What changed in this filing

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Item 1. Financial Statements

2025-11-14 compared with 2025-08-14 · 474 added, 434 removed, 561 unchanged (62% of the section changed)

FINANCIAL STATEMENTS

PHARMACEUTICALS, INC.

AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

September 30, 2025

March 31, 2025

Current assets:

Accounts receivable, net

of allowance for expected credit losses of approximately $ 598,958 and $ 387,533 respectively

expenses and other current assets

Accounts receivable, net of allowance for expected credit losses of $ 1,240,555 and $ 387,533 respectively

Prepaid expenses and other current assets

Total current assets

Property and equipment,

net of accumulated depreciation of $ 17,304,113 and $ 17,028,700 respectively

Property and equipment, net of accumulated depreciation of $ 17,579,504 and $ 17,028,700 respectively

Intangible assets

Finance lease - right-of-use

Operating lease - right-of-use

Finance lease - right-of-use asset, net of accumulated depreciation of $ 740,487 and $ 501,541 respectively

Operating lease - right-of-use asset

Deferred income tax asset

Other assets:

Restricted cash - debt

service for NJEDA bonds

Restricted cash - debt service for NJEDA bonds

Security deposits

Total other assets

$ 117,247,811

LIABILITIES AND SHAREHOLDERS’

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

2 unchanged sentences

Deferred revenue

Bonds payable, current

portion, net of bond issuance costs

Loans payable, current

Bonds payable, current portion, net of bond issuance costs

Loans payable, current portion

Related party loans payable

Lease obligation - finance

lease, current portion

obligation - operating lease, current portion

Lease obligation - finance lease, current portion

Lease obligation - operating lease, current portion

Total current liabilities

Long-term liabilities:

Bonds payable, net of current

portion and bond issuance costs

Loans payable, net of current

portion and loan costs

Lease obligation - finance

lease, net of current portion

Lease obligation - operating

lease, net of current portion

financial instruments - warrants

long-term liabilities

Commitments and Contingencies

Bonds payable, net of current portion and bond issuance costs

Loans payable, net of current portion and loan costs

Lease obligation - finance lease, net of current portion

Lease obligation - operating lease, net of current portion

Derivative financial instruments - warrants

Total long-term liabilities

Total liabilities

Commitments and Contingencies (Note 9)

Shareholders’ equity:

2 unchanged sentences

1,445,000,000 shares authorized;

1,068,463,108

and 1,068,463,108 shares issued as of June 30, 2025 and March 31, 2025, respectively;

1,068,363,108 and 1,068,363,108 shares outstanding

as of June 30, 2025 and March 31, 2025, respectively

1,073,463,108 and 1,068,463,108 shares issued as of September 30, 2025 and March 31, 2025, respectively;

1,073,363,108 and 1,068,363,108 shares outstanding as of September 30, 2025 and March 31, 2025, respectively

Additional paid-in capital

Treasury stock;

100,000 shares as of both

June 30, 2025 and March 31, 2025, at cost

100,000 shares as of both September 30, 2025 and March 31, 2025, at cost

Accumulated deficit

1 unchanged sentence

( 120,703,926 )

shareholders’ equity

liabilities and shareholders’ equity

Total shareholders’ equity

Total liabilities and shareholders’ equity

$ 117,247,811

3 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS

the Three Months Ended June 30,

Manufacturing

For the Three Months Ended

September 30,

For the Six Months Ended

September 30,

Manufacturing fees

Licensing fees

Total revenue

3 unchanged sentences

General and administrative

Non-cash compensation through

issuance of stock options

and amortization

Non-cash compensation through issuance of stock options

Depreciation and amortization

Total operating expenses

Income from operations

Other (expense) income:

Change in fair value of

derivative financial instruments - warrants

Other income (expense):

Change in fair value of derivative financial instruments - warrants

( 12,754,735 )

( 14,589,888 )

Interest expense and amortization

of debt issuance costs

( 15,537,648 )

Interest expense and amortization of debt issuance costs

Interest income

Other expense, net

Other income (expense), net

( 13,003,969 )

( 14,787,320 )

(Loss) income before income taxes

( 16,020,273 )

Income (loss) before income taxes

( 9,519,026 )

( 8,671,274 )

Income tax expense

( 1,987,940 )

Net (loss) income

( 1,517,203 )

Basic net (loss) income per share attributable

to common shareholders

Diluted net (loss) income per share attributable

to common shareholders

( 7,308,441 )

( 1,749,182 )

Net income (loss) attributable to common shareholders

$ ( 11,036,229 )

$ ( 10,420,456 )

Basic net income (loss) per share attributable to common shareholders

Diluted net income (loss) per share attributable to common shareholders

Basic weighted average Common Stock outstanding

1 unchanged sentence

1,068,273,108

1,070,180,140

1,068,273,108

Diluted weighted average Common Stock outstanding

1 unchanged sentence

1,068,273,108

1,081,817,730

1,068,273,108

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

2 unchanged sentences

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

J Preferred Stock

Shareholders’

Series J Preferred Stock

Additional Paid-In

Treasury Stock

Total Shareholders’

Balance as of March 31, 2025

5 unchanged sentences

( 5,884,715 )

Non-cash compensation through the issuance

of employee stock options

Non-cash compensation through the issuance of employee stock options

Balance at June 30, 2025

3 unchanged sentences

$ ( 126,588,641 )

J Preferred Stock

Shareholders’

Shares issued pursuant to exercise of employee stock options

Non-cash compensation through the issuance of employee stock options

Balance at September 30, 2025

1,073,463,108

$ 173,704,576

$ ( 306,841 )

$ ( 112,886,234 )

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

PHARMACEUTICALS, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

Series J Preferred Stock

Additional Paid-In

Treasury Stock

Total Shareholders’

Balance as of March 31, 2024

3 unchanged sentences

$ ( 116,389,267 )

Non-cash compensation through the issuance of employee stock options

Balance at June 30, 2024

1,068,373,108

2 unchanged sentences

$ ( 115,773,494 )

1,068,373,108

$ 173,262,878

$ ( 306,841 )

$ ( 115,773,494 )

( 11,036,229 )

Net income (loss)

Non-cash compensation through the issuance

of employee stock options

Balance at June 30,

( 11,036,229 )

Non-cash compensation through the issuance of employee stock options

Balance at September 30, 2024

1,068,373,108

4 unchanged sentences

$ 173,315,207

$ ( 306,841 )

$ ( 126,809,723 )

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

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

the Three Months Ended June 30,

CASH FLOWS FROM OPERATING

Net (loss) income

For the Six Months Ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

$ ( 10,420,456 )

