a leverage ratio at or below specified thresholds and restricts our ability to make certain distributions with respect to our capital stock, prepay other debt, make certain investments, encumber our assets, incur additional indebtedness, make capital expenditures, engage in certain business combinations, transfer, lease or dispose of our assets, alter the character of our business in any material respect or undertake various other corporate activities.

Our 2024 Credit Agreement contains restrictive and financial covenants and if we are not in compliance with these covenants, our outstanding indebtedness under this facility could be accelerated and the lenders could terminate their commitments under the facility.

The 2024 Credit Agreement contains customary covenants that require maintenance of a leverage ratio at or below specified thresholds and restricts our ability to make certain distributions with respect to our capital stock, prepay other debt, make certain investments, encumber our assets, incur additional indebtedness, make capital expenditures, engage in certain business combinations, transfer, lease or dispose of our assets, alter the character of our business in any material respect or undertake various other corporate activities.

Therefore, as a practical matter, these covenants, and any other additional restrictive covenants that may be included in the terms of any future indebtedness, restrict our ability to engage in or benefit from such activities.

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

In addition, we pledged our assets in order to secure our repayment obligations under the 2024 Credit Agreement.

This pledge may reduce our operating flexibility because it restricts our ability to dispose of our assets or engage in other transactions that may be beneficial to us.

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

If we are unable to comply with the covenants in the 2024 Credit Agreement or any future indebtedness, we will be in default, which could result in the acceleration of our outstanding indebtedness and termination of funding commitments by the lenders.

If such an acceleration occurs, we may not be able to repay our debt and we may not be able to borrow sufficient additional funds to refinance our debt, which would have a material adverse effect on our business, financial position, and operating results.

Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase and our net income and cash flows to correspondingly decrease.

Borrowings under our New Credit Agreement are at variable rates of interest and expose us to interest rate risk.

Borrowings under our 2024 Credit Agreement are at variable rates of interest and expose us to interest rate risk.

If interest rates were to increase, our debt service obligations on the variable rate indebtedness referred to above would increase even if the principal amount borrowed remained the same, and our net income and cash flows will correspondingly decrease.

Our New Credit Agreement references the Secured Overnight Financing Rate (“SOFR”) as the primary benchmark rate for our variable rate indebtedness.

Our 2024 Credit Agreement references the Secured Overnight Financing Rate (“SOFR”) as the primary benchmark rate for our variable rate indebtedness.

We are also currently party to, and in the future, we may enter into additional, interest rate swaps that involve the exchange of floating for fixed rate interest payments, in order to reduce interest rate volatility.

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As a result, the amount of interest we may pay on our variable rate indebtedness is difficult to predict.

Shares of our common stock issuable upon conversion of the Senior Notes may dilute the ownership interest of our common stockholders or may adversely affect the market price of our common stock.

The conversion of the Senior Notes may dilute the ownership interests of our stockholders.

Upon conversion of the Senior Notes, we will generally have the right to elect to settle our conversion obligation in excess of the principal amount of any converted Senior Notes by paying or delivering, as applicable, cash, shares of our common stock, or a combination of cash and shares of our common stock.

If we elect to settle our conversion obligation in excess of the principal amount of any converted Senior Notes in shares of our common stock or a combination of cash and shares of our common stock, any sales in the public market of shares of our common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock.

Also, the existence of the Senior Notes may encourage short-selling by market participants because the conversion of the Senior Notes could be used to satisfy short positions, or anticipated conversion of the Senior Notes into, in part, shares of common stock could depress the price of our common stock.

We may be unable to raise the funds necessary to repurchase the Senior Notes for cash following a fundamental change or to pay the cash amounts due upon maturity or conversion of the Senior Notes, and our other indebtedness limits our ability to repurchase the Senior Notes or to pay the cash amounts due upon their maturity or conversion.

Holders of the Senior Notes may, subject to limited exceptions, require us to repurchase their Senior Notes following a fundamental change at a cash repurchase price generally equal to the principal amount of the Senior Notes to be repurchased, plus accrued and unpaid interest, if any.

Upon maturity of the Senior Notes, we must pay their principal amount and accrued and unpaid interest in cash, unless they have been previously repurchased, redeemed or converted.

In addition, all conversions of Senior Notes will be settled partially or entirely in cash.

