ANI PHARMACEUTICALS INC

Previous wording

On September 16, 2024, the Company acquired Alimera. In connection with the Merger, the Company addeda growing and durable franchise, ILUVIEN (fluocinolone acetonide intravitreal implant) 0.19 mg, which has received marketing authorization and reimbursement in the United States (“U.S.”) and 24 countries for the treatment of diabetic macular edema (“DME”) and YUTIQ (fluocinolone acetonide intravitreal implant) 0.18 mg, available in the U.S. for the treatment of non-infectious uveitis affecting the posterior segment of the eye (“NIU-PS”). Subsequent to the acquisition of Alimera, we expanded the label for ILUVIEN to include an indication for chronic NIU-PS in addition to its then-current indication in DME in the U.S.

Current wording

On September 16, 2024, the Company acquired Alimera Sciences, Inc. (“Alimera”). In connection with the Merger, the Company addeda growing and durable franchise, ILUVIEN (fluocinolone acetonide intravitreal implant) 0.19 mg, which has received marketing authorization and reimbursement in the United States (“U.S.”) and 24 countries for the treatment of diabetic macular edema (“DME”) and YUTIQ (fluocinolone acetonide intravitreal implant) 0.18 mg, available in the U.S. for the treatment of non-infectious uveitis affecting the posterior segment of the eye (“NIU-PS”). Subsequent to the acquisition of Alimera, we expanded the label for ILUVIEN to include an indication for chronic NIU-PS in addition to its then-current indication in DME in the U.S.

Previous wording

Our objective is to build a sustainable and growing biopharmaceutical company serving patients in need and creating long-term value for our investors. Our overall strategy is enabled by an empowered, collaborative, and purposeful team with high performance-orienta tion that seeks to deliver on our purpose of “Serving Patients, Improving Lives.”

Current wording

Our objective is to build a sustainable andgrowing biopharmaceutical company serving patients in need and creating long-term value for our investors. Our overall strategy is enabled by an empowered, collaborative, and purposeful team with high performance-orienta tion that seeks to deliver on our purpose of “Serving Patients, Improving Lives.”

Previous wording

Impacts to our first quarter 2026 and 2025 results of operations, including to net revenues, operating expenses, interest and other expense, net, and income taxes are described below.

Current wording

Impacts to our second quarter 2026 and 2025 results of operations, including to net revenues, operating expenses, interest and other expense, net, and income taxes are described below.

Previous wording

(1)There were no sales of YUTIQ in Q1 2026 as the Company transitioned promotional efforts in the U.S. from YUTIQ to ILUVIEN, which has a combined label of DME and NIU-PS during the second quarter of 2025.

Current wording

(1)There were no sales of YUTIQ during the quarters ended March 31, 2026 and June 30, 2026, as the Company transitioned promotional efforts in the U.S. from YUTIQ to ILUVIEN, which has a combined label of DME and NIU-PS during the second quarter of 2025.

Previous wording

We derive substantially all of our revenues from sales of our Rare Disease, Brands and Generics portfolios of pharmaceutical products, as well as from other sources of revenue such as milestones, royalties on net sales of certain products, and other pharmaceutical services. Essentially all of our Generics products face competition from other generic products, as do many of our Brands products, and we expect them to continue to face competition from generic products in the future. The primary means of competition among generic manufacturers are pricing, contract terms, service levels, and reliability. Increased competition generally results in decreased average selling prices of generic and brands products over time. In addition, due to strategic partnerships between wholesalers and pharmacy chains, we have experienced, and expect to continue to experience, increases in net sales to the wholesalers, with corresponding decreases in net sales to the pharmacy chains.

