What changed in this filing

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Item 9A. Controls and Procedures

2025-03-05 compared with 2024-03-05 · 480 added, 453 removed, 1023 unchanged (48% of the section changed)

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Other Information .

On December 7, 2023 , Mark Schobel , Chief Innovation & Technology Officer of the Company, adopted a written sales plan intended to satisfy the affirmative defense conditions of Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, for trading 175,000 shares.

The plan commenced on December 6, 2023 and will expire on December 4, 2024.

Our Chief Operating Officer Cassie Jung adopted a written sales plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act (the "Jung Plan") on December 10, 2024 .

The Jung Plan commences on March 11, 2025 and ends on December 31, 2025 .

The maximum number of shares to be sold under the Jung Plan is 108,656 shares;

the actual number of shares sold will be dependent on the satisfaction of certain conditions set forth in the Jung Plan.

Our Chief Medical Officer Carl Kraus adopted a written sales plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act (the "Kraus Plan") on December 12, 2024 .

The Kraus Plan commences on March 17, 2025 and ends on February 27, 2026 .

The maximum number of shares to be sold under the Kraus Plan is 75,000 .

The actual number of shares sold will be dependent on the satisfaction of certain conditions set forth in the Kraus Plan.

Disclosure Regarding Foreign Jurisdictions That Prevent Inspections.

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(a)(2) Financial Statement Schedules.

All financial statement schedules have been omitted because they are not applicable, not required or the required information is given in the Consolidated Financial Statements or Notes thereto.

All financial statement schedules have been omitted because they are not applicable, not required or the required information is given in the Financial Statements or Notes thereto.

(a)(3) Exhibits.

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Amended and Restated Bylaws of Aquestive Therapeutics, Inc.

(filed as Exhibit 3.2 to the Current Report on Form 8-K of the Company, as filed on February 7, 2023, and incorporated by reference herein).

(filed as Exhibit 3.1 to the Current Report on Form 8-K of the Company, as filed on October 16, 2024, and incorporated by reference herein).

Form of Common Stock Certificate of Aquestive Therapeutics, Inc.

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Aquestive Therapeutics, Inc.

2018 Equity Incentive Plan (filed as Exhibit 10.14 to the Pre-Effective Amendment No.

1, as filed on July 16, 2018, to the Registration Statement on Form S-1 of the Company (File No.

333-225924) and incorporated by reference herein).

2018 Equity Incentive Plan, as amended (filed as Exhibit 4.1 to the Registration Statement on Form S-8 of the Company (File No.

333-273857), as filed on August 9, 2023 and incorporated by reference herein).

Aquestive Therapeutics, Inc.

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Form of Royalty Right Agreement (filed as Exhibit 10.3 to the Current Report on Form 8-K of the Company, as filed on November 2, 2023, and incorporated by reference herein).

Amendment to License and Supply Agreement between Aquestive and Atnahs Pharma UK Limited entered into March 27, 2023 (furnished herewith).

Amendment to License and Supply Agreement between Aquestive and Atnahs Pharma UK Limited entered into March 27, 2023 (filed as Exhibit 10.40 to the Annual Report on Form 10-K of the Company, as filed on March 5, 2024, and incorporated by reference herein).

Insider Trading Policy.

Consent of KPMG LLP, Independent Registered Public Accounting Firm (filed herewith).

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Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

Incentive Compensation Recovery Policy

Incentive Compensation Recovery Policy (filed as Exhibit 97 to the Annual Report on Form 10-K of the Company, as filed on March 5, 2024 and incorporated by reference herein).

101.INS* Inline XBRL Instance Document.

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Form 10-K Summary

Not applicable.

Pursuant to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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/s/ Gregory B.

Brown Member of the Board of Directors March 5, 2024

Brown Chairman of the Board of Directors

March 5, 2025

/s/ Abigail L.

Member of the Board of Directors

March 5, 2025

Member of the Board of Directors March 5, 2025

Costa Chairman of the Board of Directors March 5, 2024

/s/ Julie Krop

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Timothy Morris

Index to Consolidated Financial Statements

Index to Financial Statements

Report of Independent Registered Public Accounting Firm (KPMG LLP, New York, NY,

Auditor Firm ID:

Consolidated Balance Sheets as of December 31, 2023 and 2022

Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2023 and 2022

Consolidated Statements of Changes in Stockholders’ Deficit for the Years Ended December 31, 2023 and 2022

Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 and 2022

Notes to the Consolidated Financial Statements

Balance Sheets as of December 31, 2024 and 2023

Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2024 and 2023

Statements of Changes in Stockholders’ Deficit for the Years Ended December 31, 2024 and 2023

Statements of Cash Flows for the Years Ended December 31, 2024 and 2023

Notes to the Financial Statements

To the Stockholders and the Board of Directors

Aquestive Therapeutics, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Aquestive Therapeutics, Inc.

and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive loss, changes in stockholders’ deficit, and cash flows for each of the years in the two-year period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2023, in conformity with U.S.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Aquestive Therapeutics, Inc.

(the Company) as of December 31, 2024 and 2023, the related statements of operations and comprehensive loss, changes in stockholders’ deficit, and cash flows for each of the years in the two-year period ended December 31, 2024, and the related notes (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2024, in conformity with U.S.

generally accepted accounting principles.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

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We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

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Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Critical Audit Matter

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

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

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

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

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

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

Evaluation of the Company’s ability to continue as a going concern

As discussed in Note 4 to the consolidated financial statements, the Company has experienced a history of net losses.

As discussed in Note 4 to the financial statements, the Company has experienced a history of net losses.

The Company’s accumulated deficit totaled $363,214 thousand as of December 31, 2024.

Historically, the Company’s sources of liquidity included cash and cash equivalents, equity, and debt offerings.

The Company believes that its ongoing business, existing cash and equivalents, expense management activities, and access to an existing purchase agreement provide liquidity to fund its operating needs for twelve months from the date of issuance of these financial statements.

The Company believes that its ongoing business, existing cash and equivalents, expense management activities, and access to equity capital markets through its ATM facility provide liquidity to fund its operating needs for at least twelve months from the date of issuance of these financial statements.

We identified the evaluation of the Company’s assessment of its ability to continue as a going concern as a critical audit matter.

A high degree of subjective auditor judgment was required to evaluate the Company’s forecasted cash flows used in its going concern analysis due to uncertainty in certain assumptions, specifically forecasted expenses and the feasibility of the Company’s expense management activities.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design of the internal control over the Company’s going concern assessment and forecasted cash flows.

We compared the Company’s historical forecasted cash flows to actual results to assess the Company’s ability to accurately forecast.

We performed sensitivity analyses over the Company’s forecasted cash flows by evaluating the effect of changes to the forecasted expenses and expense management activities on the Company’s going concern assessment.

We assessed the feasibility of the Company’s expense management activities, which included comparing to management’s plans communicated to the Board of Directors and

public information disseminated by the Company.

We performed sensitivity analyses over the Company’s forecasted cash flows by evaluating the effect of changes to the forecasted expenses on the Company’s going concern assessment.

We assessed the reasonableness of the Company’s forecasted expenses by comparing to management’s communications to the Board of Directors and public information disseminated by the Company.

We assessed the Company’s disclosures related to its going concern assessment by comparing the disclosures to the audit evidence obtained.

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AQUESTIVE THERAPEUTICS, INC.

Consolidated Balance Sheets

Balance Sheets

(In thousands, except per share/unit amounts)

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Lease liabilities, current 510 390

Deferred revenue 1,551 1,513

Deferred revenue, current 1,048 1,551

Liability related to the sale of future revenue, current 1,000 922

Notes payable, current

Royalty obligations, current

Loans payable, current

Total current liabilities 18,865 18,308

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Royalty obligations, net

20,129 14,761

Liability related to the sale of future revenue, net 62,718 63,568

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Total liabilities and stockholders’ deficit $ 101,424 $ 57,418

See accompanying notes to the consolidated financial statements.

See accompanying notes to the financial statements.

AQUESTIVE THERAPEUTICS, INC.

Consolidated Statements of Operations and Comprehensive Loss

Statements of Operations and Comprehensive Loss

(In thousands, except per share data amounts)

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Interest expense related to royalty obligations, net

( 5,459 ) ( 905 )

Interest expense related to the sale of future revenue ( 236 ) ( 220 )

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Net loss before income taxes ( 44,151 ) ( 7,625 )

Income taxes ( 245 ) —

Income taxes benefit (expense)

Net loss $ ( 44,137 ) $ ( 7,870 )

Comprehensive loss $ ( 44,137 ) $ ( 7,870 )

Net loss per share – basic and diluted $ ( 0.13 ) $ ( 1.12 )

Weighted-average number of common shares outstanding - basic and diluted 61,255,864 48,734,377

See accompanying notes to the consolidated financial statements.

Loss per share attributable to common stockholders:

Basic and diluted (in dollars per share)

$ ( 0.51 ) $ ( 0.13 )

Weighted-average number of common shares outstanding:

Basic and diluted (in shares)

86,726,211 61,255,864

See accompanying notes to the financial statements.

AQUESTIVE THERAPEUTICS, INC.

Consolidated Statements of Changes in Stockholders’ Deficit

Statements of Changes in Stockholders’ Deficit

(In thousands, except per share amounts)

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Stockholders’

Equity/(Deficit)

Shares Amount

Balance at January 1, 2022 41,228,736 $ 41 $ 174,621 $ ( 256,796 ) $ ( 82,134 )

Fair value of warrants issued — — 5,874 — 5,874

Common Stock issued under private equity offering 6,686,491 7 4,622 — 4,629

Costs of common stock issued under private equity offering — — ( 824 ) — ( 824 )

Balance at December 31, 2022

54,827,734 $ 55 $ 192,598 $ ( 311,207 ) $ ( 118,554 )

Common Stock issued upon warrant exercises 8,689,452 9 8,333 — 8,342

Costs of common stock issued under private equity offering — — ( 35 ) — ( 35 )

Common Stock issued under public equity offering 4,958,341 5 9,459 — 9,464

Costs of common stock issued under public equity offering

— — ( 552 ) — ( 552 )

Shares issued under employee stock purchase plan 36,168 — 66 — 66

Vested restricted stock units 6,665 — ( 3 ) — ( 3 )

Vested restricted stock units, net

19,515 — ( 11 ) — ( 11 )

Share-based compensation expense — — 2,662 — 2,662

Other — — 3 ( 1 ) 2

Options exercised, net

1,875 — 1 — 1

Net loss — — — ( 7,870 ) ( 7,870 )

Balance at December 31, 2023 68,533,085 69 212,521 ( 319,077 ) ( 106,487 )

Common Stock issued upon warrant exercises 8,689,452 9 8,333 — 8,342

Costs of common stock issued under private equity offering — — ( 35 ) — ( 35 )

Common Stock issued under public equity offering 4,958,341 5 9,459 — 9,464

Common Stock issued under public equity offering-ATM 4,557,220 4 12,381 — 12,385

Costs of common stock issued under public equity offering-ATM — — ( 602 ) — ( 602 )

Common Stock issued under public equity offering 17,226,468 18 77,502 — 77,520

Costs of common stock issued under public equity offering — — ( 5,546 ) — ( 5,546 )

Common Stock issued upon warrant exercises

30,645 — 165 — 165

Shares issued under employee stock purchase plan 35,374 — 109 — 109

Vested restricted stock units 19,515 — ( 11 ) — ( 11 )

Share-based compensation expense — — 7,056 — 7,056

Options exercised

Other — — — — —

Vested restricted stock units, net 673,925 — ( 1,351 ) — ( 1,351 )

Options exercised, net 357,025 — 732 — 732

Net loss — — — ( 44,137 ) ( 44,137 )

Balance at December 31, 2024 91,413,742 $ 91 $ 302,967 $ ( 363,214 ) $ ( 60,156 )

See accompanying notes to the consolidated financial statements.

See accompanying notes to the financial statements.

AQUESTIVE THERAPEUTICS, INC.

Consolidated Statements of Cash Flows

(In thousands)

Statements of Cash Flows (In thousands)

Year Ended December 31,

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Amortization of debt issuance costs and discounts 10,714 1,972

Interest expense related to the sale of future revenue — 5,683

Gain on contract termination

Loss on the extinguishment of debt — 1,029

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Deferred revenue ( 12,843 ) 966

Notes Payable

Net cash used for operating activities ( 35,759 ) ( 6,380 )

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Capital expenditures ( 159 ) ( 995 )

Additions to intangible assets — ( 1,500 )

Net cash used for investing activities ( 159 ) ( 995 )

Cash flows from financing activities:

Proceeds from issuance of common stock under public equity offering, net

Proceeds from common stock and warrants issued under private equity offering, net

Proceeds from issuance of common stock under public equity offering-ATM, net

Proceeds from common stock issued under public equity offering, net

Proceeds from exercise of warrants, net

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Proceeds from issuance of Royalty Rights Agreements

Debt repayments

Repayment of debt principal including lease liabilities

( 23 ) ( 51,529 )

Payments for royalty obligations

Payments for financing costs — ( 4,643 )

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Net cash provided by financing activities 83,592 3,974

Net decrease in cash and cash equivalents ( 3,401 ) ( 751 )

Net increase (decrease) in cash and cash equivalents

47,674 ( 3,401 )

Cash and cash equivalents:

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Cash payments for interest $ 7,097 $ 4,602

See accompanying notes to the consolidated financial statements.

Cash payments for income taxes

Non-cash investing activities:

capital expenditures in accounts payable

Non-cash financing activities:

accrued taxes on share-based compensation

See accompanying notes to the financial statements.

AQUESTIVE THERAPEUTICS, INC.

Notes to Consolidated Financial Statements

Notes to Financial Statements

(In thousands, except share and per share information)

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Aquestive Therapeutics, Inc.

(together with its subsidiaries, “Aquestive” or “the Company”) is a pharmaceutical company advancing medicines to solve patients’ problems with current standards of care and provide transformative products to improve their lives.

The Company is developing pharmaceutical products that deliver complex molecules through alternative administrations to invasive and inconvenient standard of care therapies.

is a pharmaceutical company advancing medicines to bring meaningful improvement to patients’ lives through innovative science and delivery technologies.

The Company is developing pharmaceutical products to deliver complex molecules through alternative administrations to invasive and inconvenient standard of care therapies.

The Company has a proprietary commercial product, Libervant® (diazepam) Buccal Film for the acute treatment of intermittent, stereotypic episodes of frequent seizure activity ( i.e.

, seizure clusters, acute repetitive seizures) that are distinct from a patient’s usual seizure pattern in patients between two and five years of age, which was launched in April 2024.

The Company is also advancing a product pipeline for the treatment of severe allergic reactions, including anaphylaxis, under the Anaphylm™ trade name, and its Adrenaverse™ epinephrine prodrug pipeline platform.

The Company has five licensed commercialized products which are marketed by its licensees in the U.S.

