HARROW, INC. 10-Q

Item 1. Financial Statements HARROW, INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS June 30, 2026 December 31, 2025 ASSETS Current assets Cash and cash equivalents $ 83,889,000 $ 72,927,000 Accounts receivable, net 118,559,000 110,895,000 Inventories 16,910,000 13,523,000 Prepaid expenses and other current assets 9,949,000 14,405,000 Total current assets 229,307,000 211,750,000 Property, plant and equipment, net 2,960,000 3,260,000 Capitalized software costs, net 1,253,000 1,183,000 Operating lease right-of-use assets, net 7,394,000 7,783,000 Intangible assets, net 175,570,000 175,174,000 Goodwill 332,000 332,000 TOTAL ASSETS $ 416,816,000 $ 399,482,000 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable and accrued expenses $ 34,062,000 $ 41,959,000 Accrued rebates and copay assistance 55,481,000 42,236,000 Accrued payroll and related liabilities 11,578,000 10,432,000 Deferred revenue and customer deposits 106,000 788,000 Current portion of operating lease obligations 944,000 887,000 Total current liabilities 102,171,000 96,302,000 Operating lease obligations, net of current portion 7,421,000 7,905,000 Notes payable, net 292,379,000 243,184,000 TOTAL LIABILITIES 401,971,000 347,391,000 Commitments and contingencies STOCKHOLDERS’ EQUITY Common stock, $ 0.001 par value, 50,000,000 shares authorized, 37,484,233 and 37,229,159 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively 37,000 37,000 Additional paid-in capital 216,559,000 208,933,000 Accumulated deficit ( 201,396,000 ) ( 156,524,000 ) TOTAL HARROW, INC. STOCKHOLDERS’ EQUITY 15,200,000 52,446,000 Noncontrolling interests ( 355,000 ) ( 355,000 ) TOTAL STOCKHOLDERS’ EQUITY 14,845,000 52,091,000 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 416,816,000 $ 399,482,000 The accompanying notes are an integral part of these condensed consolidated financial statements. 2 Table of Contents HARROW, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS For the Three Months Ended June 30, For the Six Months Ended June 30, 2026 2025 2026 2025 Revenues: Product sales, net $ 70,571,000 $ 63,657,000 $ 114,701,000 $ 111,402,000 Other revenues 90,000 85,000 163,000 171,000 Total revenues 70,661,000 63,742,000 114,864,000 111,573,000 Cost of sales ( 20,298,000 ) ( 16,230,000 ) ( 37,456,000 ) ( 31,754,000 ) Gross profit 50,363,000 47,512,000 77,408,000 79,819,000 Operating expenses: Selling, general and administrative 53,298,000 33,235,000 96,528,000 73,748,000 Research and development 8,072,000 2,868,000 13,967,000 5,894,000 Total operating expenses 61,370,000 36,103,000 110,495,000 79,642,000 (Loss) income from operations ( 11,007,000 ) 11,409,000 ( 33,087,000 ) 177,000 Interest expense, net ( 6,263,000 ) ( 6,408,000 ) ( 11,760,000 ) ( 12,956,000 ) Other (expense) income, net — ( 6,000 ) — ( 6,000 ) (Loss) income before income taxes ( 17,270,000 ) 4,995,000 ( 44,847,000 ) ( 12,785,000 ) Income tax expense — — ( 25,000 ) — Net (loss) income $ ( 17,270,000 ) $ 4,995,000 $ ( 44,872,000 ) $ ( 12,785,000 ) Basic net (loss) income per share of common stock $ ( 0.46 ) $ 0.14 $ ( 1.20 ) $ ( 0.35 ) Diluted net (loss) income per share of common stock $ ( 0.46 ) $ 0.13 $ ( 1.20 ) $ ( 0.35 ) Weighted average number of shares of common stock outstanding, basic 37,350,401 36,790,306 37,291,190 36,304,787 Weighted average number of shares of common stock outstanding, diluted 37,350,401 38,853,855 37,291,190 36,304,787 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 Table of Contents HARROW, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY For the Three and Six Months Ended June 30, 2026 and 2025 Common Stock Additional Paid-in Capital Accumulated Deficit Total Harrow, Inc. Stockholders’ Equity Total Noncontrolling Interest Equity Total Stockholders’ Equity Shares Par Value Balance at January 1, 2025 35,622,214 $ 35,000 $ 221,002,000 $ ( 151,385,000 ) $ 69,652,000 $ ( 355,000 ) $ 69,297,000 Issuance of common stock in connection with: Exercise of employee stock-based options 10,618 — 125,000 — 125,000 — 125,000 Vesting of RSUs 1,634,009 2,000 ( 2,000 ) — — — — Shares withheld related to net share settlement of equity awards ( 552,162 ) ( 1,000 ) ( 12,768,000 ) — ( 12,769,000 ) — ( 12,769,000 ) Stock-based compensation expense — — 5,431,000 — 5,431,000 — 5,431,000 Net loss — — — ( 12,785,000 ) ( 12,785,000 ) — ( 12,785,000 ) Balance at June 30, 2025 36,714,679 $ 36,000 $ 213,788,000 $ ( 164,170,000 ) $ 49,654,000 $ ( 355,000 ) $ 49,299,000 Common Stock Additional Paid-in Capital Accumulated Deficit Total Harrow, Inc. Stockholders’ Equity Total Noncontrolling Interest Equity Total Stockholders’ Equity Shares Par Value Balance at January 1, 2026 37,229,159 $ 37,000 $ 208,933,000 $ ( 156,524,000 ) $ 52,446,000 $ ( 355,000 ) $ 52,091,000 Issuance of common stock in connection with: Exercise of employee stock-based options 265,094 — 1,102,000 — 1,102,000 — 1,102,000 Vesting of RSUs 20,500 — — — — — — Shares withheld related to net share settlement of equity awards ( 30,520 ) — ( 1,101,000 ) — ( 1,101,000 ) — ( 1,101,000 ) Stock-based compensation expense — — 7,625,000 — 7,625,000 — 7,625,000 Net loss — — — ( 44,872,000 ) ( 44,872,000 ) — ( 44,872,000 ) Balance at June 30, 2026 37,484,233 $ 37,000 $ 216,559,000 $ ( 201,396,000 ) $ 15,200,000 $ ( 355,000 ) $ 14,845,000 Common Stock Additional