Current wording

We derive substantially all of our revenues from sales of our Rare Disease, Brands and Generics portfolios of pharmaceutical products, as well as from other sources of revenue such as milestones, royalties on net sales of certain products, and other pharmaceutical services. Our Rare Disease products face competition from other brand products in many of the therapeutic categories in which they are sold. Essentially all of our Generics products face competition from other generic products, as do many of our Brands products, and we expect them to continue to face competition from generic products in the future. The primary means of competition among generic manufacturers are pricing, contract terms, service levels, and reliability. Increased competition generally results in decreased average selling prices of generic and brands products over time. In addition, due to strategic partnerships between wholesalers and pharmacy chains, we have experienced, and expect to continue to experience, increases in net sales to the wholesalers, with corresponding decreases in net sales to the pharmacy chains.

Previous wording

Net revenues for the three months ended March 31, 2026 were $237.5 million compared to $197.1 million for the same period in 2025, an increase of 20.5%, primarily as a result of the following:

Current wording

Net revenues for the three months ended June 30, 2026 were $266.0 million compared to $211.4 million for the same period in 2025, an increase of 25.9%, primarily as a result of the following:

Previous wording

•Net revenues from Rare Disease and Brands, which includes our rare disease and brands portfolios of pharmaceutical products, royalties, and other revenues were $128.2 million during the three months ended March 31, 2026, an increase of $34.2 million, compared to $94.1 million for the same period in 2025.

Current wording

•Net revenues from Rare Disease and Brands, which includes our Rare Disease and Brands portfolios of pharmaceutical products, royalties, and other revenues were $165.4 million during the three months ended June 30, 2026, an increase of $48.2 million, compared to $117.2 million for the same period in 2025.

Previous wording

•Net revenues for Rare Disease pharmaceutical products were $94.4 million during the three months ended March 31, 2026, an increase of $25.4 million from $69.0 million for the same period in 2025. This increase was driven by increased volume of Cortrophin Gel from overall ACTH market growth and market share gains. The increase in sales for ILUVIEN was driven by the continued execution of commercial and patient access initiatives established during 2025.

Current wording

•Net revenues for Rare Disease pharmaceutical products were $135.8 million during the three months ended June 30, 2026, an increase of $31.9 million from $104.0 million for the same period in 2025. This increase was driven by increased volume of Cortrophin Gel from overall ACTH market growth and market share gains. ILUVIEN net revenues were $18.7 million in the second quarter, down 16% from the prior year period.

Previous wording

•Net revenues for Brands portfolio of pharmaceutical products were $12.3 million during the three months ended March 31, 2026, a decrease of $12.8 million compared to $25.1 million for the same period in 2025, driven by a net decrease in demand for certain products during the first quarter.

Current wording

•Net revenues for Brands portfolio of pharmaceutical products were $11.8 million during the three months ended June 30, 2026, a decrease of $1.4 million compared to $13.2 million for the same period in 2025, driven by a net decrease in demand for certain products during the second quarter.

Previous wording

•Net revenues from Generics and Other, which includes our generic pharmaceutical products, sales of contract manufactured products, royalties on contract manufactured products, and other pharmaceutical services, were $109.2 million during the three months ended March 31, 2026, an increase of 6.0% compared to $103.0 million for the same period in 2025, primarily a result of the following:

Current wording

•Net revenues from Generics and Other, which includes our generic pharmaceutical products, sales of contract manufactured products, royalties on contract manufactured products, and other pharmaceutical services, were $100.7 million during the three months ended June 30, 2026, an increase of 6.8% compared to $94.2 million for the same period in 2025, primarily as a result of the following:

Previous wording

•Generic pharmaceutical products net revenues were $105.4 million during the three months ended March 31, 2026, an increase of $6.7 million over the prior year. This increase was driven by a partnered product launched in the third quarter of 2025, and increased volumes from the benefit of new product launches during 2026. From a product perspective, in addition to the partnered product cited above, the increase was principally driven by revenues from year over year increases in products such as Vancomycin and MAS ER, among others.