We may not have enough available cash or be able to obtain financing at the time we are required to repurchase the Senior Notes or pay the cash amounts due upon their maturity or conversion.

In addition, applicable law, regulatory authorities and the agreements governing our other indebtedness may restrict our ability to repurchase the Senior Notes or to pay the cash amounts due upon their maturity or conversion.

The New Credit Agreement contains restrictive covenants that limit our ability to repay other indebtedness.

Our failure to repurchase Senior Notes or to pay the cash amounts due upon their maturity or conversion when required will constitute a default under the indenture governing the Senior Notes.

Shares of our common stock issuable upon conversion of the Notes may dilute the ownership interest of our common stockholders or may adversely affect the market price of our common stock.

The conversion of the Notes may dilute the ownership interests of our stockholders.

Upon conversion of the Notes, we will generally have the right to elect to settle our conversion obligation in excess of the principal amount of any converted Notes by paying or delivering, as applicable, cash, shares of our common stock, or a combination of cash and shares of our common stock.

If we elect to settle our conversion obligation in excess of the principal amount of any converted Notes in shares of our common stock or a combination of cash and shares of our common stock, any sales in the public market of shares of our common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock.

Also, the existence of the Notes may encourage short-selling by market participants because the conversion of the Notes could be used to satisfy short positions, or anticipated conversion of the Notes into, in part, shares of common stock could depress the price of our common stock.

We may be unable to raise the funds necessary to repurchase the Notes for cash following a fundamental change or to pay the cash amounts due upon maturity or conversion of the Notes, and our other indebtedness limits our ability to repurchase the Notes or to pay the cash amounts due upon their maturity or conversion.

Holders of the Notes may, subject to limited exceptions, require us to repurchase their Notes upon the occurrence of a fundamental change (as defined in the indenture governing the Notes) at a cash repurchase price generally equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any.

Upon maturity of the Notes, we must pay the outstanding principal amount and accrued and unpaid interest in cash, unless they have been previously repurchased, redeemed or converted.

In addition, all conversions of Notes will be settled partially or entirely in cash.

We may not have enough available cash or be able to obtain financing at the time we are required to repurchase the Notes or pay the cash amounts due upon their maturity or conversion.

In addition, applicable law, regulatory authorities and the agreements governing our other indebtedness may restrict our ability to repurchase the Notes or to pay the cash amounts due upon their maturity or conversion.

The 2024 Credit Agreement contains restrictive covenants that limit our ability to repay other indebtedness.

Our failure to repurchase Notes or to pay the cash amounts due upon their maturity or conversion when required will constitute a default under the indenture governing the Notes.

A default under the indenture or the fundamental change itself could also lead to a default under agreements governing our other indebtedness, which may result in that other indebtedness becoming immediately payable in full.

We may not have sufficient funds to satisfy all amounts due under the other indebtedness and the Senior Notes.

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Provisions in the indenture governing the Senior Notes could delay or prevent an otherwise beneficial takeover of us.

Certain provisions in the Senior Notes and the indenture governing the Senior Notes could make a third-party attempt to acquire us more difficult or expensive.

For example, if a takeover constitutes a fundamental change, then, subject to limited exceptions, holders of the Senior Notes will have the right to require us to repurchase their Senior Notes for cash.

We may not have sufficient funds to satisfy all amounts due under the other indebtedness and the Notes.

Provisions in the indenture governing the Notes could delay or prevent an otherwise beneficial takeover of us.

Certain provisions in the Notes and the indenture governing the Notes could make a third-party attempt to acquire us more difficult or expensive.

For example, if a takeover constitutes a fundamental change, then, subject to limited exceptions, holders of the Notes will have the right to require us to repurchase their Notes for cash.

In addition, if a takeover constitutes a make-whole fundamental change, then we may be required to temporarily increase the conversion rate.

In either case, and in other cases, our obligations under the Senior Notes and the indenture governing the Senior Notes could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management, including in a transaction that holders of the Senior Notes or holders of our common stock may view as favorable.

The conversion of the Senior Notes could impair our financial position and liquidity.

Because we must settle at least a portion of our conversion obligation in cash, the conversion of the Senior Notes could materially and adversely affect our financial position and liquidity.

Before June 1, 2029, holders of the Senior Notes will have the right to convert their Senior Notes only upon the occurrence of certain events.

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

However, many of the conditions that permit the conversion of Senior Notes before June 1, 2029 are beyond our control.

