What changed in this filing

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Item 1. Business

2025-03-27 compared with 2024-03-19 · 712 added, 655 removed, 195 unchanged (88% of the section changed)

are a leading eyecare pharmaceutical company engaged in the discovery, development, and commercialization of innovative ophthalmic pharmaceutical

products for the U.S.

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.

We own commercial

rights to one of the largest portfolios of branded ophthalmic pharmaceutical products in North America, all of which are marketed under

the Harrow name.

We also own and operate ImprimisRx, one of the nation’s leading ophthalmology-focused pharmaceutical-compounding

In addition, we have a non-controlling equity interest in Melt Pharmaceuticals, Inc.

(“Melt”), and two other

companies that began as subsidiaries of Harrow and were subsequently carved-out of our corporate structure and deconsolidated from our

financial statements.

Ophthalmic Pharmaceuticals

the past few years, we have invested in broadening our product portfolio of FDA-approved products.

Our investments in this regard have

led to the pursuit and completion of several announced transactions, all of which are focused on eyecare pharmaceuticals primarily for

We are a leading eyecare pharmaceutical

company engaged in the discovery, development, and commercialization of innovative ophthalmic pharmaceutical products for the 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.

We own commercial rights to one of the largest

portfolios of branded ophthalmic pharmaceutical products in North America, all of which are marketed under the Harrow name.

and operate ImprimisRx, one of the nation’s leading ophthalmology-focused pharmaceutical-compounding businesses.

Branded Ophthalmic Pharmaceuticals

the past few years, we have invested in broadening our product portfolio of Food and Drug Administration (“FDA”)-approved

Our investments in this regard have led to the pursuit and completion of several announced transactions, all of which are focused

on eyecare pharmaceuticals primarily for the U.S.

and Canadian markets.

We believe that our continued investments in these and other products will result in our ability to provide

more physician prescribers and their patients with access to a complete portfolio of affordable eyecare pharmaceuticals to address their

clinical needs.

commercial rights to the following products:

(chloroprocaine hydrochloride ophthalmic gel) 3% a low-viscosity gel indicated for ocular surface

(cyclosporine ophthalmic solution) 0.1%, utilizes a novel water-free vehicle (perfluorobutylpentane) based on semifluorinated alkanes,

indicated for the treatment of the signs and symptoms associated with dry eye disease.

(triamcinolone acetonide injectable suspension) 40 mg/ml, a steroid injection for the treatment of certain ophthalmic diseases and

for visualization during vitrectomy.

(moxifloxacin hydrochloride ophthalmic solution) 0.5%, a fluoroquinolone antibiotic eye drop for the treatment of bacterial conjunctivitis

caused by susceptible strains of organisms.

(nepafenac ophthalmic suspension) 0.3%, a non-steroidal, anti-inflammatory eye drop indicated for pain and inflammation associated

with cataract surgery.

(fluorometholone acetate ophthalmic suspension) 0.1%, a corticosteroid prepared as a sterile topical ophthalmic suspension indicated

for use in the treatment of steroid-responsive inflammatory conditions of the palpebral and bulbar conjunctiva, cornea, and anterior

segment of the eye.

(natamycin ophthalmic suspension) 5%, a sterile, antifungal drug for the treatment of fungal blepharitis, conjunctivitis, and keratitis

caused by susceptible organisms, including Fusarium solani keratitis.

ST (tobramycin and dexamethasone ophthalmic suspension) 0.3%/0.05%, a topical antibiotic and corticosteroid combination for steroid-responsive

inflammatory ocular conditions for which a corticosteroid is indicated and where superficial bacterial ocular infection or a risk

of bacterial ocular infection exists.

(cetirizine ophthalmic solution) 0.24%, a histamine-1 (H1) receptor antagonist indicated for treatment of ocular itching associated

with allergic conjunctivitis.

(cyclosporine ophthalmic emulsion) 0.1%, an orphan designated drug that is a calcineurin inhibitor immunosuppressant indicated for

the treatment of vernal keratoconjunctivitis.

(nepafenac ophthalmic suspension) 0.1%, a non-steroidal, anti-inflammatory eye drop indicated for pain and inflammation associated

with cataract surgery.

Preservative Free (PF) is a lubricant eye drop that does not require a prescription and temporarily relieves burning, itching and

other dry eye symptoms.

(neomycin and polymyxin B sulfates and dexamethasone ophthalmic suspension) is an eye drop used to treat steroid-responsive inflammatory

ocular conditions where bacterial infection or a risk of bacterial ocular infection exist

(dexamethasone ophthalmic suspension) 0.1%, a steroid eye drop for steroid-responsive inflammatory conditions of the palpebral and

bulbar conjunctiva, cornea, and anterior segment of the globe.

1% (apraclonidine hydrochloride) 0.5%, an ophthalmic solution in a sterile isotonic solution indicated to control or prevent post-surgical

elevations in intraocular pressure that occur in patients after argon laser trabeculoplasty, argon laser iridotomy or Nd:YAG posterior

0.5% (apraclonidine hydrochloride) an ophthalmic solution indicated for short-term adjunctive therapy in patients on maximally tolerated

medical therapy who require additional intraocular pressure (or IOP) reduction.

We believe that our continued investments in these and other

products will result in our ability to provide more physician prescribers and their patients with access to a complete portfolio of affordable

eyecare pharmaceuticals to address their clinical needs.

commercial rights to the following products that we market and sell:

(chloroprocaine hydrochloride ophthalmic gel) 3% a low-viscosity gel indicated for

ocular surface anesthesia.

(cyclosporine ophthalmic solution) 0.1%, utilizes a novel water-free vehicle (perfluorobutylpentane)

based on semifluorinated alkanes, indicated for the treatment of the signs and symptoms associated

with dry eye disease.

· TRIESENCE ®

(triamcinolone acetonide injectable suspension) 40 mg/ml, a steroid injection for the

treatment of certain ophthalmic diseases and for visualization during vitrectomy.

(moxifloxacin hydrochloride ophthalmic solution) 0.5%, a fluoroquinolone antibiotic

eye drop for the treatment of bacterial conjunctivitis caused by susceptible strains of organisms.

(nepafenac ophthalmic suspension) 0.3%, a non-steroidal, anti-inflammatory eye drop

indicated for pain and inflammation associated with cataract surgery.

