What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-27 compared with 2025-02-28 · 668 added, 701 removed, 1320 unchanged (51% of the section changed)

26 unchanged sentences

The amount accrued for chargebacks as of December 31, 2025, is approximately $143 million.

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

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

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

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

4 unchanged sentences

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

Acquisition of Alimera – Valuation of Intangible Assets

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

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

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

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

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

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

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

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

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

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

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

/s/ EisnerAmper LLP

1 unchanged sentence

EISNERAMPER LLP

West Palm Beach, Florida

Iselin, New Jersey

February 27, 2026

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

5 unchanged sentences

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in the Internal Control - Integrated Framework ( 2013 ) issued by COSO.

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

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

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

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

15 unchanged sentences

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

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

2 unchanged sentences

EISNERAMPER LLP

West Palm Beach, Florida

Iselin, New Jersey

February 27, 2026

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ANI PHARMACEUTICALS, INC.

9 unchanged sentences

Inventories 143,067 136,782

Assets held for sale — 8,020

Prepaid income taxes 11,027 772

Prepaid expenses and other current assets 23,189 17,975

16 unchanged sentences

Income taxes payable 1,291 5,622

Income taxes payable - foreign 948 1,899

Returned goods reserve 49,504 39,274

12 unchanged sentences

Convertible Preferred Stock, Series A, $ 0.0001 par value, 1,666,667 shares authorized;

25,000 shares issued and outstanding at December 31, 2024 and 2023

24,850 24,850

0 shares issued and outstanding at December 31, 2025 and 25,000 shares issued and outstanding at December 31, 2024

Stockholders’ Equity

1 unchanged sentence

23,112,577 shares issued and 22,491,281 outstanding at December 31, 2025;

20,730,896 shares issued and 20,466,953 shares outstanding at December 31, 2023

$ 0.0001 par value, 33,333,334 shares authorized 21,537,707 shares issued and 21,108,152 shares outstanding at December 31, 2024

Class C Special Stock, $ 0.0001 par value, 781,281 shares authorized;

10 unchanged sentences

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

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ANI PHARMACEUTICALS, INC.

11 unchanged sentences

Contingent consideration fair value adjustment ( 31,012 ) ( 619 ) 1,426

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

Loss (gain) on disposal of assets 382 ( 5,347 ) —

Restructuring activities — — 1,132

1 unchanged sentence

Total Operating Expenses, net 772,273 613,792 439,845

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

Operating Income 111,093 584 46,971

Other Expense, net

1 unchanged sentence

Interest expense, net ( 20,060 ) ( 17,602 ) ( 26,940 )

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

Other income (expense), net 1,934 ( 4,033 ) ( 159 )

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

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

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

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

Income (Loss) Before Expense (Benefit) for Income Taxes 95,791 ( 22,212 ) 19,872

Income tax expense (benefit) 17,454 ( 3,690 ) 1,093

Net Income (Loss) $ 78,337 $ ( 18,522 ) $ 18,779

Dividends on Series A Convertible Preferred Stock ( 1,157 ) ( 1,625 ) ( 1,625 )

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

Basic and Diluted (Loss) Income Per Share:

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

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

Net Income (Loss) Available to Common Shareholders $ 77,180 $ ( 20,147 ) $ 17,154

Basic and Diluted Income (Loss) Per Share:

Basic Income (Loss) Per Share $ 3.50 $ ( 1.04 ) $ 0.86

Diluted Income (Loss) Per Share $ 3.32 $ ( 1.04 ) $ 0.85

Basic Weighted-Average Shares Outstanding 20,053 19,318 18,001

1 unchanged sentence

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

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ANI PHARMACEUTICALS, INC.

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2025 2024 2023

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

Other comprehensive (loss) income, net of tax:

Net Income (Loss) $ 78,337 $ ( 18,522 ) $ 18,779

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustment 116 ( 644 ) 44

(Loss) gain on interest rate swap ( 2,869 ) ( 3,355 ) 15,335

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

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

Loss on interest rate swap ( 4,427 ) ( 2,869 ) ( 3,355 )

Total other comprehensive loss, net of tax ( 4,311 ) ( 3,513 ) ( 3,311 )

Total comprehensive income (loss), net of tax $ 74,026 $ ( 22,035 ) $ 15,468

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

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ANI PHARMACEUTICALS, INC.

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

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

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

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

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

Balance, December 31, 2022 $ 24,850 25 $ 1 17,644 $ — $ 403,901 149 $ ( 5,094 ) $ 12,168 $ ( 97,286 ) $ 338,540

Stock-based Compensation Expense — — — — — 20,652 — — — — 20,652

Treasury Stock Purchases for Restricted Stock Vests — — — — — — 115 ( 4,987 ) — — ( 4,987 )

Issuance of Common Shares upon Stock Option and ESPP Exercise — — — 227 — 8,996 — — — — 8,996

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

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

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

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

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

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

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

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

Stock-based Compensation Expense — — — — — 37,929 — — — — 37,929

Conversion of Series A Convertible Preferred Stock ( 24,850 ) ( 25 ) 1 603 — 24,850 — — — — 1

Treasury Stock Purchases for Restricted Stock Vests — — — — — — 191 ( 12,209 ) — — ( 12,209 )

Mezzanine Equity

15 unchanged sentences

and Stockholders'

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

Issuance of Common Shares upon Stock Option and ESPP Exercise — — — 258 — 13,604 — — — — 13,604

Issuance of Restricted Stock Awards — — — 729 — — — — — — —

Issuance of Performance Stock Units — — — 80 — — — — — — —

Restricted Stock Awards Forfeitures — — — ( 95 ) — — — — — — —

Dividends on Series A Convertible Preferred Stock — — — — — — — — — ( 1,157 ) ( 1,157 )

Other comprehensive loss — — — — — — — — ( 4,311 ) — ( 4,311 )

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

Net Income — — — — — — — — — 78,337 78,337

Balance, December 31, 2025 $ — — $ 3 23,113 $ — $ 596,036 621 $ ( 33,249 ) $ 1,033 $ ( 23,099 ) $ 540,724

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

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ANI PHARMACEUTICALS, INC.

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Cash Flows From Operating Activities

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

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

Net income (loss) $ 78,337 $ ( 18,522 ) $ 18,779

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

Stock-based compensation 37,929 29,344 20,652

2 unchanged sentences

Unrealized gain on investment in equity securities ( 2,824 ) ( 6,307 ) —

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

Non-cash operating lease expense 1,759 1,526 1,269

1 unchanged sentence

Contingent consideration fair value adjustment ( 31,012 ) ( 619 ) 1,426

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

Loss (gain) on disposal of assets 382 ( 5,347 ) —

Loss on extinguishment of debt — 7,468 —

1 unchanged sentence

Asset impairment charges 767 7,600 —

Gain on sale of ANDAs — — ( 750 )

Changes in operating assets and liabilities, net of acquisitions:

8 unchanged sentences

Accrued expenses, accrued compensation, and other 2,226 8,384 12,271

Net Cash and Cash Equivalents Provided by (Used in) Operating Activities 64,017 118,959 ( 31,203 )

Net Cash and Cash Equivalents Provided by Operating Activities 185,225 64,017 118,959

Cash Flows From Investing Activities

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

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

Acquisition of product rights, intangible assets, and other related assets ( 20,486 ) ( 717 ) ( 9,643 )

Acquisition of property and equipment, net ( 13,835 ) ( 16,236 ) ( 8,868 )

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

Proceeds from the sale of building — 13,514 —

6 unchanged sentences

Payments on contingent consideration ( 26 ) ( 12,500 ) ( 12,500 )

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

Principal payments on borrowings ( 10,156 ) ( 3,531 ) ( 3,000 )

Debt issuance costs — ( 17,353 ) —

4 unchanged sentences

Treasury stock purchases for restricted stock vests ( 12,209 ) ( 10,959 ) ( 4,987 )

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

Net Cash and Cash Equivalents (Used in) Provided by Financing Activities ( 9,944 ) 264,945 67,439

Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash ( 233 ) ( 470 ) —

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Cash, cash equivalents and restricted cash, end of year $ 285,621 $ 144,894 $ 221,121

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Year Ended December 31,

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Cash paid for interest, net of amounts capitalized $ 26,929 $ 24,379 $ 31,431

Cash paid for income taxes $ 19,061 $ 1,228 $ 288

Cash paid for income taxes, net of refunds received $ 17,674 $ 19,061 $ 1,228

Right-of-use assets obtained in exchange for lease obligations $ 6,641 $ — $ 4,715

Supplemental non-cash investing and financing activities:

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

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

Purchase consideration for acquisition of Alimera $ — $ ( 8,322 ) $ —

Conversion of convertible preferred stock into common stock $ 24,850 $ — $ —

Property and equipment purchased and included in accounts payable $ 1,050 $ 529 $ 328

7 unchanged sentences

ANI Pharmaceuticals, Inc.

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

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

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

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

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

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

The Company's mission is “Serving Patients, Improving Lives” by developing, manufacturing, and commercializing therapeutics through its Rare Disease, Generics, and Brands businesses.

On September 16, 2024, the Company acquired Alimera Sciences, Inc.

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

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

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

The Company has ceased operations at the Oakville, Ontario, manufacturing facility as of March 31, 2023.

This action was part of ongoing initiatives to capture operational synergies following the acquisition of Novitium Pharma LLC (“Novitium”) in November 2021.

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

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

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

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

During March 2025, the U.S.

Food and Drug Administration (the “FDA”) approved an expanded label for ILUVIEN to include an indication for the treatment of chronic non-infectious uveitis affecting the posterior segment of the eye ("NIU-PS") in addition to the then-current indication of Diabetic Macular Edema ("DME").

The Company is currently marketing ILUVIEN for both indications in the U.S.

ILUVIEN was already approved for both DME and NIU-PS outside the U.S., including in seventeen European countries.

During the second quarter of 2025, the Company transitioned promotional efforts in the U.S.

from YUTIQ to ILUVIEN with its combined label of DME and NIU-PS.

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

The Company ceased operations at another manufacturing facility in Oakville, Ontario as of March 31, 2023.

The sale closed on March 28, 2024.

See Note 4 "Restructuring Canada Operations" in the notes to the consolidated financial statements for further information.

The Company held its 2025 Annual Meeting of Stockholders (the "2025 Annual Meeting") on May 22, 2025.

At the 2025 Annual Meeting, the stockholders of the Company approved an amendment to the Company's Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 33.3 million shares to 66.0 million shares.

Basis of Presentation

1 unchanged sentence

Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).

Certain prior year amounts, such as prepaid income taxes, income taxes payable, and income taxes payable-foreign, have been reclassified for consistency to conform with current year presentation in the consolidated balance sheets.

Such reclassifications had no effect on previously reported net income (loss), stockholders' equity, or cash flows.

Principles of Consolidation

2 unchanged sentences

All intercompany accounts and transactions are eliminated in consolidation.

Foreign Currency

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

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

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

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

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

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

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

ANI Pharmaceuticals, Inc.

2 unchanged sentences

For the years ended December 31, 2025, 2024, and 2023

Foreign Currency

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

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

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

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

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

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

The results of any non-U.S.

dollar transactions and balances are remeasured in U.S.

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

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

dollars was immaterial for the years ended December 31, 2024, 2023, and 2022.

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

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

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

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

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

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

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

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

Foreign currency transaction gains and losses include fluctuations related to long-term intercompany loans.

Translation gains and losses on intercompany balances of a long-term investment nature are included in foreign currency translation adjustments in accumulated other comprehensive income (loss).

Use of Estimates

13 unchanged sentences

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

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

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

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

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

The Company has completed the final fair value determination of the assets acquired and liabilities assumed from Alimera, within the measurement period, which did not exceed one year from the acquisition date.

Investment in Equity Securities

2 unchanged sentences

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

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

Restructuring Activities

20 unchanged sentences

Estimates for these elements of variable consideration require significant judgment.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

Revenue from Distribution Agreements

1 unchanged sentence

These products are sold under the ANI label.

The Company controls the products sold under these marketing and distribution agreements and therefore are the principal for sales under each of these marketing and distribution agreements.

The Company controls the products sold under these marketing and distribution agreements and therefore is the principal for sales under each of these marketing and distribution agreements.

As a result, revenue is recognized on a gross basis when control has passed to the customer and the performance obligation has been satisfied.

1 unchanged sentence

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

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

Contract Manufacturing Product Sales Revenue

17 unchanged sentences

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

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

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

Accounts Receivable

3 unchanged sentences

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

The allowance for credit losses was immaterial as of December 31, 2024 and 2023.

Inventories consist of raw materials, packaging materials, work-in-progress, and finished goods.

Inventories are stated at the lower of standard cost or net realizable value.

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

The allowance for credit losses was not material as of December 31, 2025 and 2024.

ANI Pharmaceuticals, Inc.

2 unchanged sentences

For the years ended December 31, 2025, 2024, and 2023

Inventories consist of raw materials, packaging materials, work-in-progress, and finished goods.

Inventories are stated at the lower of standard cost or net realizable value.

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

Property and Equipment

13 unchanged sentences

No impairment loss related to property and equipment was recognized during the years ended December 31, 2025, 2024, and 2023.

Assets Held-for-Sale

The Company classifies assets held-for-sale if all held-for-sale criteria is met pursuant to ASC 360-10, Property, Plant and Equipment .

Criteria include management commitment to sell the disposal group in its present condition and the sale being deemed probable of being completed within one year.

Assets classified as held-for-sale are not depreciated and are measured at the lower of their carrying amount or fair value less cost to sell.

The Company assesses the fair value of a disposal group, less any costs to sell, each reporting period it remains classified as held-for-sale and reports any subsequent changes as an adjustment to the carrying value of the disposal group, as long as the new carrying value does not exceed the initial carrying value of the disposal group.

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

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

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

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

4 unchanged sentences

As of December 31, 2025, the Company had finance leases that consist of leases for automobiles.

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

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

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

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

Intangible Assets

4 unchanged sentences

During the year ended December 31, 2025, $ 0.8 million of impairment charges were recognized on intangible assets.

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

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

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

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

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

3 unchanged sentences

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

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

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

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

At December 31, 2025, there was no IPR&D recorded on the balance sheet, and as such no impairment testing was performed, and no impairment charges were recognized on IPR&D.

During the year ended December 31, 2024, $ 4.0 million of impairment charges were recognized on IPR&D.

During the year ended December 31, 2023, no impairment charges were recognized on IPR&D.

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

10 unchanged sentences

No impairment loss related to goodwill was recognized in the years ended December 31, 2025, 2024, and 2023.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

Collaborative Arrangements

4 unchanged sentences

R&D expenses primarily consist of direct and allocated expenses incurred with the process of formulation, clinical research, and validation associated with new product development.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

Stock-Based Compensation

The Company issues stock options and restricted stock awards, which are awarded in exchange for employee and non-employee director services.

The Company issues stock options, restricted stock awards ("RSAs") and restricted stock units ("RSUs"), which are awarded in exchange for employee and non-employee director services.

From time to time, the Company may grant awards through an inducement grant outside of the incentive plan to induce prospective employees to accept employment with the Company.

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PSUs granted vest over a three-year performance period.

Currently, the PSU’s vesting is contingent upon the Company meeting certain total shareholder return (“TSR”) levels as compared to a select peer group over the over three years , and contingent upon the Company meeting certain adjusted non-GAAP year-on-year earnings before interest, income taxes, depreciation, and amortization (“EBITDA”) growth rates over the vesting term.

Currently, the vesting of PSUs is contingent upon the Company meeting both certain total shareholder return (“TSR”) levels as compared to a select peer group over the over three years and certain adjusted non-GAAP year-on-year earnings before interest, income taxes, depreciation, and amortization (“EBITDA”) growth rates over the vesting term.