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The Company also collaborates with pharmaceutical companies to bring new molecules to market using proprietary, best-in-class technologies, like PharmFilm®, and has proven drug development and commercialization capabilities.

The Company is advancing a product pipeline for the treatment of severe allergic reactions, including anaphylaxis.

The Company has also developed a product pipeline focused on treating diseases of the CNS.

The Company’s production facilities are located in Portage, Indiana, and its corporate headquarters and primary research laboratory facilities are based in Warren, New Jersey.

Equity Transactions

On September 11, 2019, the Company established an ATM facility pursuant to which the Company may offer up to $ 25,000 worth of shares of Common Stock.

On November 20, 2020, the Company began utilizing the ATM facility.

On March 26, 2021, the Company filed a prospectus supplement to offer up to an additional $ 50,000 worth of shares of Common Stock under the ATM.

The 2019 Registration Statement expired under its terms on September 17, 2022.

On September 7, 2022, the Company filed a prospectus supplement to register the offer and sale of up to $ 35,000 worth of shares of Common Stock pursuant to the Amended Equity Distribution Agreement under a shelf registration statement on Form S-3 (Registration Statement No.

333-254775, or the 2021 Registration Statement), that was declared effective by the SEC on April 5, 2021.

The Company discontinued using the 2021 Prospectus upon the filing of the prospectus supplement on September 7, 2022.

For the year ended December 31, 2023, the Company sold 4,958,341 shares which provided net proceeds of approximately $ 8,962 after deducting commissions and other transaction costs of $ 502 .

This ATM facility has approximately $ 23,952 available at December 31, 2023.

Equity Offering of Common Stock

The Company established its first ATM facility in September 2019, and since inception to December 31, 2024, the Company has sold 19,857,518 shares of Common Stock under its ATM Facility which has generated net cash proceeds of approximately $ 60,524 , net of commissions and other transactions costs of $ 3,119 .

On April 3, 2024, the Company filed a new shelf registration statement on Form S-3, the 2024 Registration Statement, which was declared effective by the SEC on April 23, 2024.

Included in the 2024 Registration Statement are (i) a base prospectus registering the offer, issuance and sale of up to $ 250,000 worth of Common Stock, preferred stock, debt securities, warrants, rights and units and (ii) a $ 100,000 ATM facility prospectus.

For the year ended December 31, 2024, the Company sold 4,557,220 shares of common stock pursuant to the ATM prospectus and the Amended Equity Distribution Agreement with Piper Sandler & Co.

(successor to Piper Jaffray & Co.), which provided net proceeds of approximately $ 11,821 after deducting commissions and other transaction costs of $ 564 .

For the year ended December 31, 2023, the Company sold 4,958,341 shares which provided net proceeds of approximately $ 8,962 after deducting commissions and other transaction costs of $ 502 .

On April 12, 2022, the Company entered into the Lincoln Park Purchase Agreement, which provides that, upon the terms and subject to the conditions and limitations under the Lincoln Park Purchase Agreement, the Company has the right, but not the obligation, to sell to Lincoln Park up to $ 40,000 worth of shares of the Company's Common Stock from time to time over the 36 -month term of the Lincoln Park Purchase Agreement.

The Lincoln Park Purchase Agreement contains an ownership limitation such that the Company will not issue, and Lincoln Park will not purchase, shares of Common Stock if it would result in Lincoln Park’s beneficial ownership of our outstanding Common Stock exceeding 9.99 %, which is equivalent to 6,486,623 shares at December 31, 2023.

The remaining authorized balance of the ATM facility was $ 100,000 as of December 31, 2024.

On April 12, 2022, the Company entered into the Lincoln Park Purchase Agreement, which provides that, upon the terms and subject to the conditions and limitations set forth in the Lincoln Park Purchase Agreement, the Company has the right, but not the obligation, to sell to Lincoln Park up to $ 40,000 worth of shares of Common Stock from time to time over the 36-month term of the Lincoln Park Purchase Agreement.

The Lincoln Park Purchase Agreement contains an ownership limitation such that the Company will not issue, and Lincoln Park will not purchase, shares of Common Stock if it would result in Lincoln Park’s beneficial ownership exceeding 9.99 % of the Company's then outstanding Common Stock.

Lincoln Park has covenanted under the Lincoln Park Purchase Agreement not to cause or engage in any manner whatsoever any direct or indirect short selling or hedging of our Common Stock.

For the year ended December 31, 2023, the Company did not sell shares in connection with the Lincoln Park Purchase Agreement.

For the year ended December 31, 2022, the Company sold 1,600,000 shares in addition to issuing 236,491 commitment shares, which provided proceeds of approximately $ 1,987 in connection with the Lincoln Park Purchase Agreement.

On June 6, 2022, the Company entered into the Securities Purchase Agreements which provided for the sale and issuance by the Company of an aggregate of:

(i) 4,850,000 shares of Common Stock, (ii) pre-funded warrants to purchase up to 4,000,000 shares of Common Stock and (iii) Common Stock warrants to purchase up to 8,850,000 shares of Common Stock.

The Company received net proceeds of approximately $ 7,796 , after deducting placement agent fees and expenses and estimated offering expenses payable by the Company.

The Company used the net proceeds from the offering for general corporate purposes.

The pre-funded warrants were fully exercised in 2022.

On June 14, 2023, warrants to purchase 3,689,452 shares of Common Stock issued pursuant to the Securities Purchase Agreements were exercised with proceeds paid to the Company thereon of approximately $ 3,542 .

On August 1, 2023, the Company entered into the Letter Agreement with a holder (the “Exercising Holder”) of 5,000,000 of the remaining Common Stock Warrants.

Pursuant to the Letter Agreement, the Exercising Holder and the Company agreed that the Exercising Holder would exercise all of its Common Stock Warrants for shares of Common Stock lying thereunder at $ 0.96 per share of Common Stock, the exercise price of the Common Stock Warrants.

Pursuant to the Letter Agreement, in consideration of the Exercising Holder exercising the 5,000,000 Common Stock Warrants, the Company issued New Warrants to the Exercising Holder to purchase up to an aggregate of 2,750,000 shares of Common Stock to the Exercising Holder.

The New Warrants are exercisable after February 2, 2024, expire on February 2, 2029 and are issuable only for cash,

subject to exception if exercise of the New Warrants is not registered in accordance with the terms of the Letter Agreement, in which case the New Warrants may also be exercised, in whole or in part, at such time by means of a "cashless exercise".

The New Warrants have an exercise price of $ 2.60 per share.

On August 2, 2023, 5,000,000 of the Common Stock Warrants were exercised pursuant to the Securities Purchase Agreement with the Exercising Holder, with the Company receiving gross proceeds therefrom of $ 4,800 .

In total, warrants to exercise 8,689,452 shares of Common Stock issued pursuant to the Securities Purchase Agreements, with proceeds of approximately $ 8,342 paid to the Company thereon, were exercised during the year ended December 31, 2023.

The Company incurred $ 35 in relation to this transaction.

For the years ended December 31, 2024 and 2023, the Company did not sell shares in connection with the Lincoln Park Purchase Agreement.

The Company has no current intent to use the Lincoln Park facility and the Lincoln Park Purchase agreement will expire on April 12, 2025.

On March 22, 2024, the Company completed the underwritten public offering of 16,666,667 shares of its common stock at the public offering price of $ 4.50 per share.

In addition, pursuant to the partial exercise of the underwriters' option, on April 22, 2024, the Company sold an additional 559,801 shares of Common Stock.

Net proceeds from the underwritten public offering, including the exercise of underwriters' option were $ 72,868 , after deducting underwriting discounts of $ 4,651 .

In addition to the underwriting discounts related to this offering, the Company incurred professional fees and other costs totaling $ 894 as of December 31, 2024.

Basis of Presentation and Principles of Consolidation

These consolidated financial statements have been prepared in accordance with GAAP in the United States of America, and in accordance with the rules and regulations of the SEC.

The accounts of wholly owned subsidiaries are included in the consolidated financial statements.

Other than corporate formation activities, no such subsidiaries have conducted any commercial, developmental or operational activities and none have customers or vendors.

These financial statements have been prepared in accordance with GAAP in the United States of America, and in accordance with the rules and regulations of the SEC.

Certain reclassifications were made to conform to the current year presentation.

As of March 31, 2024, the Company dissolved its subsidiaries and no longer prepares its financial statements on a consolidated basis.

The dissolution of the subsidiaries did not have a material impact on the Company’s financial statements as of December 31, 2024 or the consolidated financial statements as of December 31, 2023.

Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the ASC and ASU of FASB.

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These estimates and assumptions often involve assessments of matters that are inherently uncertain and accordingly actual results could differ from those estimates.

Significant items subject to estimates and assumptions include those related to revenue recognition, inventory costs, allowances for rebates from proprietary product sales prior to out-licensing to Assertio, allowances for sales returns, the useful lives of fixed assets and the valuations of warrants issued, royalty obligations, sale of future revenues, share-based compensation, and contingencies.

Significant items subject to estimates and assumptions include those related to revenue recognition, inventory costs, allowances for rebates from proprietary product sales of Libervant for patients between two to five years of age, allowances for sales returns, the useful lives of fixed assets and the valuations of warrants issued, royalty obligations, sale of future revenues, share-based compensation, and contingencies.

Cash and Cash Equivalents

The Company considers all short-term, highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

At December 31, 2023 and 2022, cash and cash equivalents consisted of cash in bank accounts.

At December 31, 2024 and 2023, cash and cash equivalents consisted of cash in bank accounts and money market Treasury mutual funds.

Concentration of Credit Risk

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The Company’s credit terms generally range from 30 to 60 days, depending on the customer and type of invoice.

The Company performs a regular review of its customers’ credit risk and payment histories, including payments made subsequent to year-end.

The Company evaluates the collectability of accounts receivable based on a combination of factors.

In situations where changing circumstances indicate that a specific customer is unable to meet its financial obligations to the Company, a provision to the allowances for doubtful accounts is recorded against amounts due in order to reduce the net recognized receivable to the amount that is reasonably expected to be collected.

For all other customers, a provision to the allowances for doubtful accounts is recorded based on factors including the length of time the receivables are past due, the current business environment and the Company’s historical experience.

Provisions to the allowances for doubtful accounts are recorded to selling, general and administrative expenses.

Account balances are charged off against the allowance when it is probable that the receivable will not be recovered.

The allowance for doubtful accounts, associated with recoverability of accounts receivable, was $ 14 and $ 40 as of December 31, 2023 and 2022, respectively.

The Company maintains an allowance for credit losses on accounts receivable, which is recorded as a reduction to accounts receivable.

Changes in the allowance are classified as Selling, general and administrative expenses in the Statements of Operations and Comprehensive Loss.

The Company assesses collectability by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when it identifies specific customers with known disputes or collectability issues.

In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status.

It also considers customer-specific information, current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss data.

On an ongoing basis, management evaluates the adequacy of these reserves.

The allowance for credit losses, was $ 0 and $ 14 as of December 31, 2024 and 2023, respectively.

Inventories, consisting of purchased materials, direct labor and manufacturing overhead, are stated at the lower of cost, determined by the first-in, first-out method, or net realizable value.

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Maintenance and repair costs are charged to expense as incurred, and expenditures for major renewals and improvements are capitalized.

Upon disposition of property and equipment, the related cost and accumulated depreciation and amortization are removed from the accounts, and any gain or loss is reflected in the accompanying Consolidated Statements of Operations and Comprehensive Loss.

Intangible Assets

Intangible assets include the costs of acquired composition and process technologies, the costs of purchased patents used in the manufacture of orally soluble film and the costs of acquired NDA.

The Company amortizes these assets using the straight-line method over the shorter of their legal lives or estimated useful lives.

Intangible assets included the costs of acquired composition and process technologies, the costs of purchased patents used in the manufacture of orally soluble film and the costs of acquired NDA.

The Company amortized these assets using the straight-line method over the shorter of their legal lives or estimated useful lives.

As of December 31, 2024, the balance of the Company's intangible assets was zero , see Note 12, Intangible Assets, Net for additional information.

Impairment of Long-Lived Assets

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Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered most appropriate.

The impairment charge of $ 216 was recognized for the year ended December 31, 2023.

No impairment was recognized for the year ended December 31, 2024.

The impairment charge of $ 216 was recognized for the year ended December 31, 2023.

Determination if an arrangement is a lease is made at inception.

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Our lease terms may include options to extend or terminate the lease and are included when it is reasonably certain that the Company will exercise the option.

The Company records operating lease assets and lease liabilities in its consolidated balance sheets.

The Company records operating lease assets and lease liabilities in its Balance Sheets.

Lease expenses for lease payments are recognized on a straight-line bases over the lease term.

Short-term leases, or leases that have a lease term of 12 months or less at consummation date, are excluded from this treatment and are recognized on a straight-line basis over the term of the lease.

During the year ended December 31, 2023, the Company recognized a lease supporting its manufacturing

facilities as a finance lease.

During the year ended December 31, 2023, the Company recognized a lease supporting its manufacturing facilities as a finance lease.

Commitments under finance leases are not significant, and are included in Property and equipment, net;

Notes Payable, current and Notes Payable, net on the Consolidated Balance Sheets.

Loans payable, current and Notes payable, net on the Balance Sheets.

Royalty Obligations, net

In connection with the issuance of the 13.5 % Notes, the Company entered into a Royalty Rights Agreement with each of the Note Holders granting the Note Holders a tiered royalty between 1.0 % and 2.0 % of annual worldwide net sales of Anaphylm (epinephrine) Sublingual Film for a period of eight years from the first sale of Anaphylm on a global basis.

On November 1, 2023, in connection with the issuance of the 13.5 % Notes, the Company and the Note Holders entered into the Royalty Rights Agreements, which provide the Note Holders a tiered royalty between 1.0 % and 2.0 % of annual worldwide net sales of Anaphylm (epinephrine) Sublingual Film for a period of eight years from the first sale of Anaphylm on a global basis.

The Note Holders are also entitled to a tiered royalty between 1.0 % to 2.0 % of annual worldwide net sales of Libervant (diazepam) Buccal Film until the earlier of (1) the first sale of Anaphylm and (2) eight years from the first sale of Libervant.

The Royalty Rights Agreements are classified as debt, and the value of the $ 45,000 13.5 % Notes has been allocated between debt and the royalty obligations based on their relative fair market values.

The fair value of the royalty obligation is being amortized over the life of the Royalty Rights Agreements and such amortization is reflected as interest expense related to royalty obligations in the Consolidated Statements of Operations and Comprehensive Loss.

The 13.5 % Notes are discussed in Note 14, Long-Term Debt , to its consolidated financial statements.

The 13.5 % Notes are discussed in Note 15, Long-Term Debt , to its financial statements.

Liability Related to the Sale of Future Revenue

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To the extent its future estimates of royalty payments are greater or less than previous estimates or the timing of such payments is materially different than its previous estimates, the Company will prospectively recognize related interest expense.

Amortization of debt is reflected as interest expense related to the sale of future revenue in the Consolidated Statements of Operations and Comprehensive Loss.