Adjustments to reconcile net (loss) income

to net cash provided by operating activities:

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

Depreciation and amortization

Provision for losses on

accounts receivable

Amortization of operating

leases - right-of-use assets

Amortization of finance

leases - right-of-use assets

Amortization of debt discount

- bonds offering costs

Provision for losses on accounts receivable

Amortization of operating leases - right-of-use assets

Amortization of finance leases - right-of-use assets

Amortization of debt discount - bonds offering costs

Loss on asset disposal

Change in fair value of

derivative financial instruments - warrants

Change in fair value of derivative financial instruments - warrants

Deferred tax expense

Non-cash compensation through

the issuance of employee stock options

Change in operating assets

and liabilities:

Non-cash compensation through the issuance of employee stock options

Change in operating assets and liabilities:

Accounts receivable

2 unchanged sentences

( 1,924,558 )

Prepaid expenses and other

current assets

( 1,234,481 )

Prepaid expenses and other current assets

Security deposits

Accounts payable

1 unchanged sentence

Deferred revenue

obligations - operating leases

cash provided by operating activities

CASH FLOWS FROM INVESTING

Purchase of property and

Purchase of intangible

from disposition of property and equipment

cash used in investing activities

Lease obligations - operating leases

Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment

Purchase of intangible assets

Proceeds from disposition of property and equipment

Net cash used in investing activities

( 1,645,722 )

CASH FLOWS FROM FINANCING

Payments of related party

loans payable

CASH FLOWS FROM FINANCING ACTIVITIES:

Payment of bond principal

Payments of related party loans payable

( 4,000,000 )

Payments on principal on

finance lease obligations

cash used in financing activities

Payments on principal on finance lease obligations

Proceeds from exercise of stock options

Loan payments

Net cash used in financing activities

( 4,247,152 )

1 unchanged sentence

Cash and restricted cash, beginning of period

Cash and restricted

cash, end of period

Supplemental disclosure of cash and non-cash

transactions:

Cash and restricted cash, end of period

Supplemental disclosure of cash and non-cash transactions:

Cash paid for interest

Finance directors and officers

insurance premium

Reconciliation of cash and

restricted cash

cash - debt service for NJEDA bonds

cash and restricted cash shown in statement of cash flows

Cash paid for income taxes

Finance directors and officers insurance premium

Recognition of finance lease right of use asset and lease liabilities entered into

Reconciliation of cash and restricted cash

Restricted cash - debt service for NJEDA bonds

Total cash and restricted cash shown in statement of cash flows

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

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product candidates are approved.

These products include drugs that cover therapeutic areas for allergy, bariatric, attention deficit

and infection.

These products include drugs that cover therapeutic areas for allergy, bariatric, attention deficit, infection, and Parkinson’s disease.

Research and development activities are performed with an objective of developing product candidates that will secure

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financial statements should be read in conjunction with the Company’s Form 10-K as filed with the SEC on June 30, 2025.

results for the three months ended June 30, 2025 are not necessarily indicative of the results to be expected for the fiscal year ending

March 31, 2026 or for any future periods.

results for the six months ended September 30, 2025 are not necessarily indicative of the results to be expected for the fiscal year

ending March 31, 2026 or for any future periods.

Company’s significant accounting policies and recent accounting standards are summarized in Note 1 of the Company’s consolidated

financial statements for the year ended March 31, 2025.

There were no significant changes to these accounting policies during the three

months ended June 30, 2025.

There were no significant changes to these accounting policies during the six

months ended September 30, 2025.

preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make certain

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Actual results could differ from those estimates.

Accounting Standards Board (“FASB”) Accounting Standards Codification 280 (“ASC 280”), Segment Reporting, establishes

standards for reporting information about operating segments.

Operating segments are defined as components of an enterprise about which

separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group,

in deciding how to allocate resources and in assessing performance.

Accounting Standards Board (“FASB”) Accounting Standards Codification 280 (“ASC 280”), Segment Reporting ,

establishes standards for reporting information about operating segments.

Operating segments are defined as components of an enterprise

about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making

group, in deciding how to allocate resources and in assessing performance.

Company’s chief operating decision maker is the Chief Executive Officer, who reviews the financial performance and the results

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of the Company.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Company has determined that its reportable segments are products whose marketing approvals were secured via an Abbreviated New Drug Application

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further development of NDAs and has not engaged in business activities.

Accordingly, during the three months ended June 30, 2025 and

2024, the Company has only engaged in business activities in a single operating segment.

Accordingly, during the three and six months ended September

30, 2025 and 2024, the Company has only engaged in business activities in a single operating segment.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

are currently no intersegment revenues.

2 unchanged sentences

The reporting segments follow the same accounting policies used in the preparation

of the Company’s unaudited condensed consolidated financial statements.

of the Company’s condensed consolidated financial statements.

Please see Note 14 for further details.

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is not probable.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Company recognizes revenue when the customer obtains control of the Company’s product based on the contractual shipping terms of

the contract, at which time the performance obligation is deemed to be completed.

The Company is primarily responsible for fulfilling

the promise to provide the product, is responsible to ensure that the product is produced in accordance with the related supply agreement,

and fulfilling the promise to deliver the product and bears risk of loss while the inventory is in-transit to the purchaser or commercial

The Company is primarily responsible for ensuring that the product is produced in accordance with the related supply agreement,

and fulfilling the promise to deliver the product and bearing the risk of loss while the inventory is in-transit to the purchaser or commercial

Revenue is measured as the amount of consideration the Company expects to receive from the sale of its products, including Elite-labeled

1 unchanged sentence

including, without limitation, chargebacks, discounts and program rebates, as applicable.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Company enters into licensing and development agreements, which may include multiple revenue generating activities, including milestones

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None of the Company’s contracts contained a significant financing

component as of June 30, 2025.

component as of September 30, 2025.

accordance with ASC 606-10-55-65, royalties are recognized when the subsequent sale of the customer’s products occurs.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Disaggregation

the following table, revenue is disaggregated by type of revenue generated by the Company.

The Company recognizes revenue at a point

in time for all performance obligations.

During the three months ended June 30, 2025 and 2024, the Company had paused further development

of NDAs and has not engaged in business activities in that segment.

Accordingly, during the three months ended June 30, 2025 and 2024,

the Company has only engaged in business activities in a single operating segment.

The table also includes a reconciliation of the disaggregated

revenue with the reportable segments:

SCHEDULE OF DISAGGREGATION OF REVENUE

the Three Months Ended June 30,

Manufacturing fees

Licensing fees

Total ANDA revenue

is disaggregated by type of revenue generated by the Company.