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

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

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

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

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

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

2 unchanged sentences

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

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

Derivative Instruments and Hedge Accounting

1 unchanged sentence

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

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

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

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

13 unchanged sentences

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

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

Any future payment of contingent consideration will be reported as a financing cash flow for amounts paid up to the acquisition-date fair value of the consideration, and as an operating cash outflow for any amounts in excess of the acquisition-date fair value in the consolidated statement of cash flows.

Accrued Licensor Payments

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

The terms of the Product Rights Agreement, dated May 17, 2023, between the Company and EyePoint Pharmaceuticals, Inc.

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

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

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

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

3 unchanged sentences

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

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

There were no amounts due and payable during the year ended December 31, 2025.

Contingent Value Rights

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

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

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

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

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

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

There were no amounts due and payable during the year ended December 31, 2025 or 2024.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

Fair Value Measurements

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The fair value hierarchy gives the lowest priority to Level 3 inputs.

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

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

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

Recent Accounting Pronouncements

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

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

Improvements to Income Tax Disclosures , which includes guidance to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid.

These amendments are effective for all public entities for fiscal periods beginning after December 15, 2024, with early adoption permitted.

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

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

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

1 unchanged sentence

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

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

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on the consolidated financial statements and disclosures and anticipates disclosing any impact of the adoption in the annual report on Form 10-K for the fiscal year ended December 31, 2027.

Recently Adopted Accounting Pronouncements

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

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

Improvements to Income Tax Disclosures , which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures.

The Company adopted ASU 2023-09 in the fourth quarter of 2025, with prospective application.

The adoption of ASU 2023-09 has not had a material effect on the Company’s statements and disclosures.

See Note 16 "Income Taxes" in the notes to the consolidated financial statements.

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

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

1 unchanged sentence

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

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

REVENUE RECOGNITION AND RELATED ALLOWANCES

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The Company generally does not have incremental costs to obtain contracts that would otherwise not have been incurred.

The Company does not adjust revenue for the promised amount of consideration for the effects of a significant financing component because our customers generally pay us within 100 days.

The Company does not adjust revenue for the promised amount of consideration for the effects of a significant financing component because its customers generally pay within 100 days.

All revenue recognized in the accompanying consolidated statements of operations is considered to be revenue from contracts with customers.

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As of December 31, 2025, there were no contract assets recorded which were related to revenue recognized based on percentage of completion but not yet billed.

The Company recognized a decrease of $ 2.1 million of net revenue from performance obligations satisfied in prior periods during the year ended December 31, 2025, consisting primarily of revised estimates for variable consideration, including chargebacks, rebates, returns, and other allowances, related to prior period sales.

As of December 31, 2025, the aggregate amount of the tran saction price allocated to the remaining performance obligations for all open contract manufacturing customer contracts was $ 2.4 million, which consists of firm orders for contract manufactured products.

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

ANI Pharmaceuticals, Inc.

2 unchanged sentences

For the years ended December 31, 2025, 2024, and 2023

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

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

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

Variable Consideration

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• A change in negotiated terms with customers,

• A change in the volume of off-contract purchases

• A change in the volume of off-contract purchases, and

• Changes in WAC.

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Government Rebates

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

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

The two largest government programs are Medicaid and Medicare.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

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

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

Medicaid reserves are based on expected claims from state Medicaid programs.

Medicaid reserves are based on expected utilization from state Medicaid programs.

Estimates for expected claims are driven by patient usage, sales mix, calculated AMP or best price, as well as inventory in the distribution channel that will be subject to a Medicaid rebate.

As a result of the delay between selling the products, dispensing the products and rebate billing, the Medicaid rebate reserve includes both an estimate of outstanding claims for end-customer sales that have occurred but for which the related claim has not been billed, as well as an estimate for future claims that will be made when inventory in the distribution channel is sold through to plan participants.

Many of the products are also covered under Medicare.

ANI participates in the Coverage Gap Discount Program in order for its branded drugs to be covered by Medicare Part D and must provide a rebate for any products sold under NDAs dispensed to Medicare Part D beneficiaries while the beneficiaries are in the Coverage Gap phase of the benefit.

This applies to all products sold under NDAs, regardless of whether the products are marketed as branded or generic.

Estimates for these discounts are based on historical experience with Medicare rebates for products.

Medicare rebates are billed quarterly for drugs dispensed to Medicare beneficiaries in the prior quarter, which is typically 120 days after the product is shipped.

As a result of the delay between selling the products, dispensing the products and rebate billing, Medicare rebate reserve includes both an estimate of outstanding claims for end-customer sales that have occurred but for which the related claim has not been billed, as well as an estimate for future claims that will be made when inventory in the distribution channel is sold through to Medicare Part D participants.

To evaluate the adequacy of the government rebate reserves, reserves are reviewed on a quarterly basis against actual claims data to ensure the liability is fairly stated.

The Company continually monitors the government rebate reserve and adjusts estimates if it is expected that actual government rebates may differ from established accruals.

Accruals for government rebates are recorded as a reduction to gross revenues in the consolidated statements of operations and as an increase to accrued government rebates in the consolidated balance sheets.

As a result of the delay between selling the products, dispensing the products and rebate billing, the Medicaid rebate reserve includes both an estimate of outstanding claims for end-customer sales that have occurred but for which the related invoice has not been received, as well as an estimate for future claims that will be made when inventory in the distribution channel is sold through to Medicaid beneficiaries.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

Many of the Company's products are also covered under Medicare.

Through 2024, the Company participated in the Coverage Gap Discount Program (“CGDP”), under which it provided discounts on covered Part D drugs approved under NDAs that were dispensed to Medicare Part D beneficiaries in the coverage gap phase of the benefit.

Beginning in 2025, the Company participates in the Medicare Part D Manufacturer Discount Program (“MDP”), which replaces the CGDP under the Inflation Reduction Act of 2022.

Under the MDP, the Company is required to provide discounts on covered Part D drugs approved under NDAs or BLAs that are dispensed to Medicare Part D beneficiaries during the initial coverage and catastrophic phases of the benefit.

This requirement applies to all covered Part D drugs approved under NDAs or BLAs, including products marketed as authorized generics.

Estimates for these discounts are based on historical experience with Medicare Part D utilization and discount invoicing patterns for applicable products.

Medicare Part D discounts are billed quarterly for drugs dispensed to Medicare Part D in the prior quarter, which is typically 120 days after the product is shipped.

As a result of the delay between selling the products, dispensing the products and discount invoicing, Medicare Part D discount reserve includes both an estimate of outstanding claims for end-customer sales that have occurred but for which the related claim has not been billed, as well as an estimate for future claims that will be made when inventory in the distribution channel is sold through to Medicare Part D beneficiaries.

To evaluate the adequacy of government rebate and discount reserves, the Company reviews these reserves on a quarterly basis against actual claims and invoicing data to ensure the liability is reasonably stated.

The Company continually monitors the government rebate and discount reserve and adjusts estimates when it expects that actual obligations may differ from established accruals.

Accruals for government rebates and discounts are recorded as a reduction to gross revenues in the consolidated statements of operations and as an increase to accrued government rebates in the consolidated balance sheets

A returns policy is in place that allows customers to return product within a specified period prior to and subsequent to the expiration date.

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

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

Prompt Payment Discounts

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Accruals for prompt payment discounts are recorded as a reduction in both gross revenues in the consolidated statements of operations and accounts receivable in the consolidated balance sheets.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

The following table summarizes activity in the consolidated balance sheets for accruals and allowances for the years ended December 31, 2025, 2024, and 2023:

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Credit Concentration

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

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

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

ANI ’ s customers are primarily national wholesalers, specialty pharmacies, retail pharmacy chains, other U.S.

and international distributors, group purchasing organizations, and hospitals and healthcare providers.

During the year ended December 31, 2025, there were three customers that accounted for 10% or more of net revenues, made up of wholesale distributors.

As of December 31, 2025, accounts receivable from these customers totaled 64 % of accounts receivable, net.

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

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

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Customer 4 22 % 16 % 12 %

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

BUSINESS COMBINATION

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

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

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

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

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

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

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

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

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

ANI Pharmaceuticals, Inc.

2 unchanged sentences

For the years ended December 31, 2025, 2024, and 2023

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

The CVRs have been remeasured to fair value as of December 31, 2025.

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

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

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

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

This acquisition was accounted for as a business combination.

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

Alimera common shares outstanding $ 53,971

Alimera Common Stock outstanding $ 53,971

Alimera Warrants outstanding after exercise 989

Alimera common shares and warrants outstanding 54,960

Alimera Common Stock and Alimera Warrants outstanding 54,960

Cash consideration per share $ 5.50

5 unchanged sentences

Total Merger Consideration $ 418,849

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

The cash payment was funded through the 2024 Credit Facility (see Note 6 “2024 Credit Agreement” in the notes to the consolidated financial statements), and also cash on-hand from the Company's balance sheet.

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

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

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

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

3 unchanged sentences

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

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

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

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

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

The CVRs have been remeasured to fair value as of December 31, 2025, se e Note 12 “Fair Value” in the notes to the consolidated financial statements.

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

(in thousands)

Preliminary Purchase Price Allocation Measurement Period Adjustment Purchase Price Allocation

Preliminary Purchase Price Allocation Measurement Period Adjustment Final Purchase Price Allocation

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

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

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

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

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

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

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

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

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

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

ANI Pharmaceuticals, Inc.

2 unchanged sentences

For the years ended December 31, 2025, 2024, and 2023

Subsequent to the acquisition date, the Company has updated certain amounts above based upon information that was not known to the Company as of the acquisition date.

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

The Company recorded a net increase to goodwill of approximately $ 2.1 million as a result of the adjustments based on matters that existed at acquisition date but were not known to the Company at that time.

Measurement period adjustments were recorded, from the acquisition date through the end of the measurement period.

The purchase price allocation was finalized during the quarter ended September 30, 2025.

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

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

Fair Value (in thousands) Amortization Period

1 unchanged sentence

YUTIQ $ 170,000 12

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

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

During the second quarter of 2025, the Company transitioned promotional efforts in the U.S.

from YUTIQ to ILUVIEN with its combined label of DME and NIU-PS, and as a result the Company combined the ILUVIEN and YUTIQ intangible assets.

The Company concluded that there were no changes to expected future cash flows for the combined ILUVIEN definite-lived intangible asset.

The fair value of the definite-lived intangible asset was not below its carrying value as of December 31, 2025.

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

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Transaction Costs

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

In conjunction with the acquisition, the Company incurred approxi mately $ 2.1 million and $ 18.1 million in transaction and integration costs during the year ended December 31, 2025 and 2024 , respectively, all of which were recognized as selling, general, and administrative expense in the consolidated statement of operations.

Pro Forma Consolidated Financial Information (unaudited)

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

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

Year Ended December 31,

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RESTRUCTURING CANADA OPERATIONS

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

This action was part of ongoing initiatives to capture operational synergies following the acquisition of Novitium in November 2021.

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

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

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

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

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

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

For the year ended December 31, 2025 and 2024, there were no restructuring activities recorded in the consolidated statements of operations or the consolidated balance sheets.

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

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

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

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

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

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

These assets were part of the Generics and Other segment.

As of December 31, 2024 these assets were sold.

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

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

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

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

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

TRUIST CREDIT FACILITY

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

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

2021 CREDIT FACILITY

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

The Company incurred $ 14.0 million in deferred debt issuance costs associated with the 2021 Credit Facility.

Costs allocated to the Term Facility are classified as a direct reduction to the current and non-current portion of the borrowings, depending on their nature.

Costs allocated to the Revolving Facility are classified as other current and other non-current assets, depending on their nature.

Costs allocated to the 2021 Term Facility were classified as a direct reduction to the current and non-current portion of the borrowings, depending on their nature.

Costs allocated to the 2021 Revolving Facility were classified as other current and other non-current assets, depending on their nature.

A commitment fee of 0.5 % per annum on any unused portion of the 2021 Revolving Facility.

3 unchanged sentences

For the years ended December 31, 2025, 2024, and 2023

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

(in thousands) 2024 2023

Current borrowing on debt $ — $ 3,000

Deferred financing costs — ( 2,150 )

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

(in thousands) 2024 2023

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

Deferred financing costs — ( 6,181 )

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

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

Extinguishment of the 2021 Credi t Facility

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

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

The proceeds of the Convertible Senior Notes and cash on-hand were used to repay the 2021 Credit Facility in its entirety, or approximately $ 294.0 million, comprised of $ 292.5 million of unpaid principal, $ 1.2 million in accrued and unpaid interest, and $ 0.3 million of legal fees.

In connection with the issuance of the Convertible Senior Notes, the Company recorded a loss on debt extinguishment in the consolidated statement of operations for the year ended December 31, 2024, amounting to approximately $ 7.5 million, comprised of the write-off unamortized deferred financing fees related to the 2021 Credit Facility as of August 13, 2024.

The following table sets forth the components of total interest expense related to the 2021 Credit Facility recognized in the accompanying consolidated statements of operations for the years ended December 31:

(in thousands) 2024 2023

1 unchanged sentence

Amortization of deferred financing costs 1,477 2,363

Capitalized interest ( 492 ) ( 588 )

$ 17,629 $ 32,467

Extinguishment of the Credi t Facility

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

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

NEW CREDIT AGREEMENT

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

2024 CREDIT AGREEMENT

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

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

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

As of December 31, 2025, $ 74.9 million is available for borrowing under the TLA Revolver.

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

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

The 2024 Credit Facility contains certain contingent acceleration clauses that could result in an earlier maturity date, none of which have been triggered as of December 31, 2025.

The cash interest rate and effective rate under the Term Loan A was approximately 6.33 % and 6.69 % per annum at December 31, 2025, respectively.

The 2024 Credit Facility is secured by a lien on substantially all of the Company’s and its principal domestic subsidiary’s assets and any future domestic subsidiary guarantors’ assets.

The 2024 Credit Facility is subject to customary financial and nonfinancial covenants.

As of December 31, 2025, the Company was in compliance with all covenants associated with the 2024 Credit Facility.

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

A commitment fee accrues on the unutilized commitments under the TLA Revolver and, from and after the date that is two months after the closing date of the 2024 Credit Agreement, the TLA at a per annum rate equal between 0.25 % and 0.40 % depending on the Company’s first lien net leverage ratio.

ANI Pharmaceuticals, Inc.

2 unchanged sentences

For the years ended December 31, 2025, 2024, and 2023

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

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

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

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

10 unchanged sentences

Non-current debt, net of deferred financing costs and current component $ 291,840 $ 309,108

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

(in thousands) New Term Facility

The contractual maturity of the Term Loan A is as follows for the years ended December 31:

(in thousands) 2024 Term Loan A

2026 $ 18,281

Total $ 312,812

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

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

(in thousands) 2025 2024 2023

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

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

Contractual coupon interest expense, 2021 Credit Agreement $ — $ ( 20,993 ) $ ( 33,270 )

Contractual coupon interest expense, 2024 Credit Agreement ( 22,137 ) ( 7,264 ) —

Contractual coupon interest expense, Convertible Notes ( 7,096 ) ( 2,747 ) —

Amortization of deferred financing costs ( 3,329 ) ( 2,624 ) ( 2,364 )

Interest expense on interest rate swap — — 2,280

Interest expense ( 32,562 ) ( 33,628 ) ( 35,634 )

4 unchanged sentences

Interest expense, net $ ( 20,060 ) $ ( 17,602 ) $ ( 26,940 )

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

2.25 % CONVERTIBLE SENIOR NOTES

7 unchanged sentences

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

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

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

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

After payment of the cost of entering into the Capped Call transactions (as defined below), the Company used the remainder of the net proceeds from the Notes offering, together with cash on hand, to repay the 2021 Credit Facility in its entirety .

Refer to Note 5 “2021 Credit Facility” to the notes to the consolidated financial statements for the details of the extinguishment of the 2021 Credit Agreement.