Amortization of debt is reflected as interest expense related to the sale of future revenue in the Statements of Operations and Comprehensive Loss.

For further discussion of the sale of the future revenue, see Note 17, Sale of Future Revenue.

Revenue Recognition

The Company’s revenues include (i) sales of manufactured products pursuant to contracts with commercialization licensees, (ii) sales of the Company’s proprietary clobazam-based Sympazan oral film product used as a treatment for LGS-related seizures prior to its outlicensing to Assertio in October 2022, (iii) license and royalty revenues and (iv) co-development and research fees generally in the form of milestone payments.

See Note 5, Revenues and Trade Receivables, Net .

for further details.

The Company’s revenues include (i) sales of manufactured products pursuant to contracts with commercialization licensees, (ii) license and royalty revenues, (iii) co-development and research fees generally in the form of milestone payments, and (iv) sales of its proprietary CNS product, Libervant, for patients between two to five years of age.

See Note 6, Revenues and Trade Receivables, Net for further details.

The Company recognizes revenue to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.

To achieve this core principle, a five-step model is applied that includes (1) identifying the contract with a customer, (2) identifying the performance obligation in the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations, and (5) recognizing when, or as, an entity satisfies a performance obligation.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in the current revenue recognition standard.

A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

At contract inception, the Company assesses the goods promised in its contracts with customers and identifies a performance obligation for each promise to transfer to the customer a distinct good.

When identifying performance obligations, the Company considers all goods or services promised in a contract regardless of whether explicitly stated in the contract or implied by customary business practice.

The Company’s performance obligations consist mainly of transferring goods and services identified in the contracts, purchase orders, invoices or statements of work.

Manufacture and supply revenue – this revenue is derived from products manufactured exclusively for specific customers according to their strictly-defined specifications, subject only to specified quality control inspections.

Accordingly, at the point in time when quality control requirements are satisfied, revenue net of related discounts is recorded.

Proprietary product sales, net – this revenue is recognized when product is shipped and title passes to the customer, typically at time of delivery.

At the time of sale, estimates for various revenue allowances are recorded based on historical trends and judgmental estimates .

Sale returns allowances and prompt pay discounts are estimated based on contract terms and historical return rates, if available, and these estimates are recorded as a reduction of accounts receivables.

Similarly determined estimates are recorded relating to wholesaler service fees, co-pay support redemptions, Medicare, Medicaid and other rebates, and these estimates are reflected as a component of accrued liabilities as a reduction of revenue.

Once all related variable considerations are resolved and uncertainties as to collectable amounts are eliminated, estimates are adjusted to actual allowance amounts.

Provisions for these estimated amounts are reviewed and adjusted on no less than a quarterly basis.

License and Royalty Revenue – license revenues are determined based on an assessment of whether the license is distinct from any other performance obligations that may be included in the underlying licensing arrangement.

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For symbolic licenses providing substantial value only in conjunction with other performance obligations to be provided by the Company, revenues are generally recorded over the term of the license agreement.

Such other obligations provided by the Company generally include manufactured products, additional development services or other deliverables that are contracted to be provided during the

license term.

Such other obligations provided by the Company generally include manufactured products, additional development services or other deliverables that are contracted to be provided during the license term.

Payments received in excess of amounts ratably or otherwise earned are deferred and recognized over the term of the license or as contingencies or other performance obligations are met.

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Royalties based on sales of licensed products have been recorded in this manner.

Co-development and Research Fees – Co-development and research fees are earned through performance of specific tasks, activities or completion of stages of development defined within a contractual development or feasibility study agreement with a customer.

The nature of these performance obligations, broadly referred to as milestones or deliverables, are usually dependent on the scope and structure of the project as contracted, as well as the complexity of the product and the specific regulatory approval path necessary for that product.

Accordingly, the duration of the Company’s research and development projects may range from several months to approximately three years .

Although each contractual arrangement is unique, common milestones included in these arrangements include those for the performance of efficacy and other tests, reports of findings, formulation of initial prototypes, production of stability clinical and/or scale-up batches, and stability testing of those batches.

Additional milestones may be established and linked to clinical results of the product submission and/or approval of the product by the FDA and the commercial launch of the product.

Revenue recognition arising from milestone payments is dependent upon the facts and circumstances surrounding the milestone payments.

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For milestone payments to be received upon the achievement of a sales threshold, the revenue from the milestone payments is recognized at the later of when the actual sales occur or the performance obligation to which the sales relate to has been satisfied.

Accordingly, the duration of the Company’s research and development projects may range from several months to approximately three years .

Additional milestones may be established and linked to clinical results of the product submission and/or approval of the product by the FDA and the commercial launch of the product.

Proprietary product sales, net – this net revenue is recognized when product is shipped and title passes to the customer, typically at time of delivery.

At the time of sale, estimates for various revenue allowances are recorded based on historical trends and judgmental estimates .

For sales of Libervant for patients between two to five years of age, returns allowances and prompt pay discounts are estimated based on contract terms and historical return rates, if available, and these estimates are recorded as a reduction of accounts receivables.

Similarly determined estimates are recorded relating to wholesaler service fees, co-pay support redemptions, and other rebates, and these estimates are reflected as a component of accrued liabilities.

Once all related variable considerations are resolved and uncertainties as to collectable amounts are eliminated, estimates are adjusted to actual allowance amounts.

Provisions for these estimated amounts are reviewed and adjusted on no less than a quarterly basis.

Contract Assets - in certain situations, customer contractual payment terms provide for invoicing in arrears.

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In these situations, billing occurs after revenue recognition, which results in a contract asset supported by the estimated value of the completed portion of the performance obligation.

These contract assets are reflected as a component of other receivables within Trade and other receivables, net within the Consolidated Balance Sheet.

These contract assets are reflected as a component of other receivables within Trade and other receivables, net within the Balance Sheets.

As of December 31, 2024 and 2023, such contract assets were $ 578 and $ 1,662 , respectively, consisting primarily of products and services provided under specific contracts to customers for which earnings processes have been met prior to shipment of goods or full delivery of completed services, as well as estimated receivables from contracts with third parties.

Contract Liabilities - in certain situations, customer contractual payment terms are structured to permit invoicing in advance of delivery of a good or service.

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In these situations, billing occurs in advance of revenue recognition, which results in contract liabilities.

These contract liabilities are reflected as deferred revenue within the Consolidated Balance Sheets.

These contract liabilities are reflected as deferred revenue within the Balance Sheets.

As remaining performance obligations are satisfied, an appropriate portion of the deferred revenue balance is credited to earnings.

As of December 31, 2024 and 2023, such contract liabilities were $ 21,053 and $ 33,896 , respectively.

Costs to obtain contracts - in certain situations, the Company may incur incremental costs of obtaining a contract with a customer.

These costs, if expected to be recovered, are recognized as an asset and reflected as other assets within the Consolidated Balance Sheets.

These costs, if expected to be recovered, are recognized as an asset and reflected as other assets within the Balance Sheets.

The asset is amortized on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the asset relates.

As of December 31, 2024 and 2023, such costs to obtain contracts were $ 480 and $ 715 , respectively.

Research and Development

Research and development, or R&D, expenses are recorded in accordance ASC 730, Research and Development and are expensed as incurred.

Research and development, or R&D, expenses are recorded in accordance with ASC 730, Research and Development and are expensed as incurred.

R&D expenses include R&D activities, services of external CROs, costs of their clinical research sites, scale-up and validation costs, and other activities.

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Share-Based Compensation

The Company records share-based compensation expenses for awards of stock options and restricted stock units (“RSUs") under ASC 718, Compensation — Stock Compensation .

The Company records share-based compensation expenses for awards of stock options and RSUs under ASC 718, Compensation — Stock Compensation .

For awards to non-employees for periods prior to the adoption of ASU 2018-07, Compensation-Stock Compensation:

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The Company recognizes compensation expense for the fair value of RSUs and stock option awards over the requisite service period of the awards.

All excess tax benefits, taxes and tax deficiencies from stock-based compensation are included in the provision for income taxes in the Company's Consolidated Statements of Operations and Comprehensive Loss.

All excess tax benefits, taxes and tax deficiencies from stock-based compensation are included in the provision for income taxes in the Company's Statements of Operations and Comprehensive Loss.

As part of the Company’s share-based compensation plan, shares are withheld to satisfy tax withholding obligations upon the vesting of RSUs.

During the years ended December 31, 2024 and 2023, the fair value of the shares withheld was $ 1,351 and $ 11 , respectively, and was recorded a reduction of Additional paid-in capital in the Statements of Changes in Stockholders’ Deficit and as a financing activity in the Statements of Cash Flows.

The portion of shares yet to be remitted as of 12/31/24 was $ 250 and is disclosed as a non-cash financing activity in the Statements of Cash Flows.

Per Share Data

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Comprehensive Loss

Comprehensive loss includes net loss as well as other changes in stockholders’ equity that may result from transactions and economic events other than those with stockholders, such as unrealized gains or losses on investments.

Comprehensive loss includes net loss as well as other changes in stockholders’ deficit that may result from transactions and economic events other than those with stockholders, such as unrealized gains or losses on investments.

For the periods ended December 31, 2024 and 2023, the Company’s comprehensive loss included only its net loss.

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• Level 1 — Quoted prices in active markets for identical assets or liabilities.

Cash and cash equivalents consisted of cash in bank accounts which are all Level 1 assets.

Cash and cash equivalents consisted of cash in bank accounts and money market Treasury mutual funds which are all Level 1 assets.

• Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

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A significant change in unobservable inputs could result in a material increase or decrease to the effective interest rate of the Royalty Right Agreements liability.

During the remainder of 2023, there were no material changes to the significant unobservable inputs used to recognize the Royalty Right Agreements liability.

During 2024 and 2023, there were no material changes to the significant unobservable

inputs used to recognize the Royalty Right Agreements liability.

Management has updated the projected years of payments to 2034 and the effective interest rate by 0.56 %.

See Note 15, Long-Term Debt for further discussion.

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The Company manages its operations as a single segment for purposes of assessing performance and making operating decisions.

For additional information regarding the adoption of ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, see Note 5, Segment Reporting.

Recent Accounting Pronouncements

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Recently Adopted Accounting Pronouncements:

June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) , amending existing guidance on the accounting for credit losses on financial instruments within its scope.

The guidance provides for use of a forward-looking expected loss model for estimating credit losses, replacing the incurred loss model that is based on past events and current conditions.

The new guidance also changes the impairment model for available-for-sale debt securities, requiring the use of an allowance to record estimated credit losses (and subsequent recoveries).

The Company adopted the new guidance on January 1, 2023.

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

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options .

The accounting standard update was issued to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange.

The Company adopted the new guidance on January 1, 2023.

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

In September 2022, the FASB issued ASU 2022-04, Liabilities-Supplier Finance Programs (Topic 405-50) Disclosure of Supplier Finance Program Obligations , to increase the transparency of supplier finance programs regarding the use of such programs by the buyer party (that is, the disclosing entity) and the programs’ effects on an entity’s working capital, liquidity, and cash flows.

ASU 2022-04 is effective for all entities for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years.

The requirement on rollforward information is effective for fiscal years beginning after December 15, 2023.

Early adoption is permitted.

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

Recent Accounting Pronouncements Not Adopted as of December 31, 2023:

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

Improvements to Reportable Segment Disclosures ASU 2023-0 7 , which requires all public entities, including public entities with a single reportable segment, to provide in interim and annual periods one or more measures of segment profit or loss used by the chief operating decision maker to allocate resources and assess performance.

Additionally, the standard requires disclosures of significant segment expenses and other segment items as well as incremental qualitative disclosures.

The guidance in this update is effective for fiscal years beginning after December 15, 2023, and interim periods after December 15, 2024.

The Company adopted the new disclosure requirements as of and for the years ended December 31, 2024 and December 31, 2023.

Refer to Note 5, Segment Reporting for the required disclosure.

In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) :

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More specifically, the ASU reduces the number of models that may be used to account for convertible instruments from five to three, amends diluted EPS calculations for convertible instruments, modifies the requirements for a contract that may be settled in an entity’s own shares to be classified in equity and requires expanded disclosures intended to increase transparency.

These amendments will be effective for the Company beginning January 1, 2024, with early adoption of the amendments permitted.

The Company is currently evaluating the impact from the adoption of ASU 2020-06 on its consolidated financial statements but does not expect to have a material impact on the Company’s consolidated financial statements.

The Company adopted the new guidance on January 1, 2024.

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

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820) :

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This Accounting Standards Update was issued to clarify the guidance in Topic 820, Fair Value Measurement , when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, and to introduce new disclosure requirements for such equity securities.

These amendments will be effective for the Company beginning January 1, 2024, with early adoption of the amendments permitted.

The Company is currently evaluating the impact from the adoption of ASU 2020-03 on its consolidated financial statements but does not expect to have a material impact on the Company’s consolidated financial statements.

The Company adopted the new guidance on January 1, 2024.

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

Recent Accounting Pronouncements Not Adopted as of December 31, 2024:

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

ASU 2024-03 will require the Company to disclose the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization, as applicable, included in certain expense captions in the Statements of Operations, and Comprehensive Loss as well as qualitatively describe the remaining amounts included in those captions.

ASU 2024-03 will also require the Company to disclose both the amount and the Company’s definition of selling expenses.

These disclosure requirements will be effective for the Company for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027.

The Company is currently evaluating the impact from the adoption of ASU 2024-03 on disclosures to its financial statements.

In December 2023, the FASB issued ASU 2023-09— Income Taxes (Topic 740)—Improvements to Income Tax Disclosures.

This Accounting Standards Update was issued to enhance the transparency and decision usefulness of income tax disclosures.

This Accounting Standards Update was issued to enhance the transparency and decision usefulness of income tax

The ASU requires that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate).

It further requires discloses on an annual basis of the following information about income taxes paid:

It further requires disclosure on an annual basis of the following information about income taxes paid:

The amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes 2.

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These disclosure requirements will be effective for the Company beginning January 1, 2025, with early adoption of the amendments permitted.

The Company is currently evaluating the impact from the adoption of ASU 2023-09 on disclosures to its consolidated financial statements.

The Company is currently evaluating the impact from the adoption of ASU 2023-09 on disclosures to its financial statements.

Risks and Uncertainties

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The Company’s accumulated deficit totaled $ 363,214 as of December 31, 2024.

The net losses and accumulated deficits were partially offset by gross margins from sales of commercialized licensed and proprietary products (prior to the licensing agreement of Sympazan with Assertio), license fees, milestone and royalty payments from commercial licensees and co-development parties.

The Company’s funding requirements have been met by its cash and cash equivalents, as well as its existing equity and debt offerings, including the 13.5 % Notes.

The Company began utilizing its ATM facility in November 2020.

Since inception to December 31, 2023, the Company sold 15,300,298 shares of Common Stock which generated net cash proceeds of approximately 48,703 , net of commissions and other transaction costs of 2,555 .