(fluorometholone acetate ophthalmic suspension) 0.1%, a corticosteroid prepared as

a sterile topical ophthalmic suspension indicated for use in the treatment of steroid-responsive

inflammatory conditions of the palpebral and bulbar conjunctiva, cornea, and anterior segment

(natamycin ophthalmic suspension) 5%, a sterile, antifungal drug for the treatment

of fungal blepharitis, conjunctivitis, and keratitis caused by susceptible organisms, including

Fusarium solani keratitis.

ST (tobramycin and dexamethasone ophthalmic suspension) 0.3%/0.05%, a topical antibiotic

and corticosteroid combination for steroid-responsive inflammatory ocular conditions for

which a corticosteroid is indicated and where superficial bacterial ocular infection or a

risk of bacterial ocular infection exists.

(cetirizine ophthalmic solution) 0.24%, a histamine-1 (H1) receptor antagonist indicated

for treatment of ocular itching associated with allergic conjunctivitis.

(cyclosporine ophthalmic emulsion) 0.1%, an orphan designated drug that is a calcineurin

inhibitor immunosuppressant indicated for the treatment of vernal keratoconjunctivitis.

(nepafenac ophthalmic suspension) 0.1%, a non-steroidal, anti-inflammatory eye drop

indicated for pain and inflammation associated with cataract surgery.

· FRESHKOTE ®

Preservative Free (PF) is a lubricant eye drop that does not require a prescription

and temporarily relieves burning, itching and other dry eye symptoms.

(neomycin and polymyxin B sulfates and dexamethasone ophthalmic suspension) is an eye

drop used to treat steroid-responsive inflammatory ocular conditions where bacterial infection

or a risk of bacterial ocular infection exist.

(dexamethasone ophthalmic suspension) 0.1%, a steroid eye drop for steroid-responsive

inflammatory conditions of the palpebral and bulbar conjunctiva, cornea, and anterior segment

of the globe.

1% (apraclonidine hydrochloride) 0.5%, an ophthalmic solution in a sterile isotonic

solution indicated to control or prevent post-surgical elevations in intraocular pressure

that occur in patients after argon laser trabeculoplasty, argon laser iridotomy or Nd:YAG

posterior capsulotomy.

0.5% (apraclonidine hydrochloride) an ophthalmic solution indicated for short-term

adjunctive therapy in patients on maximally tolerated medical therapy who require additional

intraocular pressure (or IOP) reduction.

also own U.S.

1 unchanged sentence

In February 2024, we announced that we out-licensed Canadian rights for VERKAZIA,

Cationorm® PLUS (a preservative-free formulation for dry eye or allergy relief), VEVYE, ZERVIATE and IHEEZO to Apotex Inc.

Cationorm ® PLUS (a preservative-free formulation for dry eye or allergy relief), VEVYE, ZERVIATE and IHEEZO to Apotex

We also own worldwide rights to NATACYN and FRESHKOTE.

is our ophthalmology-focused pharmaceutical compounding businesses.

From its inception in 2014, ImprimisRx, whose business consists of

integrated research and development, production, dispensing/distribution, sales, marketing, and customer-service capabilities, has offered

ophthalmologist and optometrist customers and their patients access to critical medicines to meet their clinical needs.

Initially, ImprimisRx

focused exclusively on compounded medications to serve needs unmet by commercially available drugs.

Our compounded medications include

various combinations of drugs formulated into one bottle and numerous preservative-free formulations.

Depending on the formulation, the

regulations of a specific state, and ultimately the needs of the patient, ImprimisRx products may be dispensed as patient-specific medications

from our 503A pharmacy, or for in-office use, made according to current good manufacturing practices (“cGMPs”) or other guidance

documents from the U.S.

Food and Drug Administration (the “FDA”), in our FDA-registered New Jersey outsourcing facility.

Our current ophthalmology formulary includes over 30 compounded formulations, many of which are patented or patent-pending, that are

customizable for the specific needs of a patient.

We make our formulations available at prices that are, in most cases, lower than non-customized

commercial drugs.

ImprimisRx is our ophthalmology-focused

pharmaceutical compounding businesses.

From its inception in 2014, ImprimisRx, whose business consists of integrated research and development,

production, dispensing/distribution, sales, marketing, and customer-service capabilities, has offered ophthalmologist and optometrist

customers and their patients access to critical medicines to meet their clinical needs.

ImprimisRx is focused on compounded medications

to serve needs unmet by commercially available drugs.

Our compounded medications include various combinations of drugs formulated into

one bottle and numerous preservative-free formulations.

Depending on the formulation, the regulations of a specific state, and ultimately

the needs of the patient, ImprimisRx products may be dispensed as patient-specific medications from our 503A pharmacy, or for in-office

use, made according to current good manufacturing practices (“cGMPs”) or other guidance documents from the FDA, in our FDA-registered

New Jersey outsourcing facility.

Our current ophthalmology formulary includes over 30 compounded formulations, many of which are patented

or patent-pending, that are customizable for the specific needs of a patient.

We make our formulations available at prices that are,

in most cases, lower than non-customized commercial drugs.

ImprimisRx’s customer base has grown to include more than 10,000 U.S.

eyecare-dedicated prescribers and institutions.

Subsidiaries (De-Consolidated Businesses)

have ownership interests in Melt, Surface Ophthalmics, Inc.

(“Surface”) and Eton Pharmaceuticals, Inc.

and hold royalty interests in some of Surface’s and Melt’s drug candidates.

These companies are pursuing market approval

for their drug candidates under the Federal Food Drug and Cosmetic Act (the “FDCA”), including in some instances under the

abbreviated pathway described in Section 505(b)(2), which permits the submission of a new drug application (an “NDA”) where

at least some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant

has not obtained a right of reference.

Pharmaceuticals, Inc.

is a clinical-stage pharmaceutical company focused on the development and commercialization of proprietary non-intravenous, sedation

and anesthesia therapeutics for human medical procedures in hospital, outpatient, and in-office settings.

Melt is seeking regulatory

approval for its proprietary technologies, where possible.

In December 2018, we entered into an Asset Purchase Agreement with Melt (the

“Melt Asset Purchase Agreement”), pursuant to which Harrow assigned to Melt the underlying intellectual property for Melt’s

current pipeline, including its lead drug candidate MELT-300.

The core intellectual property Melt owns is a patented series of combination

non-opioid sedation drug formulations that we estimate to have many clinical applications.

is a novel, sublingually delivered, non-IV, opioid-free drug candidate being developed for procedural sedation.

In February 2021, Melt

announced data from, and the successful completion of, its Phase 1 study.

