What changed in this filing

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Item 1. Financial Statements

2026-02-17 compared with 2025-11-14 · 315 added, 267 removed, 768 unchanged (43% of the section changed)

FINANCIAL STATEMENTS

September 30, 2025

December 31, 2025

March 31, 2025

5 unchanged sentences

Intangible assets

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

Finance lease - right-of-use asset, net of accumulated amortization of $ 866,889 and $ 508,470 respectively

Operating lease - right-of-use asset

18 unchanged sentences

Bonds payable, net of current portion and bond issuance costs

Loans payable, net of current portion and loan costs

Loans payable, net of current portion

Lease obligation - finance lease, net of current portion

8 unchanged sentences

1,445,000,000 shares authorized;

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

1,074,596,442 and 1,068,463,108 shares issued as of December 31, 2025 and March 31, 2025, respectively;

1,074,496,442 and 1,068,363,108 shares outstanding as of December 31, 2025 and March 31, 2025, respectively

Additional paid-in capital

Treasury stock;

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

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

Accumulated deficit

8 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended

September 30,

For the Six Months Ended

September 30,

For the Three Months Ended December 31,

For the Nine Months Ended December 31,

Manufacturing fees

$ 107,357,701

Licensing fees

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( 1,988,357 )

( 1,749,182 )

Net income (loss) attributable to common shareholders

Net income (loss)

$ ( 10,891,940 )

$ ( 21,312,396 )

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

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

Basic net income (loss) per share

Diluted net income (loss) per share

Basic weighted average Common Stock outstanding

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Series J Preferred Stock

Additional Paid-In

Treasury Stock

Total Shareholders’

Shareholders’

Balance as of March 31, 2025

18 unchanged sentences

$ ( 112,886,234 )

Shares issued pursuant to exercise of employee stock options

Non-cash compensation through the issuance of employee stock options

Balance at December 31, 2025

1,074,596,442

$ 173,838,752

$ ( 306,841 )

$ ( 94,292,428 )

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

19 unchanged sentences

( 11,036,229 )

Non-cash compensation through the issuance of employee stock options

Balance at September 30, 2024

1,068,373,108

2 unchanged sentences

$ ( 126,809,723 )

1,068,373,108

$ 173,315,207

$ ( 306,841 )

$ ( 126,809,723 )

( 10,891,940 )

Net income (loss)

2 unchanged sentences

Non-cash compensation through the issuance of employee stock options

Balance at September 30, 2024

Balance at December 31, 2024

1,068,373,108

10 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended

September 30,

For the Nine Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

16 unchanged sentences

( 7,227,426 )

( 1,234,481 )

Prepaid expenses and other current assets

( 1,089,900 )

Security deposits

1 unchanged sentence

Accrued expenses

( 1,582,734 )

Deferred revenue

24 unchanged sentences

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

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

Reconciliation of cash and restricted cash

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product candidates are approved.

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

marketing approvals from the United States Food and Drug Administration (“FDA”), and thereafter, commercially exploiting

such products.

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 marketing approvals from the United States Food and Drug Administration (“FDA”), and thereafter, commercially

exploiting such products.

of Presentation

15 unchanged sentences

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

results for the nine months ended December 31, 2025 are not necessarily indicative of the results to be expected for the fiscal year

ending March 31, 2026 or for any future periods.

1 unchanged sentence

financial statements for the year ended March 31, 2025.

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

months ended September 30, 2025.

There were no significant changes to these accounting policies during the

nine months ended December 31, 2025.

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

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related to revenue recognition, standalone selling price for each distinct performance obligation included in customer contracts with

multiple performance obligations, warrant derivative liability, valuation of intangible assets, the useful life of property and equipment

and identifiable intangible assets, stock-based compensation expense and income taxes.

The Company continually evaluates its estimates,

which are based on information that is currently available to the Company and on various other assumptions that it believes to be reasonable

under the circumstances.

multiple performance obligations, warrant liability, valuation of intangible assets, the useful life of property and equipment and identifiable

intangible assets, stock-based compensation expense and income taxes.

The Company continually evaluates its estimates, which are based

on information that is currently available to the Company and on various other assumptions that it believes to be reasonable under the

circumstances.