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

2 unchanged sentences

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

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

Conversion Options

9 unchanged sentences

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

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

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

7 unchanged sentences

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

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

Events of Default

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

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

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

1 unchanged sentence

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

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

As of December 31, 2025 and 2024, the unamortized debt discount and debt issuance cost of the Notes was approximately $ 8.3 and $ 10.4 million, respectively, on the consolidated balance sheets.

The effective interest rate during the year ended December 31, 2025 was 3.01 %.

2 unchanged sentences

As of December 31, 2025, the total estimated fair value (which represents a Level 2 valuation) of the Notes is approximately $ 413.0 million.

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

The Company recognized $ 7.1 million and $ 2.7 million of contractual coupon interest expense and $ 2.1 million and $ 0.8 million of interest expense related to the amortization of deferred financing costs for the years ended December 31, 2025 and 2024, respectively.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

Capped Call Transactions

9 unchanged sentences

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

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

to manage its exposure to changes in the London Interbank Offered Rate (“LIBOR”)-based interest rates underlying total borrowings under term facilities related to the 2021 Credit Agreement.

The interest rate swap matures in December 2026.

The Company amended its 2021 Credit Agreement to transition from LIBOR to the Secured Overnight Financing Rate (“SOFR”) due to the cessation of LIBOR in the third quarter of 2023, and accordingly, the interest rate swap transitioned from LIBOR to SOFR.

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

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

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

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

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

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

Concurrent with the termination of the 2021 Credit Agreement and entry into the 2024 Credit Agreement with Truist Bank, the interest rate swap with a notional value of $ 168.6 million at origin on November 21, 2021 was novated and Truist Bank became the new counterparty.

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

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

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

As of December 31, 2025 , the notional amount of the interest rate swap was $ 139.4 million, and will remain static until maturity in December 2026.

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

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

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

As of December 31, 2025 , the fair value of the interest rate swap asset recorded in other non-current assets in the consolidated balance sheets is $ 1.6 m illion .

As of December 31, 2025, $ 1.6 million was recorded in accumulated other comprehensive income (loss), net of tax in the consolidated balance sheets.

During the year ended December 31, 2025, the loss on fair value of the interest rate swaps, net of tax recorded in accumulated other comprehensive income (loss)in the consolidated statements of comprehensive income was approximately $ 4.4 million.

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

In the years ended December 31, 2025 and 2024, the Company recorded a reduction in interest expense of $ 4.9 million and $ 6.3 million in relation to the interest rate swaps, respectively.

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

Included in these amounts for the years ended December 31, 2025 and 2024 are reclassifications out of accumulated other comprehensive income (loss)of $ 3.4 million of interest income and $ 0.8 million of interest expense, respectively, related to terminated and de-designated cash flow hedges.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

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

5 unchanged sentences

Inventories $ 143,067 $ 136,782

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

Vendor Concentration

2 unchanged sentences

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

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

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

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

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

During the year ended December 31, 2025, approximately 17 % of the Company's raw material inventory purchases were from one domestic supplier.

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

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

PROPERTY AND EQUIPMENT, NET

12 unchanged sentences

During the years ended December 31, 2025, 2024, and 2023 there was $ 0.4 million , $ 0.5 million, and $ 0.6 million, respectively, of interest capitalized into construction in progress, respectively.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

GOODWILL AND INTANGIBLE ASSETS

7 unchanged sentences

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

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

There have been no events or changes in circumstances that would have reduced the fair value of the reporting units below their carrying value during the years ended December 31, 2025 and 2024, and as a result, no impairment charges have been recognized.

In addition to the qualitative impairment analysis performed at October 31, 2025, there were no events or changes in circumstances that would have reduced the fair value of the reporting unit below its carrying value from October 31, 2025 to December 31, 2025.

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

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

No goodwill impairment losses were recognized during the years ended December 31, 2025, 2024, and 2023.

Intangible Assets

16 unchanged sentences

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

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

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

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

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

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

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

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

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

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

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

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

ANI Pharmaceuticals, Inc.

2 unchanged sentences

For the years ended December 31, 2025, 2024, and 2023

Pursuant to a Royalty Purchase Agreement dated as of December 17, 2020, EyePoint Pharmaceuticals US, Inc.

(f/k/a pSivida US, Inc.

or “EyePoint”) sold to SWK Funding LLC ("SWK") its right to receive royalty payments on future sales of ILUVIEN under an existing collaboration agreement entered into in July 2017 between EyePoint and the Company (the “RPA Transaction”).

In connection with the RPA Transaction, the Company agreed to pay such royalty payments directly to SWK.

On June 19, 2024, Alimera entered into a letter agreement with SWK, pursuant to which the parties agreed to a lower fixed royalty payment of 3.125 % (the “Alternative Royalty”) on combined sales of ILUVIEN and YUTIQ.

The letter agreement included a buy-out of the Alternative Royalty at Alimera’s option at any time during the period within six (6) months after a change of control of Alimera, after which SWK would have no further right to receive any payments under the letter agreement or the RPA (the “Buy-Out Option”).

On March 17, 2025, the Company exercised the Buy-Out Option and paid SWK $ 17.3 million with cash on hand, and as such, no further royalty is due to SWK on net revenues beginning January 1, 2025, forward.

The purchase of the Buy-Out Option was recorded as a definite-lived intangible asset, which will be amortized over a period of approximately twelve years , consistent with the useful lives of YUTIQ and ILUVIEN.

The SWK definite-lived intangible asset is included in the "NDAs and product rights" in the table above.

During the year ended December 31, 2025, $ 15.8 million was reclassified from indefinite-lived IPR&D to definite-lived NDAs and Product Rights related to the commercialization of Tezruly and Inzirqo, and will be amortized over ten years .

As of December 31, 2025 there was no IPR&D on the consolidated balance sheet, and there were no impairment losses recognized on IPR&D.

Additionally, approximately $ 3.8 million of acquired ANDA intangible assets were capitalized related to asset acquisitions during the year ended December 31, 2025, which will be amortized over their useful lives.

During the second quarter of 2025, the Company transitioned promotional efforts in the U.S.

from YUTIQ to ILUVIEN with its combined label of DME and NIU-PS, and as result the Company combined the ILUVIEN and YUTIQ intangible assets.

The Company concluded that there were no changes to expected future cash flows for the combined ILUVIEN definite-lived intangible asset.

The Company recognized approximately $ 0.8 million of impairment charges during the year ended December 31, 2025, related to one product for which the Company has ceased commercialization, and recognized approximately $ 3.6 million of impairment losses during the year ended December 31, 2024, related to certain definite-lived intangibles.

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

Amortization expense for definite-lived intangible assets was $ 82.5 million, $ 60.3 million, and $ 52.3 million for the years ended December 31, 2025, 2024, and 2023, respectively.

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

Indefinite-lived intangible assets other than goodwill, as described above, include IPR&D.

Indefinite-lived intangible assets are not amortized, and the Company tests for impairment of indefinite-lived intangible assets annually as of October 31, 2025, as well as with definite-lived intangibles when events or circumstances indicate that the carrying value of the assets may not be recoverable.

1 unchanged sentence

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

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

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

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

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

The Company recorded $ 4.0 million of impairment losses on IPR&D during the year ended December 31, 2024.

There were no comparable reclassifications or impairment charges for the year ended December 31, 2023.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

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

4 unchanged sentences

Expected amortization expense is an estimate.

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

Actual amounts of amortization expense may differ due to additional intangible assets acquired, impairment of intangible assets, and other events.

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

1 unchanged sentence

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

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

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

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

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

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

The 2024 Credit Facility bears an interest rate that fluctuates with the changes in SOFR and because the variable interest rate approximates market borrowing rates available to the Company, the carrying value of the 2024 Credit Facility approximated its fair values at December 31, 2025 and 2024.

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

Alimera Contingent Value Rights Agreement

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

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

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

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

Each CVR entitles the holder to receive a Milestone Payment upon satisfaction of the applicable Milestones.

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

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

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

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

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

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

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

As a result of the decrease in forecast future revenue for 2026 and 2027, a corresponding decrease in the CVR liability was recorded.

The fair value of the CVR liability was approximately $ 1.4 million as of December 31, 2025, a decrease of approximately $ 7.6 million from $ 9.0 million as of December 31, 2024, and is classified as non-current contingent consideration in the Company's consolidated balance sheet.

The following table presents the changes in the CVR liability classified as Level 3 for the years ended December 31, 2025 and 2024:

Year Ended December 31,

6 unchanged sentences

Money market funds are readily convertible into cash and the net asset value of each fund on the last day of the reporting period is used to determine its fair value.

Money market funds are included in Cash and cash equivalents within the Consolidated Balance Sheet, and is classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices.

Money market funds are included in Cash and cash equivalents within the consolidated balance sheets, and are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices.

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

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

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

The fair value of the money market funds was approximately $ 209.9 million and $ 84.3 million as of December 31, 2025 and 2024, respectively.

Interest Rate Swap

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

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

The fair value of the interest rate swap is estimated based on the present value of projected future cash flows using the SOFR forward rate curve (see Note 6 "2024 Credit Agreement" in the notes to the consolidated financial statements).

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

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

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

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

As described in Note 8, the fair value of the interest rate swap was $ 1.6 million and $ 4.9 million at December 31, 2025 and 2024, respectively, and was classified as a non-current assets in the consolidated balance sheets.

CG Oncology Equity Securities

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

The Company currently holds 219,925 shares of common stock in CG Oncology, Inc.

CGON) ("CG Oncology").

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

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

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

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

The fair value of the CG Oncology equity securities was approximately $ 9.1 million and $ 6.3 million as of December 31, 2025 and 2024, based on a closing market price of $ 41.52 and $ 28.68 on December 31, 2025 and 2024, respectively.

The change in fair value of the equity securities is classified on the consolidated statements of operations as unrealized gain on investment in equity securities, in the amounts of approximately $ 2.8 million and $ 6.3 million for the years ended December 31, 2025 and 2024, respectively.

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

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

Novitium Contingent Consideration

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

The discounted cash flow method used to value this contingent consideration includes inputs of not readily observable market data, which are Level 3 inputs.

In connection with the acquisition of Novitium, the Company may pay up to $ 46.5 million in additional consideration related to the achievement of certain milestones, including milestones on gross profit of Novitium portfolio products over a 24-month period (which period ran from December 1, 2021 through November 30, 2023), , regulatory filings completed during this 24-month period, and a percentage of net profits on certain products that are launched in the future.

The discounted cash flow method used to value this contingent consideration includes inputs of not readily observable market data, which are Level 3 inputs, as the inputs are not based on readily available market data.

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

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

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

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

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

On February 22, 2024, the Company paid $ 12.5 million to Company Members of Novitium upon the achievement of the milestone.

See Note 18 "Related Party Transactions" in the notes to the consolidated financial statements).

Pursuant to the terms of the Novitium Merger Agreement, the Company owes 20 % of net profit generated by the sales of certain 505(b)(2) products (as defined in the Novitium Merger Agreement) to the Company Members through the earlier to occur of (i) the sum of all such payments being equal to $ 21.5 million in the aggregate and (ii) the tenth anniversary of the FDA approval of the applicable 505(b)(2) product (the "505(b)(2) Earn-Out").

The payments are due on a quarterly basis, within 45 calendar days of each quarter end.

During the years ended December 31, 2025 and 2024, the Company has paid less than $ 0.1 million and zero , respectively, for payments of the 505(b)(2) Earn-Out to the Company Members, respectively.

The total fair value of the contingent consideration was approximately $ 8.3 million and $ 10.9 million as of December 31, 2025 and 2024, respectively, and is reflected as a current and non-current accrued contingent consideration liability in the consolidated balance sheets.

The recurring Level 3 fair value measurements of contingent consideration for which a liability is recorded include the following significant unobservable inputs as of December 31, 2025 :

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Projected fiscal year of payment 2026-2034

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

The following table presents the changes in contingent consideration balances classified as Level 3 balances for the years ended December 31, 2025 and 2024:

2 unchanged sentences

Beginning balance $ 10,854 $ 23,984

Payment of Gross-Profit and ANDA Filing earn-out ( 12,500 ) ( 12,500 )

Payment of Gross-Profit earn-out ( 26 ) ( 12,500 )

Accrual of Gross-Profit earn-out 108 —

Change in fair value ( 2,588 ) ( 630 )

Ending balance $ 8,348 $ 10,854

Accrued Licensor Payments

On May 17, 2023, Alimera entered into the Product Rights Agreement with EyePoint which granted Alimera an exclusive and sublicensable right and license under EyePoint’s and its affiliates’ interest in certain of EyePoint’s and its affiliates’ intellectual property to develop, manufacture, sell, commercialize and otherwise exploit certain products, including YUTIQ, for the treatment and prevention of uveitis in the entire world, except Europe, the Middle East and Africa, where the Company already has such rights pursuant to the New Collaboration Agreement, and except for China, Hong Kong, Macau, Taiwan, Brunei, Burma (Myanmar), Cambodia, Timor-Leste, Indonesia, Laos, Malaysia, the Philippines, Singapore, South Korea, Thailand and Vietnam, where Ocumension holds a license from EyePoint.

Pursuant to the agreement, Alimera paid EyePoint an upfront payment of $ 75.0 million and has also made four quarterly guaranteed payments to EyePoint totaling $ 7.5 million during the year ended December 31, 2024.

The Company will also pay royalties to EyePoint from 2025 to 2028 at a percentage of mid-to-low double digits of annual U.S.

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

Upon making the quarterly payments in the aggregate amount of $ 7.5 million in 2024, the licenses and rights granted to the Company will automatically become perpetual and irrevocable.

During the quarter ended December 31, 2024, the Company paid the final quarterly payment of $ 1.9 million.

The present value of the remaining payments to EyePoint for years 2025 to 2028 will continue to be revalued at an appropriate discount rate for the Company at each reporting date until they are settled.

The fair value of the remaining future payments as of December 31, 2024 was approximately $ 21.0 million.

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

Payment Type Valuation Technique Unobservable Input Assumptions

Annual royalty payments for US net revenues of sales of YUTIQ and ILUVIEN Probability-weighted discounted cash flow Discount rate 12.0 %

Projected fiscal year of payment 2025-2029

ANI Pharmaceuticals, Inc.

2 unchanged sentences

For the years ended December 31, 2025, 2024, and 2023

The following table presents the changes in accrued licensor payments classified as Level 3 balances for the year ended December 31, 2024:

Accrued Licensor Payments

On May 17, 2023, Alimera entered into the Product Rights Agreement with EyePoint, which granted Alimera an exclusive and sublicensable right and license under EyePoint’s and its affiliates’ interest in certain of EyePoint’s and its affiliates’ intellectual property to develop, manufacture, sell, commercialize and otherwise exploit certain products, including YUTIQ, for the treatment and prevention of uveitis in the entire world, except Europe, the Middle East and Africa, where the Company already had such rights pursuant to the A&R Collaboration Agreement, and except for China, Hong Kong, Macau, Taiwan, Brunei, Burma (Myanmar), Cambodia, Timor-Leste, Indonesia, Laos, Malaysia, the Philippines, Singapore, South Korea, Thailand and Vietnam, for which Ocumension holds a license from EyePoint.

Pursuant to the agreement, Alimera paid EyePoint an upfront payment of $ 75.0 million and also made four quarterly guaranteed payments to EyePoint totaling $ 7.5 million during the year ended December 31, 2024.

Upon making the quarterly payments in the aggregate amount of $ 7.5 million in 2024, the licenses and rights granted to the Company became automatically perpetual and irrevocable.

There are no quarterly guaranteed payments in 2025 and beyond.

Royalties are payable to EyePoint from 2025 to 2028 at 30 % of annual U.S.

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

The Company did not make any royalty payments during 2025, as the minimum threshold of net sales that would trigger the requirement to make royalty payments was not met.

During the quarter ended December 31, 2024, the Company paid the final quarterly payment of $ 1.9 million.

