What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-02-09 compared with 2022-02-24 · 167 added, 134 removed, 946 unchanged (24% of the section changed)

14 unchanged sentences

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

EXECUTIVE COMPENSATION

Information required under this item will be contained in our Proxy Statement for the 2022 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2021 and is incorporated herein by reference pursuant to General Instruction G(3) to Form 10-K, except that information required by Item 407(e)(5) of Regulation S-K will be deemed furnished in this Form 10-K and will not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that we specifically incorporate it by reference into such filing.

Information required under this item will be contained in our Proxy Statement for the 2023 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2022 and is incorporated herein by reference, except that information required by Item 407(e)(5) of Regulation S-K will be deemed furnished in this Form 10-K and will not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that we specifically incorporate it by reference into such filing.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Securities Authorized for Issuance under Equity Incentive Plans

Information regarding securities authorized for issuance under equity incentive plans will be contained in our Proxy Statement for the 2023 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2022 and is incorporated herein by reference pursuant to General Instruction G(3) to Form 10-K.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

PRINCIPAL ACCOUNTANT FEES AND SERVICES

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

2 unchanged sentences

The Exhibits are listed in the Exhibit Index.

Form 10-K Summary

Pursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this annual report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.

12 unchanged sentences

/s/ Kevin Moran Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) February 9, 2023

Thomas Watkins Lead Independent Director February 24, 2022

Thomas Watkins

/s/ Richard W.

Dugan Lead Independent Director February 9, 2023

/s/ Anne Sempowski Ward Director February 9, 2023

2 unchanged sentences

Phaedra Chrousos

/s/ Richard W.

Dugan Director February 24, 2022

/s/ Stephen Ray Mitchell Director February 9, 2023

8 unchanged sentences

Consolidated Statements of Cash Flows for the years ended December 31, 2022 , 2021 and 2020

Notes to the Consolidated Financial Statements

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

67 unchanged sentences

Operating lease non-current liabilities

10,055 11,497

Other non-current liabilities

9 unchanged sentences

686,235 669,223

Accumulated other comprehensive income (loss) ( 175 ) 239

Accumulated other comprehensive loss ( 1,193 ) ( 175 )

Accumulated deficit ( 157,901 ) ( 164,176 )

17 unchanged sentences

Income before income taxes 11,300 42,364 31,655

Provision (benefit) for income taxes 9,212 8,318 ( 86,525 )

Provision for income taxes 5,025 9,212 8,318

Net income $ 6,275 $ 33,152 $ 23,337

14 unchanged sentences

Change in net unrealized gain (loss) on marketable securities ( 1,271 ) ( 472 ) ( 102 )

Tax benefit (provision) on other comprehensive income (loss) 107 24 ( 71 )

Other comprehensive income (loss), net of tax ( 414 ) ( 10 ) 248

Tax benefit on other comprehensive income (loss) 292 107 24

Other comprehensive loss, net of tax ( 1,018 ) ( 414 ) ( 10 )

Comprehensive income $ 5,257 $ 32,738 $ 23,327

13 unchanged sentences

Net income — — — — 23,337 23,337

Other comprehensive income, net of tax — — — 248 — 248

Other comprehensive loss, net of tax — — — ( 10 ) — ( 10 )

Balances at December 31, 2020 54,865,092 55 650,300 239 ( 197,328 ) 453,266

22 unchanged sentences

Amortization of premiums and accretion of discounts on marketable securities ( 2,963 ) 1,649 179

Gain on sale of marketable securities ( 12 ) ( 229 ) —

Gains on sales of marketable securities — ( 12 ) ( 229 )

Intangible asset amortization 1,516 1,478 1,478

14 unchanged sentences

Sales and maturities of marketable securities 399,862 344,317 306,918

Net cash used in investing activities ( 76,696 ) ( 41,499 ) ( 68,309 )

Net cash provided by (used in) investing activities 49,925 ( 76,696 ) ( 41,499 )

Cash flows from financing activities

19 unchanged sentences

In addition, the Company has a number of drugs in development, including:

• HETLIOZ ® (tasimelteon) for the treatment of jet lag disorder, delayed sleep phase disorder (DSPD), symptoms of autism spectrum disorder (ASD) and pediatric Non-24;

• Fanapt ® (iloperidone) for the treatment of bipolar disorder and Parkinson ’ s disease psychosis and a long acting injectable (LAI) formulation for the treatment of schizophrenia;

• HETLIOZ ® (tasimelteon) for the treatment of jet lag disorder, insomnia, delayed sleep phase disorder (DSPD), sleep disturbances in autism spectrum disorder (ASD) and pediatric Non-24;

• Fanapt ® (iloperidone) for the treatment of bipolar I disorder and Parkinson’s disease psychosis and a long acting injectable (LAI) formulation for the treatment of schizophrenia;

• Tradipitant (VLY-686), a small molecule neurokinin-1 (NK-1) receptor antagonist, for the treatment of gastroparesis, motion sickness, atopic dermatitis, and COVID-19 pneumonia;

• VTR-297, a small molecule histone deacetylase (HDAC) inhibitor for the treatment of hematologic malignancies and with potential use as a treatment for several oncology indications;

• Portfolio of Cystic Fibrosis Transmembrane Conductance Regulator (CFTR) activators and inhibitors, including VSJ-110 for the treatment of dry eye and ocular inflammation and BPO-27 for the treatment of secretory diarrhea disorders, including cholera;

• VQW-765, a small molecule nicotinic acetylcholine receptor partial agonist, with potential use for the treatment of psychiatric disorders;

• VHX-896 (formerly P88), the active metabolite of iloperidone.

• Portfolio of Cystic Fibrosis Transmembrane Conductance Regulator (CFTR) activators and inhibitors, including VSJ-110 for the treatment of dry eye and ocular inflammation and VPO-227 for the treatment of secretory diarrhea disorders, including cholera;

• VQW-765, a small molecule nicotinic acetylcholine receptor partial agonist, for the treatment of performance anxiety and psychiatric disorders;

• VHX-896, the active metabolite of iloperidone;

• Antisense oligonucleotide (ASO) molecules.