For the year ended December 31, 2023, the Company sold 4,958,341 shares which provided net proceeds of approximately $ 8,962 after deducting commissions and other transaction costs of $ 502 .

This ATM facility has approximately $ 23,952 available at December 31, 2023.

While the Company’s ability to execute its business objectives and achieve profitability over the longer term cannot be assured, the Company’s on-going business, existing cash and cash equivalents, expense management activities, including, but not limited to the ceasing of R&D activities, as well as access to the equity capital markets through its ATM facility (see Note 23 , Subsequent Events) and under the Lincoln Park Purchase Agreement, provide near term liquidity for the Company to fund its operating needs for at least the next twelve months as it continues to execute its business strategy.

The net losses and accumulated deficits were partially offset by gross margins from sales of commercialized licensed and proprietary products, license fees, milestone and royalty payments from commercial licensees and co-development parties.

The Company’s funding requirements have been met by its cash and cash equivalents, as well as its existing equity and debt offerings, including the 13.5 % Senior Secured Notes, as further discussed in Note 15, Long-Term Debt , the ATM facility and other equity offerings, including the underwritten public offering as discussed in Note 1, Company Overview and Equity Transactions.

While the Company’s ability to execute its business objectives and achieve profitability over the longer term cannot be assured, the Company’s on-going business, existing cash and cash equivalents, expense management activities, including, but not limited to the ceasing of R&D activities, as well as access to the equity capital markets through its ATM facility, provide near term liquidity for the Company to fund its operating needs for at least the next twelve months as it continues to execute its business strategy.

Segment Reporting

Operating segments are defined as components of an entity for which separate discrete financial information is available for evaluation by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and in assessing performance.

For the year ended December 31, 2024, the Company has identified one operating and reportable segment.

The Company defines its operating segment based on internally reported financial information that is regularly reviewed by the CODM to analyze financial performance, make decisions, and allocate resources.

The Company's Chief Executive Officer (“CEO”) is the CODM.

The Company manages its operations as a single segment for purposes of assessing performance and making operating decisions.

This segment encompasses the development and advancement of a product pipeline for the treatment of severe allergic reactions, including anaphylaxis, and the Adrenaverse epinephrine prodrug pipeline platform.

Additionally, the Company serves as the exclusive manufacturer for its proprietary product, Libervant, and four licensed commercialized products.

The CODM reviews the segment's profit or loss based on net loss reported on the Statements of Operations and Comprehensive Loss.

The CODM also considers forecast-to-actual variances on a monthly basis for expenses deemed significant.

Furthermore, the CODM reviews the segment's assets based on total assets reported on the Balance Sheets.

All long-lived assets are held in the United States.

While the Company generated $ 57,561 and $ 50,583 in revenues in 2024 and 2023, respectively, management expects the Company to continue to incur significant expenses and operating losses for the foreseeable future as it advances product candidates through all stages of development and clinical trials, ultimately seeking regulatory approval.

The CODM uses cash forecast models to guide investment decisions and assess entity-wide operating results and performance.

Net loss is used to monitor budget and rolling forecasts versus actual results.

The CODM views specific categories within research and development expenses, selling expenses, and general and administrative expenses as significant due to their direct correlation with cash burn and profitability.

The following table reconciles reported revenues to net loss under the significant expense principle for the years ended December 31, 2024, and 2023:

Year Ended December 31,

Revenues $ 57,561 $ 50,583

Costs and expenses:

Total Manufacture and Supply Expenses

17,872 20,831

R&D Project expenses:

Anaphylm project expenses

AQST-108 project expenses 786 —

Libervant project expenses

R&D other expenses:

Personnel costs 1

Total Research and Development Expenses

20,280 13,104

Selling expenses:

Personnel costs 1

Total Selling expenses

General & Administrative expenses:

Personnel costs 1

21,064 10,770

21,570 19,341

Total General and Administrative Expenses

42,634 30,111

Total Selling, General and Administrative Expenses

50,180 31,750

Total costs and expenses 88,332 65,685

Loss from operations ( 30,771 ) ( 15,102 )

Other (expenses) income

( 13,380 ) 7,477

Net loss before income taxes ( 44,151 ) ( 7,625 )

Income taxes benefits (expense)

Net loss $ ( 44,137 ) $ ( 7,870 )

Comprehensive loss $ ( 44,137 ) $ ( 7,870 )

1 - Personnel costs include payroll expenses, share-based compensation expenses and severance

2 - Other Research and Development expenses include preclinical, consulting, maintenance, and testing fees

3 - Other Selling expenses include commercialization and other related expenses

4 - Other General and Administrative expenses include legal/patent fees, insurance fees, IT expenses, investor relations expenses, regulatory fees, facility and other costs

Revenues and Trade Receivables, Net

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Co-development and research fees 1,925 1,402

Proprietary product sales, net — 7,658

Revenues $ 50,583 $ 47,680

Proprietary product revenue, net

Total revenues

$ 57,561 $ 50,583

Disaggregation of Revenue

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Revenues $ 57,561 $ 50,583

For the year ended December 31, 2024, United States revenues were derived primarily from Indivior (manufacture and supply revenue, and co-development and research fees), MTPA (license and royalty revenue that was previously recorded as deferred revenue and now recognized due to the termination of the contract), and Assertio (manufacture and supply revenue, license and royalty revenue and co-development and research fees).

Ex-United States revenues were derived primarily from Haisco (license and royalty revenue that was previously recorded as deferred revenue and now recognized due to the termination of the contract), Indivior (manufacture and supply revenue, license and royalty revenue and co-development and research fees), and Hypera (manufacture and supply revenue, license and royalty revenue and co-development and research fees) for revenue markets outside of the United States.

For the year ended December 31, 2023, United States revenues were derived primarily from Indivior (manufacture and supply revenue, and co-development and research fees), Assertio (manufacture and supply revenue, and license and royalty revenue), and Zevra (license and royalty revenue).

Ex-United States revenues were derived primarily from Indivior (manufacture and supply revenue, license and royalty revenue and co-development and research fees) and Hypera (manufacture and supply revenue and license and royalty revenue) for revenue markets outside of the United States.

Trade and other receivable, net consist of the following:

Accounts receivable $ 5,570 $ 3,274

Trade receivables

$ 4,919 $ 5,570

Contract and other receivables 2,473 2,915

allowance for bad debt ( 14 ) ( 40 )

allowance for credit losses

sales-related allowances ( 48 ) —

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Contract and other receivables totaled $ 2,473 and $ 2,915 as of December 31, 2024 and 2023, respectively, consisting primarily of contract assets and other receivables.

Contract assets consist of products and services provided under specific contracts to customers for which earnings processes have been met.

Sales-related allowances as of December 31, 2022 were estimated in relation to revenues recognized for sales of Sympazan prior to the licensing agreement the Company entered into with Assertio in October 2022.

See details in Note 6 , Material Agreements.

The following table presents the changes in the allowance for doubtful accounts:

Allowance for doubtful accounts at beginning of the period $ 40 $ 40

Allowance expense (reduction)

Write-downs charged against the allowance — —

Allowance for doubtful accounts at end of the period $ 14 $ 40

The allowance for doubtful accounts was $ 14 and $ 40 for each of the years ending December 31, 2023 and 2022.

There was a reduction of $ 26 to th e allowance for doubtful accounts for the year ended December 31, 2023.

There were no additions to or write-downs for the year ended December 31, 2022.

Contract assets consist of products and services provided under specific contracts to customers for which earnings processes have been met prior to shipment of goods or full delivery of completed services, as well as estimated receivables from contracts with third parties.

Other receivables include the current portion related to the Monetization royalty receivable and other receivables.

Sales-related allowances as of December 31, 2024 were estimated in relation to revenues recognized for sales of Libervant for patients between two to five years of age.

The following table presents the changes in the allowance for credit losses:

Balance at beginning of the period

Allowance reduction ( 14 ) ( 26 )

Balance at end of the period

Sales-Related Allowances

Revenues from sales of products are recorded net of prompt payment discounts, wholesaler service fees, returns allowances, rebates and co-pay support redemptions.

These reserves are based on estimates of the amounts earned or to be claimed on the related sales.

These amounts are treated as variable consideration, estimated and recognized as a reduction of the transaction price at the time of the sale.

The Company includes these estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized for such transaction will not occur, or when the uncertainty associated with the variable consideration is resolved.

The calculation of some of these items requires management to make estimates based on sales data, historical return data, contracts and other related information that may become known in the future.

The adequacy of these provisions is reviewed on a quarterly basis.

The following table presents the changes in sales-related allowances:

Beginning Balance

Provision related to sales in 2022 — 1,365

Credits and payments ( 87 ) ( 1,301 )

Balance at beginning of period

Payments / credits

( 23 ) ( 87 )

Reclassifications $ — $ ( 582 )

Ending Balance

Total reductions of gross product sales from sales-related allowances and accruals were $ 0 the year ended December 31, 2023 due to the outlicensing of Sympazan.

Accruals for returns allowances and prompt pay discounts are reflected as a direct reduction of trade receivables and accruals for wholesaler service fees, co-pay support redemptions and rebates as current liabilities.

Balance at end of period

Accruals for returns allowances and prompt pay discounts are reflected as a direct reduction of trade receivables, and accruals for wholesaler service fees, co-pay support redemptions and other rebates are reflected as current liabilities.

The accrued balances relative to these provisions included in Trade and other receivables, net and accrued expenses were $ 48 and $ 665 , respectively, as of December 31, 2024, and $ 0 and $ 645 , respectively, as of December 31, 2023.

2 unchanged sentences

Customers are considered major customers when net revenue exceeds 10% of total revenue for the period or outstanding receivable balances exceed 10% of total receivables.

For the year ended December 31, 2024, Indivor and Haisco represented approximately 62 % and 12 % of total revenue, including the one-time recognition of deferred revenue for Haisco, respectively.

As of December 31, 2024, Indivor and Cosmed exceeded the 10% threshold for outstanding receivable balances and represented 41 % and 16 %, respectively, of total trade and other receivables.

For the year ended December 31, 2023, Indivor represented approximately 80 % of total revenue.

As of December 31, 2023, Indivor and Zevra Therapeutics, Inc.

represented 65 % and 13 %, respectively, of total trade and other receivables.

For the year ended December 31, 2022, Indivor represented approximately 76 % of total revenue.

As of December 31, 2022, Indivior represented 80 % of total trade and other receivables.

exceeded the 10% threshold for outstanding receivable balances and represented 65 % and 13 %, respectively of total trade and other receivables .

Material Agreements

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The Indivior License Agreement specifies a minimum annual threshold quantity of Suboxone that the Company is obligated to fill and requires Indivior to provide the Company with a forecast of its requirements at various specified times throughout the year.

The Indivior License Agreement provides for payment by Indivior of an agreed upon purchase price per unit until January 1, 2025 and, thereafter, that is subject to annual adjustments based on changes in an agreed upon price index.

The Indivior License Agreement provides for payment by Indivior of an agreed upon purchase price per unit until January 1, 2025 and, thereafter, that is subject to annual adjustments based on

changes in an agreed upon price index.

In addition to the purchase price for the Suboxone supplied, Indivior is required to make certain single digit percentage royalty payments tied to net sales value (as provided for in the Indivior License Agreement) outside of the U.S., subject to annual maximum amounts and limited to the life of the related patents.

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and (ii) agreeing to transfer pricing and payment terms for supplied product under the Indivior License Agreement.

In consideration of the agreements between the parties, the Company received a payment of $ 11,482 from Indivior, of which amount $ 5,482 represents:

During the year ended December 31, 2023, in consideration of the agreements between the parties, the Company received a payment of $ 11,482 from Indivior, of which amount $ 5,482 represented:

(a) payment of the portion of a 2022 price increase that had not been previously paid and (b) an estimated payment in 2023 for certain price increases.

As of December 31, 2023, the $ 5,482 price increase has been fully recognized in Manufacture and supply revenue and $ 6,000 is included in Interest income and other income, net on the Consolidated Statements of Operations and Comprehensive Loss .

During the year ended December 31, 2023, the Company recognized $ 5,482 , of which $ 1,682 was related to the 2022 price increases, in Manufacture and supply revenue and $ 6,000 in Interest income and other income , net on the Statements of Operations and Comprehensive Loss.

There were no retroactive price adjustments included in Manufacture and supply revenue for year ended December 31, 2024.

Supplemental Agreement with Indivior

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Reddy’s Labs and Alvogen, the Company received an aggregate of $ 40,750 from Indivior under the Indivior Supplemental Agreement.

Further payments under the Indivior Supplemental Agreement were suspended until adjudication of

related patent infringement litigation is finalized.

Further payments under the Indivior Supplemental Agreement were suspended until adjudication of related patent infringement litigation was finalized.

No further payments are due to the Company under the Indivior Supplemental Agreement.

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On April 1, 2016, the Company entered into a license agreement with Cynapsus Therapeutics Inc.

(which was later succeeded to in interest by Sunovion Pharmaceuticals, Inc.), referred to as the Sunovion License Agreement, pursuant to which Sunovion obtained an exclusive, worldwide license (with the right to sub-license) to certain intellectual property, including existing and future patents and patent applications, covering all oral films containing apomorphine for the treatment of off episodes in Parkinson’s disease patients.

(which was later succeeded to in interest by Sunovion), referred to as the Sunovion License Agreement, pursuant to which Sunovion obtained an exclusive, worldwide license (with the right to sub-license) to certain intellectual property, including existing and future patents and patent applications, covering all oral films containing apomorphine for the treatment of off episodes in Parkinson’s disease patients.

Sunovion used this intellectual property to develop its apomorphine product KYNMOBI, which was approved by the FDA on May 21, 2020.

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The Amendment was entered into for the primary purpose of amending the Sunovion License Agreement as follows:

(i) including the United Kingdom and any other country currently in the European Union (EU) which later withdraws as a member country in the EU for purpose of determining the satisfaction of the condition triggering the obligation to pay the third milestone due under the Sunovion License Agreement, (ii) extending the date after which Sunovion has the right to terminate the Sunovion License Agreement for convenience from December 31, 2024 to March 31, 2028, (iii) modifying the effective inception date of the first minimum annual royalty due from Sunovion to the Company form January 1, 2020 to April 1, 2020, and (iv) modifying the termination provision to reflect the Company’s waiver of the right to terminate the Sunovion License Agreement in the event that KYNMOBI was not commercialized by January 1, 2020.

(i) including the United Kingdom and any other country currently in the EU which later withdraws as a member country in the EU for purpose of determining the satisfaction of the condition triggering the obligation to pay the third milestone due under the Sunovion License Agreement, (ii) extending the date after which Sunovion has the right to terminate the Sunovion License Agreement for convenience from December 31, 2024 to March 31, 2028, (iii) modifying the effective inception date of the first

minimum annual royalty due from Sunovion to the Company form January 1, 2020 to April 1, 2020, and (iv) modifying the termination provision to reflect the Company’s waiver of the right to terminate the Sunovion License Agreement in the event that KYNMOBI was not commercialized by January 1, 2020.