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

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

These changes resulted in a decrease of the fair value of the liability of approximately $ 21.0 million as no further payments are anticipated to be made in fiscal 2026 to 2028.

The following table presents the changes in accrued licensor payments classified as Level 3 balances for the years ended December 31, 2025 and 2024:

Year Ended December 31,

2 unchanged sentences

Accrued licensor payments — 25,000

Payments during 2024 ( 3,750 )

Payments — ( 3,750 )

Change in fair value ( 20,961 ) ( 289 )

10 unchanged sentences

Accrued licensor payment $ — $ — $ — $ —

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

(in thousands)

3 unchanged sentences

Interest rate swaps $ 4,897 $ — $ 4,897 $ —

Contingent consideration $ 23,984 $ — $ — $ 23,984

CG Oncology - Investment in equity securities $ 6,307 $ 6,307 $ — $ —

Contingent consideration, Novitium $ 10,854 $ — $ — $ 10,854

Contingent Value Rights, Alimera $ 9,000 $ — $ — $ 9,000

Accrued licensor payment $ 20,961 $ — $ — $ 20,961

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

2 unchanged sentences

There are no non-financial assets and liabilities that are measured at fair value on a recurring basis.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

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

Long-lived assets, including property and equipment, ROU assets, intangible assets, and goodwill, are measured at fair value on a non-recurring basis.

During the years ended December 31, 2024 and 2023 there were $ 7.6 million and $ 0 of impairment charges recognized related to non-financial assets and liabilities measured at fair value on a non-recurring basis, respectively.

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

During the years ended December 31, 2025 and 2024 there were $ 0.8 million and $ 7.6 million of impairment charges recognized related to non-financial assets and liabilities measured at fair value on a non-recurring basis, respectively.

During the year ended December 31, 2023, there were no impairment losses recognized in relation to any non-financial assets or liabilities measured at fair value.

Acquired Non-Financial Assets Measured at Fair Value

On September 16, 2024, the Company acquired ILUVIEN and YUTIQ in connection with the acquisition of Alimera.

See Note 3 “Business Combination” in the notes to the consolidated financial statements.

On December 27, 2023, the Company acquired from Alvogen, Inc.

the rights to certain pharmaceutical products for total cash consideration of $ 2.0 million (Note 8), which launched commercially in early 2024.

The transaction was accounted for as an asset acquisition and there were no transaction costs directly related to the acquisition.

Intangible assets amounted to $ 2.0 million as NDAs and product rights.

The payment was allocated to the acquired intangible assets based on relative fair value, which was determined using Level 3 unobservable inputs.

The intangible asset will be amortized in full over its useful life of seven years and will be tested for impairment when events or circumstances indicate that the carrying value of the asset may not be recoverable.

No such triggering events were identified during the period from the date of acquisition to December 31, 2024.

On August 14, 2023, the Company acquired one ANDA and registered patents and pending patent applications from Slayback Pharma Limited Liability Company for total consideration of $ 3.0 million.

The Company also acquired an NDA which has yet to be filed.

The transaction was funded from cash on hand.

The transaction was accounted for as an asset acquisition and the transaction costs directly related to the acquisition were capitalized.

Intangible assets amounted to $ 2.8 million as acquired ANDA intangible assets.

The payment was allocated to the acquired intangible assets based on relative fair value, which was determined using Level 3 unobservable inputs.

The ANDA will be amortized in full over its useful life of seven years and will be tested for impairment when events or circumstances indicate that the carrying value of the asset may not be recoverable.

No such triggering events were identified during the period from the date of acquisition to December 31, 2024 , and therefore no impairment loss was recognized for the year ended December 31, 2024 .

During the second quarter of fiscal 2023, the Company acquired two ANDAs and one pipeline product from the Chapter 7 Trustee for the estates of Akorn Holding Company and certain of its affiliates for total consideration of $ 4.8 million.

The transaction was funded from cash on hand.

This transaction was accounted for as an asset acquisition and the transaction costs directly related to the acquisition were capitalized.

The product portfolio included two commercial products and one pipeline product.

The Company recognized $ 4.3 million as acquired ANDA intangible assets.

The payment was allocated to the acquired intangible assets and in-process research and development based on relative fair value, which was determined using Level 3 unobservable inputs.

The ANDAs will be amortized in full over its useful life of seven years and will be tested for impairment when events or circumstances indicate that the carrying value of the asset may not be recoverable.

No such triggering events were identified during the period from the date of acquisition to December 31, 2024, and therefore no impairment loss was recognized for the year ended December 31, 2024.

Acquired non-financial assets measured at fair value consists of certain assets, such as ANDAs or NDAs, acquired by the Company during the year ended December 31, 2025 and 2024, as discussed above, and assets and liabilities acquired from Alimera during the year ended December 31, 2024 (see Note 3 "Business Combination" in the notes to the consolidated financial statements).

MEZZANINE AND STOCKHOLDERS’ EQUITY

Authorized shares

The Company is authorized to issue up to 66.0 million shares of common stock with a par value of $ 0.0001 per share, 0.8 million shares of class C special stock with a par value of $ 0.0001 per share, and 1.7 million shares of undesignated preferred st ock with a par value of $ 0.0001 per share at December 31, 2025.

There were 23.1 million and 22.5 million shares of common stock issued and outstanding as of December 31, 2025, respectively, and 21.5 million and 21.1 million shares of common stock issued and outstanding as of December 31, 2024, respectively.

ANI Pharmaceuticals, Inc.

2 unchanged sentences

For the years ended December 31, 2025, 2024, and 2023

On July 21, 2022, ANI acquired four ANDAs from Oakrum Pharma, LLC for total consideration of $ 8.0 million plus an immaterial amount for the purchase of finished goods inventory.

The transaction was funded from cash on hand.

ANI accounted for this transaction as an asset acquisition and capitalized the transaction costs directly related to the acquisition.

The product portfolio included one commercial product, one approved product with a launch completed in September 2022 and two filed products, with approval pending.

ANI recognized $ 7.2 million as acquired ANDA intangible assets and $ 1.2 million as research and development expense because certain of the generic products have significant remaining work required in order to be commercialized and the products do not have an alternative future use.

The payment was allocated to the acquired intangible assets and in-process research and development based on relative fair value, which was determined using Level 3 unobservable inputs.

ANI used the present value of the estimated cash flows related to the products, using a discount rate of 13 % to determine the fair value of the acquired intangible assets and in-process research and development.

The inventory acquired was immaterial.

Contingent liabilities are accrued when they are both estimable and probable.

ANI accrued $ 0.2 million in contingent payments due to a third party upon the launch of a product completed in September 2022.

This was accrued and recorded in the fair value of acquired intangible assets as it was probable at the acquisition date and has been paid in 2023.

No such triggering events were identified during the period from the date of acquisition to December 31, 2024, and therefore no impairment loss was recognized for the year ended December 31, 2024.

MEZZANINE AND STOCKHOLDERS’ EQUITY

Stockholders’ Equity

Authorized shares

The Company is authorized to issue up to 33.3 million shares of common stock with a par value of $ 0.0001 per share, 0.8 million shares of class C special stock with a par value of $ 0.0001 per share, and 1.7 million shares of undesignated preferred st ock with a par value of $ 0.0001 per share at December 31, 2024 and 2023.

There were 21.5 million and 21.1 million shares of common stock issued and outstanding as of December 31, 2024, respectively, and 20.7 million and 20.5 million shares of common stock issued and outstanding as of December 31, 2023, respectively.

Public Offering

6 unchanged sentences

The holders of class C special stock have no cumulative voting, preemptive, subscription, redemption, or sinking fund rights.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

Mezzanine Equity

Concurrently with the acquisition of Novitium, and as financing for a portion of the acquisition, on March 8, 2021, the Company entered into an Equity Commitment and Investment Agreement with Ampersand 2020 Limited Partnership (the “PIPE Investor”), pursuant to which the PIPE Investor agreed to purchase, 25,000 shares of the Company's Series A Convertible Preferred Stock (the “PIPE Shares”), for a purchase price of $ 1,000 per share and an aggregate purchase price of $ 25.0 million on November 19, 2021.

The PIPE Shares are classified as mezzanine equity because the shares are mandatorily redeemable for cash upon a change in control, an event that is not solely in the Company's control.

On March 8, 2021, concurrently with the acquisition of Novitium, and as financing for a portion of the acquisition, the Company entered into an Equity Commitment and Investment Agreement with Ampersand 2020 Limited Partnership (the “PIPE Investor”), pursuant to which the PIPE Investor agreed to purchase, 25,000 shares of the Company's Series A Convertible Preferred Stock (the “PIPE Shares”) for a purchase price of $ 1,000 per share and an aggregate purchase price of $ 25.0 million on November 19, 2021.

The PIPE Shares were classified as mezzanine equity because the shares were mandatorily redeemable for cash upon a change in control, an event that would not have been solely in the Company's control.

The Company incurred $ 0.2 million in issuance costs associated with the transaction.

The PIPE Shares accrue dividends at 6.50 % per year on a cumulative basis, payable in cash or in-kind, and will also participate, on a pro-rata basis, in any dividends that may be declared with respect to the Company's common stock.

The PIPE Shares are convertible into the Company's common shares at the conversion price of $ 41.47 (i) beginning two years years after their issuance date, at the election of ANI (in which case the PIPE Investor must convert all of the PIPE Shares), if the volume-weighted average price of the Company's common stock for any 20 trading days out of 30 consecutive trading days exceeds 170 % of the conversion price, and (ii) at any time after issuance, at the election of the PIPE Investor.

As of December 31, 2024, the PIPE shares are currently convertible into a maximum of 602,901 shares of the Company's common stock.

In case of a liquidation event, the holder of the PIPE Shares will be entitled to receive, in preference to holders of the Company's common stock, the greater of (i) the PIPE Shares’ purchase price plus any accrued and unpaid dividends thereon and (ii) the amount the holder of the PIPE Shares would have received in the liquidation event if it had converted its PIPE Shares into the Company's common stock.

The PIPE Shares will have voting rights, voting as one series with the Company's common stock, on as-converted basis, and will have separate voting rights on any (i) amendment to the Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock (the “Certificate”) that adversely amends and relates solely to the terms of the PIPE Shares and (ii) issuance of additional Series A convertible preferred stock.

In case of a change of control of the Company , the PIPE Shares will be redeemed at the greater of (i) the PIPE Shares’ purchase price plus any accrued and unpaid dividends thereon and (ii) the change of control transaction consideration that the holder of the PIPE Shares would have received if it had converted into the Company's common stock.

There were 25,000 shares of Series A convertible preferred stock outstanding as of December 31, 2024 and 2023.

The PIPE Shares accrued dividends at 6.50 % per year on a cumulative basis, payable in cash or in-kind, and participated, on a pro-rata basis, in any dividends that would have been declared with respect to the Company's common stock.

The PIPE Shares were convertible into shares of the Company's common stock at the conversion price of $ 41.4662 (i) beginning two years after their issuance date, at the election of ANI (in which case the PIPE Investor must convert all of the PIPE Shares), if the volume-weighted average price of the Company's common stock for any 20 trading days out of 30 consecutive trading days exceeded 170 % of the conversion price, and (ii) at any time after issuance, at the election of the PIPE Investor.

On August 14, 2025, the PIPE Investor converted 5,000 PIPE Shares into 120,580 shares of common stock based on the conversion price of $ 41.4662 per share.

On September 26, 2025, the Company mandatorily converted the remaining 20,000 outstanding PIPE Shares into 482,320 shares of common stock based on the conversion price of $ 41.4662 per share, as the conditions for conversion had been satisfied.

There were no shares of Series A convertible preferred stock outstanding at December 31, 2025.

There were 25,000 shares of Series A convertible preferred stock outstanding as of December 31, 2024.

EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted-average number of shares of common stock outstanding during the period.

For periods of net income, and when the effects are not anti-dilutive, the Company calculates diluted earnings (loss) per share by dividing net income available to common stockholders by the weighted-average number of shares outstanding plus the impact of all potential dilutive shares of common stock, consisting of shares issuable upon conversion of the Company's senior convertible notes, common stock options, shares to be purchased under the ESPP, and performance stock units, using the more dilutive of the treasury stock or the two-class method.

For periods of net loss, diluted loss per share is calculated similarly to basic loss per share.

ANI Pharmaceuticals, Inc.

2 unchanged sentences

For the years ended December 31, 2025, 2024, and 2023

EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted-average number of shares of common stock outstanding during the period.

For periods of net income, and when the effects are not anti-dilutive, the Company calculates diluted earnings (loss) per share by dividing net income available to common stockholders by the weighted-average number of shares outstanding plus the impact of all potential dilutive common shares, consisting primarily of common stock options, shares to be purchased under our ESPP, and performance stock units, using the more dilutive of the treasury stock or the two-class method.

For periods of net loss, diluted loss per share is calculated similarly to basic loss per share.

Unvested restricted shares and Series A convertible preferred stock shares contain non-forfeitable rights to dividends, and therefore are considered to be participating securities;

in periods of net income, the calculation of basic and diluted earnings (loss) per share excludes from the numerator net income (but not net loss) attributable to the unvested restricted shares and the common shares assumed converted from the preferred shares and excludes the impact of those shares from the denominator.

in periods of net income, the calculation of basic and diluted earnings (loss) per share excludes from the numerator net income (but not net loss) attributable to the unvested restricted shares and the shares of common stock assumed converted from the preferred shares and excludes the impact of those shares from the denominator.

The Company’s participating securities do not have a co ntractual obligation to share in the Company’s losses.

As such, the net loss was attributed entirely to common stockholders.

As the Company has reported a net loss for the year ended December 31, 2024 , diluted net loss per share attributable to common shareholders is the same as basic net loss per share attributable to common shareholders for this period.

As such, the net loss is attributed entirely to common stockholders.

As the Company reported a net loss for the year ended December 31, 2024 , diluted net loss per share attributable to common shareholders was the same as basic net loss per share attributable to common shareholders for this period.

Earnings (loss) per share for the years ended December 31, 2025, 2024, and 2023 are calculated for basic and diluted earnings (loss) per share as follows:

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2025 2024 2023 2025 2024 2023

Net (loss) income available to common shareholders $ ( 20,147 ) $ 17,154 $ ( 49,521 ) $ ( 20,147 ) $ 17,154 $ ( 49,521 )

Net income (loss) available to common shareholders $ 77,180 $ ( 20,147 ) $ 17,154 $ 77,180 $ ( 20,147 ) $ 17,154

Earnings allocated to participating securities ( 6,963 ) — ( 1,679 ) ( 6,611 ) — ( 1,663 )

Net (loss) income available to common shareholders $ ( 20,147 ) $ 15,475 $ ( 49,521 ) $ ( 20,147 ) $ 15,491 $ ( 49,521 )

Net income (loss) available to common shareholders $ 70,217 $ ( 20,147 ) $ 15,475 $ 70,569 $ ( 20,147 ) $ 15,491

Basic Weighted-Average Shares Outstanding 20,053 19,318 18,001 20,053 19,318 18,001

Dilutive effect of stock options, ESPP, and performance stock units — 193 —

Dilutive effect of convertible senior notes, common stock options, ESPP, and performance stock units 1,175 — 193

Diluted Weighted-Average Shares Outstanding 21,228 19,318 18,194

(Loss) earnings per share $ ( 1.04 ) $ 0.86 $ ( 3.05 ) $ ( 1.04 ) $ 0.85 $ ( 3.05 )

The number of anti-dilutive shares, which have been excluded from the computation of diluted earnings (loss) per share, were 2.3 million , 2.4 million, and 2.6 million for the years ended December 31, 2024, 2023, and 2022, respectively.

For the years ended December 31, 2024 and 2022, all potentially dilutive shares were anti-dilutive and excluded from the calculation of diluted loss per share because the Company reported a net loss .