Basis of Presentation

12 unchanged sentences

headquarters.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets to the total end of period cash, cash equivalents and restricted cash reported within the Consolidated Statement of Cash Flows:

(in thousands) 2022 2021

Cash and cash equivalents $ 135,029 $ 52,071

Restricted cash included in:

Prepaid expenses and other current assets — 57

Non-current inventory and other 519 525

Restricted cash included in non-current inventory and other 469 519

Total cash, cash equivalents and restricted cash

24 unchanged sentences

In the event a product has been approved by the FDA or an alternative future use exists for a product, patent and license costs are capitalized and amortized on a straight-line basis over the estimated useful economic life of the of the related product patents.

For intangible assets related to HETLIOZ ® , the estimated useful life is through July 2035, which is the estimated economic useful life of the related product patents.

For intangible assets related to HETLIOZ ® , the estimated useful life is through March 2035, which is the estimated economic useful life of the related product patents.

Intangible assets related Fanapt ® have been fully amortized on a straight-line basis to November 2016.

3 unchanged sentences

Depreciation of most property and equipment is provided on a straight-line basis over the estimated useful lives of the assets.

Leasehold improvements are amortized using a

straight-line basis over the lesser of the estimated useful lives of the assets or the terms of the related leases.

Leasehold improvements are amortized using a straight-line basis over the lesser of the estimated useful lives of the assets or the terms of the related leases.

The costs of additions and improvements are capitalized, and repairs and maintenance costs are charged to operations in the period incurred.

Upon retirement or disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the statement of operations for that period.

Upon retirement or disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the Consolidated Statement of Operations for that period.

The Company determines if an arrangement contains a lease at inception.

7 unchanged sentences

For all office leases entered into after January 1, 2019, executory costs are allocated between lease and non-lease elements based upon their relative stand-alone prices.

Impairment of Long-Lived Assets

The Company evaluates if events and circumstances have occurred that indicate the remaining estimated useful life of its long-lived assets, such as identifiable intangible assets, may warrant revision or that the remaining balance of these assets may not be recoverable.

In evaluating for recoverability, the Company estimates the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition.

In the event that the balance of any asset exceeds the future undiscounted or discounted cash flow estimate, impairment is recognized based on the excess of the carrying amounts of the asset above its estimated fair value.

No impairment was recognized for the years ended December 31, 2022, 2021 and 2020.

Accounts Payable and Accrued Liabilities

18 unchanged sentences

HETLIOZ ® is available in the United States (U.S.) for distribution through a limited number of specialty pharmacies, and is not available in retail pharmacies.

Specialty pharmacy customers include OptumRx (a subsidiary of UnitedHealth Group) and Accredo (a subsidiary of Express Scripts).

Specialty pharmacy customers include Accredo (a subsidiary of Express Scripts) and

OptumRx (a subsidiary of UnitedHealth Group).

Fanapt ® is available in the U.S.

for distribution through a limited number of wholesalers and is available in retail pharmacies.

Wholesaler customers include Cardinal Health, Inc., AmerisourceBergen Drug Corporation, and McKesson Corporation.

Wholesaler customers include AmerisourceBergen Drug Corporation, Cardinal Health, Inc.

and McKesson Corporation.

The Company invoices and records revenue when its customers, specialty pharmacies and wholesalers, receive product from the third-party logistics warehouse, which is the point at which control is transferred to the customer.

28 unchanged sentences

The reserve for product returns for which the product may not be returned for a period of greater than one year from the balance sheet date is included as a component of other non-current liabilities in the Consolidated Balance Sheets.

Uncertainties related to variable consideration are generally resolved in the quarter subsequent to period end, with the exception of Medicaid rebates, which are dependent upon the timing of when states submit reimbursement claims, and product returns that are resolved during the product expiry period specified in the customer contract.

Uncertainties related to variable consideration are generally resolved in the quarter subsequent to period end, with the exception of Medicaid rebates, which are dependent upon the timing of when states submit reimbursement claims, Medicare inflationary rebates, and product returns that are resolved during the product expiry period specified in the customer contract.

The Company currently records sales allowances for the following:

2 unchanged sentences

The Company expects that the specialty pharmacies and wholesalers will earn prompt payment discounts and, therefore, deducts the full amount of these discounts from total product sales when revenues are recognized.

Allowances for rebates include mandated discounts under the Medicaid Drug Rebate Program as well as contracted rebate programs with other payors.

Allowances for rebates include mandated discounts under the Medicaid Drug Rebate Program as well as contracted rebate programs with other payors, including the new Medicare Part D inflationary rebate effective October 1, 2022.

Rebate amounts owed after the final dispensing of the product to a benefit plan participant are based upon contractual agreements or legal requirements with public sector benefit providers, such as Medicaid.

2 unchanged sentences

Chargebacks are discounts that occur when contracted indirect customers purchase directly from specialty pharmacies and wholesalers.

Contracted indirect customers, which currently consist primarily of Public Health Service institutions and federal government entities purchasing via the Federal Supply Schedule, generally

purchase the product at a discounted price.

Contracted indirect customers, which currently consist primarily of Public Health Service institutions and federal government entities purchasing via the Federal Supply Schedule, generally purchase the product at a discounted price.

The specialty pharmacy or wholesaler, in turn, charges back the difference between the price initially paid by the specialty pharmacy or wholesaler and the discounted price paid to the specialty pharmacy or wholesaler by the contracted customer.

30 unchanged sentences

Research and Development Expenses

Research and development expenses consist primarily of fees for services provided by third parties in connection with the clinical trials, costs of contract manufacturing services, milestone payments, costs of materials used in clinical trials and research and development, costs for regulatory consultants and filings, depreciation of capital resources used to develop products, related facilities costs, and salaries, other employee-related costs and stock-based compensation for research and development personnel.

research and development, costs for regulatory consultants and filings, depreciation of capital resources used to develop products, related facilities costs, and salaries, other employee-related costs and stock-based compensation for research and development personnel.

The Company expenses research and development costs as they are incurred for products in the development stage, including manufacturing costs and milestone payments made under license agreements prior to FDA approval.

32 unchanged sentences

Changes in ownership may limit the amount of net operating loss (NOL) carryforwards that can be utilized in the future to offset taxable income.