Actual results could differ from those estimates.

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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 and six months ended September

Accordingly, during the three and nine months ended December

31, 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.

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including co-development projects, joint ventures and other collaborations.

ASC 606, Revenue from Contacts with Customers (“ASC 606”), the Company recognizes revenue when the customer obtains

ASC 606, Revenue from Contracts with Customers (“ASC 606”), the Company recognizes revenue when the customer obtains

control of promised goods or services, in an amount that reflects the consideration which is expected to be received in exchange for

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is not probable.

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 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

pharmaceutical products, and is recorded at net realizable value which consists of gross amounts invoiced reduced by contractual reductions,

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

PHARMACEUTICALS, INC.

1 unchanged sentence

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 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 partner.

Revenue is measured as the amount of consideration

the Company expects to receive from the sale of its products, including Elite-labeled pharmaceutical products, and is recorded at net

realizable value which consists of gross amounts invoiced reduced by contractual reductions, including, without limitation, chargebacks,

discounts and program rebates, as applicable.

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 September 30, 2025.

component as of December 31, 2025.

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

2 unchanged sentences

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

During the nine months ended December 31, 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

Accordingly, during the nine months ended December 31, 2025 and 2024, the Company has only engaged in business

activities in a single operating segment.

1 unchanged sentence

disclosed within Note 14.

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).

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

of December 31, 2025, and March 31, 2025, the Company had $ 467,575 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).

taxes are accounted for under the asset and liability method.

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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

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

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

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tax jurisdiction until the applicable statutes of limitation expire.

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

As of December 31, 2025, a summary of the tax years that remain

subject to examination in our major tax jurisdictions is:

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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 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 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

unrecognized tax positions for the nine months ended December 31, 2025.

(Loss) Per Share

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 computation.

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 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 December

31, 2025, and is therefore included in the diluted EPS calculation for that period.

However, for the nine months ended December 31, 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 nine months ended December 31, 2024, the potential dilution from the Series

J Warrants converting into 79,008,661 shares of Common Stock and the stock options converting into 15,760,000 shares of Common Stock

1 unchanged sentence

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.

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

months ended December 31, 2024.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

For the Three Months Ended

September 30,

For the Six Months Ended

September 30,

For the Three Months Ended December 31,

For the Nine Months Ended December 31,

Net income (loss) - basic

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Net income (loss) per share

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Issued Accounting Pronouncements

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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):

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

(“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.

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

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270)—Narrow-Scope Improvements .

The ASU clarifies the

scope of interim reporting guidance, reorganizes disclosure requirements for ease of navigation, and introduces a principle requiring

disclosure of material events occurring after the last annual reporting period but before interim financial statements are issued.

ASU does not create new disclosure requirements but improves clarity and consistency in presentation.

The ASU is effective for interim

periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the impact

this standard will have on the Company’s 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

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SCHEDULE OF INVENTORY

September 30, 2025

December 31, 2025

March 31, 2025

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SCHEDULE OF PROPERTY AND EQUIPMENT

September 30, 2025

December 31, 2025

March 31, 2025

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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.

expense was $ 268,662 and $ 313,060 for the three months ended December 31, 2025 and 2024, respectively, and $ 819,466 and $ 936,007 for

the nine months ended December 31, 2025 and 2024, respectively.

PHARMACEUTICALS, INC.

2 unchanged sentences

INTANGIBLE ASSETS

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

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

SCHEDULE OF INTANGIBLE ASSETS

September 30, 2025

December 31, 2025

Estimated Useful Life

Gross Carrying Amount

Impairment losses

Accumulated Amortization

Net Book Value

Patent application costs

1 unchanged sentence

March 31, 2025

Estimated Useful Life

Gross Carrying Amount

Impairment losses

Accumulated Amortization

Net Book Value

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

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

a “Product”, and (ii) grant to the Company a royalty-free, non-exclusive perpetual license to use the manufacturing technology,

proprietary information, processes, techniques, protocols, methods, know-how, and improvements necessary or used to manufacture each

Product in accordance with the applicable ANDA, in exchange for $ 900,000 in cash (the “Transaction”).