Paid-in Capital Accumulated Deficit Total Harrow, Inc. Stockholders’ Equity Total Noncontrolling Interest Equity Total Stockholders’ Equity Shares Par Value Balance at April 1, 2025 35,654,171 $ 35,000 $ 225,581,000 $ ( 169,165,000 ) $ 56,451,000 $ ( 355,000 ) $ 56,096,000 Issuance of common stock in connection with: Exercise of employee stock-based options 7,875 — 102,000 — 102,000 — 102,000 Vesting of RSUs 1,604,795 2,000 ( 2,000 ) — — — — Shares withheld related to net share settlement of equity awards ( 552,162 ) ( 1,000 ) ( 12,768,000 ) — ( 12,769,000 ) — ( 12,769,000 ) Stock-based compensation expense — — 875,000 — 875,000 — 875,000 Net income — — — 4,995,000 4,995,000 — 4,995,000 Balance at June 30, 2025 36,714,679 $ 36,000 $ 213,788,000 $ ( 164,170,000 ) $ 49,654,000 $ ( 355,000 ) $ 49,299,000 Common Stock Additional Paid-in Capital Accumulated Deficit Total Harrow, Inc. Stockholders’ Equity Total Noncontrolling Interest Equity Total Stockholders’ Equity Shares Par Value Balance at April 1, 2026 37,269,400 $ 37,000 $ 212,795,000 $ ( 184,126,000 ) $ 28,706,000 $ ( 355,000 ) $ 28,351,000 Issuance of common stock in connection with: Exercise of employee stock-based options 224,853 — 1,077,000 — 1,077,000 — 1,077,000 Vesting of RSUs 20,500 — — — — — — Shares withheld related to net share settlement of equity awards ( 30,520 ) — ( 1,101,000 ) — ( 1,101,000 ) — ( 1,101,000 ) Stock-based compensation expense — — 3,788,000 — 3,788,000 — 3,788,000 Net loss — — — ( 17,270,000 ) ( 17,270,000 ) — ( 17,270,000 ) Balance at June 30, 2026 37,484,233 $ 37,000 $ 216,559,000 $ ( 201,396,000 ) $ 15,200,000 $ ( 355,000 ) $ 14,845,000 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 Table of Contents HARROW, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS For the Six Months Ended June 30, 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ ( 44,872,000 ) $ ( 12,785,000 ) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation and amortization of property, plant and equipment and software development costs 915,000 961,000 Amortization of intangible assets 10,656,000 8,452,000 Noncash lease expense 389,000 399,000 (Recovery of) Provision for credit losses ( 295,000 ) 340,000 Amortization of debt issuance costs, discount and premium, net 851,000 2,564,000 Stock-based compensation 7,625,000 5,431,000 Changes in assets and liabilities: Accounts receivable ( 7,369,000 ) 37,211,000 Inventories ( 3,387,000 ) ( 850,000 ) Prepaid expenses and other current assets 4,355,000 3,776,000 Accounts payable, accrued expenses, accrued rebates and copay assistance 11,921,000 ( 24,009,000 ) Accrued payroll and related liabilities 1,146,000 ( 2,672,000 ) Deferred revenue and customer deposits ( 682,000 ) 47,000 NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES ( 18,747,000 ) 18,865,000 CASH FLOWS FROM INVESTING ACTIVITIES Investment in patent and trademark assets ( 52,000 ) ( 169,000 ) Purchase of product rights ( 18,000,000 ) — Purchases of property, plant and equipment ( 685,000 ) ( 336,000 ) NET CASH USED IN INVESTING ACTIVITIES ( 18,737,000 ) ( 505,000 ) CASH FLOWS FROM FINANCING ACTIVITIES Net proceeds from 8.625% notes payable, net of commissions 49,000,000 — Payment of debt issuance costs ( 555,000 ) — Proceeds from exercise of stock options 836,000 125,000 Payment of payroll taxes upon exercise and issuance of equity awards ( 835,000 ) ( 12,769,000 ) NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 48,446,000 ( 12,644,000 ) NET CHANGE IN CASH AND CASH EQUIVALENTS 10,962,000 5,716,000 CASH AND CASH EQUIVALENTS, beginning of period 72,927,000 47,247,000 CASH AND CASH EQUIVALENTS, end of period $ 83,889,000 $ 52,963,000 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for income taxes $ 2,275,000 $ 38,000 Cash paid for interest $ 10,960,000 $ 12,180,000 SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Unpaid acquisitions of property, plant and equipment $ — $ 130,000 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 5 Table of Contents HARROW, INC. NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the Three and Six Months Ended June 30, 2026 and 2025 NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Company and Background Harrow, Inc. (together with its consolidated subsidiaries, unless the context indicates or otherwise requires, the “Company” or “Harrow”) is a leading eyecare pharmaceutical company engaged in the discovery, development, and commercialization of innovative ophthalmic pharmaceutical products for the U.S. market. Harrow helps U.S. eyecare professionals preserve the gift of sight by making its comprehensive portfolio of prescription and non-prescription pharmaceutical products accessible and affordable to millions of Americans each year. The Company owns commercial rights to one of the largest portfolios of branded ophthalmic pharmaceutical products in North America, all of which are marketed under its Harrow name. The Company also owns and operates ImprimisRx, one of the nation’s leading ophthalmology-focused pharmaceutical-compounding businesses. Basis of Presentation The Company has prepared the accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the U.S. Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026 or for any other period. For further information, refer to the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned and majority-owned subsidiaries. Harrow consolidates entities in which it has a controlling financial interest. The Company assesses control under the variable interest entity (“VIE”) model to determine whether the Company is the primary beneficiary of that entity. The Company consolidates (i) entities in which it holds and/or controls, directly or indirectly, more than 50% of the voting rights, and (ii) VIEs for which the Company is deemed to be the primary beneficiary. All material intercompany accounts and transactions have been eliminated in consolidation. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following represents an update for the three and six months ended June 30, 2026 to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management are, among others, allowance for credit losses, variable consideration determined based on accruals for chargebacks, administrative fees and rebates, government rebates, returns and other allowances, renewal periods and discount rates for leases, realizability of inventories, recoverability of investments, realizability of deferred tax assets, recoverability of long-lived assets and goodwill, valuations and purchase price allocations related to business combinations and asset acquisitions, fair value of loans payable, and valuation of stock-based transactions with employees and non-employees. Actual results could differ from those estimates. 6 Table of Contents Risks, Uncertainties and Liquidity The Company is subject to certain regulatory standards, approvals, guidelines and inspections which could impact the Company’s ability to make, dispense, and sell certain products. If the Company was required to cease compounding and selling certain products because of regulatory guidelines or inspections, this may have a material impact on the Company’s financial condition, liquidity and results of operations. Credit Losses The Company estimates and records a provision for its expected credit losses related to its financial instruments, including its trade receivables. Management considers historical collection rates, the current financial status of the Company’s customers, macroeconomic factors, and other industry-specific factors when evaluating for current expected credit losses. Forward-looking information is also considered in the evaluation of current expected credit losses. However, because of the short time to the expected receipt of accounts receivable, management believes that the carrying value, net of expected losses, approximates fair value and therefore, relies more on historical and current analysis of such financial instruments, including its trade receivables. To determine the provision for credit losses for accounts receivable, the Company has disaggregated its accounts receivable by class of customer at the business component level, as management determined that the risk profile of the Company’s customers is consistent based on the type and industry in which they operate, mainly in the pharmaceuticals industry. Each business component is analyzed for estimated credit losses individually. In doing so, the Company establishes a historical loss matrix, based on the previous collections of accounts receivable by the age of such receivables, and evaluates the current and forecasted financial position of its customers, as available. Further, the Company considers macroeconomic factors and the status of the pharmaceuticals industry to estimate if there are current expected credit losses within its trade receivables based on the trends of the Company’s expectation of the future status of such economic and industry-specific factors. Also, specific allowance amounts are established based on review of outstanding invoices to record the appropriate provision for customers that have a higher probability of default. The following table provides a roll-forward of the allowance for credit losses that is deducted from accounts receivable to present the net amount expected to be collected at June 30, 2026: Balance, January 1, 2026 $ 884,000 Recovery of expected credit losses ( 295,000 ) Write-offs, net of recoveries ( 76,000 ) Balance, June 30, 2026 $ 513,000 Fair Value Measurements Fair value measurements are determined based on the assumptions that market participants would use in pricing an asset or liability. GAAP establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The established fair value hierarchy prioritizes the use of inputs used in valuation methodologies into the following three levels: • Level 1: Applies to assets or liabilities for which there are quoted prices (unadjusted) for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and must be used to measure fair value whenever available. • Level 2: Applies to assets or liabilities for which there are significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3: Applies to assets or liabilities for which there are significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. For example, Level 3 inputs would relate to forecasts of future earnings and cash flows used in a discounted future cash flows method. 