Current wording

•Generic pharmaceutical products net revenues were $99.1 million during the three months ended June 30, 2026, an increase of $8.8 million over the prior year. This increase was driven by a partnered product launched in the third quarter of 2025, and increased volumes from the benefit of new product launches during 2026. From a product perspective, in addition to the partnered product cited above, the increase was principally driven by revenues from year over year increases in products such as MAS ER, Vancomycin, among others.

Previous wording

For the three months ended March 31, 2026, cost of sales increased to $93.6 million from $73.0 million for the same period in 2025, an increase of $20.5 million, or 28.1%. The increase is primarily due to significant net growth in sales volumes of pharmaceutical products and significant growth of royalty bearing products, including Cortrophin Gel, and other products in our portfolio.

Current wording

For the three months ended June 30, 2026, cost of sales increased to $100.2 million from $74.6 million for the same period in 2025, an increase of $25.5 million, or 34.2%. The increase is primarily due to significant net growth in sales volumes of pharmaceutical products and significant growth of royalty bearing products, including Cortrophin Gel, and other products in our portfolio.

Previous wording

Cost of sales, as a percentage of net revenues, increased to 39.4% from 37.1% for the three months ended March 31, 2026, compared to the same period in 2025, primarily due to a shift in product mix year over year and an increase in sales of products that bear a royalty payable, and the non-recurrence of prior year sales from Prucalopride. These effects were somewhat tempered by the the initial revenue recognized under the Harmony Agreement.

Current wording

Cost of sales, as a percentage of net revenues, increased to 37.6% from 35.3% for the three months ended June 30, 2026, compared to the same period in 2025, primarily due to a shift in product mix year over year and an increase in sales of products that bear a royalty payable, and the non-recurrence of prior year sales from Prucalopride. These effects were somewhat tempered by the revenue recognized under the Harmony Agreement.

Previous wording

For the three months ended March 31, 2026, total other operating expenses, net increased to $105.0 million from $97.9 million for the same period in 2025, an increase of $7.1 million, or 7.3%, primarily as a result of the following factors:

Current wording

For the three months ended June 30, 2026, total other operating expenses, net increased to $125.4 million from $122.9 million for the same period in 2025, an increase of $2.6 million, or 2.1%, primarily as a result of the following factors:

Previous wording

•Depreciation and amortization expense was $20.9 million for the three months ended March 31, 2026, compared to $22.9 million for the same period in 2025, a decrease of approximately $2.0 million, primarily related to certain definite lived intangibles that have been fully amortized during 2025.

Current wording

•Depreciation and amortization expense was $19.6 million for the three months ended June 30, 2026, compared to $23.3 million for the same period in 2025, a decrease of approximately $3.6 million, primarily related to certain definite-lived intangibles that have been fully amortized during 2025.

Previous wording

For the three months ended March 31, 2026, we recognized total other income, netof $1.3 million as compared to total other expense, net of $6.2 million for the same period in 2025.

Current wording

For the three months ended June 30, 2026, we recognized total other expense, net of $3.4 million as compared to total other expense, net of $3.4 million for the same period in 2025.

Previous wording

•We reco rded an unrealized gain on investment in equity securities of approximately $5.8 million for the three months ended March 31, 2026, compared to an unrealized loss of approximately $0.9 million in the same period in 2025, which is based on the mark to market fair value of equity securities held in CG Oncology as of the balance sheet date.

Current wording

•We recorded an unrealized gain on investment in equity securities of approximately $0.7 million for the three months ended June 30, 2026, compared to an unrealized gain of approximately $0.3 million in the same period in 2025, which is based on the mark to market fair value of equity securities held in CG Oncology as of the balance sheet date.

Previous wording

•Interest expense, net for the three months ended March 31, 2026 consists primarily of coupon interest expense on borrowings under our outstanding debt and amortization of deferred financings costs on these debt instruments, interest income earned on our bank balances, and interest earned on our interest rate swap. Interest income earned on our bank balances increased approximately $1.3 million and interest expense related to our outstanding debt decreased approximately $0.6 million, resulting in an increase of interest income of approximately $1.9 million. This impact was partially offset by a decrease of interest earned on our interest rate swap of approximately $0.2 million, compared to same period in the prior year.

