What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-24 compared with 2025-02-25 · 224 added, 144 removed, 752 unchanged (33% of the section changed)

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As more fully disclosed in Note 3 to the financial statements, the Company recognizes revenue on sales of WAKIX when the customer obtains control of the product, which occurs at a point in time, typically upon delivery.

Product revenue is recorded at the product’s wholesale acquisition costs, net of applicable reserves for variable consideration that are offered within contracts between the Company and its customers, payors, and other indirect customers relating to the sale of WAKIX.

Product revenue is recorded at the product’s wholesale list price, net of applicable reserves for variable consideration that are offered within contracts between the Company and its customers, payors, and other indirect customers relating to the sale of WAKIX.

Components of variable consideration include government and commercial contracts, product returns, commercial co-payment assistance program transactions, and distribution service fees.

These deductions are based on the amounts earned, or to be claimed on the related sales, and are classified as a current liability or reduction of receivables on the Company’s consolidated balance sheet.

The rebate provision and related liability related to the Medicaid Drug Rebate Program (the “Medicaid rebate accrual”) involves the use of significant assumptions and judgments in the Company’s calculation.

These significant assumptions and judgments include historical claims experience, payer channel mix, current contract prices, unbilled claims, claims submission time lags, and inventory levels in the distribution channel.

These significant assumptions and

judgments include historical claims experience, payer channel mix, current contract prices, unbilled claims, claims submission time lags, and inventory levels in the distribution channel.

Given the complexity involved in determining the significant assumptions used in calculating the Medicaid rebate accrual, auditing these estimates involved especially subjective judgment.

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● We tested the overall reasonableness of the Medicaid rebate accrual recorded at period end by developing an expectation for comparison to actual recorded balances.

● We involved audit professionals with industry and quantitative analytics experience to assist us in performing our auditing procedures.

/s/ Deloitte & Touche LLP

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NONCURRENT ASSETS:

Property and equipment, net

Restricted cash

Investments, long-term

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Additional paid in capital

Accumulated other comprehensive (loss) income

Retained earnings (accumulated deficit)

Accumulated other comprehensive income

Retained earnings

TOTAL STOCKHOLDERS’ EQUITY

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HARMONY BIOSCIENCES HOLDINGS, INC.

AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (In thousands, except share and per share data)

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(In thousands, except share and per share data)

Year Ended December 31,

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Income tax expense

Unrealized (loss) income on investments

Unrealized income on investments

Comprehensive income

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Weighted average number of shares of common stock - diluted

(1) Includes $ 15,000 in related party expenses for the year ended December 31, 2025, and no related party expenses for the years ended December 31, 2024, and 2023.

The accompanying notes are an integral part of the consolidated financial statements

HARMONY BIOSCIENCES HOLDINGS, INC.

AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands, except share and per share data)

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Unrealized loss on investments

Issuance of common stock

Exercise of options

Repurchase of common stock

( 3,254,445 )

Exercise of options and vesting of restricted stock units (2)

Stock-based compensation

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Unrealized gain on investments

Repurchase of common stock

( 3,254,445 )

Exercise of options and vesting of restricted stock units (2)

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Unrealized gain on investments

Repurchase of common stock

Exercise of options and vesting of restricted stock units (2)

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Adjustments to reconcile net income to net cash used in operating activities:

Depreciation and impairment of long-lived assets

Intangible amortization

Acquired in-process research & development (IPR&D) expense

Stock-based and employee stock purchase compensation expense

Stock-based compensation

Stock appreciation rights market adjustment

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Acquisition of Epygenix Therapeutics, Inc., net of cash acquired

Payment of license fee and milestone

Payment of milestones

Payment of upfront fee related to license agreements (1)

Net cash used in investing activities

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Proceeds from exercised options

Net cash (used in) provided by financing activities

Net cash used in financing activities

NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

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Cash paid during the year for interest

Cash paid during the year for taxes

Cash paid during the year for income taxes net of refunds received

(1) Includes $ 15,000 in cash paid to a related party during the year ended December 31, 2025, and no related party payments during the years ended December 31, 2024, and 2023.

The accompanying notes are an integral part of the consolidated financial statements

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The Company is headquartered in Plymouth Meeting, Pennsylvania .

On October 10, 2023, the Company completed a tender offer to acquire all of the outstanding shares of common stock of Zynerba Pharmaceuticals, Inc.

(together with its subsidiary, Zynerba Pharmaceutical Pty, Ltd., “Zynerba”).

Zynerba was a clinical-stage pharmaceutical company focused on innovative pharmaceutically produced transdermal cannabidiol therapies for orphan neurobehavioral disorders, including Fragile X Syndrome.

As of July 1, 2024, Zynerba was renamed and is known as Harmony Biosciences Management, Inc.

On April 30, 2024, the Company acquired all of the issued and outstanding capital stock of Epygenix Therapeutics, Inc., a Wyoming corporation (“Epygenix”).

As a result, the Company now has an exclusive license relating to the use of clemizole, initially for the treatment of Dravet Syndrome and Lennox-Gastaut Syndrome.

We are cultivating a differentiated neuroscience company, rooted in innovation and driven by a commitment to addressing the unmet needs of patients living with neurological diseases.

To date, we have focused on rare neurological diseases with a growing portfolio now spanning sleep/wake, neurobehavioral, and rare epilepsy, and we are harnessing scientific insights and pioneering approaches to advance meaningful treatments that help patients thrive.

In July 2017, the Company entered into a License Agreement (the “2017 LCA”) with Bioprojet Société Civile de Recherche (“Bioprojet”) whereby the Company acquired the exclusive right to commercialize the pharmaceutical compound pitolisant.

Our lead product, WAKIX® (pitolisant) (“WAKIX”), is a first-in-class therapy with a novel mechanism of action designed to enhance histamine signaling in the brain by binding to H 3 receptors.

Since its initial FDA approval in 2019 for excessive daytime sleepiness (“EDS”) in adult patients with narcolepsy, WAKIX has subsequently been approved for cataplexy in adult patients in 2020 and EDS in pediatric patients six years and older in 2024.

Beyond narcolepsy, we are also advancing late-stage clinical programs exploring pitolisant in Prader-Willi syndrome (“PWS”) and continue to grow our impact in other rare neurological diseases.

In July 2022, the Company entered into a License and Commercialization Agreement (the “2022 LCA”) with Bioprojet whereby we obtained exclusive rights to manufacture, develop and commercialize one or more next generation pitolisant based products in the United States and Latin America.

Two of the next generations formulations, Pitolisant Gastro-Resistant (“Pitolisant GR”) and Pitolisant High-Dose (“Pitolisant HD”) are currently in clinical development.