7 Table of Contents The Company’s 2030 Notes (as defined in Note 8) are carried at face value, including the unamortized premium, less unamortized debt issuance costs on the condensed consolidated balance sheets and the Company presents fair value for disclosure purposes only. The 2030 Notes are classified as Level 1 instruments as the fair value is determined using quoted market prices in active markets for the same securities. The following table presents the estimated fair values and the carrying values: June 30, 2026 December 31, 2025 Carrying Value Fair Value Carrying Value Fair Value 2030 Notes $ 292,379,000 $ 306,000,000 $ 243,184,000 $ 262,500,000 The Company’s other financial instruments include cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, accrued payroll and related liabilities, deferred revenue and customer deposits and operating lease liabilities. The carrying amount of these financial instruments, except for operating lease liabilities, approximates fair value due to the short-term maturity of these instruments. Based on borrowing rates currently available to the Company, the carrying value of the operating lease liabilities approximates their respective fair values. Basic and Diluted Net Loss per Common Share Basic net loss per common share is computed by dividing net loss attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders for the period by the weighted average number of common and common equivalent shares, such as stock options, restricted stock units (“RSUs”), performance stock units (“PSUs”), and warrants, outstanding during the period. Common equivalent shares (using the treasury stock or “if converted” method) from stock options, unvested RSUs, and unvested PSUs were 329,553 and 288,659 for the three and six months ended June 30, 2026, respectively, and 2,816,409 for the six months ended June 30, 2025, and are excluded in the calculation of diluted net loss per common share for the periods presented, because the effect is anti-dilutive. Included in the basic and diluted net loss per share calculation were RSUs awarded to directors that had vested, but for which the issuance and delivery of the shares are deferred until the director ceases providing services to the Company. The number of shares underlying vested RSUs at June 30, 2026 and 2025 was 243,802 and 212,452 , respectively. The following table reconciles the number of weighted-average shares outstanding used to calculate diluted earnings per share: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Weighted-average number of shares outstanding, basic 37,350,401 36,790,306 37,291,190 36,304,787 Dilutive common equivalents — 2,063,549 — — Weighted average number of shares outstanding, diluted 37,350,401 38,853,855 37,291,190 36,304,787 Accounting Guidance Issued but Not Adopted at June 30, 2026 In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-06 , Disclosure Improvements—Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative . This ASU modifies the disclosure or presentation requirements of a variety of topics in the codification by aligning them with the SEC’s regulations. The amendments to the various topics should be applied prospectively, and the effective date for the Company for each amendment will be determined based on the effective date of the SEC’s removal of the related disclosure from Regulation S-X or Regulation S-K. If the SEC has not removed the applicable requirement by June 30, 2027, then the related amendment in ASU 2023-06 will be removed from the codification and will not become effective. Early adoption of this ASU is prohibited. The Company does not expect the amendments in this ASU to have a material impact on the disclosures or presentation in its consolidated financial statements. In November 2024, the FASB issued ASU 2024-03 , Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures , to improve the disclosures by a public business entity about the types of expenses in 8 Table of Contents commonly presented expense captions. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. Except for expanded footnote disclosure, the Company does not expect the adoption of ASU 2024-03 will have a material effect on its consolidated financial statements. NOTE 3. REVENUES The following table summarizes activity and ending balances of the Company’s variable consideration provisions in the consolidated financial statements for the six months ended June 30, 2026 and 2025: Accruals for Chargebacks, Returns, and Other Allowances Chargebacks Rebates Returns Administrative Fees and Other Rebates Co-Pay Assistance Prompt Pay Discounts Total Balance at December 31, 2024(1) $ 960,000 $ 12,360,000 $ 1,449,000 $ 32,873,000 $ 9,612,000 $ 2,377,000 $ 59,631,000 Accruals/adjustments 11,163,000 11,128,000 4,615,000 40,093,000 30,771,000 2,346,000 100,116,000 Credits taken against reserve ( 7,706,000 ) ( 7,696,000 ) ( 4,828,000 ) ( 53,480,000 ) ( 37,193,000 ) ( 3,185,000 ) ( 114,088,000 ) Balance at June 30, 2025(1) $ 4,417,000 $ 15,792,000 $ 1,236,000 $ 19,486,000 $ 3,190,000 $ 1,538,000 $ 45,659,000 Balance at December 31, 2025(1) $ 11,027,000 $ 28,217,000 $ 8,018,000 $ 16,540,000 $ 2,085,000 $ 2,494,000 $ 68,381,000 Accruals/adjustments 9,032,000 20,934,000 2,177,000 70,944,000 10,870,000 1,698,000 115,655,000 Credits taken against reserve ( 12,036,000 ) ( 15,468,000 ) ( 5,834,000 ) ( 63,632,000 ) ( 12,743,000 ) ( 3,258,000 ) ( 112,971,000 ) Balance at June 30, 2026(1) $ 8,023,000 $ 33,683,000 $ 4,361,000 $ 23,852,000 $ 212,000 $ 934,000 $ 71,065,000 ________________ (1) Chargebacks and other allowances