The Company recognizes revenue at a point in time for all performance obligations.

During the six months ended September 30, 2025 and 2024, the Company had paused further development of NDAs and has not engaged in business

activities in that segment.

Accordingly, during the six months ended September 30, 2025 and 2024, the Company has only engaged in business

activities in a single operating segment.

information on reportable segments and reconciliation of operating income by segment to income from operations before income taxes are

disclosed within Note 14.

of June 30, 2025, and March 31, 2025, the Company had $ 458,318 and $ 453,776 , of restricted cash, respectively, related to debt service

of September 30, 2025, and March 31, 2025, the Company had $ 463,240 and $ 453,776 , of restricted cash, respectively, related to debt service

reserve in regard to the New Jersey Economic Development Authority (“NJEDA”) bonds (see Note 6).

5 unchanged sentences

those temporary differences are expected to be recovered or settled.

to temporary differences in the timing of recognition of items included in income for accounting and tax purposes, deferred tax assets

or liabilities are recorded to reflect the impact arising from these differences on future tax payments.

Where applicable, the Company

records a valuation allowance to reduce any deferred tax assets that it determines will not be realizable in the future.

to temporary differences in the timing of recognition of items included in income for accounting and tax purposes, deferred tax

assets or liabilities are recorded to reflect the impact arising from these differences on future tax payments.

Where applicable,

the Company records a valuation allowance to reduce any deferred tax assets that it determines will not be realizable in the

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Company recognizes the benefit of an uncertain tax position that it has taken or expects to take on income tax returns it files if such

1 unchanged sentence

These tax benefits are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution .

Company operates in multiple tax jurisdictions within the United States.

Company operates in multiple tax jurisdictions within the United States of America.

The Company remains subject to examination in all

tax jurisdiction until the applicable statutes of limitation expire.

As of June 30, 2025, a summary of the tax years that remain subject

to examination in our major tax jurisdictions are:

As of September 30, 2025, a summary of the tax years that remain

subject to examination in our major tax jurisdictions is:

United States – Federal, 2021 and forward.

The Company did not record unrecognized

tax positions for the three months ended June 30, 2025.

Earnings Per Share Attributable to Common Shareholders’

Company follows ASC 260, Earnings Per Share , which requires presentation of basic and diluted (loss) earnings per share

The Company did not record

unrecognized tax positions for the six months ended September 30, 2025.

(Loss) Per Share Attributable to Common Shareholders’

Company follows ASC 260, Earnings Per Share , which requires presentation of basic and diluted income (loss) per share

(“EPS”) on the face of the income statement for all entities with complex capital structures and requires a

reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS

In the accompanying financial statements, basic (loss) income per share is computed by dividing net (loss) income by

In the accompanying financial statements, basic income (loss) per share is computed by dividing net income (loss) by

the weighted average number of shares of Common Stock outstanding during the period.

the Company was in a net loss position for the three months ended June 30, 2025, the potential dilution from the warrants converting

into 79,008,661 shares of Common Stock and the stock options converting into 15,640,000 of Common Stock for these periods have been excluded

from the number of shares used in calculating diluted net (loss) income per share as their inclusion would have been antidilutive.

the average market price of Common Stock for the three months ended June 30, 2024 did not exceed the exercise price of the warrants,

the potential dilution from the warrants converting into 79,008,661 shares of Common Stock for all periods have been excluded from the

number of shares used in calculating diluted net income per share as their inclusion would have been antidilutive.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

following is the computation of earnings per share applicable to common shareholders for the periods indicated:

The computation of diluted net income (loss)

per share includes the assumed exercise of options and warrants if the effect is dilutive.

The assumed exercise of the Series J

Warrants was dilutive for the three months ended September 30, 2025, and is therefore included in the diluted EPS calculation for

However, for the six months ended September 30, 2025, the assumed exercise of the Series J Warrants would have an

antidilutive effect and is therefore excluded from the diluted EPS calculation.

the Company was in a net loss position for the three and six months ended September 30, 2024, the potential dilution from the Series

J Warrants converting into 79,008,661 shares of Common Stock and the stock options converting into 10,640,000 shares of Common Stock

for these periods have been excluded from the number of shares used in calculating diluted net income (loss) per share as their inclusion

would have been antidilutive.

The assumed exercise of the Series J Warrants would have an antidilutive effect for the three and six months

ended September 30, 2024.

following is the computation of net income (loss) per share applicable to common shareholders for the periods indicated:

OF EARNINGS PER SHARE APPLICABLE TO COMMON SHAREHOLDERS

the Three Months Ended June 30,

Net (loss) income - basic

For the Three Months Ended

September 30,

For the Six Months Ended

September 30,

Net income (loss) - basic

$ ( 11,036,229 )

of dilutive instrument on net income

Net (loss) income -

$ ( 10,420,456 )

Effect of dilutive instrument on net income

( 7,519,649 )

Net income (loss) - diluted

$ ( 11,036,229 )

$ ( 10,420,456 )

Weighted average shares of Common Stock outstanding - basic

1 unchanged sentence

1,068,273,108

Dilutive effect of stock

Weighted average shares of Common Stock

outstanding - diluted

1,070,180,140

1,068,273,108

Net (loss) income per share

Dilutive effect of stock options and convertible securities

Weighted average shares of Common Stock outstanding - diluted

1,141,536,381

1,068,273,108

1,081,817,730

1,068,273,108

Net income (loss) per share

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Issued Accounting Pronouncements

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

Improvements to income tax disclosures , which enhances

the disclosure requirements for the income tax rate reconciliation, domestic and foreign income taxes paid, requiring disclosure of disaggregated

Improvements to income tax disclosures , which enhances the

disclosure requirements for the income tax rate reconciliation, domestic and foreign income taxes paid, requiring disclosure of disaggregated

income taxes paid by jurisdiction, unrecognized tax benefits, and modifies other income tax-related disclosures.

1 unchanged sentence

for the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2026.

The Company is

currently evaluating the impact of adopting this guidance on its disclosures.

November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures

(Subtopic 220-40):

The Company is currently evaluating the

impact of adopting this guidance on its disclosures.

November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation

Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

In January 2025, the FASB issued ASU No.

2025-01, Income Statement

- Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), Clarifying the Effective Date .

requires public companies to disclose, in interim and reporting periods, additional information about certain expenses in the financial

ASU 2024-03, as clarified by ASU 2025-01, is effective for public entities for annual periods beginning after December 15,

2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted and is effective on either a prospective

basis or retrospective basis.