Along with nurturing the growth of our original pipeline, our innovation strategy includes targeted business development that strengthens our foundation and strategically extends our patient reach as we look to expand our portfolio to new diseases beyond histaminergic science.

In June 2025, we entered into a research collaboration, option and license agreement (the “CiRC Agreement”) with CiRC Biosciences, Inc.

(“CiRC”), a related party.

Under this agreement, Harmony and CiRC will collaborate on the research and development of two discovery-stage candidates, CBS105 for treatment-resistant narcolepsy and CBS104 for refractory epilepsy (together, the “Candidates”), using cell replacement therapy for the treatment of refractory epilepsies and treatment-resistant narcolepsy.

In April 2024, we expanded into orexin science through a sublicense agreement with Bioprojet for an orexin 2 receptor agonist (“BP1.15205”) in preclinical development for narcolepsy and other potential indications.

Under the sublicense agreement the Company obtained the exclusive right to develop, manufacture and commercialize BP1.15205 in the United States and Latin American territories, which are rights originally licensed from Teijin Pharma, the innovator of BP1.15205.

We further broadened our portfolio into rare epilepsy when the Company acquired Epygenix Therapeutics, Inc.

(“Epygenix”) in April 2024.

As a result, the Company now has an exclusive license relating to the use of clemizole hydrochloride, initially for the treatment of Dravet Syndrome (“DS”) and Lennox-Gastaut Syndrome (“LGS”), and a liquid formulation of lorcaserin for the treatment of developmental and epileptic encephalopathies .

LIQUIDITY AND CAPITAL RESOURCES

The consolidated financial statements have been prepared as though the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

The Company had retained earnings and an accumulated deficit of $ 2,216 and $ 143,277 , as of December 31, 2024, and 2023, respectively.

Company had retained earnings of $ 160,903 and $ 2,216 , as of December 31, 2025, and 2024, respectively.

As of December 31, 2025, the Company had cash, cash equivalents and investments of $ 882,467 .

The Company believes that its existing cash, cash equivalents and investments on hand as of December 31, 2024, as well as additional cash generated from operating and financing activities will meet its operational liquidity needs and fund potential investing activities for the next twelve months from the date of issuance of these consolidated financial statements.

The Company believes that its existing cash, cash equivalents and investments on hand as of December 31, 2025, as well as additional cash generated from operating and financing activities will meet its operational liquidity needs and fund potential investing activities for at least the next twelve months from the date of issuance of these consolidated financial statements.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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All intercompany accounts and transactions have been eliminated.

Reclassifications

Certain prior period amounts within the consolidated balance sheets have been reclassified to conform to current period presentation.

In particular, restricted cash and property, plant and equipment were previously classified as separate captions and are now included within other noncurrent assets.

The reclassification of these items had no impact on net income, earnings per share or accumulated deficit in current or prior periods.

Significant Risks and Uncertainties

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Fair Value of Financial Instruments

The Company’s consolidated financial statements include cash, cash equivalents, accounts payable, and accrued liabilities, all of which are short term in nature and, accordingly, approximate fair value.

Additionally, prior to the initial public offering (the “IPO”), the Company’s consolidated financial statements included a warrant liability that was carried at fair value and was re-measured at each balance sheet date until it would be exercised or expired.

In connection with the IPO, the Warrants were re-evaluated under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity, and reclassified to equity.

See Note 16 for a further discussion of the warrants.

The Company’s consolidated financial statements include cash, cash equivalents, accounts receivable, other current assets, accounts payable, and accrued liabilities, all of which are short term in nature and, accordingly, approximate fair value.

It is the Company’s policy to measure non-financial assets and liabilities at fair value on a nonrecurring basis.

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Cash and cash equivalents

Restricted cash

Restricted cash included in other noncurrent assets

Total cash, cash equivalents, and restricted cash shown in the statements of cash flows

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The Company monitors its exposure within accounts receivable and would record a reserve against uncollectible accounts receivable if necessary.

As of December 31, 2024, three customers accounted for 100 % of gross accounts receivable, Caremark LLC (“CVS Caremark”), which accounted for 39 % of gross accounts receivable;

PANTHERx Specialty Pharmacy LLC (“PANTHERx”), which accounted for 31 % of gross accounts receivable;

and Accredo Health Group, Inc.

As of December 31, 2025, three customers accounted for 100 % of gross accounts receivable, Accredo Health Group, Inc.

(“Accredo”), which accounted for 45 % of gross accounts receivable;

Caremark LLC (“CVS Caremark”), which accounted for 36 % of gross accounts receivable;

and PANTHERx Specialty Pharmacy LLC (“PANTHERx”), which accounted for 19 % of gross accounts receivable.

As of December 31, 2024, three customers accounted for 100 % of gross accounts receivable;

Accredo, which accounted for 39 % of gross accounts receivable, CVS Caremark, which accounted for 32 % of gross accounts receivable and PANTHERx, which accounted for 29 % of gross accounts receivable.

CVS Caremark, which accounted for 39 % of gross accounts receivable, PANTHERx, which accounted for 31 % of gross accounts receivable and Accredo, which accounted for 30 % of gross accounts receivable.

For the year ended December 31, 2025, three customers accounted for 100 % of gross product revenue;

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For the year ended December 31, 2023, three customers accounted for 100 % of gross product revenue;

CVS Caremark accounted for

42 % of gross product revenue;

PANTHERx accounted for 29 % of gross products revenue;

and Accredo accounted for 29 % of gross product revenue.

The Company depends on a single supplier of the active pharmaceutical ingredient (“API”) for its commercial product, WAKIX, and single API suppliers for each of its potential product candidates.

CVS Caremark accounted for 37 % of gross product revenue;

Accredo accounted for 32 % of gross product revenue;

and PANTHERx accounted for 31 % of gross product revenue.

The Company depends on two suppliers of the active pharmaceutical ingredient (“API”) for its commercial product, WAKIX, and single API suppliers for each of its potential product candidates.

Share Repurchases

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If our estimate of future demand changes, we consider the impact on the reserve for excess inventory and adjust the reserve as required.

Inventory reserves are recorded as a component of cost of product sales in our consolidated statement of operations.

Inventory reserves are recorded as a component of cost of product sold in our consolidated statement of operations.

We may capitalize inventory costs associated with products prior to regulatory approval when future commercialization is probable.

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Revenue Recognition

We account for contracts with our customers in accordance with ASC 606, Revenue from Contracts with Customers (ASC 606), or ASC 606.

We account for contracts with our customers in accordance with ASC 606, Revenue from Contracts with Customers (ASC 606).

Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services.