are included as an offset to accounts receivable in the condensed consolidated balance sheets. Administrative Fees and Other Rebates, Prompt Pay Discounts and Returns are included as a reduction to accounts receivable, net of chargebacks and other allowances, or accrued expenses and other in the condensed consolidated balance sheets. Government rebates are included in accrued rebates and copay assistance in the condensed consolidated balance sheets. Deferred revenue and customer deposits at June 30, 2026 and December 31, 2025 were $ 106,000 and $ 788,000 , respectively. All deferred revenue and customer deposit amounts at December 31, 2025 were recognized as revenue during the six months ended June 30, 2026. NOTE 4. INVENTORIES Inventories are comprised of finished compounded formulations, over-the-counter and prescription retail pharmacy products, branded pharmaceutical products, including those held at the Company’s 3PL partner, related laboratory supplies and active pharmaceutical ingredients. The composition of inventories as of June 30, 2026 and December 31, 2025 was as follows: June 30, 2026 December 31, 2025 Raw materials $ 6,297,000 $ 6,958,000 Work in progress 1,219,000 1,036,000 Finished goods 9,394,000 5,529,000 Total inventories $ 16,910,000 $ 13,523,000 9 Table of Contents NOTE 5. PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets at June 30, 2026 and December 31, 2025 consisted of the following: June 30, 2026 December 31, 2025 Prepaid insurance $ 403,000 $ 2,185,000 Prepaid computer software licenses and related expenses 1,200,000 598,000 Prefunded co-pay assistance 1,737,000 3,342,000 Other prepaid expenses 3,739,000 1,825,000 Prescription Drug User Fee Act (“PDUFA”) program fees 1,442,000 4,327,000 Deposits and other current assets 1,428,000 2,128,000 Total prepaid expenses and other current assets $ 9,949,000 $ 14,405,000 NOTE 6. INTANGIBLE ASSETS AND GOODWILL The Company’s intangible assets at June 30, 2026 consisted of the following: Weighted-average useful life (in years) Cost Accumulated Amortization Net Carrying Value Definite-lived Intangibles Patents 19 $ 269,000 $ ( 83,000 ) $ 186,000 Licenses 20 50,000 ( 40,000 ) 10,000 Acquired product rights 14 225,481,000 ( 50,552,000 ) 174,929,000 Customer relationships 7 190,000 ( 155,000 ) 35,000 Trade name 5 70,000 ( 4,000 ) 66,000 State pharmacy licenses 25 8,000 ( 4,000 ) 4,000 Indefinite-lived Intangibles Trademarks Indefinite 340,000 — 340,000 $ 226,408,000 $ ( 50,838,000 ) $ 175,570,000 Amortization expense for intangible assets for the three and six months ended June 30, 2026 and 2025 was as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2026 2025 2026 2025 Patents $ 12,000 $ 3,000 $ 17,000 $ 6,000 Acquired product rights 5,512,000 4,220,000 10,633,000 8,440,000 Customer relationships 3,000 3,000 6,000 6,000 $ 5,527,000 $ 4,226,000 $ 10,656,000 $ 8,452,000 10 Table of Contents Estimated future amortization expense for the Company’s intangible assets at June 30, 2026 was as follows: Remainder of 2026 $ 11,238,000 2027 20,241,000 2028 17,112,000 2029 17,013,000 2030 16,582,000 Thereafter 93,044,000 $ 175,230,000 In January 2026, the Company amended the Asset Purchase Agreement with Eyevance Pharmaceuticals, LLC and the License Agreement with Santen S.A.S. (collectively, the “Santen Agreements”), each a subsidiary of Santen Pharmaceuticals Co., Ltd. (collectively, “Santen”). Pursuant to the amendment, the parties agreed to a full and final settlement of all contingent milestone obligations related to specified manufacturing-related events for the Santen products in exchange for a one-time lump sum payment by the Company of $ 7,000,000 . Following this payment, no further milestone payments will be due under the Santen Agreements. The Company capitalized this payment as an intangible asset within acquired product rights. In February 2026, the Company made a one-time upfront payment of $ 4,000,000 to Samsung Bioepis Co., Ltd. (“Samsung”) upon the license effective date related to the development and commercialization agreement with Samsung entered into in July 2025. The milestone was capitalized as an intangible asset within acquired product rights. In March 2026, the Company paid a commercial milestone payment of $ 7,000,000 related to the sales of VEVYE during 2025. The milestone payment was included in accounts payable and accrued expenses on the December 31, 2025 condensed consolidated balance sheet and was capitalized in acquired product rights. There were no changes to the carrying value of the Company’s goodwill during the three and six months ended June 30, 2026 and 2025. NOTE 7. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses at June 30, 2026 and December 31, 2025 consisted of the following: June 30, 2026 December 31, 2025 Accounts payable $ 26,265,000 $ 35,355,000 Accrued interest 7,691,000 6,498,000 Other accrued expenses 106,000 106,000 Total accounts payable and accrued expenses $ 34,062,000 $ 41,959,000 NOTE 8. DEBT 8.625 % Senior Notes Due 2030 In March 2026, the Company entered into the First Supplemental Indenture to the Indenture dated September 12, 2025 pursuant to which the Company issued $ 50,000,000 aggregate principal amount of additional 8.625 % Senior Notes due 2030 (the “New Notes”). The New Notes were issued at 100.25 % of par value and resulted in net proceeds to the Company of $ 48,445,000 after deducting underwriting discounts, commissions and other offering expenses of $ 1,555,000 . The New Notes, together with the 8.625 % Senior Notes due 2030 issued in September 2025 (the “Existing Notes”) (together, the “2030 Notes”) are treated as a single series and have the same terms as the Existing Notes. The issuance costs and premium relating to the New Notes were deferred and will be recognized as interest expense using the effective-interest method ( 9.36 %) over the remaining term of the debt. Interest expense totaled $ 6,874,000 and $ 12,866,000 for the three and six months ended June 30, 2026, respectively, and included the amortization of debt issuance costs and premium of $ 400,000 and $ 851,000 , respectively. 11 Table of Contents A summary of the Company’s debt at June 30, 2026 and December 31, 2025 is as follows: June 30, 2026 December 31, 2025 8.625 % Senior Notes due September 2030 $ 300,000,000 $ 250,000,000 Less: Unamortized debt issuance costs, discount and premium, net ( 7,621,000 ) ( 6,816,000 ) $ 292,379,000 $ 243,184,000 At June 30, 2026, future minimum principal payments under the Company’s debt were as follows: Remainder of 2026 $ — 2027 — 2028 — 2029 — 2030 300,000,000 Total minimum principal payments 300,000,000 Less: unamortized debt issuance costs, discount and premium, net ( 7,621,000 ) Notes payable, net $ 292,379,000 NOTE 9. COMMITMENTS AND CONTINGENCIES Legal General and Other In the ordinary course of business, the Company is involved in various legal proceedings, government investigations and other matters that are complex in nature and have outcomes that are difficult to predict. See also Part II, Item 1A. Risk Factors . The Company describes legal proceedings and other matters that are, or were, significant or that it believes could become significant in this footnote. The Company records accruals for loss contingencies to the extent that it concludes it is probable that a liability has been incurred and the amount of the related loss can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in legal proceedings and other matters that could cause an increase or decrease in the amount of a liability that has been accrued previously. The Company’s legal proceedings involve various aspects of its business and a variety of claims, some of which present novel factual allegations and/or unique legal theories. Typically, a number of matters pending against the Company are at early stages of the legal process, which in complex proceedings of the sort the Company faces often extend for several years. While it is not possible to accurately predict or determine the eventual outcomes of matters that have not concluded, an adverse determination in one or more of these matters (whether discussed in this footnote or not) currently pending may have a material adverse effect on the Company’s consolidated results of operations, financial position or cash flows. Legal costs incurred for loss contingencies are expensed as incurred. Ocular Science, Inc. et. al. In July 2021, ImprimisRx, LLC, a subsidiary of the Company, filed a lawsuit against Ocular Science, Inc. and OSRX, Inc. (together, “OSRX”) in the U.S. District Court for the Southern District of California, asserting claims for copyright infringement, trademark infringement, unfair competition and false advertising (Lanham Act). Since July 2021, the complaint has been amended and OSRX added counterclaims alleging ImprimisRx, LLC was violating the Lanham Act with false advertising. The Court granted cross motions for summary judgment on each party’s Lanham Act claims, thus leaving only ImprimisRx, LLC’s copyright infringement, trademark infringement, and unfair competition claims for trial. Following a jury trial in November 2024, a jury found OSRX acted with malice, fraud, or oppression, willfully engaging in trademark infringement and unfair competition under California and federal law, and ImprimisRx, LLC received a $ 34,900,000 jury verdict award, which included $ 20,400,000 in punitive damages and $ 14,500,000 in actual damages. An amended final judgment was entered on October 1, 2025, which reduced the OSRX liability to $ 11,249,000 , plus post- 12 Table of Contents judgment interest, and required OSRX to cease use of certain trademarks. In October 2025, OSRX filed an appeal. No collection activity is allowed during the appeal. The Company intends to vigorously pursue enforcement of its judgment during the appeal process. However, due to uncertainty regarding the probability of collection, the Company has not recognized any amounts associated with the judgment during the three and six months ended June 30, 2026. Product and Professional Liability Product and professional liability litigation represents an inherent risk to all firms in the pharmaceutical and pharmacy industry. The Company utilizes traditional third-party insurance policies with regard to its product and professional liability claims. Such insurance coverage at any given time reflects current market conditions, including cost and availability, when the policy is written. Indemnities In addition to the indemnification provisions contained in the Company’s charter documents, the Company generally enters into separate indemnification agreements with each of the Company’s directors and