In either case, and in other cases, our obligations under the Notes and the indenture governing the Notes could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management, including in a transaction that holders of the Notes or holders of our common stock may view as favorable.

The conversion of the Notes could impair our financial position and liquidity.

Because we must settle at least a portion of our conversion obligation with respect to the Notes in cash, the conversion of the Notes could materially and adversely affect our financial position and liquidity.

Before June 1, 2029, holders of the Notes will have the right to convert their Notes only upon the occurrence of certain events.

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

However, many of the conditions that permit the conversion of Notes before June 1, 2029 are beyond our control.

We could be required to expend a significant amount of cash to settle conversions, which could significantly harm our financial position and liquidity.

The accounting method for the Senior Notes could adversely affect our reported financial condition and results.

In accordance with applicable accounting standards, the Senior Notes are reflected as a liability on our balance sheets, with the carrying amount equal to the principal amount of the Senior Notes, net of issuance costs.

The issuance costs are treated as a debt discount for accounting purposes, which will be amortized into interest expense over the term of the Senior Notes.

As a result of this amortization, the interest expense that we recognize for the Senior Notes for accounting purposes is greater than the cash interest payments we pay on the Senior Notes, which results in lower reported income.

In addition, the shares underlying the Senior Notes are reflected in our diluted earnings per share using the “if converted” method.

Under that method, if the conversion value of the Senior Notes exceeds their principal amount for a reporting period, then we will calculate our diluted earnings per share assuming that all of the Senior Notes were converted at the beginning of the reporting period and that we issued shares of our common stock to settle the excess.

The after-tax interest expense associated with the Senior Notes will not be added back to the numerator of the diluted earnings per share calculation for these purposes.

However, if reflecting the Senior Notes in diluted earnings per share in this manner is anti-dilutive, or if the conversion value of the Senior Notes does not exceed their principal amount for a reporting period, then the shares underlying the Senior Notes will not be reflected in our diluted earnings per share.

The accounting method for the Notes could adversely affect our reported financial condition and results.

In accordance with applicable accounting standards, the Notes are reflected as a liability on our balance sheets, with the initial carrying amount equal to the principal amount of the Notes, net of issuance costs.

The issuance costs are treated as a debt discount for accounting purposes, which is being amortized into interest expense over the term of the Notes.

As a result of this amortization, the interest expense that we recognize for the Notes for accounting purposes is greater than the cash interest payments we pay on the Notes, which results in lower reported income.

In addition, the shares of common stock underlying the Notes are reflected in our diluted earnings per share using the “if converted” method.

Under that method, if the conversion value of the Notes exceeds their principal amount for a reporting period, then we will calculate our diluted earnings per share assuming that all of the Notes were converted at the beginning of the reporting period and that we issued shares of our common stock to settle the excess.

The after-tax interest expense associated with the Notes will not be added back to the numerator of the diluted earnings per share calculation for these purposes.

However, if reflecting the Notes in diluted earnings per share in this manner is anti-dilutive, or if the conversion value of the Notes does not exceed their principal amount for a reporting period, then the shares of common stock underlying the Notes will not be reflected in our diluted earnings per share.

The application of the if-converted method may reduce our reported diluted earnings per share, and accounting standards may change in the future in a manner that may adversely affect our diluted earnings per share.

Furthermore, if any of the conditions to the convertibility of the Senior Notes is satisfied, then we may be required under applicable accounting standards to reclassify the liability carrying value of the Senior Notes as a current, rather than a long-term, liability.

This reclassification could be required even if no holders of our Senior Notes convert their Senior Notes and could materially reduce our reported working capital.

The capped call transactions may affect the value of the Senior Notes and our common stock.

In connection with the pricing of the Senior Notes, we entered into privately negotiated capped call transactions with certain option counterparties.

The capped call transactions are expected generally to reduce the potential dilution to our common stock upon any conversion of the Senior Notes and/or offset any potential cash payments we are required to make in excess of the principal amount of converted Senior Notes, as the case may be, with such reduction and/or offset subject to a cap.

The option counterparties and/or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions prior to the maturity of the Senior Notes (and are likely to do so during any observation period related to a conversion of Senior Notes).

This activity could also cause or avoid an increase or a decrease in the market price of our common stock or the Senior Notes.