The Asset Purchase

Agreement includes customary representations and warranties and various customary covenants.

The closing of the Transaction occurred

on June 21, 2024.

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 a “Product”, and (ii) grant

to the Company a royalty-free, non-exclusive perpetual license to use the manufacturing technology, proprietary information, processes,

techniques, protocols, methods, know-how, and improvements necessary or used to manufacture each Product in accordance with the applicable

ANDA, in exchange for $ 900,000 in cash (the “Transaction”).

The Asset Purchase Agreement includes customary representations

and warranties and various customary covenants.

The closing of the Transaction occurred on June 21, 2024.

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

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and slower growth rates.

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

2025 or the six months ended September 30, 2024.

No such impairment was recorded during the nine months ended December 31,

2025 or 2024.

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

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ACCRUED EXPENSES

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

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

SCHEDULE OF ACCRUED EXPENSES

Co-development

December 31, 2025

March 31, 2025

Co-development profit split

Employee bonuses

3 unchanged sentences

Other accrued expenses

interest - related parties

accrued expenses

Accrued interest - related parties

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”).

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.

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,

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.

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SCHEDULE OF BONDS PAYABLE LIABILITY

bonds payable

Bonds - Series A Notes

December 31, 2025

March 31, 2025

Gross bonds payable

NJEDA 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

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

Bond offering costs

Accumulated amortization

offering costs, net

portion of bonds payable - net of bond offering costs

portions of bonds payable

Bond offering costs, net

Current portion of bonds payable - net of bond offering costs

Current portions of bonds payable

Bonds offering costs to be amortized in the next 12 months

portion of bonds payable, net of bond offering costs

term portion of bonds payable - net of bond offering costs

portion of bonds payable

Current 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 payable

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

term portion of bonds payable, net of bond offering costs

Long term portion of bonds payable, net of bond offering costs

PHARMACEUTICALS, INC.

1 unchanged sentence

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,

expense was $ 3,545 and $ 3,544 for the three months ended December 31, 2025 and 2024, respectively, and $ 10,634 and $ 10,633 for the nine

months ended December 31, 2025 and 2024, respectively.

Interest payable was $ 18,417 and $ 5,363 as of December 31, 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.

Interest expense was $ 13,812 and $ 16,088 for the three months ended December 31, 2025 and 2024, respectively, and

$ 45,229 and $ 51,783 for the nine months ended December 31, 2025 and 2024, respectively.

of bonds for the next five years are as follows:

SCHEDULE OF MATURITIES OF BONDS

ending March 31,

Years ending March 31,

Remainder of 2026

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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

December 31, 2025

March 31, 2025

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

Loans payable

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.

Long-term portion of loans payable

interest expense associated with the loans payable was $ 27,471 and $ 31,089 for the three months ended December 31, 2025 and 2024, respectively,

and $ 84,506 and $ 99,104 for the nine months ended December 31, 2025 and 2024, respectively.

PHARMACEUTICALS, INC.

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SCHEDULE OF LOAN PRINCIPAL PAYMENTS

principal balances

ending March 31,

Future principal balances

Years ending March 31,

Remainder of 2026

remaining principal balance

Total remaining principal balance

RELATED PARTY LOANS

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

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

For the three months ended December 31, 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

For the nine months ended December 31, 2025 and 2024, interest expense

on the Hakim Promissory Note totaled $ 50,000 and $ 217,500 , respectively, recorded on the unaudited condensed consolidated statements

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

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,

For the three months ended December 31, 2025 and 2024, interest expense on the Caskey Promissory Note totaled $ 0 and $ 25,000 , respectively.

For the nine months ended December 31, 2025 and 2024, interest expense on the Caskey Promissory Note totaled $ 25,000 and $ 72,500 , respectively,

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

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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

by the FDA on September 19, 2023, Elite sent the patentee and NDA holder a Notice Letter as required under the Hatch-Waxman Act.

14, 2023, a patent infringement suit was filed in the District Court of New Jersey by Purdue Pharma.