Tax benefits are recognized from an uncertain tax position only if it is more likely than not that the position will be sustained on examination by the taxing authorities based on the technical merits of the position.

Tax benefits are recognized from an uncertain tax position only if it is

more likely than not that the position will be sustained on examination by the taxing authorities based on the technical merits of the position.

The tax benefit recognized in the financial statements for a particular tax position is based on the largest benefit that is more likely than not to be realized upon settlement.

Interest and penalties related to income taxes are recognized as a component of income tax expense in the Consolidated Statements of Operations, and cumulative accrued interest and penalties are recognized within the related liability lines in the Consolidated Balance Sheets.

Certain Risks and Uncertainties

The outbreak of the novel coronavirus known as COVID-19 has resulted in government-imposed quarantines, travel restrictions and other public health safety measures.

As this pandemic endures, the extent to which COVID-19 may impact the Company’s business, financial condition and results of operations is uncertain and will depend on many factors outside of the Company’s control.

The Company’s products under development require approval from the FDA or other international regulatory agencies prior to commercial sales.

1 unchanged sentence

If the Company is denied clearance or clearance is delayed, it may have a material adverse impact on the Company.

The Company’s products are concentrated in rapidly changing, highly competitive markets, which are characterized by rapid technological advances, changes in customer requirements and evolving regulatory requirements and industry standards.

Any failure by the Company to anticipate or to respond adequately to technological developments in its industry, changes in customer requirements or changes in regulatory requirements or industry standards or any significant delays in the development or introduction of products or services could have a material adverse effect on the Company’s business, operating results and future cash flows.

The Company’s products are concentrated in rapidly changing, highly competitive markets, which are characterized by rapid technological advances, increasing generic competition, changes in customer requirements and evolving regulatory requirements and industry standards.

Any failure by the Company to anticipate or to respond adequately to technological developments in its industry, challenges from new generic market entrants, changes in customer or regulatory requirements or changes in industry standards, or any significant delays in the development or introduction of products or services could have a material adverse effect on the Company’s business, operating results and future cash flows.

The Company depends on single source suppliers for critical raw materials for manufacturing, as well as other components required for the administration of its products.

10 unchanged sentences

Recent Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes, which clarifies and simplifies certain aspects of the accounting for income taxes.

The standard is effective for years beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2020.

The adoption of this standard on January 1, 2021 did not have a material impact on the Company’s consolidated financial statements.

There are no recent accounting pronouncements that are expected to have a material impact on the Company’s consolidated financial statements or related disclosures.

Marketable Securities

18 unchanged sentences

The valuation of Level 2 instruments is also determined using a market approach based upon quoted prices for similar assets in active markets, or other inputs that are observable for substantially the full term of the financial instrument.

Level 2 securities include certificates of deposit, commercial paper, corporate notes and asset-backed securities that use as their basis readily observable market parameters.

Level 2 securities include certificates of deposit, commercial paper and corporate notes that use as their basis readily observable market parameters.

The Company held certain assets that are required to be measured at fair value on a recurring basis as of December 31, 2022, as follows:

21 unchanged sentences

Total assets measured at fair value as of December 31, 2022 and 2021 include no cash equivalents.

The Company also has financial assets and liabilities, not required to be measured at fair value on a recurring basis, which primarily consist of cash, accounts receivable, restricted cash, accounts payable and accrued liabilities, product revenue allowances, and milestone obligations under license agreements, the carrying values of which materially approximate their fair values.

The Company also has financial assets and liabilities, not required to be measured at fair value on a recurring basis, which primarily consist of cash, accounts receivable, restricted cash, accounts payable and accrued liabilities and product revenue allowances, the carrying values of which materially approximate their fair values.

Inventory consisted of the following as of December 31, 2022 and 2021:

20 unchanged sentences

Total property and equipment, net $ 2,573 $ 3,113

Depreciation expense was $ 1.4 million for each of the years ended December 31, 2021, 2020 and 2019.

Depreciation expense was $ 1.2 million, $ 1.4 million and $ 1.4 million for the years ended December 31, 2022, 2021 and 2020, respectively.

The Company’s long-term leases primarily include operating leases and subleases for office space in Washington, D.C.

and London, England.

The Company recognized ROU assets and lease liabilities related to fixed payments for these long-term operating leases in its Consolidated Balance Sheet as of December 31, 2021 and 2020.

The Company recognized ROU assets and lease liabilities related to fixed payments for these long-term operating leases in its Consolidated Balance Sheets as of December 31, 2022 and 2021.

The Company also has short-term leases, including office space in Berlin, Germany.

10 unchanged sentences

In May 2016, the Company entered into an operating lease agreement under which it leases 2,880 square feet of office space in London, England.

In November 2020, the Company extended the non-cancellable portion of the lease term from 2021 to 2023 and has the option to renew the lease for an additional three years following its expiration.

As of December 31, 2021, the renewal period has not been included in the lease term.

In November 2022, the Company extended the non-cancellable portion of the lease term from 2023 to 2026.

The following is a summary of the Company’s ROU assets and operating lease liabilities as of December 31, 2022 and 2021:

6 unchanged sentences

Weighted average discount rate

(1) Upon adoption of the new lease standard, discount rates used for existing leases were established at January 1, 2019.

For each of the years ended December 31, 2021, 2020 and 2019, the Company recognized operating lease cost of $ 2.3 million and short-term operating lease cost of $ 0.4 million.

The Company recognized operating lease cost of $ 2.2 million, $ 2.3 million and $ 2.3 million and short-term operating lease cost of $ 0.4 million for each of the years ended December 31, 2022, 2021 and 2020, respectively.

The Company also recognized $ 1.4 million, $ 1.4 million and $ 1.5 million, respectively, of expense related to non-lease elements, such as building maintenance services and utilities, and executory costs associated with the operating leases.

For existing leases as of January 1, 2019, executory costs are excluded from operating lease expense, which is consistent with the Company’s accounting under ASC 840.

For all leases entered into after January 1, 2019, executory costs are allocated between lease and non-lease elements based upon their relative stand-alone prices.