This Sunovion License Agreement will continue until terminated by Sunovion in accordance with the termination provisions of the Amendment to the Sunovion License Agreement.

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Under this termination arrangement, the Company has the right to participate in any and all value that Zevra may derive from the commercialization or any other monetization of KP-415 and KP-484 compounds or their derivatives.

Among these monetization transactions are those related to any business combinations involving Zevra and collaborations, royalty arrangements, or other transactions from which Zevra may realize value from these compounds or their derivatives.

During the year ended December 31, 2023, the Company has recognized $ 1,500 as milestone revenues for Zevra.

Licensing and Supply Agreement with Haisco for Exservan™ (Riluzole Oral Film) for ALS Treatment in China

The Company entered into the Haisco Agreement, pursuant to which Aquestive granted Haisco, a Chinese limited company listed on the Shenzhen Stock Exchange, an exclusive license to develop and commercialize Exservan (riluzole oral film) for the treatment of ALS in China.

Under the terms of the Haisco Agreement, Aquestive will serve as the exclusive sole manufacturer and supplier for Exservan in China.

Under the Haisco Agreement, as amended, the Company received a $ 7,000 upfront cash payment in September 2022, and will receive regulatory milestone payments and double-digit royalties on net sales of Exservan in China, and earn manufacturing revenue upon the sale of Exservan in China.

The Company entered into the Haisco Agreement with Haisco, a Chinese limited company listed on the Shenzhen Stock Exchange, effective as of March 3, 2022, pursuant to which Aquestive granted Haisco an exclusive license to develop and commercialize Exservan (riluzole oral film) for the treatment of ALS in China.

Under the terms of the Haisco Agreement, Aquestive was the exclusive sole manufacturer and supplier for Exservan in China.

Under the Haisco Agreement, as amended, the Company received a $ 7,000 upfront cash payment in September 2022, and was entitled to receive regulatory milestone payments and double-digit royalties on net sales of Exservan in China, and earn manufacturing revenue upon the sale of Exservan in China.

In June 2024, the Haisco Agreement was terminated, and the Company will not receive any contingent payments under the Haisco Agreement.

The Company recognized previously deferred revenue of $ 7,000 for the upfront payment received in September 2022 on the Company's Statements of Operations and Comprehensive Loss for the year ended December 31, 2024.

The termination agreement released all parties from any existing or ongoing obligations.

Commissions of $ 134 that had been capitalized were expensed immediately in Selling, general, and administrative expenses on the Statements of Operations and Comprehensive Loss.

Compensatory Arrangements of Certain Officers

On May 17, 2022, the Company announced that Keith J.

Kendall, former President and Chief Executive Officer of the Company, was leaving the Company and the Company’s Board of Directors, effective May 17, 2022 (the “Termination Agreement”).

Kendall, former President and Chief Executive Officer of the Company, was leaving the Company and the Company’s Board of Directors, effective May 17, 2022.

In connection with his departure, Mr.

Kendall and the Company entered into a Separation Agreement, including a Consulting Agreement, dated as of May 17, 2022.

Pursuant to the Separation Agreement, Mr.

Kendall’s employment with the Company ceased effective as of May 17, 2022.

Under the Separation Agreement, Mr.

Kendall received the following principal severance benefits contingent upon Mr.

Kendall’s compliance with a customary release of claims entered into at the time:

(i) a cash payment consisting of the sum of any previously unpaid base salary through the Termination Date and any accrued and unused vacation time for the 2022 calendar year;

(ii) a cash payment consisting of his pro-rata portion of his target bonus in the amount of $ 280 ;

(iii) a cash payment in the amount of $ 150 , representing 90 days of his base pay in lieu of the required notice period under Mr.

Kendall’s employment agreement;

(iv) severance payments consisting of (a) a cash payment of $ 263 , which represents an acceleration of the first three installments of Mr.

Kendall’s 18 -months severance which he is entitled to under his employment agreement;

(b) monthly severance payments of $ 53 per month for the first through the seventh months following the Termination Date;

and (d) monthly severance payments of $ 88 for the ninth through eighteenth months following the Termination Date;

(v) accelerated vesting of unvested outstanding equity awards, with options remaining exercisable for the duration of the stated term of each award;

and (vi) continuing coverage under the Company’s group health and life insurance plans at the same levels and on the same terms and conditions as are provided to similarly-situated executives, for a period of 18 months.

Under the terms of the Separation Agreement, Mr.

Kendall served as a consultant to the Company, on an as-needed basis providing transition services, strategic planning, financial planning, merger and acquisition advice and consultation, for a period of time from the Separation Date to December 31, 2022.

For these services, Mr.

Kendall received a consulting fee of $ 10 per month.

As of December 31, 2023, all obligations related to Mr.

Kendall have been completed.

Under the Separation Agreement, in addition to other severance benefits already received by Mr.

Kendall in 2022, Mr.

Kendall received a monthly severance payment for eighteen months following the Termination Date, or November 22, 2023.

By the end of December 31, 2023, all payments due to Mr.

Kendall were made.

Licensing and Supply Agreement with Atnahs Pharma UK Limited

3 unchanged sentences

Effective March 27, 2023, the Company amended the Pharmanovia Agreement to expand the scope of territory for the license of Libervant to cover the rest of the world, excluding the U.S., Canada and China.

Under the Pharmanovia Amendment, Pharmanovia will be responsible for seeking applicable regulatory approval in the expanded territories, which includes Latin America, Africa and Asia Pacific.

Under the Pharmanovia Amendment, Pharmanovia will be responsible for seeking applicable regulatory approval in the expanded territories, which include Latin America, Africa and Asia Pacific.

Pursuant to the terms of the Pharmanovia Amendment, the Company received a non-refundable payment of $ 2,000 from Pharmanovia in connection with the execution of the Pharmanovia Amendment.

7 unchanged sentences

The Company also entered into a long-term supply agreement with Assertio for Sympazan pursuant to which the Company is the exclusive sole worldwide manufacturer and supplier of the product and will receive manufacturing fees from Assertio for the product through the expiration of such supply agreement.

Licensing Agreement with Mitsubishi Tanabe Pharma America, Inc.

In January 2021, the Company announced that Aquestive granted an exclusive license to MTPA for the commercialization of Exservan in the United States.

MTPA is a multinational pharmaceutical company with a focus on patients with ALS.

The product was launched by MTPA in June 2021.

Under the terms of the MTPA license agreement, Aquestive was the exclusive manufacturer and supplier of Exservan for MTPA in the United States.

In June 2024, under the Second Amendment to the License and Supply Agreement, MTPA and the Company mutually agreed to terminate the agreement.

As of June 30, 2024 and as part of the termination, the parties were released from any existing or ongoing obligations (except for certain limited non-material post-termination obligations).

Upon termination, previously deferred revenue of $ 3,317 was recognized in the Statements of Operations and Comprehensive Loss for the year ended December 31, 2024 for milestone payments that had been received.

Commissions of $ 57 that had been capitalized were expensed immediately in Selling, general, and administrative expenses on the Statements of Operations and Comprehensive Loss for the year ended December 31, 2024.

Financial Instruments – Fair Value Measurements

19 unchanged sentences

Under the Letter Agreement, in consideration of the Exercising Holder exercising the Existing Warrants, the Company issued to the Exercising Holder new warrants to purchase up to an aggregate of 2,750,000 shares of New Warrants at $ 2.60 per share.

Professional Appraisal Practice, the American Society of Appraisers and the American Institute of Certified Public Accountants’ Accounting and Valuation Guide.

Those warrants were valued based on Level 3 inputs and their fair value was based primarily on an independent third-party appraisal prepared as of the grant date consistent with generally accepted valuation methods of the Uniform Standards of Professional Appraisal Practice, the American Society of Appraisers and the American Institute of Certified Public Accountants’ Accounting and Valuation Guide.

See Note 16 , Warrants for further information on these warrants.

23 unchanged sentences

Total depreciation and amortization related to property and equipment was $ 640 and $ 1,153 for the years ended December 31, 2024 and 2023, respectively.

For the year ended December 31, 2023 the Company recognized a $ 216 impairment of an asset held in Construction in progress account that was assessed by management as no longer usable.

Such impairment charge is included in the Manufacture and supply expenses on the Consolidated Statements of Operations and Comprehensive Loss.

No impairment losses were recognized for the year ended December 31, 2024.

For the year ended December 31, 2023, the Company recognized a $ 216 impairment of an asset held in Construction in progress account that was assessed by management as no longer usable.

Such impairment charge is included in the Manufacture and supply expenses on the Statements of Operations and Comprehensive Loss.

Right-of-Use Assets and Lease Obligations

The Company leases all realty used as its production and warehouse facilities, corporate headquarters, commercialization operations center and research and laboratory facilities.

The Company leases all realty used at its production and warehouse facilities, corporate headquarters, commercialization operations center and research and laboratory facilities.

None of these three leases include the characteristics specified in ASC 842, Leases, that require classification as financing leases and, accordingly, these leases are accounted for as operating leases.

2 unchanged sentences

During the year ended December 31, 2023, the Company recognized a lease supporting its manufacturing facilities as a finance lease.

Commitments under finance leases are not significant, and are included in Property and equipment, net, Notes Payable, current and Notes Payable, net on the Consolidated Balance Sheets.

The Company does not recognize a right-to use asset and lease liability for short-term leases, which have terms of 12 months or less on its consolidated balance sheet.

For longer-term lease arrangements that are recognized on the Company's consolidated balance sheet, the right-of-use asset and lease liability is initially measured at the commencement date based upon the present value of the lease payments due under the lease.

Commitments under finance leases are not significant, and are included in Property and equipment, net, and Notes Payable, net on the Balance Sheets.

The Company does not recognize a right-to-use asset and lease liability for short-term leases, which have terms of 12 months or less on its Balance Sheets.

For longer-term lease arrangements that are recognized on the Company's Balance sheets, the right-of-use asset and lease liability is initially measured at the commencement date based upon the present value of the lease payments due under the lease.

These payments represent the combination of the fixed lease and fixed non-lease components that are due under the arrangement.

The costs of associated with the Company’s short-term leases, as well as variable costs relating to the Company’s lease arrangements, are not material to the consolidated financial results.

The costs associated with the Company’s short-term leases, as well as variable costs relating to the Company’s lease arrangements, are not material to the financial results.

The implicit interest rates of the Company’s lease arrangements are generally not readily determinable and as such, the Company applies an incremental borrowing rate, which is established based upon the information available at the lease commencement date, to determine the present value of lease payments due under an arrangement.

Measurement of the operating lease liability reflects a range of an estimated discount rate of 14.8 % to 15.6 % applied to minimum lease payments, including expected renewals, based on the incremental borrowing rate experienced in the Company’s collateralized debt refinancing.

The Company’s lease costs are recorded in manufacture and supply, research and development and selling, general and administrative expenses in its Consolidated Statements of Operations and Comprehensive Loss.

For the years ended December 31, 2023 and 2022, total operating lease expenses totaled $ 1,745 and $ 1,753 , respectively, including variable lease expenses such as common area maintenance and operating costs of $ 447 and $ 449 , respectively.

Cash payments arising from the Company’s lease arrangements are reflected on its consolidated statement of cash flows as outflows for operating activities.

The Company’s lease costs are recorded in manufacture and supply, research and development and selling, general and administrative expenses in its Statements of Operations and Comprehensive Loss.

For the years ended December 31, 2024 and

2023, total operating lease expenses totaled $ 1,814 and $ 1,745 , respectively, including variable lease expenses such as common area maintenance and operating costs of $ 487 and $ 447 , respectively.

The Company’s payments due under its operating leases are as follows:

2029-2033 3,828

2029 and thereafter

Total lease payments 9,043

8 unchanged sentences

Amortization expense was $ 78 and $ 157 for each of the years ended December 31, 2024 and 2023, respectively.

During the remaining life of the purchased intangible, estimated annual amortization expense is $ 157 for the year ending 2024 and beyond.

As of December 31, 2023, the remaining weighted-average life of all intangible assets subject to amortization is 8.1 years.

The estimated aggregate amortization expense for each of the following fiscal years ending December 31 is presented below:

Total estimated amortization expenses

In June 2024, in connection with a termination of an agreement, the Company recorded a gain on termination of the contract in the amount of $ 1,500 , which was partially offset by an adjustment to the remaining balance of $ 1,200 of the intangible asset.

The net gain of $ 300 was recorded within Other income, net on the Statements of Operations and Comprehensive Loss for the year ended December 31, 2024.

See Note 7, Material Agreements.

Other Non-Current Assets

5 unchanged sentences

In connection with the Monetization Agreement, the Company performed an assessment under ASC 860, Transfer and Servicing to determine whether the existing receivable was transferred to Marathon and concluded it was not transferred.

Royalty receivable consists of five annual minimum payments due from Sunovion, the last of which is due in March, 2028.

As of December 31, 2024 and 2023, Royalty receivable consists of four and five , respectively, annual minimum payments due from Sunovion, the last of which is due in March, 2028.

The current portion of the royalty receivable is included in Trade and other receivables, net.

See Note 16 .

Sale of Future Revenue for further details on how this receivable relates to the Monetization Agreement transaction.

See Note 17, Sale of Future Revenue for further details on how this receivable relates to the Monetization Agreement transaction.

Non-current portion of commissions capitalized under ASC 340, Other Assets and Deferred Costs, is recorded within Other non-current assets on the Balance Sheets.

Commissions of $ 191 were expensed in Selling, general, and administrative expenses on the Statements of Operations and Comprehensive Loss for the year ended December 31, 2024 due to the termination of the underlying contracts.

Accrued Expenses

2 unchanged sentences

Real estate and personal property taxes 365 337

Accrued distribution expenses 645 1,012

Accrued distribution expenses and sales returns provision

Interest payable

Other 128 300

Total accrued expenses $ 5,907 $ 6,497

The reduction in Accrued compensation is mostly related to payments of accrued severance costs and accrued commission expenses during the year ended December 31, 2023.

The increase in Interest payable is due to the timing of interest payments on the 13.5 % Senior Notes that were due on January 2nd, 2024.

See Note 6, Material Agreements, for a discussion of the Termination agreement with certain officers and related severance accrued expenses recorded in Accrued compensation as of December 31, 2022.

The increase in Accrued compensation is mostly related to an increase in the current portion of accrued severance as of December 31, 2024.

The decrease in Interest payable is due to the timing of interest payments on the 13.5 % Senior Notes.

The fourth quarter 2024 interest payment on the 13.5 % Senior Notes was made on December 30, 2024.

As of December 31, 2023, interest payable on the 13.5 % Senior Notes was due on January 2, 2024.

See Note 15, Long-Term Debt, for discussion of 13.5 % Notes and related interest payable.

Accrued distribution expenses and sales returns provision mostly represent estimated liabilities for wholesaler service fees, co-pay support redemptions and other rebates related to the proprietary product Libervant and returns related to the period prior to the outlicensing of our proprietary product, Sympazan.