Elite has obtained several agreements

with Purdue to stay the litigation, with the latest being a stipulation and order submitted on March 19, 2025 lifting the existing stipulated

August 17, 2023, Elite filed a paragraph IV certification with its ANDA to generic OxyContin ® and after Elite got acceptance

of the ANDA by the FDA on September 19, 2023, Elite sent the patentee and NDA holder a Notice Letter as required under the Hatch-Waxman

On November 14, 2023, a patent infringement suit was filed in the District Court of New Jersey by Purdue Pharma.

Elite has obtained

several agreements with Purdue to stay the litigation, with the latest being a stipulation and order submitted on March 19, 2025 lifting

the existing stipulated stay.

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 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

2 unchanged sentences

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.

PHARMACEUTICALS, INC.

1 unchanged sentence

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

of December 31, 2025, the results of such proceedings cannot be predicted with certainty and are neither probable nor estimable.

Company entered into an operating lease for office space in North Bay Village, Pompano FL (the “NBV Pompano Office Lease”).

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The Warehouse Equipment Lease has a term of two years , ending in February 2026 .

The Company also has the option

to purchase the asset at the end of the lease term for the amount of $ 1 , which is probable to be exercised.

The Company had the option to purchase

the asset at the end of the lease term for the amount of $ 1 , which the Company exercised.

February 2024, the Company entered into a finance lease for equipment (the “February 2024 Equipment Lease”).

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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 .

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 to warehouse and laboratory equipment with an aggregate acquisition cost of $ 153,745 .

of 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.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

19 unchanged sentences

to account for lease and non-lease components separately.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

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.

1 unchanged sentence

SCHEDULE OF RENT EXPENSE STRAIGHT-LINE BASIS

the Three Months Ended

the Six Months Ended

For the Three Months Ended December 31,

For the Nine Months Ended December 31,

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

SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS

ending March 31,

Years ending March 31,

Operating Lease Amount

Financing Lease Amount

Remainder of 2026

value of lease payments

Present 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 Six Months Ended

Term and Discount Rate

For the Nine Months Ended

Lease Term and Discount Rate

Remaining lease term (years)

Operating leases

Finance leases

Discount rate

Operating leases

Finance leases

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

PREFERRED STOCK

9 unchanged sentences

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.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

as of December 31, 2025 and March 31, 2025.

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

4 unchanged sentences

SCHEDULE OF FAIR VALUE OF WARRANTS ISSUED

Fair value of

the Company’s Common Stock

December 31, 2025

March 31, 2025

Fair value of the Company’s Common Stock

Initial exercise price

2 unchanged sentences

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:

December 31, 2025 and 2024:

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

Balance at March 31, 2025

in fair value of derivative financial instruments - warrants

Change in fair value of derivative financial instruments - warrants

Balance at June 30, 2025

in fair value of derivative financial instruments - warrants

Change in fair value of derivative financial instruments - warrants

( 7,519,649 )

Balance at September 30, 2025

Change in fair value of derivative financial instruments - warrants

( 11,817,375 )

Balance at December 31, 2025

Balance at March 31, 2024

in fair value of derivative financial instruments - warrants

Change in fair value of derivative financial instruments - warrants

Balance at June 30, 2024

in fair value of derivative financial instruments - warrants

Change in fair value of derivative financial instruments - warrants

Balance at September 30, 2024

Change in fair value of derivative financial instruments - warrants

Balance at December 31, 2024

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

on a Recurring Basis

1 unchanged sentence

the level in the fair value hierarchy within which those measurements fell:

OF LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS

Value Measurement

Balance as of

March 31, 2025

in fair value of derivative financial instruments - warrants

as of September 30, 2025

Value Measurement

Balance as of

March 31, 2024

in fair value of derivative financial instruments - warrants

as of September 30, 2024

SCHEDULE OF LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS

Fair Value Measurement

Amount at Fair Value

Balance as of March 31, 2025

Change in fair value of derivative financial instruments - warrants

Balance as of December 31, 2025

Fair Value Measurement

Amount at Fair Value

Balance as of March 31, 2024

Change in fair value of derivative financial instruments - warrants

Balance as of December 31, 2024

STOCK-BASED COMPENSATION

10 unchanged sentences

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 plans for the six months ended September

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

31, 2025 is as follows:

SCHEDULE OF STOCK OPTION PLAN

at March 31, 2025

Outstanding at March 31, 2025

( 6,133,334 )

and Forfeited

Outstanding at September

Exercisable at September

Expired and Forfeited

Outstanding at December 31, 2025

Exercisable at December 31, 2025

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 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

and the quoted price of the Company’s Common Stock as of December 31, 2025 of $ 0.49 for those awards with strike prices lower than

the quoted price of the Company’s Common Stock as of December 31, 2025.