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(iii) determine the transaction price;

(iv) allocate the transaction price to the performance

obligations in the contract;

(iv) allocate the transaction price to the performance obligations in the contract;

and (v) recognize revenue when (or as) the entity satisfies a performance obligation.

We only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services it transfers to the customer.

We only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer.

The amount of variable consideration which is included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized under contracts will not occur in a future period.

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Net Product Revenue

We recognize revenue from sales of WAKIX when the customer obtains control of the product which occurs at a point in time, typically upon delivery.

Product revenue is recorded at the product’s list price, net of applicable reserves for variable consideration that are offered within contracts between us and our customers, payors, and other indirect customers relating to the sale of WAKIX.

We recognize revenue from sales of WAKIX when the customers, specialty pharmacies, obtain control of the product which occurs at a point in time, typically upon delivery.

Product revenue is recorded at the product’s list price, and is reduced from the product’s list price at the time of recognition for variable consideration that are offered within contracts between us and our customers, payors, and other indirect customers relating to the sale of WAKIX.

Components of variable consideration include government (as detailed below) and commercial contracts, commercial co-payment assistance program, and distribution service fees.

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This pronouncement addresses disclosures only and had no impact on its consolidated financial results.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued Accounting Standards Update (“ASU”) No 2023-09, “Income Taxes (Topic 740):

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ASU 2023-09 is effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company is currently evaluating the impact that ASU 2023-09 will have on its consolidated financial statements.

Early adoption was permitted.

The Company adopted this guidance in the fourth quarter of 2025 on a prospective basis.

This pronouncement addresses disclosures only and had no impact on its consolidated financial results.

Recently Issued Accounting Pronouncements

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

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ASU 2024-03 also requires disclosure of the total amount of selling expenses and, in annual periods, an entity’s definition of selling expenses.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and

interim periods within fiscal years beginning after December 15, 2027.

The guidance may be applied prospectively or retrospectively.

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The Company is currently evaluating the impact that ASU 2024-03 will have on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software .

ASU 2025-06 makes targeted improvements to accounting for and disclosure of software costs under ASC 350-40.

This ASU is effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods.

The guidance may be adopted prospectively, retrospectively, or via a modified prospective transition method.

Early adoption is permitted.

The Company is currently evaluating the impact that ASU 2025-06 will have on its consolidated financial statements.

Acquisition of Zynerba

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The Zynerba Acquisition was accounted for as an asset acquisition under ASC Topic 805, Business Combinations, because substantially all of the fair value of the gross assets acquired was concentrated in a single identifiable IPR&D asset, ZYN002, Zynerba’s lead asset.

ZYN002 is the first and only pharmaceutically manufactured, synthetic cannabidiol, devoid of THC, formulated as a patent-protected permeation-enhanced gel for transdermal delivery through the skin and into the circulatory system and is currently in Phase III clinical trial for the potential treatment of Fragile X Syndrome.

The Company recognized the acquired assets and assumed liabilities based on the consideration paid, including transaction costs, on a relative fair value basis, and after first allocating the preliminary excess of the fair value of net assets acquired over the purchase price consideration to certain qualifying assets, principally, the IPR&D asset.

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Net assets acquired

In September 2025, the Company achieved a clinical milestone for ZYN002 that triggered a $ 15,000 payment, which was paid in the fourth quarter of 2025.

Acquisition of Epygenix

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The Company did not acquire any outputs and there was not an acquired substantive process in place to create outputs.

The Company recognized the acquired assets and assumed liabilities based on the consideration paid,

including transaction costs, on a relative fair value basis, and after first allocating the preliminary excess of the fair value of net assets acquired over the purchase price consideration to certain qualifying assets, principally, the IPR&D asset.

In accordance with the accounting for asset acquisitions, an entity that acquires IPR&D assets in an asset acquisition follows the guidance in ASC Topic 730, Research and Development, which requires that both tangible and intangible identifiable research and development assets with no alternative future use be allocated a portion of the consideration transferred and recorded as research and development expense at the acquisition date.

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Total short-term investments

Commercial paper

Corporate debt securities

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Corporate debt securities

government securities

Total short-term investments

Commercial paper

Corporate debt securities

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Finished goods

Inventory, gross

Reserve for excess inventory

Total inventory, net

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The Company determined a useful life of 7.6 years for the intangible asset, and, as of December 31, 2025, the remaining useful life was 3.8 years.

Amortization expense was $ 23,845 , $ 23,845 and $ 22,966 for the years ended December 31, 2024, 2023 and 2022, respectively, and is recorded in general and administrative expenses in the consolidated statements of operations and comprehensive income (loss).

Amortization expense was $ 23,845 for each of the years ended December 31, 2025, 2024 and 2023, respectively, and is recorded in general and administrative expenses in the consolidated statements of operations and comprehensive income (loss).

Future annual amortization expense for the unamortized intangible assets is as follows:

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As of December 31, 2025, and 2024, the Company had accrued $ 65,819 and $ 51,746 , respectively, for sales-based, trademark and tiered royalties.

In July 2022, Harmony entered into a License and Commercialization Agreement (the “2022 LCA”) with Bioprojet whereby Harmony obtained exclusive rights to manufacture, use and commercialize one or more new products based on pitolisant in the United States and Latin America, with the potential to add additional indications and formulations upon agreement of both parties.

Harmony paid an initial, non-refundable $ 30,000 licensing fee in October 2022 and additional payments of up to $ 155,000 are potentially due under the 2022 LCA upon the achievement of certain future development

and sales-based milestones.

In July 2022, Harmony entered into the 2022 LCA with Bioprojet whereby Harmony obtained exclusive rights to manufacture, use and commercialize one or more new products based on pitolisant in the United States and Latin America, with the potential to add additional indications and formulations upon agreement of both parties.

In addition, there are other payments due upon achievement of development milestones for new indications and formulations as agreed upon by both parties.

The 2022 LCA also requires a fixed trademark royalty and a tiered royalty based on net sales upon commercialization, which will be payable to Bioprojet on a quarterly basis.

The $ 30,000 licensing fee was recorded in research and development within the consolidated statement of operations and comprehensive income (loss) for the year ended December 31, 2022.

In April 2024, the Company announced that it entered into a sublicense agreement with Bioprojet for an orexin-2 receptor agonist (OX2R) (“BP1.15205”) to be evaluated for the treatment of narcolepsy and other potential indications (the “Sublicense”).

In April 2024, the Company announced that it entered into the Sublicense agreement with Bioprojet for an orexin-2 receptor agonist (OX2R), BP1.15205, to be evaluated for the treatment of narcolepsy and other potential indications (the “Sublicense”).