Long-Term Debt

7 unchanged sentences

Further, the Company entered into an additional Purchase Agreement with its noteholders whereby the Company issued in aggregate $ 4,000 of additional 12.5 % Notes (the "Additional Notes") in lieu of paying a prepayment premium to two noteholders on the early repayment of the 12.5 % Notes discussed above.

The result of these two transactions reduced the net balance of the Company's 12.5 % Senior Notes outstanding in the aggregate to $ 51,500 at December 31, 2020, and such aggregate principal amount remained outstanding as of December 31, 2022.

The result of these two transactions reduced the net balance of the Company's 12.5 % Senior Notes outstanding in the aggregate to $ 51,500 at December 31, 2020.

The $ 4,000 principal issuance would be repaid proportionally over the same maturities as the other 12.5 % Notes.

6 unchanged sentences

This repurchase offer was capped at 30 % of the cash proceeds received by the Company as the contingent milestones were attained, if any, up through June 30, 2025.

A valuation study was performed by an independent third-party appraiser and updated as of December 31, 2022.

Based on the valuation study, the put option was valued at $ 45 and has been recorded in Other non-current liabilities.

The embedded put option was deemed to be a derivative under ASC 815 Derivatives and Hedging , which required the recording of the embedded put option at fair value subject to remeasurement at each reporting period.

A valuation study was performed by an independent third-party appraiser and updated in June 30, 2023.

Based on the valuation study, the put option was valued at $ 0 .

The resulting $ 45 decrease in the put option fair value was recorded in interest income and other income, net on the Statements of Operations and Comprehensive Loss for the year ended December 31, 2023.

The embedded put option was deemed to be a derivative under ASC 815 Derivatives and Hedging , which required the recording of the embedded put option at fair value subject to remeasurement at

each reporting period.

In addition, as of the closing of this transaction, the Company issued to the holders of the 12.5 % Notes warrants to purchase 143,000 shares of the Company's Common Stock.

On August 6, 2021, pursuant to the Third Supplemental Indenture, the holders of the 12.5 % extended to June 30, 2022 from December 31, 2021, the Company’s ability to access, at the Company’s option, $ 30,000 of 12.5 % Notes re-openers under the Indenture.

On May 13, 2022, pursuant to the Fifth Supplemental Indenture, the holders of the 12.5 % Notes further extended to March 31, 2023 from June 30, 2022, the Company's ability to access, at the Company's option, $ 30,000 of 12.5 % Notes re-openers under the Indenture, subject to the full approval of Libervant by the FDA for sale in the United States, which full approval included U.S.

market access for Libervant.

Because full FDA approval was not obtained by March 31, 2023, the Company's option to access the re-openers expired on such date.

As of December 31, 2023, the put option was no longer in place due to the refinancing of the 12.5 % Notes.

On October 7, 2021, the Company entered into the Fourth Supplemental Indenture, pursuant to which the amortization schedule for the 12.5 % Notes was amended to provide for the date of the first principal payment to be extended from September 30, 2021 to March 30, 2023.

1 unchanged sentence

In connection with the Fourth Supplemental Indenture, the Company entered into a Consent Fee Letter with the holders of the 12.5 % Notes (the “Consent Fee Letter”), pursuant to which the Company agreed to pay the holders of the 12.5 % Notes an additional cash payment ("Consent Fee") of $ 2,700 in the aggregate, payable in four quarterly payments beginning May 15, 2022.

As of December 31, 2022, the Company recorded the remaining Consent Fee to be paid of $ 675 as Notes payable, current, on its Consolidated Balance Sheet.

The payment was made in February 2023.

The last Consent Fee installment of $ 675 was made in February 2023.

The 12.5 % Notes provided a stated fixed interest rate of 12.5 %, payable quarterly in arrears, with the final quarterly principal repayment of 12.5 % Notes due at maturity on June 30, 2025.

As of December 31, 2022, the Company recorded its principal payments due as Notes Payable, current and Notes Payable, net on its Consolidated Balance Sheet.

The Company could have elected, at its option, to redeem the 12.5 % Notes at any time at premiums that range from 101.56 % of outstanding principal if prepayment occurs on or after the fifth anniversary of the issue date of the Initial Notes to 112.50 % if payment occurs during the third year after the issuance of the 12.5 % Notes.

The Indenture also included change of control provisions under which the Company may have been required to redeem the 12.5 % Notes at 101 % of the remaining principal plus accrued interest at the election of the noteholders.

Collateral for the loan under the 12.5 % Notes consisted of a first priority lien on substantially all property and assets, including intellectual property, of the Company.

This secured obligation provided payment rights that are senior to all existing and future subordinated indebtedness of the Company and provides noteholders with perfected security interests in substantially all of the Company’s assets.

On November 4, 2022 and December 16, 2022, the Company issued two separate notices of partial redemption pursuant to the Indenture, dated as of July 15, 2021, between the Company and the Trustee and collateral agent governing the 12.5 % Notes.

Pursuant to each of the notice of partial redemption, the Company gave holders of the 12.5 % Notes notice that the Company intended to redeem $ 3,765 and $ 1,882 , respectively, of its outstanding 12.5 % Notes at a redemption price pursuant to the formula set forth in the Indenture governing the 12.5 % Notes, plus accrued and unpaid interest and fees.

Such partial redemptions occurred in January and February 2023, respectively.

The Company also paid $ 353 in a prepayment premium as a result of the early retirement of debt which was reflected as a loss on extinguishment of debt in Loss on the Extinguishment of Debt in the Company’s Consolidated Statements of Operations and Comprehensive Loss.

Further, during 2023 the Company made three scheduled principal payments totaling $ 11,463 .

Amortization expense arising from deferred debt issuance costs and debt discounts related to the 12.5 % Notes for the years ended December 31, 2023 and December 31, 2022 was $ 13 and $ 16 , respectively.

Unamortized deferred debt issuance costs and deferred debt discounts related to the 12.5 % Notes were $ 0 and $ 27 as of December 31, 2023 and December 31, 2022, respectively.

During the year ended December 31, 2023, the Company redeemed $ 5,647 of its outstanding 12.5 % Notes.

The Company also paid a $ 353 prepayment premium as a result of the early retirement of debt which was reflected as a loss on extinguishment of debt on the Company's Statements of Operations and Comprehensive Loss for the year ended December 31, 2023.

The Company also made three scheduled principal payments totaling $ 11,463 during the year ended December 31, 2023.

Amortization expense arising from deferred debt issuance costs and debt discounts related to the 12.5 % Notes for the year ended December 31, 2023 was $ 13 .

On November 1, 2023, the Company issued the 13.5 % Notes, as described below, and used the proceeds from the issuance to repay the outstanding principal balance under the 12.5 % Notes of $ 36,014 , including accrued and unpaid interest and a redemption fee.

The Company accounted for this transaction as an extinguishment of debt and recognized a debt extinguishment charge of $ 1,029 for the year ended December 31, 2023.

The debt extinguishment charge is included in Loss on the extinguishment of debt in the Company’s Consolidated Statements of Operations and Comprehensive Loss.

The debt extinguishment charge is included in Loss on the extinguishment of debt in the Company’s Statements of Operations and Comprehensive Loss.

13.5 % Senior Secured Notes

11 unchanged sentences

If the Company undergoes a change of control, the Note Holders may require the Company to repurchase for cash all or any portion of the 13.5 % Notes at a change of control repurchase price equal at 108.5 % plus the Exit Fee of the remaining principal, plus accrued interest at the election of the Note Holders.

The Indenture permits the Company, upon the continuing satisfaction of certain conditions, including that the Company (on a consolidated basis) has at least $ 100,000 of net revenues for the most recently completed twelve calendar month period, to enter into an asset-based borrowing facility not to exceed $ 10,000 (the “ABL Facility”).

The Indenture permits the Company, upon the continuing satisfaction of certain conditions, including that the Company has at least $ 100,000 of net revenues for the most recently completed twelve calendar month period, to enter into an ABL facility not to exceed $ 10,000 .

The ABL Facility may be collateralized only by assets of the Company constituting inventory, accounts receivable, and the proceeds thereof.

7 unchanged sentences

The Royalty Right Agreements fair value is estimated by applying probability-weighted cash flows for future sales, which are then discounted to present value.

Changes to fair value of the Royalty Rights Agreements can result from changes to one or a number of the aforementioned inputs.

Changes to the fair value of the Royalty Rights Agreements can result from changes to one or a number of the aforementioned inputs.

A significant change in unobservable inputs could result in a material increase or decrease to the effective interest rate of the Royalty Right Agreements liability.

During the remainder of 2023, there were no material changes to the significant unobservable inputs used to recognize the Royalty Right Agreements liability.

The following table summarizes the significant unobservable inputs used in the initial fair value measurement of the Royalty Right Agreements as of December 31, 2023:

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Projected Years of Payments 2025 - 2033

As of December 31, 2024, there were no material changes to the significant unobservable inputs used to recognize the Royalty Right Agreements liability.

Management has updated the projected years of payments to 2034 and the effective interest rate by 0.56 %.

Since the Royalty Right Agreements were issued in connection with the 13.5 % Notes, the Company allocated the proceeds to the two instruments based on their relative fair values.

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The excess of future estimated royalty payments of $ 56,926 over the $ 13,856 of allocated fair value is recognized as a discount related to the Royalty Right Agreements and is amortized as interest expense using the effective interest method.

Consequently, the Company calculated an imputed rate of interest on the unamortized portion of the Royalty Right Agreements liability, which was approximately 9.68 % as of December 31, 2023.

The allocated amounts of $ 13,856 when combined with the Exit Fee of $ 2,000 , original issue discount of $ 1,125 and debt issuance costs of $ 3,517 , resulted in debt discount of $ 20,498 .

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Amortization expense arising from the discounts related to the 13.5 % Notes and Royalty Right Agreements for the year ended December 31, 2024 was 5,019 and $ 5,459 , respectively.

Amortization expense arising from the discounts related to the 13.5 % Notes and Royalty Right Agreements for the year ended December 31, 2023 was $ 833 and $ 905 , respectively.

Unamortized discounts totaled $ 12,646 for the 13.5 % Notes and $ 36,706 for royalty obligations as of December 31, 2024.

Unamortized discounts totaled $ 17,665 for the 13.5 % Notes and $ 42,165 for royalty obligations as of December 31, 2023.

Long-term notes and unamortized debt discount balances are as follows:

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( 12,646 ) ( 17,665 )

Current portion of long-term debt — ( 18,025 )

Notes payable, long-term

32,354 27,335

Finance lease

Finance lease, long-term

Notes payable, net

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Royalty obligations

$ 56,922 $ 56,926

Unamortized discount ( 36,706 ) ( 42,165 )

Current portion of royalty obligation

Royalty obligations, net

$ 20,129 $ 14,761

Scheduled principal payments on the 13.5 % Notes as of December 31, 2024 are as follows:

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Management estimated the fair value of the Initial Warrants to be $ 6,800 and the Additional Warrants to be $ 735 , each based on an assessment by an independent third-party appraiser.

The fair value of the respective warrants was treated as a debt discount, amortizable over the term of the respective warrants, with the unamortized 12.5 % Notes portion applied to reduce the aggregate principal amount of the 12.5 % Notes in the Company’s Consolidated Balance Sheet.

Additionally, since the Initial Warrants and Additional Warrants issued do not provide warrant redemption or put rights within the control of the holders that could require the Company to make a payment of cash or other assets to satisfy the obligations under the warrants, except in the case of a “cash change in control”, the fair value attributed to the warrants is presented in Additional Paid-in Capital in the Company’s Consolidated Balance Sheet.

There were no warrants exercised as it relates to the Initial Warrants and the Additional Warrants during the year ended December 31, 2023 and December 31, 2022, respectively.

Warrants to purchase a total of 1,714,429 shares of Common Stock with exercise prices of $ 4.25 and $ 5.38 for 1,571,429 warrants and 143,000 warrants, respectively, remain outstanding as of December 31, 2023 and December 31, 2022.

Long-Term Debt.

During the year ended December 31, 2024, 30,645 of the Additional Warrants were exercised with the Company receiving proceeds of $ 165 .

There were no warrants exercised during the year ended December 31, 2023.

Warrants to purchase a total of 1,683,784 shares of Common Stock with exercise prices of $ 4.25 and $ 5.38 for 1,571,429 warrants and 112,355 warrants, respectively, remained outstanding as of December 31, 2024.

Warrants to purchase a total of 1,714,429 shares of Common Stock with exercise prices of $ 4.25 and $ 5.38 for 1,571,429 warrants and 143,000 warrants, respectively, remained outstanding as of December 31, 2023 See Note 15, Long-Term Debt.

Warrants Issued Under Securities Purchase Agreements

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Management estimated the fair value of the pre-funded warrants and Common Stock warrants to be $ 5,874 based on an assessment by an independent third-party appraiser.

The fair value of the pre-funded and Common Stock warrants is treated as equity and is presented in Additional Paid-in Capital in the Company’s Consolidated Balance Sheet.

The fair value of the pre-funded and Common Stock warrants is treated as equity and is presented in Additional Paid-in Capital in the Company’s Balance Sheets.

On June 14, 2023, 3,689,452 Common Stock warrants issued pursuant to the Securities Purchase Agreements were exercised with proceeds of approximately $ 3,542 .

On August 1, 2023, the Company entered into the Letter Agreement with the Exercising Holder of 5,000,000 of the remaining Common Stock Warrants.

Pursuant to the Letter Agreement, the Exercising Holder and the Company agreed that the

Exercising Holder would exercise all of its Existing Warrants for shares of Common Stock underlying the Existing Warrants at $ 0.96 per share of Common Stock, the current exercise price of the Existing Warrants.

Pursuant to the Letter Agreement, the Exercising Holder and the Company agreed that the Exercising Holder would exercise all of its Existing Warrants for shares of Common Stock underlying the Existing Warrants at $ 0.96 per share of Common Stock, the current exercise price of the Existing Warrants.

Under the Letter Agreement, in consideration of the Exercising Holder exercising the Existing Warrants, the Company issued to the Exercising Holder New Warrants to purchase up to an aggregate of 2,750,000 shares of Common Stock.

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Management estimated the fair value of the warrants to be $ 4,671 based on an assessment by an independent third-party appraiser.

The fair value of the New warrants is treated as equity and is presented in Additional Paid-in Capital in the Company’s Consolidated Balance Sheet.

The fair value of the New warrants is treated as equity and is presented in Additional Paid-in Capital in the Company’s Balance Sheets.

On August 2, 2023, 5,000,000 of the Existing Warrants were exercised pursuant to the Securities Purchase Agreement with the Exercising Holder, with the Company receiving gross proceeds therefrom of $ 4,800 .

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The Company incurred $ 35 in relation to this transaction.