As of December 31, 2025, there was $ 80,823 in unrecognized

stock-based compensation expense that will be recognized over a weighted average 0.72 year period.

CONCENTRATIONS AND CREDIT RISK

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

These three customers

customer accounted for approximately 64 % of the Company’s revenues for the nine months ended December 31, 2025.

customers accounted for approximately 64 % of the Company’s revenues for the nine months ended December 31, 2024.

These two customers

accounted for approximately 41 % and 23 % 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.

customer accounted for approximately 70 % of the Company’s accounts receivable as of December 31, 2025.

customers accounted for approximately 76 % of the Company’s accounts receivable as of December 31, 2024.

These two customers accounted

for approximately 47 % and 29 % 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.

suppliers accounted for approximately 75 % of the Company’s purchases of raw materials for the nine months ended December 31, 2025.

These three suppliers accounted for approximately 39 %, 20 %, and 16 % of purchasing, respectively.

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.

suppliers accounted for approximately 71 % of the Company’s purchases of raw materials for the nine months ended December 31, 2024.

These three suppliers accounted for approximately 39 %, 16 %, and 16 % of purchasing, respectively.

SEGMENT RESULTS

4 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

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SCHEDULE OF SELECTED INFORMATION FOR REPORTABLE SEGMENTS

the Three Months Ended

the Six Months Ended

Income by Segment

For the Three Months Ended

For the Nine Months Ended

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.

Operating income by

Company notes that there was no revenue related to the NDA segment for the three and nine months ended December 31, 2025 and 2024.

ELITE PHARMACEUTICALS, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

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

1 unchanged sentence

SCHEDULE OF OPERATING INCOME BY SEGMENT TO INCOME FROM OPERATIONS

the Three Months Ended

the Six Months Ended

Operating income

unallocated costs

For the Three Months Ended

For the Nine Months Ended

Operating income by segment

Corporate unallocated costs

( 2,466,336 )

2 unchanged sentences

( 6,967,514 )

expense and amortization of debt issuance costs

and amortization expense

compensation through issuance of stock options

in fair value of derivative instruments

Interest income

Interest expense and amortization

of debt issuance costs

Depreciation and amortization

( 1,177,885 )

( 1,278,564 )

Non-cash compensation through

issuance of stock options

Change in fair value of

derivative instruments

( 11,729,368 )

(loss) before income taxes

( 2,772,513 )

( 27,267,016 )

Income (loss) before

$ ( 10,652,765 )

$ ( 19,324,039 )

RELATED PARTY AGREEMENTS

6 unchanged sentences

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.

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,

3 unchanged sentences

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

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

of December 31, 2025, the Company owes an aggregate of $ 2,968,030 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 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.

of March 31, 2025, the Company owed an aggregate of $ 2,617,210 to Mikah in accordance with the agreements, with such amount being recorded

as an accrued expense on the 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

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.

income tax expense was $ 2,239,910 and $ 239,175 for the three months ended December 31, 2025 and 2024, respectively.

The Company’s

income tax expense was $ 9,548,351 and $ 1,988,357 for the nine months ended December 31, 2025 and 2024

Company recorded tax expense of approximately 10.8 % and ( 2.2 ) % of income before income tax expense, for the three months ended December

31, 2025 and 2024, respectively.

The Company recorded tax expense of approximately 26.6 % and ( 10.3 ) % of income before income tax expense,

for the nine months ended December 31, 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.

3 unchanged sentences

SUBSEQUENT EVENTS

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.

January 9, 2026, Doug Plassche exercised stock options for 2,500,000 shares of Common Stock of the Company at an exercise price of $ 0.03

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