Cash paid for amounts included in the measurement of operating lease liabilities is included in operating cash flows and was $ 2.6 million, $ 2.3 million and $ 2.6 million for the years ended December 31, 2022, 2021 and 2020, respectively.

10 unchanged sentences

As a result of this approval, the Company met a milestone under its license agreement with Bristol-Myers Squibb (BMS) that required the Company to make a license payment of $ 8.0 million to BMS.

The $ 8.0 million is being amortized on a straight-line basis over the estimated economic useful life of the related product patents.

In April 2018, the Company met its final milestone under its license agreement with BMS when cumulative worldwide sales of HETLIOZ ® reached $ 250.0 million.

As a result of the achievement of this milestone, the Company made a payment to BMS of $ 25.0 million in 2018.

The $ 25.0 million, which was capitalized as an intangible asset in the first quarter of 2015, was

determined to be additional consideration for the acquisition of the HETLIOZ ® intangible asset and is being amortized on a straight-line basis over the estimated economic useful life of the related product patents.

These milestone payments were determined to be additional consideration for the acquisition of the HETLIOZ ® and capitalized as an intangible asset and is being amortized on a straight-line basis over the estimated economic useful life of the related product patents.

The following is a summary of the Company’s intangible assets as of December 31, 2022:

4 unchanged sentences

Amortization Net

July 2035 $ 33,000 $ 12,919 $ 20,081

March 2035 $ 33,000 $ 14,435 $ 18,565

The following is a summary of the Company’s intangible assets as of December 31, 2021:

22 unchanged sentences

Operating lease liabilities 2,328 2,311

Milestone obligations under license agreements — 350

Accounts payable and other accrued liabilities 12,690 925

17 unchanged sentences

In territories outside the U.S., the royalty is 5 % on net sales.

In the U.S., the current royalty on net sales is 10 %.

This royalty will drop to 5 % in December 2022 and will end in April 2024.

In the U.S., the royalty on net sales in the U.S.

decreased from 10 % to 5 % in December 2022.

royalty will end in April 2024.

The Company is also obligated under the license agreement to pay BMS a percentage of any sublicense fees, upfront payments and milestone and other payments (excluding royalties) that it receives from a third party in connection with any sublicensing arrangement, at a rate which is in the mid-twenties .

4 unchanged sentences

(Sanofi) a fixed royalty of 3 % of net sales through December 2019 related to manufacturing know-how.

The Company is also obligated to pay Sanofi a fixed royalty on Fanapt ® net sales equal to 6 % on Sanofi know-how not related to manufacturing under certain conditions for a period of up to 10 years in markets where the NCE patent has expired or was not issued.

The Company is obligated to pay this 6 % royalty on net sales in the U.S.

3 unchanged sentences

As of December 31, 2022, the Company has paid Lilly $ 3.0 million in upfront fees and development milestones.

As of December 31, 2021, remaining milestone obligations include a $ 2.0 million development milestone due upon the filing of the first marketing authorization for tradipitant in either the U.S.

or European Union (E.U.), $ 10.0 million and $ 5.0 million for the first approval of a marketing authorization for tradipitant in the U.S.

As of December 31, 2022, remaining milestone obligations include a $ 2.0 million development milestone due upon the filing of the first application for marketing authorization for tradipitant in either the U.S.

or European Union (E.U.), $ 10.0 million and $ 5.0 million for the first approval of an application for marketing authorization for tradipitant in the U.S.

and E.U., respectively, and up to $ 80.0 million for sales milestones.

7 unchanged sentences

Included in the $ 11.9 million of development milestones are $ 1.1 million of milestone obligations due upon the conclusion of clinical studies for each licensed product but not to exceed $ 3.2 million in total for the CFTR portfolio.

As a result of completion of the first clinical study initiated by the Company for VSJ-110, the Company made a $ 350,000 development milestone payment to UCSF in the fourth quarter of 2021.

The likelihood of achieving this milestone was determined to be probable during 2020 and the obligation of $ 350,000 tied to such milestone was recorded as research and development expense in the consolidated Statements of Operations during the year ended December 31, 2020 and as a current liability in the Consolidated Balance Sheet as of December 31, 2020.

In connection with a settlement agreement with Novartis relating to Fanapt ® , the Company received an exclusive worldwide license under certain patents and patent applications, and other licenses to intellectual property, to develop and commercialize VQW-765, a Phase II alpha-7 nicotinic acetylcholine receptor partial agonist.

2 unchanged sentences

however, Novartis is eligible to receive tiered-royalties on net sales at percentage rates up to the mid-teens .

Other Agreements

In September 2022, the Company entered into an agreement with OliPass Corporation (OliPass) to jointly develop a set of antisense oligonucleotide (ASO) molecules based on OliPass’ proprietary modified peptide nucleic acids.

As consideration for entering into the arrangement, the Company paid OliPass an upfront fee of $ 3.0 million, which was recorded as research and development expense during the three months ended September 30, 2022.

The Company will fund the research and development activities and has the option to license jointly developed intellectual property upon successful development.

Purchase Commitments

In the course of its business, the Company regularly enters into agreements with third-party vendors under fee service arrangements, which generally may be terminated on 90 days’ notice without incurring additional charges, other than charges for work completed or materials procured but not paid for through the effective date of termination and other costs incurred by the Company’s contractors in closing out work in progress as of the effective date of termination.

The Company’s non-cancellable purchase commitments for agreements longer than one year primarily relate to commitments for data services and are not material.

The Company’s non-cancellable purchase commitments for agreements longer than one year are not material.

Various other long-term agreements entered into for services with other third-party vendors, such as inventory purchase commitments, are cancellable in nature or contain variable commitment terms within the agreement.