As of December 31, 2023, in addition to the New Warrants to purchase of 2,750,000 shares of Common Stock described above, there remain outstanding Common Stock Warrants to purchase 160,548 shares of Common Stock with an exercise price of $ 1.09 of the original Securities Purchase Agreements .

There were no warrants issued or exercised as it relates to the Warrants Issued Under Securities Purchase Agreements during the year ended December 31, 2024.

As of December 31, 2024, in addition to the warrants to purchase 2,750,000 shares of Common Stock described above, there remained outstanding warrants to purchase 160,548 shares of Common Stock at an exercise price of $ 0.96 and warrants to purchase 1,683,784 shares of Common Stock outstanding related to the original issuance of the 12.5 % Notes prior to the debt refinancing described above in this Note 15, Long-Term Debt , with exercise prices of $ 4.25 and $ 5.38 for 1,571,429 warrants and 112,355 warrants, respectively.

Sale of Future Revenue

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Its ongoing obligations include the maintenance and defense of the intellectual property and to provide assistance to Marathon in executing a new license agreement for KYNMOBI in the event Sunovion terminates the Sunovion License Agreement in one or more jurisdictions of the licensed territory under the Sunovion License Agreement.

The accounting liabilities, as adjusted over time, resulting from this transaction and any non-cash interest expenses associated to those liabilities do not and will not represent any obligation to pay or any potential future use of cash.

The accounting liabilities, as adjusted over time, resulting from this transaction and any non-cash interest expenses associated with those liabilities do not and will not represent any obligation to pay or any potential future use of cash.

During the second quarter of 2020, under the Sunovion License Agreement, the Company recognized $ 8,000 of royalty revenue and corresponding royalty receivable, related to the $ 1,000 annual minimum guaranteed royalty that is due.

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The sum of future royalty payments less the $ 50,000 in proceeds received and future contingent payments will be recorded as interest expense over the life of the Monetization Agreement.

At execution, the estimate of this total interest expense resulted in an effective annual interest rate of approximately 24.9 %.

At execution, the

estimate of this total interest expense resulted in an effective annual interest rate of approximately 24.9 %.

This estimate contains significant assumptions that impact both the amount recorded at execution and the interest expense that will be recognized over the life of the Monetization Agreement.

The Company will periodically assess the estimated royalty and milestone payments to Marathon from Sunovion and contingent milestone payments from Marathon to the Company.

The Company assesses the estimated royalty and milestone payments to Marathon from Sunovion and contingent milestone payments from Marathon to the Company.

To the extent the amount or timing of such payments is materially different from the original estimates, an adjustment will be recorded prospectively to increase or decrease interest expense.

There are a number of factors that could materially affect the amount and timing of royalty and milestone payments to Marathon from Sunovion and, correspondingly, the amount of interest expense

recorded by the Company, most of which are not under the Company’s control.

There are a number of factors that could materially affect the amount and timing of royalty and milestone payments to Marathon from Sunovion and, correspondingly, the amount of interest expense recorded by the Company, most of which are not under the Company’s control.

Such factors include, but are not limited to, changing standards of care, the initiation of competing products, manufacturing or other delays, generic competition, intellectual property matters, adverse events that result in government health authority imposed restrictions on the use of products, significant changes in foreign exchange rates as the royalties remitted to Marathon are made in U.S.

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In June 2023, Sunovion announced that it has voluntarily withdrawn KYNMOBI from the U.S.

and Canadian markets, therefore, the Company likely will not receive any of the additional contingent payments under the Monetization agreement.

and Canadian markets.

Therefore, the Company likely will not receive any of the additional contingent payments under the Monetization agreement.

Further, the Company discontinued recording interest expense related to the sale of future revenue during the fourth quarter of 2022.

The following table shows the activity of the Liability related to the sale of future revenue for the year ended December 31, 2023:

Liability related to the sale of future revenue, net at December 31, 2022

The following table shows the activity of the Liability related to the sale of future revenue:

Liability related to the sale of future revenue, net at beginning of the period

$ 64,490 $ 65,259

Royalties related to the sale of future revenue ( 1,008 ) ( 989 )

Amortization of issuance costs 236 220

Interest expense related to the sale of future revenue —

Liability related to the sale of future revenue, net (includes current portion of $ 922 )

Liability related to the sale of future revenue, net at end of the period (includes current portion of $ 1,000 and $ 922 , respectively)

$ 63,718 $ 64,490

Other Non-Current Liabilities

The Company’s other non-current liabilities at December 31, 2023 consisted of AROs of $ 2,016 , and the fair value of the put option on the 12.5 % Notes of $ 0 .

The Company’s other non-current liabilities at December 31, 2022 consisted of AROs of $ 1,989 and the long-term portion of fair value of the put option on the 12.5 % Notes of $ 45 .

See Note 14, Long-Term Debt for discussion of 12.5 % Notes.

The Company’s other non-current liabilities at December 31, 2024 consisted of AROs of $ 2,039 and severance liabilities of $ 356 .

The Company’s other non-current liabilities at December 31, 2023 consisted of AROs of $ 2,016 .

AROs consists of estimated future spending related to removing certain leasehold improvements at the Company’s facilities in Portage, Indiana and Warren, New Jersey, and returning all facilities to their original condition.

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Balance at December 31, 2022 $ 1,989

Additions 110

Accretion 167

Balance at December 31, 2023 2,016

Balance at December 31, 2024 $ 2,039

Note 18 .Net Loss Per Share

Net Loss Per Share

Basic net loss per share is calculated by dividing net loss by the weighted-average number of shares of Common Stock.

As a result of the Company’s net loss incurred for the years ended December 31, 2023 and 2022, all potentially dilutive instruments outstanding would have anti-dilutive effects on per-share calculations for the periods.

Therefore, basic and diluted net loss per share were the same for all periods presented below.

Diluted EPS is adjusted by the effect of dilutive securities, including options and awards under the Company’s equity compensation plans, warrants and ESPP.

As a result of the Company’s net loss incurred for the years ended December 31, 2024 and 2023, all potentially dilutive instruments outstanding would have anti-dilutive effects on per-share calculations.

Therefore, basic and diluted net loss per share are the same for the years ended December 31, 2024 and 2023 as reflected below.

Year Ended December 31, 2024 Year Ended December 31, 2023

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At December 31, 2024, there were approximately 2.0 million shares available for grant.

The Company recognized share-based compensation in its Consolidated Statements of Operations and Comprehensive Loss during the periods presented as follows:

The Company recognized share-based compensation in its Statements of Operations and Comprehensive Loss during the periods presented as follows:

Expense classification:

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(In thousands)

Unvested, December 31, 2021

Unvested as of December 31, 2022

Granted 1,874 0.91

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Vested ( 57 ) 2.03

Unvested, December 31, 2022 162 $ 2.38

Unvested as of December 31, 2023

Granted 1,470 5.52

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Vested ( 765 ) 1.45

Unvested, December 31, 2023 1,948 $ 0.97

Unvested as of December 31, 2024

Expected to vest as of December 31, 2024

The Company granted 1,470,300 service-based restricted stock units during 2024.

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During 2024, the total grant date fair market value of shares vested was $ 1,112 .

As of December 31, 2023, $ 1,278 of total unrecognized compensation expenses related to unvested service-based restricted stock units are expected to be recognized over a weighted average period of 2.18 years from the date of grant.

As of December 31, 2024, $ 5,772 of total unrecognized compensation expenses related to unvested service-based restricted stock units are expected to be recognized over a remaining weighted average period of 1.73 years.

The service-based restricted stock units granted to employees are subject to a three-year graduated vesting schedule and are not subject to performance-based criteria other than continued employment.

2022 Inducement Equity Incentive Plan

The Company adopted the 2022 Equity Inducement Plan approved by the Compensation Committee of the Board of Directors of the Company effective as of July 29, 2022 pursuant to which the Compensation Committee of the Board of Directors may make inducement grants in accordance with Nasdaq Listing Rule 5635(c)(4).

There were 150,000 awards granted and outstanding under this Plan as of December 31, 2023 and included in the service-based restricted stock units granted as described in the table above.

In accordance with NASDAQ Listing Rule 5635(c)(4), the Company adopted the 2022 Equity Inducement Plan approved by the Compensation Committee of the Board of Directors of the Company effective as of July 29, 2022.

There were no awards outstanding under this Plan as of December 31, 2024.

Restricted Stock Unit Awards (RSUs) - Market conditions vesting-based:

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(In thousands)

Unvested, December 31, 2022 — $ —

Unvested as of December 31, 2022

Granted 1,332 2.40

Forfeited — —

Unvested, December 31, 2023 1,332 $ 2.40

The Company granted 1,332,000 market conditions vesting-based restricted stock units during 2023.

Unvested as of December 31, 2023

Forfeited — —

Vested ( 250 ) 2.41

Unvested as of December 31, 2024

Expected to vest as of December 31, 2024

There were no market conditions vesting-based restricted stock units granted in 2024.

As of December 31, 2023, $ 2,314 of total unrecognized compensation expenses related to unvested market conditions vesting-based restricted stock units are expected to be recognized over a weighted average period of 2.34 years from the date of grant.

The Company granted 1,332,000 market conditions vesting-based restricted stock units during 2023.

As of December 31, 2024, $ 1,133 of total unrecognized compensation expenses related to unvested market conditions vesting-based restricted stock units are expected to be recognized over a remaining weighted average period of 1.34 years.

The market conditions vesting-based restricted stock units vest based on a Performance Price measured as the 30-day average of the closing prices of the Company’s common stock as reported on the Nasdaq Stock Market immediately prior to and including the last calendar day of the three-year performance period (which ends on the third anniversary of the grant date).

To the extent the Performance Price is less than $ 1.75 , the Vesting Percentage will be zero .

To the extent the Performance Price

is $ 1.75 , the Vesting Percentage will be 50 %.

To the extent the Performance Price is $ 1.75 , the Vesting Percentage will be 50 %.

To the extent the Performance Price is $ 1.76 or greater, but less than $ 2.50 , the Vesting Percentage will be a prorated amount between 50.01 % and 99.99 %, based on straight-line interpolation.

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Intrinsic Value

Outstanding at December 31, 2021

Outstanding as of December 31, 2022

6,028 $ 5.48 7.50 $ 38

Granted 150 $ 2.02

Exercised ( 1 ) $ 0.88

Forfeited and Expired ( 444 ) $ 2.27

Outstanding at December 31, 2022 6,028 $ 5.48 7.50 $ 38

Outstanding as of December 31, 2023

5,733 $ 5.58 6.41 $ 1,082

Granted 1,024 4.83

( 357 ) $ 2.05

Forfeited and Expired ( 99 ) $ 3.84

Outstanding at December 31, 2023 5,733 $ 5.58 6.41 $ 1,082

Vested and expected to vest at December 31, 2023 5,674 $ 5.62 6.32 $ 1,050

Exercisable at December 31, 2023 4,324 $ 6.59 5.98 $ 596

Outstanding as of December 31, 2024

6,301 $ 5.68 6.08 $ 4,009

Expected to vest as of December 31, 2024

6,234 $ 5.69 6.05 $ 3,980

Exercisable as of December 31, 2024

4,861 $ 6.24 5.33 $ 2,898

The weighted average grant date fair value of stock options granted during 2024 and 2023 was $ 3.98 and $ 1.50 , respectively.

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The Company anticipates reinvesting earnings for the foreseeable future in product development and other avenues of share-value growth and therefore used a dividend yield of zero .

The estimate of volatility was determined based on an estimate of stock price volatility based on the historical trading data of comparable public companies at the time of grant given the lack of sufficient history for the Company's publicly-traded Common Stock.

The estimate of volatility was determined based on an estimate of stock price volatility using the historical trading data of the Company's publicly-traded Common Stock at the time of grant.

The expected term of the award was calculated using the simplified method and weighted average was utilized taking into account the vesting periods and contractual life.

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Treasury yield curve in effect on the date of grant for instruments with a remaining term similar to the expected term of the options.

As of December 31, 2023, $ 1,421 of total unrecognized compensation expenses related to non-vested stock options is expected to be recognized over a weighted average period of 1.06 years from the date of grant.

As of December 31, 2024, $ 2,867 of total unrecognized compensation expenses related to non-vested stock options is expected to be recognized over a remaining weighted average period of 1.35 years.

These option grants provided a maximum contract term of 10 years from grant date, with a weighted average remaining contract life of 6.08 years.

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The Company may also make discretionary contributions.

Total contributions made to the plan by the Company for the year ended December 31, 2023 and 2022 were $ 761 and $ 815 , respectively.

Total contributions made to the plan by the Company for the years ended December 31, 2024 and 2023 were $ 849 and $ 761 , respectively.

The components of the provision for income taxes are as follows:

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Year Ended December 31,

$ ( 14 ) $ 245

Provision for Income Tax

$ ( 14 ) $ 245

The tax effect of temporary differences between the tax bases of assets and liabilities and their financial reporting amounts that give rise to the deferred tax assets and deferred tax liabilities as of December 31, 2024 and 2023 are as follows:

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Royalty Monetization 16,117 16,750

16,750 17,139

Property and Equipment

Orphan Drug and R&D Tax Credits 5,099 4,805

Accrued debt fees — 697

Intangible Assets 137 154

Section 174 R&D Capitalization 7,263 5,039

Royalty Obligations

Sales of Royalty Rights

OID and Deferred Financing Cost

95,348 84,695

Deferred tax liabilities:

481(a) adjustment ( 193 ) —

OID and Deferred Financing Cost

Prepaid expenses ( 795 ) ( 449 )

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Tax Cuts and Jobs Act (“TCJA”), updated regulations under section 163(j) create new limitations on deductible interest expense.

For the year ended December 31, 2023, the Company’s interest expense deduction under 163(j) will be limited for tax purposes based on a calculation of 30% of its EBITDA on a tax basis.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act, which the Company refers to as the "U.S.

CARES ACT," was signed into law.

CARES Act, among other things, includes provisions related to net operating loss carryback periods, modifications to the interest deduction limitation.

CARES Act increased the adjusted taxable income limitation from 30% to 50% for business interest deductions for tax years beginning in 2019 and 2020.

This modification increased the allowable interest expense deduction and resulted in additional net operating loss (NOL) for the year 2019 and lower current taxable income (before NOL utilization) for the Company.

Additionally, the U.S.

CARES Act allowed the Company to fully offset 2020 taxable income with prior years’ NOL carried forward.

For the year ended December 31, 2024, the Company’s interest expense deduction under 163(j) will be limited for tax purposes based on a calculation of 30% of its EBIT on a tax basis.

The Company has determined, based upon available evidence, that is more likely than not that the net deferred tax asset will not be realized and, accordingly, has provided a full valuation allowance against its net deferred tax assets.

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The Company has analyzed its tax positions and has concluded that there were no uncertain positions as of December 31, 2024 and 2023.