Under the Sublicense, the Company obtained the exclusive right to develop, manufacture and commercialize BP1.15205 in the United States and Latin American territories (the “Licensed Territories”), which are rights that Bioprojet originally licensed from Teijin Pharma, the innovator of BP1.15205.

BP1.15205 is currently in pre-clinical development with a Clinical Trial Application currently anticipated in mid-2025.

Under the Sublicense, the Company paid Bioprojet an upfront license fee of $ 25,500 , which the Company recognized as an IPR&D charge recorded in research and development within the consolidated statements of operations and comprehensive income for the year ended December 31, 2024, and will also be obligated to pay up to $ 127,500 upon achievement of development and regulatory milestones and up to $ 240,000 upon achievement of sales-based milestones, as well as royalty rates in the mid-teens on any sales of product using the Licensed Compound in the Licensed Territories.

In November 2025, the Company achieved a clinical milestone for BP1.15205 that triggered a $ 4,250 payment to Bioprojet under the Sublicense, which was paid in December 2025.

The Company will also be obligated to pay up to $ 123,250 upon achievement of development and regulatory milestones and up to $ 240,000 upon achievement of sales-based milestones, as well as royalty rates in the mid-teens on any sales of product using the Licensed Compound in the Licensed Territories.

ConSynance Agreement

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There are additional payments due under the APA upon the achievement of certain milestones including $ 19,000 for development milestones, $ 44,000 for regulatory milestones and $ 110,000 for sales milestones .

CiRC Agreement

In June 2025, the Company entered into a research collaboration, option and license agreement (the “CiRC Agreement”) with a related party, CiRC Biosciences, Inc.

Under this agreement, the Company and CiRC will collaborate on the research and development of two discovery-stage candidates (together the “Candidates”) using cell replacement therapy for treatment of refractory epilepsies and treatment-resistant narcolepsy.

In connection with the CiRC Agreement, the Company paid CiRC an upfront fee of $ 15,000 , which was recognized as an IPR&D charge recorded in research and development within the condensed consolidated statements of operations and comprehensive income for the year ended December 31, 2025.

The Company will also be obligated to pay $ 2,000 to CiRC upon the achievement of certain research milestones for each of the Candidates.

In addition, the Company has an option to obtain an exclusive license for each of the Candidates that would grant the Company global rights to develop, manufacture and commercialize each Candidate.

Upon exercise of each option, the Company would be obligated to pay an option exercise fee of $ 8,000 , or $ 16,000 in the aggregate if the options related to both Candidates were to be exercised, and the Company would be obligated upon achievement to pay future development, regulatory and sales-based milestones, as well as royalties on sales of any product derived from the Candidates.

Refer to Note 20, Related-Party Transactions , for further discussion of related party considerations for the CiRC Agreement.

ACCRUED EXPENSES

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Research and development

Professional fees, consulting, and other services

Accrued legal and professional fees

Other expenses

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The DDTL was initially available to draw down through August 9, 2022.

In August 2022, the Company entered into an agreement to extend the expiration date of the DDTL to August 9, 2023, for which the Company will pay a ticking fee at a rate of 1 % per annum on the undrawn portion of the DDTL, which commenced on August 10, 2022.

In August 2022, the Company entered into an agreement to extend the expiration date of the DDTL to August 9, 2023.

Net cash received from the Initial Term Loan was $ 191,849 , net of debt issuance costs of $ 8,151 .

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Total term loan interest expense

In June 2018, the Company entered into an operating lease for approximately fifteen thousand square feet of office space in Plymouth Meeting, PA, which was set to expire in May 2024.

The Company subsequently entered into two separate operating leases for additional office space in Plymouth Meeting, PA, which include approximately thirteen thousand square feet and seven thousand square feet of additional office space, respectively, and were extended through June 2025.

The terms of the lease payments provide for rental payments on a monthly basis and on a graduated scale.

Beginning in June 2018, the Company was party to an operating lease and subsequent amendments for three office suites of approximately fifteen thousand square feet, seven thousand square feet and thirteen thousand square feet in Plymouth Meeting, PA, which was set to expire in November 2025.

In November 2025, t he Company entered into a new operating lease amendment (the “PM Lease Amendment”) extending the lease through March 31, 2031.

The terms of the PM Lease Amendment provide for fixed rental payments on a monthly basis and on a graduated scale.

Additionally, the terms of the PM Lease Amendment also provide the Company with an option to extend the lease for two additional five-year periods and an option to early terminate the lease effective on the forty-first month, which were not considered in the determination of the operating lease right-of-use asset (“ROU asset”) or operating lease liability as neither option is reasonably certain to be exercised by the Company.

The Company also leases a fleet of automobiles that are used by its sales representatives and are classified as operating leases.

Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future lease payments using our incremental borrowing rate.

Leases with an initial term of 12 months or less are not recorded on the balance sheet.

Our leases have remaining lease terms of less than 1 year to 3 years , some of which may include the option to extend or terminate the leases.

As the rate implicit in the lease is not readily determinable, the Company’s operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future lease payments using the Company’s incremental borrowing rate, defined as the rate of interest that it would have to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

As a policy election, leases with an initial term of 12 months or less are not recorded on the balance sheet.

The Company’s leases have remaining lease terms of less than 1 year to approximately 5 years , some of which may include the option to extend or terminate the leases.

The Company recorded operating lease costs of $ 1,971 , $ 2,099 and $ 1,811 for the years ended December 31, 2025, 2024 and 2023, respectively.

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The amount of loss incurred in relation to matters for which an accrual has been established may be higher or lower than the amounts accrued.

Any expenses, fines, fees, penalties, judgments or settlements that might be incurred by the Company in connection with proceedings could have a material adverse effect on the Company’s results of operations and financial condition.

As of December 31, 2024, there were no material claims or lawsuits outstanding other than the ANDA litigation discussed below .

Abbreviated New Drug Application (“ANDA”) Litigation

On September 27, 2023, the Company and its licensor, Bioprojet, received notice from Lupin Limited (“Lupin”) pursuant to 21 U.S.C.

Any expenses, fines, fees, penalties, judgments or settlements that might be incurred by the Company in connection with

proceedings could have a material adverse effect on the Company’s results of operations and financial condition.

As of December 31, 2025, there were no material claims or lawsuits outstanding other than the Abbreviated New Drug Application (“ANDA”) litigation discussed below .

ANDA Litigation

In September 2023, the Company and its licensor, Bioprojet, received notice from Lupin Limited (“Lupin”) pursuant to 21 U.S.C.

§ 355(j) et seq.

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8,486,947 (“’947 patent”) and 8,207,197 (“’197 patent”).