The Company is currently evaluating the impact that the updated standard will have on the Company’s

disclosures within the unaudited condensed consolidated financial statements.

2025-01, Income

Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), Clarifying the Effective Date

(“ASU-2024-03”).

ASU 2024-03 requires public companies to disclose, in interim and reporting periods, additional

information about certain expenses in the financial statements.

ASU 2024-03, as clarified by ASU 2025-01, is effective for public

entities for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted and is effective on either a prospective basis or retrospective basis.

The Company is currently

evaluating the impact that the updated standard will have on the Company’s disclosures within the unaudited condensed

consolidated financial statements.

May 2025, the FASB issued ASU 2025-04, Compensation-Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic

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condensed consolidated financial statements.

July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts

Receivable and Contract Assets .

The ASU introduces a practical expedient and an accounting policy election to simplify the estimation

of expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC

The practical expedient allows entities to assume that conditions at the balance sheet date remain unchanged for the asset’s

remaining life when preparing forecasts as part of estimating expected credit losses.

The ASU is effective for fiscal years beginning

after December 15, 2025, and is to be adopted on a prospective basis.

Early adoption is permitted.

The Company is currently evaluating

the impact of this standard on its unaudited condensed consolidated financial statements.

has evaluated recently issued accounting pronouncements outside of those mentioned above and does not believe that any of these pronouncements

will have a significant impact on the Company’s unaudited condensed consolidated financial statements and related disclosures.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

consisted of the following:

SCHEDULE OF INVENTORY

September 30, 2025

March 31, 2025

Finished goods

4 unchanged sentences

SCHEDULE OF PROPERTY AND EQUIPMENT

September 30, 2025

March 31, 2025

Land, building and improvements

Laboratory, manufacturing, warehouse and transportation

Laboratory, manufacturing, warehouse and transportation equipment

Office equipment and software

4 unchanged sentences

( 17,028,700 )

Property and equipment,

and amortization expense was $ 275,413 and $ 322,103 for the three months ended June 30, 2025 and 2024, respectively.

Property and equipment, net

expense was $ 275,391 and $ 227,356 for the three months ended September 30, 2025 and 2024, respectively, and $ 550,804 and $ 622,947 for

the six months ended September 30, 2025 and 2024, respectively.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

INTANGIBLE ASSETS

following table summarizes the Company’s intangible assets as of and for the periods ended June 30, 2025 and March 31, 2025:

following table summarizes the Company’s intangible assets as of and for the periods ended September 30, 2025 and March 31, 2025:

SCHEDULE OF INTANGIBLE ASSETS

Carrying Amount

September 30, 2025

Patent application costs

ANDA acquisition costs

Carrying Amount

March 31, 2025

Patent application costs

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Purchase Agreement”), pursuant to which Nostrum was obligated to (i) sell to the Company all of its rights in and to the approved

abbreviated new drug applications (ANDAs) for generic Norco® (Hydrocodone Bitartrate and Acetaminophen tablets, USP CII), generic

ANDAs for generic Norco® (Hydrocodone Bitartrate and Acetaminophen tablets, USP CII), generic

Percocet® (Oxycodone Hydrochloride and Acetaminophen, USP CII), and generic Dolophine® (Methadone Hydrochloride tablets), each

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on June 21, 2024.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Company tests its intangible assets for impairment at least annually (as of March 31st) and whenever events or circumstances indicate

6 unchanged sentences

and slower growth rates.

No such impairment was recorded during the three months ended June 30, 2025

and the three months ended June 30, 2024.

No such impairment was recorded during the six months ended September 30,

2025 or the six months ended September 30, 2024.

Patent application costs were incurred in relation to the Company’s abuse deterrent opioid technology.

3 unchanged sentences

through the expiry of the related patent(s).

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ACCRUED EXPENSES

of June 30, 2025 and March 31, 2025, the Company’s accrued expenses consisted of the following:

of September 30, 2025 and March 31, 2025, the Company’s accrued expenses consisted of the following:

SCHEDULE OF ACCRUED EXPENSES

Co-development profit split

Co-development

Employee bonuses

Other accrued expenses

Legal and professional expense

Salaries and fees payable

Director dues

Accrued interest - related

Total accrued expenses

August 2005, the Company refinanced a prior 1999 bond issue occurring in 1999 through the issuance of Series A and B Notes new

tax-exempt bonds (the “NJEDA Bonds” and/or “Bonds”).

The refinancing involved borrowing $ 4,155,000 ,

evidenced by a 6.5 % Series A Note in the principal amount of $ 3,660,000 maturing on September 1, 2030 and a 9 % Series B Note in the

principal amount of $ 495,000 maturing on September 1, 2012 .

During July 2014, the Company retired all the outstanding Series B

Notes, at par, along with all accrued interest due and owed.

Salaries and fees payable

Other accrued expenses

interest - related parties

accrued expenses

August 2005, the Company refinanced a prior 1999 bond issue occurring in 1999 through the issuance of Series A and B Notes new tax-exempt

bonds (the “NJEDA Bonds”).

The refinancing involved borrowing $ 4,155,000 , evidenced by a 6.5 %

Series A Note in the principal amount of $ 3,660,000 maturing on September 1, 2030 and a 9 % Series B Note in the principal amount of $ 495,000

maturing on September 1, 2012 .

During July 2014, the Company retired all the outstanding Series B Notes, at par, along with all accrued

interest due and owed.

relation to the Series A Notes, the Company is required to maintain a debt service reserve fund.

1 unchanged sentence

as restricted cash on the accompanying unaudited condensed consolidated balance sheets.

The NJEDA Bonds require the Company to make

an annual principal payment on September 1st based on the amount specified in the loan documents and semi-annual interest payments

on March 1st and September 1st, equal to interest due on the outstanding principal.

The NJEDA Bonds require the Company to make an

annual principal payment on September 1st based on the amount specified in the loan documents and semi-annual interest payments on March

1st and September 1st, equal to interest due on the outstanding principal.

The annual interest rate on the Series A Note is 6.5 %.

The NJEDA Bonds are collateralized by a first lien on the Company’s facility and equipment acquired with the proceeds of the

original and refinanced bonds.

NJEDA Bonds are collateralized by a first lien on the Company’s facility and equipment acquired with the proceeds of the original

and refinanced bonds.