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

Earnings (loss) per share $ 3.50 $ ( 1.04 ) $ 0.86 $ 3.32 $ ( 1.04 ) $ 0.85

The number of anti-dilutive shares, which have been excluded from the computation of diluted earnings (loss) per share, was 2.0 million, 2.3 million, and 2.4 million for the years ended December 31, 2025, 2024, and 2023, respectively.

For the year ended December 31, 2024, all potentially dilutive shares were anti-dilutive and excluded from the calculation of diluted loss per share because the Company reported a net loss .

STOCK-BASED COMPENSATION

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In July 2016, the Company commenced administration of the ANI Pharmaceuticals, Inc.

As of December 31, 2024, there are approximately 0.1 million shares of common stock available for issuance under the ESPP.

Under the ESPP, participants can purchase shares of common stock at a 15 % discount on the lowest share price on the first day of the purchase period or the last day of the purchase period.

During the 2025 Annual Meeting, the stockholders of the Company approved an amendment to the ESPP.

Subject to adjustment, the Amended and Restated ANI Pharmaceuticals, Inc.

2016 Employee Stock Purchase Plan, or Amended and Restated ESPP, authorized the issuance of an additional 500,000 shares.

As of December 31, 2025, there are appro ximately 0.5 million shares of common stock available for issuance under the Amended and Restated ESPP.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

Stock Incentive Plan

During the 2024 Annual Meeting of Stockholders held on May 21, 2024, the stockholders of the Company approved an amendment to the Amended and Restated Stock Incentive Plan (the “2022 Plan”) (such amendment, the “2024 Stock Plan Amendment” and the 2022 Plan, after giving effect to the 2024 Stock Plan Amendment, the “Amended 2022 Stock Plan”).

Subject to adjustment, the 2024 Stock Plan Amendment authorizes the issuance of an additional 1,610,000 shares.

As of December 31, 2024, approximately 2.0 million shares of common stock were available for issuance under the 2022 Plan.

Equity-based service awards are granted under the ANI Pharmaceuticals, Inc.

Amended and Restated 2022 Stock Incentive Plan (the “2022 Plan”), which was approved by the Company's stockholders at the 2022 Annual Meeting of Stockholders (the “Annual Meeting”) held on April 27, 2022.

Subject to adjustment, the 2024 Stock Plan Amendment authorizes the issuance of an additional 1,610,000 shares pursuant to the Amended 2022 Stock Plan.

During the 2025 Annual Meeting, the stockholders of the Company approved a further amendment to the Amended 2022 Stock Plan (such amendment, the “2025 Stock Plan Amendment”;

and the Amended 2022 Stock Plan, after giving effect to the 2025 Stock Plan Amendment, the “Second Amended 2022 Stock Plan”).

The 2025 Stock Plan Amendment authorized the issuance of an additional 750,000 shares pursuant to the Second Amended 2022 Stock Plan..

As of December 31, 2025, approximate ly 1.9 million shares of common stock were available for issuance under the Second Amended 2022 Stock Plan.

Equity-based service awards are granted under the 2022 Plan, which was approved by the Company's stockholders at the 2022 Annual Meeting of Stockholders (the “Annual Meeting”) held on April 27, 2022.

Prior to this approval, the Company granted equity-based incentive awards under the Sixth Amended and Restated 2008 Stock Incentive Plan (the “2008 Plan”), which was renamed, amended and restated to the 2022 Plan.

The 2022 Plan, among other things, increased the number of shares reserved for issuance thereunder by 1,150,000 shares.

The 2022 Plan, among other things, increased the number of shares reserved for issuance under the 2008 Plan by 1,150,000 shares.

On May 23, 2023, the Company’s stockholders approved an amendment to the 2022 Plan (such amendment, the “2023 Stock Plan Amendment”).

Subject to adjustment, the 2023 Stock Plan Amendment increased the number of shares reserved for issuance under the 2022 Plan by 750,000 shares.

From time to time, the Company may grant stock options to employees through an inducement grant outside of the 2022 Plan to induce prospective employees to accept employment with us (the “Inducement Grants”).

From time to time, the Company may grant stock options to employees through an inducement grant outside of the Second Amended 2022 Stock Plan to induce prospective employees to accept employment (the “Inducement Grants”).

The options are granted at an exercise price equal to the fair market value of a share of the common stock on the respective grant date and are generally exercisable in four equal annual installments beginning on the first anniversary of the respective grant date.

The grants are made pursuant to inducement grants outside of the stockholder approved equity plan as permitted under the Nasdaq Stock Market listing rules.

No Inducement Grants were issued to employees in 2023, 2024, or 2025.

The cost of equity-based service awards are measured based on the grant-date fair value of the award.

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Stock-based compensation expense is recognized ratably over the vesting periods of the awards.

The following table summarizes stock-based compensation expense incurred for ESPP expense incurred under the 2016 Employee Stock Purchase Plan, stock options, restricted stock awards, performance-based restricted stock units, and Inducement Grants and included in the consolidated statements of operations:

The following table summarizes stock-based compensation expense incurred for ESPP expense, stock options, restricted stock awards, restricted stock units, performance-based restricted stock units, and Inducement Grants and included in the consolidated statements of operations:

(in thousands) Years Ended December 31,

3 unchanged sentences

Cost of sales 1,803 1,277 706

$ 29,344 $ 20,652 $ 14,599

Total $ 37,929 $ 29,344 $ 20,652

Income tax benefits of approximately $ 1.4 million , $ 2.8 million, and $ 3.3 million were recognized for stock-based compensation-related tax deductions in the 2025, 2024, and 2023 consolidated statements of operations, respectively.

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Outstanding stock options granted to non-employee directors generally vest over a period of one to four years and have 10-year contractual terms.

There were no grants of stock options during 2024.

For 2023, and 2022, the fair value of each option grant was estimated using the Black-Scholes option-pricing model, using the following assumptions:

Years Ended December 31,

There were no grants of stock options during 2025 or 2024.

For 2023, the fair value of each option grant was estimated using the Black-Scholes option-pricing model, using the following assumptions:

Year Ended December 31,

Expected option life (years) 6.25

Risk-free interest rate 4.1 %

1.7 % - 2.8 %

Expected stock price volatility 49.0 %

48.4 % - 50.0 %

Dividend yield —

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The calculated estimated volatility rate is based on ANI's historical stock price.

The Company has not issued a cash dividend on the common shares in the past nor does the Company have any current plans to do so in the future;

The Company has not issued a cash dividend on its shares of common stock in the past nor does the Company have any current plans to do so in the future;

therefore, an expected dividend yield of zero was used.

A summary of stock option activity under the 2022 Plan and Inducement Grants during the years ended December 31, 2024, 2023, and 2022 is presented below:

A summary of stock option activity under the Second Amended 2022 Stock Plan and Inducement Grants during the years ended December 31, 2025, 2024, and 2023 is presented below:

(in thousands, except per share and

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Intrinsic Value

Outstanding December 31, 2021 988 $ 45.56 6.6 $ 6,786

Outstanding at December 31, 2022 907 $ 45.47 5.6 $ 3,868

Granted 3 41.84 $ 22.12

2 unchanged sentences

Expired ( 11 ) 55.15

Outstanding December 31, 2022 907 $ 45.47 5.6 $ 3,868

Granted 3 41.84 $ 22.12

Outstanding at December 31, 2023 689 $ 46.05 4.9 $ 8,370

Exercised ( 102 ) 43.80 $ 2,001

Forfeited ( 21 ) 33.45

Expired ( 3 ) 50.88

1 unchanged sentence

Exercised ( 197 ) 55.22 $ 5,125

Forfeited ( 3 ) 34.24

Expired ( 33 ) 68.71

5 unchanged sentences

For the years ended December 31, 2025, 2024, and 2023

As of December 31, 2024, there was $ 0.4 million of total unrecognized compensation cost related to non-vested stock options granted under the 2022 Plan and Inducement Grant.

The cost is expected to be recognized over a weighted-average period of 0.50 years.

During the year ended December 31, 2024, ANI received $ 4.5 million in cash from the exercise of stock options and recorded approximately $ 0.2 million tax provision related to these exercises.

During the year ended December 31, 2023, ANI received $ 8.3 million in cash from the exercise of stock options and recorded a $ 0.2 million tax provision related to these exercises.

During the year ended December 31, 2022, ANI received $ 0.7 million in cash from the exercise of stock options and recorded a $ 0.1 million tax provision related to these exercises.

As of December 31, 2025, there was less than $ 0.1 million of total unrecognized compensation cost related to non-vested stock options granted under the Second Amended 2022 Stock Plan and Inducement Grant.

The cost is expected to be recognized over a weighted-average peri od of 0.83 years.

Duri ng the year ended December 31, 2025, the Company received $ 10.9 million in cash from the exercise of stock options and recorded approximately $ 0.2 million tax provision related to these exercises.

During the year ended December 31, 2024, the Company received $ 4.5 million in cash from the exercise of stock options and recorded a $ 0.2 million tax provision related to these exercises.

During the year ended December 31, 2023, the Company received $ 8.3 million in cash from the exercise of stock options and recorded a $ 0.2 million tax provision related to these exercises.

Restricted Stock Awards

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RSAs granted to non-officer directors generally vest over a period of one year .

Shares of common stock delivered to employees and directors will be unrestricted upon vesting.

During the vesting period, the recipient of the restricted stock has full voting rights as a stockholder and would receive dividends, if declared, even though the restricted stock remains subject to transfer restrictions and will generally be forfeited upon termination of the officer prior to vesting.

The fair value of each RSA is based on the market value of the Company's stock on the date of grant.

A summary of RSA activity under the Plan during the years ended December 31, 2024, 2023, and 2022 is presented below:

Upon vesting, unrestricted shares of common stock are delivered to employees and directors.

A summary of RSA activity under the Second Amended 2022 Stock Plan during the years ended December 31, 2025, 2024, and 2023 is presented below:

(in thousands, except per share and

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Unvested at December 31, 2025 1,537 $ 54.59 2.3

As of December 31, 2024, there was $ 55.7 million of total unrecognized compensation cost related to non-vested RSAs granted under the Plan, which is expected to be recognized over a weighted-average period of 2.3 years .

As of December 31, 2025, there was $ 66.5 million of total unrecognized compensatio n cost related to non-vested RSAs granted under the Second Amended 2022 Stock Plan, which is expected to be recognized over a weighted-average period of 2.26 years.

Restricted Stock Units

Restricted stock units (“RSUs”) are typically granted to international employees of the Company under the Amended 2022 Stock Plan, and generally vest over a period of four years .

Each RSU will entitle the recipient to receive one unrestricted share of common stock upon vesting.

The fair value of each RSU is based on the market value of the Company's stock on the date of grant.

The Company began granting RSUs to certain employees during the year ended 2025, and there were no grants to employees during 2024 or 2023.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

A summary of RSU activity under the Second Amended 2022 Stock Plan during the year ended December 31, 2025 is presented below:

(in thousands, except per share and

remaining term data) Shares Weighted

Average Grant

Value Weighted Average

Remaining Term

Unvested at December 31, 2024 — $ — —

Granted 23 70.09

Forfeited ( 1 ) 69.64

Unvested at December 31, 2025 22 $ 70.12 3.4

As of December 31, 2025, there was $ 1.4 million of total unrecognized compensation cost related to non-vested RSUs granted under the Second Amended 2022 Stock Plan, which is expected to be recognized over a weighted-average period of 3.4 years .

Performance-Based Restricted Stock Units

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PSUs granted to date vest over a three -year performance period.

February 12, 2025 Performance-Based Restricted Stock Units

On February 12, 2025, as part of the Company's equity compensation program, PSUs were granted to certain executives.

Of these PSUs, 50 % were market performance-based restricted stock units (“MPRSUs”), vesting of which is contingent upon the Company meeting certain total shareholder return (“TSR”) levels as compared to a select peer group over the over three years starting January 1, 2025, and 50 % of the PSUs were performance based restricted stock units (“PRSUs”), vesting of which is contingent upon the Company meeting certain adjusted non-GAAP year-on-year EBITDA growth rates over the over three years starting January 1, 2025.

The MPRSUs and PRSUs are also subject to the recipient’s continued employment or service through December 31, 2027.

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

On February 12, 2025, the Company granted 79,859 PSUs to employees and officers of the Company under the Second Amended 2022 Stock Plan (including 74,421 PSUs to officers of the Company).

As described above, PSU performance will be measured over three-year performance period from January 1, 2025 through December 31, 2027 and will cliff-vest contingent upon the achievement of specified performance objectives.

Both the MPRSUs and the PRSUs have a maximum potential to vest at 200 %.

At each reporting period, the Company analyzes progress on the performance goals to assess the likelihood of achievement.

The estimated grant date fair value per share of the MPRSUs was $ 97.48 and was calculated using a Monte Carlo simulation model.

These MPRSUs are included at 100 % of the estimate number of shares at the end of the three-year performance period and are reflected under “Granted” in the table below.

The estimated grant date fair value per share of the PRSUs was $ 59.68 based on the closing price of the stock on the date of grant.

These PRSUs are included at 100 % of the estimated number of shares at the end of the three-year performance period and are reflected under “Granted” in the table below.

ANI Pharmaceuticals, Inc.

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February 14, 2024 Performance-Based Restricted Stock Units Grant

On February 14, 2024, the Company granted 73,588 PSUs to officers and employees of the Company under the 2022 Plan ( 66,433 to officers of the Company).

On February 14, 2024, the Company granted 73,588 PSUs to officers and employees of the Company under the Second Amended 2022 Stock Plan (including 66,433 PSUs to officers of the Company).

PSU performance will be measured over a three-year performance period from January 1, 2024 through December 31, 2026 and will cliff-vest contingent upon the achievement of specified performance objectives.

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On February 28, 2023, as part of the Company's equity compensation program, PSUs were granted to certain executives.

Of these PSUs, 50 % were MPRSUs, vesting of which is contingent upon the Company meeting certain TSR levels as compared to a select peer group over the over three years starting January 1, 2023.

The MPRSUs are also subject to the recipient’s continued employment or service through December 31, 2025.

3 unchanged sentences

The MPRSUs are included at 100 % of the estimate number of shares at the end of the three -year performance period and are reflected under “Granted” in the table below.

The other 50 % of the PSUs were performance based restricted stock units (“PRSUs”), vesting of which is contingent upon the Company meeting certain adjusted non-GAAP year-on-year EBITDA growth rates over the over three years starting January 1, 2023.

The other 50 % of the PSUs were PRSUs, vesting of which is contingent upon the Company meeting certain adjusted non-GAAP year-on-year EBITDA growth rates over the over three years starting January 1, 2023.

The PRSUs are also subject to the recipient’s continued employment or service through December 31, 2025.

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For the years ended December 31, 2025, 2024, and 2023

A summary of PSU activity under the Plan during the years ended December 31, 2024 and 2023 is presented below:

A summary of PSU activity under the Second Amended 2022 Stock Plan during the years ended December 31, 2025, 2024, and 2023 is presented below:

(in thousands, except per share and

10 unchanged sentences

Unvested at December 31, 2024 150 $ 48.52 1.6

As of December 31, 2024, there was $ 7.2 million of total unrecognized compensation cost related to non-vested PSUs granted under the Plan, which is expected to be recognized over a weighted-average period of 1.6 years .

The foreign current and foreign deferred (benefits) expenses below represent our tax (benefit) expense from Canada, India, United Kingdom, Ireland, Portugal, and Germany jurisdictions.

Granted 80 59.68

Unvested at December 31, 2025 230 $ 52.40 1.5

As of December 31, 2025, there was $ 8.5 m illion of total unrecognized compensation cost related to non-vested PSUs granted under the Second Amended 2022 Stock Plan, which is expected to be recognized over a weighted-average period of 1.5 years.

The foreign current and foreign deferred (benefit) expense below represent the Company's tax (benefit) expense from Canada, India, United Kingdom, Ireland, Portugal, and Germany.