On September 27, 2023, the Company and Bioprojet received notice from Novugen Pharma Sdn.

The ’947 patent and the ‘197 patent are listed with respect to WAKIX ® in the FDA’s Orange Book and will expire in September 2029 and March 2030, respectively.

The Lupin Notice Letter asserts that their generic product will not infringe the ’947 patent and the ‘197 patent and/or that the ’947 patent and the ‘197 patent are invalid or unenforceable.

In November 2023, we, Bioprojet and Bioprojet’s wholly owned subsidiary, Bioprojet Pharma SAS (“Bioprojet Pharma”), filed a complaint for patent infringement of the ’947 patent and the ‘197 patent against Lupin and certain of their affiliates and agents in the United States District Court for the District of Delaware in response to the filing of their respective ANDAs with the FDA.

In December 2024, the Company and Bioprojet received further notice from Lupin pursuant to 21 U.S.C.

§ 355(j) et seq.

and 21 C.F.R.

§ 314.95 et seq .

(the “Second Lupin Notice Letter”) that Lupin has submitted the Lupin ANDA to the FDA and is seeking regulatory approval to market a generic version of WAKIX ® before the expiration of the ‘947 patent and the ‘197 patent.

The Second Lupin Notice Letter asserts that its generic product will not infringe the ’947 patent and the ‘197 patent and/or that the ’947 patent and the ‘197 patent are invalid or unenforceable.

In January 2025, we, Bioprojet and Bioprojet Pharma filed a complaint in the United States District Court for the District of Delaware for patent infringement of the ’947 patent and the ‘197 patent against Lupin.

I n June 2025, the Company reached an agreement with Lupin to resolve the dispute over Lupin’s ANDA to market a generic version of WAKIX.

Under the terms of the settlement agreement, the litigation between the parties in the United States District Court for the District of Delaware will be dismissed, and Lupin will have a license to sell its generic product beginning July 2030 if WAKIX receives pediatric exclusivity, or earlier under certain circumstances

In September 2023, the Company and Bioprojet received notice from Novugen Pharma Sdn.

(“Novugen”) pursuant to 21 U.S.C.

2 unchanged sentences

§ 314.95 et seq.

(the “Novugen Notice Letter”) that Novugen has submitted ANDA No.

(the “Novugen Notice Letter”) that Novugen had submitted ANDA No.

218834 (the “Novugen ANDA”) to the FDA and is seeking regulatory approval to market a generic version of WAKIX ® before the expiration of the ’947 patent and ’197 patent.

The ’947 patent and the ‘197 patent are listed with respect to WAKIX ® in the FDA’s Orange Book and will expire in September 2029 and March 2030, respectively.

The Lupin Notice Letter and the Novugen Notice Letter assert that their generic product will not infringe the ’947 patent and the ‘197 patent and/or that the ’947 patent and the ‘197 patent are invalid or unenforceable.

On November 9, 2023, we, Bioprojet and Bioprojet’s wholly owned subsidiary, Bioprojet Pharma SAS (“Bioprojet Pharma”), filed a complaint for patent infringement of the ’947 patent and the ‘197 patent against Lupin, Novugen and certain of their affiliates and agents in the United States District Court for the District of Delaware in response to the filing of their respective ANDAs with the FDA.

On October 12, 2023, the Company and Bioprojet received notice from Novitium Pharma LLC (“Novitium”), pursuant to 21 U.S.C.

The Novugen Notice Letter asserts that their generic product will not infringe the ’947 patent and the ‘197 patent and/or that the ’947 patent and the ‘197 patent are invalid or unenforceable.

In November 2023, we, Bioprojet and Bioprojet’s wholly owned subsidiary, Bioprojet Pharma SAS (“Bioprojet Pharma”), filed a complaint for patent infringement of the ’947 patent and the ‘197 patent against Novugen and certain of their affiliates and agents in the United States District Court for the District of Delaware in response to the filing of their respective ANDAs with the FDA.

In October 2024, the Company reached an agreement with Novugen Pharma to resolve the dispute over Novugen’s ANDA for a generic pitolisant hydrochloride product.

Under the terms of the settlement agreement, the litigation between the parties in the United States District Court for the District of Delaware was ended on November 4, 2024, and Novugen will have a license to sell its generic product beginning July 2030 if WAKIX receives pediatric exclusivity, or earlier under certain circumstances.

In October 2023, the Company and Bioprojet received notice from Novitium Pharma LLC (“Novitium”), pursuant to 21 U.S.C.

§ 355(j) et seq.

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218495 (the “Novitium ANDA”) to the FDA and is seeking regulatory approval to market a generic version of WAKIX ® before the expiration of U.S.

8,354,430 (the “’430 patent”), which is also listed with respect to WAKIX ® in the FDA’s Orange Book and will expire in February 2026, ’947 patent, and ’197 patent.

On October 12, 2023, the Company and Bioprojet received notice from Zenara Pharma Pvt.

8,354,430 (the “’430 patent”), which is also listed with respect to WAKIX ® in the FDA’s Orange Book and will expire in February 2026.

The Novitium Notice Letter asserts that its generic product will not infringe the ‘430 patent, ’947 patent and the ‘197 patent and/or that the ‘430 patent, ’947 patent and the ‘197 patent are invalid or unenforceable.

In November 2023, the Company, Bioprojet and Bioprojet Pharma filed a complaint for patent infringement of the ’947 patent and the ‘197 patent against Novitium and certain of their affiliates and agents and for patent infringement of the ’430 patent against Novitium and certain of their affiliates and agents in the United States District Court for the District of Delaware in response to their filing of their respective ANDAs with the FDA.

In January 2026, the Company reached an agreement with Novitium to resolve the dispute over Novitium’s ANDA to market a generic version of WAKIX.

Under the terms of the settlement agreement, the litigation between the parties in the United States District Court for the District of Delaware will be dismissed, and Novitium will have a license to sell its generic product beginning July 2030 if WAKIX receives pediatric exclusivity, or earlier under certain circumstances .

In October 2023, the Company and Bioprojet received notice from Zenara Pharma Pvt.

(“Zenara”), pursuant to 21 U.S.C.

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218796 (the “Zenara ANDA”) to the FDA and is seeking regulatory approval to market a generic version of WAKIX ® before the expiration of the ’430 patent, ’947 patent and the ’197 patent.

On October 14, 2023, the Company and Bioprojet received notice from AET Pharma US, Inc.

The Zenara Notice Letter asserts that its generic product will not infringe the ‘430 patent, ’947 patent and the ‘197 patent and/or that the ‘430 patent, ’947 patent and the ‘197 patent are invalid or unenforceable.