The bonds mature on September 1, 2030.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

following tables summarize the NJEDA Bonds’ payable liability:

following tables summarize the Company’s bonds payable liability:

SCHEDULE OF BONDS PAYABLE LIABILITY

Gross bonds payable

- Series A Notes

bonds payable

Bonds - Series A Notes

Current portion of bonds payable (prior to deduction of bond offering costs)

portion of bonds payable (prior to deduction of bond offering costs)

Bond offering costs

Bond offering

Accumulated amortization

offering costs, net

Current portion

of bonds payable - net of bond offering costs

Current portions of bonds

portion of bonds payable - net of bond offering costs

portions of bonds payable

Bonds offering costs to be amortized in the next 12 months

portion of bonds payable, net of bond offering costs

Long term portion

of bonds payable - net of bond offering costs

Long term portion of bonds

term portion of bonds payable - net of bond offering costs

portion of bonds payable

Bond offering costs to be amortized subsequent to the next 12 months

term portion of bonds payable, net of bond offering costs

expense was $ 3,545 and $ 3,544 for the three months ended June 30, 2025 and 2024, respectively.

Interest payable was $ 21,450 and $ 5,363

as of June 30, 2025 and March 31, 2025, respectively.

Interest expense was $ 16,087 and $ 18,200 for the three months ended June 30, 2025

and 2024, respectively.

of bonds for the next five years and thereafter are as follows:

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

expense was $ 3,545 and $ 3,545 for the three months ended September 30, 2025 and 2024, respectively, and $ 7,089 and $ 7,089 for the six

months ended September 30, 2025 and 2024, respectively.

Interest payable was $ 4,604 and $ 5,363 as of September 30, 2025 and March 31,

2025, respectively.

Interest expense was $ 15,329 and $ 18,200 for the three months ended September 30, 2025 and 2024, respectively, and

$ 31,417 and $ 39,785 for the six months ended September 30, 2025 and 2024, respectively.

of bonds for the next five years are as follows:

SCHEDULE OF MATURITIES OF BONDS

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SCHEDULE OF LOANS PAYABLE

Mortgage loan payable 4.75 % interest

and maturing June 2032

Equipment and insurance financing loans payable,

between 5.99 % and 12.02 % interest and maturing between July 2024 and October 2025

Current portion

of loans payable

Long-term portion of

loans payable

interest expense associated with the loans payable was $ 28,797 and $ 34,883 for the three months ended June 30, 2025 and 2024, respectively.

Mortgage loan

payable 4.75 % interest and maturing June 2032

Equipment and insurance financing

loans payable, between 5.99 % and 12.02 % interest and maturing between July 2024 and October 2025

Current portion of loans payable

portion of loans payable

interest expense associated with the loans payable was $ 28,237 and $ 33,135 for the three months ended September 30, 2025 and 2024, respectively,

and $ 57,034 and $ 68,017 for the six months ended September 30, 2025 and 2024, respectively.

PHARMACEUTICALS, INC.

1 unchanged sentence

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

principal payments for the next five years and thereafter are as follows:

principal payments for the next five years are as follows:

SCHEDULE OF LOAN PRINCIPAL PAYMENTS

2 unchanged sentences

Remainder of 2026

Total remaining principal

remaining principal balance

RELATED PARTY LOANS

6 unchanged sentences

and Chairman of the Board of Directors of the Company (the “Board”), pursuant to which the Company borrowed funds in the

aggregate principal amount of $ 3,000,000

(the “Hakim Promissory Note”).

Promissory Note had an interest rate of 9 %

for the first year and 10 %

for an optional second year and the proceeds were used for working capital and other business purposes.

The original maturity date of

the Hakim Promissory Note was June 2, 2024, with an optional second year extension.

The second year extension was exercised pursuant

to the terms of the Hakim Promissory Note.

For the three months ended June 30, 2025 and 2024, interest expense on the Hakim Promissory

Note totaled $ 50,000

and $ 67,500 ,

respectively, recorded on the unaudited condensed consolidated statements of operations in interest expense and amortization of debt

issuance costs.

On June 2, 2025, the Hakim Promissory Note was paid in full and no balance was outstanding as of this date.

aggregate principal amount of $ 3,000,000 (the “Hakim Promissory Note”).

The Hakim Promissory Note had an interest rate of

9 % for the first year and 10 % for an optional second year and the proceeds were used for working capital and other business purposes.

The original maturity date of the Hakim Promissory Note was June 2, 2024, with an optional second year extension.

The second year extension

was exercised pursuant to the terms of the Hakim Promissory Note.

For the three months ended September 30, 2025 and 2024, interest expense

on the Hakim Promissory Note totaled $ 0 and $ 75,000 , respectively.

For the six months ended September 30, 2025 and 2024, interest expense

on the Hakim Promissory Note totaled $ 50,000 and $ 142,500 , respectively, recorded on the unaudited condensed consolidated statements

of operations in interest expense and amortization of debt issuance costs.

On June 2, 2025, the Hakim Promissory Note was paid in full

and no balance was outstanding as of this date.

June 30, 2023, the Company entered into a collateralized promissory note with Davis Caskey (the “Caskey Promissory Note”).

5 unchanged sentences

The second year extension was exercised pursuant to the terms of the Caskey Promissory Note.

For the three months ended June 30, 2025 and 2024, interest expense on the Caskey Promissory Note totaled $ 25,000 and $ 22,500 , respectively,

For the three months ended September 30, 2025 and 2024, interest expense on the Caskey Promissory Note totaled $ 0 and $ 25,000 , respectively.

For the six months ended September 30, 2025 and 2024, interest expense on the Caskey Promissory Note totaled $ 25,000 and $ 47,500 , respectively,

recorded on the unaudited condensed consolidated statements of operations in interest expense and amortization of debt issuance costs.

5 unchanged sentences

for a liability when it believes that it is both probable that a liability has been incurred, and the amount can be reasonably estimated.

If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company’s unaudited

condensed consolidated financial statements.

Contingencies are inherently unpredictable, and the assessments of the value can involve

a series of complex judgments about future events and can rely heavily on estimates and assumptions.

If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company’s condensed

consolidated financial statements.

Contingencies are inherently unpredictable, and the assessments of the value can involve a series

of complex judgments about future events and can rely heavily on estimates and assumptions.

August 17, 2023, Elite filed a paragraph IV certification with its ANDA to generic Oxycontin and after Elite got acceptance of the ANDA

4 unchanged sentences

An amended complaint was filed by Purdue on April 18, 2025.

On June 17, 2025 Elite filed a Motion to Dismiss Purdue’s

First Amended Complaint and on July 3, 2025 Purdue filed a Second Amended Complaint.

Elite filed a Motion to Dismiss Purdue’s Second

Amended Complaint on August 7, 2025.

On September 2, 2025 Purdue filed an Opposition to Defendants’ Motion to Dismiss Plantiffs’

Second Amended Complaint and Cross-Motion to Extend the 30-Month Stay.