Current wording

•Interest expense, net for the three months ended June 30, 2026 consists primarily of coupon interest expense on borrowings under our outstanding debt and amortization of deferred financing costs on these debt instruments, interest income earned on our bank balances, and interest earned on our interest rate swap. Interest income earned on our bank balances increased approximately $1.2 million and interest expense related to our outstanding debt decreased approximately $0.8 million resulting in an increase of interest income of approximately $2.0 million. This impact was partially offset by a decrease of interest earned on our interest rate swap of approximately $0.2 million, compared to the same period in the prior year.

Previous wording

For the three months ended March 31, 2026, our income tax expense was approximately $10.7 million. Our effective tax rate of 26.7% of pre-tax income for the current year was determined based on our pre-tax income, statutory tax rates and the tax impacts of certain discrete items for the three months ended March 31, 2026, which impact our income tax expense in the period in which they occur. The effective tax rate differed from the federal statutory rate of 21% primarily due to state taxes and disallowed officers compensation partially offset by excess tax benefits recognized upon settlement of stock-based compensation.

Current wording

For the three months ended June 30, 2026, our income tax expense was approximately $12.4 million. Our effective tax rate of 33.4% of pre-tax income for the current year was determined based on our pre-tax income, statutory tax rates and the tax impacts of certain discrete items for the three months ended June 30, 2026, which impact our income tax expense in the period in which they occur. The effective tax rate differed from the federal statutory rate of 21% primarily due to state taxes and disallowed officers' compensation partially offset by excess tax benefits recognized upon settlement of stock-based compensation.

Previous wording

•Net revenues for Brand royalties and other revenues during the three months ended March 31, 2026, includes a $15.0 million upfront payment and associated royalties of approximately $6.5 million, related to the Harmony Agreement.

Current wording

•Net revenues for Brand royalties and other revenues during the six months ended June 30, 2026, includes a $15.0 million upfront payment, associated royalties of approximately $16.3 million, and $8.0 million of revenue associated with development milestones satisfied over time, related to the Harmony Agreement.

Previous wording

During the three months ended March 31, 2026, approximately 33% of our raw material inventory purchases were from one domestic supplier. During the three months ended March 31, 2025, approximately 22% of our raw material inventory purchases were from one domestic supplier.

Current wording

During the six months ended June 30, 2026, approximately 23% of our raw material inventory purchases were from one domestic supplier. During the six months ended June 30, 2025, approximately 23% of our raw material inventory purchases were from one domestic supplier.

Previous wording

•Selling, general, and administrative expenses decreased from $76.5 million to $73.7 million, a decrease of approximately $2.9 million, and includes a litigation settlement received of $9.0 million and a decrease of approximately $1.5 million in transaction and integration costs related to the Alimera acquisition, offset by increased investment in Rare Disease sales and marketing infrastructure, including the initial marketing and recruitment expense related to our expansion of the Rare Disease team which is targeting opportunities in acute gouty arthritis, and an overall increase in activities to support the growth of our business, compared to the same period in 2025.

Current wording

•Selling, general, and administrative expenses increased from $158.3 million to $165.3 million, an increase of approximately $7.0 million, and includes increased investment in Rare Disease sales and marketing infrastructure, related to our expansion of the Rare Disease team which is targeting opportunities in acute gouty arthritis, and an overall increase in activities to support the growth of our business, compared to the same period in 2025, offset by a litigation settlement received of $9.0 million, and a decrease of approximately $2.3 million in transaction and integration costs related to the Alimera acquisition.

Previous wording

•We recognized a net gain of approximately $0.2 million for the three months ended March 31, 2026 related to changes in our contingent consideration liabilities, which are measured at fair value. The net gain resulted from the adjustment of future forecasted cash flows and includes: (1) a $0.4 million reduction related to the Alimera contingent value rights; and (2) a $0.2 million increase in contingent consideration related to the Novitium acquisition.