Accumulated Other Comprehensive Income (Loss)

The accumulated balances related to each component of other comprehensive income (loss), net of taxes, were as follows for the years ended December 31, 2021 and 2020:

Accumulated Other Comprehensive Loss

The accumulated balances related to each component of other comprehensive loss, net of taxes, were as follows for the years ended December 31, 2022 and 2021:

(in thousands) December 31, 2022 December 31, 2021

Foreign currency translation $ ( 7 ) $ 32

Unrealized gain on marketable securities ( 207 ) 158

Accumulated other comprehensive income (loss) $ ( 175 ) $ 239

Unrealized loss on marketable securities ( 1,186 ) ( 207 )

Accumulated other comprehensive loss $ ( 1,193 ) $ ( 175 )

Stock-Based Compensation

23 unchanged sentences

Granted 745,028 11.10

Forfeited ( 128,285 ) 15.79

Expired ( 14,000 ) 11.95

66 unchanged sentences

Foreign 3 22 ( 42 )

Provision (benefit) for income taxes $ 9,212 $ 8,318 $ ( 86,525 )

The Company assesses the need for a valuation allowance against its deferred tax asset each quarter through the review of all available positive and negative evidence.

Deferred tax assets are reduced by a tax valuation allowance when, in the opinion of management, it is more likely than not that some portion of the deferred tax assets will not be realized.

The analysis depends on historical and projected taxable income.

Projected taxable income includes significant assumptions related to revenue, commercial expenses and research and development activities.

During 2019, after considering all available positive and negative evidence, including but not limited to cumulative income in recent periods, historical, current and future projected results and significant risks and uncertainties related to forecasts, the Company concluded that it was more likely than not that substantially all of its deferred tax assets in the U.S.

are realizable in future periods.

A valuation allowance was retained against certain District of Columbia state deferred tax assets as of December 31, 2021 and 2020.

Provision for income taxes $ 5,025 $ 9,212 $ 8,318

The following is reconciliation between the federal statutory tax rate and the Company’s effective tax rate for the years ended December 31, 2022, 2021 and 2020:

10 unchanged sentences

Stock-based compensation 5.8 % ( 1.8 ) % 5.1 %

Settlements 2.6 % — % — %

Other items 0.5 % 0.5 % 1.2 %

Effective tax rate 44.5 % 21.7 % 26.3 %

(1) Reductions in 2020 valuation allowances are attributable to 2020 income before income taxes.

Reductions in 2019 valuation allowances include $ 7.5 million related to 2019 U.S.

income before income taxes, $ 10.7 related to adjustments for prior period credit carryforwards and uncertain tax positions and $ 85.6 million related to a change in beginning-of-the-year balances that resulted from a change in circumstances that caused a change in judgment about the realizability of U.S.

deferred tax assets in future years.

(2) 2019 activity includes adjustments to prior year credit carryforwards and prior year tax positions.

As a result of the tax valuation allowance previously recorded against deferred tax assets in the U.S., these adjustments resulted in no change in tax expense.

The following is a summary of the components of the Company’s net deferred tax assets and the related tax valuation allowance as of December 31, 2022 and 2021.

6 unchanged sentences

Research and development and orphan drug credit carryforwards 42,402 39,975

Capitalized research and development expenses 16,990 —

Other 3,798 3,081

18 unchanged sentences

These tax attributes will begin to expire in 2035 , 2024 and 2030 , respectively.

In addition, the Company has $ 8.3 million of deferred tax assets relating to other U.S.

In addition, the Company has $ 7.7 million of

deferred tax assets relating to other U.S.

NOL carryforwards, which primarily relate to the District of Columbia.

NOLs for the District of Columbia will begin to expire in 2032 and state NOLs will begin to expire in 2029 .

The tax benefit recognized in the financial statements for a particular tax position is based on the largest benefit that is more likely than not to be realized upon settlement.

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:

4 unchanged sentences

Increases related to current year tax positions 2,895 1,580 1,613

Settlements ( 270 ) — —

Unrecognized tax benefits at the end of the year $ 15,485 $ 12,935 $ 11,233

1 unchanged sentence

Unrecognized tax benefits are not expected to change materially over the next 12 months.

Income tax returns filed by the

Company for all periods are open to examination by tax jurisdictions.

Generally, the tax years 2019 through 2021 remain open to examination by the major taxing jurisdiction to which the Company is subject.

To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service, or state or foreign tax authorities, to the extent utilized in a future period.

As of December 31, 2022, the Company is not under examination by any federal or state tax jurisdiction.

28 unchanged sentences

and Apotex Corp.

(Apotex) (collectively, the Fanapt ® Defendants) each submitted an Abbreviated New Drug Applications (ANDA) to the FDA seeking approval to market generic versions of Fanapt ® prior to the expiration of certain of the Company’s patents covering Fanapt ® , including U.S.

(Apotex) (collectively, the Fanapt ® Defendants) each submitted an Abbreviated New Drug

Application (ANDA) to the FDA seeking approval to market generic versions of Fanapt ® prior to the expiration of certain of the Company’s patents covering Fanapt ® , including U.S.

8,586,610 (‘610 Patent) and U.S.

3 unchanged sentences

In August 2016, the Delaware District Court ruled in the Company’s favor, permanently enjoining Roxane from manufacturing, using, selling, offering to sell, distributing or importing any generic iloperidone product described in Roxane’s ANDA until the expiration of the ‘610 Patent in November 2027, or May 2028 if the Company obtains pediatric exclusivity.

This ruling was affirmed on appeal by the Federal Circuit Court of Appeals in April 2018.

This ruling was affirmed on appeal by the U.S Court of Appeals for the Federal Circuit (Federal Circuit) in April 2018.

West-Ward, having replaced Roxane as defendant following the acquisition of Roxane by West-Ward’s parent company, Hikma Pharmaceuticals PLC (Hikma), petitioned the U.S.

Supreme Court for a writ of certiorari, which was denied in January 2020.

The Company’s lawsuit against Hikma regarding the ‘432 Patent remains pending.

The Company entered into separate license agreements with each of Taro, Apotex and Lupin resolving these lawsuits in October 2016, December 2016 and July 2020, respectively.

1 unchanged sentence

effective as of the expiration of the ‘610 Patent or earlier under certain limited circumstances.

The Company entered into a confidential stipulation with Inventia

regarding any potential launch of its generic versions of Fanapt ® , but the Company’s lawsuit against Inventia regarding the ‘610 and ‘432 Patents remains pending.

The Company entered into a license agreement with Hikma regarding the ‘432 Patent in September 2022.

The license agreement grants Hikma a non-exclusive license to manufacture and commercialize a version of Fanapt ® in the U.S.

effective as of the expiration of the ‘610 Patent.