In November 2023, the Company, Bioprojet and Bioprojet Pharma filed a complaint for patent infringement of the ’947 patent and the ‘197 patent against Zenara and certain of their affiliates and agents and for patent infringement of the ’430 patent against Zenara and certain of their affiliates and agents in the United States District Court for the District of Delaware in response to their filing of their respective ANDAs with the FDA.

In January 2026, the Company reached an agreement with Hikma (to whom Zenara transferred its ANDA) to resolve the dispute over Hikma’s ANDA to market a generic version of WAKIX.

Under the terms of the settlement agreement, the litigation between the parties in the United States District Court for the District of Delaware will be dismissed, and Hikma will have a license to sell its generic product beginning March 2030 if WAKIX receives pediatric exclusivity, or earlier under certain circumstances.

In October 2023, the Company and Bioprojet received notice from AET Pharma US, Inc.

(“AET”), pursuant to 21 U.S.C.

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218892 (the “AET ANDA”) to the FDA and is seeking regulatory approval to market a generic version of WAKIX ® before the expiration of the ’947 patent and the ’197 patent.

On October 16, 2023, the Company and Bioprojet received notice from Annora Pharma Private Limited (“Annora”), pursuant to 21 U.S.C.

§ 355(j) et seq.

and 21 C.F.R.

§ 314.95 et seq.

(the “Annora Notice Letter”), that Annora has submitted ANDA No.

218832 (the “Annora ANDA”) to the FDA and is seeking regulatory approval to market a generic version of WAKIX ® before the expiration of the ’430 patent, the ’947 patent and the ’197 patent.

AET’s Notice Letter asserts that AET’s generic product will not infringe the ’947 patent and the ‘197 patent and/or that ’947 patent and the ‘197 patent are invalid or unenforceable.

The Annora Notice Letter asserts that its generic product will not infringe the ‘430 patent, ’947 patent and the ‘197 patent and/or that the ‘430 patent, ’947 patent and the ‘197 patent are invalid or unenforceable.

On November 21, 2023, the Company, Bioprojet and Bioprojet Pharma filed a complaint for patent infringement of the ’947 patent and the ‘197 patent against AET, Annora, Novitium and Zenara and certain of their affiliates and agents and for patent infringement of the ’430 patent against Annora, Novitium and Zenara and certain of their affiliates and agents in the United States District Court for the District of Delaware in response to their filing of their respective ANDAs with the FDA.

In October 2023, MSN Pharmaceuticals Inc.

(“MSN Pharma”) sent correspondence to the Company and Bioprojet stating that MSN Pharma has submitted ANDA No.

218873 (the “MSN ANDA”) to the FDA and is seeking regulatory approval to market a generic version of WAKIX ® .

On December 8, 2023, MSN Laboratories Private Limited (“MSN”) filed a declaratory judgment action in the United States District Court for the Eastern District of Virginia against Bioprojet claiming that the ‘430 patent, the ’947 patent and the ‘197 patent will not be infringed by MSN’s generic version of WAKIX ® and that the ‘947 patent is invalid.

On December 11, 2023, we, Bioprojet and Bioprojet Pharma filed a complaint in the United States District Court for the District of Delaware for patent infringement of the ‘430 patent, the ’947 patent and the ‘197 patent against MSN and MSN Pharma.

On January 12, 2024, the declaratory judgment action was transferred from the United States District Court for the Eastern District of Virginia to the United States District Court for the District of Delaware.

On April 15, 2024, the United States District Court for the District of Delaware issued a scheduling order consolidating the cases described above for all purposes up to and including trial (the “Scheduling Order”).

The Scheduling Order set March 27, 2025, as the date for the hearing on claim construction and scheduled a four-day bench trial beginning on February 17, 2026.

On August 7, 2024, the Company and Bioprojet received further notice from AET pursuant to 21 U.S.C.

In November 2023, the Company, Bioprojet and Bioprojet Pharma filed a complaint for patent infringement of the ’947 patent and the ‘197 patent against AET and certain of their affiliates and agents in the United States District Court for the District of Delaware in response to their filing of their respective ANDAs with the FDA.

In August 2024, the Company and Bioprojet received further notice from AET pursuant to 21 U.S.C.

§ 355(j) et seq.

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The Second AET Notice Letter asserts that its generic product will not infringe the ’947 patent and the ‘197 patent and/or that the ’947 patent and the ‘197 patent are invalid or unenforceable.

On August 13, 2024, we, Bioprojet and

Bioprojet Pharma filed a complaint in the United States District Court for the District of Delaware for patent infringement of the ’947 patent and the ‘197 patent against AET.

On October 31, 2024, the Company reached an agreement with Novugen Pharma to resolve the dispute over Novugen’s ANDA for a generic pitolisant hydrochloride product.

Under the terms of the settlement agreement, the litigation between the parties in the United States District Court for the District of Delaware was ended on November 4, 2024, and Novugen will have a license to sell its generic product beginning January 2030, or earlier under certain circumstances.

On December 12, 2024, the Company and Bioprojet received further notice from Lupin pursuant to 21 U.S.C.

In August 2024, we, Bioprojet and Bioprojet Pharma filed a complaint in the United States District Court for the District of Delaware for patent infringement of the ’947 patent and the ‘197 patent against AET.

In October 2023, the Company and Bioprojet received notice from Annora Pharma Private Limited (“Annora”), pursuant to 21 U.S.C.

§ 355(j) et seq.

1 unchanged sentence

§ 314.95 et seq.

On January 24, 2025, we, Bioprojet and Bioprojet Pharma filed a complaint in the United States District Court for the District of Delaware for patent infringement of the ’947 patent and the ‘197 patent against Lupin.

The resolution of one or more of these matters against the Company could have a significant negative effect on the Company’s results of operations .

(the “Annora Notice Letter”), that Annora has submitted ANDA No.

In November 2023, the Company, Bioprojet and Bioprojet Pharma filed a complaint for patent infringement of the ’947 patent and the ‘197 patent against Annora and certain of their affiliates and agents and for patent infringement of the ’430 patent against Annora and certain of their affiliates and agents in the United States District Court for the District of Delaware in response to their filing of their respective ANDAs with the FDA.

In March 2025, the Company reached an agreement with Annora to resolve the dispute over Annora’s ANDA for a generic pitolisant hydrochloride product.

Under the terms of the settlement agreement, the litigation between the parties in the United States District Court for the District of Delaware was ended on March 31, 2025, and Annora will have a license to sell its generic product beginning July 2030 if WAKIX receives pediatric exclusivity, or earlier under certain circumstances.

In October 2023, MSN Pharmaceuticals Inc.