The Company is required to establish a valuation allowance for deferred tax assets if, based on the weight of all available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

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The Company considers the projected future taxable income and tax planning strategies in making this assessment.

As of December 31, 2024 and 2023, the consolidated valuation allowance was $ 9.5 million and $ 0.4 million, respectively, primarily related to deferred tax assets for net operating losses in the UK and and U.S.

As of December 31, 2025 and 2024, the consolidated valuation allowance was $ 12.4 million and $ 9.5 million, respectively, primarily related to deferred tax assets for net operating losses in the UK and certain U.S.

state jurisdictions.

The Company recorded a valuation allowance of approximately $ 7.5 million in connection with the acquisition of Alimera, and recorded an additional increase in the valuation allowance of approximately $ 1.5 million during the three months ended December 31, 2024.

(Loss) income before taxes consisted of the following:

As of December 31,

In July 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted into law.

For fiscal year 2025, the primary impact of the OBBBA to the tax provision was the accelerated expensing of domestic research and development activities which reduced the Company's deferred tax assets and reduced its current income tax liability.

The OBBBA restored an EBITDA-based calculation permanently and it resulted in the reduction of deferred tax assets and additional tax-deductible interest expense.

Income (loss) before expense (benefit) for income taxes consisted of the following:

Years Ended December 31,

(in thousands) 2025 2024 2023

Domestic $ ( 24,618 ) $ 19,124 $ ( 64,913 )

United States $ 103,588 $ ( 24,618 ) $ 19,124

Foreign ( 7,797 ) 2,406 748

(Loss) income before income tax (benefit) expense $ ( 22,212 ) $ 19,872 $ ( 62,665 )

Income (loss) before expense (benefit) for income taxes

$ 95,791 $ ( 22,212 ) $ 19,872

ANI Pharmaceuticals, Inc.

2 unchanged sentences

For the years ended December 31, 2025, 2024, and 2023

Total income tax (benefit) expense for income taxes consists of the following for the years ended December 31:

As of December 31,

Total income tax expense (benefit) for income taxes consists of the following for the years ended December 31:

(in thousands) 2025 2024 2023

Current income tax expense

Current income tax expense (benefit)

Federal $ ( 3,011 ) $ 13,714 $ 9,117

1 unchanged sentence

Foreign 171 1,876 26

Total 17,821 12,677 467

Deferred income tax benefit

Total current tax expense 2,693 17,821 12,677

Deferred income tax expense (benefit)

Federal 15,979 ( 17,876 ) ( 7,601 )

1 unchanged sentence

Foreign ( 2,942 ) ( 1,217 ) ( 29 )

Total ( 22,999 ) ( 11,576 ) ( 15,232 )

Total deferred tax expense (benefit) 11,787 ( 22,999 ) ( 11,576 )

Change in valuation allowance 2,974 1,488 ( 8 )

Total (benefit) expense for income taxes $ ( 3,690 ) $ 1,093 $ ( 14,769 )

The difference between the expected income tax (benefit) expense from applying U.S.

Federal statutory tax rates to the pre-tax (loss) income and actual income tax (benefit) expense relates primarily to the effect of the following:

Total expense (benefit) for income taxes $ 17,454 $ ( 3,690 ) $ 1,093

The following is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the year ended December 31, 2025, updated for the new disclosure guidance within ASU 2023-09, which the Company has adopted prospectively.

Year Ended December 31, 2025

(in thousands)

Amount Percentage

Tax expense at federal statutory rate $ 20,116 21.0 %

State and local income tax, net of federal (national) income tax effect 2,902 3.0 %

Foreign tax effects:

Foreign Tax Effects - United Kingdom - Valuation Allowance 2,974 3.1 %

Foreign Tax Effects - United Kingdom - Other ( 468 ) ( 0.5 ) %

Foreign Tax Effects - Other foreign jurisdictions ( 662 ) ( 0.7 ) %

Tax Credits - Research and Experimentation ( 3,771 ) ( 3.9 ) %

Nontaxable or nondeductible items:

Nontaxable or Nondeductible Items - Executive compensation 2,668 2.8 %

Nontaxable or Nondeductible Items - Equity compensation ( 1,281 ) ( 1.3 ) %

Nontaxable or Nondeductible Items - Contingent consideration ( 5,992 ) ( 6.3 ) %

Nontaxable or Nondeductible Items - Other 989 1.0 %

Other adjustments ( 21 ) — %

Tax expense at effective rate $ 17,454 18.2 %

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

The following is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the years ended December 31, 2024 and 2023, prior to the application of ASU 2023-09:

As of December 31,

2024 2023 2022

US federal statutory rate 21.0 % 21.0 %

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Effective income tax rate 16.6 % 5.5 %

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

Deferred income taxes reflect the net tax effects of differences between the bases of assets and liabilities for financial reporting and income tax purposes.

Deferred income tax assets and liabilities consisted of the following:

The components of deferred tax assets and liabilities as of December 31, 2025 and 2024, are as follows (in thousands):

As of December 31,

5 unchanged sentences

Inventories 6,614 5,234

Intangible assets — 40,193

Net operating loss carryforwards 28,148 27,254

2 unchanged sentences

Debt instruments 7,728 9,590

Charitable contribution carryforward 7,003 —

Other assets 7,718 5,305

Total deferred tax assets $ 104,032 $ 120,737

Less valuation allowance ( 12,423 ) ( 9,450 )

Total net deferred tax assets $ 91,609 $ 111,287

Deferred tax liabilities:

3 unchanged sentences

Total deferred tax liabilities $ ( 22,537 ) $ ( 26,181 )

Valuation allowance ( 9,450 ) ( 438 )

Deferred tax assets, net of deferred tax liabilities and valuation allowance $ 69,072 $ 85,106

As of December 31, 2024, U.S.

federal net operating loss carryforwards were approximately $ 55.6 million and UK net operating losses of approximately $ 50.8 million, primarily arose as a result of the acquisition of Alimera and the 2013 merger with BioSante Pharmaceuticals, Inc.

Net operating loss carryforwards related to the 2024 acquisition are indefinite lived.

Net operating loss carryforwards related to the 2013 merger, if not used, expire in annual increments through 2033.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

As of December 31, 2025, the Company had U.S.

federal net operating loss carryforwards of approximately $ 48.3 million and UK net operating loss carryforwards of approximately $ 61.9 million as a result of the acquisition of Alimera.

Net operating loss carryforwards related to the Alimera acquisition are indefinite lived.

State net operating loss carryforwards related to the 2013 merger with BioSante Pharmaceuticals, Inc., if not used, expire in annual increments through 2033.

All of the net operating loss carryforwards are limited on an annual basis as prescribed by Section 382 of the U.S.

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the current annual limitation is approximately $ 7.2 million per year.

Additionally, as of December 31, 2024, the Company has total net operating losses in various states of $ 5.7 million which begin to expire through 2042.

Additionally, as of December 31, 2025, the Company had tax effected total net operating losses in various states of $ 2.2 million which begin to expire through 2030.

The amounts of income tax paid by the Company, net of refunds, for the year ended December 31, 2025 were as follows:

(in thousands)

United States - federal $ 13,699

United States - state and local - other 2,343

United States - state and local - Pennsylvania 976

The Company is subject to income taxes in numerous jurisdictions in the U.S.

and certain foreign jurisdictions.

Significant judgement is required in evaluating tax positions and determining the expense for income taxes.

Significant judgment is required in evaluating tax positions and determining the expense for income taxes.

The Company established liabilities for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due.

These liabilities are established when the Company believe that certain positions might be challenged despite our belief that our tax return positions are fully supportable.

We adjusts these liabilities in light of changing facts and circumstances, such as the outcome of a tax audit.

These liabilities are established when the Company believe that certain positions might be challenged despite its belief that its tax return positions are fully supportable.

The Company adjusts these liabilities in light of changing facts and circumstances, such as the outcome of a tax audit.

The expense for income taxes includes the impact of changes to the liability that is considered appropriate.

The Company has not identified any material uncertain income tax positions as of December 31, 2025 and 2024.

The Company is subject to income tax audits in all jurisdictions for which tax returns are filed.

Tax audits by their nature are often complex and can require several years to complete.

All of the Company's income tax returns remain subject to examination by tax authorities due to the availability of net operating loss carryforwards.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

While the general IRS assessment statute of limitations is three years, the IRS can examine an original loss year return to verify a net operating loss deduction, even if it is beyond the three-year statute.

This exception applies because a net operating loss deduction may affect the taxable income in other years, and the IRS retains the right to audit the original year to ensure the net operating loss was properly calculated.

COMMITMENTS AND CONTINGENCIES

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The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

In April 2023, the Company entered into an agreement to lease additional warehouse space in East Windsor, New Jersey.

The lease has a term of five years , and is classified as an operating lease.

Additionally, during October 2023, the Company entered into an amendment for the Middleton, Wisconsin location which expanded the Company ’ s square footage and also extended the termination date to December 2028.

In connection with the acquisition of Alimera, the Company acquired operating leases for office space in Alpharetta, Georgia, which has a remaining term of approximately five years .

The Company also entered into a new lease agreement in Princeton, New Jersey, for office space which is expected to have a commencement date during 2025.

The Princeton, New Jersey lease will have a remaining term of approximately 10 years.

As of December 31, 2024, there are 15 operating leases for facilities and office equipment with remaining terms expiring from 2025 through 2029 and a weighted average remaining lease terms of 3.8 years and 3.9 years, as of December 31, 2024 and 2023, respectively.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

The Company entered into a new lease agreement for office space located in Princeton, New Jersey, for a term of approximately 10 years, following the lease commencement date of August 18, 2025.

The office space serves as the Company's commercial headquarters, which includes certain employees in the Company's corporate, legal, human resources, business functions, and commercial operations.

The Company recognized a right-of-use asset and a corresponding lease liability at the lease commencement date of approximately $ 5.2 million.

The lease liability is initially measured at the present value of the lease payments, discounted using the lessee's incremental borrowing rate of approximately 7.4 %.

The lease agreement includes a rent-free period of three months, and is classified as an operating lease in the consolidated balance sheets.

In connection with the acquisition of Alimera, the Company acquired an operating lease for office space in Alpharetta, Georgia The lease for this space expires in December 2032 with an early termination option in December 2029 and an option to extend five years beyond December 2032.

During 2025, the Company entered into an agreement to sublease the entire space to a subtenant, which agreement will expire in December 2032.

As of December 31, 2025, the Company has operating leases for facilities and office equipment with remaining terms expiring from 2026 through 2035 and a weighted average remaining lease terms of 6.5 years and 3.8 years, as of December 31, 2025 and 2024, respectively.

Many of the operating leases have fair value renewal options, none of which are considered certain of being exercised or included in the minimum lease term.

The weighted average incremental borrowing rates as of December 31, 2024 and 2023 is 8.10 % and 8.12 %, respectively.

The weighted average incremental borrowing rates for the Company's lease obligations as of December 31, 2025 and 2024 are 7.74 % and 8.10 %, respectively.

Lease expense consisted of the following for the years ended December 31:

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Variable lease costs 190 261 221

Sublease income ( 64 ) — —

Total lease costs $ 3,548 $ 2,426 $ 2,252

The table below reconciles the fixed component of the undiscounted cash flows for each of the first five years and the total remaining years to the operating leas e liabilities recorded on the Consolidated Balance Sheet as of December 31, 2024 :

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

The table below reconciles the fixed component of the undiscounted cash flows for each of the next five years and the total remaining years to the operating leas e liabilities recorded on the consolidated balance sheet as of December 31 :

(in thousands)

Thereafter 4,094

Total minimum lease payments $ 14,272

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Non-current lease liability, included in other non-current liabilities $ 9,173

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

Finance Leases

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Finance lease ROU assets are included in other non-current assets, specifically in Property and equipment, net, and finance lease liabilities are included in accrued expenses and other and other non-current liabilities in the consolidated balance sheets.

As of December 31, 2024, a schedule of maturity of lease liabilities under finance leases, together with the present value of minimum lease payments is as follows:

As of December 31, 2025, a schedule of maturity of finance lease liabilities, together with the present value of minimum lease payments, is as follows:

(in thousands)

Future payments:

Total minimum lease payments $ 158

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Non-current lease liability, included in other non-current liabilities $ 48

As of December 31, 2024 , the weighted average remaining lease terms of the Company's financing leases was 1.7 years.

As of December 31, 2024 the we ighted average discount rate used to determine the financing lease liabilities was 10.7 %.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

As of December 31, 2025, the weighted average remaining lease terms of the Company's finance leases was 0.6 years.

As of December 31, 2025 the weighted average discount rate used to determine the finance lease liabilities was 10.7 %.

Government Regulation

The Company's products and facilities are subject to regulation by a number of federal and state governmental agencies, such as the Drug Enforcement Administration (“DEA”), the Food and Drug Administration (“FDA”), the Centers for Medicare and Medicaid Services (“CMS”), the Central Drugs Standard Control Organization (“CDSCO”), The Narcotics Control Bureau (“NCB”), and India’s Ministry of Health and Family Welfare (“MoHFW”).

The Company's products and facilities are subject to regulation by a number of federal and state governmental agencies, such as the Drug Enforcement Administration (“DEA”), the FDA, the Centers for Medicare and Medicaid Services, the Central Drugs Standard Control Organization, the Narcotics Control Bureau (“NCB”), and India’s Ministry of Health and Family Welfare.

The FDA, in particular, maintains oversight of the formulation, manufacture, distribution, packaging, and labeling of all of ANI's products.

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During the years ended December 31, 2025, 2024, and 2023, net revenues from the commercial sales of these products totaled $ 24.1 million, $ 22.4 million, and $ 22.4 million, respectively.

Before acquisition of Hyoscyamine, contract manufacturing revenues for Hyoscyamine, for the years ended December 31, 2024, 2023, and 2022 were $ 0.1 million, $ 1.9 million and $ 2.6 million, respectively.

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

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

The FDA evaluates whether to initiate enforcement action on a case-by-case basis, but gives higher priority to enforcement action against products in certain categories, such as those with potential safety risks or that lack evidence of effectiveness.

The Company believes that, so long as it complies with applicable manufacturing standards, the FDA will continue to operate on a risk-based approach and will not take action against us.

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

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

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

Before the acquisition of Hyoscyamine, contract manufacturing revenues for Hyoscyamine, for the years ended December 31, 2024 and 2023 were $ 0.1 million and $ 1.9 million, respectively.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

Legal proceedings

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These matters are complex and subject to significant uncertainties.

While the Company believes that it have valid claims and/or defenses in the litigation and other matters described below, litigation is inherently unpredictable, particularly where the damages sought are substantial or indeterminate or when the proceedings, investigations or inquiries are in the early stages, and the outcome of the proceedings could result in losses, including substantial damages, fines, civil or criminal penalties and injunctive or administrative remedies.

While the Company believes that it has valid claims and/or defenses in the litigation and other matters described below, litigation is inherently unpredictable, particularly where the damages sought are substantial or indeterminate or when the proceedings, investigations or inquiries are in the early stages, and the outcome of the proceedings could result in losses, including substantial damages, fines, civil or criminal penalties and injunctive or administrative remedies.

The Company intends to vigorously prosecute and/or defend these matters, as appropriate;

however, from time to time, ANI may settle or otherwise resolve these matters on terms and conditions that it believes are in the Company's best interests.

Resolution of any or all claims, investigations, and legal proceedings, individually or in the aggregate, could have a material adverse effect on our results of operations and/or cash flows in any given accounting period or on our overall financial condition.

however, from time to time, the Company may settle or otherwise resolve these matters on terms and conditions that it believes are in the Company's best interests.

Resolution of any or all claims, investigations, and legal proceedings, individually or in the aggregate, could have a material adverse effect on the results of operations and/or cash flows in any given accounting period or on the Company's overall financial condition.