The Company entered into a confidential stipulation with Inventia regarding any potential launch of its generic version of Fanapt ® , but the Company’s lawsuit against Inventia regarding the ‘610 and ‘432 Patents remains pending.

Between April 2018 and March 2021, the Company filed numerous Hatch-Waxman lawsuits in the Delaware District Court against Teva Pharmaceuticals USA, Inc.

1 unchanged sentence

and MSN Laboratories Private Limited (MSN) and Apotex (collectively the HETLIOZ ® Defendants) asserting that U.S.

RE46,604, 9,060,995, 9,539,234, 9,549,913, 9,730,910, 9,844,241, 10,071,977, 10,149,829, 10,376,487, 10,449,176, 10,610,510, 10,610,511, 10,829,465, and 10,611,744 will be infringed by the HETLIOZ ® Defendants’ generic versions of HETLIOZ ® , for which they are seeking FDA approval.

RE46,604 (‘604 Patent), 9,060,995, 9,539,234, 9,549,913, 9,730,910 (‘910 Patent), 9,844,241, 10,071,977, 10,149,829 (‘829 Patent), 10,376,487 (‘487 Patent), 10,449,176, 10,610,510, 10,610,511, 10,829,465, and 10,611,744 will be infringed by the HETLIOZ ® Defendants’ generic versions of HETLIOZ ® for which they were seeking FDA approval.

In January 2022, the Company entered into a license agreement with MSN and Impax Laboratories LLC (Impax) resolving the lawsuits against MSN.

The license agreement, which is subject to review by the U.S.

Federal Trade Commission and the U.S.

Department of Justice (the DOJ), grants MSN and Impax a non-exclusive license to manufacture and commercialize MSN’s version of HETLIOZ ® in the U.S.

The license agreement grants MSN and Impax a non-exclusive license to manufacture and commercialize MSN’s version of HETLIOZ ® in the U.S.

effective as of March 13, 2035, unless prior to that date the Company obtains pediatric exclusivity for HETLIOZ ® , in which case the license will be effective as of July 27, 2035.

MSN and Impax may enter the market earlier under certain limited circumstances.

The consolidated lawsuits against the remaining HETLIOZ ® Defendants are scheduled for trial in March 2022.

The consolidated lawsuits against the remaining HETLIOZ ® Defendants were tried in March 2022.

On December 13, 2022, the Delaware District Court ruled that Teva and Apotex did not infringe the ‘604 Patent, and that the asserted claims of the ‘604, ‘910, ‘829 and ‘487 Patents were invalid.

On December 14, 2022, Vanda appealed the Delaware District Court’s decision to the Federal Circuit and requested an injunction prohibiting market entry by Teva and Apotex while the appeal is pending.

On December 16, 2022, the Federal Circuit granted a temporary injunction to prohibit market entry by Teva and Apotex until the Federal Circuit entered its order on the Company’s motion for a stay pending appeal.

On December 28, 2022, the Federal Circuit denied the Company’s request for an injunction, which therefore lifted the stay pending appeal.

The oral argument for the Company’s appeal is scheduled for March 14, 2023.

On December 27, 2022, the Company filed patent infringement lawsuits, including Hatch-Waxman Act claims, against each of Teva and Apotex in the U.S.

District Court for the District of New Jersey (NJ District Court) asserting that U.S.

11,285,129, a method of administration patent that was not litigated in the Delaware District Court cases (‘129 Patent), will be infringed by Teva’s and Apotex’ generic versions of HETLIOZ ® , each of which was approved by the FDA.

The Company has asked the NJ District Court to, among other things, order that the effective date of the FDA’s approval of Teva’s and Apotex’ generic versions of HETLIOZ ® be a date that is no earlier than the expiration of the ‘129 Patent, or such later date that the NJ District Court may determine, and enjoin each of Teva and Apotex from the commercial manufacture, use, import, offer for sale and/or sale of their generic versions of HETLIOZ ® until the expiration of the ‘129 Patent, or such later date that the NJ District Court may determine.

On December 28, 2022, the Company filed a similar lawsuit against Apotex in the U.S.

District Court for the Southern District of Florida asserting the same claims and seeking the same relief against Apotex as are asserted and sought in the litigation pending before the NJ District Court.

In January 2023, the Company filed a lawsuit in the NJ District Court against Teva challenging Teva’s advertising and marketing practices related to its at risk launch of its generic version of HETLIOZ ® for the single indication of Non-24.

The Company believes that Teva’s advertising and marketing practices related to its generic version of HETLIOZ ® promote its product for uses beyond the limited labeling that Teva sought and the FDA approved.

The Company seeks to, among other things, enjoin Teva from engaging in false and misleading advertising and recover monetary damages.

In January 2023, the Company filed a lawsuit in the U.S.

District Court for the District of Columbia (DC District Court) against the FDA challenging the FDA’s approval of Teva’s ANDA for its generic version of HETLIOZ ® capsules under the Administrative Procedure Act, the Food, Drug, and Cosmetic Act (FDCA), and FDA regulations.

Under the FDCA, every ANDA must contain information to show that the labeling proposed for the generic drug is the same as the labeling approved for the listed drug;

additionally, the generic drug must have the same conditions of use as the listed drug.

The Company believes that Teva’s approved labeling does not comply with these requirements.

The Company has asked the DC District Court to, among other things, vacate the FDA’s approval of Teva’s ANDA, declare that the approval of the ANDA was unlawful, arbitrary, and capricious and compel the FDA to order Teva to recall its shipments or sales of its generic HETLIOZ ® product.

In February 2023, Teva filed a motion with the DC District Court to intervene as a defendant in the lawsuit.

Vanda did not oppose Teva’s motion.

Other Matters .

In February 2019, a qui tam action filed against the Company was unsealed by order of the U.S.

District Court for the District of Columbia (DC District Court).

The qui tam action, which was filed under seal in March 2017, was brought by a former Company employee on behalf of the U.S., 28 states and the District of Columbia (collectively, the Plaintiff States) and the policyholders of certain insurance companies under the Federal False Claims Act and state law equivalents to the Federal False Claims Act and related state laws.