(“MSN Pharma”) sent correspondence to the Company and Bioprojet stating that MSN Pharma has submitted ANDA No.

218873 (the “MSN ANDA”) to the FDA and is seeking regulatory approval to market a generic version of WAKIX ® .

In December 2023, MSN Laboratories Private Limited (“MSN”) filed a declaratory judgment action in the United States District Court for the Eastern District of Virginia against Bioprojet claiming that the ‘430 patent, the ’947 patent and the ‘197 patent will not be infringed by MSN’s generic version of WAKIX ® and that the ‘947 patent is invalid.

In December 2023, we, Bioprojet and Bioprojet Pharma filed a complaint in the United States District Court for the District of Delaware for patent infringement of the ‘430 patent, the ’947 patent and the ‘197 patent against MSN and MSN Pharma.

In January 2024, the declaratory judgment action was transferred from the United States District Court for the Eastern District of Virginia to the United States District Court for the District of Delaware.

In January 2026, the Company reached an agreement with MSN to resolve the dispute over MSN’s ANDA to market a generic version of WAKIX.

Under the terms of the settlement agreement, the litigation between the parties in the United States District Court for the District of Delaware will be dismissed.

The remaining terms of the settlement agreement remain confidential.

In April 2024, the United States District Court for the District of Delaware issued a scheduling order consolidating the cases described above for all purposes up to and including trial (the “Scheduling Order”).

The Scheduling Order set March 27, 2025, as the date for the hearing on claim construction and scheduled a bench trial that began on February 17, 2026, and concluded on February 19, 2026.

A post-trial briefing schedule and closing arguments are to be scheduled at a later date.

Settlement amounts associated with ANDA litigation have been recognized in general and administrative expenses on the Company’s consolidated statements of operation and comprehensive income for the year ended December 31, 2025.

Unpaid settlements as of December 31, 2025, have been recognized in accrued expenses on the Company’s consolidated balance sheets as of December 31, 2025.

The resolution of any ANDA litigation matters against the Company could have a significant negative effect on the Company’s results of operations.

STOCKHOLDERS’ EQUITY

8 unchanged sentences

The October 2023 Repurchase Program may be suspended, terminated, or modified at any time for any reason.

During the year ended December 31, 2024, the Company repurchased and retired no shares of common stock.

During the years ended December 31, 2025, and 2024, the Company repurchased no shares of common stock.

During the year ended December 31, 2023, the Company repurchases and retired 1,814,653 shares of common stock at an aggregate cost of $ 50,000 under the October 2023 Repurchase Program, excluding commissions and transaction fees.

3 unchanged sentences

In August 2020, the Company adopted, and its stockholders approved, the 2020 Incentive Award Plan (the “2020 Plan”), in order to facilitate the grant of cash and equity incentives to directors, employees (including the Company’s named executive officers) and consultants of the Company and its subsidiaries.

The 2020 Plan provides for the grant of stock

options, including incentive stock options (“ISOs”) and non-qualified stock options (“NSOs”), stock appreciation rights (“SARs”), restricted stock, dividend equivalents, restricted stock units (“RSUs”) and other stock or cash-based awards.

The 2020 Plan provides for the grant of stock options, including incentive stock options (“ISOs”) and non-qualified stock options (“NSOs”), stock appreciation rights (“SARs”), restricted stock, dividend equivalents, restricted stock units (“RSUs”) and other stock or cash-based awards.

Stock options and stock appreciation rights under the 2020 Plan have a 10-year contractual term and vest over the vesting period specified in the applicable award agreement, at achievement of a performance requirement, or upon change of control (as defined in the applicable plan).

RSUs vest over the vesting period specified in the applicable award agreement, at achievement of a performance requirement, or upon change of control (as defined in the applicable plan).

As of December 31, 2024, there were 6,888,336 shares of common stock available for issuance under the 2020 Plan.

As of December

31, 2025, there were 8,704,203 shares of common stock available for issuance under the 2020 Plan.

The number of shares that may be issued under the 2020 Plan will automatically increase on January 1 of each year in an amount equal to the lesser of (i) 4.0 % of the shares of the Company’s common stock outstanding on December 31 of the preceding year or (ii) an amount determined by the Company’s board of directors.

14 unchanged sentences

Awards unvested—December 31, 2025

The weighted-average grant-date fair value of stock options granted during the year ended December 31, 2024, was $ 20.68 .

The total intrinsic value of stock options exercised for the year ended December 31, 2024, was $ 4,328 .

The weighted-average grant-date fair values of stock options granted during the years ended December 31, 2025, and 2024, were $ 24.08 and $ 20.68 , respectively.

The total intrinsic value of stock options exercised for the years ended December 31, 2025, and 2024, were $ 6,439 and $ 4,328 , respectively.

Stock Appreciation Rights

63 unchanged sentences

The following table summarizes segment revenue and significant segment expenses for the years ended December 31, 2025, 2024 and 2023:

Rare Neurological Diseases Segment

Year Ended December 31,

Net product revenue

Cost of product sold

Research and development (excluding stock compensation and IPR&D)

Sales and marketing (excluding stock compensation)

General and administrative (excluding stock compensation, amortization and depreciation)

Cost of product sold (a)

Research and development (b)

Sales and marketing (c)

General and administrative (d)

Depreciation and amortization

2 unchanged sentences

Interest income

Income tax expense (benefit)

Other segment items (a)

Income tax expense

Other segment items (e)

Consolidated net income

(a) Other segment items include other expense (income), net, IPR&D charges and charges related to the extinguishment of debt.

(a) Cost of product sold excluding depreciation.

(b) Research and development excluding stock-based compensation, IPR&D and impairment of long-lived assets.

(d) General and administrative excluding stock-based compensation and amortization.

(e) Other segment items include other expense (income), net, IPR&D charges and charges related to the extinguishment of debt.

EARNINGS PER SHARE

15 unchanged sentences

Year Ended December 31,

Valuation allowance

The reasons for the difference between the statutory federal income tax rate and the Company’s effective income tax rate as of December 31, 2024, 2023 and 2022 are as follows:

A reconciliation of the differences between the U.S.

statutory federal income tax rate of 21.0 % and the Company’s effective income tax rate as of December 31, 2025, after the adoption of ASU 2023-09, is as follows:

Year Ended December 31,

Federal statutory rate

State income taxes, net of federal tax effect*

Orphan drug credit

Research and development credit

Nontaxable or nondeductible Items

In-process research and development

Other adjustments

Effective tax rate

* State taxes include the impact of the remeasurement of state deferred tax assets.

There was no individual state that made up the majority (greater than 50%) of the tax effect in this category.