In December 2022, Melt announced topline data from its Phase

2 study for MELT-300 as set forth below:

a study of more than 300 patients, undergoing cataract surgery conducted at nine study sites, MELT-300 achieved its primary procedural

sedation endpoint, demonstrating statistical superiority for procedural sedation compared to all comparator treatment arms, including

midazolam 3mg (P=0.0129) and ketamine 50mg (P=0.0096).

the validated Ramsey Sedation Scale (RSS), MELT-300 treatment arm patients were 50% less likely to require rescue sedation compared

to midazolam 3mg (P=0.0198).

the RSS, MELT-300 treatment arm patients were 66% less likely to require rescue sedation pre-operatively compared to the midazolam

3mg treatment arm.

safety profile was generally comparable to the placebo arm.

expects to begin Phase 3 program activities in 2024, which will consist of a single pivotal study comparing MELT-300 to sublingual midazolam

and placebo in subjects undergoing cataract surgery.

Beginning in July 2023 through March 1, 2024, Melt had raised over $23,000,000 in

gross proceeds from the sale and issuance of Melt’s Series B Preferred Stock.

We own 3,500,000 shares of Melt common stock, 2,260,000

shares of Melt’s Series B-1 Preferred Stock and 74,256 shares of Melt’s Series B Preferred Stock, which in aggregate represented

approximately 47% and 46% of Melt’s equity and voting interests issued and outstanding as of December 31, 2023 and March 1, 2024,

respectively.

is required to make mid-single digit royalty payments to the Company on net sales of MELT-300 while any patent rights remain outstanding,

subject to other conditions.

Melt can require the Company to cease compounding like products at the time of FDA approval of MELT-300.

If approved, we do not expect a cessation of compounding like products to have a material impact on our operations and financial performance.

Ophthalmics, Inc.

is a clinical-stage pharmaceutical company focused on development and commercialization of innovative therapeutics for ocular surface

Surface is developing four product candidates at various stages of development for certain ocular surface related indications.

own 3,500,000 shares of Surface common stock, which represented approximately 20% of Surface’s equity and voting interests as of

December 31, 2023.

Harrow owns mid-single-digit royalty rights on net sales on Surface’s drug candidates SURF-100, SURF-200 and

Pharmaceuticals, Inc.

is an innovative pharmaceutical company focused on developing, acquiring, and commercializing treatments for rare diseases.

Eton currently

commercializes ALKINDI SPRINKLE® and Carglumic Acid tablets and has additional rare disease products under development, including

dehydrated alcohol injection and the ZENEO® hydrocortisone autoinjector.

In May 2017, we gave up our controlling interest in Eton.

We own 1,982,000 shares of Eton common stock, which represented less than 10% of Eton’s equity and voting interests issued and

outstanding as of December 31, 2023.

Pharmaceutical

Compounding Businesses

Pharmaceutical

Pharmaceutical Compounding

Pharmaceutical

13 unchanged sentences

involving a patient-in-need, a physician’s diagnosis, a fair price and great service for a quality pharmaceutical product.

Compounding Facilities

Pharmaceutical

compounding businesses are governed by Sections 503A and 503B of the FDCA.

Section 503A of the FDCA provides that a pharmacy is only

permitted to compound a drug for an individually identified patient based on a prescription for the patient and is only permitted to

distribute the drug interstate if the pharmacy is licensed to do so in the states where it is compounded and where the medication is

ImprimisRx Compounding Facilities

Pharmaceutical compounding businesses

are governed by Sections 503A and 503B of the FDCA.

Section 503A of the Federal Food, Drug and Cosmetic Act (the “FDCA”)

provides that a pharmacy is only permitted to compound a drug for an individually identified patient based on a prescription for the

patient and is only permitted to distribute the drug interstate if the pharmacy is licensed to do so in the states where it is compounded

and where the medication is received.

503B of the FDCA provides that a pharmacy engaged in preparing sterile compounded drug formulations may voluntarily elect to register

6 unchanged sentences

FDA inspection.

operate two compounding facilities located in Ledgewood, New Jersey.

Our New Jersey operations are comprised of two separate entities

and facilities, one of which is registered with the FDA as an outsourcing facility (“NJOF”) under Section 503B of the FDCA.

The other New Jersey facility (“RxNJ”) is a licensed pharmacy operating under Section 503A of the FDCA.

All of our compounded

products that we sell, produce and dispense are made in the United States.

believe that, with our current compounding pharmacy facilities and licenses and FDA registration of NJOF, we have the infrastructure

to scale our business appropriately under the current regulatory landscape and meet the potential growth in demand we are targeting.

We plan to invest in one or both of our facilities to further their capacity and efficiencies.

Also, we may seek to access greater pharmacy

and production related redundancy and markets through acquisitions, partnerships or other strategic transactions.

and Marketing

focus of our sales and marketing is in the U.S.

We do, however, believe that our proprietary drug formulations, drug candidates and drug

products could have commercial appeal in international markets, and have engaged distributors and entered into out-licensing arrangements

for certain of our products and proprietary formulations in certain non-U.S.

two compounding facilities located in Ledgewood, New Jersey.

Our New Jersey operations are comprised of two separate entities and facilities,

one of which is registered with the FDA as an outsourcing facility (“NJOF”) under Section 503B of the FDCA.

The other New

Jersey facility (“RxNJ”) is a licensed pharmacy operating under Section 503A of the FDCA.

All of our compounded products

that we sell, produce and dispense are made in the U.S.

that, with our current compounding pharmacy facilities and licenses and FDA registration of NJOF, we have the infrastructure to scale

our business appropriately under the current regulatory landscape and meet the potential growth in demand we are targeting.

invest in one or both of our facilities to further their capacity and efficiencies.

Also, we may seek to access greater pharmacy and

production related redundancy and markets through acquisitions, partnerships or other strategic transactions.

Carved-Out Subsidiaries

(De-Consolidated Businesses)

ownership interests in Melt Pharmaceuticals, Inc.

(“Melt”) and Surface Ophthalmics, Inc.

(“Surface”) and hold

royalty interests in some of Surface’s and Melt’s drug candidates.

These companies are pursuing market approval for their

drug candidates under the FDCA, including in some instances under the abbreviated

pathway described in Section 505(b)(2), which permits the submission of a new drug application (an “NDA”) where at least

some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant has

not obtained a right of reference.

We previously held ownership interest in Eton Pharmaceuticals, Inc.

(“Eton”) and sold

such interests in April 2024.

Melt Pharmaceuticals,

is a clinical-stage pharmaceutical company focused on the development and commercialization of proprietary non-intravenous, sedation

and anesthesia therapeutics for human medical procedures in hospital, outpatient, and in-office settings.