The complaint alleged that the Company violated these laws through the promotion and marketing of its products Fanapt ® and HETLIOZ ® and sought, among other things, treble damages, civil penalties for each alleged false claim, and attorneys’ fees and costs.

By virtue of the DC District Court having unsealed the original complaint, the Company learned that in January 2019, the DOJ, as well as the Plaintiff States, elected not to intervene in the qui tam action at that time.

In May 2019, the plaintiff filed an amended complaint under seal repeating the same allegations and seeking the same relief.

According to a filing unsealed in June 2019, the DOJ reaffirmed its decision not to intervene and incorporated its prior filing, indicating that neither the DOJ nor the Plaintiff States were intervening regarding the original complaint.

Although the DOJ and the Plaintiff States have elected not to intervene, the plaintiff has continued to litigate this action and the DOJ and the Plaintiff States may later seek to intervene.

In August 2019, the Company filed a motion to dismiss, and in May 2020, the DC District Court dismissed the plaintiff’s complaint in its entirety, without prejudice.

In June 2020, the plaintiff filed a second amended complaint with similar allegations and seeking the same relief.

In July 2020, the Company filed another motion to dismiss, which was denied by the DC District Court in March 2021.

The Company filed its answer to the plaintiff’s second amended complaint in April 2021 and intends to continue to vigorously defend itself in the case.

In February 2019, a securities class action, Gordon v.

1 unchanged sentence

, was filed in the U.S.

District Court for the Eastern District of New York naming the Company and certain of its officers as defendants.

District Court for the Eastern District of New York (New York District Court) naming the Company and certain of its officers as defendants.

An amended complaint was filed in July 2019.

The amended complaint, filed on behalf of a purported stockholder, asserts claims on behalf of a putative class of all persons who purchased the Company’s publicly traded securities between November 4, 2015 and February 11, 2019, for alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder.

The amended complaint, filed on behalf of a purported stockholder, asserted claims on behalf of a putative class of all persons who purchased the Company’s publicly traded securities between November 4, 2015 and February 11, 2019 (the Class), for alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder.

The amended complaint alleges that the defendants made false and misleading statements and/or omissions regarding Fanapt ® , HETLIOZ ® and the Company’s interactions with the FDA regarding tradipitant between November 3, 2015 and February 11, 2019.

1 unchanged sentence

In March 2021, the motion to dismiss was granted in part and denied in part.

In April 2021, the Company filed its answer to the amended complaint.

The Company believes that it has meritorious defenses and intends to vigorously defend this lawsuit.

The Company does not anticipate that this litigation will have a material adverse effect on its business, results of operations or financial condition.

However, this lawsuit is subject to inherent uncertainties, the actual cost may be significant, and the Company may not prevail.

The Company believes it is entitled to coverage under its relevant insurance policies, subject to a retention, but coverage could be denied or prove to be insufficient.

In May 2022, the parties executed a stipulation of settlement for $ 11.5 million to resolve the claims asserted with no admission of wrongdoing by any defendant.

The settlement was preliminarily approved by the New York District Court in September 2022.

Payment of the settlement amount was made by the Company’s insurers into an escrow account and is recognized in the Consolidated Balance Sheet as of December 31, 2022 in prepaid and other current assets and accounts payable and accrued liabilities.

In January 2023, the New York District Court fully and finally approved the settlement and issued its final judgment and order of dismissal with prejudice, thereby resolving the class action with respect to all plaintiffs other than three individuals who requested exclusion from the Class.

The settlement is not expected to have a material adverse effect on the Company’s business, results of operations or financial condition.

In April 2022, the Company filed a lawsuit in the DC District Court against the FDA to compel the FDA to produce, as required by the Freedom of Information Act (FOIA), certain records relating to its denial of the Company’s supplemental NDA for HETLIOZ ® in the treatment of jet lag disorder.

The Company has repeatedly attempted to obtain these records from the FDA pursuant to a FOIA request submitted by the Company in December of 2019, but the FDA has refused to provide them, claiming an exemption under FOIA.

The Company does not believe that the exemption claimed by the FDA applies to the records requested.

In April 2022, the Company filed a lawsuit in the U.S.

District Court for the District of Maryland (the MD District Court) against the Centers for Medicare & Medicaid Services (CMS) and the Administrator of CMS challenging CMS’ rule broadly interpreting the defined terms “line extension” and “new formulation” under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (ACA), which went into effect in January 2022 (the Rule).

The Company believes that the Rule is unlawful and contrary to the intent of Congress when it passed the ACA.

Under the Rule, certain of the Company’s products would be treated as line extensions and new formulations subject to enhanced rebates, despite the statutory text and CMS’ own long-standing practice, under which such products would not constitute line extensions or new formulations.

The Company seeks to, among other things, have the MD District Court set aside the definitions of “line extension” and “new formulation” in the Rule, declare the Rule unlawful and void and enjoin CMS from enforcing, applying, or implementing the Rule as applied to require the Company to treat these products as line extensions.

In May 2022, the Company filed a lawsuit in the DC District Court against the FDA to compel the FDA to produce, as required by FOIA, certain records relating to cases in which the FDA waived its putative requirement of a 9-month non-rodent toxicity study before drugs can be tested on human patients for extended durations.

The Company attempted to obtain these records from the FDA pursuant to a FOIA request submitted by the Company in January of 2020, but the FDA has failed to respond to the request.

In May 2022, the Company filed a lawsuit in the DC District Court against the FDA challenging the FDA’s denial of Fast Track designation for tradipitant.

In October 2021, the Company submitted to the FDA a request for Fast Track designation for tradipitant under the Food and Drug Administration Modernization Act of 1997 (FDAMA).

The FDAMA provides for expedited development and review of drugs that receive Fast Track designation from the FDA.

Under the FDAMA, the FDA must designate a drug as a Fast Track product if it both (1) is intended to treat a serious or life-threatening

disease or condition and (2) demonstrates the potential to address unmet medical needs for such disease or condition.

Although Fast Track designation is non-discretionary when the criteria are satisfied, the FDA denied the Company’s request for Fast Track designation.

The Company does not believe that the FDA based its decision on the relevant criteria.

Therefore, among other reasons, the Company maintains that the FDA’s denial is unlawful.