officers. These agreements require the Company, among other things, to indemnify the director or officer against specified expenses and liabilities, such as attorneys’ fees, judgments, fines and settlements, paid by the individual in connection with any action, suit or proceeding arising out of the individual’s status or service as the Company’s director or officer, other than liabilities arising from willful misconduct or conduct that is knowingly fraudulent or deliberately dishonest, and to advance expenses incurred by the individual in connection with any proceeding against the individual with respect to which the individual may be entitled to indemnification by the Company. Several of the Company’s asset purchase and license agreements contain customary representations, warranties, covenants and confidentiality provisions, and also contain mutual indemnification obligations related primarily to performance under the respective agreements. The Company also indemnifies its lessors in connection with its facility leases for certain claims arising from the use of the facilities. These indemnities do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not incurred any payments for these obligations and, therefore, no liabilities have been recorded for these indemnities in the accompanying condensed consolidated balance sheets. Asset Purchase, License and Related Agreements FDA Approved Product Acquisitions In recent years, the Company has acquired commercial and product rights to various FDA-approved ophthalmic medications and products through asset purchase, licenses, supply and/or other related agreements. In general, in exchange for product and commercial rights these agreements provide the counterparties with certain upfront and contingent milestone payments typically related to certain annual sales amounts and manufacturing events, and in certain cases, per unit transfer prices and royalties on sales of some of the products. During the three and six months ended June 30, 2026, $ 3,476,000 and $ 5,853,000 , respectively, were incurred under these agreements as royalty expenses. During the three and six months ended June 30, 2025, $ 2,201,000 and $ 4,374,000 , respectively, were incurred as royalty expenses. During the six months ended June 30, 2026, $ 18,000,000 was paid under these agreements related to upfront and milestone payments. As of June 30, 2026, the remaining contingent considerations payable pursuant to these agreements were not considered probable as the contingency is not resolved and therefore, no amount has been recognized related to these contingent considerations as of June 30, 2026. Contract Manufacturing The Company has entered into manufacturing agreements with respect to third-party contract manufacturers for its FDA-approved pharmaceutical products. Some of these contract manufacturing agreements require minimum annual order amounts. The Company has committed to pay approximately $ 10,723,000 related to contract manufacturing agreements for the year ending December 31, 2026. Minimum annual quantities carry no payment obligation for quantities not purchased; the supplier's sole remedy for a shortfall is prospective repricing and, if no agreement on pricing can be reached, termination of the agreement. No liability has been recorded, and no commitment loss has been recognized under ASC 330, as of June 30, 2026. 13 Table of Contents NOTE 10. SEGMENTS AND CONCENTRATIONS The chief operating decision maker (“CODM”) is the Chief Executive Officer. The CODM does not review segment assets when assessing segment performance and deciding how to allocate resources. The Company reports on two reportable segments which are generally determined based on the decision-making structure of the Company and the grouping of similar products and services: Branded and Compounding. • The Branded segment includes activities of the Company’s FDA-approved ophthalmology pharmaceutical products, including the out-licensing of rights to certain of our branded products. • The Compounding segment represents activities in the Company’s ophthalmology-focused pharmaceutical compounding business. The CODM evaluates segment performance and makes resource-allocation decisions primarily on the basis of segment contribution. Segment contribution is the internal measure of profitability that the CODM reviews on a regular basis to assess the operational performance of each segment, determine the appropriate level of sales and marketing investments, evaluate pricing decisions, and prioritize capital deployment among branded product initiatives and the compounding operations. Segment contribution for the segments represents net revenues less cost of sales, certain general and administrative expenses, selling and marketing expenses, and research and development expenses. The Company does not evaluate the following items at the segment level: • Selling, general and administrative expenses that result from shared infrastructure, including certain expenses associated with legal matters, public company costs (e.g. investor relations), Board of Directors and principal executive officers and other similar shared expenses. • Operating expenses within selling, general and administrative expenses that result from the impact of corporate initiatives. Corporate initiatives primarily include