A reconciliation of income tax benefit and the amount computed by applying the statutory federal income tax rates of 21% to loss before taxes for the year ended December 31, 2023 and 2022, respectively, as follows:

A reconciliation of income tax benefit and the amount computed by applying the statutory federal income tax rates of 21% to loss before taxes for the years ended December 31, 2024 and 2023, respectively, as follows:

Year Ended December 31,

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Effective tax rate 0.03 % ( 3.22 ) %

The Company received an ERTC refund of $ 1,250 .

It is included in Interest income and other income, net on the December 31, 2023 Company's Consolidated Statements of Operations and Comprehensive Loss.

During the year ended December 31, 2023, the Company received an ERTC refund of $ 1,250 , which is included in Interest income and other income, net on the Company's Statements of Operations and Comprehensive Loss.

Contingencies

From time to time, the Company has been and may again become involved in legal proceedings arising in the course of its business, including product liability, intellectual property, securities, civil tort, and commercial litigation, and environmental or other regulatory matters.

Patent-Related Litigation

Indivior Inc., Indivior UK Ltd., and Aquestive Therapeutics, Inc.

Reddy’s Laboratories S.A.

Reddy’s Laboratories, Inc.

On February 7, 2018, the Company and Indivior Inc.

and Indivior UK Ltd.

(collectively, “Indivior”) initiated a lawsuit against Dr.

Reddy’s Laboratories S.A.

Reddy’s Laboratories, Inc.

(collectively, “Dr.

Reddy’s”) asserting infringement of U.S.

9,855,221 (the "221 patent”).

On April 3, 2018, the Company and Indivior initiated a separate lawsuit against Dr.

Reddy’s asserting infringement of U.S.

9,931,305 (the “’305 patent”).

On May 29, 2018, the lawsuits regarding the ’221 and ’305 patents were consolidated which was originally initiated by Indivior against Dr.

Reddy’s asserting infringement of U.S.

9,687,454 (the “’454 patent”).

On February 19, 2019, the Court granted the parties’ agreed stipulation to drop the ’221 patent from the case.

On January 8, 2020, the Court entered a stipulated order of non-infringement of the ’305 patent based on the Court’s claim construction ruling, and the Company and Indivior preserved its rights to appeal the claim construction ruling.

On June 28, 2022, pursuant to a settlement agreement between the parties, the Court entered a Stipulation and Order of Dismissal, dismissing all claims and counterclaims with prejudice in the lawsuit.

Indivior Inc., Indivior UK Ltd., and Aquestive Therapeutics, Inc.

Teva Pharmaceuticals USA, Inc.

On February 7, 2018, the Company and Indivior initiated a lawsuit against Teva Pharmaceuticals USA, Inc.

(“Teva”) asserting infringement of the ’221 patent.

On April 3, 2018, the Company and Indivior initiated a separate lawsuit against Teva asserting infringement of the ’305 patent.

On May 29, 2018, the lawsuits regarding the ’221 and ’305 patents were consolidated with a suit originally initiated by Indivior against Teva asserting infringement of the ’454 patent.

The parties agreed that the case would be governed by the final judgment against Dr.

Reddy’s (described above).

On January 31, 2024, the Court entered a Stipulation and Order of Dismissal, dismissing all claims and counterclaims with prejudice in the lawsuit.

Indivior Inc., Indivior UK Ltd., and Aquestive Therapeutics, Inc.

Alvogen Pine Brook LLC

On September 14, 2017, Indivior initiated a lawsuit against Alvogen Pine Brook LLC (“Alvogen”) asserting infringement of the ’454 patent.

On February 7, 2018, the Company and Indivior filed an Amended Complaint, adding the Company as a plaintiff and asserting infringement of the’221 patent.

On April 3, 2018, the Company and Indivior initiated a separate lawsuit against Alvogen asserting infringement of the ’305 patent.

On May 29, 2018, the cases were consolidated.

On February 26, 2019, the court granted the parties’ agreed stipulation to drop the ’221 patent from the case.

On January 9, 2020,

the court entered a stipulated order of non-infringement of the ’305 patent based on the court’s claim construction ruling, and the Company and Indivior preserved the right to appeal the claim construction ruling.

On November 21, 2019, Alvogen filed an amended answer and counterclaims asserting monopolization, attempted monopolization, and conspiracy to monopolize against the Company and Indivior under federal and New Jersey antitrust laws.

The court denied the Company’s motion to dismiss Alvogen’s counterclaims on August 24, 2020.

On November 2, 2020, Alvogen filed a second amended answer and counterclaims, removing its allegations of monopolization and attempted monopolization against the Company and asserting only conspiracy to monopolize against the Company.

On November 9, 2023, pursuant to a settlement agreement between the parties, the Court entered a Stipulation and Order of Dismissal, dismissing all claims and counterclaims with prejudice in the lawsuit.

Patent Litigation Settlement with BDSI

The Company reached a settlement effective March 3, 2023 in the patent infringement lawsuits related to the sale of BDSI’s Bunavail and Belbuca drug film products in the United States.

Under the terms of the settlement agreement, all pending patent claims have been resolved between BDSI and Aquestive, as well as Indivior Inc., co-plaintiff in the Belbuca lawsuit, in exchange for a one-time, lump-sum payment of $ 8,500 to the Company.

This settlement continues the Company's focus on resolving outstanding litigation matters, where possible and appropriate.

The payment is included in Interest income and other income, net on the Company's Consolidated Statements of Operations and Comprehensive Loss.

Kentucky Litigation - Humana

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The Humana action was stayed pending related litigation, and the stay was lifted on October 30, 2023.

No schedule has been set in the action and there is no trial date set.

The Company is not able to determine or predict the ultimate outcome of the state court action in Kentucky by Humana, or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter.

The parties to this case reached a settlement on November 27 2024, the terms of which are confidential.

Aquestive had no obligation, cost or liability in the settlement as all were assumed by Indivior.

California Litigation

2 unchanged sentences

On December 5, 2019, Neurelis, Inc.

filed a lawsuit against the Company in the Superior Court of California, County of San Diego alleging the following three causes of action:

("Neurelis") filed a lawsuit against the Company in the Superior Court of California, County of San Diego alleging the following three causes of action:

(1) Unfair Competition under California Business and Professional Code § 17200 (“UCL”);

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The Third Amended Complaint alleges additional facts but includes the same claims as the Second Amended Complaint.

Trial in this matter is scheduled for October 25, 2024.

Hearings on motions for summary judgement are scheduled for May 16, 2025.

The trial in this matter is scheduled for July 18, 2025.

The Company is not able to determine or predict the ultimate outcome of this proceeding or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter.

Federal Securities Class Action

Deanna Lewakowski v.

Aquestive Therapeutics, Inc., et al.

On March 1, 2021, a securities class action lawsuit was filed in the United States District Court for the District of New Jersey alleging that the Company and certain of its officers engaged in violations of the federal securities laws relating to public statements made by the Company regarding the FDA approval of Libervant.

Following the court’s appointment of a lead plaintiff, an amended complaint was filed by the plaintiffs on June 25, 2021.

Defendants filed a motion to dismiss on August 16, 2021, which became fully briefed as of November 1, 2021.

On March 14, 2023, the Court entered an order granting

Defendants’ motion to dismiss without prejudice and permitting plaintiffs leave to file a final, Second Amended Complaint by April 14, 2023.

On April 7, 2023, the parties filed a Stipulation of Voluntary Dismissal stating that plaintiffs determined not to file an amended complaint and agreed to dismiss the action as to them with prejudice.

On April 10, 2023, the Court so-ordered the stipulation and terminated the lawsuit.

Shareholder Derivative Litigation

Loreen Niewenhuis v.

Keith Kendall, et al.

On December 15, 2021, a purported Aquestive shareholder instituted a derivative action captioned Loreen Niewenhuis v.

Keith Kendall, et al.

in the United States District Court for the District of New Jersey, purportedly on behalf of the Company, against certain current and former officers and directors of the Company.

The case was designated as related to the pending federal securities class action Deanna Lewakowski v.

Aquestive Therapeutics, Inc., referenced above, and accepted by the same judge presiding over the securities class action.

The complaint in this matter alleges claims for breach of fiduciary duty and contribution.

The factual allegations that form the basis of these claims are similar to the disclosure-related allegations asserted in the class action.

On April 4, 2022, the plaintiff filed an amended complaint asserting the same claims against the same defendants.

The Company filed a motion to dismiss the amended complaint on April 25, 2022, which became fully briefed as of June 27, 2022.

On April 20, 2023, the parties filed a Stipulation of Voluntary Dismissal stating that plaintiff agreed to dismiss the action as to her with prejudice.

On April 21, 2023, the Court so-ordered the stipulation and terminated the lawsuit.

Commercial Agreements

Amendment to the Indivior Commercial Exploitation Agreement

Effective as of March 2, 2023, the Company and Indivior entered into Indivior Amendment 11.

The Indivior Amendment 11 was entered into for the primary purpose of amending the Indivior License Agreement, dates as of August 15, 2008 as follows:

(i) extending the term of the Indivior License Agreement until August 16, 2026 and thereafter providing for automatic renewal terms of successive one year periods unless Indivior delivers notice to the Company, at least twelve months prior to the expiration of the then current term, of Indivior’s intent not to renew, subject to the earlier termination rights of the parties under the Indivior License Agreement, and providing that the Indivior License Agreement will not automatically renew for any renewal term beginning after the expiration of the last to expire of the product patents;

and (ii) agreeing to transfer pricing and payment terms for supplied product.

In addition, Indivior agreed to pay the Company reimbursable amounts due to the Company under the Invidior License Agreement.

In consideration of the agreements between the parties, the Company received a payment of $ 11,482 from Indivior, of which amount $ 5,482 represents:

(a) payment of the portion of a 2022 price increase that had not been previously paid and (b) an estimated payment in 2023 for certain price increases.

The $ 5,482 payment is included in Manufacture and supply revenue and $ 6,000 is included in Interest income and other income, net on the Company's Consolidated Statements of Operations and Comprehensive Loss.

Subsequent Events

Continued Utilization of the At-The-Market Facility

The Company continued utilization of its ATM facility from January 1 through March 4, 2024 and sold 4,557,220 shares which generated net proceeds of approximately $ 12,014 .

Product Liability Litigation

As of February 21, 2024, the Company has been named as a defendant in 40 product liability lawsuits along with Indivior and several other defendants.

These individual plaintiffs allege that their use of Suboxone Sublingual Film caused them dental injuries.

On February 2, 2024, this litigation became a Multidistrict Litigation (“MDL") consolidated in the United States District Court for the Northern District of Ohio.

Indivior has agreed to defend the Company in this litigation.

Neurelis FDA Lawsuit

Neurelis, Inc.

Califf, et al .

District Court for the District of Columbia

In May 2024, Neurelis filed a complaint in the U.S.

District Court for the District of Columbia against the U.S.

Food and Drug Administration, the U.S.

Department of Health and Human Services, and certain government officials.

The complaint in this matter alleges that the defendants violated the Administrative Procedure Act by approving Aquestive’s NDA for Libervant for ARS patients aged between two and five years, and asks the Court to vacate that approval and enjoin the defendants from approving Libervant for this pediatric patient population until January 10, 2027, the scheduled date for the expiration of the U.S.

orphan drug market exclusivity granted by the FDA to the Valtoco nasal spray product of Neurelis.

Aquestive intervened in this litigation to defend the approval of Libervant for this ARS pediatric patient population and, on June 25, 2024, the Court entered a scheduling order governing further proceedings in the case.

Pursuant to that order, Neurelis filed a motion for summary judgment on August 19, 2024;

Aquestive and the federal defendants each filed their own cross-motions for summary judgment and opposed Neurelis’s motion for summary judgment on September 18, 2024.

Neurelis filed its combined reply brief in support of its motion for summary judgment and in opposition to the defendants’ cross-motions on October 9, 2024, and Aquestive and the federal defendants filed their closing briefs on October 30, 2024.

Following the FDA's award of ODE to Libervant for ARS patients between two and five years of age, Neurelis filed a motion for preliminary injunction requesting an expedited order to vacate FDA's approval and enjoining the sale of Libervant.

On February 14, 2025, the Court ruled in favor of Neurelis, granting its summary judgment motion, and against the FDA's and Aquestive's cross-motions for summary judgment.

In an accompanying opinion, the Court directed the FDA to vacate the approval of Libervant.

Because the Court entered a final appealable judgment in favor of Neurelis, Neurelis' motion for an expedited preliminary injunction was denied as moot by the Court.

On February 18, 2025, Aquestive filed an appeal of the Court's decision with the U.S.

Circuit Court of Appeals for the District of Columbia (the "DC Appellate Court") and, on the same day, filed an emergency motion with the District Court to stay its order pending a decision on the appeal with the DC Appellate Court.

The District Court set a scheduling order governing filings of all briefs on the motion for stay, ending on March 5, 2025.

No dates have been set for arguments on the stay of the District Court's order or proceedings on the appeal at the DC Appellate Court.

The Company is not able to determine or predict the ultimate outcome of this proceeding or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter.

Suboxone Product Liability Litigation

The Company was named as a defendant in a multitude of product liability lawsuits, along with Indivior and several other named defendants, in which the individual plaintiffs in those cases allege that their use of Suboxone® Sublingual Film, a prescription drug product for opioid use disorder, caused them dental injuries.

On February 2, 2024, this litigation became a Multidistrict Litigation (“MDL") consolidated in the U.S District Court for the Northern District of Ohio.

One case alleging the same allegations as contained in the MDL has been filed in a state court in the State of New Jersey.

The parties to the MDL have agreed to a tolling of unfiled claimants in several states.

Indivior has agreed to defend the Company in these litigation matters.

Discovery is underway and no trial date has been set in the MDL matter.

The Company's motion to dismiss the MDL matter was granted as to all claims by plaintiffs except design defect claims.

The Company is not able to determine or predict the ultimate outcome of this litigation or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter.

The Company was named as a defendant in three proposed class action lawsuits filed in Canada, along with Indivior and several other named defendants, in which the individual plaintiffs in those cases allege that their use of Suboxone® products caused them dental injuries.

two of these cases have been filed in British Columbia, and the plaintiffs in those cases are seeking assignment of a case management judge.

The anticipated next step in British Columbia will involve applications by the plaintiffs to determine which of the two cases will proceed towards a certification hearing and which will be stayed.

The third case has been filed in Quebec and is proceeding towards an authorization hearing, the date of which has not yet been set.

The authorization and certification hearings will determine whether the Courts will allow the cases to proceed as class actions.

Pre-discovery and case management proceedings are underway and no trial date has yet been set.

Given the early stages of these proceedings, the Company is not able to determine or predict the ultimate outcome of this litigation or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this litigation.

Subsequent Events

Utilization of the At-The-Market Facility

In the period subsequent to December 31, 2024 through March 5, 2025, the Company sold 7,457,627 shares under its ATM facility, which generated net proceeds of approximately $ 21,400 net of commissions of $ 605 .

The remaining authorized balance of the ATM facility was $ 78,000 as of March 5, 2025.

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 9A. Controls and Procedures