Melt is seeking regulatory

approval for its proprietary technologies, where possible.

is a novel, sublingually delivered, non-IV, opioid-free drug candidate being developed for procedural sedation.

In November 2024, Melt

announced data from, and the successful completion of, its pivotal Phase 3 study for MELT-300.

The MELT-300 pivotal Phase 3 clinical

trial was a randomized, double-blind, three-arm study comparing, at a 4:1:1 ratio, MELT-300, sublingual midazolam, and sublingual placebo,

respectively, for procedural sedation in patients undergoing cataract surgery.

The study was conducted at 13 clinical sites in the U.S.

and enrolled over 530 patients.

Results from the clinical study are summarized below:

achieved its primary procedural sedation endpoint, demonstrating statistical superiority

for procedural sedation compared to all comparator treatment arms, including midazolam 3mg

(P=0.009) and placebo (P<0.001).

the validated Ramsey Sedation Scale (RSS), MELT-300 treatment arm patients were 50% less

likely to require rescue sedation compared to midazolam 3mg (P=0.0198).

of patients requiring rescue sedation was nearly two-fold higher for sublingual midazolam

compared with MELT-300 (P=0.003).

safety profile was generally comparable to the placebo arm.

Phase 3 study was conducted following the successful completion of the MELT-300 Phase 2 clinical trial in patients undergoing cataract

surgery, which compared MELT-300 against (i) sublingual placebo alone, (ii) sublingual midazolam, and (iii) sublingual ketamine in over

300 patients.

MELT-300 was statistically superior for procedural sedation compared to all individual comparator arms:

(i) sublingual

placebo (P<0.0001), (ii) sublingual midazolam (P=0.0129), and (iii) sublingual ketamine (P=0.0096).

2024, Melt reached an agreement with the FDA on a Special Protocol Assessment (“SPA”) for the MELT-300 Phase 3 study.

agreed the study would “adequately address the objectives necessary to support a regulatory submission.” The SPA agreement

establishes a binding agreement on key elements to support a future marketing application.

During 2025, we believe Melt intends to conduct

ancillary studies including a confirmatory pharmacokinetic, hepatic impairment, renal impairment and 28-day toxicity studies.

completion of those ancillary studies, in early 2026, we believe Melt intends to submit an NDA to the FDA for marketing approval of MELT-300.

A final decision regarding marketing approval will be based on the FDA’s review of the full MELT-300 submission package.

require ImprimisRx to cease compounding like products at the time of FDA approval of MELT-300.

December 31, 2024, we owned approximately 45% of Melt’s equity and voting interests issued and outstanding, along with a mid-single

digit royalty on future net sales of MELT-300.

Surface Ophthalmics,

is a clinical-stage pharmaceutical company focused on development and commercialization of innovative therapeutics for ocular surface

Surface is developing four product candidates for certain ocular surface related indications.

own 3,500,000 shares of Surface common stock, which represented approximately 20% of Surface’s equity and voting interests as

of December 31, 2024.

We own mid-single-digit royalty rights on future net sales of Surface’s drug candidates SURF-100,

SURF-200 and SURF-201.

Eton Pharmaceuticals,

is an innovative pharmaceutical company focused on developing, acquiring, and commercializing treatments for rare diseases.

created and formed as a wholly-owned subsidiary of Harrow.

In May 2017, we gave up our controlling interest in Eton.

In April 2024, we

sold all of our remaining equity interests in Eton which was 1,982,000 shares of common stock in a block trade at a gross price of $3.00

After deducting trading expenses and commissions of approximately $436,000, we received net proceeds of $5,510,000 and recorded

a loss of $3,171,000 related to the sale of our investment in Eton.

Sales and Marketing

The focus of our sales and marketing

is in the U.S.

We do, however, believe that our drug candidates and drug products could have commercial appeal in international markets,

and have engaged distributors and entered into out-licensing arrangements for certain of our products and proprietary formulations in

certain non-U.S.

markets, including Canada.

Our sales and marketing activities

consist primarily of efforts to educate doctors, ambulatory surgery centers, healthcare systems, hospitals and other users throughout

about our branded drug products and compounded formulations.

We expect that we may experience growth in the sales of our products

in future periods, particularly in light of our recent product launches and commercial campaigns.

However, we may not be successful in

doing so, whether due to the safety, quality or availability of our products and proprietary compounded formulations, the size of the

markets for such products, which could be smaller than we expect, the timing of market entry relative to competitive products, the availability

of alternative compounded formulations or FDA-approved drugs, the price of our products relative to alternative products or the success

of our sales and marketing efforts, which is dependent on our ability to further build and continue to grow a qualified and adequate

internal sales function.

expect to continue to acquire and/or develop additional FDA-approved ophthalmic products that allow us to leverage our existing commercial

infrastructure to promote, sell, and ultimately bring these products to market.

As we execute this strategy, we will continue to expand

our sales and marketing team, expertise and expenses.

Ophthalmology

any ocular procedure, a surgeon may require drugs for sedation, dilation, anesthesia, inflammation and infection prevention, and ocular

surface preservation.

The cataract surgery market continues to experience significant growth.

According to Market Scope , approximately

4.8 million lens procedures were performed in the U.S.

in 2021, 97% of which were cataracts, with the number expected to grow to 5.5

million lens procedures in 2026.

Nearly 96% of the refractive surgery procedures performed are LASIK (laser in situ keratomileusis) surgeries,

an outpatient surgical procedure used to treat nearsightedness, farsightedness, and astigmatism.

According to an article published in

2021 in Clinical Ophthalmology , an estimated 800,000 eyes were treated with laser correction surgery (such as LASIK) each year

for the previous ten years.

eye occurs when the eye does not produce enough tears, or when the tears are not of the correct consistency and evaporate too quickly.

Inflammation of the surface of the eye may also occur.

According to a 2023 Market Scope report, there are 39 million people in

that suffer from both signs and symptoms of dry eye, with 49% of diagnosed dry eye patients having moderate to severe dry eye.

The same report stated the global dry eye product market is expected to grow from $5.8 billion in 2023 to $7.5 billion in 2028.

is among the most common conditions seen by eyecare professionals.

injections are one of the most common procedures performed by ophthalmologists in the United States.

According to a 2023 article published

in Healio , approximately 8 million intravitreal injections were expected to be performed that year.