Unless otherwise disclosed, the Company is unable to predict the outcome of the matter or to provide an estimate of the range of reasonably possible material losses.

The Company records accruals for loss contingencies to the extent it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

From time to time, the Company may also be involved in other pending proceedings for which, in our opinion based upon facts and circumstances known at the time, either the likelihood of loss is remote or any reasonably possible loss associated with the resolution of such proceedings is not expected to be material to our results, and therefore remain undisclosed.

If and when any reasonably possible losses associated with the resolution of such other pending proceedings, in our opinion, become material, ANI will disclose such matters.

From time to time, the Company may also be involved in other pending proceedings for which, in the opinion of management and based upon facts and circumstances known at the time, either the likelihood of loss is remote or any reasonably possible loss associated with the resolution of such proceedings is not expected to be material to our results, and therefore remain undisclosed.

If and when any reasonably possible losses associated with the resolution of such other pending proceedings, in the opinion of management, become material, the Company will disclose such matters.

Furthermore, like many pharmaceutical manufacturers, the Company is periodically exposed to product liability claims.

The prevalence of these claims could limit our coverage under future insurance policies or cause those policies to become more expensive, which could harm our business, financial condition, and operating results.

The prevalence of these claims could limit the Company's coverage under future insurance policies or cause those policies to become more expensive, which could harm its business, financial condition, and operating results.

Recent trends in the product liability and director and officer insurance markets is to exclude matters related to certain classes of drugs.

Our policies have been subject to such exclusions which place further potential risk of financial loss on us.

Legal fees for litigation-related matters are expensed as incurred and included in the consolidated statements of operations under the selling, general, and administrative expense line item.

Commercial Litigation

On December 3, 2020, class action complaints were filed against the Company on behalf of putative classes of direct and indirect purchasers of the drug Bystolic.

On December 23, 2020, six individual purchasers of Bystolic, CVS, Rite Aid, Walgreen, Kroger, Albertsons, and H-E-B, filed complaints against the Company.

On March 15, 2021, the plaintiffs in these actions filed amended complaints.

All amended complaints were substantively identical.

The plaintiffs in these actions alleged that, beginning in 2012, Forest Laboratories, the manufacturer of Bystolic, entered into anticompetitive agreements when settling patent litigation related to Bystolic with seven potential manufacturers of a generic version of Bystolic:

Hetero, Torrent, Alkem/Indchemie, Glenmark, Amerigen, Watson, and various of their corporate parents, successors, subsidiaries, and affiliates.

ANI itself was not a party to patent litigation with Forest concerning Bystolic and did not settle patent litigation with Forest.

The plaintiffs named the Company as a defendant based on the Company’s January 8, 2020 Asset Purchase Agreement with Amerigen.

Under the terms of the 2020 Asset Purchase Agreement, Amerigen agreed to indemnify ANI for certain liabilities relating to Bystolic, including liabilities that arose prior to closing of the asset purchase.

The complaints alleged that the 2013 patent litigation settlement agreement between Forest and Amerigen violated federal and state antitrust laws and state consumer protection laws by delaying the market entry of generic versions of Bystolic.

Plaintiffs alleged they paid higher prices as a result of delayed generic competition.

Plaintiffs sought damages, trebled or otherwise multiplied under applicable law, injunctive relief, litigation costs and attorneys’ fees.

The complaints did not specify the amount of damages sought from the Company or other defendants and the Company.

The cases were consolidated in the United States District Court for the Southern District of New York.

On April 23, 2021, the Company and other defendants filed motions to dismiss the amended complaints.

On January 24, 2022, the court dismissed all claims brought by the plaintiffs without prejudice.

The court granted the plaintiffs until February 22, 2022 to file amended complaints, which were filed in federal court in the Southern District of New York, on that date.

The newly amended complaints contained substantially similar claims.

On April 19, 2022, the Company and other defendants filed motions to dismiss the newly amended complaints.

After full briefing and oral argument, on February 21, 2023, the court granted the Company and the defendants’ motion to dismiss all actions with prejudice.

Plaintiffs filed an appeal in the Second Circuit.

On May 13, 2024, the Second Circuit affirmed the district court’s judgment, dismissing plaintiffs’ claims with prejudice.

The Company's policies have been subject to such exclusions which place further potential risk of financial loss on us.

Legal fees for litigation-related matters are expensed as incurred and included in the consolidated statements of operations und er the selling, general, and administrative expense line item.

ANI Pharmaceuticals, Inc.

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For the years ended December 31, 2025, 2024, and 2023

Commercial Litigation

On March 4, 2024, ANI commenced a civil action against CG Oncology, Inc.

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On April 2, 2024, CG Oncology filed an answer and counterclaim (the “CGON Answer and Counterclaim”) and concurrently moved for judgment on the pleadings or, in the alternative, for partial summary judgment (the “Motion for Summary Judgment”).

CG Oncology’s Motion for Summary Judgment seeks judgment declaring that the November 2010 Agreement does not “oblige CGON to pay royalties after expiration of the latest-running assigned patent.” CG Oncology also seeks judgment awarding compensatory damages and punitive damages on counterclaims for alleged breach of the November 2010 Agreement and for alleged misappropriation of trade secrets under federal and Delaware state law.

On April 22 and 25, 2024, ANI filed its reply to CG Oncology’s counterclaims, denying any liability to CG Oncology and asserting additional counterclaims against CG Oncology (“Reply Counterclaims”) for alleged breach of the November 2010 Agreement and, in the alternative, for unjust enrichment.

ANI’s Reply Counterclaims seek judgment (i) declaring that, under Section 3.3 of the November 2010 Agreement, CG Oncology is contractually obligated to pay ANI 5 % of the worldwide net sales of cretostimogene made by CG Oncology or any affiliate or sublicensee thereof;

(ii) dismissing CG Oncology’s counterclaims with prejudice;

(iii) awarding ANI compensatory damages as provided by law, including damages grounded in restitution and unjust enrichment;

(iv) in the event of a judgment in ANI’s favor on ANI’s fourth counterclaim for unjust enrichment, ordering CG Oncology to re-transfer to ANI ownership of all assets that ANI sold to CG Oncology under the November 2010 Agreement, including, without limitation, all data and documentation comprising IND 12154;

and (v) in the event of a judgment in ANI’s favor on ANI’s fourth counterclaim for unjust enrichment, imposing a constructive trust on all fruits of CG0070-related assets that ANI sold to CG Oncology under the November 2010 Agreement including, without limitation, all data and documentation comprising IND 12154 and any other IND that CG Oncology may have for CG0070.

On May 15, 2024, CG Oncology filed a reply to ANI’s counterclaims, which generally maintains the positions in the CGON Answer and Counterclaim.

The parties are currently engaged in pretrial fact discovery.

On August 22, 2024, the court heard the parties' oral arguments in a hearing on CG Oncology’s Motion for Summary Judgment.

On November 18, 2024, the court issued its decision denying CG Oncology's Motion for Summary Judgment.

The deadline for submitting amendments or supplements to the pleadings has passed.

The court entered the case management order on January 16, 2025 and trial is scheduled to commence on July 21, 2025.

ANI intends to vigorously pursue this matter.

CG Oncology’s Motion for Summary Judgment sought judgment declaring that the November 2010 Agreement does not “oblige CGON to pay royalties after expiration of the latest-running assigned patent.” On April 25, 2024, ANI filed a reply to CG Oncology’s counterclaims, denying any liability to CG Oncology and asserting additional counterclaims against CG Oncology (“Reply Counterclaims”) for alleged breach of the November 2010 Agreement and, in the alternative, for unjust enrichment.

On May 15, 2024, CG Oncology filed a reply to ANI’s counterclaims, denying any liability to ANI and generally maintaining the positions taken in the CGON Answer and Counterclaim.

On November 18, 2024, the court denied CG Oncology's Motion for Summary Judgment.

On June 2, 2025, CG Oncology filed five motions for summary judgment seeking dismissal of all of ANI's claims and counterclaims, including breach of the royalty payment provision, breach of good faith performance, breach of the implied covenant of good faith, and in the alternative, unjust enrichment.

Also on June 2, 2025, ANI filed a motion for partial summary judgment seeking dismissal of CG Oncology's counterclaims for unenforceability of the royalty payment provision under Brulotte , breach of good faith performance, breach of confidentiality and trade secret misappropriation.

At a pretrial conference on July 16, 2025, the court granted CG Oncology's motion for partial summary judgment on its Brulotte counterclaim and affirmative defense, but allowed the case to proceed on ANI's counterclaim for unjust enrichment.

The court also granted ANI's motion for partial summary judgment, dismissing CG Oncology's breach of confidentiality and trade secret misappropriation claims.

The jury trial commenced in Delaware Superior Court on July 21, 2025.

On July 29, 2025, a verdict was returned by the jury, finding that (1) the unenforceability of the royalty payment provision in the November 2010 Agreement did not affect the economic or legal substance of the transactions contemplated thereby in a manner that was materially adverse to ANI, and (2) awarding no damages to ANI on its unjust enrichment counterclaim.

On August 12, 2025, ANI filed a motion for a new trial and for judgment as a matter of law.

On September 10, 2025, CG Oncology filed its opposition to ANI's motion, and on October 8, 2025, ANI filed its reply to CG Oncology's opposition.

A hearing date has been scheduled for April 10, 2026.

ANI expects to continue to challenge this verdict through post-trial motions and/or an appeal.

On March 6, 2024, a complaint was filed against ANI by Acella Pharmaceuticals, LLC, in the United States District Court of Minnesota, asserting, among other things, false advertising under the Lanham Act, and unfair trade practices and false advertising under Minnesota law, relating to ANI’s natural desiccated thyroid tablets USP.

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On December 19, 2024, the court issued an order denying Acella's motion.

The parties have been unable to reach a settlement and have agreed to an extension for fact discovery until July 1, 2025.

Trial is currently scheduled to begin as early as April 2026.

The parties have been unable to reach a settlement to date.

Fact discovery is now closed and expert discovery is currently ongoing.

The trial-ready date is currently set for no earlier than August 3, 2026.

ANI disputes any liability in this matter and intends to defend this lawsuit vigorously.

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Patent Litigation

On November 21, 2023, a complaint was filed against Novitium and certain other defendants in the case of Harmony Biosciences, LLC, Bioprojet Societe Civile de Recherche and Bioprojet Pharma SAS v.

AET Pharma US, Inc., Annora Pharma Private Limited, Novitium Pharma LLC, Zenara Pharma Private Limited and Biophore India Pharmaceuticals Private Limited in the United States District Court for the District of Delaware, asserting, among other things, that Novitium’s proposed pitolisant hydrochloride drug product, which is subject to Novitium’s Abbreviated New Drug Application, infringes certain U.S.

On November 21, 2023, a complaint was filed against Novitium and certain other defendants in the case of Harmony Biosciences, LLC, Bioprojet Societe Civile de Recherche and Bioprojet Pharma SAS (collectively, the "Plaintiffs") v.

AET Pharma US, Inc., Annora Pharma Private Limited, Novitium Pharma LLC, Zenara Pharma Private Limited and Biophore India Pharmaceuticals Private Limited in the U.S.

District Court for the District of Delaware, asserting, among other things, that Novitium’s proposed pitolisant hydrochloride drug product, which is subject to Novitium’s Abbreviated New Drug Application, infringes certain U.S.

patents owned by the plaintiffs.

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et al., into one consolidated matter filed in C.A.

The case is currently in discovery.

The court set a trial date for February 2026.

Novitium disputes any liability in this matter.

On December 27, 2024, a complaint was filed against Novitium by Athena Bioscience, LLC (“Athena”) in the United States District Court for the District of Delaware, asserting, among other things, that Novitium’s proposed tramadol hydrochloride solution drug product, which is subject to Novitium’s Abbreviated New Drug Application, infringes certain U.S.

On January 15, 2026, Plaintiffs and Novitium entered into a Settlement Agreement, and on January 16, 2026, Plaintiffs and Novitium filed a Stipulation and Joint Dismissal of all claims, counterclaims and defenses, which order was entered by the court on January 20, 2026, effectively terminating the case against Novitium.

On December 27, 2024, a complaint was filed against Novitium by Athena Bioscience, LLC (“Athena”) in the U.S.

District Court for the District of Delaware, asserting, among other things, that Novitium’s proposed tramadol hydrochloride solution drug product, which is subject to Novitium’s Abbreviated New Drug Application, infringes certain U.S.

patents owned by Athena.

The complaint seeks damages, injunctive relief, attorneys’ fees and costs.

Novitium disputes any liability in this matter.

On March 7, 2025, Novitium filed its answer, denying all allegations and asserting counterclaims of non-infringement and invalidity.

On March 28, 2025, Athena filed its answer to Novitium's answer and counterclaims.

On September 4, 2025, Athena and Novitium jointly filed a Stipulation and Order of Dismissal of all claims, counterclaims and defenses, which order was entered by the court on September 8, 2025, effectively terminating the case.

Ranitidine Related Litigation

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Plaintiffs filed opening briefs on April 10, 2024 and generics defendants filed their response on July 25, 2024.

Plaintiffs filed reply briefs in September 2024.

Oral arguments were heard on October 10, 2025, and a decision from the court is pending.

ANI and Novitium dispute any liability in this matter.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025, 2024, and 2023

State Court Personal Injury Litigation

ANI and Novitium have also been named as defendants in various state lawsuits.

The pending cases in California state court naming generic ranitidine manufacturers were transferred to an existing civil case coordination docket for pretrial proceedings (JCCP) in Alameda County.

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Defendants filed omnibus demurrers to the complaint.

Novitium is named in one third wave case.

Novitium is currently named in one bellwether case (Bautista), one wave 2 case (Austin), one wave 3 case (Rodarte), three wave 5 cases, six wave 6 cases, and four wave 7 cases.

The court heard arguments for the demurrers on August 22, 2024 and issued its final ruling on August 28, 2024, allowing some counts to survive.

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Novitium filed its answer to the second amended master complaint on September 6, 2024.

Discovery is currently ongoing.

ANI Pharmaceuticals, Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

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

In December 2023, the Keller Postman firm filed approximately 200 individual plaintiff short form complaints that name generic defendants.

In December 2023, the Keller Postman firm filed a large number of short form complaints that name generic defendants.

Novitium is named in 29 of the short form complaints which reference the claims for the master complaint, but Novitium has not been served.

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Plaintiffs filed amended short form complaints on September 20, 2024 and defendants filed responses on October 6, 2024.

Pleadings are now closed and discovery is currently ongoing.

Pennsylvania.

In September 2022, two complaints were filed naming Novitium as a defendant in Pennsylvania state court, Philadelphia County.

On February 16, 2023, the Pennsylvania plaintiffs filed a consolidated long-form complaint against the generic defendants, Plaintiffs v.

Civil Action No.

The long-form complaint names Novitium as a defendant.

The long form complaint asserts causes of action for negligence, failure to warn, negligent storage and transportation, breach of express warranties, breach of implied warranties, negligent misrepresentation, fraud, strict products liability, wrongful death and survivor actions, and loss of consortium.

The complaint includes a prayer for punitive damages.

The generic defendants filed their preliminary objections to Plaintiffs’ consolidated long-form generic complaint on March 20, 2023.

The court dismissed all claims related to failure to warn/design defects on preemption grounds.

The court also sustained the generics’ preliminary objections relating to the counts of strict liability-design defect and breach of implied warranty to the extent Pennsylvania substantive law applies, effectively dismissing the generic defendants from the case unless and until a non-resident plaintiff names a generic in a short form complaint.

Out of an abundance of caution, however, the generics, including Novitium, all filed answers to the long form complaint in June 2023.

In January 2024, plaintiffs filed short form complaints naming generic defendants, including Novitium in one complaint.

Generic defendants filed joint preliminary objections to the short form complaints based on preemption.

The deadline for filing responses to these objections has passed.

In addition, Novitium was not named in any amended short form complaint filed by plaintiffs

ANI and Novitium dispute any liability in these matters.