A reconciliation of the differences between the U.S.

statutory federal income tax rate of 21.0 % and the Company’s effective income tax rate as of December 31, 2024, and 2023, prior to the adoption of ASU 2023-09, is as follows:

Year Ended December 31,

Federal income tax rate

2 unchanged sentences

Valuation allowance

The Company made cash payments for income taxes, net of refunds, during the year ended December 31, 2025, as follows:

Year Ended December 31,

Total Income tax paid, net of refunds

Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2025, and 2024, are as follows:

8 unchanged sentences

Valuation allowance

As of December 31, 2024, and December 31, 2023, our deferred tax assets were primarily the result of acquired in-process research and development costs, operating loss carryforwards, capitalized research and development costs, inventory, and accrued rebates.

During the years ended December 31, 2024 and 2023, the Company recorded a valuation allowance on federal net operating losses of the Company’s subsidiary, Zynerba Pharmaceuticals Pty Ltd., and the state net operating losses of Zynerba.

The Company previously recorded a valuation allowance against Harmony’s historical deferred tax assets.

The Company recorded $ 96,336 as a benefit to the income tax provision upon release of this valuation allowance during year ended December 31, 2022, in part because in the year ended December 31, 2022, we achieved three years of cumulative pretax income, which was a positive indication of the Company’s ability to generate sufficient future taxable income, the Company determined that there was sufficient positive evidence to conclude that it was more likely than not that additional deferred taxes are realizable and, therefore, released the valuation allowance accordingly.

Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2024, 2023 and 2022 were as follows:

Year Ended December 31,

Valuation allowance at the beginning of the year

Decreases recorded as a benefit to income tax provision

Increases recorded to income tax provision

Increases recorded in opening balance sheet

Valuation allowance at the end of the year

As of December 31, 2025, and December 31, 2024, our deferred tax assets primarily related to acquired in-process research and development costs, operating loss carryforwards, capitalized research and development costs, inventory, and accrued rebates.

On July 4, 2025, the "One Big Beautiful Bill Act" (the "OBBBA") was enacted.

The OBBBA contains several changes to corporate taxation, including the allowance of immediate expensing of domestic research and development expenses.

As a result, the Company recorded a $ 48,000 reduction to deferred tax assets related to domestic research and development expenses which is reflected in its consolidated balance sheet as of December 31, 2025.

As of December 31, 2024, the Company had a valuation allowance on net operating loss carryforwards of the Company’s subsidiary, Zynerba Pharmaceuticals Pty Ltd., and net operating loss carryforwards and other deferred tax assets of the Company’s subsidiary, Harmony Biosciences Management, Inc.

During the year ended December 31, 2025, it was determined that the net operating loss carryforward and other deferred tax assets related to the Company’s subsidiaries were not utilizable, accordingly the Company removed the related deferred tax asset and the corresponding valuation allowance, which reduced the valuation allowance by $ 2,891 .

As of December 31, 2025, and 2024, the Company has approximately $ 203,788 and $ 220,243 , respectively, of federal net operating loss ("NOL") carryforward available to offset future federal taxable income.

The Company also has approximately $ 110,579 and $ 111,079 of state NOL carryforwards as of December 31, 2025, and 2024, respectively, available to offset future state taxable income.

All of the Company’s tax years remain open to examination by federal and state taxing authorities.

The Company’s state NOLs begin to expire in 2037.

Utilization of the net operating loss carryforwards may be subject to a substantial limitation due to state provisions.

As of December 31, 2025, and 2024, the Company had federal tax credits of $ 3,499 and $ 3,902 , respectively.

Utilization of the net operating loss carryforwards and federal tax credits may be subject to a substantial limitation under Section 382 of the Internal Revenue Code due to ownership changes that could occur in the future.

These changes may limit the amount of net operating loss and tax credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively.

In general, an “ownership change” as defined by Section 382 of the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders or public groups.

As of December 31, 2024, and 2023, the Company has federal tax credits of $ 3,902 and $ 0 , respectively.

The majority of the Company’s carryforwards and federal tax credits were acquired in conjunction with the Zynerba and Epygenix acquisitions and are subject to annual limitations under Section 382 of the Internal Revenue Code.

The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates.

In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable.

There are currently no pending income tax examinations.

The Company’s tax years are still open under statute from 2022 to present.

All open years may be examined to the extent that tax credits or NOLs are used in future periods.

The Company’s policy is to record interest and penalties related to income taxes as part of its income tax provision.

The Company has not recorded any amounts for unrecognized tax benefits as of December 31, 2025, and 2024.

RETIREMENT PLAN

6 unchanged sentences

The Company is party to a right of use agreement with the related party whereby it has access to and the right to use certain office space leased by the related party in Chicago, Illinois.

For the years ended December 31, 2024, 2023 and 2022, the Company incurred $ 290 , $ 290 and $ 284 , respectively, in expenses pursuant to the right of use agreement with this related party, which are included in general and administrative expense in the consolidated statements of operations and comprehensive income (loss).

Additionally, the Company received consulting services from Paragon during the twelve months ended December 31, 2025.

For the years ended December 31, 2025, 2024 and 2023, the Company incurred $ 474 , $ 290 and $ 290 , respectively, of expenses pursuant to the right of use agreement with this related party, which are included in general and administrative expense in the consolidated statements of operations and comprehensive income (loss).

As of December 31, 2 0 25, and 2024, there were no amounts due to or due from related parties included within the consolidated balance sheet.

In June 2025, the Company entered into the CiRC Agreement with CiRC, an entity controlled by Paragon.

The Company paid a $ 15,000 upfront payment to CiRC pursuant to the CiRC Agreement which was recorded as an IPR&D charge in research and development in the consolidated statements of operations and comprehensive income.

As of December 31, 2 0 25, there were no amounts due to or due from CiRC under the CiRC agreement.

Refer to Note 9, License Agreements , for further discussion regarding the CiRC Agreement.

VALUATION AND QUALIFYING ACCOUNTS – ACCOUNTS RECEIVABLE, NET

5 unchanged sentences

Allowance for distribution fees, discounts and chargebacks at the end of the year

SUBSEQUENT EVENTS

On January 11, 2026, the Company entered into a license agreement with a third party, which includes an exclusive license to additional intellectual property that will expand the patent estate of the Company, as well as a co-exclusive license, with which the Company intends to develop a new formulation of pitolisant in broad CNS indications outside of sleep/wake.

Under the license agreement, the Company paid an upfront license fee of $ 15,000 and will also be obligated to pay up to $ 10,000 upon achievement of certain development milestones, as well as low single-digit royalties on net sales of pitolisant based products.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data