Our sales and marketing activities consist primarily of efforts to educate doctors, ambulatory

surgery centers, healthcare systems, hospitals and other users throughout the U.S.

about our drug products.

We expect that we may experience

growth in the sales of our products in future periods, particularly in light of our recent product launches and commercial campaigns.

However, we may not be successful in doing so, whether due to the size of the markets for such products, which could be smaller than

we expect, the timing of market entry relative to competitive products, the availability of alternative compounded formulations or FDA-approved

drugs, the price of our products relative to alternative products or the success of our sales and marketing efforts, which is dependent

on our ability to further build and continue to grow a qualified and adequate internal sales function.

to continue to acquire and/or develop additional FDA-approved ophthalmic products that allow us to leverage our existing commercial infrastructure

to promote, sell, and ultimately bring these products to market.

As we execute this strategy, we will continue to expand our sales and

marketing team, expertise and expenses.

Supply Chains

of our ImprimisRx finished compounded products are made in the U.S.

at our compounding facilities located in New Jersey.

not manufacture any of our branded pharmaceutical products and rely on third party manufacturing partners to make these finished goods.

The following table describes by product the country where our finished branded products are made:

Country Finished Product Is Manufactured

Ophthalmology Market

For any ocular procedure, a surgeon

may require drugs for sedation, dilation, anesthesia, inflammation and infection prevention, and ocular surface preservation.

surgery market continues to experience significant growth.

According to Market Scope , approximately 4.8 million lens procedures

were performed in the U.S.

in 2021, 97% of which were cataracts, with the number expected to grow to 5.5 million lens procedures in 2026.

Nearly 96% of the refractive surgery procedures performed are LASIK (laser in situ keratomileusis) surgeries, an outpatient surgical

procedure used to treat nearsightedness, farsightedness, and astigmatism.

According to an article published in 2021 in Clinical Ophthalmology ,

an estimated 800,000 eyes were treated with laser correction surgery (such as LASIK) each year for the previous ten years.

Dry eye occurs when the eye does

not produce enough tears, or when the tears are not of the correct consistency and evaporate too quickly.

Inflammation of the surface

of the eye may also occur.

According to a 2023 Market Scope report, there are 39 million people in the U.S.

that suffer from both

signs and symptoms of dry eye, with 49% of diagnosed dry eye patients having moderate to severe dry eye.

The same report stated the global

dry eye product market is expected to grow from $5.8 billion in 2023 to $7.5 billion in 2028.

Dry eye is among the most common conditions

seen by eyecare professionals.

injections are one of the most common procedures performed by ophthalmologists in the U.S.

According to a 2023 article published in

Healio , approximately 8 million intravitreal injections were expected to be performed that year.

These injections are utilized

11 unchanged sentences

and treatment of macular holes.

According to an October 2022 article published on the Cleveland Clinic website, U.S.

surgeons perform

about 225,000 vitrectomies each year.

According to data from Definitive Health from 2023, U.S.

surgeons perform about 420,000 vitrectomies

The number is likely to continue to grow as eye care providers find more uses for vitrectomy.

7 unchanged sentences

lower dose steroids to minimize the risk of further flares.

pharmaceutical and pharmacy industries are highly competitive.

We compete against branded drug companies, generic drug companies, outsourcing

facilities and compounding pharmacies.

We are smaller than some of our competitors, and we may lack the financial and other resources

needed to develop, produce, distribute, market and commercialize any of our branded products and proprietary formulations or compete

for market share in these sectors.

The drug products available through branded and generic drug companies with which our products and

formulations compete have been approved for marketing and sale by the FDA and are required to be manufactured in facilities compliant

with cGMP standards.

Although we prepare some of our compounded formulations in accordance with cGMP standards and our other formulations

are produced according to the standards provided by United States Pharmacopoeia (USP) Chapter <795> (“USP 795”) and

USP Chapter <797> (“USP 797”) and applicable state and federal law, our compounded formulations are not required to

be, and have not been, approved for marketing and sale by the FDA.

As a result, some physicians may be unwilling to prescribe, and some

patients may be unwilling to use, our compounded formulations.

Additionally, under federal and state laws applicable to our current compounding

pharmacy operations operating under Section 503A of the FDCA, we are not permitted to prepare significant amounts of a specific formulation

in advance of a prescription, compound quantities for office use or utilize a wholesaler for distribution of our formulations;

our compounded formulations must be prepared and dispensed in connection with a physician prescription for an individually identified

Pharmaceutical companies, on the other hand, are able to sell their FDA-approved products to large pharmaceutical wholesalers,

who can in turn sell to and supply hospitals and retail pharmacies.

Even though we have registered NJOF with the FDA, our compounding

business may not be scalable on the scope available to our competitors that produce FDA-approved drugs, which may limit our potential

for profitable operations.

These facets of our operations may subject our business to limitations our competitors offering only FDA-approved

drugs may not face.

Biotechnology

and related pharmaceutical technologies are subject to rapid and significant change.

Our future success will depend in large part on

our ability to maintain a competitive position with respect to these technologies.

Products developed by our competitors, including FDA-approved

drugs and compounded formulations created by other pharmacies, could render our products and technologies obsolete or unable to compete.

Any products that we develop may become obsolete before we recover expenses incurred in developing the products, which may require that

we seek additional funds that may or may not be available to continue our operations.

The competitive environment requires an ongoing,

extensive search for medical and technological innovations and the ability to develop and market these innovations effectively, and we

may not be competitive with respect to these factors.

Other competitive factors include the safety and efficacy of a product, the size

of the market for a product, the timing of market entry relative to competitive products, the availability of alternative compounded

formulations or approved drugs, the price of a product relative to alternative products, the availability of third-party reimbursement,

the success of sales and marketing efforts, brand recognition and the availability of scientific and technical information about a product.

Although we believe we are positioned to compete favorably with respect to many of these factors, if our proprietary formulations are

unable to compete with the products of our competitors, we may never gain a significant market share or achieve profitability.

Affecting Our Performance

believe the primary factors affecting our performance are our ability to increase revenues of our ophthalmic products, grow and gain

operating efficiencies in our pharmacy operations, successfully adjust our operations to account for any future regulatory-related restrictions,

The pharmaceutical and pharmacy

industries are highly competitive.

We compete against branded drug companies, generic drug companies, outsourcing facilities and compounding

We are smaller than some of our competitors, and we may lack the financial and other resources needed to develop, produce,

distribute, market and commercialize any of our branded products and proprietary formulations or compete for market share in these sectors.