No case including Novitium is expected to go to trial before June 2026.

Novitium disputes any liability in these matters.

RELATED PARTY TRANSACTIONS

On March 8, 2021, the Company entered into an Equity Commitment and Investment Agreement with the PIPE Investor, pursuant to which 25,000 shares were purchased for $ 1,000 per share and an aggregate purchase price of $ 25.0 million on November 19, 2021.

The Chairman of the Company's board of directors is an operating partner of Ampersand Capital Partners, an affiliate of the PIPE Investor.

The former Chairman of the Company's Board of Directors and current Director, Patrick D.

Walsh, is an operating partner of Ampersand Capital Partners, an affiliate of the PIPE Investor.

During the quarter ended September 30, 2025, all PIPE Shares were converted to shares of common stock, and as such there were no PIPE Shares outstanding as of December 31, 2025.

Refer to Note 13 “Mezzanine and Stockholders' Equity” to the notes to the consolidated financial statements for further information related to the conversion of the PIPE Shares.

In connection with the acquisition of Novitium, the Company entered into employment agreements with the two executives and founders of Novitium, Muthusamy Shanmugam, Head of R&D and COO of NJ Operations of ANI, and Chad Gassert, Sr.

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Shanmugam also serves on the Company ’ s Board of Directors.

Shanmugam holds a minority interest in Scitus Pharma Services (“Scitus”), which provides clinical research services to Novitium, a majority interest in SS Pharma LLC (“SS Pharma”), which acquires and supplies API to Novitium, a minority interest in Nuray Chemical Private Limited (“Nuray”), which manufactured and supplied API to Novitium in prior periods, a majority interest in Esjay Pharma LLC (“Esjay”), which provides research and development and facilities consulting services, and a minority interest in SThree Chemicals Pvt Ltd (“SThree”), which acquires and supplies API to Novitium.

Shanmugam holds a minority interest in Scitus Pharma Services Private Limited (“Scitus”), which provides clinical research services to Novitium.

Shanmugam holds interests in certain entities with which the Company conducts business, including a majority interest in SS Pharma LLC (“SS Pharma”), which acquires and supplies API to Novitium;

a minority interest in Nuray Chemical Private Limited (“Nuray”), which manufactured and supplied API to Novitium in prior periods;

a majority interest in each of Esjay Pharma Private Limited and Esjay LLC (together, “Esjay”), which provides research and development services, certain finished goods, and certain consulting services to the Company;

and a minority interest in each of SThree Chemicals Pvt Ltd and SThree Chemicals LLC (together, “SThree”), which acquires and supplies API to Novitium.

ANI Pharmaceuticals, Inc.

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(in thousands) 2025 2024 2023

Scitus Pharma Services $ 2,759 $ 3,646 $ 2,075

SS Pharma LLC 1,244 8,235 3,669

Esjay Pharma LLC 115 — 101

SThree Chemicals Pvt Ltd 11,428 — —

Nuray Chemical Private Limited — — 1,110

$ 15,546 $ 11,881 $ 6,955

As of December 31, 2024, the outstanding balances due to Scitus was $ 0.9 million .

There was no outstanding balance due to SS Pharma, SThree, Nuray, or Esjay at December 31, 2024.

The Company paid Mr.

Shanmugam and Esjay, and Mr.

Gassert's company Chali Properties LLC, approximately $ 6.7 million and $ 1.9 million, respectively, for their portion of the cash consideration due to them as part of the Novitium acquisition.

The Company paid Mr.

Shanmugam and Esjay, and Mr.

Gassert's company Chali Properties LLC, approximately $ 6.7 million and $ 1.9 million, respectively, for their portion of the cash consideration due to them as part of the Novitium acquisition.

Scitus $ 4,066 $ 2,759 $ 3,646

SS Pharma — 1,244 8,235

Esjay 4,566 115 —

SThree 8,268 11,428 —

Total Payments $ 16,900 $ 15,546 $ 11,881

As of December 31, 2025, the outstan ding balances due to Scitus, Esjay, and SThree were $ 0.5 million, $ 0.9 million, and $ 1.3 million, respectively.

There was no outstanding balance due to SS Pharma or Nuray at December 31, 2025.

On December 12, 2023, the Company paid $ 12.5 million of cash consideration to the Company Members of Novitium for the achievement of the "ANDA Filing Earn-Out," as defined in the Novitium Merger Agreement, and as discussed in Note 2 “Revenue Recognition and Related Allowances” in the notes to the consolidated financial statements.

The Company paid each of Mr.

Shanmugam, Esjay, and Mr.

Gassert, through his company Chali Properties LLC, approximately $ 0.1 million, $ 6.6 million, and $ 1.9 million, respectively, for their portion of the cash consideration due to them as part of the Novitium Merger Agreement.

On February 22, 2024, the Company paid $ 12.5 million of cash consideration to the Company Members of Novitium for the achievement of the "Gross Profit Earn-Out," as defined in the Novitium Merger Agreement, and as discussed in Note 2 “Revenue Recognition and Related Allowances” in the notes to the consolidated financial statements.

The Company paid each of Mr.

Shanmugam, Esjay, and Mr.

SEGMENT REPORTING

An operating segment is defined as a component of an entity that engages in business activities from which it may recognize revenues and incur expense, its operating results are regularly reviewed by the entity’s chief operating decision maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance, and its discrete financial information is available.

An operating segment is defined as a component of an entity that engages in business activities from which it may recognize revenues and incur expense, the operating results of which are regularly reviewed by the entity’s chief operating decision maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

The CODM for the Company is the Chief Executive Officer.

The Company does not aggregate its operating segments for reporting purposes, and therefore, the reportable segments are the same as its operating segments.

Following the acquisition of Alimera and during the fourth quarter of 2024, the Company reorganized the segment information that is regularly provided to the chief operating decision maker which caused the identification of significant segment expenses to change.

Therefore, the Company recasted prior period segment information to conform to the current-period presentation in accordance with the segment guidance at ASC 280-10-50-34.

Following the acquisition of Alimera and during the fourth quarter of 2024, the Company reorganized the segment information that is regularly provided to the CODM resulting in changes to the Company's identification of significant segment expenses.

Therefore, the Company has recast prior period segment information to conform to the current-period presentation in accordance with the segment guidance at ASC 280-10-50-34.

The Company is now organized into two operating segments a s follows:

• Rare Disease and Brands – Consists of two reporting units, Rare Disease and Brands.

The Rare Disease unit consists of operations related to the development, manufacturing and marketing of proprietary branded pharmaceutical products, with a strategic focus on products used in the treatment of patients with rare disease conditions and consists of operations related to Cortrophin Gel, and from September 16, 2024, through December 31, 2024, ILUVIEN and YUTIQ.

In addition, the Brands reporting unit includes a portfolio of approximately 16 brand products that are principally sold in highly genericized markets.

The Rare Disease unit consists of operations related to the development, manufacture and marketing of proprietary branded pharmaceutical products, with a strategic focus on products used in the treatment of patients with rare disease conditions, and consists of operations related to Cortrophin Gel and ILUVIEN (there were no sales of YUTIQ d uring the third and fourth quarters of 2025).

In addition, the Brands reporting unit includes a portfolio of approximately 20 branded prod ucts that are principally sold in highly genericized markets.

• Generics and Other – Consists of operations related to the development, manufacture, and marketing of generic pharmaceutical products including those sold through traditional wholesale and retail sales channels, sales of contract manufactured products, royalties on contract manufactured products, product development

ANI Pharmaceuticals, Inc.

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For the years ended December 31, 2025, 2024, and 2023

• Generics and Other – Consists of operations related to the development, manufacturing, and marketing of generic pharmaceutical products including those sold through traditional wholesale and retail sales channels, sales of contract manufactured products, royalties on contract manufactured products, product development services, and other.

services, and other.

As of December 31, 2025 , this reporting segment was comprised of over 120 product families.

The CODM evaluates the performance of the Company as two operating segments based on revenues and operating income (loss), exclusive of corporate expenses and other expenses not directly allocated or attributable to an operating segment.

These expenses include, but are not limited to, certain management, legal, accounting, human resources, insurance, an d information technology expenses, and transaction and integration expenses related to the acquisition of Alimera and other acquisitions .

These expenses include, but are not limited to;

certain management, legal, accounting, human resources, insurance, and information technology expenses, as well as transaction and integration expenses related to the acquisition of Alimera and other acquisitions.

The Company does not manage assets of the Company by operating segment and the CODM does not review asset information by operating segment.

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Year Ended December 31, 2025

(in thousands)

Generics and Other Rare Disease and Brands Corporate and Unallocated Total

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Cost of sales (excluding depreciation and amortization) ( 201,955 ) ( 139,355 ) — ( 341,310 )

Research and Development ( 30,519 ) ( 14,062 ) — ( 44,581 )

Selling, general, and administrative ( 5,120 ) ( 125,972 ) ( 118,544 ) ( 249,636 )

Research and Development expense ( 36,815 ) ( 14,849 ) — ( 51,664 )

Selling, general, and administrative expense ( 5,675 ) ( 188,489 ) ( 123,581 ) ( 317,745 )

Depreciation and amortization — — ( 91,417 ) ( 91,417 )

Fair value adjustment — — 619 619

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

Contingent consideration fair value adjustment — — 31,012 31,012

Loss on disposal of assets — — ( 382 ) ( 382 )

Intangible asset impairment charge — — ( 767 ) ( 767 )

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Interest expense, net — — ( 20,060 ) ( 20,060 )

Other expense, net — — ( 4,033 ) ( 4,033 )

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

Income (Loss) Before Expense (Benefit) for Income Taxes $ 116,024 $ 72,469 $ ( 210,705 ) $ ( 22,212 )

Other income, net — — 1,934 1,934

Income (Loss) Before Income Tax Expense $ 154,988 $ 141,240 $ ( 200,437 ) $ 95,791

ANI Pharmaceuticals, Inc.

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Year Ended December 31, 2024

(in thousands)

Generics and Other Rare Disease and Brands Corporate and Unallocated Total

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Cost of sales (excluding depreciation and amortization) ( 168,371 ) ( 81,839 ) — ( 250,210 )

Research and Development ( 28,197 ) ( 6,089 ) — ( 34,286 )

Selling, general, and administrative ( 2,451 ) ( 73,466 ) ( 85,780 ) ( 161,697 )

Research and Development expense ( 30,519 ) ( 14,062 ) — ( 44,581 )

Selling, general, and administrative expense ( 5,120 ) ( 125,972 ) ( 118,544 ) ( 249,636 )

Depreciation and amortization — — ( 67,731 ) ( 67,731 )

Fair value adjustment — — ( 1,426 ) ( 1,426 )

Restructuring activities — — ( 1,132 ) ( 1,132 )

Contingent consideration fair value adjustment — — 619 619

Gain on disposal of assets — — 5,347 5,347

Intangible asset impairment charge — — ( 7,600 ) ( 7,600 )

Operating Income (Loss) $ 116,024 $ 72,469 $ ( 187,909 ) $ 584

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

Interest expense, net — — ( 17,602 ) ( 17,602 )

Other expense, net — — ( 4,033 ) ( 4,033 )

Income (Loss) Before Expense for Income Taxes $ 105,927 $ 89,173 $ ( 175,228 ) $ 19,872

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

Income (Loss) Before Income Tax Benefit $ 116,024 $ 72,469 $ ( 210,705 ) $ ( 22,212 )

Year Ended December 31, 2023

(in thousands)

Generics and Other Rare Disease and Brands Corporate and Unallocated Total

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Cost of sales (excluding depreciation and amortization) ( 152,739 ) ( 28,774 ) — ( 181,513 )

Research and Development ( 19,964 ) ( 2,354 ) — ( 22,318 )

Selling, general, and administrative ( 3,963 ) ( 55,306 ) ( 64,775 ) ( 124,044 )

Research and Development expense ( 28,197 ) ( 6,089 ) — ( 34,286 )

Selling, general, and administrative expense ( 2,451 ) ( 73,466 ) ( 85,780 ) ( 161,697 )

Depreciation and amortization — — ( 59,791 ) ( 59,791 )

Fair value adjustment — — ( 3,758 ) ( 3,758 )

Contingent consideration fair value adjustment — — ( 1,426 ) ( 1,426 )

Restructuring activities — — ( 1,132 ) ( 1,132 )

Intangible asset impairment charge — — ( 112 ) ( 112 )

Operating Income (Loss) $ 105,927 $ 89,173 $ ( 148,129 ) $ 46,971

Interest expense, net $ — $ — $ ( 26,940 ) $ ( 26,940 )

Other income, net — — 670 670

Income (Loss) Before Benefit for Income Taxes $ 85,475 $ 10,538 $ ( 158,678 ) $ ( 62,665 )

Other expense, net — — ( 159 ) ( 159 )

Income (Loss) Before Income Tax Expense $ 105,927 $ 89,173 $ ( 175,228 ) $ 19,872

Geographic Information

The following depicts the Company's total revenue according to geographic location.

The Company has ceased operations at the Oakville, Ontario, Canada location as of March 31, 2023.

The revenue from the acquisition of Alimera is also included in the year ended December 31, 2024 in the table below.

The majority of the assets of the Company are located in the United States.

The Company's operations are also located in the United Kingdom, Ireland, India, and Portugal.

The Company ceased operations at the Oakville, Ontario, Canada location as of March 31, 2023.

The revenue from the acquisition of Alimera is also included in the years ended December 31, 2025 and 2024 in the table below.

The majority of the assets of the Company are located in the U.S.

The Company also maintains operations in India, Ireland, Portugal, Germany, and the United Kingdom.

ANI Pharmaceuticals, Inc.

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Total Revenue $ 883,366 $ 614,376 $ 486,816

The following table depicts the Company’s property, plant and equipment, net according to geographic location, which excludes the land and building at the Company’s Canada facility, which was classified as held for sale as of December 31, 2023 .

These assets had a carrying value of approximately $ 8.0 million .

The land and building at the Canada facility was sold on March 28, 2024, refer to Note 4 “Restructuring Canada Operations” to the notes to consolidated financial statements .

The following table depicts the Company’s property, plant and equipment, net according to geographic location during the year ended:

(in thousands) December 31, 2025 December 31, 2024

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SUBSEQUENT EVENTS

On February 12, 2025, the Company granted RSA and PSU awards to officers and employees of the Company under the 2022 Plan.

The Company granted 580,057 RSAs to employees and officers of the Company.

These RSAs vest over four years .

The Company granted 79,859 PSUs to employee and officers of the Company ( 74,421 to officers of the Company).

PSU performance will be measured over three years from January 1, 2025 through December 31, 2027 and will cliff-vest contingent upon the achievement of specified performance objectives.

PSUs granted to date vest over a three -year performance period.

Additionally, on February 15, 2025, the Company granted 46,182 RSAs to new employees of the Company, which will vest over four years .

On February 27, 2025, the Company received written notice of non-renewal from EyePoint, effective May 31, 2025, of the YUTIQ Supply Agreement, dated May 17, 2023, by and among Alimera and EyePoint, under which EyePoint manufactures and supplies YUTIQ for ANI.

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

Tariff Update

On February 20, 2026, the United States Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA").

The ultimate availability, timing, and amount of any potential refunds of such tariffs remain highly uncertain and are subject to further legal, regulatory, and administrative developments.

Following the Supreme Court’s decision, the U.S.

presidential administration announced its intention to invoke other laws to collect tariffs and announced new tariffs on imports from all countries, in addition to any existing non-IEEPA tariffs.

There remains substantial uncertainty regarding the duration of existing and newly announced tariffs, potential changes or pauses to such tariffs, tariff levels, and whether further additional tariffs or other retaliatory actions may be imposed, modified, or suspended, and the impacts of such actions on the Company.

The Company continues to monitor and evaluate these developments and assess their potential impact on its business, financial condition, and results of operations.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data