On September 29, 2025 Elite filed a Reply memorandum in Support

of their Motion to Dismiss and in Opposition to Plantiffs’ Cross Motion to Extend the 30-Month Stay.

Elite’s launch of a generic Oxycontin will depend on the approval

by the FDA and the outcome of various litigation involving Purdue or the expiry of the patents listed on the Orange Book.

As of September

30, 2025, the results of such proceedings cannot be predicted with certainty and are neither probable nor estimable.

41 unchanged sentences

The March 2024 Equipment Leases are related to manufacturing equipment and vault installed at the Company’s facility located at

144 Ludlow Avenue, Northvale NJ with an aggregate acquisition cost of $ 1,100,000 .

144 Ludlow Avenue, Northvale NJ with an aggregate acquisition cost of $ 1.1 million.

Each of the separate leases included in the March

2024 Equipment Leases have a term of five years , ending in March 2029 .

The Company will retain ownership of all related assets at lease termination .

July 2024, the Company entered into two separate finance leases for manufacturing assets (the “July 2024 Equipment Leases”).

The July 2024 Equipment Leases are related warehouse and laboratory equipment with an aggregate acquisition cost of $ 153,745 .

the separate leases included in the July 2024 Equipment Lease have a term of five years , ending in July 2029 .

The Company will retain

ownership of all related assets at lease terminations .

The Company will retain ownership of all related assets at lease

termination .

July 2024, the Company entered into two separate finance leases for manufacturing assets (the “July 2024 Equipment

The July 2024 Equipment Leases are related to warehouse and laboratory equipment with an aggregate acquisition cost

of $ 153,745 .

Each of the separate leases included in the July 2024 Equipment Lease have a term of five

years , ending in July

Company will retain ownership of all related assets at lease terminations .

lease is classified as a finance lease if any of the following criteria are met:

13 unchanged sentences

lease was determined to be a finance lease.

The finance lease is included on the unaudited condensed consolidated balance sheets as Finance

lease - right-of-use asset and Lease obligation - finance lease.

The finance lease costs are split between Depreciation and amortization

expense related to the asset and Interest expense and amortization of debt issuance costs on the lease liability, using the effective

rate charged by the lessor.

The Company has elected to account for lease and non-lease components separately.

The finance lease is included on the condensed consolidated balance sheets as Finance lease

- right-of-use asset and Lease obligation - finance lease.

The finance lease costs are split between Depreciation and amortization expense

related to the asset and interest expense on the lease liability, using the effective rate charged by the lessor.

The Company has elected

to account for lease and non-lease components separately.

PHARMACEUTICALS, INC.

1 unchanged sentence

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

expense is recorded on the straight-line basis and in cost of manufacturing in the unaudited condensed consolidated statements

of operations.

expense is recorded on the straight-line basis and in cost of manufacturing in the unaudited condensed consolidated statements of operations.

Rent expense is as follows:

SCHEDULE OF RENT EXPENSE STRAIGHT-LINE BASIS

the Three Months Ended June 30,

the Three Months Ended

the Six Months Ended

table below shows the future minimum rental payments, exclusive of taxes, insurance and other costs:

2 unchanged sentences

Remainder of 2026

Present value of lease

weighted-average remaining lease term and the weighted-average discount rate of the Company’s leases were as follows:

value of lease payments

weighted-average remaining lease term and the weighted-average discount rate of our leases were as follows:

SCHEDULE OF WEIGHTED -AVERAGE REMAINING TERM AND THE WEIGHTED-AVERAGE DISCOUNT RATE

the Three Months Ended June 30,

and Discount Rate

the Six Months Ended

Term and Discount Rate

Remaining lease term (years)

Operating leases

Finance leases

Discount rate

Operating leases

Finance leases

PREFERRED STOCK

7 unchanged sentences

and Hedging Activities .

Company issued warrants, with a term of ten years , to affiliates in connection with an exchange agreement dated April 28, 2017, as further

described in this note below.

Company issued warrants, with a term of ten years , to affiliates in connection with an exchange agreement dated April 28, 2017.

Company has 79,008,661 total warrants to purchase shares of Common Stock outstanding with a weighted average exercise price of $ 0.1521

as of September 30, 2025 and March 31, 2025.

PHARMACEUTICALS, INC.

1 unchanged sentence

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Company has 79,008,661 total warrants to purchase shares of Common Stock outstanding with a weighted average exercise price of $ 0.1521

as of June 30, 2025 and March 31, 2025.

April 28, 2017, the Company entered into an Exchange Agreement with Nasrat Hakim, the Chairman of the Board, President, and Chief

Executive Officer of the Company, pursuant to which the Company issued to Nasrat Hakim 24.0344

shares of its Series J Preferred and warrants to purchase an aggregate of 79,008,661

shares of its Common Stock (the “Series J Warrants” and, along with the Series J Preferred issued to Nasrat Hakim, the

“Securities”) in exchange for 158,017,321

shares of Common Stock owned by Nasrat Hakim.

The fair value of the Series J Warrants was determined to be $ 6,474,674

upon issuance at April 28, 2017.

Series J Warrants are exercisable for a period of 10 years from the date of issuance, commencing April 28, 2020.

The initial exercise

price is $ 0.1521 per share and the Series J Warrants can be exercised for cash or on a cashless basis, including a provision within that

provides the holder a choice of net cash settlement or settlement in shares upon a cashless exercise.

The net cash settlement amount

is the cash value obtained by subtracting the then exercise price from the closing price of the Company’s Common Stock (provided

such closing price is higher than the exercise price) and multiplying the difference by the number of shares exercised.

As this event

is at the holder’s option, it is considered outside of the Company’s control.

As a result of the net cash settlement at the

option of the holder, such warrants are classified as liabilities and measured initially and subsequently at fair value.

exercise price is subject to adjustment for any issuances or deemed issuances of Common Stock or Common Stock equivalents at an effective

price below the then exercise price.

The Series J Warrants also provide for other standard adjustments upon the happening of certain

customary events.

fair value of the Series J Warrants was calculated using a Black-Scholes model.

The following assumptions were used in the Black-Scholes

model to calculate the fair value of the Series J Warrants:

a result of the net cash settlement at the option of the holder, such warrants are classified as liabilities and measured initially and

subsequently at fair value.

The fair value of the Series J Warrants was calculated using a Black-Scholes model.