The drug products available through branded and generic drug companies with which our products and formulations compete have been approved

for marketing and sale by the FDA and are required to be manufactured in facilities compliant with cGMP standards.

Although we prepare

some of our compounded formulations in accordance with cGMP standards and our other formulations are produced according to the standards

provided by U.S.

Pharmacopoeia (USP) Chapter <795> (“USP 795”) and USP Chapter <797> (“USP 797”)

and applicable state and federal law, our compounded formulations are not required to be, and have not been, approved for marketing and

sale by the FDA.

As a result, some physicians may be unwilling to prescribe, and some patients may be unwilling to use, our compounded

formulations.

Additionally, under federal and state laws applicable to our current compounding pharmacy operations operating under Section

503A of the FDCA, we are not permitted to prepare significant amounts of a specific formulation in advance of a prescription, compound

quantities for office use or utilize a wholesaler for distribution of our formulations;

instead, our compounded formulations must be

prepared and dispensed in connection with a physician prescription for an individually identified patient.

Pharmaceutical companies,

on the other hand, are able to sell their FDA-approved products to large pharmaceutical wholesalers, who can in turn sell to and supply

hospitals and retail pharmacies.

Even though we have registered NJOF with the FDA, our compounding business may not be scalable on the

scope available to our competitors that produce FDA-approved drugs, which may limit our potential for profitable operations.

of our operations may subject our business to limitations our competitors offering only FDA-approved drugs may not face.

Biotechnology and related pharmaceutical

technologies are subject to rapid and significant change.

Our future success will depend in large part on our ability to maintain a competitive

position with respect to these technologies.

Products developed by our competitors, including FDA-approved drugs and compounded formulations

created by other pharmacies, could render our products and technologies obsolete or unable to compete.

Any products that we develop may

become obsolete before we recover expenses incurred in developing the products, which may require that we seek additional funds that

may or may not be available to continue our operations.

The competitive environment requires an ongoing, extensive search for medical

and technological innovations and the ability to develop and market these innovations effectively, and we may not be competitive with

respect to these factors.

Other competitive factors include the safety and efficacy of a product, the size of the market for a product,

the timing of market entry relative to competitive products, the availability of alternative compounded formulations or approved drugs,

the price of a product relative to alternative products, the availability of third-party reimbursement, the success of sales and marketing

efforts, brand recognition and the availability of scientific and technical information about a product.

Although we believe we are positioned

to compete favorably with respect to many of these factors, if our proprietary formulations are unable to compete with the products of

our competitors, we may never gain a significant market share or achieve profitability.

Factors Affecting Our Performance

the primary factors affecting our performance are our ability to increase revenues of our ophthalmic products, grow and gain operating

efficiencies in our pharmacy operations, successfully adjust our operations to account for any future regulatory-related restrictions,

optimize pricing and obtain reimbursement options for our ophthalmic products, and continue to pursue development and commercialization

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See “Liquidity and Capital Resources” below.

Medicaid and Other Reimbursement Options

in the United States of our marketed products are dependent, in large part, on the availability and extent of reimbursement from third-party

payors, including private payor healthcare and insurance programs, health maintenance organizations, pharmacy benefit management companies,

and government programs such as Medicare and Medicaid, see also Part I, Item 1A.

“Risk Factors” for additional risks related

to reimbursement and government programs.

participate in, and have certain price reporting obligations to, the Medicaid Drug Rebate program, state Medicaid supplemental rebate

program(s), and other governmental pricing programs.

We also have obligations to report the average sales price for certain drugs to

the Medicare program.

Under the Medicaid Drug Rebate program, we are required to pay a rebate to each state Medicaid program for our

covered outpatient drugs that are dispensed to Medicaid beneficiaries and paid for by a state Medicaid program as a condition of having

federal funds being made available for our drugs under Medicaid and Part B of the Medicare program.

Medicare, Medicaid and Other Reimbursement Options

of our marketed products are dependent, in large part, on the availability and extent of reimbursement from third-party payors,

including private payor healthcare and insurance programs, health maintenance organizations, pharmacy benefit management companies, and

government programs such as Medicare and Medicaid.

“Risk Factors” for risks related to reimbursement and government

We participate

in, and have certain price reporting obligations to, the Medicaid Drug Rebate program, state Medicaid supplemental rebate program(s),

and other governmental pricing programs.

We also have obligations to report the average sales price for certain drugs to the Medicare

Under the Medicaid Drug Rebate program, we are required to pay a rebate to each state Medicaid program for our covered outpatient

drugs that are dispensed to Medicaid beneficiaries and paid for by a state Medicaid program as a condition of having federal funds being

made available for our drugs under Medicaid and Part B of the Medicare program.

is a federal program that is administered by the federal government that covers individuals age 65 and over or that are disabled as well

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other legislative change could impact the market conditions for our products.

and TRIESENCE are covered under Medicare Part B and we may develop other drug candidates and/or acquire drug products that are also covered

under Medicare Part B.

In February 2023, we announced that CMS had issued a permanent, product specific J-code for IHEEZO (J2403) which

will become effective under the Healthcare Procedure Coding System (HCPCS) on April 1, 2023.

TRIESENCE has a permanent product specific

J-code (J3300) as well, which physicians can use for reimbursement purposes of that product.

New drugs approved by the FDA that are used

in surgeries performed in a hospital outpatient departments or ambulatory surgical centers may receive a transitional pass-through reimbursement

under Medicare, provided they meet certain criteria, including a “not insignificant” cost criterion.

Pass-through status

allows for separate payment (i.e., outside the packaged payment rate for the surgical procedure) under Medicare Part B, which consists

of Medicare reimbursement for a drug based on a defined formula for calculating the minimum fee that a manufacturer may charge for the

Under current regulations of CMS, pass-through status applies for a period of three years;

which is measured from the date Medicare

makes its first pass-through payment for the product.

Following the three-year period, the product would be incorporated into the cataract

bundled payment system, which could significantly reduce the pricing for that product.

Temporary pass-through reimbursement for IHEEZO

was awarded by CMS and made effective in the second quarter of 2023.

Following the expiration of pass-through status, under current CMS

policy, non-opioid pain management surgical drugs when used on Medicare Part B patients in an outpatient setting can qualify for ongoing

separate payments.

CMS’ current non-opioid separate payment policy, like other CMS policies, can be changed by CMS through its

annual rulemaking and comment process.

are also working to ensure our continued access to the Medicare market for the ambulatory surgery center (ASC), hospital and outpatient

department (HOPD), and in-office use markets for IHEEZO.