Current wording

•We recognized a net gain of approximately $0.8 million for the six months ended June 30, 2026 related to changes in our contingent consideration liabilities, which are measured at fair value. The net gain resulted from the adjustment of future forecasted cash flows and includes primarily: (1) a $0.9 million reduction related to the Alimera contingent value rights; and (2) a $0.2 million increase in contingent consideration related to the Novitium acquisition.

Previous wording

For the three months ended March 31, 2025, our income tax expense was approximately $4.3 million. Our effective tax rate was 21.5% of pre-tax income reported in the period, as well as the net effect of certain discrete items for the three months ended March 31, 2025 which impact our income tax expense in the period in which they occur. Discrete items are primarily related to excess tax benefits recognized upon settlement of stock-based compensation awards.

Current wording

For the six months ended June 30, 2025, our income tax expense was approximately $6.3 million. Our effective tax rate was 20.6% of pre-tax income reported in the period, as well as the net effect of certain discrete items for the six months ended June 30, 2025 which impact our income tax expense in the period in which they occur. Discrete items are primarily related to excess tax benefits recognized upon settlement of stock'based compensation awards.

Previous wording

On August 13, 2024, we entered into the 2024 Credit Agreement with JPMorgan Chase Bank, N.A., and other financial institutions, which provides for aggregate principal commitments consisting of (i) a senior secured term loan facility in an aggregate principal amount of $325.0 million, and (ii) a senior secured revolving credit facility in an aggregate commitment amount of $75.0 million, which may be used for revolving credit loans, swingline loans and letters of credit (the “TLA Revolver” and together with the TLA, the “2024 Credit Facility”). As of March 31, 2026, the outstanding principal under our 2024 Credit Agreement was approximately $308.8 million, with $74.9 million remaining available for borrowing under the TLA Revolver. We also maintain an interest rate swap with a notional value of $139.4 million at an effective fixed rate of 2.313% to manage SOFR-based variable interest rate exposure on a portion of the borrowings under the 2024 Credit Agreement.

Current wording

On August 13, 2024, we entered into a credit agreement (the “2024 Credit Agreement”) with JPMorgan Chase Bank, N.A., and other financial institutions, which provides for aggregate principal commitments consisting of (i) a senior secured delayed-draw term loan facility in an aggregate principal amount of $325.0 million (the “TLA”), and (ii) a senior secured revolving credit facility in an aggregate commitment amount of $75.0 million, which may be used for revolving credit loans, swingline loans and letters of credit (the “TLA Revolver” and together with the TLA, the “2024 Credit Facility”). As of June 30, 2026, the outstanding principal under our 2024 Credit Agreement was approximately $304.7 million, with $74.9 million remaining available for borrowing under the TLA Revolver. We also maintain an interest rate swap with a notional value of $139.4 million at an effective fixed rate of 2.313% to manage SOFR-based variable interest rate exposure on a portion of the borrowings under the 2024 Credit Agreement.

Previous wording

On August 13, 2024, the Company completed an offering of $316.25 million aggregate principal amount of Notes. The Notes are due September 1, 2029, unless earlier repurchased, redeemed, or converted. The Notes accrue interest at a rate of 2.25% per annum, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2025.

Current wording

On August 13, 2024, the Company completed an offering of $316.3 million aggregate principal amount of the Company’s Convertible Senior Notes due 2029 (the “Notes”). The Notes are due September 1, 2029, unless earlier repurchased, redeemed, or converted. The Notes accrue interest at a rate of 2.25% per annum, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2025.

Previous wording

As of March 31, 2026 and December 31, 2025, we had $311.2 million and $285.6 million, respectively, in unrestricted cash and cash equivalents. The majority of our cash balances are held in interest bearing and non-interest bearing accounts in U.S.-based financial institutions that are guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) up to $250 thousand. The majority of our cash balances are in excess of FDIC coverage, which we consider to be a normal business risk. In addition, we have cash and cash equivalents held in international bank accounts that are denominated in various foreign currencies, specifically in Canada, the United Kingdom, Germany, Ireland, Portugal, and India.