The following assumptions

were used in the Black-Scholes model to calculate the fair value of the Series J Warrants:

SCHEDULE OF FAIR VALUE OF WARRANTS ISSUED

Fair value of the Company’s

Fair value of

the Company’s Common Stock

Initial exercise price

1 unchanged sentence

Risk free rate

changes in warrants (Level 3 financial instruments) measured at fair value on a recurring basis were as follows:

changes in warrants (Level 3 financial instruments) measured at fair value on a recurring basis were as follows for the periods ended

September 30, 2025 and 2024:

SCHEDULE OF CHANGES IN WARRANTS MEASURED AT FAIR VALUE ON A RECURRING BASIS

Balance at March 31, 2025

Change in fair value of

derivative financial instruments - warrants

in fair value of derivative financial instruments - warrants

Balance at June 30, 2025

in fair value of derivative financial instruments - warrants

( 7,519,649 )

Balance at September

Balance at March 31, 2024

Change in fair value of

derivative financial instruments - warrants

in fair value of derivative financial instruments - warrants

Balance at June 30, 2024

in fair value of derivative financial instruments - warrants

Balance at September

on a Recurring Basis

2 unchanged sentences

OF LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS

Amount at Fair

Value Measurement

Balance as of March 31, 2025

Balance as of

March 31, 2025

in fair value of derivative financial instruments - warrants

Balance as of June

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Amount at Fair

as of September 30, 2025

Value Measurement

Balance as of March 31, 2024

Balance as of

March 31, 2024

in fair value of derivative financial instruments - warrants

Balance as of June

as of September 30, 2024

STOCK-BASED COMPENSATION

of the compensation paid by the Company to employees consists of the granting of options to purchase Common Stock.

its 2014 Equity Incentive Plan and 2024 Equity Incentive Plan, the Company did grant and may grant stock options to officers,

selected employees, as well as members of the Board and advisory board members.

On July 1, 2024 the Company restated the 2014 Equity

Incentive Plan to increase the shares reserved under the option plan by 12,730,000 shares .

Under the 2024 Equity Incentive Plan, 80,000,000

options are available for grant.

All options have generally been granted at a price equal to or greater than the fair market value

of the Company’s Common Stock at the date of the grant.

Generally, options are granted with a vesting period of up to three

years and expire ten years from the date of grant.

its 2014 Equity Incentive Plan and 2024 Equity Incentive Plan, the Company did grant and may grant stock options to officers, selected

employees, as well as members of the Board and advisory board members.

On July 1, 2024 the Company restated the 2014 Equity Incentive

Plan to increase the shares reserved under the option plan by 12,730,000 shares.

Under the 2024 Equity Incentive Plan, 80,000,000 options

are available for grant.

All options have generally been granted at a price equal to or greater than the fair market value of the Company’s

Common Stock at the date of the grant.

Generally, options are granted with a vesting period of up to three years and expire ten years

from the date of grant.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

fair value of option awards is estimated on the date of grant using the Black-Scholes option-pricing model.

11 unchanged sentences

that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

summary of the activity of Company’s 2024 Equity Incentive plan and prior equity incentive plan for the three months ended June

summary of the activity of Company’s 2024 Equity Incentive plan and prior equity incentive plans for the six months ended September

30, 2025 is as follows:

SCHEDULE OF STOCK OPTION PLAN

Exercise Price

Remaining Contractual

Term (in years)

Outstanding at March 31, 2025

Expired and Forfeited

Outstanding at June 30, 2025

Exercisable at June 30, 2025

at March 31, 2025

( 5,000,000 )

and Forfeited

Outstanding at September

Exercisable at September

aggregate intrinsic value for outstanding options is calculated as the difference between the exercise price of the underlying awards

and the quoted price of the Company’s Common Stock as of June 30, 2025 of $ 0.73 for those awards with strike prices lower than

the quoted price of the Company’s Common Stock as of June 30, 2025.

As of June 30, 2025, there was $ 175,837 in unrecognized stock

based compensation expense that will be recognized over a weighted average 1.06 year period.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

and the quoted price of the Company’s Common Stock as of September 30, 2025 of $ 0.64 for those awards with strike prices lower

than the quoted price of the Company’s Common Stock as of September 30, 2025.

As of September 30, 2025, there was $ 125,919 in unrecognized

stock-based compensation expense that will be recognized over a weighted average 0.88 year period.

CONCENTRATIONS AND CREDIT RISK

customers accounted for approximately 76 % of the Company’s revenues for the three months ended June 30, 2025.

customers accounted for approximately 81 % of the Company’s revenues for the six months ended September 30, 2025.

These three customers

accounted for approximately 64 %, 9 %, and 8 % of revenues, respectively.

customers accounted for approximately 68 % of the Company’s revenues for the three months ended June 30, 2024.

These two customers

accounted for approximately 44 % and 24 % of revenue, respectively.

customers accounted for approximately 77 %

of the Company’s accounts receivable as of June 30, 2025.

These three customers accounted for approximately 54 %, 12 %,

of the accounts receivable, respectively.

customers accounted for approximately 74 %

of the Company’s accounts receivable as of June 30, 2024.

These two customers accounted for approximately 50 %

of the accounts receivable, respectively.

suppliers accounted for approximately 75 % of the Company’s purchases of raw materials for the three months ended June 30, 2025.

customers accounted for approximately 72 % of the Company’s revenues for the six months ended September 30, 2024.

These three customers

accounted for approximately 42 %, 22 %, and 8 % of revenues, respectively.

customers accounted for approximately 88 % of the Company’s accounts receivable as of September 30, 2025.

These three customers

accounted for approximately 76 %, 8 %, and 4 % of accounts receivable, respectively.

customers accounted for approximately 70 % of the Company’s accounts receivable as of September 30, 2024.

These two customers accounted

for approximately 46 % and 24 % of accounts receivable, respectively.

suppliers accounted for approximately 73 % of the Company’s purchases of raw materials for the six months ended September 30, 2025.

These three suppliers accounted for approximately 38 %, 21 %, and 14 % of purchasing, respectively.

suppliers accounted for approximately 61 % of the Company’s purchases of raw materials for the three months ended June 30, 2024.

suppliers accounted for approximately 60 % of the Company’s purchases of raw materials for the six months ended September 30, 2024.

These two suppliers accounted for approximately 43 %, and 17 %, of purchasing, respectively.

5 unchanged sentences

management disaggregates a company.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

loss from operations, which is reported in the accompanying unaudited condensed consolidated statements of operations, is the measure

of segment profit or loss that is regularly reviewed by the Chief Operating Decision Maker (“CODM”).

Our CODM is our President and Chief Executive Officer.