In this regard, we are designing and intend to execute, during 2024, clinical

studies to build data sets that could be presented to CMS to extend our temporary pass-through period for IHEEZO in ASCs and HOPDs.

also met with CMS in January 2024 to request clarification related to its anesthesia billing policy which has historically not allowed

for the separate billing of anesthesia services in the physician’s office.

During the meeting we requested that CMS clarify that

J-Code 2403, IHEEZO’s permanent J-Code, is appropriate to be billed for the anesthesia product itself (i.e., IHEEZO in our case)

in the physician’s office setting.

As of the date of this Annual Report, we have not received feedback from CMS following our meeting

in January 2024.

and TRIESENCE are covered under Medicare Part B and we may develop other product candidates and/or acquire drug products that are

also covered under Medicare Part B.

In February 2023, we announced that CMS had issued a permanent, product specific J-code for

IHEEZO (J2403) which became effective under the Healthcare Procedure Coding System (HCPCS) on April 1, 2023.

TRIESENCE has a

permanent product specific J-code (J3300) as well, which physicians can use for reimbursement purposes of that product.

approved by the FDA that are used in surgeries performed in a hospital outpatient departments or ambulatory surgical centers may

receive a transitional pass-through reimbursement under Medicare, provided they meet certain criteria, including a “not

insignificant” cost criterion.

Pass-through status allows for separate payment (i.e., outside the packaged payment rate for

the surgical procedure) under Medicare Part B, which consists of Medicare reimbursement for a drug based on a defined formula for

calculating the minimum fee that a manufacturer may charge for the drug.

Under current regulations of CMS, pass-through status

applies for a period of three years;

which is measured from the date Medicare makes its first pass-through payment for the product.

Following the three-year period, the product would be incorporated into the cataract bundled payment system, which could

significantly reduce the pricing for that product.

Temporary pass-through reimbursement for IHEEZO was awarded by CMS and made

effective in the second quarter of 2023 and temporary pass-through reimbursement for TRIESENCE was made effective April 1, 2025.

Following the expiration of pass-through status, under current CMS policy, non-opioid pain

management surgical drugs when used on Medicare Part B patients in an outpatient setting can qualify for ongoing separate payments.

CMS’ current non-opioid separate payment policy, like other CMS policies, can be changed by CMS through its annual rulemaking

and comment process.

is a joint federal and state program that is administered by the states for low-income and disabled beneficiaries.

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removed, and our rebate liability could increase accordingly.

we become aware that our reporting for a prior quarter was incorrect or has changed as a result of recalculation of the pricing data,

we are obligated to resubmit the corrected data for up to three years after those data originally were due, which revisions could affect

become aware that our reporting for a prior quarter was incorrect or has changed as a result of recalculation of the pricing data, we

are obligated to resubmit the corrected data for up to three years after those data originally were due, which revisions could affect

our rebate liability for prior quarters.

44 unchanged sentences

manufacturers to agree to provide 340B discounted pricing on drugs used in an inpatient setting.

order to be eligible to have our products paid for with federal funds under the Medicaid and Medicare Part B programs and purchased by

certain federal agencies and grantees, we participate in the U.S.

Department of Veterans Affairs (“VA”) Federal Supply Schedule

(“FSS”) pricing program.

FSS participation is required for our products to be purchased by the VA, Department of Defense

(“DoD”), Coast Guard, and Public Health Service (“PHS”).

Prices for innovator drugs purchased by the VA, DoD,

Coast Guard, and PHS are subject to a cap (known as the “Federal Ceiling Price”) equal to 76% of the annual non-federal average

manufacturer price (“non-FAMP”) minus, if applicable, an additional discount.

The additional discount applies if non-FAMP

increases more than inflation (measured by reference to the Consumer Price Index - Urban).

We also participate in the Tricare Retail

Pharmacy Program, under which we pay quarterly rebates to DoD for prescriptions of our innovator drugs dispensed to Tricare beneficiaries

through Tricare Retail network pharmacies.

The governing statute provides for civil monetary penalties for failure to provide information

timely or for knowingly submitting false information to the government.

to be eligible to have our products paid for with federal funds under the Medicaid and Medicare Part B programs and purchased by certain

federal agencies and grantees, we participate in the U.S.

Department of Veterans Affairs (“VA”) Federal Supply Schedule (“FSS”)

pricing program.

FSS participation is required for our products to be purchased by the VA, Department of Defense (“DoD”),

Coast Guard, and Public Health Service (“PHS”).

Prices for innovator drugs purchased by the VA, DoD, Coast Guard, and PHS

are subject to a cap (known as the “Federal Ceiling Price”) equal to 76% of the annual non-federal average manufacturer price

(“non-FAMP”) minus, if applicable, an additional discount.

The additional discount applies if non-FAMP increases more than

inflation (measured by reference to the Consumer Price Index - Urban).

We also participate in the Tricare Retail Pharmacy Program, under

which we pay quarterly rebates to DoD for prescriptions of our innovator drugs dispensed to Tricare beneficiaries through Tricare Retail

network pharmacies.

The governing statute provides for civil monetary penalties for failure to provide information timely or for knowingly

submitting false information to the government.

Part D provides coverage to enrolled Medicare patients for self-administered drugs (i.e., drugs that are not administered by a physician).

15 unchanged sentences

monetary penalty.

payor healthcare and insurance providers, health maintenance organizations, and pharmacy benefit managers in the United States are adopting

more aggressive utilization management techniques and are increasingly requiring significant discounts and rebates from manufacturers

as a condition to including products on formulary with favorable coverage and copayment/coinsurance.

payor healthcare and insurance providers, health maintenance organizations, and pharmacy benefit managers in the U.S.

are adopting more

aggressive utilization management techniques and are increasingly requiring significant discounts and rebates from manufacturers as a

condition to including products on formulary with favorable coverage and copayment/coinsurance.

These payors may not cover or adequately

reimburse for use of our products or may do so at levels that disadvantage them relative to competitive products.

proprietary ophthalmic compounded formulations are primarily available on a cash-pay basis and generally are not subject to Medicare,

Medicaid, or other payor-related initiatives.

success and ability to compete depends upon our ability to protect our intellectual property.

We conduct a fulsome analysis of the intellectual

property landscape prior to acquiring rights to formulations and filing patent applications.

In addition, as of March 1, 2024, we owned

and/or licensed more than 50 total issued and pending patent applications, which include U.S.-issued patents, international-issued patents,

and foreign/international patent pending applications.

Intellectual Property

Our success and ability to compete

depends upon our ability to protect our intellectual property.