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Furthermore, if any of the conditions to the convertibility of the Notes is satisfied, then we may be required under applicable accounting standards to reclassify the liability carrying value of the Notes as a current, rather than a long-term, liability.

This reclassification could be required even if no holders of our Notes actually convert their Notes and could materially reduce our reported working capital.

The capped call transactions may affect the value of the Notes and our common stock.

In connection with the pricing of the Notes, we entered into privately negotiated capped call transactions with certain option counterparties.

The capped call transactions are expected generally to reduce the potential dilution to our common stock upon any conversion of the Notes and/or offset any potential cash payments we are required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap.

The option counterparties and/or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions prior to the maturity of the Notes (and are likely to do so during any observation period related to a conversion of Notes).

This activity could also cause or avoid an increase or a decrease in the market price of our common stock or the Notes.

We are subject to counterparty risk with respect to the capped call transactions, and the capped call may not operate as planned.

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Our exposure to the credit risk of the option counterparties is not secured by any collateral.

Global economic conditions have from time to time resulted in the actual or perceived failure or financial difficulties of many financial institutions, including the bankruptcy filing by Lehman Brothers Holdings Inc.

and its various affiliates.

Global economic conditions have from time to time resulted in the actual or perceived failure or financial difficulties of many financial institutions, including the closures of Silicon Valley Bank and Signature Bank in March 2023, and First Republic Bank in May 2023.

If an option counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under our transactions with that option counterparty.

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Risks Related to Our Common Stock

Our principal stockholders, directors, and executive officers own a significant percentage of our stock and will be able to exercise meaningful influence over our business.

Our current principal stockholders, directors, and executive officers beneficially own approximate ly 10% of our outstanding capital stock entitled to vote as of December 31, 2024.

As a result, these stockholders, if acting to gether, would be able to influence or control matters requiring approval by our stockholders, including the election of directors and the approval of mergers, acquisitions, or other extraordinary transactions.

They may also have interests that differ from stockholders generally and may vote in a way with which other stockholders disagree and which may be adverse to their interests.

This concentration of ownership may have the effect of delaying, preventing, or deterring a change of control of ANI, could deprive stockholders of an opportunity to receive a premium for their common stock as part of a sale of ANI, and might ultimately affect the market price of our common stock.

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

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These restrictive covenants may include limitations on additional borrowing and specific restrictions on the use of our assets, as well as prohibitions on our ability to create liens, pay dividends, redeem our stock, or make investments.

We can offer no assurance that any equity or debt financing transaction will be available on terms acceptable to us, or at all.

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We cannot be certain that any equity or debt financing transaction will be available on terms acceptable to us, or at all.

Provisions in our charter documents and Delaware law could discourage or prevent a takeover, even if such a transaction would be beneficial to our stockholders.

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

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S.

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S.

GAAP”) requires us to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the period.

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

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Our success is largely dependent upon certain key employees, including members of our senior management team, the loss of whom could adversely affect our operations.

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

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

Our success is dependent upon the efforts of certain key employees, including members of our senior management team.

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

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

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

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

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

The market price of our common stock has been volatile, and an investment in our common stock could decline in value.

The market price of our common stock has increased and decreased significantly and is likely to continue to fluctuate in the future.

From time to time, the securities of small capitalization pharmaceutical companies, including ANI, experience significant market price fluctuations, often unrelated to these companies’ operating performance.

In particular, the market price of our common stock may fluctuate significantly due to a variety of factors, including, but not limited to, regulatory or legal developments with respect to our industry, variations in our financial results or those of companies that are perceived to be similar to us, and rumors or new announcements by third parties, many of which are beyond our control and that may not be related to our operating performance.

The stock market in general and the market for biotechnology companies in particular have experienced extreme price and volume volatility that has often been unrelated to the operating performance of particular companies.

The market price of our common stock may fluctuate significantly due to a variety of factors, including, but not limited to, regulatory or legal developments with respect to our industry, variations in our financial results or those of companies that are perceived to be similar to us, and rumors or new announcements by third parties, many of which are beyond our control and that may not be related to our operating performance.

In addition, the occurrence of any of the risks described in this report or in subsequent reports we file with the SEC could have a material adverse impact on the market price of our common stock.

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Securities litigation, whether with or without merit, could result in substantial costs and divert management’s attention and resources, which could harm our business, financial position, and operating results, as well as the market price of our common stock.

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

What changed 10-K

Item 1A. Risk Factors