This enables the CODM to assess the overall level of available resources

and determine how best to deploy these resources across research and development projects in line with the long-term company-wide strategic

The reporting segments follow the same accounting policies used in the preparation of the Company’s unaudited condensed

consolidated financial statements.

The Company’s

CODM is the President and Chief Executive Officer.

This enables the CODM to assess the overall level of available resources and determine

how best to deploy these resources across research and development projects in line with the long-term company-wide strategic goals.

The reporting segments follow the same accounting policies used in the preparation of the Company’s unaudited condensed consolidated

financial statements.

following represents selected information for the Company’s reportable segments:

SCHEDULE OF SELECTED INFORMATION FOR REPORTABLE SEGMENTS

the Three Months Ended June 30,

the Three Months Ended

the Six Months Ended

Income by Segment

Operating income by

Company notes that there was no revenue related to the NDA segment for the three months ended June 30, 2025 and 2024.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

table below reconciles the Company’s operating income by segment to (loss) income before income taxes as reported in the Company’s

unaudited condensed consolidated statements of operations:

income by Segment

Company notes that there was no revenue related to the NDA segment for the three and six months ended September 30, 2025 and 2024.

table below reconciles the Company’s operating income by segment to income before income taxes as reported in the Company’s

condensed consolidated statements of operations:

SCHEDULE OF OPERATING INCOME BY SEGMENT TO INCOME FROM OPERATIONS

the Three Months Ended June 30,

Operating income by segment

Corporate unallocated costs

the Three Months Ended

the Six Months Ended

Operating income

unallocated costs

( 4,029,199 )

( 2,273,744 )

Interest income

Interest expense and amortization

of debt issuance costs

Depreciation and amortization

Significant non-cash items

Change in fair value of

derivative instruments

( 7,433,283 )

( 4,242,898 )

(Loss) income before

expense and amortization of debt issuance costs

and amortization expense

compensation through issuance of stock options

in fair value of derivative instruments

( 12,754,735 )

( 14,589,888 )

( 15,537,648 )

(loss) before income taxes

$ ( 9,519,026 )

$ ( 8,671,274 )

RELATED PARTY AGREEMENTS

Pharma, LLC Agreements

May 2020, Praxgen (formerly known as SunGen Pharma LLC), pursuant to an asset purchase agreement, assigned its rights and

obligations under the Praxgen Agreement for Amphetamine IR and Amphetamine ER to Mikah Pharma LLC (“Mikah”).

for Amphetamine IR and Amphetamine ER are now registered under Elite’s name.

Mikah will now be Elite’s partner with

respect to Amphetamine IR and Amphetamine ER and assumed all the rights and obligations for these products from Praxgen.

was founded in 2009 by Nasrat Hakim, a related party and the Company’s President, Chief Executive Officer and Chairman of the

June 2021, the Company entered into a development and license agreement with Mikah, pursuant to which Mikah engages in the research,

May 2020, Praxgen (formerly known as SunGen Pharma LLC), pursuant to an asset purchase agreement, assigned its rights and obligations

under the Praxgen Agreement for Amphetamine IR and Amphetamine ER to Mikah Pharma LLC (“Mikah”).

The ANDAs for Amphetamine

IR and Amphetamine ER are now registered under Elite’s name.

Mikah has agreed to be Elite’s partner with respect to Amphetamine

IR and ER and has agreed to assume all the rights and obligations for these products from Praxgen.

Mikah was founded in 2009 by Nasrat Hakim,

a related party and the Company’s President, Chief Executive Officer and Chairman of the Board.

June 2021, the Company entered into a development and license agreement with Mikah, pursuant to which Mikah will engage in the research,

development, sales and licensing of generic pharmaceutical products.

2 unchanged sentences

Initially two generic products were identified for the parties to develop.

of June 30, 2025, the Company owes an aggregate of $ 1,864,456 to Mikah in accordance with the agreements, with such amount being recorded

as an accrued expense on the unaudited condensed consolidated balance sheets.

determination of income tax expense in the accompanying unaudited condensed consolidated statements of income is based on the effective

tax rate for the year, adjusted for the impact of any discrete items which are accounted for in the period in which they occur.

The Company’s

income tax expense was $ 5,320,501

of September 30, 2025, the Company owes an aggregate of $ 4,263,410 to Mikah in accordance with the agreements, with such amount being

recorded as an accrued expense on the unaudited condensed consolidated balance sheets.

determination of income tax expense in the accompanying unaudited condensed consolidated statements of income is based on the

effective tax rate for the year, adjusted for the impact of any discrete items which are accounted for in the period in which they

The Company’s income tax expense was $ 1,987,940

and $ 1,517,203

for the three months ended June 30, 2025 and 2024, respectively.

The Company recorded tax expense of approximately ( 943.0 )%

of income before income tax expense, for the three month period ended June 30, 2025 and 2024, respectively.

The increase of the effective

tax rate for the current period as compared to the prior period is primarily due to the nondeductible fair market value change in the

Company’s warrant derivative liabilities.

for the three months ended September 30, 2025 and 2024, respectively.

The Company’s income tax expense was $ 7,308,441 and $ 1,749,182 for the six months ended September 30, 2025 and 2024

Company recorded tax expense of approximately 12.7 %

and ( 15.9 ) % of

income before income tax expense, for the three months ended September 30, 2025 and 2024, respectively.

The Company recorded tax

expense of approximately 48.3 %

and ( 20.2 ) %

of income before income tax expense, for the six months ended September 30, 2025 and 2024, respectively.

The Company’s

effective tax rate is subject to volatility as changes in the fair value adjustments in the Company’s derivative

liabilities significantly impact pre-tax earnings.

July 4, 2025, tax legislation known as the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States.

has evaluated the impact of U.S.

tax law changes introduced by OBBBA on its consolidated financial statements and the impact to the current

year’s financial statements is not material.

SUBSEQUENT EVENTS

July 3, 2025, Douglas Plassche exercised stock options for 2,500,000 shares of Common Stock of the Company at an exercise price of $ 0.03

July 4, 2025, tax legislation known as the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the United States.

The Company is currently evaluating the impact of U.S.

tax law changes introduced by the OBBBA on our consolidated financial

FDA approval for generic

On November 12, 2025,

the Company announced that it received approval from the FDA for an ANDA for a generic version of Requip XL® (Ropinirole Extended-Release

Tablets USP), with strengths of 2mg, 4mg, 6mg, 8mg and 12mg tablets.

Ropinirole belongs to a class of drugs known as non-ergoline dopamine

agonist used to treat symptoms of Parkinson’s disease.

This product will be marketed and sold under the Elite Laboratories, Inc.

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-Q

Item 1. Financial Statements