We conduct a fulsome analysis of the intellectual property landscape prior

to acquiring rights to formulations and filing patent applications.

In addition, as of March 1, 2025, we owned and/or licensed more than

50 total issued and pending patent applications, which include U.S.-issued patents, international-issued patents, and U.S.

and foreign/international

patent pending applications.

We expect to file additional patent applications in the U.S.

patent protection for certain of our formulations in other important international jurisdictions in the future.

of March 1, 2024, we had, on a worldwide basis, more than 100 issued trademarks, pending trademark and copyright applications, or registered

copyrights and/or trademarks.

We also rely on unpatented trade secrets and know-how and continuing technological innovation in order

to develop our products and formulations, which we seek to protect, in part, by confidentiality agreements with our employees, consultants,

collaborators and others, including certain service providers.

We also have invention or patent assignment agreements with our current

employees and certain consultants.

However, our employees and consultants may breach these agreements, and we may not have adequate remedies

for any breach, or our trade secrets may otherwise become known or be independently discovered by competitors.

In addition, inventions

relevant to us could be developed by a person not bound by an invention assignment agreement with us, in which case we may have no rights

to use the applicable invention.

and pursue patent protection for certain of

our formulations in other important international jurisdictions in the future.

As of March 1, 2025, we had,

on a worldwide basis, more than 100 issued trademarks, pending trademark and copyright applications, or registered copyrights and/or

We also rely on unpatented trade secrets and know-how and continuing technological innovation in order to develop our products

and formulations, which we seek to protect, in part, by confidentiality agreements with our employees, consultants, collaborators and

others, including certain service providers.

We also have invention or patent assignment agreements with our current employees and certain

However, our employees and consultants may breach these agreements, and we may not have adequate remedies for any breach,

or our trade secrets may otherwise become known or be independently discovered by competitors.

In addition, inventions relevant to us

could be developed by a person not bound by an invention assignment agreement with us, in which case we may have no rights to use the

applicable invention.

following table lists our outstanding material patents in the U.S.

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One or more patents with the same or earlier expiry dates may fall under the same general subject matter and are not listed separately.

Subject Matter

using topical formulations

composition for treatment of dry eye syndrome

composition comprising cyclosporine

Semiflourinated

compounds for ophthalmic administration

administration method

of injectable suspension

for treating ophthalmic disorder

containing a synergistic combination of polymers

comprising carbomer, galactomannan and borate

Carboxyvinyle

polymer-containing nanoparticle suspension

2030 March 2032

for treating inflammation where infection may occur

containing tobramycin and dexamethasone

for treating eye disease

of oil-in-water cationic emulsion

containing quaternary ammonium compounds

for treating ophthalmic allergic conjunctivitis

topical compositions of cetirizine

business is subject to federal, state and local laws, regulations, and administrative practices, including, among others:

federal, state

and local licensure and registration requirements concerning the operation of pharmacies and the practice of pharmacy;

the Health Insurance

Portability and Accountability Act of 1996 (“HIPAA”);

General Subject Matter

Methods using topical formulations

Compositions compromising chloroprocaine

September 2038

Formulation composition for treatment of dry

Ophthalmic composition comprising cyclosporine

Semiflourinated compounds for ophthalmic administration

Topical administration method

December 2030

September 2037

November 2038

Composition of injectable suspension

Methods for treating ophthalmic disorder

December 2029

Composition comprising carbomer, galactomannan and borate

Carboxyvinyle polymer-containing nanoparticle suspension

December 2030

Methods for treating inflammation where infection may occur

Compositions containing tobramycin and dexamethasone

December 2027

Methods for treating eye disease

Compositions of oil-in-water cationic emulsion

Compositions containing quaternary ammonium compounds

November 2027

Governmental Regulation

Our business is subject to federal,

state and local laws, regulations, and administrative practices, including, among others:

federal, state and local licensure and registration

requirements concerning the operation of pharmacies and the practice of pharmacy;

the Health Insurance Portability and Accountability

Act of 1996 (“HIPAA”);

the Health Care Reform Law;

statutes and regulations of the FDA, the

Federal Trade Commission (the “FTC”), the U.S.

statutes and regulations of the FDA, the U.S.

Federal Trade Commission

(the “FTC”), the U.S.

Drug Enforcement Administration and the U.S.

Consumer Product Safety

Commission, as well as regulations promulgated by comparable state agencies concerning the sale, advertisement and promotion of the products

The regulatory and quality compliance environment for compounded drugs has become significantly more rigorous, complex and strict

since the passage of The Drug Quality and Security Act of 2013 (the “DQSA”).

The complexity of the current state and federal

regulatory environment, as well as the expected continued evolution of state and federal laws governing pharmaceutical compounding, have

presented, and will continue to present, potentially significant challenges to our business model and the fulfillment of our mission

as a company.

Below are descriptions of some of the various federal and state laws and regulations which may govern or impact our current

and planned operations.

New Drug Application Process

discussed in other sections of this Annual Report, we are pursuing, and may continue to pursue, alone or with project partners, FDA approval

to market and sell one or more of our product candidates through the FDA’s NDA process.

As a condition of approval, the FDA or

other regulatory authorities may require further studies, including Phase 4 post-marketing studies, to provide additional data.

post-marketing studies may be required to gain approval for the use of a product as a treatment for clinical indications other than those

for which the product was initially tested and approved.

Also, the FDA or other regulatory authorities require post-marketing reporting

to monitor the adverse effects of a drug.

Consumer Product Safety Commission, as well as regulations

promulgated by comparable state agencies concerning the sale, advertisement and promotion of the products we sell.

The regulatory and

quality compliance environment for compounded drugs has become significantly more rigorous, complex and strict since the passage of The

Drug Quality and Security Act of 2013 (the “DQSA”).

The complexity of the current state and federal regulatory environment,

as well as the expected continued evolution of state and federal laws governing pharmaceutical compounding, have presented, and will

continue to present, potentially significant challenges to our business model and the fulfillment of our mission as a company.

are descriptions of some of the various federal and state laws and regulations which may govern or impact our current and planned operations.

FDA New Drug Application (NDA)

As discussed in other sections

of this Annual Report, we are pursuing, and may continue to pursue, alone or with project partners, FDA approval to market and sell one

or more of our product candidates through the FDA’s NDA process.

As a condition of approval, the FDA or other regulatory authorities

may require further studies, including Phase 4 post-marketing studies, to provide additional data.

What changed 10-K

Item 1. Business