integration, restructuring, acquisition and other shared costs. • Other select revenues and operating expenses including research and development expenses, amortization, and asset sales and impairments, net as not all such information has been accounted for at the segment level, or such information has not been used by all segments. Segment net revenues, segment operating expenses and segment contribution information consisted of the following: Three Months Ended June 30, 2026 Three Months Ended June 30, 2025 Branded Compounding Consolidated Branded Compounding Consolidated Product sales, net $ 56,015,000 $ 14,556,000 $ 70,571,000 $ 42,189,000 $ 21,468,000 $ 63,657,000 Other revenues 90,000 — 90,000 85,000 — 85,000 Total revenues 56,105,000 14,556,000 70,661,000 42,274,000 21,468,000 63,742,000 Cost of sales 13,434,000 6,864,000 20,298,000 8,734,000 7,496,000 16,230,000 Gross profit 42,671,000 7,692,000 50,363,000 33,540,000 13,972,000 47,512,000 Operating expenses Selling, general and administrative 36,177,000 7,009,000 43,186,000 20,330,000 7,098,000 27,428,000 Research and development 7,674,000 339,000 8,013,000 2,390,000 442,000 2,832,000 Segment contribution $ ( 1,180,000 ) $ 344,000 ( 836,000 ) $ 10,820,000 $ 6,432,000 17,252,000 Corporate 10,112,000 5,807,000 Research and development 59,000 36,000 Loss from operations $ ( 11,007,000 ) $ 11,409,000 14 Table of Contents Six Months Ended June 30, 2026 Six Months Ended June 30, 2025 Branded Compounding Consolidated Branded Compounding Consolidated Product sales, net $ 86,646,000 $ 28,055,000 $ 114,701,000 $ 69,883,000 $ 41,519,000 $ 111,402,000 Other revenues 163,000 — 163,000 171,000 — 171,000 Total revenues 86,809,000 28,055,000 114,864,000 70,054,000 41,519,000 111,573,000 Cost of sales 24,389,000 13,067,000 37,456,000 16,915,000 14,839,000 31,754,000 Gross profit 62,420,000 14,988,000 77,408,000 53,139,000 26,680,000 79,819,000 Operating expenses Selling, general and administrative 62,075,000 14,050,000 76,125,000 41,012,000 14,620,000 55,632,000 Research and development 13,295,000 549,000 13,844,000 4,383,000 666,000 5,049,000 Segment contribution $ ( 12,950,000 ) $ 389,000 ( 12,561,000 ) $ 7,744,000 $ 11,394,000 19,138,000 Corporate 20,403,000 18,116,000 Research and development 123,000 845,000 Loss from operations $ ( 33,087,000 ) $ 177,000 Substantially all revenue is attributable to the U.S. All long-lived assets at June 30, 2026 and December 31, 2025 were located in the U.S. Revenues by segment are further described as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 IHEEZO $ 15,619,000 $ 18,336,000 $ 17,535,000 $ 23,558,000 VEVYE 29,387,000 18,641,000 50,335,000 40,156,000 Other branded products 11,009,000 5,212,000 18,776,000 6,169,000 Other revenues 90,000 85,000 163,000 171,000 Branded revenue, net 56,105,000 42,274,000 86,809,000 70,054,000 Compounding revenue, net 14,556,000 21,468,000 28,055,000 41,519,000 Total revenues, net $ 70,661,000 $ 63,742,000 $ 114,864,000 $ 111,573,000 Other than IHEEZO and VEVYE for the three and six months ended June 30, 2026 and 2025, no other products accounted for more than 10% of total revenues for the periods presented. Customer and Supplier Concentrations Substantially all of the Company’s Branded sales are made to third-party distributors who sell the products to pharmacies and to the end-users. There were three customers who comprised more than 10 % of the Company’s Branded revenues for the three and six months ended June 30, 2026 and two customers who comprised more than 10 % of the Company’s Branded revenues for the three and six months ended June 30, 2025. There were no customers who comprised more than 10% of Compounding revenues for either the three and six months ended June 30, 2026 or 2025. As of June 30, 2026, accounts receivable from three customers accounted for 91 % of total consolidated accounts receivable. As of December 31, 2025, accounts receivable from three customers accounted for 90 % of total consolidated accounts receivable. The Company received its active pharmaceutical ingredients from three main suppliers during each of the three and six months ended June 30, 2026 and 2025. These suppliers collectively accounted for 61 % and 54 % of manufacturing supplies purchases during the three and six months ended June 30, 2026, respectively, and 76 % and 72 % during the three and six months ended June 30, 2025, respectively. 15 Table of Contents NOTE 11. SUBSEQUENT EVENTS In August 2026, the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Viatris Inc. and certain of its subsidiaries (collectively, “Viatris”), pursuant to which the Company agreed to acquire the global rights to TYRVAYA ® (varenicline solution) nasal spray 0.03% (“TYRVAYA”), a cholinergic agonist indicated for the treatment of the signs and symptoms of dry eye disease (the “Acquisition”). As consideration for the Acquisition, the Company will pay Viatris $ 30,000,000 in cash at the closing of the Acquisition (the “Closing”) and has agreed to pay up to an additional $ 70,000,000 in contingent milestone payments, payable if specified annual net sales thresholds for TYRVAYA are achieved in certain calendar years following the Closing. The purchase price is subject to a customary post-closing adjustment based on the net working capital transferred at the Closing. 16 Table of Contents