The Company has asked the DC District Court to, among other things, set aside and vacate the FDA’s denial.

In September 2022, the Company filed a lawsuit in the DC District Court against the FDA to compel the FDA to comply with two separate nondiscretionary obligations under the FDCA and its implementing regulations:

an obligation to publish a notice of an opportunity for a hearing on Vanda’s supplemental New Drug Application (sNDA) in the Federal Register within 180 days of the filing of the sNDA, and a separate obligation to publish the same notice within 60 days of the request for a hearing.

The FDA published the notice of an opportunity for a hearing on October 11, 2022.

The Company has asked the DC District Court to, among other things, compel the FDA to comply with its obligations and declare that its lack of compliance violates the FDCA and the FDA regulations.

In October 2022, the Company filed a lawsuit in the DC District Court against the FDA to compel the FDA to produce, as required by FOIA, documents responsive to the Company’s request seeking communications external to the FDA from 11 specified FDA employees relating to tradipitant.

The FDA has failed to respond and disclose the requested documents within the statutory timeframe.

The Company has asked the DC District Court to, among other things, compel the FDA to comply with its obligations and declare that its lack of compliance violates FOIA.

In November 2022, the Company filed a lawsuit in the DC District Court against the FDA to compel the FDA to produce, as required by FOIA, documents responsive to the Company’s request seeking communications within the FDA relating to tradipitant.

The FDA has failed to respond and disclose the requested documents within the statutory timeframe.

The Company has asked the DC District Court to, among other things, compel the FDA to comply with its obligations and declare that its lack of compliance violates FOIA.

In December 2022, the Company filed a lawsuit in the DC District Court against the FDA to compel the FDA to produce, as required by FOIA, documents responsive to the Company’s request seeking communications external to the FDA from specified FDA employees relating to HETLIOZ ® .

The FDA has failed to respond and disclose the requested documents within the statutory timeframe.

The Company has asked the DC District Court to, among other things, compel the FDA to comply with its obligations and declare that its lack of compliance violates FOIA.

The FDA has failed to respond and disclose the requested documents within the statutory timeframe.

The Company has asked the DC District Court to, among other things, compel the FDA to comply with its obligations and declare that its lack of compliance violates FOIA.

VANDA PHARMACEUTICALS INC.

9 unchanged sentences

333-130759) on March 17, 2006, and incorporated herein by reference).

4.2* Description of Securities of the registrant

4.2 Description of Securities of the registrant (filed as Exhibit 4.2 to the registrant’s Annual Report on Form 10-K (File No.

001-34186) on February 24, 2022 and incorporated herein by reference).

10.1 Amended and Restated License, Development and Commercialization Agreement, dated July 24, 2005, by and between Bristol-Myers Squibb Company and the registrant (relating to HETLIOZ®) (filed as Exhibit 10.3 to Amendment No.

25 unchanged sentences

001-34186) on April 29, 2013 and incorporated herein by reference).

Manufacturing Agreement, dated January 24, 2014, by and between Patheon Pharmaceuticals Inc.

and the registrant (relating to HETLIOZ ® ).

Number Description

Manufacturing Agreement, dated January 24, 2014, by and between Patheon Pharmaceuticals Inc.

and the registrant (relating to HETLIOZ®) (filed as Exhibit 10.12 to the registrants annual report on Form 10-K (File No.

001-34186) on February 24, 2022 and incorporated herein by reference).

10.13 First Amendment to Lease Agreement, dated March 18, 2014, by and between Square 54 Office Owner LLC and the registrant (filed as Exhibit 10.54 to the registrant’s quarterly report on Form 10-Q (File No.

39 unchanged sentences

333-218774) on June 15, 2017 and incorporated herein by reference).

Manufacturing Agreement, dated May 6, 2016, by and between Patheon Pharmaceuticals Inc.

and the registrant (relating to Fanapt ® ).

Number Description

Manufacturing Agreement, dated May 6, 2016, by and between Patheon Pharmaceuticals Inc.

and the registrant (relating to Fanapt®) (filed as Exhibit 10.29 to the registrant's annual report on Form 10-K (File No.

001-34186) on February 24, 2022 and incorporated herein by reference).

10.30 Second Amendment to Lease Agreement, dated June 20, 2016, by and between Square 54 Office Owner LLC and the registrant (filed as Exhibit 10.43 to the registrant’s quarterly report on Form 10-Q (File No.

24 unchanged sentences

001-34186) on February 10, 2021 and incorporated herein by reference).

10.42 License Agreement, dated January 13, 2022, by and among MSN Pharmaceuticals Inc., MSN Laboratories Private Limited, Impax Laboratories LLC and the registrant (filed as Exhibit 10.1 to the registrant's quarterly report on Form 10-Q (File No.

001-34186) on May 6, 2022 and incorporated herein by reference).

21.1 List of Subsidiaries (filed as Exhibit 21.1 to the registrant’s annual report on Form 10-K (File No.

4 unchanged sentences

32.1* Certification of the Chief Executive Officer and Chief Financial Officer as required by Section 906 of the Sarbanes-Oxley Act of 2002.

Number Description

101* The following financial information from this annual report on Form 10-K for the fiscal year ended December 31, 2022, formatted in Inline Extensible Business Reporting Language (iXBRL) and furnished electronically herewith:

1 unchanged sentence

(ii) Consolidated Statements of Operations for the years ended December 31, 2022, 2021 and 2020;

(iii) Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2021, 2020 and 2019;

(iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2022, 2021 and 2020;

(iv) Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2022, 2021 and 2020;

(v) Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020;

and (vi) Notes to the Consolidated Financial Statements.

and (vi) Notes to Consolidated Financial Statements.

104 Cover Page Interactive Data File (embedded within the Inline XBRL document).

Number Description

† Indicates management contract or compensatory plan or arrangement.

# Confidential treatment has been granted with respect to certain portions of this exhibit.

Omitted portions have been filed separately with the Securities and Exchange Commission.

‡ Portions of this exhibit have been omitted under rules of the Securities and Exchange Commission permitting the confidential treatment of select information.

1 unchanged sentence

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

What changed 10-K

Item 9A. Controls and Procedures