Current wording

As of June 30, 2026 and December 31, 2025, we had $360.2 million and $285.6 million, respectively, in unrestricted cash and cash equivalents. The majority of our cash balances are held in interest bearing and non-interest bearing accounts in U.S.-based financial institutions that are guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) up to $250 thousand. The majority of our cash balances are in excess of FDIC coverage, which we consider to be a normal business risk. In addition, we have cash and cash equivalents held in international bank accounts that are denominated in various foreign currencies, specifically in Canada, the United Kingdom, Germany, Ireland, Portugal, and India.

Previous wording

The following table summarizes the net cash and cash equivalents (used in) provided by operating activities, investing activities, and financing activities for the periods indicated:

Current wording

The following table summarizes the net cash and cash equivalents provided by operating activities, used in investing activities, and used in financing activities for the periods indicated:

Previous wording

Net cash provided by operating activities was $58.4 million for the three months ended March 31, 2026, compared to net cash provided by operating activities of $35.0 million during the same period in 2025, an increase of $23.4 million. The increase in cash provided by operating activities primarily resulted from our net income of $29.5 million adjusted for non-cash items, and an increase in our working capital accounts driven by the growth of our business.

Current wording

Net cash provided by operating activities was $115.0 million for the six months ended June 30, 2026, compared to net cash provided by operating activities of $110.8 million during the same period in 2025, an increase of $4.2 million. The increase in cash provided by operating activities primarily resulted from our net income of $54.2 million adjusted for non-cash items, and an increase in our working capital accounts driven by the growth of our business.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2026 was $11.3 million, which includes the acquisition of intangible assets of approximately $5.3 million and capital expenditures of approximately $6.1 million. Net cash used in investing activities for the three months ended March 31, 2025 was $19.8 million, which includes the payment for the exercise of the SWK Buy-Out Option of approximately $17.3 million and capital expenditures of approximately $2.5 million.

Current wording

Net cash used in investing activities for the six months ended June 30, 2026 was $14.4 million, which includes the acquisition of intangible assets of approximately $5.3 million and capital expenditures of approximately $9.1 million. Net cash used in investing activities for the six months ended June 30, 2025 was $26.8 million, principally due to the payment for the exercise of an option by the Company to buy-out royalties owed to SWK Funding LLC in connection with the Company’s acquisition of Alimera, and purchases of other intangible assets of approximately $20.3 million and capital expenditures of approximately $6.5 million.

Previous wording

Netcash used in finan cing activities for the three months ended March 31, 2026 was $21.6 million, resulting from $19.8 million of treasury stock purchases for restricted stock vests and principal payments on our 2024 Credit Facility of $4.1 million, offset by proceeds received from stock option exercises and ESPP purchases of approximately $2.2 million. Net cash used in financing activities for the three months ended March 31, 2025 was $9.9 million, resulting from $10.0 million of treasury stock purchases for restricted stock vests and a principal payment on our 2024 Credit Facility of $2.0 million, offset by proceeds received from stock option exercises and ESPP purchases.

Current wording

Net cash used in financing activities for the six months ended June 30, 2026 was $26.3 million, resulting from $20.6 million of treasury stock purchases for restricted stock vests and principal payments on our 2024 Credit Facility of $8.1 million, offset by proceeds received from stock option exercises and 2016 Employee Stock Purchase Plan (“ESPP”) purchases of approximately $2.5 million. Net cash used in financing activities for the six months ended June 30, 2025 was $11.7 million, principally resulting from $10.6 million of treasury stock purchases for restricted stock vests, principal payment on our 2024 Credit Facility of $4.1 million, offset by proceeds received from stock option exercises and ESPP purchases.